PDD - Q1 2023

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to PDD Holdings Inc. First Quarter 2023 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 then one on your telephone. I must advise you that this conference is being recorded today. I would now like to hand the conference over to your host today, Mr. Chen Pang. Sir, please go ahead.

Chen Pang (Director of Investor Relations)

Thank you, operator. Hello, everyone, and thank you for joining us today. My name is Chen, and I will help host the earnings call. PDD Holdings earnings release was distributed earlier and is available on our website at investor.pddholdings.com, as well as through global news wire services. Before we begin, I would like to refer you to our safe harbor statement in earnings press release, which applies to this call, as we will 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 the non-GAAP measures to GAAP measures. Joining us today on the call are Chen Lei, our Chairman and Co-Chief Executive Officer; Zhao Jiazhen, our Executive Director and Co-Chief Executive Officer; Liu Jun, our VP of Finance.

Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus. Jun will then take us through our financial results for the first quarter ended March 31, 2023. During the Q&A session, Lei and Jiazhen will answer questions in Chinese, and we will help translate. Please kindly note that all translations provided are for reference purpose only. In case of any discrepancy between the original remarks and the translated version, statements in the original language should prevail. Now, it's my pleasure to introduce our Chairman and Co-Chief Executive Officer, Chen Lei. Lei, please go ahead.

Chen Lei (Chairman, and Co-CEO)

Hello, everyone. Thank you for joining our earnings call for the first quarter of 2023. I will start by giving a brief overview of our first quarter results. We achieved a total of RMB 37.6 billion in revenue this quarter, representing a 58% year-on-year increase. During the past quarter, we saw consumer sentiment continue to improve. We have seen a surge in demand across various categories, reflecting consumers' eagerness to explore the wide range of products we offer. The quarter results also show that our long-term strategic focus on high-quality development is starting to paying off. We are glad to see that the focus on quality development not only sets us on a solid routine for the future, but also delivers immediate gains for consumers and sellers. We are encouraged by the strong backing from our stakeholders.

We work hard to create a lively marketplace, where consumers can find what they are looking for and where high-quality sellers can thrive and succeed. Technology is very important to our mission to build a healthy and vibrant platform ecosystem. It is also a vital catalyst to drive efficiency and opportunities in the manufacturing and the retailer sectors. That is why we are putting more time and resources into R&D to foster sustainable progress. Our engineers make up about half of our total employees. R&D helps us meet the unique needs of consumers, provide merchants with deeper understanding in shopping trends, and allow manufacturers to respond swiftly to evolving demand. By making supply and demand work better together, we can help unlock the potentials in different industries. We will continue to step up our investment in R&D. Now, let me talk about our globalization efforts.

Last year, we launched Temu to offer quality products at affordable prices to consumers around the world. By working closely with sellers and manufacturers, Temu offers a wide selection of merchandise, reduces supply chain inefficiencies, passing savings to consumers. As we move forward, we will keep seeking ways to meet diverse consumer needs, and we are still in the early stage of exploration. We will always start from the fundamental needs of consumers, adapt quickly, and strive to create our own unique value. As we continue to grow, we are finding more ways to generate a positive impact to the society. A vibrant and sustainable ecosystem, e-commerce ecosystem, can only be achieved by encouraging broader engagement in a digital economy. For instance, the advent of mobile internet has created a space for female entrepreneurs in e-commerce, enabling them to balance work and family....

By providing the opportunities, we have enabled females to utilize their unique skills in managing successful e-commerce enterprises. In fact, many of our platform female entrepreneurs started their first business with us. They have created new jobs and injected new vitalities into their communities. We are committed to providing more opportunities for individuals to become entrepreneurs through training and wider market access. We are promoting reading among the younger generation. We believe that nurturing a passion for reading can open doors to knowledge. To this end, we hold regular reading events and donate books, and we invite reputable authors to talk with students in rural areas. We hope this will help young students broaden their horizon. We are also working to promote agriculture digital inclusion. We are helping young people who are passionate about agriculture to bring new technology from lab to the field.

We are working with top universities and institutes to encourage innovation. We also hold competitions for young people to realize their skills and ideas, which help create innovative and sustainable farming practices. As a young company still in the development stage, we believe that through the increasing business opportunities facilitated by us, we can help uplift communities and make contributions to the society. We will do more as we grow. Finally, I want to introduce my long-time colleague, Mr. Zhao Jiazhen, who was recently appointed as the co-CEO and executive director by our board. Jiazhen concentrates more on supply chain management and China operations, while my focus is more on globalization efforts. Jiazhen is a founding member of our company. He led the team to launch and expand our Duo Duo Grocery business, and also led our supply chain efforts.

Jiazhen and I have been working closely together for over a decade. We have established deep trust in each other. This new leadership role shows that our team is full of vitality, and our next generation of leaders are ready to take on more challenges. Now, I will hand over to Jiazhen.

Zhao Jiazhen (Director, and Co-CEO)

Thank you, Lei. Hello, everyone. This is Zhao Jiazhen. I'm glad to join this earnings call. In Q1, many places introduced measures to promote consumption. We see clear recovery trends. Online retail continues to pick up. Users on Pinduoduo show a higher willingness to shop. Consumption vitality is becoming increasingly evident. These favorable trends lay a solid foundation for the steady growth of consumption for the whole year. We are very optimistic about the process of the consumption market. Over the past quarter, we actively mobilized platform resources to stimulate and realize the consumption potential. As always, we provide users quality merchandise with more savings. In the various large-scale promotional campaigns in Q1, such as the Chinese New Year promotion and the New Year sale, we step up discounts and issued extra coupons to benefit as many users as possible.

