Core Viewpoint - Chengdu's first city duty-free store is set to open on September 25, showcasing a blend of global selections and domestic products, with a focus on Sichuan characteristics and national brands [1][8]. Group 1: Store Overview - The duty-free store is located in the Renheng Plaza, covering over 3,000 square meters, featuring more than 70 international brands and over 50 quality domestic brands [3][5]. - The product categories include cosmetics, alcoholic beverages, fashion items, watches, jewelry, and travel electronics, with notable brands like Estée Lauder, Lancôme, and Hennessy available [3][5]. Group 2: Pricing and Promotions - The store offers significant price advantages compared to regular retail, with promotional activities during the opening, including no-threshold consumption vouchers and a value package for members worth 666 yuan [5][8]. - Customers must present valid exit-entry documents and have travel plans within 60 days to purchase duty-free items [5][7]. Group 3: Shopping Experience - The store employs a "in-store ordering, airport pickup" model, allowing travelers to collect their purchases at the Chengdu Tianfu International Airport on the day of departure [7]. - A "taxable goods area" is also available for all visitors, allowing for no-threshold purchases and benefiting from departure tax refund policies [8][10]. Group 4: Cultural and Experience Offerings - The store promotes domestic products and cultural heritage, featuring brands like Tongrentang and local themed products, alongside a dedicated area for trendy toys and cultural items [10][12]. - An exclusive Care Bears themed store is introduced, along with a small bar for visitors to experience and taste local beverages, enhancing the shopping experience beyond mere transactions [12].

Financial Data and Key Metrics Changes - GMV for Q1 2025 was $94.7 million, up 3% year over year, exceeding guidance despite a challenging market backdrop [22][32] - Net revenue increased to $22.5 million, a 2% rise, with transaction revenue comprising approximately 75% of total revenue [27][32] - Adjusted EBITDA loss was $1.7 million, compared to a loss of $1.8 million in the previous year, maintaining an adjusted EBITDA margin loss of 8% [30][32] Business Line Data and Key Metrics Changes - Consumer GMV grew mid-single digits, while trade GMV remained flat; jewelry and fashion verticals posted double-digit growth [25][32] - Active buyers increased to approximately 64,800, reflecting a 7% year-over-year growth [25][32] - Unique seller accounts decreased by 23% year over year to about 5,900, attributed to subscription pricing optimizations [19][26] Market Data and Key Metrics Changes - The company experienced steady listings growth, ending the quarter with over 1.8 million listings, up 5% [26][32] - Organic traffic accounted for over 70% of total traffic, with improvements in SEO and direct traffic contributing to growth [12][24] - Conversion rates improved year over year for six consecutive quarters, although growth moderated in Q1 compared to Q4 [10][24] Company Strategy and Development Direction - The company is focused on a product-led growth strategy aimed at enhancing buyer and seller experiences while gaining market share [4][10] - Key initiatives include accelerating organic traffic growth, competitive pricing, funnel optimization, and elevating service levels [11][12] - The company aims to maintain growth and expense discipline while capturing additional market share throughout 2025 [20][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tougher demand backdrop for luxury home discretionary spending due to evolving trade policies and macroeconomic effects [5][8] - The company expects continued listings growth and normalization of seller churn in Q2 2025 [20][32] - Future guidance reflects a forecasted GMV of $85 million to $92 million for Q2, indicating a potential decline of 7% to an increase of 1% [31][32] Other Important Information - The company has repurchased approximately $33.4 million worth of shares since initiating its buyback program in August 2023 [31] - The adjusted EBITDA margin guidance for Q2 is projected to be a loss of 14% to 10%, reflecting increased headcount-related costs and transaction loss provisions [32] Q&A Session Summary Question: On organic traffic and conversion - Management noted that organic traffic had declined for over a year but returned to growth in Q1, attributing this to product and engineering efforts [36][38] - Conversion changes were primarily driven by macroeconomic factors, particularly in the consumer furniture segment [39][40] Question: On active buyers growth - Active buyer growth is linked to conversion rates, which are influenced by macroeconomic conditions; management remains focused on long-term value drivers [44][46] Question: On market share gains - Market share is measured against GMV changes versus syndicated credit card data, with growth observed for five consecutive quarters [50] - The rollout of machine learning pricing models has seen high adoption for lower-priced items, with ongoing improvements expected [52][54]