PDD Holdings Inc. (PDD) Q4 2025 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by and welcome to PDD Holdings, Inc. fourth quarter and fiscal year 2025 earnings conference call. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star 1 on your telephone. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your host today. Sir, please go ahead.

Thank you, Operator. and hello everyone and thank you for joining us today. PTT Holdings earnings release was distributed earlier and is available on our website at investor.pttholdings.com as well as through the Globe Newswire services. Before we begin, I would like to refer you to our safe harbor statement in earnings price release, which applies to this call, as we will make certain full-looking statements. This call also 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 are Mr. Chen Lei, our co-chairman and co-chief effective officer, and Mr. Zhao Jiazhen, our co-chairman and co-chief effective officer. Our VP of Finance, Ms. Liu Jun, is unfortunately on medical leave. Delivering the prepared remarks today will be Mr. Li Jun, our finance director. Jiazhen and Lei will make some general remarks on our performance for the past quarter and our strategic focus. Zhiyong will then walk us through our financial results for the fourth quarter and the fiscal year ended December 31st, 2025. During the Q&A session, Lei and Jiajian will answer questions in Chinese and will help translate. Please kindly note that English translation is for reference only. 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, Hello everyone, and thank you for joining our earnings call for the 4th quarter and fiscal year of 2025. will rise to a new level at a new level.

In the next year, we expanded the company's leadership structure, and implemented the leadership of the company's leadership. We also expanded the company's strategy as a heavy supply chain, and expanded the high-quality supply chain, and expanded the value of the supply chain.

In 2025, we celebrated the 10th anniversary of the company's funding, and it is also the year in which we made our largest investment in high quality development. For the first time in the e-commerce industry, we launched the 100 billion support program to support merchants. The entire company joined efforts in stepping up our support to farmers and merchants. And during the shareholders' meeting at the end of last year, we improved our corporate governance structure by introducing the co-chair structure and further sharpened our strategic focus to investing deeply in the supply chain and concentrating on high-quality, brand-oriented growth to drive the entire supply ecosystem to move up the value chain. in the past year, we delivered steady results. This quarter, the group's revenue reached 123.9 billion RMB, growing 12% year-on-year, while full-year revenue reached 431.8 billion RMB, up 10% year-on-year. Both this quarter and the annual net income decreased year-on-year, which primarily reflects our sustained investment on both the supply side and demand side. As we have communicated in the past, we prioritize long-term value generation by nurturing our ecosystem, rather than short-term financial results. In benefiting from long-term investments on both supply and demand sides, through initiatives like the 100 billion support program, the platform and supply chain ecosystem have been moving steadily. in the right direction. Key participants of the supply chain, such as agricultural regions and the industrial belts, have become core pillars supporting the platform and ecosystem, while also bringing consumers more affordable, high-quality products. With the continued investments under the 100 billion support program, dedicated projects such as多多 local specialties, new quality supply, and logistics support for remote regions have gradually broadened our support from top merchants and SMEs. to every segment of the supply chain, helping businesses across all categories pursue a differentiated growth. This has enabled the transition from merely supplying products to pursuing quality and to brand building, greatly improving supply chain efficiency and overall industrial capabilities, while at the same time, create room for profit and innovation for agricultural regions and industrial belts.

In the fourth季度, 多多好特产专项团队深入安月柠檬 普尔咖啡 武汉瓜子 梅州柚子 文山蓝梅 福州鲍鱼 连运港海苔等农特产区 通过一品一方案的定制化扶持 解决生鲜产品标准化不足 附加值不高等问题 推动农产区实现了种植标准化 精品化销售 增加工发展等路径 有效提升了农产品的附加值 也将更多的利润留在了原产地 In the fourth quarter, the多多 local specialties team visited the agricultural region such as anew lemons for coffee, Wuhan seeds, major pomelos,

