PDD Holdings Inc. (NASDAQ:PDD) Q2 2025 Earnings Conference Call August 25, 2025 7:30 AM ET
Company Participants
Jiazhen Zhao - Co-CEO & Executive Director
Jun Liu - Vice President of Finance
Lei Chen - General Counsel, Co-CEO & Chairman
Conference Call Participants
Alicia Yap - Citigroup Inc., Research Division
Lixin Ju - BofA Securities, Research Division
Thomas Chong - Jefferies LLC, Research Division
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the PDD Holdings, Inc. Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded.
女士们、先生们，感谢各位耐心等待，欢迎参加拼多多控股有限公司 2025 年第二季度财报电话会议。[操作提示] 请注意，今天的会议正在录音。
I would now like to hand the conference over to your host today. Sir, please go ahead.
现在我将会议交给今天的主持人。先生，请开始。
Unidentified Company Representative
Thank you, operator, and 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 and also through the Globe Newswire services.
谢谢主持人。大家好，感谢今天参加我们的会议。拼多多控股的财报公告已于稍早发布，您可以在公司官网 investor.pddholdings.com 或通过 Globe Newswire 服务查阅。
Before we begin, I would like to refer you to our safe harbor statement in earnings press release, which applies to this call as we will make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures.
在会议开始前，我想提醒大家关注财报公告中的安全港声明，该声明适用于本次电话会议，因为我们会做出一些前瞻性陈述。此外，本次电话会议将涉及一些非 GAAP 财务指标，请参考财报公告，其中包含非 GAAP 指标与 GAAP 指标的对照说明。
Joining us today on the call are Mr. Chen Lei, our Chairman and Co-Chief Executive Officer; Mr. Zhao Jiazhen, our Executive Director and Co-Chief Executive Officer; and Mr. Liu Jun, our VP of Finance. Liu and Zhao will make some general remarks on our performance for the past quarter and our strategic focus, and Jun will walk us through our financial results for the second quarter ended June 30, 2024. During the Q&A session, Lei and Jiazhen will answer questions in Chinese and will help translate. Please note that English transmission is for reference only. And in case of any discrepancy, statements in the original language should prevail.
今天参加会议的有我们的董事长兼联席首席执行官陈磊先生；执行董事兼联席首席执行官赵佳臻先生；以及财务副总裁刘军先生。刘军和赵佳臻将首先对过去一个季度的业绩表现和战略重点做总体说明，随后刘军将带大家回顾截至 2024 年 6 月 30 日的第二季度财务结果。在问答环节中，陈磊和赵佳臻将用中文回答问题并协助翻译。请注意，英文传译仅供参考，如有不一致之处，以中文原文为准。
Now it’s my pleasure to introduce our Chairman and Co-Chief Executive Officer, Mr. Chen Lei. Lei, please go ahead.
现在我很荣幸地介绍我们的董事长兼联席首席执行官陈磊先生。陈总，请开始。
Lei Chen
Hello, everyone, and thank you for joining our second quarter 2025 earnings conference call. The first half of 2025 has seen rapid trends in the external environment. At this critical juncture when merchants doing business on the platform face challenges, we stepped up our commitment in high-quality development and launched the RMB 100 billion support program.
大家好，感谢各位参加我们 2025 年第二季度财报电话会议。2025 年上半年，外部环境快速变化。在平台商家面临挑战的关键时刻，我们加大了对高质量发展的投入，并启动了人民币 1000 亿元的支持计划。
Through this program, we have invested and will continue to invest substantial resources to support the merchant ecosystem. Together with our merchants, we are actively exploring new business models for the global business, seeking new growth opportunities and navigating the ups and downs of the market cycles. This significant ecosystem investments were reflected in our Q2 financial performance.
通过该计划，我们已投入并将继续投入大量资源以支持商家生态。我们与商家一道，积极探索全球业务的新模式，寻找新的增长机会，并共同应对市场周期的波动。这些对生态的重大投资已反映在我们第二季度的财务表现中。
Revenue growth further moderated and operating profit declined by 21% year-over-year.
营收增长进一步放缓，营业利润同比下降 21%。
However, as we have emphasized in the past, we prioritize long-term value creation over short-term financial results. Our focus remains on investing for the long term, such as strengthening the ecosystem, driving value chain upgrades and delivering tangible benefits to our consumers.
不过，正如我们过去一再强调的，我们更注重长期价值创造，而不是短期财务结果。我们的重点仍然是进行长期投资，比如强化生态、推动价值链升级，并为消费者带来实实在在的好处。
As a result of our investments in a RMB 100 billion support programs, we are pleased to see that the platform ecosystem is making steady progress towards sustainable and high-quality development. Since August last year, our RMB 10 billion fee reduction initiative has brought substantial savings for our merchants, creating room for them to innovate and to offer a wider selection of high-quality products to the consumers. At the same time, our logistics support initiative significantly reduced the cost of shipping to remote areas and led to a 40% growth in order numbers from the regions, injecting new energy into the economy.
得益于我们在人民币 1000 亿元支持计划中的投入，我们很高兴看到平台生态正稳步走向可持续和高质量发展。自去年 8 月起，人民币 100 亿元的降费举措为商家带来了可观的节省，为他们创新以及向消费者提供更多优质商品创造了空间。同时，我们的物流支持举措显著降低了偏远地区的配送成本，使这些地区的订单量增长了 40%，为经济注入了新活力。
In this past quarter, the entire company rallied behind the RMB 100 billion support program to deliver innovative solutions to help merchants grow their business, while further reducing costs and commissions for merchants. We are seeing businesses of all sizes from established brands to small merchants, gaining new momentum in our ecosystem.
在过去的季度里，全公司围绕人民币 1000 亿元支持计划，推出创新解决方案，帮助商家拓展业务，同时进一步降低他们的成本和佣金。我们看到，从知名品牌到小商家，各类企业都在我们的生态中获得了新的发展动力。
Let us look at a few examples. We are seeing established consumer brands successfully reinventing themselves by leveraging consumer insights to shorten product launch cycles, lower R&D costs and enter into new market segments. Many industrial belt manufacturers were able to make the transition from white label products to a branded offering, breaking away from commoditized competition.
