Q1 2026 PDD Holdings Inc Earnings Call

May 27, 2026

Speaker #1: Thank you for standing by, and welcome to the PDD Holdings Inc. Q1 2026 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator: Thank you for standing by and welcome to the PDD Holdings Inc. 1Q 2026 Earnings Conference Call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to our host today. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key, followed by the number 1 on your telephone keypad. I would now like to hand the conference over to our host today.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Operator. Hello, everyone, and thank you for joining us today. PDD Holdings' earnings release was distributed earlier, and it's available on our website at investor.pddholdings.com, as well as through the Globe Newswire services.

Gary: Thank you, operator. Hello everyone, and thank you for joining us today. PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com, as well as through the GlobeNewswire services. Before we start, I'd like to refer you to our safe harbor statement in the press earnings release, which applies to this call, as we'll make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures. Joining us today on the call are Mr. Lei Chen, our Co-Chairman and Co-Chief Executive Officer, Mr. Jiazhen Zhao, our Co-Chairman and Co-Chief Executive Officer, as well as Mr. Jiong Li, our Financial Director. Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus.

[Company Representative] (PDD Holdings): Thank you, operator. Hello everyone, and thank you for joining us today. PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com, as well as through the GlobeNewswire services. Before we start, I'd like to refer you to our safe harbor statement in the press earnings release, which applies to this call, as we'll make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures. Joining us today on the call are Mr. Lei Chen, our Co-Chairman and Co-Chief Executive Officer, Mr. Jiazhen Zhao, our Co-Chairman and Co-Chief Executive Officer, as well as Mr. Jiong Li, our Financial Director. Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus.

Speaker #2: Before we start, I'd like to refer you to our Safe Harbor statement in the press earnings release, which applies to this call, as well as make certain forward-looking statements.

Speaker #2: Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures.

Speaker #2: Joining us today on the call are Mr. Chen Lei, our co-chairman and co-chief executive officer, and Mr. Jiazhen Zhao, our co-chairman and co-chief executive officer.

Speaker #2: As well as Mr. Li Juan, our Financial Director. Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus.

Speaker #2: And Jun will then walk us through our financial results for the first quarter ended March 31, 2026. During the Q&A session, Lei and Jiazhen will answer questions in Chinese and will help translate.

Gary: Zhong will then walk us through our financial results for Q1 ended 31 March 2026. During the Q&A session, Lei and Jiazhen will answer questions in Chinese and we'll help translate. Please note the English translation is for reference only, and in case of any discrepancy, statements in the original language should prevail. Now it's my pleasure to introduce our Co-Chairman and Co-Chief Executive Officer, Jiazhen Zhao. Jiazhen, please go ahead. Hello everyone. This is Jiazhen Zhao. Thank you all for joining the Q1 2026 earnings call. This year marks the beginning of PDD's second decade. Following my appointment as chairman, this is also a critical year for the complete reinvention of a corporate organization and culture, which is centered on the high-quality development of the new decade.

[Company Representative] (PDD Holdings): Zhong will then walk us through our financial results for Q1 ended 31 March 2026. During the Q&A session, Lei and Jiazhen will answer questions in Chinese and we'll help translate. Please note the English translation is for reference only, and in case of any discrepancy, statements in the original language should prevail. Now it's my pleasure to introduce our Co-Chairman and Co-Chief Executive Officer, Jiazhen Zhao. Jiazhen, please go ahead.

Speaker #2: Please note the English translation is for reference only, and in case of any discrepancy, statements in the original language shall prevail. Now, it is my pleasure to introduce our Co-Chairman and Co-Chief Executive Officer, Jiazhen Zhao.

Speaker #2: Jiazhen, please go ahead.

Speaker #3: 大家好，我是赵亚珍。感谢各位参加我们2026年第一季度业绩的公开发布。

Jiazhen Zhao: [Foreign language]

[Translator 1]: Hello everyone. This is Jiazhen Zhao. Thank you all for joining the Q1 2026 earnings call. This year marks the beginning of PDD's second decade. Following my appointment as chairman, this is also a critical year for the complete reinvention of a corporate organization and culture, which is centered on the high-quality development of the new decade.

Speaker #2: Hello, everyone. This is Jiazhen Zhao. Thank you all for joining the first quarter 2026 earnings call.

Speaker #3: 今年是拼多多第二个十年的开局之年，也是我接任董事长后围绕新十年高质量发展启动公司组织与文化整体重塑的关键一年。我们要求从上到下必须以安全合规、社会责任为前提，以高质量发展为核心，久久为功，推动业务、团队、内部流程和组织管理的深刻变革，积极承担起平台型企业的责任和担当，为用户、产业和社会创造更多的正向价值。

Speaker #2: And this year marks the beginning of PDD's second decade. Following my appointment as chairman, this is also a critical year for the complete reinvention of our corporate organization and culture, which is centered on the high-quality development of a new decade.

Speaker #2: We are calling on everyone across all levels of the company to pull together in a sustained effort to drive a deep transformation in our business life, teams, internal processes, and organizational management.

Gary: We are calling on everyone across all levels of the company to pull together in a sustained effort to drive a deep transformation in our business lines, teams, internal processes, and organizational management. The whole team is required to treat safety, compliance, and social responsibility as the absolute prerequisite for everything we do, and maintain a clear focus on high-quality development. We are committed to stepping up to our responsibilities as a platform enterprise to create positive value for our users, the industry, and society as a whole. In Q1, the company entered a new phase of the three-year strategy to build another Pinduoduo, which was launched last year. Our new first-party brand business is making steady progress, and we are doubling down on our supply chain through innovative models and fresh investments.

[Translator 1]: We are calling on everyone across all levels of the company to pull together in a sustained effort to drive a deep transformation in our business lines, teams, internal processes, and organizational management. The whole team is required to treat safety, compliance, and social responsibility as the absolute prerequisite for everything we do, and maintain a clear focus on high-quality development. We are committed to stepping up to our responsibilities as a platform enterprise to create positive value for our users, the industry, and society as a whole. In Q1, the company entered a new phase of the three-year strategy to build another Pinduoduo, which was launched last year. Our new first-party brand business is making steady progress, and we are doubling down on our supply chain through innovative models and fresh investments.

Speaker #2: The whole team is required to treat safety, compliance, and social responsibility as the absolute prerequisites for everything we do, and maintain a clear focus on high-quality development.

Speaker #2: We are committed to stepping up to our responsibilities as a platform enterprise to create positive value for our users, the industry, and society as a whole.

Speaker #3: 在今年的一季度，我们去年提出的三年三兆拼多多重大战略开始进入了深化发展的新阶段。新成立的品牌自营业务正在稳步推进。我们将通过新的模式、新的投入继续中长供应链，同时我们长期投入的千亿扶持会商战略正在持续地反哺上架和产业，加速推动会计免费送货入村，完善平台的治理与合规建设，积极履行更大的社会责任。

Speaker #2: In Q1, the company entered a new phase of the three-year strategy to build another 拼多多, which was launched last year. Our new first-party brand business is making steady progress, and we are doubling down on our supply chain to innovative models and fresh investments.

Speaker #2: At the same time, our long-term $100 billion support initiatives continue to generate value for merchants and the broader industry. The team is accelerating the rollout of free shipping to rural villages, enhancing platform governance and compliance, and proactively taking on broader social responsibilities.

Gary: At the same time, our long-term 100 Billion Support initiatives continue to generate value for merchants and the broader industry. The team is accelerating the rollout of free shipping to rural villages, enhancing platform governance and compliance, and proactively taking on broader social responsibilities. We delivered solid results in the past quarter. Group revenue in the quarter was RMB 106.2 billion, a year-over-year increase of 11%. As communicated in the past, our priority is long-term value creation through sustained investment in the ecosystem and the supply chain, rather than short-term results.

[Translator 1]: At the same time, our long-term 100 Billion Support initiatives continue to generate value for merchants and the broader industry. The team is accelerating the rollout of free shipping to rural villages, enhancing platform governance and compliance, and proactively taking on broader social responsibilities. We delivered solid results in the past quarter. Group revenue in the quarter was RMB 106.2 billion, a year-over-year increase of 11%. As communicated in the past, our priority is long-term value creation through sustained investment in the ecosystem and the supply chain, rather than short-term results.

Speaker #3: 在过去的这个季度，我们的业绩表现保持稳健。本季度集团收入1,062亿元，同比增长11%。这是我们多次强调的与短期业绩相比，我们更愿意专注于反哺生态、中长供应链带来的长期价值。

Speaker #2: We delivered solid results in the past quarter. Group revenue in the quarter was RMB 106.2 billion, for a year-over-year increase of 11%. As communicated in the past, our priority is long-term value creation through sustained investments in the ecosystem and the supply chain, rather than short-term results.

Speaker #3: 今年3月，我们的上海成立了专项公司，正式开启品牌自营业务。首期以现金注资150亿元，未来三年计划投入1,000亿真金白银。目前我们的团队正在稳步地推进品牌自营业务，深入产业一线，加快整合供应链资源，联合全球知名IP进行深度共创，孵化面向不同市场、不同品类的品牌，全方位地赋能供应链迈向品牌化，推动供应链体系实现价值跃迁。

Jiazhen Zhao: 今年3月，我们在上海成立了专项公司，正式开启品牌自营业务，首期以现金注资150亿元，未来三年计划投入1,000亿，真金白银。目前我们的团队正在稳步地推进品牌自营业务，深入产业一线，加快整合供应链资源，联合全球知名IP进行深度共创，孵化面向不同市场、不同品类的品牌，全方位地赋能供应链迈向品牌化，推动供应链体系实现价值跃迁。

Jiazhen Zhao: [Foreign language]

Speaker #2: In March, we incorporated a dedicated company in Shanghai, marking the official launch of our first-party brand business with an initial cash injection of RMB 15 billion and a plan to invest RMB 100 billion over the next three years.

Gary: In March, we incorporated a dedicated company in Shanghai, marking the official launch of our first-party brand business with an initial cash injection of RMB 15 billion and a plan to invest RMB 100 billion over the next three years. Currently, our team is steadily advancing this business by going deep into industry hubs to accelerate the consolidation of supply chain resources. We are also collaborating closely with global IPs for deep co-creation to incubate new brands tailored to various markets and product categories. This holistic approach will empower our supply chain's transition towards brand development, catalyzing a breakthrough across the entire supply chain.

[Translator 1]: In March, we incorporated a dedicated company in Shanghai, marking the official launch of our first-party brand business with an initial cash injection of RMB 15 billion and a plan to invest RMB 100 billion over the next three years. Currently, our team is steadily advancing this business by going deep into industry hubs to accelerate the consolidation of supply chain resources. We are also collaborating closely with global IPs for deep co-creation to incubate new brands tailored to various markets and product categories. This holistic approach will empower our supply chain's transition towards brand development, catalyzing a breakthrough across the entire supply chain.

Speaker #2: Currently, our team is steadily advancing this business by going deep into industry hubs to accelerate the consolidation of supply chain resources. We are also collaborating closely with global IPs for deep co-creation to incubate new brands, tailored to various markets and product categories.

Speaker #2: This holistic approach will empower our supply chains, support the transition towards brand development, and catalyze a breakthrough across the entire supply chain.

Speaker #3: 在第一季度，我们的千亿扶持会上政策仍然保持高度投入，并对多多好特展、薪资供给、电商吸金等专项行动进行迭代升级。在农业领域，我们推出了2026多多好特展项目。在去年扶持商品和商家的基础上，深耕农产品的种植培育、冷链物流、亲身加工等上下游环节，助力农产品供应链提质增效，推动农产区提升价值链。目前，首批项目已在南宁沃柑、海南凤梨、同仁抹茶、宁夏枸杞、格陵岛水产等农特产区展开。

Jiazhen Zhao: 在第一季度，我们的千亿扶持惠商政策仍然保持高度投入，并对多多好特价、新质供给、电商西进等专项行动进行迭代升级。在农业领域，我们推出了"2026多多好特产"项目，在去年扶持商品和商家的基础上，深耕农产品的种植培育、冷链物流、精深加工等上下游环节，助力农产品供应链提质增效，推动农产区提升价值链。目前，首批项目已在南宁沃柑、海南凤梨、铜仁抹茶、宁夏枸杞、连云港水产等农特产区展开。

Jiazhen Zhao: [Foreign language]

Speaker #2: Throughout the first quarter, our $100 billion support program continued to see high levels of investment, rolling out upgraded iterations of initiatives such as Duoduo Premium Produce, new quality supply, and logistics support to remote regions.