Chen Pang (Director of Investor Relations)

Recently, in this year's Double Five shopping festival in Shanghai, we invested over RMB 4 billion in coupons and discounts, marking a new high. During this event, we partnered with China Central Television and Oriental TV on live streaming sales, showcasing a wide range of products to viewers in an interactive and direct manner, enhancing consumer trust in online shopping. Furthermore, our total grocery team actively explores innovation by creating new consumption scenarios and deepening the spillover effect of the pickup points of surrounding areas consumption. We hope this can further promote the development and integration of online and offline consumption.

Zhao Jiazhen (Director, and Co-CEO)

除 了 多 实 惠 的 强 项 ， 我 们 还 进 一 步 提 升 了 好 服 务 的 能 力 ， 优 化 消 费 体 验 。 我 们 在 April 率 先 启 动 了 数 码 家 电 消 费 季 ， 提 出 了 Everyday is June 18 的 消 费 理 念 。 在 全 力 保 证 好 价 之 余 ， 我 们 从 多 个 维 度 全 面 优 化 服 务 ， 保 障 消 费 者 体 验 。

在 April 下 旬 启 动 的 Pinduoduo Reading Month 的 活 动 中 ， 我 们 投 入 RMB 100 million-level 的 读 书 基 金 ， 助 力 高 质 量 阅 读 的 普 及 。 来 自 第 三 方 平 台 的 测 评 报 告 显 示 ， 在 综 合 价 格 、 正 品 保 障 、 售 后 服 务 、 物 流 时 效 以 及 优 惠 力 度 的 five 项 指 标 中 ， Pinduoduo 平 台 的 综 合 购 书 体 验 在 多 个 电 商 平 台 中 名 列 前 茅 。

Chen Pang (Director of Investor Relations)

In addition to our strong suit of more savings, we have further improved our ability to provide better services to optimize the consumer experience. We launched the electronics shopping season in advance in April, and introduced the concept of Everyday is June 18. We not only ensure good prices, but also upgrade services on many fronts to improve consumer experience. In the Pinduoduo Reading Month, which kicked off in late April, we invested hundreds of millions RMB to promote high quality and universal access to reading. A third-party evaluation report shows that in five dimensions, including price, authenticity, after sales support, logistic efficiency, and promotion level, the Pinduoduo platform's overall shopping experience for books ranks as one of the best among many e-commerce peers.

Zhao Jiazhen (Director, and Co-CEO)

在 提 振 消 费 的 大 背 景 下 ， 高 质 量 地 满 足 消 费 者 的 多 元 化 需 求 ， 形 成 扩 大 消 费 的 合 力 ， 对 我 们 来 说 既 是 机 遇 也 是 挑 战 。 我 们 希 望 通 过 加 大 补 贴 、 扩 充 品 类 、 升 级 服 务 、 充 分 保 护 消 费 者 的 权 益 等 一 项 举 措 ， 进 一 步 优 化 平 台 的 生 态 ， 通 过 平 台 生 态 的 高 质 量 转 型 ， 进 一 步 助 推 消 费 活 力 。

Chen Pang (Director of Investor Relations)

Against the backdrop of consumption recovery, to satisfy the diversified needs of consumers and form a driving force for expanding consumption, is both an opportunity and a challenge for us. We aim to further improve the platform ecosystem through a series of impactful measures, including increasing discount, upgrading services, and fully protecting consumer rights. We hope to further boost consumption vitality through our focus on quality development of the platform ecosystem.

Zhao Jiazhen (Director, and Co-CEO)

消 费 回 暖 的 同 时 呢 ， 也 带 来 了 更 加 激 烈 的 行 业 竞 争 。 随 着 竞 争 的 激 烈 并 且 进 一 步 异 化 ， 一 些 竞 争 行 为 已 经 超 出 了 正 常 的 商 业 范 畴 。

Chen Pang (Director of Investor Relations)

As consumption rebounds, it also brings about more intense industry competition. As competition further intensifies, some competitive behaviors have gone beyond the scope of normal business activities.

Zhao Jiazhen (Director, and Co-CEO)

例 如, 从 三 月 底 开 始, 拼 多 多 上 的 数 十 家 品 牌 旗 舰 店 遭 到 了 大 规 模 的 炸 店 攻 击, 攻 击 者 有 组 织 有 预 谋 地 扰 乱 这 些 店 铺 的 正 常 经 营, 造 成 了 很 大 的 损 失. 我 们 在 第 一 时 间 对 利 益 受 损 的 商 家 进 行 兜 底 保 障, 同 时 也 升 级 了 攻 防 策 略, 很 快 恢 复 了 正 常 的 经 营 秩 序.

Chen Pang (Director of Investor Relations)

For example, since late March, dozens of flagship stores on Pinduoduo were bombarded with malicious orders. The attackers disrupted the store's normal operation in a clearly organized and purposeful way, causing significant losses. We immediately provided protection to the affected stores and upgraded our defense strategy. The stores were back in normal business operation very soon.