让我们来看几个例子。我们看到一些成熟的消费品牌，成功利用消费者洞察缩短了产品上市周期，降低了研发成本，并进入了新的细分市场。许多产业带制造商也实现了从白牌产品向品牌化的转型，从而摆脱了同质化竞争。
With the help of the Duo Duo premium produce program, we are seeing farmers and growers and higher margins by improving quality control and by moving into food processing to capture higher value add. Alongside merchant support, we have also expanded our consumer giveback program. In addition to the RMB 10 billion program, we introduced new long-term consumer campaigns, such as the RMB 10 billion coupon program.
在多多优选农产品项目的帮助下，我们看到农户和种植者通过加强质量管控，并进入食品加工环节以获取更高的附加值，从而获得了更高的利润率。在支持商家的同时，我们也扩展了消费者回馈计划。除了人民币 100 亿元的项目外，我们还推出了新的长期消费者活动，比如人民币 100 亿元优惠券计划。
During this year’s June 18 shopping festival, we provided additional coupons to the top of – on top of a national trading program, driving record sales across multiple categories, including fresh produce, electronics, on applicants and apparel, offering more value for the consumers.
在今年的“6·18”购物节期间，我们在全国促销活动的基础上额外提供了优惠券，推动了生鲜、电子产品、家电和服装等多个品类的创纪录销售，为消费者带来了更多实惠。
Meanwhile, in our global business, merchants and our platform faced more complex business environment. To navigate through the market cycles, we are working together with merchants to explore new business models and new markets while at the same time deliver innovative solutions to drive efficiency.
与此同时，在全球业务中，商家和我们的平台面临更加复杂的经营环境。为了应对市场周期，我们正与商家携手探索新的商业模式和市场，同时推出创新解决方案以提升效率。
As a platform that has its roots in agriculture, we continue to invest in agritech through initiatives like the Smart Agriculture Competition, which is now in its 5th iteration. 46 global teams competed in a preliminary held in July this year, showcasing cutting-edge technology in AI farming, hydroponics and [indiscernible] systems. This event is emerging as an important platform for agricultural technology research and application. Later in this year’s competition, the participants will bring their technology from labs to fields, testing the commercial application of their research findings.
作为一家根植于农业的平台，我们持续通过智慧农业大赛等举措投资农业科技。今年已是第五届，共有 46 支全球团队参加了 7 月举行的初赛，展示了人工智能农业、水培系统及其他尖端技术。该赛事正逐步成为农业科技研发与应用的重要平台。今年晚些时候，参赛团队将把他们的技术从实验室带到田间，测试研究成果的商业化应用。
Looking ahead, as external environment continue to evolve and competition intensifies, we remain committed to long-term value creation over short-term results. Our team will prioritize high-quality growth by creating long-term opportunities for merchants and investing in consumer experience. As we ramp up our investments, profitability will inevitably fluctuate and this quarter’s results may not represent future earnings trends.
展望未来，随着外部环境不断演变、竞争加剧，我们将继续坚持长期价值创造，而非短期结果。我们的团队将以高质量增长为优先，为商家创造长期机遇，并持续投资于消费者体验。随着我们不断加大投入，盈利水平不可避免地会有所波动，本季度的结果可能并不代表未来的盈利趋势。
And now I will hand it over to Zhao Jiazhen to share more details about our performance in the second quarter.
现在我将把话筒交给赵佳臻先生，请他分享更多关于我们第二季度业绩的细节。
Jiazhen Zhao [Interpreted]
Thank you, Lei, and hello, everyone. This is Zhao Jiazhen. Thank you for joining our second quarter 2025 earnings call. In Q2, to help merchants tackle emerging challenges we actively leveraged our role as a platform to take on more social responsibilities. We accelerated our execution of the RMB 100 billion Support Program, which represents a significant commitment to high-quality development. This also marks the first merchant support program of this scale.
谢谢磊，大家好，我是赵佳臻。感谢大家参加我们 2025 年第二季度的财报电话会议。在第二季度，为了帮助商家应对新出现的挑战，我们积极发挥平台的作用，承担更多社会责任。我们加快了人民币 1000 亿元支持计划的执行，这体现了我们在高质量发展上的重大承诺。这也是首个如此规模的商家支持计划。
These substantial investments once again affected our quarterly revenue and profit. As Lei noted, comparing to short-term financial performance, we focus more on investments that bring long-term value to the platform ecosystem. And this is why we are willing to accept lower profits to consistently reinvest in the platform ecosystem in the long run.
这些巨额投入再次影响了我们的季度营收和利润。正如磊所提到的，与短期财务表现相比，我们更加注重能为平台生态带来长期价值的投资。这就是为什么我们愿意接受较低利润，以便在长期内持续再投资于平台生态。
This past quarter under the unprecedented investment through the RMB 100 billion support program, significant resources to initiatives such as RMB 10 billion fee reduction program, logistics support initiative and new quality merchant support program. We continue to lower costs and increase efficiencies for millions of merchants, mainly saved millions of RMB each year just from service fee reductions. These efforts created more momentum and space for industrial upgrades. The logistics support initiative also bridged supply and demand and helped drive rapid order volume growth from remote regions, greatly enriching the daily life of consumers in these regions.
在过去的季度里，在人民币 1000 亿元支持计划的史无前例投入下，我们为 100 亿元降费计划、物流支持计划和新质商家支持计划等举措提供了大量资源。我们持续为数百万商家降低成本、提升效率，仅服务费减免一项就能为商家每年节省数百万元人民币。这些努力为产业升级带来了更多动力和空间。物流支持计划也有效衔接了供需，推动偏远地区订单量快速增长，大大丰富了这些地区消费者的日常生活。
On the supply side, the RMB 100 billion support program expanded support for SMEs, new quality merchants and branded merchants, ensuring all types of businesses could benefit from the platform’s resource support. This help agriculture and manufacturing regions achieve all-rounded, high-quality development to meet diverse consumer needs.
