The management has made it clear that over the next three years, they will not pursue business diversification but instead go “All in” on the supply chain to “rebuild another PDD Holdings.” In the face of fierce industry competition and a complex global regulatory environment, senior executives emphasized that compliance is the bottom line and provided clear guidance to the market: to actively sacrifice short-term financial performance in exchange for long-term intrinsic value within the ecosystem. Fluctuations in profit margins in future quarters will become the “new normal.”
PDD Holdings maintained robust double-digit revenue growth in the fourth quarter and for the full year of 2025. However, amid intense industry competition and a complex global regulatory environment, the company explicitly announced its decision to sacrifice short-term profits, adopting an 'All in' approach to heavily invest in its supply chain, aiming to 'recreate another PDD Holdings' within the next three years.
Tonight, core management including Chen Lei and Zhao Jiazhen, co-chairmen and co-CEOs, along with Chief Financial Officer Li Jiong, attended the subsequent earnings conference call. During the one-hour exchange, PDD Holdings’ management provided clear strategic direction in response to market concerns over slowing growth, profit margin fluctuations, and compliance issues related to globalization.
As of the time of writing,$PDD Holdings (PDD.US)$The U.S. stock market rose nearly 2% at the start of trading, with a transaction volume reaching $247 million.
Revenue remains robust but net profit declines year-over-year; 'benefiting the ecosystem through concessions' becomes the main theme.
In terms of core financial data, PDD Holdings' revenue continued to demonstrate steady growth. In the fourth quarter of 2025, total group revenue reached RMB 123.9 billion, representing a 12% increase year-over-year, while total annual revenue for 2025 reached RMB 431.8 billion, up 10% year-over-year. Notably, transaction service revenue in the fourth quarter performed exceptionally well, reaching RMB 63.9 billion, an increase of 19% year-over-year.
However, contrasting with the revenue growth, both quarterly and annual group net profits declined year-over-year. Co-CEO Zhao Jiazhen directly addressed this highly sensitive market indicator. He explicitly stated that the decline in profit primarily resulted from the company’s ongoing investments on both the supply and demand sides. During the meeting, Zhao Jiazhen remarked:
"As we have repeatedly emphasized, we prioritize long-term value creation by nurturing the ecosystem rather than focusing on short-term performance."
He revealed that the company launched the e-commerce industry's first business-friendly strategy at the scale of hundreds of billions and assumed the second-leg transfer fees for 'delivery-to-villages,' incorporating more remote rural areas into free-shipping zones. These significant investments directly impacted the current period's profit performance.
Focus on core business: No pursuit of diversification, 'Recreating another PDD Holdings.'
As the e-commerce industry experiences an overall slowdown in growth and enters a new phase of存量 competition, $PDD Holdings (PDD.US)$Where does the future growth potential lie? The management's answer is not盲目 expansion but rather internal optimization.
At this meeting, Zhao Jiazhen made a highly impactful strategic declaration:
"In the next phase, the company’s strategic focus will not be on business diversification but on high-quality development of the supply chain. We will continue to leverage our long-term accumulated advantages in the supply chain to achieve the platform's reinvention. ... I believe that in the next three years, we will have the opportunity to create another PDD Holdings."
He further elaborated: "Reinvesting heavily in the supply chain and recreating PDD Holdings is our fundamental duty." To achieve this goal, PDD Holdings has launched special initiatives such as 'Duoduo Specialty Products' and 'New Quality Supply,' shifting from simple traffic allocation to providing comprehensive support across the entire lifecycle of product research and development, production, manufacturing, and sales.
Facing globalization challenges: Compliance is the bottom line, and the external environment brings greater uncertainty.
In response to the market's significant concern regarding $PDD Holdings (PDD.US)$the regulatory storm faced by globalization businesses (such as Temu) overseas, Co-CEO Chen Lei did not回避 the issue. He acknowledged that, with the global political landscape becoming increasingly complex and trade, tax, and data regulations in different countries and regions continuing to evolve, greater challenges have emerged for global operations.