Zhao Jiazhen (Director, and Co-CEO)

呃 ， 我 们 认 为 ， 竞 争 能 够 激 励 我 们 更 高 效 地 学 习 ， 更 快 速 地 创 新 ， 从 而 也 能 促 进 服 务 的 快 速 迭 代 。 我 们 将 继 续 坚 持 消 费 者 导 向 ， 以 正 面 和 积 极 的 方 式 应 对 所 有 类 型 的 竞 争 。 即 使 是 面 对 恶 意 的 攻 击 ， 我 们 也 会 善 意 地 解 读 。

Chen Pang (Director of Investor Relations)

We believe that competition can motivate us to learn more efficiently and innovate more quickly, so that we can speed up the iteration of our services. We will continue to be consumer-oriented and react positively and actively to all types of competition. Even when we face malicious attacks, we will maintain positive thinking.

Zhao Jiazhen (Director, and Co-CEO)

我 们 会 将 竞 争 对 手 的 攻 击 转 化 为 自 身 前 进 的 动 力 ， 坚 持 本 分 ， 不 断 地 自 我 完 善 ， 有 的 放 矢 地 高 效 创 新 ， 引 导 平 台 更 高 质 量 的 发 展 。 例 如 ， 我 们 把 绝 大 部 分 的 品 类 从 支 持 72 小 时 发 货 ， 升 级 到 支 持 48 小 时 内 发 货 。 在 售 后 策 略 上 ， 对 老 人 及 偏 远 地 区 的 消 费 者 进 行 服 务 倾 斜 ， 同 时 也 执 行 了 更 加 主 动 的 客 服 策 略 ， 比 如 为 消 费 者 提 供 仅 退 款 服 务 。

Chen Pang (Director of Investor Relations)

We will turn attacks from competitors into our motivation to move forward. We will stick to our benefit, improve ourselves constantly, innovate with a clear direction, and guide the platform towards higher quality development. For example, we have upgraded the shipping processing time for most merchandise categories from 72 hours after placing the order to no later than 48 hours. We will also provide a preferential after-sales services for elderly consumers and consumers in remote areas. In addition, we take a more proactive approach in customer service, such as offering consumers the option to receive refunds without returning the item.

Zhao Jiazhen (Director, and Co-CEO)

与 此 同 时 呢 ， 我 们 会 进 一 步 的 加 大 对 于 优 质 供 给 的 扶 持 力 度 和 对 供 应 链 的 投 入 。 我 们 将 建 立 百 亿 生 态 专 项 ， 对 优 质 商 户 和 商 品 进 行 资 源 倾 斜 ， 推 动 中 小 企 业 优 质 商 家 实 现 有 质 量 的 增 长 ， 提 升 平 台 商 户 的 整 体 服 务 效 率 与 品 质 。

而 在 供 应 链 方 面 呢 ， 多 年 来 ， 我 们 扎 根 各 大 产 区 和 产 业 带 ， 直 连 产 品 与 消 费 者 ， 缩 减 了 流 通 环 节 ， 降 低 了 供 需 两 端 的 成 交 成 本 。 我 们 也 将 继 续 加 大 投 入 ， 优 化 供 应 链 能 力 ， 强 化 实 体 供 应 链 的 建 设 ， 推 动 传 统 产 业 转 型 升 级 ， 进 一 步 地 构 筑 优 势 壁 垒 。

Chen Pang (Director of Investor Relations)

At the same time, we will further step up our support for quality supply and our investment in the supply chain. We are launching the 10 Billion Ecosystem Initiative to offer resources and support to quality sellers and products, so that we can promote the quality growth of SMEs and quality sellers, and improve the overall seller service efficiency and standard. For supply chain, over the years, we have rooted ourselves deeply in major production areas and industrial belts. We connect products directly with end consumers, reduce distribution layers, and lower the procurement and sales costs between supply and demand. We will continue to increase investment, optimize our supply chain capabilities, strengthen the buildup of physical supply chain infrastructure, contribute to the transformation and upgrade of traditional sectors, and further deepen our competitive advantages.

Zhao Jiazhen (Director, and Co-CEO)

今 年 以 来 呢 ， 拼 多 多 对 内 持 续 优 化 平 台 治 理 ， 积 极 和 主 动 地 承 担 社 会 责 任 ， 立 人 更 有 温 度 ， 更 有 担 当 。 例 如 ， 我 们 近 期 推 出 了 未 成 年 人 保 护 专 项 、 图 书 治 理 专 项 等 专 项 治 理 升 级 行 动 ， 打 造 可 持 续 发 展 的 正 向 生 态 。

Chen Pang (Director of Investor Relations)

This year, Pinduoduo has continuously optimized platform governance and actively takes on social responsibilities. We strive to bring warmth and responsibility. For example, we have recently launched several dedicated initiatives, such as the initiative to protect the minors and the initiative on authentic books, to name a few, so that we can build a positive ecosystem for sustainable development.