在供给端，人民币 1000 亿元支持计划扩大了对中小企业、新质商家和品牌商家的支持，确保各类企业都能从平台资源中受益。这帮助农业和制造业地区实现全面的高质量发展，以满足多样化的消费需求。
Our Duo Duo premium produce team visited multiple agricultural regions, including Suzhou rice, Zhaotong potatoes, Kunming flowers, Shangqiu eggs, bamboo shoots in Fuzhou, seafood in Shantou and Chaoshan and [indiscernible] in Guizhou to provide customized support based on local specialties and industry advantages. By enriching product offerings and store metrics, we helped fresh produce merchants overcome seasonal shortages and achieve sustainable growth.
我们的多多优选农产品团队走访了多个农业产区，包括苏州大米、昭通土豆、昆明鲜花、商丘鸡蛋、福州竹笋、汕头与潮汕海鲜，以及贵州的特色农产品，基于当地特色和产业优势提供定制化支持。通过丰富商品供给和店铺运营指标，我们帮助生鲜商家克服了季节性短缺，实现了可持续增长。
In Zhaotong Yunnan, for example, local potatoes are particularly taste and nutritious and have been a main source of income for local farmers. However, due to geographic constraints, these potatoes were traditionally sold as low added value raw produce. In recent years, one of our merchants set up automated production to turn these potatoes into flavored chips. With the platform’s health, the product gained national popularity creating its own online followings. This turned agricultural produce into a key local industry that increased income for 11,000 local farmers.
以云南昭通为例，当地土豆口感好、营养丰富，是当地农民的重要收入来源。然而，由于地理限制，这些土豆过去通常只能作为低附加值的原料出售。近年来，我们的一位商家建立了自动化生产线，将这些土豆加工成风味薯片。在平台的帮助下，该产品迅速走红全国，积累了大量线上粉丝。这使得农业产品成功转变为当地的支柱产业，增加了 1.1 万名农户的收入。
This quarter, new quality supply team also visited industrial belts such as Yiwu small merchandise, Xinyang snacks, apparel in Guanyuan, children’s’ wear in Foshan and fishing gear in Weiha. By making these visits, we gained deeper understanding of merchant needs and challenges faced by them. Following these visits, leveraging the platform’s digital capabilities and promotional tools such as the Black Label stores and Duo Duo short videos, we were able to help merchants explore new growth models.
本季度，新质供给团队还走访了义乌小商品、信阳零食、广元服装、佛山童装、威海渔具等产业带。通过这些走访，我们更深入地了解了商家的需求和所面临的挑战。在此基础上，借助平台的数字化能力以及黑标店铺、多多短视频等推广工具，我们帮助商家探索新的增长模式。
In Yiwu, after decades of development, the local small merchandise market is facing intense commoditized competition, with many merchants and factories operating with same profit margins and low barriers to entry. Our team integrated the merchant systems with the platform’s back-end to help them identify hit products. Together with the referral support from the platform, this significantly improved the success rate of new product development, reducing the cost of trial and error. Our support measures created room for merchants to innovate and injected new energy in the transformation of the local industries.
在义乌，经过数十年的发展，当地小商品市场正面临激烈的同质化竞争，许多商家和工厂利润空间狭窄、进入门槛低。我们的团队将商家系统与平台后台打通，帮助他们识别潜在爆款。结合平台的流量扶持，这显著提高了新品开发的成功率，降低了试错成本。我们的支持措施为商家创新创造了空间，并为当地产业转型注入了新活力。
In addition to merchant in agricultural regions and industry belts, the RMB 100 billion support program is also empowering consumer brands, especially traditional national brands, facing new consumer trends. Many of these traditional brands are dealing with challenges such as lack of product innovation and slowing growth. Leveraging deep consumer insights, our team worked with brand partners on an end-to-end solution covering product planning, marketing and store operations. These partnerships have enabled brands to successfully tap into younger and niche market segments, unlocking new growth opportunities and achieving strategic transformation.
除了农业产区和产业带的商家外，人民币 1000 亿元支持计划还在赋能消费品牌，尤其是面临新消费趋势的传统国货品牌。这些传统品牌普遍面临产品创新不足、增长放缓等挑战。借助深度的消费者洞察，我们的团队与品牌合作伙伴共同制定涵盖产品规划、营销和店铺运营的一体化解决方案。这些合作帮助品牌成功切入年轻化和细分市场，释放新的增长机会，实现战略转型。
Our supply side investments also stimulated consumption demand. During the June 18 promotion, sales hit new highs across dozens of categories. The Super Double Discount event alone reached over 3.76 million orders in a single day, meeting consumers’ evolving needs.
我们的供给端投入也刺激了消费需求。在“6·18”大促期间，数十个品类销售额创下新高。仅超级双倍优惠活动一天的订单量就超过 376 万单，满足了消费者不断变化的需求。
And as competition in the e-commerce industry intensifies around new business models, we remain committed to long-term thinking. We will continue to deepen the RMB 100 billion support program investing substantial resources in improving user experience, merchant services and industrial upgrades to build a win-win ecosystem. We also hope our efforts can help guide the industry toward a more inclusive and more open environment, creating greater value for the society.
随着电商行业围绕新商业模式的竞争日益激烈，我们依然坚持长期思维。我们将继续深化人民币 1000 亿元支持计划，投入大量资源改善用户体验、商家服务和产业升级，建设共赢的生态。同时，我们也希望我们的努力能够引导行业走向更加包容和开放的环境，为社会创造更大价值。
I will now hand it over to Jun, who will provide you with an update on our Q2 financial performance.
接下来，我将把话筒交给刘军先生，他会为大家介绍我们第二季度的财务表现。
Jun Liu
Thank you, Zhao Jiazhen. Hello, everyone. Let me walk you through our financial performance for the second quarter ended June 30, 2025. In terms of some statements in the second quarter, total revenues increased 7% year-over-year to RMB 104 billion. This was driven by an increase in revenues from online marketing services and transaction services.
谢谢赵佳臻。大家好。下面由我来带大家回顾截至 2025 年 6 月 30 日的第二季度财务表现。第二季度总营收同比增长 7%，达到人民币 1040 亿元，主要得益于线上营销服务和交易服务收入的增长。
Revenue growth further moderated as competition intensified and as we help merchants increase efficiencies. Revenues from online marketing services and others were RMB 55.7 billion this quarter, up [indiscernible] from the quarter of 2024. Revenues from transaction services were RMB 48.3 billion, up 1% from the same quarter last year.
