Operator
Ladies and gentlemen, thank you for standing by and welcome to PDD Holdings Inc second quarter 2026 earnings conference call. At this time, all participants are in a 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 one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today. Sir, please go ahead.
Thank you for joining us today. PDD Holdings Earnings Conference Earnings Release was distributed earlier and is available on our website at investor.pddholdings.com as well as through the Globe Newswire services. Before we begin, I'd like to refer you to our safe harbor statement in the earnings press release which applies to this call as we'll make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release which contains a reconciliation of non-GAAP measures to GAAP measures. Joining us today on the call are Mr. Chen Lei, our co-chairman and co-chief executive officer, Mr. Zhao Jiazhen, our co-chairman and co-chief executive officer, as well as Mr. Li Jun, our financial director. Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus. Jun will then walk us through our financial results for the second quarter ended June 30, 2026. On today's call, certain management remarks will be in Chinese and will help translate. Please kindly note that English translation is for reference only, and in case of any discrepancy, statements in the original language should prevail. Now it's my pleasure to introduce our Co-Chairman and Co-Chief Executive Officer, Mr. Zhao Jiazhen. Jiazhen, please go ahead. Hello everyone, I'm Zhao Jiazhen.
Thank you for joining us for the public release of our second year of 2020.
Hello, everyone. This is Zhao Jiazhen, and thank you for joining our earnings call for the second quarter of 2026. Before we formally begin, we would like to take this opportunity to express our deepest condolences on the passing of our independent director, Professor Yvonne Richens, and to pay our highest tribute to her significant contributions and dedicated service during her tenure with us.
Lichens教授,生前长期担任荷兰瓦赫宁根大学独立学系主任, 在食品研究和药品作用领域享有国际的声誉, 自2023年8月担任独立董事以来, Rachel's教授为公司的治理和发展提出了宝贵的专业意见 同时,赫兰瓦赫尼根大学 作为多座农员大赛的长期合作伙伴 持续为赛事注入国际事业和专业指导 助力赛事成为全球农员科技创新 与人才成长的重要平台 我们将继续秉承教授对农员事业的热忱 持续加大对农业农员的投入 以长期行动传承其专业精神 为全球农业发展和食品安全贡献更多的力量
接下来,让我们回到等级度的业绩发布 Professor Richens served a long-turner as chair of the toxicology department at Wageningen University and Research in the Netherlands and earned an international reputation in the fields of food research and drug effects Since joining the company as an independent director in August 2023 Professor Richens provided invaluable professional advice on the company's governance and development At the same time, as a long-standing partner of our March Agricultural Competition, Wageningen University and Research has consistently brought international perspectives and expert guidance to the event, helping it become an important global platform for innovation in agricultural technology as well as for talent development. We will carry forward the passion for agricultural research and continue to increase our investment in agriculture and agricultural research. And through these long-term commitments, honor her professional legacy and make greater contributions to agriculture and food safety research worldwide.
And now, let us return to the results for the quarter. 同时我们继续稳步地推进三年载造苹果多重大战略,自营品牌业务虽然在过去半年里受到一些客观因素的影响,比预期的起步进度要慢,但整体的态势良好,当前已经全面启动,正在顺利地推进。 We will ب全力投入供应链的高质量代造, 推动传统产业升级, 持续释放供应链的内生潜力。 此外, 为了进一步推动供应链转型升级, 我们还在雄安新区设立的专项公司, 构置了办公大楼, 锚定智能化发展新机遇, 推动传统制造业升级, 高质量发展, 走向价值高端。 设立了传统产业数据处理服务中心,
The second quarter this year marked a new phase in the new decade of high-quality development as we moved from initial rollout to deeper execution. Our 100 billion support program has entered a phase in which our sustained investment is beginning to yield tangible results. The positive effects across our platform and industry are being unlocked at a faster pace, with improvements in both the quality and efficiency across the supply and demand sites. At the same time, we continue to make steady progress on our strategic goal of building another PED over the next three years. Although the initial rollout of our first-party brand model over the past six months was slower than expected due to certain external factors, the overall momentum remains positive. The operations are now fully underway and progressing smoothly. We will commit fully to transforming the supply chain for higher quality growth, drive the upgrading of traditional industries, and continue to unlock the supply chain's new growth potential from within. Furthermore, to accelerate supply chain transformation and upgrades, we have established a dedicated company in the Xiong'an new area and purchased an office building there to focus on new opportunities created by intelligent technologies. And to support upgrading and high-quality development of traditional manufacturing, we have also established a data processing service center for traditional industries and an integrated service center to help traditional manufacturers move up the value chain and pursue high-quality development. We delivered solid results for the quarter. Group revenue with RMB 112.4 billion, representing a year-over-year increase of 8%, while group net income with RMB 27.2 billion, declining 12% year-over-year. This mainly reflected our continued investments in our platform and a broader industry ecosystem, which partly weighed on our performance this quarter. In the first half of this year, competition in the e-commerce industry remained intense. A complex and rapidly evolving market environment placed greater demands on both platform governance and industry development, presenting us with new challenges. We continue to step up investment in our platform and industry ecosystems to a coordinated set of measures focused on governance, fee reductions, and merchant support, with the goal of building a platform ecosystem that creates value for all participants. We have significantly increased our R&D spending on platform governance, in addition to upgrading including our technology-enabled risk prevention and control systems, we significantly expanded our specialist trust and safety teams and strengthened our oversight across all product categories.