wenshan blueberries, fujo abalone, and lingang seaweed. To customize one product, one plant support programs, the team addressed issues such as the lack of product standardization and low value add. These efforts guided farmers and growers to adopt standardized planting, immunization, and deep processing, effectively increasing the added value of agricultural products and retaining more profits in their places of origin, thereby enabling sustainable growth in specialty agriculture industries. In Industrial Belt, we accelerated the execution of new quality supply program by doubling down on our support efforts. Our dedicated teams visited manufacturing clusters such as Yiwu accessories, Pinghu down jackets, Hunan spicy snacks, Anhui roasted seeds, Tianjin potato chips, Zhongshan small appliances, and Shanghai chocolate, and delved deep into every segment of the supply chain, from raw materials to components. Through a combination of fee reduction and support, we helped unlock the potential in the supply chain, driving an overall upgrade in supply chain operations and helping industrial belt transition from commoditized competition to brand building. from the northern region of the eastern region, to the northern region of the region of the region.

Until now, we have been in all the 10 counties in the province of the region including the state of the region and the local community and the state of the region and the state of the region will be registered in the region.

While stepping up our investment in the supply chain, we also unlocked the consumption potential in remote regions through our logistics support program, driving new growth opportunities for merchants. In the fourth quarter, building on the success of this campaign, we continue to tackle the last mile of parcel delivery into villages across multiple provinces and cities, extending the benefits of new e-commerce from western provinces to vast rural areas. To date, we have deployed and built end-to-end delivery networks, including county-level transfer warehouses and and village-level pick-up points in over 10 provinces and municipalities. We also cover the transshipping fees for orders delivered to villages, bringing more remote rural areas into the free shipping zones.

In the presentation of the presentation, we will continue to improve the consumption and consumer environment, and continue to improve the users and customers' experience.

In June, the presentation of the presentation of the presentation of the presentation In terms of trust and safety, we continue to improve the business environment and further enhance the service levels for both consumers and merchants. During the Spring Festival, we rolled out a series of full safety measures, including compliance checks on business qualifications, reviews of food advertisements, controls on food live streaming, protection of miners, IP protection, and the development of a food database, all to safeguard the food safety for consumers during the festivities. 业务优势 在之前的股东会上 我们宣布全力投入供应链的升级 重头供应链

再造一个瓶多多 这是我们的本分 在过去的几个月里 我们在股东大会上 正宗宣布的上年重大战略 正在转化为具体的行动 业务和组织内部 正在发生深刻的变革 在下个阶段 公司的战略重心 不是业务多元化 而是要聚焦供应链的高质量发展 继续发挥 In our global business, despite the drastic changes in external environment, we deliver a steady world over the past year, mainly reflecting the competitive advantages built through our long-term focus on the supply chain.

At the last shareholders' meeting, we announced our all-out efforts in investing in the transformation of the supply chain and in building another Pinduoduo. This remains our duty and primary focus. Over the past few months, the three-year strategy we committed to during the annual general meeting has been translated into concrete actions, and fundamental changes are taking place within the business and our organizations. In the next phase of our journey, our strategic priority will not be business diversification, but rather concentrating on the high-quality development of the supply chain, Leveraging our strength in the supply chain accumulated over the years, we will reinvent the platform and propel the ecosystem up the value chain.

Let's have a chance to join another Pinduoduo.

2026 marks PDD's 11th year and a new starting point as we head into our next decade. We are starting afresh and moving forward with an all-in latitude and a persistent focus on execution. We will dedicate more talent and resources to deepen our investments in the supply chain, accelerating its upgrade and transformation. We believe that in the next three years, we will have the opportunity to build another Pinduoduo. Now, I'll hand it over to Chen Lei for further remarks.