Zhao Jiazhen (Director, and Co-CEO)

我 们 还 进 一 步 推 动 农 业 数 字 化 ， 推 出 面 向 全 国 农 产 品 产 业 带 的 农 云 行 动 。 至 今 呢 ， 该 专 项 团 队 已 经 深 入 了 多 个 农 业 大 省 的 主 要 农 产 区 ， 为 农 户 和 商 家 提 供 了 专 项 的 电 商 培 训 ， 帮 助 他 们 对 接 适 合 农 货 上 行 的 仓 储 和 冷 链 等 物 流 体 系 ， 减 少 运 输 货 损 ， 提 升 商 品 竞 争 力 。

为 助 力 农 产 品 品 牌 的 打 造 ， 我 们 找 到 了 各 产 区 的 特 色 产 品 ， 持 续 集 中 曝 光 ， 并 引 导 他 们 入 驻 百 亿 补 贴 ， 提 升 知 名 度 。 通 过 类 似 农 云 行 动 的 项 目 ， 我 们 希 望 让 更 多 的 产 区 跑 出 扎 根 本 地 的 领 头 羊 ， 带 动 整 个 产 业 链 的 数 字 化 发 展 。

Chen Pang (Director of Investor Relations)

We also promote digitization in agriculture. We launched the Agricultural Cloud Initiative. To date, our dedicated team has gone deep into the various production regions in many provinces. We provide specialized e-commerce training for farmer sellers and help connect them with logistics infrastructure suitable for agricultural produce, such as warehousing and cold chain logistics, to reduce transportation spoilage and improve product competitiveness. To support brand building in agriculture, we search for high-quality specialty products, provide strong traffic support, and help them gain recognition by including them in our Ten Billion program. Through initiatives similar to the Agricultural Cloud Initiative, we hope to enable more local production regions to emerge as leaders of certain products and drive the digital transformation of the entire industry value chain.

Zhao Jiazhen (Director, and Co-CEO)

我 们 不 断 加 强 与 顶 级 农 业 高 校 的 合 作 ， 提 升 前 沿 科 技 在 农 业 转 型 升 级 中 的 支 撑 能 力 ， 助 力 科 技 转 化 。 我 们 持 续 落 地 Pinduoduo Cup Growing Competition、Smart Agriculture Competition、Global AgriInno Challenge 等 围 绕 农 业 发 展 的 赛 事 ， 以 竞 赛 促 进 创 新 ， 鼓 励 更 多 有 为 青 年 投 身 农 业 。以 销 售 反 哺 科 研 ， 进 一 步 促 进 科 研 成 果 转 化 。

作 为 10 Billion Agriculture Initiative 的 一 部 分 ， 我 们 还 向 China Agricultural University 捐 赠 RMB 100 million， 设 立 Pinduoduo - China Agricultural University Research Fund， 进 一 步 支 持 农 业 科 技 的 基 础 研 究 和 创 新 。 我 们 荣 获 了 Food and Agriculture Organization of the United Nations 颁 发 的 2022 Innovation Award， 鼓 励 我 们 在 农 业 供 应 链 方 面 的 创 新 。 我 们 也 是 2022 年 该 奖 项 在 全 球 的 唯 一 获 奖 者 。 我 们 将 继 续 努 力 ， 进 一 步 助 力 农 业 科 技 的 谱 汇 ， 持 续 践 行 科 技 向 好 。

Chen Pang (Director of Investor Relations)

We continue to deepen our cooperation with top agronomic institutes to support the role of agritech in agricultural transformation and promote agritech adoption. We have hosted various events focusing on agricultural development, such as the Pinduoduo Cup Growing Competition, the Smart Agriculture Competition, and the Global Agricultural Innovator Competition. These competitions promote innovation and inspire more young people to join agriculture. It also leverages sales to support research and helps bring more research funding to the market. As a part of our 10 Billion Agriculture Initiative, we recently donated RMB 100 million to set up the Pinduoduo - China Agricultural University Research Fund to further support fundamental research and innovation in agritech. We are proud to receive the FAO 2022 Innovation Award from the Food and Agriculture Organization of the United Nations, which recognizes our innovation in the agriculture supply chain.

We were the sole recipient of this award globally in 2022. We will continue to work hard, support digital transformation and technology adoption in agriculture, and uphold the principle of tech for good. We will stick to our quality-first principle, continue to live up to our role, and proactively take up bigger social responsibilities. Additionally, we will remain rooted in the real economy, increase investment in the supply chain, and search for strong driving forces towards our high quality development. We will speed up the process of building up a healthy ecosystem featuring more savings and better services. I look forward to working together with the team to promote high quality development and promote a healthy win-win outcome for our platform ecosystem. Now, let me hand it over to Jun. She will provide you with an update on our financial performance.

Liu Jun (VP of Finance)

Thank you, Jiazhen. Hello, everyone. Let me walk you through our financial performance for the first quarter ended March 31st, 2023. In terms of income statements, our total revenues in the quarter were RMB 37.6 billion, up 58%, RMB 23.8 billion in the same quarter of 2022. This increase mainly came from encouraging trends in consumer sentiment and positive responses from consumers and merchants towards our focus on high quality development. Revenues from online marketing services and others were RMB 27.2 billion this quarter, up 50% compared with the same period of 2022. Revenues from transaction services this quarter were RMB 10.4 billion, up 86% versus the same period of 2022. Moving on to costs and expenses.