By taking into account specific characteristics of the different categories and launching targeted governance initiatives, we made ecosystem governance more regular, granular, and rules-based. 也至目前,平台已累计出台150亿项综合治理举措,仅6月份便针对戏份领域集中落地了50亿个专项方案,覆盖商品准入,视频安全,药品安全,知识审核,广告治理,知识产权保护,虚假营销整治,直播大货规范,技术滥用防范等关键环节。 To date, the platform has introduced more than 150 comprehensive trust and safety measures.
In June alone, we launched over 50 targeted initiatives addressing key areas such as product listing controls, food and drug safety, qualification reviews, advertising compliance, intellectual property protection, misleading marketing, live-stream e-commerce standards, and prevention of technology misuse. We are dedicated to upholding high compliance standards through rigorous rules, taking a systematic approach to reshaping our governance framework and fostering a safer, better regulated, and more trustworthy shopping environment.
In the world of食品安全, we推出专项治理指措 全面经受餐饮自受类商品 进一步提升商家的知识审核、信息展示等环节的准入标准 从前端繁范并降低食品安全风险 与此同时,平台还对直播售卖食品的经营范围 主播行为讲解方式等做出了细化的要求 从商品准入到直播呈现 全程引导商家诚信经营、真实展示
确保消费者在直播间能够买的安心,吃的汗行。 conduct and how products are described and presented. From product admission to live stream presentation, we guide merchants throughout the food process to operate with integrity and present product truthfully, so that consumers can purchase and consume the food products with ease of mind. In early June, we also produced and released a number of video courses addressing common challenges and pain points in platform governance. These courses encourage merchants to familiarize themselves with the rules relevant to their industries, avoid violations, and protect their legitimate rights and interests in accordance with platform rules.
Namely, the course frequently asked questions about store business licenses received 340,000 views within 24 hours of launch. 广大三家延伸至农产区产业带的上下游,推动供应链体系,实现全方位升级,在农产区,2026多多好特产专项行动,先后走进江苏水产,重庆李子,山西乡村,海南凤梨,海南荔枝,湖南板鸭,湖北小龙虾等数十个农特产区,助力农产区培育新品,提升种植标准,完善冷链物流等,推动农产区实现价值转换。
Building on the systematic upgrade of our platform governance, we have continued to step up investment in the 100 billion support program. Our support now extends beyond our broad merchant base to upstream and downstream participants across agricultural production regions and industrial clusters, helping drive comprehensive upgrades throughout the supply chain. In agricultural production regions, the 2026 Dozo Premium Produce Initiative has reached dozens of specialty agricultural regions, including those for Jiangsu aquatic products, Chongqing plums, Shaanxi Chinese tuna sprouts, Hainan pineapples, Hainan lychees, Hunan preserved duck, and Hubei crayfish.
To the initiative, we help these regions develop new products, raise cultivation standards, and improve culture and logistics, thereby unlocking greater value for their agricultural products. 以海南凤梨产区为例,当地商家在近年开始引进金钻凤梨的新品种,与传统品种不同,金钻凤梨口感甜了不酸,且无需挖眼,不用泡盐水,在平台鸟杀,万人团等流量引擎的扶持下,迅速打开局面,成为当季的水果顶流。 此外,电商的确定性订单也给了果农扩大种植的信心。截至目前,金钻红林在当地的种植面积从最初的零星市众已经发展到了超过10万亩。
Take Hainan's pineapple growing region as an example. In recent years, local merchants have begun introducing a new variety known as the Golden Diamond Pineapple. Unlike traditional varieties, it has a distinct sweetness and required neither removing the ice nor soaking in salt water before serving. Supported by high-traffic programs on our platform, including flash sale and 10,000 people group by the variety quickly gained market traction and became one of the season's most popular foods. The greater certainty provided by e-commerce orders has also given growers the confidence to expand production.
