Financial Data and Key Metrics Changes - In Q1 2025, total revenues increased by 10% year over year to RMB 95.7 billion, driven by online marketing services and transaction services [23][28] - Total cost of revenues rose by 25% to RMB 40.9 billion, primarily due to increased fulfillment and payment processing fees [24] - GAAP operating profit decreased to RMB 16.1 billion from RMB 26 billion in the same quarter last year, while non-GAAP operating profit fell to RMB 18.3 billion from RMB 28.6 billion [27][28] - Net income attributable to ordinary shareholders was RMB 14.7 billion, down from RMB 28 billion in the same quarter last year [28] Business Line Data and Key Metrics Changes - Revenues from online marketing services were RMB 48.7 billion, up 15% year over year [23] - Revenues from transaction services increased to RMB 47 billion, a 6% rise from the previous year [23] - Non-GAAP sales and marketing expenses surged by 44% to RMB 32.8 billion, reflecting increased promotional efforts [26] Market Data and Key Metrics Changes - The e-commerce sector in China is experiencing intensified competition, impacting profit margins and growth rates [9][39] - The company is facing challenges in passing on policy incentives to consumers, putting merchants at a disadvantage compared to first-party businesses [10][50] Company Strategy and Development Direction - The company is focusing on a high-quality development strategy, emphasizing merchant support and ecosystem investments [7][8] - A new RMB 100 billion support program has been launched to enhance merchant support, particularly for small and medium-sized businesses [16][49] - The company aims to build a win-win ecosystem that benefits both merchants and consumers, prioritizing long-term intrinsic value over short-term financial results [12][42] Management Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by external policy changes and competition, emphasizing the need for increased support for merchants [36][38] - The company expects profitability to face challenges in the near term due to ongoing investments in the ecosystem [42] - Long-term growth is prioritized, with a focus on building a robust merchant ecosystem to ensure sustainable development [59] Other Important Information - The company has launched initiatives to support agricultural products and enhance supply chain transformation [19][20] - A digital system for agricultural product operations has been developed to modernize traditional supply chains [20] Q&A Session Summary Question: What preparations has the platform made in response to macro policy changes? - Management emphasized proactive actions and increased support for merchants through the RMB 100 billion support program to help them navigate external uncertainties [36][38] Question: What factors contributed to the decline in net profit margins this quarter? - The decline is attributed to a slowdown in revenue growth and increased ecosystem investments, leading to a mismatch between investment and return cycles [39][41] Question: How will the RMB 100 billion support program be delivered to merchants? - The program will extend support to more small and medium-sized merchants, enhancing operational efficiency and reducing costs [48][49] Question: How does the company respond to the National Subsidy Program? - The company has launched a dedicated page for the national subsidy program and is enhancing promotional efforts to provide additional savings to consumers [51]