Thanks, Jackson. And hello, everyone. 2025 marked our 10th anniversary. As Jackson just mentioned, we took on greater responsibility this past year and launched the 100 billion support program to give back to the version ecosystem. We also established a co-chair structure to further improve our governance and firmly anchored our company's strategic focus on the high-quality development of supply chain. Through these efforts, we continue to create long-term value for consumers, for merchants, the industry, and the society. ETA has been nearly a year since we launched the 100% support board. During this time, we continue to reinvest in our ecosystem through measures such as fee reductions, merchant support, trust and safety initiatives. Our dedicated team has gone deep into agricultural regions and the manufacturing hubs to have hundreds of regions establish standardized production systems and to explore differentiated and brand-oriented growth models. This effort has significantly improved the efficiency and quality of operations, driving the supply chain transformation from scale-driven to value-driven. This also brings more high-quality affordable products to our consumers. Our consistent investment in the supply chain has unlocked strong consumer demand into the platform. The platform delivers strong performance during major promotions, such as June 18th, 2011 at Spring Festival. Party products from different regions go through geographic and offering consumers more adverse and further enhancing the quality of life. Our global e-commerce business continues to deliver 30 goals and has reached meaningful scale in most countries in the third. Accomplished in three years was to do business ten years to complete. However, over the past year, the global geopolitical landscape has grown more complex. Trade and regulatory policies across different countries and regions will continue to evolve. This has introduced greater uncertainty to our global business and will impact and even reshape our development model. In this context, we need to rely more than ever on the collective capabilities of our supply chain ecosystem. Therefore, we will continue to anchor our strategy in investing deeply in supply chain capabilities and direct more efforts, technical, and resources to its transformation. We aim to empower our merchants and manufacturers to become innovators with critical market capabilities, developing consumer insights, coming up product size, and building brands. This will drive pressure towards high-quality and brand-oriented growth, creating real value for consumers. Over the past few months, we have been making steady progress on the execution of three-year strategies adopted at a shareholders meeting. We are pleased to see some results. In the fourth quarter, our long-line investments in agricultural research achieved new results. Last October, for the second consecutive year, we were invited to attend a World Food Forum hosted by a UN Food and Agriculture Organization, representing Asian enterprises. We share our experience and achievements in supporting digital agricultural innovation. And we also sponsored two great agricultural research teams that took the stage at a forum, bringing new energy into agricultural research and development. Since the start of 2026, competitions in e-commerce sector have continued to intensify around new business models and new technologies. At the same time, the global environment has become more complex than last year, with increased uncertainty in the economy and trade climate, as well as in regulatory policies across various countries and regions. This will inevitably bring more challenges and weight on our future performance, putting pressures on our profitability in short-term. However, we will continue to uphold our long-term philosophy and faithfully execute our strategy of investing deeply in a supply chain, dedicating more resources to give back to the industry and the society. And now I will turn a call over to Lijo, who will talk to you through our financial performance for the first year of 2025.