To date, the local cultivation area for golden diamond pineapples has grown from scattered trial plots to more than 100,000 mou. 在产业带,我们的新资供给专项团队,先后走进苏州家坊,绍兴帐篷,进华户外,广州美庄,节养卵庄,新养房制等产业带,从流量曝光,数据赋能,市场拓围,成本减负,智能制造和仓属升级等维度,为产业带商家提供系统性的扶持,很多工厂的市场周期压缩了一倍, 旅游能力实现了大幅度的提升 既能快速响应平台的海岸订单需求 又能精准匹配用户个性化定制订单 从而实现了从传统制造到自建品牌的跨越式发展 也带动各个产业带完成了新旧动能的转换
Across the industrial belt, our dedicated new quality supply team has visited manufacturers across different regions and sectors including home textile in Suzhou, tent manufacturers in Shaoxing, outdoor products in Jinghua, cosmetics in Guangzhou, menswear in Jeyang, and textile in Xinyao. We provide a suite of support measures to these merchants, such as traffic support, data enablement, expansion of market reach, cost reduction, smart manufacturing and warehousing upgrades. As a result, manufacturers have cut their production cycles by half and have substantially improved their fulfillment capabilities. They can now rapidly handle large order volumes on a platform while tailoring to consumers' customization needs. This has enabled manufacturers to take a transformative leap from traditional manufacturing to building brands of their own, while accelerating the shift from traditional to new growth drivers across this industrial field. And Xinyang's textile industry is a good example. Gu Shi County in Xinyang was once a major source of migrant labor, with more than 200,000 local residents previously working in the textile industry in Jiangsu and Zhejiang provinces In recent years, younger generations from the county have begun establishing factories locally and selling textile products nationwide to Pinduoduo. Their annual sales have grown by an average of 4 to 5 times and have built leading brands in niche categories such as mosquito nets that are exported to Southeast Asia and Europe during the summer season. Today, the local economy has moved beyond its traditional reliance on labor migration and has established an integrated path to industrial development that brings together capital, technology, talent, and sales channels. 农资农聚等加速进入乡村市场,使用为各类商家开拓新增量,让偏远乡村的用户过上更好的生活。
以山东省为例,作为农业大省,山东省是平东多免费送货入村的重点不足区域,此前合着的眷层,零以以水等地的试点已经取得了显著的成效,乡村增长量成倍增长。 In addition, our Free Shipping to Villages program has continued to deliver positive results since its launch six months ago.
We have now established last-mile delivery networks across more than 10 provinces and municipalities nationwide, including county-level transit hubs and village pickup points. These networks have brought significant job creation to counties and rural communities while accelerating the distribution of consumer goods, home appliances, agriculture supplies, and farming equipment to rural markets. In doing so, we are helping merchants unlock new growth opportunities and enabling consumers in remote villages to improve quality of life. I take Shandong as an example. As one of China's leading agricultural provinces, it is a key region for Pinoduo's free shipping to villages program. And earlier pilots in Heze-Juanchen and Dingyi-Yishui have already produced significant results, with all the volumes in the villages increasing several fold. And Qingzhou, meanwhile, is a major domestic production hub for water-soluble and innovative fertilizers. and many local agricultural supply companies are building on this momentum to reach more villages across the country. As a platform serving the public, we have always sought to fulfill our social responsibilities and give back to the society. Recently, typhoons and heavy rainfall caused severe flooding in several parts of Guangxi. To support frontline disaster relief efforts, Pindledore made a cash donation of RMB 10 million to the affected areas. The funds were used to procure relief supplies and equipment, provide assistance and temporary shelter to affected residents, and support post-disaster recovery and reconstruction. As we embark on our next decade, we are more convinced than ever that high quality development development calls for both the intensity of a sprint and, more importantly, the perseverance of a marathon. We will stay committed to taking a long-term approach and execute our new decade of high-quality development strategy with patience and resolve to deliver solid and tangible progress at every step. We will continue to invest resolutely in our supply chain, empower merchants and industries, and deliver better products and services to consumers. Through concrete actions, we aim to create greater positive value for our users, merchants, and the society as a whole. With that, I will turn the call over to Chen Lei, who will provide further details.