Our total cost of revenues increased 55% from RMB 7.2 billion in Q1 2022 to RMB 11.1 billion this quarter, mainly due to increased fulfillment fees and payment processing fees. Total operating expenses this quarter were RMB 19.6 billion on a GAAP basis, versus RMB 14.5 billion in the same quarter of 2022. On non-GAAP basis, our total operating expenses increased to RMB 18.1 billion this quarter, from RMB 13 billion in Q1 2022. We rolled out several large scale promotional campaigns to help boost user sentiment, and we continue to invest in our long-term focus areas to support our high quality development. Our total non-GAAP operating expenses as a percentage of total revenues this quarter is 48%, compared to 54% in the same quarter last year.

Looking to specific expense items, our non-GAAP sales and marketing expenses this quarter were RMB 15.8 billion, up 47% versus the same quarter of 2022. On non-GAAP basis, our sales and marketing expenses as a percentage of our revenue this quarter was 42%, compared with 45% for the same quarter in 2022. In Q1, we actively outreach the platform resources to facilitate consumption recovery. Our non-GAAP general and administrative expenses were RMB 338.3 million, versus RMB 208.8 million in the same quarter of 2022. Our non-GAAP research and development expenses were RMB 2 billion this quarter. R&D is a top priority and a long-term focus for us. We're committed to further strengthening our R&D capabilities, and we continue to increase investment in this area.

Operating profit for the quarter was RMB 6.9 billion on a GAAP basis, compared with operating profit of RMB 2.2 billion in the same quarter of 2022. Non-GAAP operating profit was RMB 8.5 billion, versus operating profit of RMB 3.7 billion in the same quarter of 2022. Net income attributable to ordinary shareholders was RMB 8.1 billion, compared with RMB 2.6 billion in the same quarter of 2022. Basic earnings per ADS was RMB 6.13, and diluted earnings per ADS was RMB 5.55, versus basic earnings per ADS of RMB 2.06, and diluted earnings per ADS of RMB 1.84 in the same quarter of 2022. Non-GAAP net income attributable to ordinary shareholders was RMB 10.1 billion, compared with RMB 4.2 billion in the same quarter last year. Non-GAAP diluted earnings per ADS was RMB 6.92, versus RMB 2.95 in the same quarter of 2022.

We continue to increase investments and focus on creating sustainable and a vibrant ecosystem to support our long-term, high-quality development. That completes the income statement. Now let me move on to cash flow. Our net cash flow generated from operating activities was RMB 1.3 billion, compared with the cash outflow of RMB 9.1 billion in the same quarter of 2022, mainly due to the increase in net income and the changes in working capital. As of March 31st, 2023, the company had RMB 157 billion in cash equivalents, and short-term investments. Thank you. This concludes my prepared remarks.

Speaker 8

Thank you, Jun. Next, we will move on to the Q&A session. Today's Q&A session, Lei, Jiazhen, and Jun will take questions from analysts online. We could take a maximum of two questions per analyst. Lei and Jiazhen will answer questions in Chinese, and we will help translate their remarks for easier reference. Operator, we may now take questions on the line.

Operator (participant)

Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. Participants are requested to restrict to two questions at each time. Your first question today comes from Joyce Ju with Bank of America. Please go ahead.

Joyce Ju (VP, AND Senior Equity Analyst)

晚 上 好 ， 感 谢 给 我 这 个 机 会 提 问 。 我 有 两 个 问 题 ， 第 一 呢 ， 我 们 看 到 近 期 公 司 架 构 调 整 成 为 了 联 席 CEO 的 模 式 ， 这 对 公 司 未 来 的 战 略 会 有 什 么 改 变 吗 ？ 未 来 主 要 的 增 长 驱 动 力 是 什 么 ？我 们 也 注 意 到 联 席 CEO 架 构 中 ， 陈 磊 总 将 更 多 的 精 力 放 在 全 球 化 的 业 务 上 ， 这 是 否 意 味 着 全 球 化 战 略 现 在 的 重 要 级 提 升 了 ？

我 的 第 二 个 问 题 是 ， 公 司 这 个 季 度 的 业 务 收 入 ， 在 广 告 上 面 同 比 增 加 了 50% ， 和 上 个 季 度 相 比 要 加 快 了 一 些 ， 我 们 应 该 怎 么 理 解 这 一 季 度 的 收 入 的 加 速 ？ 管 理 层 是 否 能 和 我 们 分 享 一 下 这 个 季 度 的 业 务 亮 点 ？ 非 常 感 谢 。 I will translate myself.

My first question is, I'm noting PDD recently implemented the co-CEO structure. How does the change affect your group strategies? What are your key growth drivers going forward? Per your announcement, post the co-CEO structure change, they will focus more on the globalization side. Does that mean your globalization strategy now has a higher priority? My second question is related to top-line growth. Your online marketing services revenue increased by 50% year-over-year this quarter, accelerating from the last quarter. How should we think about this re-accelerated momentum? What PDD has done this quarter contributing to this? Thank you very much.

Chen Lei (Chairman, and Co-CEO)

Joyce, 谢 谢 你 的 提 问 ， 我 是 陈 磊 。 我 先 来 回 答 一 下 你 问 到 的 第 一 个 ， 就 是 有 关 公 司 战 略 的 问 题 。

Speaker 9

Hi, Joyce. Thank you very much for your question, and this is Lei. I can take your first question on strategies.