Now, let me walk you through our financial performance in the fourth quarter and the fiscal year and December 30. In terms of income statements, in Q4, our total revenues increased 12% year-over-year to R&B $123.9 billion and 10% year-over-year to R&B $431.8 billion for full-year 2025. This was mainly driven by an increase in revenues from both online marketing services and others for RMB $60 billion this quarter, up 5% compared to for RMB $63.9 billion, up 19% versus moving on to costs and expenses. Our total costs of revenues increased 15% from RMB $47.8 billion in Q4 2024 to RMB $55.2 billion this quarter. For the full year, our total costs of revenues increased 23% to R&B $188.8 billion, mainly due to increased fulfillment fees, bandwidth and server costs, and payment processing. On a GAAP basis, total operating expenses this quarter increased 10% to R&B $41 billion. On a non-GAAP basis, our total operating expenses increased to R&B $39.3 billion this quarter from R&B $35.1 billion in Q4 2024. Total non-GAAP operating expenses as a percentage of total revenues was 32% in Q4 in 2025. Total non-GAAP operating expenses were R&B $140.7 billion, up from $122 billion in 2024. Looking to specific expense items, our non-GAAP sales and market expenses this quarter were R&B $34 billion, up 9% versus the same quarter on a non-GAAP basis, our sales and market expenses as a percentage of revenues this quarter was 27% compared to 28% in Q4 of 2024. For the full year, non-GAAP sales and marketing expenses increased from R&B $109.1 billion to R&B $123.3 billion in 2025. Our non-GAAP GNA expense was R&B $907 million in Q4 versus R&B $998 million in the same quarter of 2024. Our annual non-GAAP G&A expenses were R&B $3.2 billion in 2025 versus R&B $2.8 billion last year. Our research and development expenses were R&B $4.4 billion in the fourth quarter on a non-GAAP basis and R&B $5 billion on a GAAP basis. On a GAAP basis, operating profit for the quarter was R&B $27.7 billion versus R&B $25.6 billion in the same quarter, 2024. Non-GAAP operating profit was R&B 29.5 billion versus R&B 28 billion in the same quarter 2024. Non-GAAP operating profit margin was 24% this quarter compared with 25% for the same quarter 2024. For the full year, non-GAAP operating profit was R&B 102.6 billion compared with R&B 18.3 billion in 2020. Now the income attributable to ordinary shareholders was RMB $24.5 billion for the quarter and RMB $99.4 billion for the full year. In the fourth quarter, basic earnings per ADS was R&B 17.50 and diluted earnings per ADS was R&B 16.51 versus basic earnings per ADS of R&B 19.76 and diluted earnings per ADS of R&B 18.53 in the same quarter of 2024. Non-GAAP net income attributable to ordinary shareholders was R&B 26.3 billion for the quarter and RMB $107.3 billion for the full year. In the fourth quarter, non-GAAP diluted earnings per ADS was RMB $17.69 versus RMB $20.15 in the same quarter of 2024. That completes the income statement. Now, let me move on to cash flow. For net cash flow generated from operating activities was R&B $24.1 billion in Q4 and R&B $106.9 billion for the full year of 2025. Compared with R&B $29.5 billion in the same quarter of 2024 and R&B $121.9 billion in 2024. As of December 31st, 2025, the company had an R&B $422.3 billion in cash, cash equivalents, and short-term investments. Thank you, and this concludes my prepared remarks.

Next, we'll move on to the Q&A session. In today's Q&A session, Lei and Jiajun will take questions from analysts on the line. We could take a maximum of two questions from each analyst. Lei and Jiajun will answer questions in Chinese. Operator, we're open for questions.

Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Participants are requested to stick to two questions at each time. Your first question comes from Alicia Yap with Citigroup. 也受到蛮复杂的一些监管环境的新挑战,想请管理层如何在这样的这个公司如何在这样的这个环境中保持团队的这个拟结和执行力。

然后第二个问题是过去这个季度我们看到电商平台增长有在放缓,然后公司过去两个季度的这个广告收入增速其实也有所回落,这样想请管理层分享一下对目前中国电商市场的看法,然后我们的行业下阶段的一个增长有可能会来自哪些地方,我自己翻译一下。 I have two questions. First is that the company makes some organization adjustments at the shareholder meeting at the end of last year. So currently, the company is operating in over 90 markets and at the same time also face new challenges from the complex regulatory environments. So how does the company maintain the flexibility and also the quality of execution in such an environment. And the second question is, over the past quarter, we have seen a slowdown in the growth of e-commerce platform in China, and the company's online marketing revenue growth also showed a slowdown over the past two quarters. So could management share with us your view on the current state of China e-commerce market and where the next phase of growth for the industry might come from.