Gary: Throughout Q1, our 100 Billion Support Program continued to see high levels of investment, rolling out upgraded iterations of initiatives such as Duoduo Premium Produce, New Quality Supply, and Logistics Support to Remote Regions. In agriculture, we launched the 2026 Duoduo Premium Produce program. Building on last year's support for products and merchants, we are now deepening our support across the entire value chain, including planting and cultivation, cold chain logistics, and deep processing of agricultural products. This helps improve the quality and efficiency of the agricultural supply chain and enables production regions to move up the value chain. The first phase of this project has been launched in specialty regions such as Nanning oranges, Hainan pineapples, Tongren matcha, Ningxia goji berries, and Lianyungang seafood.

[Translator 1]: Throughout Q1, our 100 Billion Support Program continued to see high levels of investment, rolling out upgraded iterations of initiatives such as Duoduo Premium Produce, New Quality Supply, and Logistics Support to Remote Regions. In agriculture, we launched the 2026 Duoduo Premium Produce program. Building on last year's support for products and merchants, we are now deepening our support across the entire value chain, including planting and cultivation, cold chain logistics, and deep processing of agricultural products. This helps improve the quality and efficiency of the agricultural supply chain and enables production regions to move up the value chain. The first phase of this project has been launched in specialty regions such as Nanning oranges, Hainan pineapples, Tongren matcha, Ningxia goji berries, and Lianyungang seafood.

Speaker #2: In agriculture, we launched the 2026 Duoduo Premium Produce program, building on last year's support for products and merchants. We are now deepening our support across the entire value chain, including planting and cultivation, culture and logistics, and deep processing of agricultural products.

Speaker #2: This helps improve the quality and efficiency of the agricultural supply chain and enables production regions to move up the value chain. The first phase of these projects has been launched in specialty regions such as Nining oranges, Hainan pineapples, Tongren matcha, Ningxia goji berries, and Liaoning Gong seafood.

Speaker #3: 在产业带，新一轮的薪资供给专项行动继续向实向深推进。先后的走进漳州零食、郑州护肤、义乌首饰、金枝发廊、中山照明、天津巧克力等产业带，我们看到很多商家和工厂正在走出别人卖什么，我们卖什么的同质化竞争，转向以用户为中心的自主研发模式。不断挖掘平台消费者的细分化、差异化需求，完成了品牌化的转型。原来的螺丝刀工厂也快速升级为自动化、智能化的工厂，实现了标准化的效率和质量，为当下的产业升级创造了新的范式。

Jiazhen Zhao: 在产业带，新一轮的新质供给专项行动继续向深推进，先后地走进漳州零食、郑州护肤、义乌首饰、晋江发廊、中山照明、天津巧克力等产业带。我们看到很多商家和工厂正在走出别人卖什么、我们卖什么的同质化竞争，转向以用户为中心的自主研发模式，不断挖掘平台消费者的细分化、差异化需求，完成了品牌化的转型。原来的螺丝刀工厂也快速升级为自动化、智能化的工厂，实现了标准化的效率和质量，为当下的产业升级创造了新的范式。

Jiazhen Zhao: [Foreign language]

Speaker #2: Within the industrial belt, the latest brand of our new quality supply initiative continues to deliver tangible results. The initiative has been introduced to manufacturing hubs such as Zhangzhou Snacks, Zhangzhou Skincare, Jewelry, Qingdao Porcelain Enamel, Zhongshan Lighting, and Tianjin Chocolate.

Gary: Within the industrial belt, the latest round of our New Quality Supply initiative continues to deliver tangible results. The initiative has been introduced to manufacturing hubs such as Zhangzhou snacks, Zhengzhou skincare, Yiwu accessories, Qingdao porcelain enamel, Zhongshan lighting, and Tianjin chocolate. Merchants and factories are starting to move away from the homogeneous competition of selling whatever others are selling and shifting towards a consumer-centric R&D-driven model. They are uncovering highly specific and differentiated consumer demands on platform and successfully building their own brands. Former screwdriver factories are rapidly growing into automated smart factories. The efficiency and quality achieved through this transformation offers a new roadmap to industry upgrades.

[Translator 1]: Within the industrial belt, the latest round of our New Quality Supply initiative continues to deliver tangible results. The initiative has been introduced to manufacturing hubs such as Zhangzhou snacks, Zhengzhou skincare, Yiwu accessories, Qingdao porcelain enamel, Zhongshan lighting, and Tianjin chocolate. Merchants and factories are starting to move away from the homogeneous competition of selling whatever others are selling and shifting towards a consumer-centric R&D-driven model. They are uncovering highly specific and differentiated consumer demands on platform and successfully building their own brands. Former screwdriver factories are rapidly growing into automated smart factories. The efficiency and quality achieved through this transformation offers a new roadmap to industry upgrades.

Speaker #2: And merchants and factories are starting to move away from the homogeneous competition of selling whatever others are selling, and shifting towards a consumer-centric, R&D-driven model.

Speaker #2: They are uncovering highly specific and differentiated consumer demands on the platform and successfully building their own brands. Former small driver factories are rapidly growing into automated smart factories.

Speaker #2: The efficiency and quality achieved through this transformation offer a new roadmap to industry upgrades.

Speaker #3: 此外，我们的电商吸金政策也为广大商家带来了新增量。以中山照明产业为例，一款大型的吸顶灯从中山运输到甘肃，原来的运费达到四五十元，在平台兜底二次物流中等费用后，运费已降至10元左右。很多商家在西部地区的订单量呈现了年均30%以上的高速增长。

Jiazhen Zhao: 此外，我们的电商西进政策也为广大商家带来了新增量。以中山照明产业为例，一款大型的吸顶灯从中山运送到甘肃，原来的运费达到四五百元，在平台兜底25%的重量费用后，运费已降至10元左右。很多商家在西部地区的订单量呈现了年均30%以上的高速增长。

Jiazhen Zhao: [Foreign language]

Speaker #2: In addition, our logistics support to remote regions has also unlocked new growth opportunities for a wide range of merchants. Take the lighting industry in Zhongshan as an example.

Gary: Our Logistics Support to Remote Regions has also unlocked new growth opportunities to a wide range of merchants. Take the lighting industry in Zhongshan as an example. Shipping a large ceiling light from Zhongshan to Gansu used to cost 40 to 50 RMB. By covering the transshipping fees for the merchants, the platform is able to cut the shipping cost to around 10 RMB. Many merchants are seeing order volumes to western provinces growing at an annual rate of over 30%.

[Translator 1]: Our Logistics Support to Remote Regions has also unlocked new growth opportunities to a wide range of merchants. Take the lighting industry in Zhongshan as an example. Shipping a large ceiling light from Zhongshan to Gansu used to cost 40 to 50 RMB. By covering the transshipping fees for the merchants, the platform is able to cut the shipping cost to around 10 RMB. Many merchants are seeing order volumes to western provinces growing at an annual rate of over 30%.

Speaker #2: Shipping a large ceiling light from Zhongshan to Gansu used to cost 40 to 50 RMB. By covering the transshipping fees for the merchants, the platform is able to cut the shipping cost to around 10 RMB.

Speaker #2: Many merchants are seeing order volumes to Western provinces growing at an annual rate of over 30%.

Speaker #3: 今年以来，我们的电商吸金的基础上，全力推进快递免费送货入村服务。目前也已初见成效。以河南部分县城为例，我们通过建设县级中转摊、村级代收点等末端基地网络，截至3月份，送货进村在当地县城覆盖的行政村已经超过了七成。中转摊当前日均单量已经接近上万单，不仅让更多的乡村成为了包邮区，也为当地创造了更多的工作岗位，为县域与乡村经济注入了更多活力。

Jiazhen Zhao: 今年以来，我们在电商西进的基础上全力推进快递免费送货入村服务，目前也已初见成效。以河南部分县城为例，我们通过建设县级中转仓、村级代收点等末端基地网络，截至3月份，送货进村在当地县城覆盖的行政村已经超过了七成。中转仓当前日均单量已经接近3万单，不仅让更多的乡村成为了包邮区，也为当地创造了更多的工作岗位，为县域与乡村经济注入了更多活力。

Jiazhen Zhao: [Foreign language]

Gary: Since the beginning of this year, building on our Logistics Support to Remote Regions, we are rolling out the free shipping to villages initiative at full speed. We have achieved some initial results. By taking some counties in Henan as an example, by setting up last-mile delivery networks, such as county-level transfer warehouses and village pickup points, we have expanded the direct-to-village coverage to over 70% of local villages by March. The daily order volume at these transfer warehouses has approached 10,000 orders. This not only brings more rural areas into the free shipping zone, but also creates more local job opportunities, injecting greater vitality into county and rural economies.

[Translator 1]: Since the beginning of this year, building on our Logistics Support to Remote Regions, we are rolling out the free shipping to villages initiative at full speed. We have achieved some initial results. By taking some counties in Henan as an example, by setting up last-mile delivery networks, such as county-level transfer warehouses and village pickup points, we have expanded the direct-to-village coverage to over 70% of local villages by March. The daily order volume at these transfer warehouses has approached 10,000 orders. This not only brings more rural areas into the free shipping zone, but also creates more local job opportunities, injecting greater vitality into county and rural economies.

Speaker #2: Since the beginning of this year, building on our logistics support to remote regions, we are rolling out efficient inter-village initiatives at full speed, and have achieved some initial results.

Speaker #2: Taking some counties in Henan as an example, by setting up last-mile delivery networks such as county-level transport warehouses and village pickup points, we have expanded the direct-to-village coverage to over 70% of local villages by March.

Speaker #2: The daily order volume at these transport warehouses has approached 10,000 orders. This not only brings more rural areas into free shipping zones, but also creates more local job opportunities, injecting greater vitality into county and rural economies.

Speaker #3: 在平台治理上，我们先后推出了多轮治理举措，不断加强平台的治理水平，完善平台的合规能力，持续提升用户和商家的服务体验。在一季度，平台立即推出了20余项适应安全治理的举措，主要包括经资质合规审查、适应广告治理、食品直播管控、食品数字库建设、直播场景合规巡查、完善食品安全信息举报通道、加强技术与人工巡查等。并将违规店铺的处理时效提升至小时级，全方位守护消费者的食品安全。

Jiazhen Zhao: 在平台治理上，我们先后推出了多轮治理举措，不断加强平台的治理水平，完善平台的合规能力，持续提升用户和商家的服务体验。在一季度，平台立即推出了20余项食品安全治理的举措，主要包括经营资质合规审查、食品广告治理、食品直播管控、食品溯源建设、直播产品合规巡查、完善食品安全信息及举报通道、加强技术与人工巡查等，并将违规店铺的处理时效提升至小时级，全方位守护消费者的食品安全。

Jiazhen Zhao: [Foreign language]

Speaker #2: Building platform governance, multiple rounds of initiatives have been rolled out to continuously strengthen platform oversight, enhance our compliance capabilities, and improve the overall experience for our users and merchants.

Gary: Regarding platform governance, multiple rounds of initiatives have been rolled out to continuously strengthen platform oversight, enhance our compliance capabilities, and improve the overall experience for our users and merchants. In Q1, the platform introduced over 22 safety initiatives. These include compliance review of business qualifications, food advertising content moderation, food live streaming monitoring, and building a dedicated food database. We have also enhanced compliance inspection of live streaming, upgraded food safety reporting channels, and strengthened automated and manual monitoring. Further, the turnaround time for handling store violations has been shortened to within hours, safeguarding food safety for consumers.