"Over the past period, we have indeed received inquiries from some regulatory agencies." Chen Lei stated:
"As our business scale expands and regulatory environments in various regions change rapidly, we deeply recognize that compliance is the bottom line. ... This inevitably brings greater challenges and uncertainties, which will influence and even reshape our development model."
To address this uncertainty, Chen Lei emphasized that the company’s strategic focus remains on investing in supply chain capabilities, empowering merchants and manufacturers to build direct-to-market capabilities, and adapting to changes in global trade policies through flexible model iteration.
Earnings Guidance: Intensified competition, fluctuations in profit margins will become the 'new norm.'
Regarding investors' most pressing concern about future margin trends, $PDD Holdings (PDD.US)$the management conducted expectation management, clearly dispelling the market’s expectation of持续 high margins.
Zhao Jiazhen frankly pointed out:
"The time mismatch between investment and returns will inevitably have a direct impact on our performance during specific phases. … As we continue with strategic investments, coupled with the current complex and volatile macro environment, the company's profit margins will continue to fluctuate between quarters, and this will become the norm."
Chen Lei also made a grim forecast for the market environment in 2026:
"Since the beginning of 2026, competition within the e-commerce industry has continued to intensify, revolving around new business models and technologies. … This will inevitably bring more challenges and pressures to our future performance, putting pressure on our profitability and growth."
Management strongly recommended that the market shift its evaluation metrics and urged investors to "not overly focus on quarterly profit margins but instead pay more attention to the high-quality development of our platform ecosystem."
Ask Futubull AI:What are the key highlights from PDD Holdings' 2025 earnings and conference call, and how will the future trend unfold?
The full transcript of the conference call is as follows:
Moderator
I am now pleased to introduce our Co-Chairman and Co-CEO, Zhao Jiazhen. Please proceed with your remarks.Zhao Jiazhen
Hello everyone, I am Zhao Jiazhen. Thank you all for attending the public release of our Q4 and full-year 2025 results.Moderator
Hello everyone, thank you for joining our Q4 and fiscal year 2025 earnings conference call.Zhao Jiazhen
The year 2025 marks the tenth anniversary of PDD Holdings' founding and represents the most significant year for high-quality development investments on the platform. For the first time in the e-commerce industry, we launched a business-friendly strategy worth hundreds of billions. The entire company has made all-out efforts to elevate agricultural support and merchant benefits to an unprecedented level. At the year-end shareholders' meeting, we upgraded the corporate governance structure by implementing a co-chairman system while further enhancing the company's strategic focus on heavily investing in the supply chain. Emphasizing high-quality and branded development of the supply chain, we aim to drive a value leap across the entire supply chain system.Zhao Jiazhen
Over the past year, our performance has remained stable. This quarter, the group achieved revenue of 123.9 billion yuan, representing a year-on-year increase of 12%. For the full year, group revenue reached 431.8 billion yuan, up 10% year-on-year. Both quarterly and annual net profits declined year-on-year, primarily due to our continuous investment in both the supply and demand sides. As we have repeatedly emphasized, compared to short-term results, we are more committed to fostering long-term value through ecosystem reinvestment.Zhao Jiazhen
Benefiting from the policy of providing hundreds of billions in support, our long-term investments on both the supply and demand sides have led to steady improvements in the platform and industrial ecosystem. Agricultural production zones and industrial belts have become key pillars supporting the platform and its ecosystem, bringing consumers more affordable, high-quality products.Zhao Jiazhen
Under the sustained investment of the hundred-billion-yuan support initiative, special actions such as promoting regional specialties, advancing new quality supply, and expanding e-commerce to the western regions have been continuously implemented. Support for the supply chain has expanded from leading merchants and small-to-medium-sized businesses to every link in the industrial chain, empowering merchants across various categories to achieve differentiated growth. This has enabled a transformation from product categories and quality to branding, significantly improving supply chain efficiency and overall industry capabilities while creating more profit margins and innovation opportunities for agricultural production zones and industrial belts.Zhao Jiazhen