Hello everyone, I'm Chen Lei, and thank you for joining our credit score for the second quarter of 2026. In the first half of the year, we made tangible progress under the new decade of high-quality development strategy and laid a solid foundation for long-term growth. As Jiazen just mentioned, we focused on two key areas. First, through the $100 billion support program, we continue to give back to both consumers and merchants. At the same time, we upgraded our platform governance framework across the board. This initiative has helped foster a healthier environment both on our platform and in the broader industrial ecosystem. And second, we continue to work towards our three-year initiative of building another PDD. We step up supply chain investment and help supply chain partners build and develop their own brands. During the quarter, our long-term investment in the $100 billion support program started to materialize into gains in a healthier platform ecosystem. On the supply side, our merchants benefited from a combination of fee reductions, merchant support initiatives, and a stronger level of governance. These initiatives unlocked greater innovation among merchants, leading to the launch of new products and new brands, which drove incremental demand and new sources of growth. Many manufacturers adopted digital and intelligent technology to enable customized production, and this drove improvements in quality and efficiency across the supply chain and enabled manufacturers to transition towards a new development model. On the demand side, we continue to serve consumers' evolving needs for different product categories and diverse consumption occasions. This was particularly evident in rural areas where our free shipping to villages program put a much wider selection of products within the reach of our consumers, helping improve their quality of life. Drawing all the supply chain capabilities and brand development experience gained through the 100 billion support program, we took steps in this quarter to further integrate the supply chain. Our teams delve into the industrial belts of different product categories and started early-stage corporations with high-quality suppliers. By setting clear standards for products, production processes, and quality control, we help merchants and manufacturers adapt their operations and develop a range of higher-quality products with higher margins. Through these efforts, we continue to unlock the strengths and potential within the supply chain, driving the manufacturing sectors up the value chain. Since the beginning of the year, global regulatory and compliance landscapes have undergone significant shifts. This change created challenges as well as opportunities, and they also come with greater responsibilities. We find ourselves at a unique intersection of global trade, constantly navigating diverse international regulatory frameworks. At the same time, our position is a unique one. The business touches the daily lives of billions of people around the world. While there is substantial potential for growth, it is accompanied by increased expectation and higher standards of accountability. We will stay true to our mission and continue to do every part of our work with dedication and discipline. First, we will keep strengthening our compliance capabilities and fine-tuning plasma governance. Through Protect Intellectual Property, we combine screening technologies with expert review to monitor and assess product listings across all categories in real-time. This enables us to address IP risks earlier in the process and has led to systematic improvements of IP protection across the platform. And second, we continue to invest resolutely in the supply chain. By truthfully executing on these structural upgrades, our ultimate goal is to build a highly resilient e-commerce platform that consumers around the world can rely on for competitive price and great quality. As we step into our next decade, we remain laser-focused on our core e-commerce business. By deepening our supply chain investments, we will continue to empower our merchants and broader industry, delivering a wider range of high-quality products and services. We are confident in our ability to translate our three-year initiative of building another PDD into tangible, verifiable results. And in doing so, we will strive to help the traditional suppliers capture the opportunity in this new intelligent era and empowering them to transform and move other value chains and build brands with global reach. And now, let me turn it over to Li Zhou, who will walk you through our results for the second quarter, 2026.