[Translator 1]: Regarding platform governance, multiple rounds of initiatives have been rolled out to continuously strengthen platform oversight, enhance our compliance capabilities, and improve the overall experience for our users and merchants. In Q1, the platform introduced over 22 safety initiatives. These include compliance review of business qualifications, food advertising content moderation, food live streaming monitoring, and building a dedicated food database. We have also enhanced compliance inspection of live streaming, upgraded food safety reporting channels, and strengthened automated and manual monitoring. Further, the turnaround time for handling store violations has been shortened to within hours, safeguarding food safety for consumers.

Speaker #2: In the first quarter, the platform introduced over 20 food safety initiatives. These include compliance review of business qualifications, food advertising content moderation, food live streaming monitoring, and building a dedicated food database.

Speaker #2: We have also enhanced compliance inspection of live streaming, upgraded food safety reporting channels, and strengthened automated and manual monitoring. Further, the turnaround time for handling store violations has been shortened to within hours.

Speaker #2: Safeguarding food safety for consumers.

Speaker #3: 开局之难在所难免。当困难恰恰是团队自我革命的驱动力，新的发展阶段也是塑造新的团队、新的机制和文化的契机。我们这届团队将迎难而战，踏踏实实埋头苦干，用扎实的行动与可检验的成果，回应外界的关切以期许，不负各方的信任与支持。

Jiazhen Zhao: 开局之难在所难免，但困难恰恰是团队自我革命的驱动力。新的发展阶段也是塑造新的团队、新的机制和文化的契机。我们这支团队将迎难而上，踏踏实实埋头苦干，用扎实的行动与可检验的成果，回应外界的关切与期许，不负各方的信任与支持。

Jiazhen Zhao: [Foreign language]

Speaker #2: Initial challenges are inevitable, but these difficulties will be the very fuel that powers our self-transformation. This new phase of growth also provides a good opportunity to build new teams, new systems, and culture.

Gary: Initial challenges are inevitable, but these difficulties will be the very fuel that powers our self-transformation. This new phase of growth also provides a good opportunity to build new teams, new systems, and culture. Our current leadership team will tackle these challenges head-on, putting our heads down and working diligently. We will answer the public's concerns and expectations with concrete actions and measurable results, and live up to the trust and support that are placed in us by all stakeholders.

[Translator 1]: Initial challenges are inevitable, but these difficulties will be the very fuel that powers our self-transformation. This new phase of growth also provides a good opportunity to build new teams, new systems, and culture. Our current leadership team will tackle these challenges head-on, putting our heads down and working diligently. We will answer the public's concerns and expectations with concrete actions and measurable results, and live up to the trust and support that are placed in us by all stakeholders.

Speaker #2: Our current leadership team will tackle these challenges head-on, putting our heads down and working diligently. We will answer the public's concerns and expectations with concrete actions and measurable results.

Speaker #2: And live up to the trust and support that are placed in us by all stakeholders.

Speaker #3: 下面我把话筒交给陈磊，请他为大家进一步的介绍。

Jiazhen Zhao: 下面我把话筒交给陈磊，请他为大家进一步的介绍。

Jiazhen Zhao: [Foreign language]

Speaker #2: Now I'll hand it over to Chen Lei for further remarks.

Gary: Now, I'll hand it over to Lei Chen for further remarks.

[Translator 1]: Now, I'll hand it over to Lei Chen for further remarks.

Speaker #4: Thank you, Jiazhen, and hello everyone. This is Chen Lei. Thank you all for joining our earnings call today. At last year's Annual General Meeting, we officially put forward a three-year strategy of building another Pinduoduo.

Lei Chen: Thank you, Jiazhen, and hello, everyone. This is Lei Chen. Thank you all for joining our earnings call today. At last year's annual general meeting, we officially put forward a three-year strategy of building another Pinduoduo, focusing the company's strategic priority on investment in the supply chain. In Q1 of this year, a dedicated company was established to launch the first-party brand business, making the first full quarter under the three-year strategy. In Q1, steady progress was made in our first-party brand business. The teams went deep into the industrial belts across different product categories to accelerate the integration of high-quality supply chain resources and to lay the foundation of the first-party business model. Deep collaborations are taking place with merchants and manufacturers across different categories to design and develop first-party brand products tailored to different global markets.

Speaker #4: Focusing the company's strategic priority on investment in the supply chain, in the first quarter of this year, a dedicated company was established to launch the first-party brand business, making the first four quarters under a three-year strategy.

Speaker #4: In the first quarter, steady progress was made in our first-party brand business. The teams went deep into the industrial belt across different product categories to accelerate the integration of high-quality supply chain resources.

Speaker #4: And to lay the foundation of the first-party business model, deep cooperations are taking place with merchants and manufacturers across different categories to decide and develop first-party brand products tailored to different global markets.

Speaker #4: This initiative aimed at raising supply chain standards and driving a transformation and upgrade of the supply. This quarter, our global business continued to grow at a steady pace.

Lei Chen: These initiatives aim at raising supply chain standards and driving the transformation and upgrade of the supply chain. This quarter, our global business continued to grow at a steady pace, opening great market opportunities. At the same time, the continuous investments under the 100 Billion Support Program have yielded valuable insights and firsthand experiences, which will guide the future investment in the supply chain. Since the beginning of this year, we have stepped up our investment in our platform and wider ecosystem through multiple initiatives under the 100 Billion Support Program to enhance the overall experience for our merchants and customers, making agriculture supply chain more efficient and resilient. We help merchants upgrade their business model, extending free shipping coverage to more remote areas and rural regions. The company is consistently delivering value to both the supply and demand sides of our platform.

Speaker #4: Opening great market opportunities. At the same time, the continuous investment under the $100 million support program has yielded valuable insights and first-hand experiences, which will guide future investment in the supply chain.

Speaker #4: Since the beginning of this year, we have stepped up our investment in our platform and wired the ecosystem through multiple initiatives under the 100 billion support program.

Speaker #4: We enhanced the overall experience for our merchants and customers, making the agriculture supply chain more efficient and resilient. We have merchants upgrade their business model, extending free shipping coverage to more remote areas and rural regions. The company is consistently delivering value to both the supply and demand side of our platform.

Speaker #4: In the industrial belt, many merchants are leveraging our platform support to build their own brand. Many merchants have been optimizing their product portfolio to be more focused and curated.

Lei Chen: In the industrial belts, many merchants are leveraging our platform support to build their own brand. Many merchants have been optimizing their product portfolio to be more focused and curated, and transitioning from standard batch manufacturing to demand-driven customization. This transition is enabling them to quickly grow into emerging brands in their respective categories. At the same time, many traditional OEM factories are also moving beyond basic productions, investing in product development, technology, branding, and distribution channelsThat evolving from a volume-driven model to quality-driven, bringing more resilience and value to the supply chain, acting as a new catalyst for the industry transformation. The results from our 100 Billion Support Program demonstrate that brand development is the next major opportunity for supply chain upgrades, which gives us conviction in the first-party brand model. Branded products are only getting started on our global platform, with consumer demands still underserved in different markets.

Speaker #4: And transitioning from standard bench manufacturing to demand-driven customization, this transition is enabling them to quickly grow into emerging brands in their respective categories. At the same time, many traditional OEM factories are also moving beyond basic productions.

Speaker #4: Investing in product development, technology, branding, and distribution channels, we are evolving from a volume-driven model to a quality-driven one. This brings more resilience and value to the supply chain.

Speaker #4: Acting as a new catalyst for industry transformation, the results from our 100 billion support program demonstrate that brand development is the next major opportunity for supply chain upgrades.

Speaker #4: Which gives us conviction in the first-party brand model. Branded products are only getting started on our global platform, with consumer demands still underserved in different markets.

Lei Chen: This creates significant potential in launching branded products in various product categories. Through the first-party brand model, our goal is to systematically incubate a portfolio of globally recognized brands, which in turn will drive transformation of the supply chain. This year has been continued investment in agricultural research. Just recently, we launched the finals of the fifth Smart Agriculture Competition. The four finalist teams have designed and built their own plant factories. Relying on these facilities, the participants will explore strawberry cultivation solutions that maximize yield and quality, minimizing cost, energy use. This year marks the sixth iteration of the Smart Agriculture Competition. Over the years, it has evolved from an industry contest to a testing ground for turning agricultural technology innovations into real-world applications. It has also become an incubator for the next generation of agricultural research talent, making its own contribution to the modernization of agriculture.

Speaker #4: This creates significant potential in launching branded products in various product categories. Through the first-party brand model, our goal is to systematically incubate a portfolio of globally recognized brands, which in turn will drive transformation of the supply chain.

Speaker #4: And this year has seen continued investment in agricultural research. Just recently, we launched the finals of the fifth Smart Agriculture competition. The four finalist teams have designed and built their own plant factories relying on these facilities.

Speaker #4: The participants will explore strawberry cultivation solutions that maximize yield and quality, while minimizing cost and energy use. This year marks the sixth iteration of the Smart Agriculture competition.

Speaker #4: Over the years, it has evolved from an industry contest to a testing ground for turning agricultural technology innovations into real-world applications. It has also become an incubator for the next generation of agricultural research talents, making its own contribution to the modernization of agriculture.

Speaker #4: 2026 marks the new starting point for PDD's next decade. Jiazhen just mentioned we have reflected carefully on our shortcomings and have taken decisive steps to rectify our operations.

Lei Chen: 2026 marks the new starting point for PDD's next decade. Jiazhen just mentioned, we have reflected carefully on our shortcomings and have taken decisive steps to rectify our operations. Restructuring our internal management and strengthening our team's compliance awareness. We are building a foundation that benefits the long-term health growth of the company and the industry. Grounded in gratitude and a deep sense of duty, we move forward with the firm belief that staying true to our roots is the foundation, prerequisite, and a guiding principle for all our future undertakings. It will serve as a compass for the next phase of our journey. We will increase investment in the new business, resolutely advance the first-party brand business, and step up investments in the supply chain.

Speaker #4: We are restructuring our internal management and strengthening our team's compliance awareness. We are building a foundation that benefits the long-term healthy growth of the company and the industry.

Speaker #4: From ingratitude and the deep sense of duty, we move forward with the firm belief that staying true to our roots is the foundational prerequisite and the guiding principle for all our future undertakings.

Speaker #4: And we will serve as a compass for the next phase of our journey. We will increase investment in the new business, resolutely advance the first-party brand business, and step up investments in the supply chain.

Speaker #4: Through these efforts, our objective is to build another Pinduoduo in the next three years and to drive the transformation of the supply chain as a whole.

Lei Chen: Through these efforts, our objective is to build another Pinduoduo in next 3 years and to drive the transformation of the supply chain as a whole. Now let me hand it over to Liu Jun, who will walk you through our financial performance for Q1 2026.

Speaker #4: And now, let me hand it over to Li Jun. We will walk you through our financial performance for the first quarter of 2026.

Speaker #1: Well, thank you, Lei. Hi, everyone. This is John. Let me walk you through our financial performance for the first quarter ended March 31, 2026.

Jun Liu: Well, thank you, Lei. Hi, everyone. This is Jun Liu. Let me walk you through our financial performance for Q1 ended 31 March 2026. In terms of income statement, in Q1, our total revenues increased 11% year over year to RMB 106.2 billion. This was mainly driven by the increase in revenues from transaction services. Revenues from online marketing services and others were RMB 49.9 billion this quarter, compared with RMB 48.7 billion in the same quarter of 2025. Revenues from transaction services were RMB 56.3 billion, up 20% from the same quarter of last year. Moving on to costs and expenses. Our total costs of revenues increased to 15% from RMB 40.9 billion in Q1 2025 to RMB 46.9 billion this quarter, mainly due to increase in fulfillment fees, bandwidth and server costs, and payment processing fees.