Chen Lei (Chairman, and Co-CEO)

Zhao Jiazhen 和 我 呢 ， 之 前 已 经 共 事 了 多 年 ， 我 们 俩 之 间 呢 ， 是 有 着 深 厚 的 信 任 。 在 公 司 高 质 量 发 展 的 这 个 大 目 标 下 呢 ， 我 们 制 定 了 清 晰 的 、 长 期 的 战 略 ， 并 且 将 继 续 带 领 团 队 去 执 行 这 些 战 略 。 在 此 基 础 上 ， 我 们 能 够 结 合 不 同 的 背 景 和 思 路 ， 实 现 更 高 效 的 决 策 。

Speaker 9

Jiazhen and I have been working together for many years, and we have established deep trust. With our goal of high quality development in mind, we have constructed a very clear long-term strategy, and we will continue to lead our team in terms of execution.

on top of that, we will leverage our different backgrounds and ideas and be efficient in decision making.

Zhao Jiazhen (Director, and Co-CEO)

在 过 去 一 段 时 间 当 中 ， 我 们 一 直 在 循 序 渐 进 地 调 整 策 略 重 心 。 从 过 去 关 注 增 长 的 速 度 ， 那 么 转 为 追 求 发 展 的 质 量 ， 我 们 的 这 个 调 整 得 到 了 消 费 者 和 商 家 的 正 向 反 馈 ， 那 么 这 也 反 映 在 了 我 们 这 个 季 度 的 财 报 中 。

Speaker 9

Over the past period of time, we are steadily shifting our strategic focus from the speed of growth towards the quality of growth. We have seen positive feedbacks from both consumers and sellers on this shift, which is also reflected in this quarter's results.

Chen Lei (Chairman, and Co-CEO)

那 么 在 我 们 长 期 的 战 略 下 呢 ， 我 们 正 在 持 续 地 提 升 供 应 链 的 能 力 ， 增 加 优 质 的 供 给 。 那 么 我 们 还 将 进 一 步 地 加 大 ， 特 别 是 对 优 质 商 家 的 扶 持 力 度 。 那 么 通 过 建 立 百 亿 生 态 的 专 项 ， 推 进 和 提 升 平 台 整 体 的 服 务 品 质 。 那 么 除 此 之 外 呢 ， 我 们 也 会 持 续 地 去 优 化 整 个 平 台 生 态 。

Speaker 9

Under our long-term strategies, we are continuously strengthening our supply chain capabilities, and also expanding the supply of high quality merchandise. We will further increase our support for quality sellers, and by launching our 10 Billion Ecosystem initiatives, and further push forward our platform's overall quality. In addition, we will continue to optimize our platform ecosystem.

Chen Lei (Chairman, and Co-CEO)

作 为 一 家 技 术 导 向 的 公 司 ， 那 我 们 所 创 造 的 价 值 呢 ， 和 我 们 的 研 发 是 密 不 可 分 的 。 那 么 所 以 说 呢 ， 我 们 也 在 持 续 地 强 化 研 发 的 能 力 ， 不 断 地 加 大 研 发 投 入 。 目 前 公 司 的 研 发 相 关 人 员 已 经 占 到 了 员 工 总 数 的 一 半 。

Speaker 9

As a tech-driven company, the value we create is inseparable from our R&D capabilities. We are also strengthening our R&D capabilities, and increasing our R&D investment. Currently, our R&D team makes up about half of our total employees.

Chen Lei (Chairman, and Co-CEO)

那 么 中 国 呢 ， 是 一 个 巨 大 的 市 场 ， 我 们 在 中 国 仍 有 很 大 的 发 展 潜 力 。 我 们 认 为 呢 ， 在 可 见 的 未 来 ， 中 国 市 场 呢 ， 都 会 成 为 我 们 最 主 要 的 市 场 。 当 然 ， 我 们 也 看 到 这 个 市 场 的 变 化 是 非 常 迅 速 的 ， 竞 争 的 也 日 益 的 加 剧 ， 应 该 说 是 挑 战 和 机 遇 并 存 。

那 么 这 也 是 为 什 么 董 事 会 任 命 了 赵 佳 珍 作 为 联 席 的 CEO， 那 么 和 我 一 起 呢 ， 共 同 制 定 和 执 行 战 略 ， 那 并 且 呢 进 一 步 加 强 我 们 中 国 业 务 的 团 队 力 量 。 那 么 下 面 呢 ， 我 有 请 赵 佳 珍 为 大 家 介 绍 一 下 情 况 。

Speaker 9

The China market is huge. We see big potential for us to further grow. We believe that in the foreseeable future, China market is our biggest market. At the same time, we also note that it is changing very fast and competition is intense, which demonstrates both challenges and opportunities. This is why our board has appointed Jiazhen as Co-Chief Executive Officer, to design and execute strategies together with me, and further strengthen our China operations team. Next, let me hand over to Jiazhen.