Thank you, Lei. And hello, everyone. This is Zhou. Now, let me walk you through our financial performance for the second quarter, end of June 30, 2026. First, income of income statement. In the second quarter, our total revenues increased 8% year over year to R&B $112.4 This was managing by an increase in revenues from transaction services. Revenues from online marketing services and others were R&B $57.6 billion this quarter compared with R&B $55.7 billion in the same quarter of 2025. Revenues from transaction services were R&B $54.7 billion up 13% from the same quarter last year. Moving on to costs and expenses, our total costs of revenues increased 5% from R&B $5.9 billion in Q2 2025 to R&B $48 billion this quarter. On a gap basis, total operating expenses this quarter increased 13% to R&B $36.6 billion from R&B $32.3 billion in the same quarter of 2025. On a non-GAAP basis, total operating expenses increased to R&B $35.3 billion this quarter from R&B $30.4 billion in Q2 2025. Our total non-GAAP operating expenses as a percentage of total revenue this quarter was 31% versus 29% in the same quarter last year. Looking into specific expense items, our non-GAAP sales in the marketing expenses this quarter for R&B $29.3 billion of 10% versus the same quarter last year. On a non-GAAP basis, our sales and marketing expenses as a percentage of our revenues this quarter was 26%, same quarter last year. Our non-GAAP general administrative expenses for R&B $1.7 billion versus R&B $0.7 billion in the same quarter of 2025. Our research and development expenses for R&B 4.3 billion this quarter on a non-GAAP basis, up 40% year-over-year. On a GAAP basis, operating profit for the quarter was R&B 27.8 billion versus R&B 25.8 billion in the same quarter last year, up 8% year-over-year. Non-GAAP operating profit was R&B 29.1 billion versus R&B 27.7 billion in the same quarter last year. Non-GAAP operating profit margin was 26% this quarter versus 27% for the same quarter last year. Net income attributable to ordinary shareholders was R&B 27.2 billion for a quarter compared to R&B 30.8 billion in the same quarter last year. Basic earnings per ADS was R&B 19.32 and diluted earnings per ADS was R&B 18.45 versus basic earnings per ADS of RMB 22.01 and diluted earnings per ADS of RMB 20.75 in the same quarter of 2020. Non-GAAP non-income attributable to ordinary shareholders was RMB 28.5 billion versus RMB 32.7 billion in the same quarter last year. Non-GAAP diluted earnings per ADS was RMB 19.33 versus RMB 22.07 in the same quarter of 2025. That completes the income statement. Now, let me move on to cash flow. Our net cash generated from operating activities was R&B $25.7 billion. Compared with R&B $21.6 billion in the same quarter last year, June 30, 2026, we had R&B $456.4 billion in cash, cash equivalents, and short-term investments. Thank you, and this concludes my prepared remarks.
Thank you, John. We'll now move on to the Q&A session. In today's Q&A session, Lei, Jiajeng, and Jiang will take questions from analysts on the line. We could take a maximum of two questions from each analyst. Lei and Jiajeng will answer questions in Chinese and will help translate for convenience purposes. Operator, we're open for questions.
Operator
Thank you. 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 star 2. Participants are requested to restrict to two questions at each time. Your first question comes from Thomas Chung with Jeffrey.
Please go ahead. 请问管理层这些关税的变动以及海外去源的监管的大环境对平台整体的单量预计会产生多大程度的影响 面对这些政策的逆风 公司接下来的全球化的业务的发展战略会是什么 这个是第一个问题 我第二个问题是 关于上一个季度 公司也宣布了全新的品牌 经营的战略 请观念程序分享一下 最近的一个发展 市场应该如何思考 这个品牌经营上线之后 对公司业务会带来的影响 比如说在经营商品和3P的 商品的侧重 以及在经营商品的定价上 I will translate myself. My first question is about the company's global business. We noticed that the EU introduced a temporary customs duty on low-value cross-border consignments starting from July this year. Can management help us understand the expected impact of this change on the company's overall order volume? In light of these policy headwinds, what will be the company's growth strategy for the global business going forward? And my second question is on the company's first-party brand business announced last quarter. Could management provide an update about the rollout and the progress made so far? And more broadly, how should investors frame the potential impact of this initiative on the company? How are you thinking about the mix and the positioning of first-party versus first-party products? And what will guide your pricing strategy for first-party products?
Thank you. has become a big change for our business. We also feel that our responsibility is very big.
Hi Thomas, this is Chen Lei. Let me take your first question about our global business. Over this period, the regulatory and compliance landscape facing our global business has changed significantly. These changes have created challenges as well as opportunities for our business. They also come with great responsibilities. We believe we stand at a unique intersection in the global economy and global trade. We face pressure from different regulatory policies, while also occupying a distinctive position. Currently, our business touches the daily lives of billions of people around the world. While there is substantial potential for growth, it is accompanied by increased expectations and higher standards of accountability.
That's right. will face a low-end contract and a low-end tax rate.