Speaker #1: In terms of income statements, in the first quarter, our total revenues increased 11% year over year to around $106.2 billion. This was mainly driven by the increase in revenues from transaction services.

Speaker #1: Revenues from online marketing services and others were around $49.9 billion this quarter, compared with around $48.7 billion in the same quarter of 2025. Revenues from transaction services were around $56.3 billion, up 20% from the same quarter last year.

Speaker #1: Moving on to costs and expenses. Our total costs of revenues increased by 15%, from around $40.9 billion in Q1 2025 to around $46.9 billion this quarter.

Speaker #1: Mainly due to increases in fulfillment fees, bandwidth and server costs, and payment processing fees. On a GAAP basis, total operating expenses this quarter were around $39.8 billion, compared with $38.6 billion in the same quarter of 2025.

Jun Liu: On a GAAP basis, total operating expenses this quarter were RMB 39.8 billion compared with RMB 38.6 billion in the same quarter of 2025. On a non-GAAP basis, total operating expenses increased to RMB 38.3 billion this quarter from RMB 36.5 billion in Q1 2025. Our total non-GAAP operating expenses as a percentage of total revenues this quarter was 36%, compared to 38% in the same quarter last year. Looking into specific expense items, our non-GAAP sales and marketing expenses this quarter were RMB 33.4 billion, compared to RMB 32.8 billion in the same quarter last year. On a non-GAAP basis, our sales and marketing expenses as a percentage of our revenue this quarter was 31% versus 34% for the same quarter last year. Our non-GAAP general and administrative expenses were RMB 872 million versus RMB 735 million in the same quarter of 2025.

Speaker #1: And on a GAAP basis, total operating expenses increased to around $38.3 billion this quarter from around $36.5 billion in Q1 2025. Our total non-GAAP operating expenses as a percentage of total revenues this quarter was 36%, compared to 38% in the same quarter last year.

Speaker #1: Looking into specific expense items, our non-GAAP sales and marketing expenses this quarter were around $33.4 billion, compared to RMB 32.8 billion in the same quarter last year.

Speaker #1: On a non-GAAP basis, our sales and marketing expenses as a percentage of our revenue this quarter was 31%, versus 34% for the same quarter last year.

Speaker #1: Our non-GAAP general and administrative expenses were around $872 million, versus RMB 735 million in the same quarter of 2025. Our research and development expenses were around $4 billion this quarter, on a non-GAAP basis.

Jun Liu: Our research and development expenses were RMB 4 billion this quarter on a non-GAAP basis, up 32% year over year. On a GAAP basis, operating profit for the quarter was RMB 19.6 billion versus RMB 16.1 billion in the same quarter last year, up 22% year over year. Non-GAAP operating profit was RMB 21.1 billion versus RMB 18.3 billion in the same quarter last year. Non-GAAP operating profit margin was 20% this quarter, compared to 19% for the same quarter last year. Net income attributable to ordinary shareholders was RMB 12.5 billion for the quarter, compared to RMB 14.7 billion in the same quarter last year. Basic earnings per ADS was RMB 8.94, and diluted earnings per ADS was RMB 8.48 versus basic earnings per ADS of RMB 10.59 and diluted earnings per ADS of RMB 9.94 in the same quarter of 2025.

Speaker #1: Up 32% year over year. On a GAAP basis, operating profit for the quarter was RMB 19.6 billion, versus RMB 16.1 billion in the same quarter last year.

Speaker #1: Up 22% year over year. Non-GAAP operating profit was RMB 21.1 billion, versus RMB 18.3 billion in the same quarter last year. Non-GAAP operating profit margin was 20% this quarter, compared to 19% for the same quarter last year.

Speaker #1: Net income attributable to ordinary shareholders was RMB 12.5 billion for the quarter, compared to RMB 14.7 billion in the same quarter last year.

Speaker #1: Basic earnings per ADS was RMB 8.94 and diluted earnings per ADS was RMB 8.48, versus basic earnings per ADS of RMB 10.59 and diluted earnings per ADS of RMB 9.94 in the same quarter of 2025.

Speaker #1: Non-GAAP net income attributable to ordinary shareholders was RMB 14.1 billion, versus RMB 16.9 billion in the same quarter last year. Non-GAAP diluted earnings per ADS was RMB 9.51, versus RMB 11.41 in the same quarter of 2025.

Jun Liu: Non-GAAP net income attributable to ordinary shareholders was RMB 14.1 billion versus RMB 16.9 billion in the same quarter last year. Non-GAAP diluted earnings per ADS was RMB 9.51 versus RMB 11.41 the same quarter of 2025. That completes the income statement. Now let me move on to cash flow. Our net cash generated from operating activities was RMB 16.4 billion, compared with RMB 15.5 billion in the same quarter last year. As of 31 March 2026, we had RMB 436.1 billion in cash equivalents, and short-term investments. Thank you. This concludes my prepared remarks.

Speaker #1: That completes the income statements. Now let me move on to cash flow. Our net cash generated from operating activities was RMB 16.4 billion, compared with RMB 15.5 billion in the same quarter last year.

Speaker #1: As of March 31, 2026, we had RMB 436.1 billion in cash, cash equivalents, and short-term investments. And thank you, this concludes my prepared remarks.

Speaker #1: So, thank you, Jun. Next, we'll move on to the Q&A session. For today's Q&A session, Lei, Jiazhen, and Jun will take questions from analysts on the line.

Gary: Thank you, Jun. Next, we'll move on to the Q&A session. Today's Q&A session, Lei, Jiazhen, and Jun will take questions from analysts on the line. We could take a maximum of two questions from each analyst. Lei and Jiazhen will answer questions in Chinese, and we will help translate for convenience purposes. Operator, we're open for questions.

[Company Representative] (PDD Holdings): Thank you, Jun. Next, we'll move on to the Q&A session. Today's Q&A session, Lei, Jiazhen, and Jun will take questions from analysts on the line. We could take a maximum of two questions from each analyst. Lei and Jiazhen will answer questions in Chinese, and we will help translate for convenience purposes. Operator, we're open for questions.

Speaker #1: We could take a maximum of two questions from each analyst. Lei and Jiazhen will answer questions in Chinese, and we'll help translate for convenience purposes.

Speaker #1: Operator, we're open for questions.

Speaker #2: Thank you. If you wish to ask a question, please press star one (*) on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two (*2).

Operator: Thank you. Your first question today comes from Alicia Yap with Citigroup. Please go ahead.

Speaker #2: If you're on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Alicia Yap with Citi Group.

Speaker #2: Please go ahead.

Speaker #3: Thank you, Wanyi and Wan Shanghao. Citi接受我的提问。两个问题。第一个问题是公司一直以来的定位是电商平台。那我们看到上个季度公司发布的这个品牌自营项目，想请公司介绍一下现在这个时点发起品牌自营的主要考虑是什么。然后我们是否应该把它理解为公司整体的一个战略的转型。然后第二个问题是通过第三方数据我们看到公司在全球化业务取得了不错的这个用户增长。接下来这块业务公司的发展重心会是在哪里？然后从用户增长的角度是否已经达到预期？然后公司计划如何留住并且服务好这些消费者？我自己翻译一下。Thanks very much for taking my questions. First is that the company has been positioned as an e-commerce platform, and then we saw the company launch the new first-party brand initiative last quarter.

Joyce Ju: Thank you. Thanks, management, for taking my questions. First is that the company has been positioned as an e-commerce platform. Then we saw the company launch the new first-party brand initiative last quarter. Could management elaborate on the key considerations behind doing this at this current moment? Should we interpret this as a major pivot in the company overall strategy? Number two, second question is from the third-party data that we see, PDD's global business has achieved good user growth. What will be the primary focus for business moving forward? Has user growth met expectation? How does the company plan to retain and serve these consumers well? Thank you.

Alicia Yap: Thank you. Thanks, management, for taking my questions. First is that the company has been positioned as an e-commerce platform. Then we saw the company launch the new first-party brand initiative last quarter. Could management elaborate on the key considerations behind doing this at this current moment? Should we interpret this as a major pivot in the company overall strategy? Number two, second question is from the third-party data that we see, PDD's global business has achieved good user growth. What will be the primary focus for business moving forward? Has user growth met expectation? How does the company plan to retain and serve these consumers well? Thank you.

Speaker #3: So, could management elaborate on the key considerations behind doing this at the current moment? And then, should we interpret this as a major pivot in the company's overall strategy?

Speaker #3: Number two, second question is from the third-party data that we see PDD's global business has achieved good user growth. What will be the primary focus for the business moving forward?

Speaker #3: Has user growth met expectations, and how does the company plan to retain and serve these consumers? Well, thank you.

Speaker #4: 你好，我是张亚珍。关于你的第一个问题，今天以来我们正在围绕着安全合规、社会责任，正在推动内部的组织管理的深刻的重构，也在积极地承担平台企业的社会担当，努力地为用户、产业和社会创造更多的价值。一季度设立的这个专项公司和品牌自营模式的落地，就是我们在这个方向上的一个延伸。

Gary: Hi, this is Jiazhen Zhao. Regarding your first question, since the beginning of this year, we have been driving a deep restructuring for our organization and internal management. These efforts are centered on safety, compliance, and social responsibility, and we are striving to create greater value for our users, the industry, and the society. The formation of the dedicated company in Q1 and the launch of the first-party brand model represents a continuation in this direction.

Jiazhen Zhao: [Foreign language]

[Translator 1]: Hi, this is Jiazhen Zhao. Regarding your first question, since the beginning of this year, we have been driving a deep restructuring for our organization and internal management. These efforts are centered on safety, compliance, and social responsibility, and we are striving to create greater value for our users, the industry, and the society. The formation of the dedicated company in Q1 and the launch of the first-party brand model represents a continuation in this direction.

Speaker #5: Hi, this is Jiazhen Zhao. Regarding your first question, since the beginning of this year, we have been driving a deep restructuring for our organization and internal management.

Speaker #5: And these efforts are centered on safety, compliance, and social responsibility, and we are striving to create greater value for our users, the industry, and society.

Speaker #5: The formation of the dedicated company in the first quarter, and the launch of the first-party brand model, represents a continuation in this direction.

Speaker #4: 那在多年现在产业带的过程中，我们越来越清晰地认识到当前的供应链正在面临的一些挑战。有许多优秀的制造企业受限于人才、信息规模等这些因素的制约，他们还没有完成品牌化的转型，也在面临着同质化的竞争。

Gary: Through years of deep engagement with the industrial belt, it has become clear to us that supply chain is facing certain challenges at the moment, and many good manufacturers, constrained by factors such as talent, information, and scale, have not yet completed their brand transformation and are caught in homogeneous competition作为平台，我们有责任也有能力加深供应链的投入，为行业面临的挑战提出方案。这次设立专项公司就是希望整合平台资源，更加积极深入地参与到产品研发和标准制定，推进品牌自营的新模式。As a platform, we have both the responsibility and the capability to deepen our investment in the supply chain and bring our own solutions to the challenges that is faced by the industry.

Jiazhen Zhao: [Foreign language]

[Translator 1]: Through years of deep engagement with the industrial belt, it has become clear to us that supply chain is facing certain challenges at the moment, and many good manufacturers, constrained by factors such as talent, information, and scale, have not yet completed their brand transformation and are caught in homogeneous competition

Speaker #5: Through years of deep engagement with the industrial belt, it has become clear to us that the supply chain is facing certain challenges at the moment.

Speaker #5: And many good manufacturers, constrained by factors such as talent, information, and scale, have not yet completed their brand transformation and are caught in homogeneous competition.