随着竞争加剧以及我们帮助商家提升效率，营收增速进一步放缓。本季度线上营销服务及其他收入为人民币 557 亿元，较 2024 年同期有所增长。交易服务收入为人民币 483 亿元，同比增长 1%。
Moving on to cost and expenses. Our total cost of revenues increased 36% from RMB 33.7 billion in Q2 2024 to RMB 45.9 billion this quarter, mainly due to increase in fulfillment fees, bandwidth and server costs and payment processing fees.
下面来看成本和费用。我们的营收成本总额同比增长 36%，由 2024 年第二季度的人民币 337 亿元增至本季度的人民币 459 亿元，主要原因是履约费用、带宽及服务器成本以及支付处理费用的增加。
On a GAAP basis, operating expenses this quarter increased 5% to RMB 32.3 billion, from RMB 30.8 billion in the same quarter of 2024. On a non-GAAP basis, operating losses increased to RMB 3.4 billion this quarter from RMB 28.4 billion in Q2 2024. In the second quarter, a significant resources in rolling out a series of merchant support initiatives.
按 GAAP 口径计算，本季度营业费用同比增长 5%，从 2024 年同期的人民币 308 亿元增至人民币 323 亿元。按非 GAAP 口径计算，本季度经营亏损为人民币 34 亿元，而 2024 年第二季度为人民币 284 亿元。本季度我们在一系列商家支持举措上投入了大量资源。
Looking ahead, we are committed to supporting the vitality of the ecosystem, and we’ll continue to prioritize long-term value creation over short-term results. Our total non-GAAP operating expenses as a percentage of total revenues this quarter was 29%, in line with the same quarter last year.
展望未来，我们将继续致力于支持生态的活力，坚持长期价值创造而非短期结果。本季度非 GAAP 营业费用占总营收的比重为 29%，与去年同期保持一致。
Looking to specific expense items. Our non-GAAP sales and marketing expenses this quarter were [[indiscernible], up 5% versus the same term last year. Sales and marketing expenses as a percentage of our revenues this quarter was 26%, in line with the same quarter last year. Our non-GAAP general and administrative expenses were RMB 667 million versus RMB 594 million in the same quarter of 2024.
具体费用项目方面，本季度非 GAAP 销售与营销费用为 [数据不清]，同比增长 5%。销售与营销费用占总营收的比重为 26%，与去年同期一致。非 GAAP 管理费用为人民币 6.67 亿元，而 2024 年同期为人民币 5.94 亿元。
Our research and development expenses were RMB 3.1 billion this quarter on non-GAAP basis and RMB 3.6 billion on a GAAP basis, up 23% year-over-year. On a GAAP basis, operating profit for the quarter was RMB 25.8 billion versus [indiscernible] in the same last year, [indiscernible] year-over-year. Non-GAAP operating profit was RMB 27.7 billion versus RMB 35 billion in the same quarter last year.
本季度研发费用按非 GAAP 口径为人民币 31 亿元，按 GAAP 口径为人民币 36 亿元，同比增长 23%。按 GAAP 口径计算，本季度营业利润为人民币 258 亿元，而去年同期为 [数据不清]。按非 GAAP 口径，本季度营业利润为人民币 277 亿元，而去年同期为人民币 350 亿元。
Non-GAAP operating profit margin was 21% this quarter, down from 36% from the same quarter last year. The year-on-year decline of operating profit reflects our continued investments in supporting our merchants and ecosystem. Net income attributable to ordinary shareholders was [RMB 30.8 billion] for the quarter compared to RMB 32 billion in the same quarter last year, down 4% year-over-year.
本季度非 GAAP 营业利润率为 21%，低于去年同期的 36%。营业利润同比下降反映了我们持续在商家和生态支持上的投资。本季度归属于普通股股东的净利润为 [人民币 308 亿元]，而去年同期为人民币 320 亿元，同比下降 4%。
Base earnings per ADS was RMB 22.01 and diluted earnings per ADS was RMB 20.75 versus basic earnings per ADS of RMB 23.14 and diluted earnings per ADS of RMB 21.61 in the same quarter of 2024. Non-GAAP net income attributable to ordinary shareholders was RMB 32.7 billion versus RMB 34.4 billion in the same quarter last year. Non-GAAP diluted earnings per ADS of [RMB 22.07 versus RMB 23.24] in the second quarter of 2024.
本季度每份 ADS 基本收益为人民币 22.01 元，摊薄收益为人民币 20.75 元；而去年同期基本收益为人民币 23.14 元，摊薄收益为人民币 21.61 元。非 GAAP 归属于普通股股东的净利润为人民币 327 亿元，而去年同期为人民币 344 亿元。非 GAAP 摊薄每份 ADS 收益为 [人民币 22.07 元，而去年同期为 23.24 元]。
The net income in Q2 benefited from e-commerce seasonality and may not represent future earnings. As we remain focused on long-term dollar creation, the sustained investments may continue to weigh on short-term profitability. That completes the income statement.
第二季度的净利润受益于电商行业的季节性因素，可能并不能代表未来的盈利水平。由于我们继续专注于长期价值创造，持续的投资可能会继续压制短期盈利能力。以上是利润表部分。
Now let me move on to cash flow. Our net cash generated from operating activities was RMB 21.6 billion compared with RMB 43.8 billion in the same quarter last year. As of June 30, 2025, we have RMB 387.1 billion in cash, cash equivalents and short-term investment. Thank you. This concludes prepared remarks.
下面我们来看现金流。本季度经营活动产生的净现金为人民币 216 亿元，而去年同期为人民币 438 亿元。截至 2025 年 6 月 30 日，我们持有现金、现金等价物和短期投资共人民币 3871 亿元。谢谢大家。这就是我们准备的发言内容。
Unidentified Company Representative
Thank you, Jun. Next, we’ll move on to the Q&A session. In today’s Q&A session, Lei, Jiazhen and Jun will take questions from analysts on the line. [Operator Instructions] Lei and Jiazhen will answer questions in Chinese, will help translate for convenience purposes. Operator, we’ll open for questions.
谢谢刘军。接下来进入问答环节。在今天的 Q&A 中，陈磊、赵佳臻和刘军将回答线上分析师的提问。[操作提示] 陈磊和赵佳臻将以中文回答，并提供翻译以便理解。主持人，请开放提问。
Operator
[Operator Instructions] Your first question comes from Alicia Yap with Citigroup.