The increase in the same amount of the changes to the EU customs duties that you mentioned, our team is actively assessing and adapting to them. Drawing on the experience that we have gained over the years, we have adjusted our supply chain and we are optimizing our fulfillment processes. With compliance as our bottom line, we are working to balance consumer experience, merchant operations, and the long-term development of our business. In the short term, cross-border orders in the affected markets will face lower fulfillment efficiency and higher costs, which will have a considerable impact on those parts of our business. 这也是在促使我们加快相关能力的建设 那么一方面我们会继续的引入和支持更多本土的优质商家 那么丰富本地商品的供给 那么另外一方面 我们也是在加快本地化仓储 履约基建的布局 那么扩大本地发扩的布盖面 那么通过这些口路 However, over the medium to long term, changes in the external environment have further underscored the importance in our supply chain and has prompted us to accelerate the development of the relevant capabilities. First, the platform will continue to onboard and support more high-quality local merchants to broaden the supply of local products. Second, we are accelerating the build-out of local warehousing and fulfillment infrastructure and expanding the coverage of local fulfillment. Through these investments, we hope to integrate more deeply into every market we serve, strengthen the foundation and resilience of our supply chain, and better navigate changes and volatility in the environment. In addition to supply chain capability, compliance capabilities and platform governance are also critical foundational capabilities in which we will invest for the long term. We will continue to enhance platform governance, further improve product quality, and strengthen consumer protection with the goal of providing consumers around the world with a platform they can trust. 同时为了给全球的商家提供一个健康公平的营销环境,我们在知识产权和规方面做了大量的工作。 目前平台已经在技术监测和人工审查的基础之上,构建了系统化的知识产权保护能力。 At the same time, we have done extensive work on intellectual property compliance to provide a healthy business environment and level playing field for merchants around the world. Building on technology-enabled monitoring and manual review, the platform has developed systematic IP protection capabilities. Our recent favorable ruling in the IP litigation involving an industry peer has further demonstrated the effectiveness of our IP protection mechanism. We will remain committed to protecting the legitimate rights and interests of our ecosystem partners and to fostering a fair and reliable business environment.
那么监管和政策的变化 应该来说是整个行业要共同面临的课题 我们对团队的执行力和组织任性都有充分的信心 也不会因为短期的波动而改变全球化业务的长期方向 那么接下来我们将继续踏实地做好供应链 预约合规和消费者服务 to provide a long-term investment, a cost-efficient, a cost-efficient, a platform that can be trusted, or a trustee of the consumer. Thank you.
Regulatory and policy changes are issues that the entire industry must address. We are confident in our execution capabilities and organizational resilience. Short-term volatility will not change the long-term direction of our global business. Going forward, We will continue to steadily advance our work across supply chain, fulfillment, compliance, and consumer service. We will strive to provide consumers around the world with a shopping platform that remains stable over the long term and offers compelling prices and reliable quality, a platform that they can count on, trust, and enjoy using.
Thank you. 你好啊,我是戴亚珍。 关于你的第二个问题,我来回答啊。 The company-a-battle business is one of our important important things to invest in the market. We also希望 with the ability and the ability of a company-building and development through the market. The ability to create a support platform for the global communities and to improve the company-based market. and the value of the value of the product. And we can also bring the value of the value of the product.
Hi, this is Zhao Zhao Zhen. Regarding your second question, our first party brand business is an important extension of our long-term investment in supply chain capabilities. We aim to work closely with manufacturers that have strong capabilities and willingness to invest in long-term product development By leveraging the platform's market insights and global reach, we seek to bring greater certainty to brand development and value creation across the industry value chain, and in turn turn that incremental value into tangible benefits for all the participants. And in terms of execution, we will first focus selectively on core product categories where our platform and supply chain capabilities provide some distinctive advantages. We will work with manufacturers over the long term, from product planning and R&D to setting quality standards and market testing. The business requires an extended period of development and collaboration, and the initial rollout has taken longer than we originally expected. And nevertheless, it remains a clear long-term strategic priority for the platform, and we will remain patient and focused on getting every step right, and we are confident in the long-term prospects of our first-party brand model.
In the future, our brand-friendly products and third-party products will be able to fill out the portfolio in different locations and different locations of different storefront customers. We will eventually be able to create more mobile products. Thank you.
And, in terms of our operating strategy, our commitment to maintaining an open and fair marketplace will not change. We have always believed that consistently delivering quality products and services to consumers requires a healthy, fair and diverse supply chain ecosystem. And going forward, our first-party brand products and products offered by third-party merchants will complement each other in meeting consumers' diverse needs across different use cases and market segments, and ultimately creating an ecosystem that benefits all participants.
Thank you, Thomas. And operator, we can move on to the next analyst on the line.
Operator
Your next question comes from Alicia Yap with Citigroup. Please go ahead.