Zhao Jiazhen (Director, and Co-CEO)

谢 谢 陈 磊 。 首 先 啊 ， 我 非 常 荣 幸 获 得 董 事 会 的 信 任 ， 我 呢 ， 对 新 的 任 命 呢 非 常 的 兴 奋 ， 同 时 呢 ， 也 感 到 很 大 的 责 任 和 ， 和 压 力 。 呃 ， 在 整 个 行 业 复 苏 的 同 时 呢 ， 我 们 也 在 步 入 新 阶 段 。

在 过 去 的 几 年 中 呢 ， 我 们 已 经 成 功 地 从 营 销 驱 动 转 为 了 这 个 研 发 驱 动 ， 为 我 们 的 发 展 夯 实 了 基 础 。 现 在 我 们 则 是 到 了 另 外 一 个 阶 段 的 门 口 ， 就 是 需 要 全 力 以 赴 ， 全 面 地 推 进 高 质 量 发 展 的 新 阶 段 。

Speaker 9

Thank you, Lei. First, I'm honored that our board put their trust in me. I'm very excited for my new role. At the same time, I feel responsibilities and challenge. As the industry recovers, we are also entering a new stage, and in the past few years, we successfully shifted from marketing driven to R&D driven, and this lays a solid foundation for our development. Now we reach the gate of another stage, which is the stage of dedicating ourselves to promoting holistic, high quality development.

Zhao Jiazhen (Director, and Co-CEO)

在 这个 新 阶段 呢，我们 正在 进一步 地 优化 平台 的 生态，升级 消费者 的 服务，大力 地 扶持 优质 供给，深化 供应链 的 能力。我们 也 将会 不断 地 优化 平台 治理，进一步 建设 有 社会 价值 的 平台。

Speaker 9

In this new stage, we are further improving our platform ecosystem.

Chen Pang (Director of Investor Relations)

Upgrading our consumer services, increasing support for our quality supply, and also, deepening our supply chain expertise. We constantly optimize platform governance, to further build a socially responsible platform.

Zhao Jiazhen (Director, and Co-CEO)

我 们 相 信 对 平 台 生 态 、 供 应 链 研 发 的 投 入 是 具 有 长 远 价 值 的 。 我 们 会 一 并 带 领 团 队 坚 决 执 行 这 些 战 略 ， 加 速 步 入 高 质 量 发 展 的 新 篇 章 。

Chen Pang (Director of Investor Relations)

We believe that investing in our platform, our ecosystem, supply chain, and also our R&D can create long-term value. We will lead our team together to execute these strategies with determination, accelerating our footsteps in entering this new stage of high-quality development.

Zhao Jiazhen (Director, and Co-CEO)

我 再 来 回 答 一 下 关 于 增 长 的 问 题.

Chen Pang (Director of Investor Relations)

Let me also take your question on revenue growth.

Zhao Jiazhen (Director, and Co-CEO)

在 过去 的 一个 季度 以来 呢, 随着 各地 促进 消费 的 政策 的 落地, 我们 也 看到 了 这个 消费 信心 在 持续 地 恢复. 这些 趋势 呢, 这个 为 2023 年 开 了 一个 很好 的 头, 我们 也 从中 受益, 平台 的 消费 活力 也 得到 了 进一步 的 释放.

Chen Pang (Director of Investor Relations)

In the past quarter, many places introduced policies to support consumption. We see a continued improvement in consumer sentiment, and these trends show a good beginning for 2023. We have also benefit from this, and our platform consumption vitality is further boosted.

Zhao Jiazhen (Director, and Co-CEO)

为 了 助 力 消 费 复 苏 呢 ， 呃 ， 我 们 坚 持 从 消 费 的 需 求 出 发 ， 呃 ， 全 力 调 动 了 这 个 平 台 的 资 源 。 为 了 继 续 为 消 费 者 带 来 多 实 惠 ， 我 们 也 连 续 组 织 了 多 个 大 规 模 的 促 销 活 动 ， 发 放 了 额 外 的 优 惠 券 和 折 扣 ， 奖 励 给 消 费 者 ， 希 望 能 够 增 加 他 们 的 消 费 信 心 。

Chen Pang (Director of Investor Relations)

To support a consumption recovery, we continue to start from consumer demand and actively mobilize our platform resources. To give consumers more savings, we organized several large-scale sales events in a row, and gave out extra coupons to boost consumer sentiment.

Zhao Jiazhen (Director, and Co-CEO)

我 们 也 ， 也 致 力 于 为 消 费 者 带 来 好 服 务 ， 我 们 全 面 升 级 了 消 费 者 的 保 护 和 服 务 。 举 个 例 子 ， 我 们 平 台 绝 大 多 数 的 商 品 已 经 从 七 十 二 小 时 发 货 升 级 为 了 四 十 八 小 时 内 发 货 。

Chen Pang (Director of Investor Relations)

We are also strive to give better services to our consumers. We have upgraded our consumer protection and also services throughout the entire shopping experience. For example, for most of the product categories, the shipping processing time has been cut down from 72 hours to within 48 hours.

Zhao Jiazhen (Director, and Co-CEO)

呃 ， 我 们 搭 建 了 这 样 多 实 惠 加 好 服 务 的 这 个 良 性 的 平 台 生 态 ， 为 我 们 带 来 了 不 错 的 消 费 者 和 商 家 的 反 馈 。 同 时 呢 ， 一 季 度 的 增 长 也 初 步 反 映 了 这 个 生 态 建 设 的 成 果 。 再 往 后 看 的 话 呢 ， 我 们 依 然 需 要 脚 踏 实 地 ， 进 一 步 地 修 炼 内 功 ， 创 造 更 多 的 消 费 者 价 值 。 比 如 我 们 启 动 了 百 亿 生 态 的 专 项 ， 希 望 能 够 进 一 步 提 升 平 台 对 优 质 供 给 的 支 持 。 谢 谢 。

Chen Pang (Director of Investor Relations)

Our virtuous platform ecosystem of more savings and better services has earned us a decent consumer and seller feedback. Our Q1 growth is an early testament to our progress in building up the platform ecosystem. We still need to remain down to earth and further strengthen our core capabilities so that we can create more value for consumers. We are launching the 10 Billion Ecosystem Initiative to further support quality supply. Thank you. I think we are ready to take the next question on the line.