Hi, this is Zhao Jiaxin. Let me take your first question. Over the past few years, our global business has indeed achieved some progress and now serving nearly a hundred markets and achieving meaningful scale. And throughout this process, our corporate governance and the development of internal talents have lagged behind the business growth, and that leaves us difficult to keep up in many areas. At the same time, the international geopolitical landscape is evolving rapidly, with trade and regulatory policies across regions changing quickly and becoming increasingly tightening. This places new demands on our company as a whole. 因此我们认为有这个机会也有这个必要进行系统性的结构性的组织文化和公司治理的再造 当然这肯定是需要一个过程的 去年的12月我们在股东大会上宣布的联系总事长的制度 以及新提升的新的领导者就是这样的一个系统性变革的开始 And therefore, we believe there is both an opportunity and a necessity to undertake a systemic and structural transformation of our organization, culture, and corporate governance. And of course, this will be a gradual process. The co-chair structure and the appointment of new leaders that was announced at our shareholders' meeting last December is the beginning of this systematic transformation. 那在未来的一段时期里呢,我们将花更大的精力,财力和物力投入到供应链的升级再造,实现这个供应链的运营模式的整体性的升级。 And in the period ahead, we will dedicate greater energy, capital and resources to upgrading and reinventing the supply chain, and to achieve an overall transformation of our supply chain and operations. I will also address this question. the second question as you mentioned over the past few quarters we have seen the e-commerce industry enter a new phase of intensified competition and slowing growth in in this new stage our strategy of investing deeply in the supply chain was formulated it was formulated from the recognition that an e-commerce platform should not just be a simple transaction platform rather it can and should do more, creating greater value for all participants across the entire supply chain.

That's the whole thing about the supply chain. In the past, we've been doing a lot of good products. That's why we've been doing a lot of good products in the supply chain. That's why I want to be interested in the supply chain.

Our deep investments in the supply chain cover multiple aspects. And initiatives launched recently, such as DODO's local specialties and logistic support for remote regions, are all projects empowering the supply chain to be more inclusive. Here, I will also highlight two specific programs. The first program is Free Delivery to Villages. This is a new project we piloted in the fourth quarter of last year, aimed at addressing the challenges of high logistics costs and merchants lack of incentives to ship to remote rural villages, bringing more villages into the free shipping zone. And currently, we have built last mile logistics infrastructure, including transit warehouses at the county level and pickup points at the villages level across multiple regions in China, and with a platform covering the transshipping fees for orders delivered to these villages. model, merchants only need to send their products to their transport warehouses, and the transportation from the warehouse to the village-level pickup point is then handled by the transit warehouse. And building on our existing experience, we apply the transshipping model to the last mile delivery to the villages, improving the shopping experiences in remote areas and helping a merchant to tap into new market opportunities. The second example is new quality supply. For merchants willing to improve their product quality and services, The platform empowers them by providing industry insights and supply chain support. These measures support merchants to upgrade their operations across the entire product life cycle, from R&D and production to manufacturing and sales, and driving the transformation of the supply chain. The final information is compiled by our merchant development teams and promptly relates to the market. merchants. Together with traffic support for new product testing, these measures enable merchants to iterate their products with more success and improve the ROI of their R&D will become the driving force behind the company's sustainable and healthy growth in the next decade. Operator, we are ready for the next analyst on the line.

Your next question comes from Kenneth Fong with UBS. Please ask your question.

Hi, thank you for the管理层接受我的提问. I have two questions. The first is the company has been in the past few years and has been faced with a lot of change. From last year's beginning, 我们也看到一些重要的市场 出现了一些high profile的监管调查 以及跟公司业务比较相关的一些贸易政策 也发生了一些重大的变化 管理层可不可以跟我们分享一下 目前对坏部一些环境的看法 在这个环境里面 公司的全球化业务的发展的重心会在哪里 第二个问题就是关于利润率的 其实过去公司这个季度的利润率 也会有些起伏 跟管理层可不可以分享一下就是公司过去一段时间 在推出了不同的业务的模式 对我们利润率会有什么影响呢 以及我们应该怎么思考公司的长期的利润率的水平呢 我自己翻译一下 The company global business has experienced some ups and downs Since last year we have seen high profile regulatory inquiries in some key markets and significant changes in trade policy are highly relevant to our operations. Could management share your thoughts on the current external environment and under such condition, where is your global business strategic focus in the next phase? My second question is about the profitability. The company profitability over the past two quarters has experienced some fluctuation. So could management share how different business model launch that may impact the profitability, and how should we think about the company's long-term profit margin level?

