【Earnings Highlights】
- Revenue: RMB 95.7 billion, up 10% year-over-year but showing significant slowdown
- Net income: RMB 14.7 billion, down from RMB 28 billion in Q1 2024
- Operating profit margin declined to 19% from 33% last year
- Company launched upgraded 100 billion RMB merchant support program

【Key Takeaways】

1. Challenging External Environment Impacting Growth
- Macroeconomic uncertainties and policy changes like tariffs are creating significant pressure for merchants
- As a third-party marketplace, PDD faces inherent limitations in passing on policy incentives to consumers compared to platforms with first-party businesses
- Revenue growth slowed notably amid the rapidly changing external environment

2. Prioritizing Merchant Support Through Increased Investments
- Launched upgraded 100 billion RMB support program to help merchants navigate challenges
- Expanding coverage of high-quality merchant support from top/mid-tier to more small and medium-sized merchants
- Increasing subsidies and marketing support to help merchants boost sales and reduce costs
- Management views this as a necessary long-term investment, though it will impact near-term profitability

3. Consumer-Side Initiatives
- Introduced new 10 billion RMB merchant giveback program under existing 10 billion RMB subsidy channel
- Offering additional coupons across product categories to stimulate demand
- Upgraded direct discount program to benchmark against national subsidy standards in multiple categories

4. Long-Term Focus Despite Near-Term Headwinds
- Management emphasizes commitment to long-term ecosystem investments over quarterly financials
- Believes supporting merchants and consumers through uncertainties is key to sustainable high-quality growth
- Expects profitability to remain under pressure in the near-term due to increased investments

5. Consumption Trends and 618 Shopping Festival
- Launched dedicated page for national subsidy program in January, now covering 20+ provinces
- For 618 festival, introduced price protection service for promotional items
- Focusing on simplified mechanisms and real savings to benefit both consumers and merchants

【Q&A Highlights】

Q: How is the company addressing challenges in competing with first-party platforms, especially regarding policy incentives?

A: PDD is leveraging internal resources and increasing investments to help merchants maintain competitiveness. Specific actions include:
- Launching a dedicated national subsidy program page
- Expanding subsidy coverage to more product categories, including daily necessities
- Providing additional coupons on top of government subsidies
- Benchmarking prices against national subsidy standards in multiple categories

While these investments may impact short-term profitability, management believes they are necessary to support merchants and create opportunities for high-quality, differentiated growth.

Q: Can you provide an update on consumption trends and the ongoing 618 shopping festival performance?

A: Management highlighted the following points:
- Continuing to focus on simplified shopping mechanisms and real savings for consumers
- Introduced price protection service for products participating in 618 promotions
- Aiming to excel in quality and service to build consumer trust and drive sustainable sales growth
- Working with merchants to offer high-quality products at compelling prices while driving sales

The company sees these efforts as part of building a win-win ecosystem that benefits all stakeholders in the long run.

Disclaimer: This earnings call summary is generated by AI and is for informational purposes only. Due to technical limitations, inaccuracies may exist. It does not constitute investment advice or commitments.