Financial Data and Key Metrics Changes - Total revenue increased by 11.7% year over year to RMB 91.8 billion [28] - Cost of revenue ratio increased by 8.1 percentage points year over year to 66.9% [28] - Selling and marketing expenses ratio increased by 6.5 percentage points year over year to 24.5% [28] - Total segment operating profit declined significantly to RMB 1.8 billion, and adjusted net profit also declined to RMB 1.5 billion [28][30] - Cash generated from operating activities reduced year over year to RMB 4.8 billion [31] Business Line Data and Key Metrics Changes - Core local commerce segment revenue increased by 7.7% year over year to RMB 65.3 billion, but operating profit declined to RMB 3.7 billion [31][32] - On-demand delivery order volume achieved modest year-over-year growth acceleration, while GTV growth maintained the same pace as the previous quarter [33] - Instant shopping segment revenue grew by 22.8% year over year, driven by retail operation expansion and overseas business development [36] Market Data and Key Metrics Changes - The overall on-demand delivery industry is experiencing intense competition, with industry-wide subsidies reaching record highs [30] - The average user transaction volume transacted at least once a week, with MAU exceeding 500 million for the Meituan app [6] - The GTV for over 60 product categories doubled during the June 18 shopping festival, indicating strong consumer engagement [16] Company Strategy and Development Direction - The company aims to enhance products and services to better address consumer needs through technology and innovation [7] - Focus on building a sustainable ecosystem for the local service industry, emphasizing long-term development over short-term subsidies [8][27] - Plans to invest in building 1,200 raccoon cloud kitchens nationwide to improve food safety and operational efficiency [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the fierce competition but emphasizes a commitment to operational efficiency and service quality [30][49] - The company remains confident in its ability to sustain healthy growth over the long term despite short-term volatility [38] - Management believes that the food delivery sector will continue to grow as it becomes a lifestyle for consumers [56] Other Important Information - The company has expanded its membership program, which has positively impacted cross-selling and user engagement [84] - The company is exploring new supply formats and enhancing service quality to meet evolving consumer demands [66][70] - The company plans to accelerate the expansion of its Shao Xiang supermarket while scaling back Meituan Select [92][96] Q&A Session Summary Question: Competition and Response Strategies - Management emphasized a commitment to fundamentals such as selection, price, and service quality to maintain market leadership despite intense competition [41][43][49] Question: Core Advantages and Long-term Growth Targets - Management highlighted competitive advantages in operational efficiency, user engagement, and a strong merchant ecosystem, with a focus on long-term growth in order volume and GTV [51][55][58] Question: On-demand Retail Competitive Edge - Management stated that Meituan's extensive network and focus on selection, delivery, and price provide a competitive edge in the on-demand retail market [62][64][66] Question: In-store Business and Membership Progress - Management reported positive developments in the in-store business and membership program, with significant growth in member engagement and cross-selling [81][84] Question: New Initiatives and Capital Investment Plans - Management explained the rationale behind scaling back Meituan Select and investing in Shao Xiang supermarket, with expectations for continued growth in the grocery retail sector [88][92][96] Question: Overseas Business Expansion - Management provided updates on the overseas expansion of KITA, emphasizing a cautious approach to growth while leveraging existing infrastructure [100][104][109]