Hi, this is Chen Lei. I will take your first question. Over the past period, we have indeed received inquiries from regulatory authorities. As our global business grew rapidly and reached a meaningful scale in different countries, it is understandable that this has drawn surprise, concern, and closer scrutiny. 但是我们管理很相信当前的对类监管是为我们进入下一个阶段的成长奠定好的基础 同时也会为我们在这种快速妙化的国际政策环境下的模特迭代指明方向 However, our management believes that the current regulatory scrutiny will lay a solid foundation for our next stage of growth, and we'll also provide direction for iterating our model amid the rapidly evolving international political and regulatory landscape. Since the launch of our global business, we have consistently focused on the long term. Building on our deep roots in the supply chain, we are committed to achieving sustainable development in each market and creating real value for consumers. As our business skills and regulatory regulatory environment across regions change rapidly, we deeply recognize that regulatory compliance is the baseline requirement. As a company operating within local communities, it is our fundamental responsibility as an e-commerce platform to meet local needs and stay true to our core mission, fulfill our duties, and contribute meaningfully to the societies we operate in. Therefore, our management team invests significantly in business compliance. However, trade policies, taxation, data regulations, product compliance requirements, and other regulatory frameworks are undergoing significant changes across different countries and regions. These requirements often vary considerably and can sometimes contradict one another, inevitably bringing greater challenges and uncertainty. We are actively learning, adapting to these changes, and continuously enhancing our compliance capabilities to create sustainable value for society.

We also mentioned changes in global trade policies.

Since the beginning of last year, we have indeed seen some shifts in trade policies in many major markets. Ensuring business compliance, the team has quickly iterated our business model based on the regulatory environment and market conditions in different regions to deliver reliable services to consumer. This is closely tied to the supply chain capabilities we have accumulated over the years.

So, this direction will also be our goalie投入. Thank you.

The strategic focus of our company's global business will remain on investing in supply chain capabilities. Every aspect of this directly impacts the consumer shopping experience, and accordingly will be a key area of our investment. Thank you.

Hello, my name is David. I will answer your second question. 首先我想明确的是公司目前依然处于战略的投入期,当前的外部环境跟金融的格局都在发生快速的变化,为了满足消费者不断演变的需求,我们正在与这个平台的三家紧密的协同持续探索,并推出能够适应新环境的业务模式。 任何的新模式呢,从开始到全面破开,都需要平台在初期进行坚决的资源投入。 that is suited to the new conditions.

Any new model from launching to a full rollout requires the platform to commit substantial resources in its early stages. Whether it is exploring the new business models or making strategic investments in the supply chain, these are fundamental and long-term initiatives. the timing difference between investment and return will inevitably have a direct impact on our performance in certain stages.

This will be a standard.

As we have communicated on multiple occasions, between short-term financial performance and the long-term value of the platform ecosystem, we will resolutely choose the latter.

And therefore, as we continue our strategic investments, coupled with a complex and volatile macro environment, it could be normal to see fluctuations in our profit margins from quarter to quarter. 那在这个过去的几个月里呢 我们在股东大会上震重宣布的重大战略 正在转化为具体的项目落地 业务和组织正在经历深刻的变革 那我们建议大家呢 不要过多的关注单一基础的利润率指标 而是更多的关注我们平台生态的高质量发展 只有健康的平台生态和强大的供应链 平台才能够有长期可持续的内生价值的增长

And over the past few months, the strategy we announced at the shareholders' meeting is being translated into concrete projects. The business and organization are undergoing deep transformation. And we suggest not to focus too much on the profitability of a single quarter, but rather pay more attention to the high-quality development of our platform ecosystem. Because only with a healthy platform ecosystem and a robust supply chain Can the platform achieve sustainable growth in a long-term intrinsic value?

