Summary of Pinduoduo Conference Call Company Overview - **Company**: Pinduoduo - **Date**: July 28, 2025 Key Points Industry Performance - Pinduoduo's long-term GMV growth is maintained at over 15%, significantly exceeding the market growth rate of 7% due to the increasing concentration in the Chinese retail sector [2][4] - The company is experiencing strong growth in overseas markets, particularly in Europe, Latin America, and Southeast Asia, with MAU and DAU increasing despite short-term impacts from U.S. tariffs [2][4] Financial Projections - Overseas GMV reached $45 billion in 2024 and is expected to nearly double in 2025 [2][4] - Pinduoduo's profitability is influenced by GMV growth, asset turnover, and net profit margin, with long-term improvements expected from rising market share in China and the expansion of manufacturing overseas [2][6] Business Model and Strategy - The company is shifting from a low-price model to a focus on quality merchants, enhancing user trust and platform stickiness [2][5] - Pinduoduo employs algorithms to understand consumer needs, similar to the Costco model, which helps in providing high-value products [2][3][7] Market Outlook - The company is optimistic about future growth, driven by the advantages of Chinese manufacturing in overseas markets and adjustments in profit distribution between product and logistics sectors [5] - Although short-term monetization rates may decline, the long-term outlook remains positive with steady GMV growth and robust overseas expansion [5][7] Competitive Landscape - The trend towards online-offline integration in the Chinese retail industry is expected to enhance market concentration, with Pinduoduo's core competitiveness lying in its understanding of user needs [3] Investment Considerations - The evaluation of Pinduoduo's investment value should focus on its long-term growth potential rather than short-term fluctuations, emphasizing the importance of market share and operational efficiency [6] Additional Insights - Pinduoduo's personalized services and focus on high-cost performance products in categories like agricultural and daily necessities further enhance its platform value [7]

Core Viewpoint - Pinduoduo reported a total revenue of 95.6722 billion yuan for Q1 2025, reflecting a year-on-year growth of 10%, while net profit attributable to ordinary shareholders decreased by 45% to 16.916 billion yuan [1][2]. Financial Performance - Total revenue for Q1 2025 was 95.6722 billion yuan, a 10% increase compared to the previous year [1]. - Net profit attributable to ordinary shareholders was 16.916 billion yuan, down 45% year-on-year [1]. Management Insights - Management acknowledged the pressure on platform merchants due to macro policy changes, indicating a need for proactive measures to support them [3]. - The company plans to enhance its supply chain and operational capabilities while focusing on high-quality development and compliance [3][4]. - A "100 billion support plan" was introduced to assist small and medium-sized merchants in stabilizing sales and reducing operational costs [4][5]. Business Strategy - The company aims to deepen service levels and expand into new categories and services to build a more robust platform ecosystem [4]. - Pinduoduo emphasizes the importance of supporting merchants to ensure long-term stability and better consumer service [5]. - The company is committed to lowering merchant fees and providing marketing support to enhance the ecosystem, viewing these expenses as long-term investments [6]. Future Outlook - The management expects ongoing challenges to profitability due to the mismatch between investment and return cycles, which may persist for a longer duration [6]. - The focus remains on long-term value creation rather than short-term financial performance, with plans to expand support initiatives for more small businesses [6].

Core Insights - Pinduoduo's Q1 2025 financial report shows significant underperformance, with total revenue of 95.7 billion yuan, a 10% year-on-year increase, but adjusted net profit of 16.9 billion yuan, down 45% from the previous year, falling short of market expectations by 11 billion yuan [1][2] Revenue Structure - Online marketing services and other revenues accounted for 48.7 billion yuan, up 15% year-on-year, while transaction service revenue was 47 billion yuan, up 6% year-on-year [1] - The growth rate of Pinduoduo's revenue is slowing, particularly in transaction service revenue, which has decreased from a 33% growth rate in the previous quarter [1][4] Cost and Profitability - Sales and marketing expenses surged to 33.4 billion yuan, a 43% increase from 23.4 billion yuan in the same quarter last year, contributing to a significant decline in profits [1][2] - Total operating expenses reached 38.6 billion yuan, a 37% increase, outpacing revenue growth [2] Strategic Initiatives - Pinduoduo has launched initiatives like the "100 Billion Support" plan to improve the business environment, which includes reducing store security deposits for various categories [4][5] - The company aims to explore further commission reduction measures to alleviate costs for merchants, focusing on small and medium-sized businesses [5] Regulatory Environment - Recent regulatory proposals from the market supervision authority may impact Pinduoduo's revenue, as they emphasize reducing fees for platform operators, particularly benefiting small merchants [5] Competitive Landscape - Pinduoduo is facing increased profit costs to compensate for competitive disadvantages, particularly in response to national subsidy policies [5] - The management has indicated a willingness to sacrifice short-term performance to support merchants through market fluctuations [5]

Group 1 - Ele.me announced a significant increase in platform subsidies, launching a promotion called "Over 10 Billion Subsidies" starting April 30, emphasizing genuine benefits rather than competitive rhetoric [1] - JD.com announced the launch of its "100 Billion Subsidy" program on April 11, offering subsidies up to 20 yuan for all users across various restaurant brands [2][6] - JD.com reported that its daily order volume exceeded 1 million within 40 days of launching the subsidy program, expanding its coverage from major brands to include more small and medium-sized restaurants [6] Group 2 - Pinduoduo introduced a "100 Billion Support" plan, committing over 100 billion yuan in resources over the next three years to enhance the e-commerce ecosystem and support merchant innovation [7] - The "2025 Good Specialty Products" initiative by Pinduoduo aims to boost local agricultural products' market presence, with plans to visit various provinces to implement targeted support [7] - Pinduoduo's "100 Billion Merchant Feedback Plan" will invest 10 billion yuan in consumer coupons to stimulate demand and support new quality merchants and brands [8]