In the fourth quarter, the dedicated team for regional specialties delved into specialized agricultural areas such as Anyue lemons, Pu'er coffee, Wuhan melon seeds, Meizhou pomelos, Wenshan blueberries, Fuzhou abalone, and Lianyungang seaweed. Through customized, one-product-one-solution support, they addressed issues like insufficient standardization and low added value of fresh produce. By promoting standardized cultivation, premium product development, and deep-processed sales pathways, they effectively increased the added value of agricultural products, retained more profits within the origin regions, and further advanced sustainable development for specialty agricultural industries.Zhao Jiazhen
Industrial belts. In these industrial belts, the cultivation of new quality supply and its upward momentum are continuously accelerating. Our specialized teams have successively entered manufacturing clusters such as Yiwu jewelry accessories, Pinghu down products, Hunan spicy gluten, Anhui roasted snacks, Tianjin potato chips, small home appliances in Jiangsu and Zhejiang, and Shanghai chocolate. We have delved into every aspect of the supply chain, including raw materials and components, implementing dual measures of fee reductions and support. This further unleashes the advantages of the supply chain, promotes an overall upgrade in supply chain operational models, and helps industrial belts overcome homogenization.Zhao Jiazhen
While heavily investing in the supply chain, we have also further activated the consumption potential of remote areas through e-commerce expansion to the west, actively helping merchants explore new growth opportunities. In the fourth quarter, based on the achievements of our western e-commerce initiatives, we continued to tackle the 'last mile' challenge of delivering parcels to villages across multiple provinces and cities nationwide. This extends the inclusive benefits of new e-commerce from western regions to vast rural areas. To date, we have deployed and constructed an end-point logistics network—including county-level transfer warehouses and village-level collection points—in more than ten provinces and cities nationwide. Additionally, we cover the second-stage transfer fees for delivering goods to villages, incorporating more remote rural areas into free-shipping zones.Zhao Jiazhen
In terms of platform governance, we continuously improve the consumer and business environment on the platform, further enhancing the service experience for users and merchants. During the Spring Festival, the platform introduced a series of food safety governance measures, primarily focusing on compliance reviews of business qualifications, regulation of food advertisements, control of live-streamed food sales, protection of minors, intellectual property rights protection, and the establishment of a food database. These efforts comprehensively safeguard consumers' grocery baskets and ensure the safety of their New Year's Eve dinners.Zhao Jiazhen
In global e-commerce operations, despite significant changes in the external environment, our global e-commerce business maintained steady growth over the past year—a testament to our long-term focus on supply chain development and accumulated advantages. At our previous shareholders' meeting, we announced a full commitment to upgrading the supply chain, re-investing heavily in it to rebuild PDD Holdings. This is our core mission. Over the past few months, the three-year strategic initiative solemnly announced at the shareholders' meeting has been translated into concrete actions, with profound transformations occurring within the business and organizational structure. In the next phase, the company’s strategic focus will not be on diversification but on high-quality development of the supply chain. We will continue to leverage our accumulated strengths in the supply chain to reinvent the platform and drive the entire supply chain system toward greater value creation.Zhao Jiazhen
The year 2026 marks the 11th anniversary of PDD Holdings and serves as a new starting point as we move into the next decade. With renewed determination, we set out again with an all-in attitude, a spirit of perseverance, and bold strides forward. We will invest more manpower and resources, doubling down on supply chain upgrades and modernization. We believe that in the next three years, we will have the opportunity to rebuild PDD Holdings.Zhao Jiazhen
Next, I will pass the microphone to Chen Lei, who will provide further details.Chen Lei