Hi, thank you. 管理层网上好 谢谢接受我的提问 两个问题 第一个问题是我们看到全球其他的头部电商平台 随着他们的业务的规模扩大 也会选择加大物流和履约基础设施的这个投资 比如在自建仓储网络和配送的团队 所以想请问管理层如何思考未来在物流履约层面的这个投入策略 第二个问题是我们过去一段时间我们看到不少这个全球的同行 就Global Peers都在及时零售上做了大量的这个投入 请问管理层如何评估这种新消费习惯对行业竞争格局和公司核心业务的潜在影响 然后在行业加速布局半小时达的这个情况下,公司有什么好的策略去持续巩固用户新知和市场的份额? 我自己翻译一下。 So thanks for taking my question. So two questions. First is that we have seen many global e-commerce companies invest in their own warehousing and also delivery capabilities at their scale. So, for example, by building out their own warehouse networks and also delivery capabilities, how should we think about the company investment priority in this area over the long term? And the second question is on the quick commerce. So, many global peers have made significant investment in this area. How does management assess the potential impact of the shift in consumer behavior on the industry competitive landscape and also the company's core business. As the industry ramps investment in the same-day delivery, what strategy is the company pursuing to strengthen user mindshare and also defend your market share? 你好啊,我是戴尔珍。 关于这个物流履约投资, 那这个和其他的投入一样, 我们呢始终是这个立足消费者体验 与商家在做生意的时候遇到的一些痛点 我们去做一些能够创造切实价值 有针对性的神圣的投入 因此我们针对不同的市场和业务形态 我们的投入重点是会有所不同的
Hi, this is Zhao Jiazhen As with our other investments Our investments in logistics and fulfillment are guided by the need to improve consumer experience and address the practical challenges the merchants face in doing business. We make prudent and targeted investments where we believe we can create tangible value. And accordingly, our investment priorities vary across markets and business models.
In the country market, most of the cities of the world have been more mature. But in the northern part of the region and in the northern part of the region, the supply of the end is still a明显ous environment.
In the domestic market, e-commerce logistics networks are already quite well developed across most regions. However, last mile delivery remains a significant bottleneck in remote western regions and many rural communities. And to address this problem, we have committed substantial resources to strengthening logistic network, and under our 100 billion support program, we are firmly advancing the Free Shipping to Villages initiative and our logistic support for remote regions. And since the end of last year, under the Free Ship into Villages initiative, initiative, we have established local service stations covering all 177 villages in Hunan In Shandong Yishui, we have increased the number of parcels delivered to villages to more than 100,000 per day. This infrastructure not only helps agricultural supplies such as fertilizers and reach farmers more directly, but also enables a wider range of high-quality products to reach rural consumers more efficiently. And in doing so, we are helping unlocking significant consumer demand in underserved regions and meaningfully improve border conversion for merchants that serve these communities. In certain overseas markets, fragmented point-to-point shipping by individual merchants oftentimes makes it very difficult to achieve the economy's upscale that is made possible through the consolidation of shipments. This results in higher over-fulfillment costs and leaves some consumer demand unmet. In markets facing these challenges, we invest targetedly in development and operations of transit warehouses. These investments help local merchants streamline their fulfillment processes and lower logistics barriers, while providing local consumers with a more reliable delivery experience. 回到你的问题呢,未来我们将继续坚持这种以解决实际问题为导向的履约投入策略,我们把供应链的能力做扎实,通过提升履约效率和确定性,去改善消费者体验,推动供需之间的正向循环,从而增加平台长期的内生的资产动力。 And back to your question, we will continue to take a practical and solution-oriented approach to fulfillment-related investments, and by building stronger supply chain capabilities and improving the efficiency and reliability of fulfillment services, we aim to enhance the consumer experience, create a virtuous cycle between supply and demand, and strengthen the platform's capacity for sustainable organic growth over the long term.
零售与电商的这个形态始终是在快速的演进,我们也关注到市场上不断的涌现出各种创新的业务模式,那即使零售和我们核心的电商和买菜业务呢,满足的是消费者在不同场景下的多元化的诉求,从我们现阶段的业务基础来看,他们在底层的供应面路和业务模式上还是有较大的差异的, we think the relationship can be quite appropriate. Therefore, in this stage, we should be able to get the energy and resources to invest in the energy that can be more efficient, and to be able to attract the unique value of the market.
And to your second question, retail and e-commerce business models are constantly evolving, and we are seeing a growing range of innovative business models emerge across the market. Quick commerce serves different consumer needs and use cases as compared to our core e-commerce and grocery businesses. And given the current stage of our business, these are fairly different in terms of both supply chain requirements and operating model, and with limited scope for synergies. We have therefore chosen to focus our resources and efforts on areas where we have established strength and our best position to create differentiated value. As the industry matures, platforms will take different approaches to serving consumers based on their respective capabilities and experience. Our path has always been quite clear, which is we will continue strengthening our supply chain capabilities. Our current supply chain investments have two complementary priorities.