Speaker #4: 那作为平台，我们有责任，也有能力加深供应链的投入，为行业面临的挑战提出方案。那这次设立专项公司就是希望整合平台资源，更加积极深度地参与到产品研发和标准制定，推进品牌自营的新模式。

Jiazhen Zhao: [Foreign language]

[Translator 1]: As a platform, we have both the responsibility and the capability to deepen our investment in the supply chain and bring our own solutions to the challenges that is faced by the industry. The formation of the dedicated company aims to consolidate platform resources to advance the new first-party brand business model by taking a deeper and more active role in product development and standard setting.

Speaker #5: As a platform, we have both the responsibility and the capability to deepen our investment in the supply chain and bring our own solutions to the challenges that are faced by the industry.

Speaker #5: The formation of the dedicated company aims to consolidate platform resources, to advance the new first-party brand business model, by taking a deeper and more active role in product development and standard setting.

Gary: The formation of the dedicated company aims to consolidate platform resources to advance the new first-party brand business model by taking a deeper and more active role in product development and standard setting. 通过品牌自营, 平台承担起更多的责任和风险, 让我们的产业带伙伴能够专注在高品质的生产和制造上. 我们认为这是推动平台和整个电商生态系统迈向下一个阶段高质量发展的必经之路. 利用平台的规模, 我们希望与供应链制造商共担风险, 共享回报, 为生态系统中的参与者提供确定性. Through the first-party brand model, the platform takes on greater responsibility and also risks, allowing our industrial belt partners to focus on high quality production.

Speaker #4: 那通过品牌自营，平台承担起更多的责任和风险。让我们的产业带伙伴能够专注在高品质的生产和制造上，那我们认为这是推动平台和整个电商生态系统迈向下一个阶段高质量发展的这个必经之路。那利用平台的规模，我们希望以供应链制造商共担风险、共享回报，为生态系统中的参与者提供确定性。

Jiazhen Zhao: [Foreign language]

[Translator 1]: Through the first-party brand model, the platform takes on greater responsibility and also risks, allowing our industrial belt partners to focus on high quality production.

Speaker #5: Through the first-party brand model, the platform takes on greater responsibility and also risks, allowing our industrial belt partners to focus on high-quality production. We believe this is necessary in order to drive the platform and the entire e-commerce ecosystem towards the next stage of high-quality growth.

Gary: We believe this is necessary in order to drive the platform and the entire e-commerce ecosystem towards the next stage of high quality growth.

[Translator 1]: We believe this is necessary in order to drive the platform and the entire e-commerce ecosystem towards the next stage of high quality growth.

Speaker #5: And, leveraging the platform scale, we will take on more risks while sharing rewards with the supply chain manufacturers, providing certainty for the participants across the whole ecosystem.

Gary: Leveraging the platform scale, we will take on more risks while sharing rewards with the supply chain manufacturers, providing certainty for the participants across the whole ecosystem. 我们认为这种确定性能够大幅地提升整个链路的运转效率，并且让工厂有底气去投入产品研发和技术创新，形成正向的循环。在这个复杂多变的市场环境下，我们觉得平台必须承担更多，也做得更深。我们也将继续保持高度的聚焦，继续重担供应链，推动供应链下阶段的高质量发展。We believe this certainty will significantly enhance the overall efficiency of the supply chain and empower factories to reinvest into product development and R&D and driving a positive cycle.

[Translator 1]: Leveraging the platform scale, we will take on more risks while sharing rewards with the supply chain manufacturers, providing certainty for the participants across the whole ecosystem.

Speaker #4: 那我们认为这种确定性能够大幅地提升整个链路的运转效率，并且让工厂有底气去投入产品研发和技术创新，形成正向的循环。那在这个复杂多变的市场环境下，我们觉得平台必须承担更多，也做得更深。那我们也将继续保持高度的聚焦，继续中长供应链，推动供应链下阶段的高质量发展。

Jiazhen Zhao: [Foreign language]

[Translator 1]: We believe this certainty will significantly enhance the overall efficiency of the supply chain and empower factories to reinvest into product development and R&D and driving a positive cycle.

Speaker #5: And we believe this certainty will significantly enhance the overall efficiency of the supply chain and empower factories to reinvest into product development and R&D, and driving a positive cycle.

Speaker #5: And in a complex and fast-changing market environment, the platform must take on greater responsibility and deepen our operations. We will remain highly focused, continue to invest heavily in the supply chain, and drive the next phase of high-quality development for the supply chain.

Gary: In a complex and fast changing market environment, the platform must take on greater responsibility and deepen our operations. We will remain highly focused, continue to invest heavily in the supply chain, and drive the next phase of high quality development for the supply chain.

[Translator 1]: In a complex and fast changing market environment, the platform must take on greater responsibility and deepen our operations. We will remain highly focused, continue to invest heavily in the supply chain, and drive the next phase of high quality development for the supply chain.

Speaker #4: Alicia, 你好，我是陈磊。那我来回答一下你的第二个问题。那么经过近三年的发展，我们的全球化业务应该说在全世界各地获得了不少的消费者的支持。那么随着业务的增长，我们的管理层也在不断地思考，在这样的竞争激烈的全球市场，怎样才能够为消费者找到更加可持续且有差异化的长期价值。我们认为关键还是要回归到电商的本质，回归到供应链能力的建设上。

Lei Chen: 刘总你好，我是陈磊，那我要回答一下你的第二个问题。经过近三年的发展，我们的全球化业务在全世界各地获得了不少的消费者的支持。随着业务的增长，我们的管理层也在不断地思考，在这样的竞争激烈的全球市场，怎样才能够为消费者创造更加可持续且有差异化的长期价值。我们认为关键还是要回归到电商的本质，回归到供应链能力的建设上。Hi, this is Lei Chen.

Lei Chen: [Foreign language]

[Translator 2]: Hi, this is Lei Chen.

Speaker #6: Hi, this is Chen Lei. Let me take your second question. After nearly three years of growth, our global business has received support from many consumers worldwide.

Lei Chen: Let me take your second question. After nearly three years of growth, our global business have received support from many consumers worldwide. As the business grows, management team has also been reflecting on how to create more sustainable and differentiated value for consumers in a highly competitive global market.

[Translator 2]: Let me take your second question. After nearly three years of growth, our global business have received support from many consumers worldwide. As the business grows, management team has also been reflecting on how to create more sustainable and differentiated value for consumers in a highly competitive global market.We believe the key is to return to the roots of e-commerce, which is supply chain capabilities。

Speaker #6: As the business grows, the management team has also been reflecting on how to create more sustainable and differentiated value for consumers in a highly competitive global market.

Speaker #6: We believe the key is to return to the roots of e-commerce, which is supply chain capabilities.

Lei Chen: We believe the key is to return to the roots of e-commerce, which is supply chain capabilities。那么围绕这一关键，我们接下来会从两方面发力。首先，我们将继续推进供应链资源的整合优化，打通各个环节上的瓶颈。这不仅能够丰富平台的商品种类，更加能够实质性地提升消费者的购物体验。在这个过程中，我们将积极地吸纳优质的商家和生态伙伴的加入，让平台融入到各个市场的商业业态中去。Centering on this core priority, we will direct our efforts on two fronts.

Lei Chen: [Foreign language]

[Translator 2]: Centering on this core priority, we will direct our efforts on two fronts.

Speaker #4: 那么围绕这一关键，我们接下来会从两方面发力。那首先我们将继续推进供应链资源的整合，优化。那么打通各个环节上的瓶颈。那这不仅能够丰富平台的商品品类，更加能够实质性地提升消费者的购物体验。那么在这个过程中，我们将积极地吸纳优质的商家和生态伙伴的加入，让平台融入到各个市场的商业业态中去。

Speaker #6: 先从我们的 core priority。We will direct our efforts on two fronts. First, we will advance the integration and optimization of our supply chain, eliminating bottlenecks from end to end.

Lei Chen: First, we will advance the integration and optimization of our supply chain, eliminating bottlenecks from end to end. This will not only expand the platform's product offerings, but also meaningfully enhance the consumer shopping experience.

[Translator 2]: First, we will advance the integration and optimization of our supply chain, eliminating bottlenecks from end to end. This will not only expand the platform's product offerings, but also meaningfully enhance the consumer shopping experience.

Speaker #6: This will not only expand the platform's product offerings, but also meaningfully enhance the consumer shopping experience. Throughout this process, we will actively onboard high-quality merchants and ecosystem partners, integrating the platform into the business ecosystem of various markets.

Lei Chen: Throughout this process, we will actively onboard high quality merchants and ecosystem partners, integrating the platform into the business ecosystem of various markets。其次，我们将深化地发展品牌自营的模式，特别是在全球市场，我们尤其是要通过品牌化的建设，增强消费者对于平台商品优质优价的信赖。与此同时，品牌化的发展也是进一步提升商品品质标准的重要的途径，让我们能够在日益复杂的监管环境中，进一步提升平台的合规能力。Second, we will deepen the development of the first-party brand model.

[Translator 2]: Throughout this process, we will actively onboard high quality merchants and ecosystem partners, integrating the platform into the business ecosystem of various markets。

Lei Chen: [Foreign language]

[Translator 2]: Second, we will deepen the development of the first-party brand model.

Speaker #4: 那么其次，我们将深化的发展品牌自营的模式。特别是在全球市场，尤其是要通过品牌化的建设，增强消费者对于平台商品优质、优价的用户心智。与此同时，品牌化的发展也是进一步提升商品品质标准的这样重要途径。让我们能够在日益复杂的监管环境中进一步提升平台的合规能力。

Speaker #6: Second, we will deepen the development of the first-party brand model. In a global market, brands are particularly crucial in strengthening consumers' mindshare of the value proposition of great quality and great value.

Lei Chen: In the global market, brands are particularly crucial in strengthening consumers' mindshare of the value proposition of great quality and great value.

[Translator 2]: In the global market, brands are particularly crucial in strengthening consumers' mindshare of the value proposition of great quality and great value.

Speaker #6: At the same time, brand development is also an important pathway to raising product quality standards, enabling us to strengthen the platform's compliance capabilities in an increasingly complex regulatory environment.

Lei Chen: At the same time, brand development is also an important pathway to raising product quality standards, enabling us to strengthen the platform's compliance capabilities in an increasingly complex regulatory environment那么电商行业竞争其实是非常激烈的。我们看消费者在不同的平台之间转化成本很低。你们大家看得到的，就是平台间通过营销的手段争取消费者。但是更长期、更可持续的竞争优势还是来自于那些看不见的、底层的供应链能力。The e-commerce industry is highly competitive with low switching costs for consumers.

[Translator 2]: At the same time, brand development is also an important pathway to raising product quality standards, enabling us to strengthen the platform's compliance capabilities in an increasingly complex regulatory environment

Lei Chen: [Foreign language]

Speaker #4: 那么电商行业竞争其实是非常激烈的。我们看消费者在不同的平台之间转化成本很低。你们大家看得到的是平台间通过营销的手段争取消费者，但是更长期、更可持续的竞争优势还是来自于这些看不见的、底层的供应链能力。

[Translator 2]: The e-commerce industry is highly competitive with low switching costs for consumers. While people often see platforms winning over consumers through marketing, the true driver of long-term and sustainable competitive advantage lies in the supply chain capabilities that are often unseen.

Speaker #6: The e-commerce industry is highly competitive, with low switching costs for consumers. While people often see platforms winning over consumers through marketing, the true driver of long-term and sustainable competitive advantage lies in the supply chain capabilities that are often unseen.

Lei Chen: While people often see platforms winning over consumers through marketing, the true driver of long-term and sustainable competitive advantage lies in the supply chain capabilities that are often unseen. 那么工业的投入也是一项长期的系统的工程。无论我们短期面临怎样的波动或者挑战，都会不忘初心，持续地推动团队、业务流程、组织管理的深刻的变革。我们希望是以切实的供应链投入推动全球化业务下一个阶段的增长。谢谢。Supply chain investment is a long-term, systematic undertaking.