Thank you, and hello everyone. The year 2025 marks our tenth anniversary. As Jiazhen mentioned earlier, over the past year, we have fulfilled our corporate responsibilities as a group by launching a hundred-billion-yuan support plan to give back to our merchant ecosystem. We have also established a co-chairman system to further improve governance and firmly anchor our strategic focus on the high-quality development of the supply chain. Through these efforts, we continue to create long-term value for our customers, merchants, industries, and society. It has been almost a year since we launched the hundred-billion-yuan support plan. During this period, we have continued to reinvest in the ecosystem through measures such as fee reductions, merchant support, and food safety initiatives. Our dedicated teams have delved into agricultural production areas and manufacturing clusters, helping hundreds of regions establish standardized production systems and explore differentiated and branded development models. These efforts have significantly improved the efficiency and quality of industrial chain operations, driving the transformation of the supply chain from scale-driven to value-driven. This has also brought more high-quality and affordable products to our consumers. Our continuous investment in the supply chain has unleashed strong consumer demand on the platform. The platform performed strongly during major promotional events like 618, Double Eleven, and the Spring Festival. High-quality products from various regions transcended geographical boundaries, providing consumers with more diverse choices and further enhancing their quality of life.Chen Lei
Our global e-commerce business continues to achieve steady growth and has reached a considerable scale in most countries. Within three years, we have accomplished what it took PDD Holdings a decade to achieve domestically. However, over the past year, the global political landscape has become increasingly complex. Trade and regulatory policies in different countries and regions continue to evolve, bringing greater uncertainty to our global operations and potentially reshaping our development model. In this context, we rely more than ever on the collective capabilities of our supply chain ecosystem. Therefore, we will continue to deepen our strategic investments in supply chain capabilities and allocate more effort, capital, and resources toward its transformation. Our goal is to empower our merchants and manufacturers to become innovators capable of directly addressing market needs, understanding consumer demands, conceptualizing products, and building brands, thereby driving high-quality, branded growth and creating genuine value for consumers.Chen Lei
Over the past few months, we have made steady progress in executing the three-year strategy approved at our shareholders' meeting. We are pleased to see some results materialize in the fourth quarter. Our local investments in agricultural research have yielded new outcomes. Last October, we were invited for the second consecutive year to participate in the World Food Forum hosted by the United Nations Food and Agriculture Organization, representing Asian enterprises to share our experiences and achievements in supporting digital agricultural innovation. We also sponsored two agricultural research teams to present on the forum stage, injecting new vitality into agricultural R&D. Since early 2026, competition in the e-commerce industry has intensified around new business models and technologies. Meanwhile, the global environment has grown more complex compared to last year, with increased uncertainties in economic and trade conditions as well as regulatory policies across countries and regions. This will inevitably bring more challenges and pressure to our future performance, impacting our profitability and growth. Nevertheless, we will continue to adhere to our long-term vision and faithfully execute our strategy of deepening supply chain investments, allocating more resources to give back to the industry and society. Now, I will hand over the call to Li Jiong, who will introduce our financial performance for the fiscal year 2025.Li Jiong
Alright, thank you, Lei. Hello everyone, I am Li Jiong. Let me now introduce our financial performance for the fourth quarter and fiscal year ending December 31, 2025. Regarding the income statement, in the fourth quarter, our total revenue grew by 12% year-over-year to reach 123.9 billion yuan, while our total revenue for the full year of 2025 increased by 10% year-over-year to reach 431.8 billion yuan. This growth was primarily driven by increases in online marketing services and transaction service revenues.Li Jiong
Online marketing services and other revenue for this quarter amounted to RMB 60 billion, representing a 5% increase compared to the same period in 2024. Our transaction services revenue for this quarter reached RMB 63.9 billion, marking a 19% growth compared to the same period in 2024. Turning to costs and expenses, our total revenue cost increased by 15% from RMB 47.8 billion in Q4 2024 to RMB 55.2 billion this quarter.Li Jiong
For the full year, our total revenue cost grew by 23% to reach RMB 188.8 billion, primarily due to increases in fulfillment expenses, bandwidth and server costs, as well as payment processing fees.Li Jiong