[操作提示] 第一位提问的是花旗集团的 Alicia Yap。
Alicia Yap
Two questions. First is that this quarter, we saw our e-commerce platform have made substantial investment in the instant retail, instant shopping, launching a new wave of industry investment. At the same time, we also saw some content platforms also continue to step up their e-commerce effort. So compared to the peers, the lead in the company’s revenue growth rate has narrowed this quarter. So could management elaborate on the reasons behind this and how management is thinking about navigating these competitive dynamics?
我有两个问题。第一个是，本季度我们看到电商平台在即时零售、即时消费领域进行了大量投资，掀起了新一轮行业投入。同时也看到一些内容平台继续加大在电商方面的布局。因此，与同行相比，公司本季度的营收增速优势有所收窄。管理层能否解释背后的原因，以及你们如何看待并应对这样的竞争格局？
And then the second question is the external environment has shifted rapidly in the first half of this year. So looking ahead, how does management think about the next phase for your global business? What new directions or evolutions do you see in terms of the business model?
第二个问题是，今年上半年外部环境快速变化。展望未来，管理层如何看待全球业务的下一阶段？在商业模式上会有哪些新的方向或演变？
And then from a financial perspective, where do you think the main growth opportunities are? And how should we think about the growth target?
从财务角度来看，主要的增长机会在哪里？我们应该如何理解公司的增长目标？
Jiazhen Zhao [Interpreted]
This is Zhao Jiazhen, let me take your first question. And in the past quarter, industry competition intensified further as the major market participants invested heavily in new business models. And against this backdrop, our revenue growth slowed further in Q2, while operating profit declined meaningfully for the second consecutive quarter.
我是赵佳臻，我来回答第一个问题。过去一个季度，随着主要市场参与者在新业务模式上的大规模投入，行业竞争进一步加剧。在这样的背景下，我们第二季度的营收增速进一步放缓，营业利润也连续第二个季度显著下降。
And in response to the intensified competition, we will adopt a proactive and long-term approach, taking the competition as an opportunity to strengthen the high-quality development of the platform ecosystem. And then accordingly, we have chosen to increase investment and to forego part of the profits in order to create growth opportunities for the SME merchants.
针对加剧的竞争，我们采取的是积极而长期的应对方式，把竞争视为强化平台生态高质量发展的契机。因此，我们选择加大投入，牺牲部分利润，以为中小商家创造更多的增长机会。
And from management’s perspective, we believe this is a responsibility that the platform is best placed to take on. And at the same time, represents a long-term investment in strengthening our ecosystem. We do not believe this quarter’s profit level are sustainable and fluctuations in profitability is likely to continue in the coming quarters.
从管理层的角度看，我们认为这是平台应当承担的责任，同时也是对强化生态的一项长期投资。我们并不认为本季度的利润水平具有可持续性，未来几个季度盈利波动很可能还会继续。
Currently, the industry is going through a critical stage of high-quality development. We realize that only by taking the initiative and working closely with the supply chain partners, can the platform drive sustainable growth for the industry and also achieve high-quality development. Amid the intensifying competition, we choose to turn our focus on the individual merchants and the specific merchant support cases to deepen our merchant support measures one case at a time.
目前行业正处于高质量发展的关键阶段。我们认识到，只有主动作为、并与供应链伙伴紧密合作，平台才能推动行业的可持续增长，实现高质量发展。在竞争加剧的环境下，我们选择把重点放在具体的商家和具体的商家支持案例上，通过一个个案例来深化我们的商家支持措施。
For example, we are seeing merchants on our platform collaborating with college research teams to design and build smart factories and automatic production lines, which are then used to produce high-quality, ready-to-eat, fresh salad products. In the past, these products could only be found offline and now available to consumers through our platform and deliver to their doorsteps. The platform pay special attention to this technology-enabled agriculture products and provide targeted support under the RMB 100 billion support program, which helps merchants increase its online offered tangible savings to consumers and, at the same time, broaden the supply of high-quality innovative products on the platform.
例如，我们看到平台上的商家与高校科研团队合作，设计并建立智慧工厂和自动化生产线，用来生产高品质的即食鲜蔬沙拉产品。过去这些产品只能在线下购买，现在通过我们的平台即可送达消费者家中。平台对这类科技赋能的农业产品给予重点关注，并在人民币 1000 亿元支持计划下提供定向扶持，既帮助商家拓展线上销售、为消费者带来实实在在的优惠，同时也丰富了平台上优质创新产品的供给。
There are many more examples of such cases that benefit all parties involved. And each of these cases is made possible only through the close collaboration between the platform, the merchants and the supply chain. We understand that to deliver effective support and to ensure that the RMB 100 billion support program truly gets to the SME merchants who need it most, we need to go deep into agricultural regions and the industry belts and carefully understand the pain points and difficulties that merchants are dealing with.
这样的案例还有很多，且每一个案例都只有在平台、商家和供应链的紧密合作下才能实现。我们深知，要让支持真正落到实处、让人民币 1000 亿元支持计划惠及最需要的中小商家，就必须深入农业产区和产业带，细致了解商家面临的痛点和困难。
And looking ahead, changes in the external environment and intensifying competition will inevitably lead us to step our investments in the merchant ecosystem. And these factors combined will cause the short-term financial results to fluctuate. However, in the long run, if we execute well on each and every one of these merchant support cases, we are confident in achieving sustainable, high-quality growth together with our merchants. This is how we are approaching today’s competitive environment.
展望未来，外部环境的变化和日益激烈的竞争将不可避免地要求我们加大对商家生态的投入，这些因素叠加会导致短期财务结果的波动。但从长期来看，如果我们能在每一个商家支持案例上都做到执行到位，我们有信心与商家一起实现可持续的高质量增长。这就是我们应对当下竞争环境的方式。
Lei Chen [Interpreted]
Hello. This is Chen Lei. Let me take your questions on our global business. We noted that in the past few quarters, we have seen significant changes across countries and regions and also shifts in the global. We may continue to see some short-term volatility in different markets. Overall, however, we observed steady consumer demand and consumer trust in our platform is gradually growing. We will proactively adapt to changes in each region, make timely adjustment and to meet the changing regulatory requirements of each region as well as the diverse needs of consumers.