Speaker #4: 那么供应链的投入也是一项长期的、系统的工程。那么无论我们短期面临怎样的波动或者挑战，都会不忘初心。那么持续地推动团队、业务流程、组织管理的深刻的变革。我们希望是以切实的供应链投入推动全球化业务下一个阶段的增长。谢谢。

Lei Chen: [Foreign language]

[Translator 2]: Supply chain investment is a long-term, systematic undertaking.

Speaker #6: Supply chain investment is a long-term, systematic undertaking. Regardless of the challenges we may face, we will stay true to our roots and continue to drive deep transformations across our teams, business processes, and organizational management.

Lei Chen: Regardless of the challenges we may face, we will stay true to our roots, continue to drive deep transformations across our teams, business process, and organizational management, and continue to grow our global business with tangible supply chain improvements. Thank you.

[Translator 2]: Regardless of the challenges we may face, we will stay true to our roots, continue to drive deep transformations across our teams, business process, and organizational management, and continue to grow our global business with tangible supply chain improvements. Thank you.

Speaker #6: And continue to grow our global business with tangible supply chain improvements. Thank you.

Speaker #4: Thank you.

Alicia Yap: Thank you.

Speaker #3: All right. Thank you, Alicia. Corporate let's move on to the next analyst on the line.

Gary: All right. Thank you, Alicia. Operator, let's move on to the next analyst on the line.

[Company Representative] (PDD Holdings): All right. Thank you, Alicia. Operator, let's move on to the next analyst on the line.

Speaker #7: Thank you. Your next question comes from Ronald Kang with Goldman Sachs. Please go ahead.

Operator: Thank you. Your next question comes from Ronald Keung with Goldman Sachs. Please go ahead.

Speaker #8: Hey, 大家好。那我有两个提问。第一，就我们看到公司宣布了这个三年1,000亿的品牌自营投资计划。那我的问题是，公司计划这些投入主要会在哪些方向？那预计什么时候我们会开始能看到反映在公司的财务报表中？那市场应该，我们应该怎么去思考这个战略可能带来的一个增量的空间？第二，就想问我们看到这个整体的消费大盘，这个社零总额在一季度的增长也不错，线上这个渗透率其实还在提升。那在这个背景下，我们广告收入这个季度增速有所放缓，那想请管理层介绍一下我们接下来平台GMV和广告收入的这个增量，可能是有哪些驱动？那么让我翻译一下。 Thank you very much for taking my question. Two questions. One is we note the announcement of the three-year RMB 100 billion investment plan for the first-party brand initiative.

Ronald Keung: 谢谢。Zhao Jiazhen和Gary。我有两个提问。第一，我们看到公司宣布了三年1000亿元的品牌自营投资计划，我的问题是，公司计划这些投入主要会在哪些方向？预计什么时候我们会开始能看到反应在这个公司的财务发表中？我们应该怎么去思考这个战略可能带来的一个增量的空间？第二，我们看到整体的消费大盘，社零数在一季度增长也不错，线上渗透率其实还在提升。在这个背景下，我们广告收入这个季度增速有所放缓。想请管理层介绍一下，接下来平台GMV和广告收入的增量可能是有哪些驱动？让我翻译一下。Thank you very much for taking my question.

Ronald Keung: [Foreign language]

[Translator 1]: Thank you very much for taking my question.

Ronald Keung: Two questions. One is we note the announcement of the three-year CNY 100 billion investment plan for the first party brand initiative. My question is, in which areas do the company plan to allocate these investments? When can we expect this to begin to reflect in the company's financials? How should we evaluate the incremental growth potential driven by this strategy? My second question is, we've seen from the National Bureau of Statistics consumption growth in Q1 was quite solid, and online penetration rate for physical goods is still rising. In that backdrop, we see the online marketing service growth rate slowed in Q1 for PDD. Could you outline just where the future growth for GMV and online marketing services from here? Thank you.

[Translator 1]: Two questions. One is we note the announcement of the three-year CNY 100 billion investment plan for the first party brand initiative. My question is, in which areas do the company plan to allocate these investments? When can we expect this to begin to reflect in the company's financials? How should we evaluate the incremental growth potential driven by this strategy? My second question is, we've seen from the National Bureau of Statistics consumption growth in Q1 was quite solid, and online penetration rate for physical goods is still rising. In that backdrop, we see the online marketing service growth rate slowed in Q1 for PDD. Could you outline just where the future growth for GMV and online marketing services from here? Thank you.

Speaker #8: So my question is, in which areas does the company plan to allocate these investments? When can we expect this to begin to reflect in the company's financials?

Speaker #8: And how should we evaluate the incremental growth potential driven by the strategy? My second question is, we've seen from the National Bureau of Statistics that consumption growth in the first quarter was quite solid.

Speaker #8: Online penetration rate for fiscal goods is still rising. So in that backdrop we see the online marketing service growth rate slowed in the first quarter for PDD.

Speaker #8: So could you outline just where the future growth for GMV and online marketing services from here? Thank you.

Speaker #3: 你好。我是在针对你的第一个问题，首先这个品牌建设涉及到多方面的能力，从产品设计、标准制定、协同制造，再到这个品控、仓储履约、法律合规、售后等等整条的链路。那我们觉得这个每个环节都是要要求长期耐心的投入。那不少产业带中的这个中小的制造企业，他们在这个量产交付和成本控制方面确实做得很极致，但是因为缺乏这个品牌化的能力，到现在还没有完成价值链上的跃迁。 This is Jiazhen Zhao. To your first question, first brand building involves a range of capabilities from product design, standard setting, manufacturing to quality control, warehousing and fulfillment, legal and compliance, customer service and so on.

Jiazhen Zhao: 你好，我是赵震。针对你的第一个问题，首先品牌建设涉及到多方面的能力，从产品设计、标准制定、协同制造，再到品控、仓储履约、法律合规、售后等等整条的链路。我们觉得每个环节都是要求长期耐心的投入。不少产业带中的中小的制造企业，他们在量产交付和成本控制方面确实做得很极致，但是因为缺乏品牌化的能力，到现在还没有完成价值链上的跃迁。Hi, this is Jiazhen Zhao.

Jiazhen Zhao: [Foreign language]

[Translator 1]: Hi, this is Jiazhen Zhao.

Jiazhen Zhao: To your first question. First, brand building involves a range of capabilities from product design, standard setting, manufacturing to quality control, warehousing and fulfillment, legal compliance, customer service, and so on. Each requires long-term and patient investment. Many SME manufacturers in the industrial belt are very good at mass production and cost control.

[Translator 1]: To your first question. First, brand building involves a range of capabilities from product design, standard setting, manufacturing to quality control, warehousing and fulfillment, legal compliance, customer service, and so on. Each requires long-term and patient investment. Many SME manufacturers in the industrial belt are very good at mass production and cost control. However, due to a lack of branding capabilities, they have not yet moved up the value chain。

Speaker #3: And each requires long-term and patient investment. And many SME manufacturers in the industrial belt are very good at mass production, and cost control. However, due to a lack of branding capabilities, they have not yet moved up the value chain.

Jiazhen Zhao: However, due to a lack of branding capabilities, they have not yet moved up the value chain。通过设立专项公司，我们正在深度地整合平台的技术、规模与组织能力，通过强化底层能力的建设来补齐产业链品牌化的短板。在品牌自营模式下，平台将销量的确定性直接带给了产业链，让制造端有底气去投入产品研发和工艺创新，能够大幅地降低试错成本，还有品牌化过程中的不确定性。And through the creation of the dedicated company, we are leveraging the platform's strength in technology, scale and organization to build the foundational capabilities that are required to help our supply chain partners in developing brands.

Jiazhen Zhao: [Foreign language]

[Translator 1]: And through the creation of the dedicated company, we are leveraging the platform's strength in technology, scale and organization to build the foundational capabilities that are required to help our supply chain partners in developing brands.

Speaker #8: 那通过设立专项公司，我们正在深度地整合平台的技术规模与组织能力。通过强化底层能力的建设，来补齐产业链品牌化的短板。在品牌自营模式下，平台将销量的确定性直接带给了产业链。让制造端有底气去投入产品研发和供应创新，能够大幅地降低市售成本，还有品牌化过程中的不确定性。

Speaker #3: Through the creation of the dedicated company, we are leveraging the platform's strength in technology, scale, and organization to build a foundational capabilities that are required to help our supply chain partners in brand in developing brands.

Speaker #3: And under our first-party brand model, we provide a certainty of sales volume to the supply chain, empowering the manufacturers to confidently invest in R&D and process innovation, and significantly cutting down the cost and risks that are inherent in innovation and brand building.

Jiazhen Zhao: Under our first party brand model, we provide a certainty of sales volume to the supply chain, empowering the manufacturers to confidently invest in R&D and process innovation, and significantly cutting down the cost and risks that are inherent.

[Translator 1]: Under our first party brand model, we provide a certainty of sales volume to the supply chain, empowering the manufacturers to confidently invest in R&D and process innovation, and significantly cutting down the cost and risks that are inherent.

Gary: 在 innovation and brand building.

[Translator 1]: 在 innovation and brand building.

Speaker #8: 那我们相信这件事情由平台来做，是正确的战略方向。那因为平台在技术规模、市场趋势等方面的优势，让我们具备了承担并且消化这些不确定性的能力。通过将制造端的风险内化为平台的责任，我们在用确定性为供应链赋能，为行业生态创造一个多方共赢的局面。那就是制造端能够摆脱同质化的竞争，专注品质升级。消费者用合理的价格能够享受到品质的商品，平台也能进一步地深化供应链的根基，最终实现平台的再造。

Jiazhen Zhao: 我们相信这件事情由平台来做是正确的战略方向。因为平台在技术、规模、市场趋势等方面的优势，让我们具备了承担并且消化这些不确定性的能力。通过将制造端的风险内化为平台的责任，我们在用确定性为供应链赋能，为行业生态创造一个多方共赢的局面。那就是制造端能够摆脱同质化的竞争，专注品质升级，消费者能用合理的价格享受到品质的商品，平台也能进一步地深化工业的根基，最终实现平台的再造。

Jiazhen Zhao: [Foreign language]

Speaker #3: We believe it is the right strategic direction for the platform to step in and to play this role. Our advantages in technology, scale, and market insights allow us to take on and digest these uncertainties.

Gary: We believe it is the right strategic direction for the platform to step in and to play this role. Our advantages in technology, scale, and market insights allow us to take on and digest these uncertainties. By internalizing some of the risks faced by the manufacturers, we empower the supply chain with certainty, creating a win-win situation for the industry ecosystem. The manufacturers are enabled to break free from the homogeneous competition and focus on quality upgrades. Consumers can enjoy quality products at reasonable prices, and the platform further deepens its supply chain capabilities, enabling the reinvention of the platform.

[Translator 1]: We believe it is the right strategic direction for the platform to step in and to play this role. Our advantages in technology, scale, and market insights allow us to take on and digest these uncertainties. By internalizing some of the risks faced by the manufacturers, we empower the supply chain with certainty, creating a win-win situation for the industry ecosystem. The manufacturers are enabled to break free from the homogeneous competition and focus on quality upgrades. Consumers can enjoy quality products at reasonable prices, and the platform further deepens its supply chain capabilities, enabling the reinvention of the platform.

Speaker #3: By internalizing some of the risks faced by the manufacturers, we empower the supply chain with certainty, creating a win-win situation for the industry ecosystem.

Speaker #3: Manufacturers are enabled to break free from homogeneous competition and focus on quality upgrades. Consumers can enjoy quality products at reasonable prices, and the platform further deepens its supply chain capabilities, enabling the reinvention of the platform.

Speaker #8: 回顾我们创立以来的发展轨迹，从最早的农产品扇形到后来的多多买菜、全球化业务，还有千亿扶持计划，平台始终在看到问题和解决问题的过程中，不断加深在供应链的参与度。如果我们想要从根本上解决平台商家同质化竞争的挑战，就必须承担起更多的责任，推动更深的供应链整合。我们认为这是平台生态演进的必经之路。 Looking back at our history from the early initiative of improving agriculture supply chain to later efforts such as total grocery, the global business, and the 100 billion support program, the platform has continuously deepened its operations in the supply chain through the process of identifying and solving problems.