On a GAAP basis, total operating expenses for this quarter increased by 10% from RMB 37.2 billion in the same period of 2024 to RMB 41 billion. On a non-GAAP basis, total operating expenses for this quarter rose from RMB 35.1 billion in Q4 2024 to RMB 39.3 billion. For Q4, non-GAAP total operating expenses accounted for 32% of revenue. For the full year of 2025, non-GAAP total operating expenses amounted to RMB 140.7 billion, up from RMB 122 billion in 2024. In terms of specific expense items, non-GAAP sales and marketing expenses for this quarter were RMB 34 billion, reflecting a 9% increase compared to the same period in 2024. On a non-GAAP basis, sales and marketing expenses as a percentage of revenue were 27% this quarter, compared to 28% in Q4 2024. For the full year, non-GAAP sales and marketing expenses increased from RMB 109.1 billion in 2024 to RMB 123.3 billion in 2025.Li Jiong
Non-GAAP general and administrative expenses for Q4 were RMB 907 million, compared to RMB 998 million in the same period of 2024. For the full year of 2025, non-GAAP general and administrative expenses amounted to RMB 3.2 billion, compared to RMB 2.8 billion last year. Research and development expenses for this quarter were RMB 4.4 billion on a non-GAAP basis and RMB 5 billion on a GAAP basis.Li Jiong
On a GAAP basis, operating profit for this quarter was RMB 27.7 billion, compared to RMB 25.6 billion in the same period of 2024. Non-GAAP operating profit was RMB 29.5 billion, compared to RMB 28 billion in the same period of 2024. The non-GAAP operating profit margin for this quarter was 24%, compared to 25% in the same period of 2024. For the full year, non-GAAP operating profit amounted to RMB 102.6 billion, compared to RMB 118.3 billion in 2024. Net profit attributable to ordinary shareholders for this quarter was RMB 24.5 billion, with a total of RMB 99.4 billion for the full year. For Q4, basic earnings per ADS were RMB 17.50, and diluted earnings per ADS were RMB 16.51, compared to basic earnings per ADS of RMB 19.76 and diluted earnings per ADS of RMB 18.53 in the same period of 2024.Li Jiong
The non-GAAP net profit attributable to ordinary shareholders for this quarter was RMB 26.3 billion, and for the full year it was RMB 107.3 billion.Li Jiong
In the fourth quarter, the non-GAAP diluted earnings per ADS were RMB 17.69, compared to RMB 20.15 for the same period in 2024. This concludes the income statement section. Now let me discuss cash flow. The net cash flow generated from our operating activities in the fourth quarter was RMB 24.1 billion, and for the full year of 2025 it was RMB 106.9 billion, compared to RMB 29.5 billion for the same period in 2024 and RMB 121.9 billion for the full year of 2024. As of December 31, 2025, the company held RMB 422.3 billion in cash, cash equivalents, and short-term investments. Thank you, and this concludes my prepared remarks. Thank you, Joey.Moderator
Next, we will move on to the Q&A session. Today's Q&A session will feature Lei and Jiazhen answering questions from online analysts. Each analyst may ask up to two questions. Lei and Jiazhen will answer the questions in Chinese and assist with translations. Operator, we are ready to begin the Q&A session.Operator
Ladies and gentlemen, we will now begin the Q&A session. If you would like to ask a question, please press the star key followed by 1 on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Each participant is limited to two questions at a time. Your first question comes from Malaysia Yap of Citi Bank.Malaysia Yap
Hello, thank you. Good evening, management. Thank you for taking my questions; I have two. The first question relates to the organizational restructuring that took place at our company’s annual shareholder meeting at the end of last year. We currently see that the company operates in over 90 markets and faces new challenges from a fairly complex regulatory environment. Could management share how they plan to maintain team agility and execution in such an environment? My second question concerns the slowdown in e-commerce platform growth observed in the past quarter. Additionally, the company’s advertising revenue growth has also decelerated over the past two quarters. Could management provide their insights into the current state of China's e-commerce market and where potential growth drivers might come from in the next phase? Let me translate myself. There are two questions. The first is about the organizational restructuring carried out during the annual shareholder meeting at the end of last year. At present, the company operates in more than 90 markets while also facing new challenges from a complex regulatory environment. How does the company intend to remain flexible and maintain execution capabilities under these conditions? The second question relates to the slower growth of China’s e-commerce platforms in the past quarter, as well as the evident slowdown in the company’s online marketing revenue growth over the last two quarters. Could management share their views on the current situation of China's e-commerce market and possible sources of growth in the industry's next phase? Thank you.Zhao Jiazhen