大家好，我是陈磊。我来回答关于全球业务的问题。我们注意到，在过去几个季度，不同国家和地区都出现了显著变化，全球层面也在发生转变。未来各市场可能仍会出现一些短期波动，但总体而言，我们观察到消费者需求稳定，消费者对我们平台的信任正在逐步提升。我们将积极适应各地区的变化，及时作出调整，以满足各地区不断变化的监管要求以及消费者的多样化需求。
Now our global business has gone through an initial phase of growth. We are encouraged to see that our products and services are well received by consumers around the world. But at the same time, our business is still in its early stages, and there is plenty of room for improvement. The vision of our global business has always been to bring more high-quality products to consumers worldwide.
目前我们的全球业务已完成初步的成长阶段。令人鼓舞的是，我们的产品和服务受到了全球消费者的广泛欢迎。但与此同时，我们的业务仍处于早期阶段，仍有很大提升空间。我们的全球业务愿景始终是把更多高质量的产品带给全球消费者。
Looking ahead, we will continue to invest in our supply chain capabilities, service capabilities and compliance capabilities to strengthen the fundamentals for the next phase of the global business.
展望未来，我们将继续在供应链能力、服务能力和合规能力方面加大投入，为全球业务的下一阶段夯实基础。
On the supply chain capabilities, we are continuously strengthening our localized operations, working closely with local merchants to diversify product offerings and improve supply stability and delivery efficiency. On the surface capabilities, we are constantly iterating collaborations with our logistics partners to enhance the fulfillment experience. We are continuously building our team’s capabilities to meet the high expectations of consumers worldwide.
在供应链方面，我们不断加强本地化运营，与当地商家紧密合作，丰富产品供给，提升供应稳定性和配送效率。在服务方面，我们持续迭代与物流伙伴的合作，以优化履约体验。同时，我们也在不断提升团队能力，以满足全球消费者的高标准期待。
Looking forward, the level of surface we currently provide is still in its early stage. Our team will continue to work hard day by day through the continuous improvement in service quality. We hope to win over more and more consumers. Thank you for your questions.
展望未来，我们目前提供的服务水平仍处于初期阶段。我们的团队将继续日复一日努力，通过不断提升服务质量，争取赢得越来越多消费者的信赖。感谢您的提问。
Operator
Your next question comes from Thomas Chong with Jefferies.
下一位提问的是杰富瑞证券的 Thomas Chong。
Thomas Chong
My first question is about since the launch of the RMB 100 billion support program last quarter, what are the key changes that management has observed in your business operations? From a financial perspective, how is the impact of these investments shown in your financial performance? And on a mid to long term horizon, what will these affect the company’s monetization and spending?
我的第一个问题是，自上季度推出人民币 1000 亿元支持计划以来，管理层在业务运营中观察到了哪些主要变化？从财务角度看，这些投资对财务表现产生了怎样的影响？从中长期来看，这会如何影响公司的变现能力和支出？
My second question is about what’s the company’s view on the Duo Duo Grocery business? We noticed that some of the company’s main competitors in this business have exceeded certain markets. What are the company’s future plans for this business?
第二个问题是，公司如何看待多多买菜业务？我们注意到在该业务上，公司的一些主要竞争对手已经退出了部分市场。公司未来对此业务有何规划？
Jiazhen Zhao [Interpreted]
Thank you, Thomas, this is Zhao Jiazhen. Let me answer your first question. And since the second half of last year, with escalating competition and accelerating changes in the external environment, we have scaled up commission reductions across the platform, initiatives such as the RMB 10 billion fee reduction initiative, the new quality merchant support program and the logistics support initiatives have been rolled out to lower operating costs and help drive efficiencies.
谢谢 Thomas，我来回答第一个问题。自去年下半年以来，随着竞争加剧和外部环境的快速变化，我们在全平台扩大了佣金减免力度，陆续推出了人民币 100 亿元降费举措、新质商家支持计划和物流支持计划，帮助商家降低运营成本、提升效率。
And earlier this year, the management unanimously decided to launch the RMB 100 billion support program as our next strategic initiative, dedicating significant resources and sacrificing the platform’s profits to cultivate a sustainable and healthy platform ecosystem.
在今年年初，管理层一致决定推出人民币 1000 亿元支持计划，作为我们的下一项战略举措，投入大量资源，并牺牲平台利润，以培育一个可持续、健康的平台生态。
The RMB 100 billion support program is very broad in scope. We focus on our support measures where merchants needed most. Over the past quarter, we have begun to see some of the early effects. For instance, in agriculture sector, we launched 2025 Duo Duo premium produce initiative, expanding support to merchants across hundreds of high-quality agricultural regions. It helped our merchants explore new ways to bring agricultural products online, increase the added value captured by the merchants and drive higher production and income.
人民币 1000 亿元支持计划覆盖范围非常广，我们重点聚焦在商家最需要的支持环节。过去一个季度，我们已经开始看到一些初步成效。例如，在农业领域，我们启动了 2025 多多优选农产品项目，扩大对数百个优质农业产区商家的支持，帮助商家探索新的农产品上行方式，提高商家获取的附加值，推动产量和收入提升。
And beyond agriculture, our dedicated teams for a new quality merchant support program also visited hundreds of manufacturing belts assisting more SME merchants with their transformation and accelerating the manufacturers’ shift towards high-quality development.
在农业之外，我们的新质商家支持计划团队也走访了数百个制造业产业带，帮助更多中小商家转型，加快制造商向高质量发展的转变。
And similarly, through our logistics support initiatives, the platform waived shipping fees from transit warehouses to final destination for orders shipping to remote regions, allowing the merchants to sell their products to these regions by paying only the euro shipping fees, which significantly expanded the market reach. This initiative not only brought down cost and improved efficiency for merchants, but also stimulated regional consumption and allows high-quality products to reach more consumers and benefiting the wider consumer base.