Jiazhen Zhao: 回顾我们创立以来的发展轨迹，从最早的农产品上行到后来的多多买菜、全球化业务，还有千亿扶持计划，平台始终在看到问题和解决问题的过程中，我们在不断地加深在供应链的参与度。如果我们想要从根本上能够解决平台商家同质化竞争的挑战，就必须承担起更多的责任，推动更深的供应链整合。我们认为这是平台生态演进的必经之路。

Jiazhen Zhao: [Foreign language]

Gary: Looking back at our history from the early initiative of improving agriculture supply chain to later efforts such as Duoduo Grocery, the global business, and the 100 Billion Support Program. The platform has continuously deepened its operations in the supply chain through the process of identifying and solving problems. If we are to fundamentally address the challenge of homogeneous competition that is faced by platform merchants, we must take on greater responsibility and enable deeper supply chain integration. We believe this is an inevitable path in the evolution of the platform ecosystem.

[Translator 1]: Looking back at our history from the early initiative of improving agriculture supply chain to later efforts such as Duoduo Grocery, the global business, and the 100 Billion Support Program. The platform has continuously deepened its operations in the supply chain through the process of identifying and solving problems. If we are to fundamentally address the challenge of homogeneous competition that is faced by platform merchants, we must take on greater responsibility and enable deeper supply chain integration. We believe this is an inevitable path in the evolution of the platform ecosystem.

Speaker #8: And if you are to fundamentally address the challenge of homogeneous competition that is faced by platform merchants, we must take on greater responsibility and enable deeper supply chain integration.

Speaker #8: And we believe this is an inevitable path in the evolution of the platform ecosystem. 今年是平台新十年高质量发展的开局之年。那我们将以此为契机，深化组织和内部的管理变革，以重新出发的姿态，持续地聚焦供应链投入、品牌自营是我们几个月前宣布重头供应链升级战略后落地的首个战略举措。随着多个供应链项目的推进，我们相信未来三年我们将有机会再造一个拼多多。

Jiazhen Zhao: 今年是平台新十年高质量发展的开局之年，我们将以此为契机，深化组织和内部的管理变革，以重新出发的姿态持续地聚焦供应链投入。品牌自营是我们几个月前宣布重投供应链升级战略后落地的首个战略举措。随着多个供应链项目的推进，我们相信未来三年我们将有机会再造一个拼多多。

Jiazhen Zhao: [Foreign language]

Speaker #3: And this year kicks off a new decade of high-quality development. We will start afresh, taking this opportunity to reshape our organization and internal management, and focus on building supply chain capabilities.

Gary: This year kicks off a new decade of high quality development. We will start afresh, taking this opportunity to reshape our organization and internal management, and focus on building supply chain capabilities. The first-party brand initiative is the first strategic move that we implemented after announcing the strategy of heavy investment in supply chain a few months ago. As we roll out more supply chain initiatives, we believe we will have the opportunity to build another Pinduoduo over the next three years.

[Translator 1]: This year kicks off a new decade of high quality development. We will start afresh, taking this opportunity to reshape our organization and internal management, and focus on building supply chain capabilities. The first-party brand initiative is the first strategic move that we implemented after announcing the strategy of heavy investment in supply chain a few months ago. As we roll out more supply chain initiatives, we believe we will have the opportunity to build another Pinduoduo over the next three years.

Speaker #3: And the first-party brand initiative is the first strategic move that we implemented after announcing the strategy of heavy investment in supply chain a few months ago.

Speaker #3: As we roll out more supply chain initiatives, we believe we'll have the opportunity to build another Pinduoduo over the next three years.

Speaker #8: 关于你的第二个问题，那线上的零售市场目前依然充满了潜力。我们也觉得我们能做的事情还有很多。但是与此同时，行业已经全面进入了高质量发展的中间期。我们觉得平台只有主动的作为，深度的赋能供应链，那才有可能去推动行业的长期的健康增长。

Jiazhen Zhao: 关于你的第二个问题，线上的零售市场目前依然充满了潜力，我们也觉得我们能做的事情还有很多。但是与此同时，行业已经全面进入了高质量发展的攻坚期，我们觉得平台只有主动地作为，深度地赋能供应链，才有可能去推动行业的长期的健康增长。

Jiazhen Zhao: [Foreign language]

Speaker #3: And to your second question, the online retail market continues to hold great potential, and there is much more that we can do. However, at the same time, the industry has entered a critical phase of high-quality development.

Gary: To your second question, the online retail market continues to hold great potential, and there is much more that we can do. However, at the same time, the industry has entered a critical phase of high-quality development, and the only way to realize sustainable and healthy industry growth is to take the necessary initiatives to deeply empower the supply chain.

[Translator 1]: To your second question, the online retail market continues to hold great potential, and there is much more that we can do. However, at the same time, the industry has entered a critical phase of high-quality development, and the only way to realize sustainable and healthy industry growth is to take the necessary initiatives to deeply empower the supply chain.

Speaker #3: The only way to realize sustainable and healthy industry growth is to take the necessary initiatives to deeply empower the supply chain.

Speaker #8: 以这个判断，我们去年四月推出了千亿扶持计划之后，紧接着启动了一系列的供应链的扶持专项。那我们的团队也深入到了全国各大的农产区产业带，通过解决供应链的实际问题，那来推动行业和平台的进一步的增长。

Jiazhen Zhao: 基于这个判断，我们去年4月推出了千亿扶持计划之后，紧接着启动了一系列的供应链的扶持项目。我们的团队也深入到了全国各大的农产区、产业带，通过解决供应链的实际问题来推动行业和平台的进一步的增长。

Jiazhen Zhao: [Foreign language]

Speaker #3: And based on this understanding, following the launch of the $100 billion support program in April last year, we rolled out a series of supply chain support initiatives. Our team has gone deep into the agricultural regions and industrial belts, solving practical supply chain issues and unlocking further growth for both the industry and the platform.

Gary: Based on this understanding, following the launch of the 100 Billion Support Program in April last year, we rolled out a series of supply chain support initiatives. Our team has gone deep into the agricultural regions and industrial belts. By solving practical supply chain issues, we are unlocking further growth for both the industry and the platform.

[Translator 1]: Based on this understanding, following the launch of the 100 Billion Support Program in April last year, we rolled out a series of supply chain support initiatives. Our team has gone deep into the agricultural regions and industrial belts. By solving practical supply chain issues, we are unlocking further growth for both the industry and the platform.

Speaker #8: 比如说我们的团队正在把会计定存的春季的会计驿站升级为多功能融合的数字乡村微综合体。那这个新业态既是村民收集包裹的自提点，也是当地特色农产品扇形的最初一公里的枢纽。那它帮助农户一站式地解决打包基地等需求，也让更多优质的农产品走向市场。那这样我们通过直接就业和农产品外销，这些微综合体为当地的居民带来了增收增利。

Jiazhen Zhao: 比如说我们的团队正在把快递进村的村级的快递驿站升级为多功能融合的数字乡村微综合体。这个新业态既是村民收集包裹的聚集点，也是当地特色农产品上行的最初一公里的枢纽。它帮助农户一站式地解决打包、寄递等需求，也能让更多优质的农产品走向市场。这样我们通过直接就业和农产品外销，这些微综合体为当地的居民带来了增收增利。

Jiazhen Zhao: [Foreign language]

Speaker #3: And for instance, our team is in the process of upgrading the village pickup point to a multifunctional digital rural microhub. And this new model operates as both a Puzzel pickup point and a first-mile logistics node for the distribution of local specialty agricultural products.

Gary: For instance, our team is in the process of upgrading the village pickup point to a multifunctional digital rural micro hub. This new model operates as both parcel pickup point and a first-mile logistics node for the distribution of local specialty agricultural products. By giving farmers a one-stop solution for packaging and shipping, we are actually helping quality agricultural goods reach the broader market. Through the creation of direct employment and sale of agricultural products, these micro hubs are increasing the income of local communities.

[Translator 1]: For instance, our team is in the process of upgrading the village pickup point to a multifunctional digital rural micro hub. This new model operates as both parcel pickup point and a first-mile logistics node for the distribution of local specialty agricultural products. By giving farmers a one-stop solution for packaging and shipping, we are actually helping quality agricultural goods reach the broader market. Through the creation of direct employment and sale of agricultural products, these micro hubs are increasing the income of local communities.

Speaker #3: And by giving farmers a one-stop solution for packaging and shipping, we're actually helping quality agricultural goods reach broader markets. And through the creation of direct employment and sale of agricultural products, these microhubs are increasing the income of local communities.

Speaker #8: 那再比如说，平台的电商吸金的专项团队，通过搭建中转仓，并且由平台承担物流中转费的方式，将偏远地区消费者纳入这个包邮区。通过实实在在的供应链的改造，将部分偏远地区的物流成本降低了接近八成，拉平了不同地区的运营成本，不少商家单单是在物流履约上就节约了上百万元。平台通过这些真金白银的投入，拉近了供需两端的距离，也创造了更多的有效需求。

Jiazhen Zhao: 再比如说平台的电商西进的专项团队，通过搭建中转仓，并且由平台承担物流中转费的方式，将偏远地区消费者纳入这个包邮区，通过实实在在的供应链的改造，将部分偏远地区的物流成本降低了接近八成，拉平了不同地区的运营成本。不少商家单单是在物流履约上就节约了上百万元。平台通过这些真金白银的投入，拉近了供需两端的距离，也创造了更多的有效需求。

Jiazhen Zhao: [Foreign language]

Speaker #3: And another example is the logistics support for remote regions. Our team is bringing more consumers into remote from remote areas into the free shipping zones, by creating transit warehouses and by covering the transshipping cost.

Gary: Another example is the Logistics Support to Remote Regions. Our team is bringing more consumers from remote areas into the free shipping zones by creating transit warehouses and by covering the free shipping costs. Through tangible supply chain improvements like these, the logistics costs for shipping to some remote regions have been reduced by nearly 80%, leveling the operational costs between the different regions. Many merchants are saving millions of RMB in shipping costs alone. With these substantial investments, the platform is bridging the gap between supply and demand and creating more effective demand.

[Translator 1]: Another example is the Logistics Support to Remote Regions. Our team is bringing more consumers from remote areas into the free shipping zones by creating transit warehouses and by covering the free shipping costs. Through tangible supply chain improvements like these, the logistics costs for shipping to some remote regions have been reduced by nearly 80%, leveling the operational costs between the different regions. Many merchants are saving millions of RMB in shipping costs alone. With these substantial investments, the platform is bridging the gap between supply and demand and creating more effective demand.

Speaker #3: And through tangible supply chain improvements like these, the logistics cost for shipping to some remote regions has been reduced by nearly 80%, and this is leveling the operational costs between the different regions.

Speaker #3: Many merchants are saving millions of RMB in shipping costs alone. And with these substantial investments, the platform is bridging the gap between supply and demand, and creating more effective demand.

Speaker #8: 像这样的例子还有很多。那接下来我会继续通过这样一个一个扎实落地的供应链项目，为用户产业和社会创造更多的正向价值。

Jiazhen Zhao: 像这样的例子还有很多，接下来我会继续通过这样一个一个扎实落地的供应链项目，为用户、产业和社会创造更多的正向价值。

Jiazhen Zhao: [Foreign language]

Speaker #3: And these are just a few examples. And looking ahead, we will continue to work on concrete supply chain projects and through these initiatives, deliver more value to our users, the industries, and the society.

Gary: These are just a few examples. Looking ahead, we will continue to work on concrete supply chain projects and through these initiatives, deliver more value to our users, the industries, and the society.