Hello, this is Zhao Jiazhen. I will address the first question. Over the past few years, our global business has indeed made breakthrough progress, now covering nearly 100 markets and reaching a certain scale.Zhao Jiazhen
In this process, we feel that our corporate governance and the growth of internal talent cannot keep pace with the development of our business. We find ourselves struggling in many areas. The current rapid changes in international geopolitics, along with the swift and increasingly stringent shifts in trade and regulatory policies across regions, have imposed new demands on our company as a whole.Zhao Jiazhen
Therefore, we believe there is both an opportunity and a necessity to undertake a systematic and structural overhaul of our organizational culture and corporate governance. Of course, this will undoubtedly require time. In December last year, at our shareholders' meeting, we announced the implementation of a rotating chairman system and the promotion of a new leader, marking the beginning of such a systemic transformation.Zhao Jiazhen
In the coming period, we will invest more resources, both financial and material, into upgrading and transforming our supply chain to achieve an overall upgrade in its operational model.Zhao Jiazhen
Let me also address your second question. Indeed, as you mentioned, over the past few quarters, we have observed the e-commerce industry entering a phase of intensified competition and slowing growth. In this new stage, our focus on heavily investing in the supply chain reflects our recognition that e-commerce platforms should no longer be simple trading venues but must also, and can, do more to create added value for all participants across the supply chain.Zhao Jiazhen
This emphasis on the supply chain encompasses multiple aspects. Over the past period, initiatives such as DuoDuo Specialty Products and E-commerce Expansion to the West, which we launched, are inclusive projects aimed at empowering the supply chain. Here, I would like to highlight two specific initiatives.Zhao Jiazhen
The first is free delivery to villages, which was a new pilot project in the fourth quarter of last year. The original intention was to address the high logistics and distribution costs and low merchant shipping willingness for remote administrative villages. We aim to include more remote rural areas into the free shipping zone. Currently, PDD Holdings has established county-level transfer warehouses and village-level collection points as part of its end-to-end logistics infrastructure in multiple locations across the country, with the platform covering the secondary transfer fees for village delivery orders.Zhao Jiazhen
Deliveries are sent to the transfer warehouse, where the transportation from the warehouse to the village-level collection point is completed. This approach extends the segmented transport and centralized relay model, based on the platform’s accumulated experience, to the last mile in villages. It optimizes the shopping experience in remote areas while also helping merchants expand their reach.Zhao Jiazhen
The second initiative is the New Quality Supply Platform, designed for high-quality merchants seeking to enhance product quality and optimize services. Through industry insights and supply chain collaboration, the platform supports merchants in upgrading the entire lifecycle of research, production, manufacturing, and sales, thereby driving the transformation of the supply chain system.Zhao Jiazhen
There is much that the platform can do in this regard. For instance, in product development, traditional methods of new product research often involve an element of luck. However, within today’s platform ecosystem, key product information is consolidated by our business development team and promptly shared with merchants. With traffic support, merchants can conduct product testing and iterate on their offerings more effectively.Zhao Jiazhen
These are two specific examples of our supply chain upgrades. In response to slowing industry growth and intensifying competition, we have proactively chosen to invest resources in building a high-quality supply chain. The platform’s solid investments in foundational capabilities, such as new quality supply and village delivery, will serve as key drivers for the company’s sustainable and healthy growth over the next decade.Moderator
Operator, we are ready to take the next analyst’s question.Operator
Your next question is from Kenneth Long of UBS Group. Please go ahead.Kenneth Long