同样地，通过物流支持举措，平台对发往偏远地区的订单，免除了从中转仓库到最终目的地的运费，商家只需支付基础运费即可销售至这些地区。这一举措显著扩大了市场覆盖，不仅降低了商家的成本、提升了效率，还刺激了区域消费，让更多高质量的产品能够触达消费者，从而惠及更广泛的消费群体。
Going forward, we will continue to do our best to understand the pain points and difficulties faced by our merchant and through the RMB 100 billion support program, increase our investments to deliver targeted and meaningful support to deepen our support to the merchant ecosystem.
展望未来，我们将继续深入了解商家所面临的痛点和困难，并通过人民币 1000 亿元支持计划，加大投入，提供有针对性且有意义的支持，进一步深化对商家生态的扶持。
From a financial perspective, the investments made over the past quarter have resulted in slower revenue growth and year-on-year profit decline. This reflects the platform’s commitment to invest in substantial resources to support merchants. We will continue to ramp up our investments to enable merchants to thrive, while building a more sustainable and robust platform ecosystem. And as such, we do not believe this quarter’s profits are sustainable. There will be fluctuations in profitability in the coming quarters.
从财务角度来看，过去一个季度的投资导致营收增长放缓、利润同比下降。这体现了平台致力于投入大量资源支持商家的承诺。我们将继续加大投入，帮助商家成长，同时打造更可持续、更具韧性的生态系统。因此，我们不认为本季度的利润水平具有可持续性，未来几个季度盈利将会有波动。
And about your second question on Duo Duo Grocery. And first of all, Duo Duo Grocery is a hard business, requiring significant long-term investments. The competition chose to exit the business at this juncture to concentrate on investing in new business models. But to us, this is not a time to relax, we need to further increase investments based on our own business model and to address the impact from the intensifying competition with relentless execution.
关于你提的第二个问题——多多买菜。首先，多多买菜是一项艰难的业务，需要长期、大规模的投入。一些竞争对手选择在此时退出，把资源集中到新的商业模式投资上。但对我们来说，现在并不是放松的时候，我们需要在自身商业模式的基础上进一步加大投入，以坚定执行来应对日益激烈的竞争。
As to the Duo Duo Grocery business itself, when evaluating whether to pursue a new business, the first question that comes to us is always whether we can create our unique value. When we launched the Duo Duo Grocery business in 2020, we viewed this as a natural extension of our e-commerce operations. The initial reason for us to start this business was seeing the traditional e-commerce supply chains struggle to meet the users’ demand for fresh produce.
至于多多买菜业务本身，当我们评估是否开展一项新业务时，首要问题始终是能否创造独特价值。2020 年我们启动多多买菜时，将其视为电商业务的自然延伸。最初的原因是看到传统电商供应链难以满足用户对生鲜产品的需求。
And for example, certain fresh products incurred significant spoilage during traditional e-commerce fulfillment. And in response to these pain points, we decided to increase our investments in the supply chain to better match demand and local supply, building a supply chain suited for agricultural and fresh products and creating value for both users and merchants in terms of product variety and fulfillment efficiency.
例如，一些生鲜产品在传统电商履约过程中出现严重损耗。针对这些痛点，我们决定加大在供应链上的投资，更好地匹配需求和本地供给，构建适合农产品和生鲜商品的供应链，在商品丰富度和履约效率上为用户和商家创造价值。
After 5 years of investment, our Duo Duo Grocery now covers 70% of villages nationwide, addressing last mile delivery challenges in many areas and meeting consumer demand for high-quality, affordable products. At the same time, we have established an efficient agricultural product distribution network, connecting local farmers and SME merchants with local consumers and expanding the market reach.
经过 5 年的投入，目前多多买菜已覆盖全国 70% 的行政村，解决了许多地区的“最后一公里”配送难题，满足了消费者对高品质、实惠商品的需求。同时，我们也建立了高效的农产品流通网络，把本地农户和中小商家与本地消费者连接起来，扩大了市场覆盖范围。
Since the beginning of this year, with the RMB 100 billion support program, the platform has increased support and traffic allocation to remote regions. In regions where Duo Duo Grocery services were recently launched, local product offerings have greatly improved and expanding the reach of inclusive consumption network to meet local consumers’ growing demand for better products. And meanwhile, the Grocery business has created competitive local employment opportunities contributing to the economic growth in these communities.
自今年以来，随着人民币 1000 亿元支持计划的实施，平台加大了对偏远地区的扶持和流量分配。在一些新开通多多买菜服务的地区，当地商品供给显著改善，包容性消费网络的覆盖范围得到扩大，满足了当地消费者对更好产品的日益增长需求。同时，多多买菜业务还创造了有竞争力的本地就业机会，推动了这些社区的经济发展。
As I just mentioned, while Duo Duo Grocery business requires substantial investment, we believe it is quite meaningful that we will continue to increase our investments. And going forward, we’ll deepen our long-term commitments across product, supplies, service quality and delivery efficiency for the Duo Duo Grocery business, creating tangible benefits for consumers, supply chain participants. Thank you for your question.
正如我刚才所提到的，虽然多多买菜业务需要大量投入，但我们认为这项业务极具意义，因此我们会继续加大投资。未来，我们将在商品供给、服务质量和配送效率等方面加深长期投入，为消费者和供应链参与者创造实实在在的价值。谢谢你的提问。
好的，这里是你提供的 Lixin Ju 提问 & 刘军回答第一问 的英文—中文平行翻译：
Operator
Lixin Ju with Bank of America.
下一位提问的是美国银行的 Lixin Ju。
Lixin Ju [Interpreted]
Let me translate my questions. First, in last quarter’s earnings call, management mentioned the mismatch between investment cycles and the return cycle was a primary cause of the profit decline in the first quarter. Looking at the the second quarter results, it seems the company’s expense ratio and profit margin levels show signs of stabilization. Just wonder, does it indicate like the company’s investment cycle has already like stabilized? And how should we actually expect the profit margin trends going forward, both long term and short term?
我来翻译一下我的问题。第一个问题是，在上季度的财报电话会上，管理层提到投资周期与回报周期的不匹配是第一季度利润下滑的主要原因。从第二季度的结果来看，公司费用率和利润率似乎出现了稳定迹象。请问这是否意味着公司的投资周期已经趋于稳定？未来利润率的走势，无论短期还是长期，我们应该如何看待？
My second question is recently, we have seen some signs of improving consumer demand from some industry data. Has management observed a similar trend lately? Any updates on consumer sentiment or behaviors will be appreciated. And how does management view macro trends in the third and fourth quarter this year?