[Translator 1]: These are just a few examples. Looking ahead, we will continue to work on concrete supply chain projects and through these initiatives, deliver more value to our users, the industries, and the society.

Speaker #8: 谢谢管理层。

Ronald Keung: 谢谢，王宁总。

Ronald Keung: [Foreign language]

Speaker #3: Okay. Thank you, Ronald. Operator, let's move on to the next analyst on the line.

Gary: Okay, thank you, Ronald. Operator, let's move on to the next analyst on the line.

[Translator 1]: Okay, thank you, Ronald.Operator, let's move on to the next analyst on the line.

Speaker #1: Thank you. Your next question comes from Joyce Chu with Bank of America. Please go ahead.

Operator: Thank you. Your next question comes from Joyce Ju with Bank of America. Please go ahead.

Speaker #2: Lei Zhaozhen, Joe, 还有凯瑞，晚上好。感谢接受我的提问。我有两个问题。第一是我们看到电商行业现在不断涌现一些新的业务模式，包括直播电商、即时零售这些。不知道公司怎么看这些新模式对整个行业的影响，公司在这些领域有没有一些布局的考虑？我的第二个问题是，在一季度我们看到多多的营销费用的占比是有所波动的，整体利润率也稍有下滑。从长期看，我们应该怎么去理解这些利润率的波动，还有怎么去预期公司的稳态利润率水平？Let me translate myself。First, we have seen the continuous emergence of new e-commerce models in e-commerce industry, including live streaming commerce and quick commerce.

Joyce Ju: 陈磊，家珍总，还有Gary，晚上好，感谢接受我的提问。我有两个问题，第一是我们看到电商行业现在不断涌现一些新的业务模式，包括直播电商，即时零售这些，不知道公司怎么看这些新模式对整个行业的影响，公司在这些领域有没有一些布局的考虑？我的第二个问题是在Q1，我们看到多多的营销费用的占比是有所波动的，整体利润率也稍有下滑。从长期看，我们应该怎么去理解这些利润率的波动，还有怎么去预期公司的稳态利润率水平？ First, we have seen the continuous emergence of new e-commerce models in the e-commerce industry, including live stream e-commerce and quick commerce. How does the company assess the impact of these new models on the broader industry landscape?

Joyce Ju: [Foreign language]

[Translator 3]: First, we have seen the continuous emergence of new e-commerce models in the e-commerce industry, including live stream e-commerce and quick commerce. How does the company assess the impact of these new models on the broader industry landscape?

Speaker #2: How does the company assess the impact of these new models on the broader industry landscape? And are there any plans for the company to expand into these areas?

Joyce Ju: Are there any plans of the companies to expand into these areas? Second is, in Q1, we saw a slight increase in sales and marketing expense ratio of the company alongside a fluctuation in overall profit margin. How should we expect margin trends going forward? What will be a reasonable expectation as to those steady state profit margin level? 谢谢.

[Translator 3]: Are there any plans of the companies to expand into these areas? Second is, in Q1, we saw a slight increase in sales and marketing expense ratio of the company alongside a fluctuation in overall profit margin. How should we expect margin trends going forward? What will be a reasonable expectation as to those steady state profit margin level? 谢谢.

Speaker #2: Second is, in the first quarter, we saw a slight increase in the sales and marketing expense ratio of the company. Alongside a fluctuation in the overall profit margin, how should we expect margin trends going forward, and what will be a reasonable expectation as door-to-door steady-state profit margin level?

Speaker #2: 谢谢。

Speaker #3: 你好，我是赛亚真。那电商行业相比传统的零售，消费者的切换的成本更低。那因此这个演变的速度会更快，竞争也会更加的激烈。我们管理层也在密切地关注新技术的发展动态。

Jiazhen Zhao: 你好，我是家珍。那电商行业相比传统的零售，消费者的切换的成本更低，因此这个演变的速度会更快，竞争力也会更加的激烈。我们管理层也在密切地关注新技术的发展动态。

Jiazhen Zhao: [Foreign language]

Speaker #4: Hi, this is Jiazhen Zhaozhen. Compared to traditional retail, e-commerce has much lower switching costs which leads to faster industry evolution and more intense competition.

Gary: Hi, this is Jiazhen Zhao. Compared to traditional retail, e-commerce has much lower switching costs, which leads to faster industry evolution and more intense competition. The management team is also closely monitoring the development of new technologies.

[Translator 1]: Hi, this is Jiazhen Zhao. Compared to traditional retail, e-commerce has much lower switching costs, which leads to faster industry evolution and more intense competition. The management team is also closely monitoring the development of new technologies.

Speaker #4: The management team is also closely monitoring the development of new technologies.

Speaker #3: 但无论前端的模式怎么创新，那回归到电商的本质，消费者的核心诉求始终是跟丰富的选择、更有竞争力的价格和更好的服务。正如我们刚才所说的，不同的电商平台或者业务模式之间的竞争，归根结底我们认为都是底层供应链能力的竞争。

Jiazhen Zhao: 但无论前端的模式怎么创新，那回归到电商的本质，消费者核心诉求始终是更丰富的选择，更有竞争力的价格和更好的服务。正如我们刚才所说的，不同的电商平台或者业务模式之间的竞争，归根结底我们认为都是底层供应链能力的竞争。

Jiazhen Zhao: [Foreign language]

Speaker #4: And, however, regardless of the innovations in front-end business models, the core needs of consumers remain unchanged. We have wider product selection, competitive prices, and better services.

Gary: However, regardless of the innovations in front-end business models, the core needs of consumers remain unchanged, which are wider product selection, competitive prices, and better services. As we mentioned earlier, competition among the different e-commerce platforms or business models ultimately boils down to competition in the underlying supply chain capabilities.

[Translator 1]: However, regardless of the innovations in front-end business models, the core needs of consumers remain unchanged, which are wider product selection, competitive prices, and better services. As we mentioned earlier, competition among the different e-commerce platforms or business models ultimately boils down to competition in the underlying supply chain capabilities.

Speaker #4: As we mentioned earlier, competition among the different e-commerce platforms or business models ultimately boils down to competition in the underlying supply chain capabilities.

Speaker #3: 那这也是为什么我们去年底明确了聚焦重头供应链升级的集团战略方向。那在这个战略指导下，我们正在稳步地推进各项供应链的投入。这里面就包括了品牌自营业务。那目前专项团队已经深入到各大的产业带，加快整合优质的供应链资源，搭建品牌自营的业务体系。我们也正在与制造端深度的合作，设计和研发面向全球不同市场的自营品牌产品，全面地提升供应链的转型升级。

Jiazhen Zhao: 那这也是为什么我们去年底明确了聚焦重投供应链升级的集团战略方向。那在这个战略指导下，我们正在稳步地推进各项供应链的投入，这里面就包括了品牌自营业务。目前专项团队已经深入到各大的产业带，加快整合优质的供应链资源，搭建品牌自营的业务体系。我们也正在与制造端深度合作，设计和研发面向全球不同市场的自营品牌产品，全面地提升供应链的转型升级。

Jiazhen Zhao: [Foreign language]。

Speaker #4: And this is why we set a clear group strategy at the end of last year to focus on and invest heavily in supply chain.

Gary: This is why we set a clear group strategy at the end of last year to focus on and invest heavily in supply chain. Under this strategy, we are steadily advancing various supply chain initiatives, particularly the first-party brand business. Currently, our dedicated teams are working in major industrial belts to accelerate the integration of high-quality supply chain resources and building the framework for the first-party brand business. We are working closely with manufacturers to design and develop first-party brand products for the different global markets while elevating the transformation and upgrading of the supply chain. The coming period represents a critical window for our supply chain investments, and we will advance the first-party brand initiative at full speed, step up the investment in the foundational supply chain capabilities.

[Translator 1]: This is why we set a clear group strategy at the end of last year to focus on and invest heavily in supply chain. Under this strategy, we are steadily advancing various supply chain initiatives, particularly the first-party brand business. Currently, our dedicated teams are working in major industrial belts to accelerate the integration of high-quality supply chain resources and building the framework for the first-party brand business. We are working closely with manufacturers to design and develop first-party brand products for the different global markets while elevating the transformation and upgrading of the supply chain. The coming period represents a critical window for our supply chain investments, and we will advance the first-party brand initiative at full speed, step up the investment in the foundational supply chain capabilities.

Speaker #4: And under this strategy, we're steadily advancing various supply chain initiatives, particularly in the first-party brand business. Currently, a dedicated team is working in major industrial belts to accelerate the integration of high-quality supply chain resources and build the framework for the first-party brand business.

Speaker #4: And we're working closely with manufacturers to design and develop first-party brand products for the different global markets, while elevating the transformation and upgrading of the supply chain.

Speaker #3: 接下来的这段时间，从我们供应链投入的关键窗口期，我们将全力地推进品牌自营，保持供应链的技术能力建设的投入强度，通过不断地为供应链生态创造独特的价值，来应对行业未来可能的变化。

Speaker #4: 对，the coming period represents a critical window for our supply chain investments. And we'll advance the first-party brand initiative at full speed, step up the investments in the foundational supply chain capabilities, and we'll also navigate the evolving industry landscape by constantly creating our unique value to the supply chain ecosystem.

Gary: We will also navigate an evolving industry landscape by constantly creating our unique value to the supply chain ecosystem.

[Translator 1]: We will also navigate an evolving industry landscape by constantly creating our unique value to the supply chain ecosystem.

Speaker #3: Hi, this is Joe. Let me take your second question. As we have regularly communicated in the past, our objective is the long-term sustainable growth of the platforms in transcending value.

Jun Liu: Hi, this is Jun Liu. Let me take your second question. As we have regularly communicated in the past, our objective is the long-term sustainable growth of the platform's intrinsic value. In this process, due to seasonality and our only investment circle, it is normal to see some fluctuation in our quarter-to-quarter financial results. The long-term value of the platform is fundamentally tied to the value we create for consumers and the broader ecosystem. That's why we remain steadfast in our commitment to long-term supply chain investments. Whether it's our first-party brand strategy, direct-to-village delivery, or New Quality Supply chain initiatives, these are all high-impact projects that unlock long-term value and new growth for the industry. We will continue to invest in them resolutely.

Speaker #3: And in this process, due to seasonality and our only investment cycle, it is normal to see some fluctuation in our quarter-to-quarter financial results. The long-term value of the platform is fundamentally tied to the value we create for consumers and the broader ecosystem.

Speaker #3: And that's why we remain steadfast in our commitment to long-term supply chain investments. Whether it's our first-party brand strategy, direct-to-village delivery, or new quality supply chain initiatives, these are all high-impact projects that unlock long-term value and new growth for the industry.

Speaker #3: We will continue to invest in them resolutely. So instead of focusing on short-term financial performance, we prioritize the healthy development of the platform ecosystem and the accumulation of foundational supply chain capabilities.

Jun Liu: Instead of focusing on short-term financial performance, we prioritize the healthy development of the platform ecosystem and the accumulation and foundation of supply chain capabilities. These more enduring sources of a competitive advantage will determine the trajectory of the platform's intrinsic value. Thanks.

Speaker #3: These more enduring sources of competitive advantage will determine the trajectory of the platforms in transcending value. Thanks.

Speaker #4: Okay.

Gary: Okay.

[Company Representative] (PDD Holdings): Okay.

Speaker #2: Anything.

Operator: Thank you.

Speaker #3: Anything.

Gary: Thank you, John. Thank you, Joy. Thank you all once again for joining us today. I think it's about time. We look forward to speaking to you again next quarter. Thank you.

[Company Representative] (PDD Holdings): Thank you, John. Thank you, Joy. Thank you all once again for joining us today. I think it's about time. We look forward to speaking to you again next quarter. Thank you.

Speaker #4: Okay, and thank you, Joy. And thank you all once again for joining us today. I think it's about time. We look forward to speaking to you at the next quarter.

Speaker #4: Thank you.

Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.