Thank you, management, for taking my questions. I have two questions. The first one relates to the company's global operations, which have experienced significant volatility over the past period. Since last year, we have seen some high-profile regulatory investigations in key markets, along with major shifts in trade policies that are closely related to the company’s business. Could the management share your current perspective on the external environment? In this context, where will the focus of the company’s globalization strategy lie? My second question pertains to profit margins. We have observed fluctuations in profit margins over the past few quarters. Management, could you elaborate on how the introduction of different business models has impacted our profit margins and how we should think about the company’s long-term profit margin levels?Chen Lei
Hello Kenny, this is Chen Lei. Let me address your first question. Over the past period, we have indeed received inquiries from some regulatory bodies. As our global operations have grown rapidly, we now have a certain scale in different countries, and with that comes heightened scrutiny, concerns, and stricter oversight, which I believe is understandable.Chen Lei
However, our management team believes that the current wave of regulatory actions lays a solid foundation for us to enter the next phase of growth. It also provides direction for refining our operational model amid a rapidly changing international political and policy environment. Since the launch of our global operations, we have adhered to a long-term strategic vision, building upon supply chain fundamentals to achieve sustainable development in each market. Our goal is to create genuine value for consumers.Chen Lei
As our business scales up and regulatory environments evolve quickly across regions, we deeply recognize that compliance is non-negotiable. As an enterprise operating within local communities, we believe it is essential to meet local needs, stay true to our original mission, and fulfill our responsibilities. Contributing to the societies in which we operate is fundamental to being an e-commerce platform. Therefore, our management team has invested substantial effort into ensuring business compliance.Chen Lei
However, we are also witnessing significant changes in the regulatory frameworks governing trade policies, taxation, data regulations, and product compliance requirements across countries and regions. These requirements often vary greatly and can sometimes even be contradictory, inevitably presenting us with greater challenges and uncertainties.Chen Lei
We are actively learning and adapting to these changes while continuously enhancing our compliance capabilities to create sustainable value for society.Chen Lei
You also mentioned changes in global trade policies. Since early last year, we have indeed observed shifts in trade policies across many major markets. While ensuring business compliance, our team has rapidly iterated our business model based on the regulatory environments and market conditions of different regions to provide consumers with reliable services. This is closely tied to our accumulated supply chain capabilities over the years.Chen Lei
Looking ahead, the strategic focus of our company's global business will remain on investing in supply chain capabilities. Each link directly impacts the consumer shopping experience, and accordingly, this will become a key area of our investment.Zhao Jiazhen
Hello, I’m Zhao Jiazhen, and I’ll address your second question. First, let me clarify that our company remains in the investment phase of this strategy. The external environment and competitive landscape are evolving rapidly. To meet the ever-changing needs of consumers, we are working closely with merchants on our platform to continuously explore and roll out business models that adapt to the new environment. Any new model requires decisive resource investment from the platform during its initial stages before full-scale implementation.Zhao Jiazhen
Whether it is the exploration of new business models or our strategic investment in the supply chain, these are fundamental, long-term efforts. The temporal mismatch between investment and returns will inevitably have a direct impact on our performance at specific stages.Zhao Jiazhen
As we have communicated with you multiple times before, we will resolutely choose the long-term value of the platform ecosystem over short-term financial performance. Therefore, as we continue our strategic investments amidst the current complex and volatile macro environment, the company's profit margins will continue to fluctuate across different quarters, which will be the norm.Zhao Jiazhen
Over the past few months, the major strategy we solemnly announced at the shareholders' meeting has been translated into concrete project implementations. Our businesses and organization are undergoing profound transformations. We suggest that you do not focus excessively on single-quarter profit margin indicators but rather pay more attention to the high-quality development of our platform ecosystem. Only a healthy platform ecosystem and a robust supply chain platform can sustain long-term intrinsic value growth.Moderator