第二个问题是，最近从一些行业数据中，我们看到了消费需求改善的迹象。请问管理层是否也观察到了类似趋势？能否分享一下关于消费者情绪或行为的最新情况？另外，管理层如何看待今年三、四季度的宏观走势？
Jun Liu
Joyce, this is Jun. I would take your first questions. First of all, our profits in Q2 benefited from e-commerce seasonality. And so this quarter may not represent future earnings. If we’re looking at the numbers, our Q2 revenue growth further slowed to 7% and operating profit dropped to 21%. We believe there are some reasons for this. First, under the [indiscernible], the platform has increased its investment to support merchants which naturally impacts profitability.
Joyce，我来回答第一个问题。首先，我们第二季度的利润受益于电商行业的季节性因素，因此本季度的表现可能并不能代表未来的盈利水平。从数据上看，二季度营收增速进一步放缓至 7%，营业利润下降至 21%。我们认为主要有几个原因。第一，在 [听不清] 的背景下，平台加大了对商家的投入，这自然对盈利能力带来了影响。
And for second, intensified industry competition continue to create challenges for our merchants and the platform. So to help merchants navigate market cycles, the platform will continue to scale up investments should Q2 profit levels should not be seen as a reference for future performance. We do not believe this quarter’s profit level is sustainable – fluctuations in profitability in the coming quarters.
第二，行业竞争加剧，持续给商家和平台带来挑战。为了帮助商家渡过市场周期，平台将继续扩大投入，因此第二季度的利润水平不应被视为未来业绩的参考。我们不认为本季度的利润水平是可持续的，未来几个季度盈利波动可能会继续。
As we have communicated in the past, in current market environment, increasing platform investment to help merchants through the cycles is a responsibility the platform can and must take on. We believe that these investments will create a healthier merchant ecosystem in the long run. Our focus remains on long-term value creation rather than short-term financial performance, as Lei and Jiazhen just mentioned, we will continue to increase our [indiscernible].
正如我们过去所沟通的，在当前市场环境下，加大平台投入、帮助商家渡过周期，是平台能够且必须承担的责任。我们相信这些投资将在长期内打造一个更健康的商家生态。我们的重点仍然是长期价值创造，而非短期财务表现。正如陈磊和赵佳臻刚才所提到的，我们会继续加大 [听不清]。
Jiazhen Zhao [Interpreted]
This is Zhao Jiazhen. Let me answer your second question. China’s consumer market demonstrates remarkable potential and resilience and driven by sustained pro consumption policies, we have observed steady growth in overall retail sales, alongside the continuous rise in online retail penetration. We remain very confident in the overall potential of China’s consumer market.
我是赵佳臻，我来回答第二个问题。中国消费市场展现出了巨大的潜力和韧性，在持续的促消费政策推动下，我们观察到整体社会零售额稳步增长，同时线上零售渗透率不断提升。我们对中国消费市场的整体潜力依然充满信心。
However, from an industry structure perspective, we are seeing escalating competition and it is increasingly convenient for consumers to switch between different platforms. And the competitive landscape is at risk of being reshaped. And in this environment, the platform must take on a more proactive goal by increasing investments.
不过，从行业结构来看，我们看到竞争在不断加剧，消费者在不同平台之间切换也变得越来越容易，竞争格局正面临重塑风险。在这样的环境下，平台必须承担起更积极的角色，加大投入。
And during the June 18 shopping festival in Q2, we not only provided substantial support to high-quality agriculture and national brands but also offered extra coupons to consumers, to provide consumers more savings for their midyear shopping needs. And during the promotion, a number of agriculture and new quality merchants participating in the RMB 10 billion program doubled, enabling many SME merchants across multiple categories to reach new milestones. And moreover, categories such as beauty, skin care, maternity and baby and pet supplies also experienced good growth through the promotion.
在第二季度的“6·18”购物节中，我们不仅为优质农产品和国货品牌提供了大力支持，还向消费者发放了额外优惠券，帮助他们在年中购物季节享受更多实惠。在这次促销中，参加百亿补贴计划的农业和新质商家数量实现了翻倍，使多个品类的大量中小商家达成了新的里程碑。此外，美妆、护肤、母婴和宠物用品等品类在活动中也取得了良好增长。
The 2025 Duo Duo premium produce program has reached hundreds of high-quality agricultural regions, helping high-quality agricultural products, which urban consumers. For example, leeches from Guangdong Maoming quickly sold over 50,000 kilograms after being featured in the RMB 10 billion program. Our dedicated team for a new quality merchant support program also continued to engage with hundreds of manufacturing regions such as footwear and apparel in Xinjiang and cameras in Guangdong, leveraging the momentum of the shopping festival, we helped a large number of quality products quickly reach the market.
2025 年多多优选农产品项目已覆盖数百个优质农业产区，帮助更多优质农产品触达城市消费者。例如，广东茂名的荔枝在进入百亿补贴计划后，很快销售超过 5 万公斤。我们的新质商家支持团队也继续深入数百个制造业产区，包括新疆的鞋服、广东的相机等，借助购物节的势能，帮助大量优质产品快速进入市场。
And then the platform’s proactive investments have created a positive feedback from both consumers and merchants. And going forward, in this intensifying competitive environment, we will continue to increase our support on both the supply and demand sides, sacrificing part of the platform’s profit to foster healthier and more vibrant ecosystem. And by doing so, we hope to help more SME reduce costs and drive sales and offer consumers more tangible benefits. Thank you.
平台的积极投入也带来了消费者和商家的正向反馈。展望未来，在日益激烈的竞争环境下，我们将继续在供给和需求两端加大支持，牺牲平台部分利润，以培育更健康、更有活力的生态。通过这种方式，我们希望帮助更多中小商家降低成本、提升销量，同时为消费者提供更多实实在在的好处。谢谢。
And I think it’s about time. And thank you again for joining our call today, and we look forward to speaking to you again next quarter.
我想时间差不多了。再次感谢大家参加今天的电话会议，我们期待下季度再与各位交流。
Operator
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect.
女士们、先生们，今天的会议到此结束。感谢各位的参与，现在可以挂断电话了。