Firstly, it's ensuring a strong supply of quality products, and second is building the infrastructure to deliver them efficiently. 。 在备好货方面,我们在持续地通过薪资供给多多好特产等这些专项,去帮助有能力的传统代工厂,去提升产品和品牌的能力,去推动供给车的价值跃迁,让消费者能够享受到更高自价比的优质的国货。 On the product supply side, through initiatives such as New Quality Supply and Dordor Premium Produce,
We continue to help capable traditional manufacturers strengthen their product development and brand building capabilities, enabling them to move up the value chain and giving consumers greater access to high-quality products at compelling value. And on the infrastructure side, through projects such as pre-shipping to villages, we are improving our distribution network and addressing last mile delivery gaps in remote areas, and enabling consumers in more regions to benefit from the convenience and affordability of e-commerce. The supply chain investments we have chosen to make may not yield immediate results, but we believe over the long term, they will create tangible value for the industry, consumers, and our merchant ecosystem. We will remain focused on this foundational yet very important work and continue creating differentiated value for consumers and merchants. Thank you. So I think we have time for one more analyst.
Operator
Thank you. Your final question comes from Joyce G with Bank of America. Please go ahead.
My first question is on long-term commercialization potential. It has been like almost a year since the company launched the RMB 100 billion support program. Could management provide an update on the health and activity of the merchant ecosystem following the investments? As the ecosystem improves, are you seeing or would you expect to see a corresponding increase in merchants' willingness to spend on advertising? My second question is on the revenue growth outlook. Based on the trends observed in the first half, how are you thinking about the consumer spending outlook for the full year? Looking ahead, does platform revenue have the potential to outgrow the broader consumer market? Thank you very much.
In the beginning of the pandemic, the supply chain and the supply chain chain have been closed to the beginning of the year.
Hi, this is Zhao Jia Zhang. As mentioned earlier, the 100 billion support program is starting to show results. From the 10 billion fee reduction program introduced in 2024 to the 100 billion support program early last year, The resources and the supply chain support that we have provided have reached major agricultural regions and manufacturing clusters. And we're encouraged to see that these efforts have enabled many merchants in industrial belts to make meaningful gains in both quality and efficiency. For example, with the support from the platform, a cosmetics company in Guangdong significantly reduced its customer acquisition and operating costs. This company reinvested the profits in a two-year R&D effort, successfully transitioning into patented and national brand. And merchants in Zhongshan's lighting manufacturing belt have also leveraged the platform's fast product-hacking capabilities to increase investment in high-quality lighting components and smart product features, which led to the launch of a best-selling product that generated several millions in sales within just a few months. And these tangible results demonstrate that our efforts to reinvest in the supply chain ecosystem are working. Of course, building a healthier merchant ecosystem takes time. We will remain committed to these investments and help more merchants achieve healthier and more sustainable growth. E-commerce platforms are two-sided networks. Merchants' growth prospects are closely tied to a high-quality consumer experience and a healthy platform ecosystem. Our 100 billion support program is therefore focused first and foremost on improving product quality, strengthening the supply chain, and supporting the merchant ecosystem, such that small and medium-sized merchants can reinvest the efficiency gains in product upgrades. Over the long term, lower operating costs, stronger profitability, and greater business confidence among merchants will ultimately drive sustainable organic value creation across the platform. Thank you.
Hi, this is John, and let me take your second question. In the first half of the year, as consumption support policies continue to take effect, China's consumer market expanded steadily, and online retail penetration continued to grow. We remain confident in the long-term potential of China's consumer market and e-commerce industry. As e-commerce enters a new stage of development, platforms need to take a more proactive role in unlocking new growth by addressing fundamental supply chain bottlenecks. Like, for example, through a free shipping to village initiative, we're investing in more comprehensive fast-mile delivery network, including transit warehouses and village pickup points. These efforts are helping strengthen rural commerce and distribution networks and stimulate consumer demand in these regions. In the first half of this year, retail sales in rural areas grew faster than the overall market, showing significant potential. On monetization, just as Joshua mentioned, we remain focused on strengthening the platform ecosystem and helping our merchant grow. Over time, by getting these fundamentals right, we believe the sustainable growth in the platform's intrinsic value will naturally follow. Thank you.
Thank you, John. Thank you all for joining us today. It's about time, and we look forward to seeing you next quarter.
Operator
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.