Alright, Joyce, please ask your question.Joyce
My first question also relates to profit margins. Since last year, the company has launched several investment initiatives, including the billion-yuan support plan. Management just mentioned significant investment in the supply chain during their remarks. Could management elaborate on how the company views the return-on-investment cycle for these projects? What impact will this have on the company’s financial performance in the long term? My second question pertains to the strong growth momentum observed in online retail sales in the first two months of this year. Could management share their perspective on the consumer market? Does the company have targeted strategies to capture opportunities in rapidly growing product categories? Thank you.Zhao Jiazhen
Hello, this is Zhao Jiazhen, and I will address your questions. About a year ago, we became further aware of the importance of the long-term sustainable development of the platform ecosystem. Consequently, we successively introduced a series of initiatives, such as the hundred-billion-yuan relief and thousand-billion-yuan support plans. We allocated substantial resources to assist merchants and industries, creating ample room for upgrading and modernizing the supply chain.Zhao Jiazhen
Our management team unanimously believes that as the platform grows into a public platform with social influence, we should consider the issue of corporate development from the perspective of greater public interest and the long-term health of the industry’s ecosystem. The company's overall strategy, clearly focused on core business and heavy investment in supply chain upgrades, which was announced at the shareholders' meeting at the end of last year, represents an extension and reinforcement of this direction.Zhao Jiazhen
After years of development in the e-commerce industry, the ecosystem has continuously matured, and merchants have put forward diversified requirements for platforms, evolving from initial trading platforms to comprehensive empowerment as business partners. What merchants need most from platform support has expanded from direct traffic倾斜 to aspects such as R&D, production, and sales. This requires us to refine our operations further, taking into account the characteristics of different industries to introduce targeted solutions and build a more competitive supply chain.Zhao Jiazhen
Such investments involve tens of thousands of businesses across the industrial chain and cannot be achieved overnight. Therefore, we are prepared for long-term, patient investment. We are also pleased to see that some of these investments have already yielded results. For example, under the support of the new quality supply project I just mentioned, some merchants have chosen to reinvest the cost reductions provided by the platform into expanding their R&D teams and upgrading production lines. Combined with the platform's digital empowerment, they have embarked on a path of product differentiation transformation.Zhao Jiazhen
This type of long-term structural investment will not immediately reflect in short-term financial performance, but it is a crucial component for the sustainable growth of the platform and the e-commerce ecosystem in the long run. We will steadfastly implement these long-term investments, nurturing the ecosystem through tangible contributions, reducing merchant costs, enhancing supply chain quality, and optimizing consumer experience. By leveraging supply chain as the core key, we aim to reinvent the platform and drive value elevation within the ecosystem.Zhao Jiazhen
Regarding your second question, we are very pleased to see the continuous improvement in consumer spending. However, at the same time, we clearly recognize that amid the current intense competitive landscape, we still face challenges. The future performance of e-commerce platforms will increasingly depend on how much incremental value they can create for the entire supply chain, rather than relying solely on simple traffic acquisition and distribution. Pay.Zhao Jiazhen
Therefore, at this moment, we firmly choose the Zhongcang supply chain. For different categories, our business development team will work closely with merchants to provide them with customized industry solutions based on market insights, helping platform merchants innovate.Zhao Jiazhen
We firmly believe that these investments are essential to advancing the e-commerce supply chain into the next phase of high-quality development, and we will remain committed to this effort over the long term.Moderator
Thank you, Joyce, and thank you, Jiazhen. We appreciate everyone joining us today for the meeting. We look forward to connecting with you again next quarter. Thank you, and we wish you all a great day.Operator
Ladies and gentlemen, today's conference has concluded. Thank you for your participation. You may now disconnect the call.
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