Operator, let's move on to the next analyst on the line. 想请管理层讲一讲公司如何规划这些项目的投入回报周期

预计长远来看会对公司的业务表现带来什么样的影响 我第二个问题是今年前两个月的线上零售增长势头也非常好 可不可以请管理层分享一下公司对消费市场的这个趋势是怎么看的 针对市场上增速较快的类目 公司有没有针对性的策略来更好地把握这个市场机会 I will translate myself. My first question is related to the profit margin as well. Since last year, the company launched several investment initiatives, including last year's $100 billion support program, and the management just mentioned heavy investment in the supply chain in the remarks. Could the management elaborate a bit on how the company thinks about investment and return cycles for these projects, and what will be the long-term impact on the company's financial performance? My second question is, online retail sales show very strong growth momentum in the first two months of the year. Could the management share the company's view on the consumer market, like regarding categories with faster growth in the market? Does the company have targeted strategies to capture new opportunities in the fast-growing product categories? Many thanks.

Hi, this is Zhao Jiazhen. I'll answer your question. About a year ago, We further recognized the importance of the long-term development of the ecosystem, and we launched a series of merchant support initiatives, such as the 10 billion fee reduction and the 100 billion support programs, committing tangible resources to help the merchants and the industries. to consider the products of the industry ecosystem.

The company's company in the last year, the overall strategy of the global supply chain is to expand and expand.

Our management unanimously agrees that as the platform grows into a public platform with social influence, we should consider the company's development from the broader perspective of public interest and the long-term health of the industry ecosystem. The strategy of focusing on core business and investing deeply in supply chain upgrades that was announced at the shareholders meeting at the end of last year is an extension and reinforcement in this direction. And after years of development, the e-commerce industry's ecosystem is becoming more mature, and merchants' demand on the platform has also become more diverse. The platform's role has evolved from initially being a transaction platform to now becoming a comprehensive business partner. Accordingly, the support that merchants need the most from the platform has also extended from traffic support to all aspects of their operations, including R&D, production, and sales. This requires us to go deeper in our operations, to come up with targeted support plans, tailored to different industries, and thereby building a more competitive supply chain. And such investments involve thousands of merchants, and cannot be achieved overnight. We are prepared for long-term and patient investments, and are very pleased to see that many of these investments have already yielded some results. For example, with the support of the new quality supply project I just mentioned, some merchants have chosen to reinvest the fee reductions provided by the platform into expanding their R&D teams and upgrading production lines.

And together with the platform's digital solutions, they have started on a path of product differentiation and transformation. 这种长期的结构性的投入不会立刻的体现在短期的财务表现上,但它是接下来平台和电商生态长期可持续增长的重要一环,我们会扎扎实实的把这些长期投入做到位,通过正经白印的防补生态,降低上下成本,提升供应链的质量,优化消费者体验,通过供应链这个核心关键,实现平台再造,带动生态体系的价值跃迁。 These long-term structural investments will now be immediately reflected in the financial

performance in the short run, but they are a crucial part of the long-term sustainable growth of the platform and ecosystem. We will diligently implement these long-term projects by reinvesting concrete resources back into the ecosystem. We target to lower merchant costs, enhance supply chain quality, and improve consumer experience. Through investing in the supply chain, we will seek to reinvent the platform and move the ecosystem up the value chain. 而不是依靠简单的流量获取和分配. And regarding your second question, we are also very pleased to see the improvement in the overall consumption market. However, at the same time, we also clearly recognize that in today's competitive landscape, we still face some challenges. The future performance of e-commerce platforms will increasingly be dependent on how much incremental value they can create for the entire supply chain rather than relying solely on traffic acquisition and allocation. And therefore, at this juncture, we have made a firm decision to invest deeply in the supply chain. And for different product categories, our merchant development teams will work closely with sellers, and based on industry insights, we will provide them with tailored industry solutions to help merchants achieve new quality transformation and driving a high-quality development of the supply chain. And we firmly believe that these investments are essential for the e-commerce high-quality development in the next stage, and we are committed to patiently furthering these efforts in the long run. Thank you, Joyce. And thank you, Jia Zhen. Thank you for joining us today. We look forward to speaking with you again next quarter. Thank you, and have a great day.

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.