Operator (participant)

The next question comes from Natalie Wu with Haitong International. Please go ahead.

Natalie Wu (Managing Director of Equity Research)

哎 ， 晚 上 好 ， 谢 谢 管 理 层 接 受 我 的 提 问 。 那 么 我 这 边 呢 ， 主 要 两 个 问 题 ， 呃 ， 第 一 个 的 话 是 随 着 六 幺 八 的 临 近 啊 ， 我 们 看 到 很 多 电 商 公 司 都 推 出 了 今 年 的 一 个 大 促 计 划 和 政 策 ， 那 看 上 去 非 常 强 势 ， 啊 ， 不 知 道 公 司 对 此 有 什 么 应 对 策 略 ， 那 么 管 理 层 啊 ， 如 何 思 考 接 下 来 如 何 保 持 咱 们 的 一 个 竞 争 优 势 ？

啊 ， 特 别 是 对 于 价 格 而 言 啊 ， 这 是 不 是 意 味 着 各 家 会 为 了 保 持 这 个 价 ， 啊 ， 不 断 会 提 高 补 贴 ？那 么 第 二 个 问 题 的 话 是 ， 我 们 看 到 公 司 这 个 季 度 的 啊 ， 这 个 盈 利 啊 ， 虽 然 也 是 稍 微 好 ， 但 比 上 个 季 度 比 的 话 是 下 降 的 。

那 么 ， 呃 ， 这 背 后 主 要 原 因 是 什 么 ？ 是 因 为 季 节 性 还 是 竞 争 加 剧 ？ 啊 ， 是 不 是 意 味 着 公 司 正 在 为 着 啊 ， 追 求 未 来 的 增 长 更 加 努 力 。Uh, let me translate myself in English.

Thanks for taking my question. I have two questions here. First one is, with the June 18 approaching, we see that many of your peers have rolled out this year's promotion, which seems to be very aggressive. Just wondering what's your response and how do you plan to maintain your competitive advantage specifically for pricing? Do you think there will be an endless spiral of increasing discounts to ensure the lowest price? Secondly, we noticed that your profitability margin this quarter is another sequential decrease. Just wondering what are the major reasons behind? Is it because of the seasonality or competition? Does it mean that you are now actively spending extra for growth? Thank you.

Zhao Jiazhen (Director, and Co-CEO)

你 好 , 我 是 赵 大 征 。 谢 谢 这 位 分 析 师 的 问 题 啊 。 我 来 分 享 一 下 我 们 对 于 行 业 竞 争 的 一 些 看 法 。

Chen Pang (Director of Investor Relations)

This is Jiazhen here, thank you for your questions. I will share my views on competition.

Zhao Jiazhen (Director, and Co-CEO)

相 比 于 关 注 竞 争 对 手 的 动 作 呢 , 我 们 更 加 会 重 视 自 身 在 竞 争 中 的 成 长 。 对 我 们 而 言 , 竞 争 是 检 验 能 力 的 一 个 试 金 石 , 并 且 能 够 激 励 我 们 快 速 地 迭 代 。 就 像 我 在 刚 才 的 讲 话 中 提 到 的 ， 我 们 坚 持 消 费 的 导 向 ， 会 以 正 面 积 极 的 方 式 应 对 所 有 类 型 的 竞 争 。

Chen Pang (Director of Investor Relations)

Instead of paying too much attention to what competitors are doing, we actually focus more on how we grow in competition.

We view competition as a testing ground, and it motivates us to iterate quickly. Just I have mentioned in my remarks, we are always a consumer-oriented, and we actively and positively embrace all types of competition.

Zhao Jiazhen (Director, and Co-CEO)

我 们 也 正 在 加 速 地 建 设 多 实 惠 加 好 服 务 的 健 康 的 生 态 。 多 实 惠 的 核 心 呢, 是 来 自 于 零 售 效 率 的 提 升 。 我 们 会 这 个 进 一 步 地 加 强 技 术 能 力, 提 升 精 准 匹 配 供 需 的 能 力 。 我 们 也 将 扎 根 于 更 多 的 产 区 和 产 带, 将 这 个 优 质 的 产 品 啊, 这 个 直 连 消 费 者 。

比 如 我 们 在 这 个 农 云 行 动 的 项 目 中, 我 们 依 靠 这 个 供 应 链 的 能 力, 给 更 多 的 用 户 带 来 价 格 公 道 的 优 质 农 货 。 我 们 也 希 望 是 说 进 一 步 地 提 升 效 率, 将 效 率 转 化 成 可 持 续 的 价 格 优 势 。 同 时 呢, 我 们 也 将 继 续 会 加 码 补 贴, 发 放 消 费 券, 直 接 回 馈 消 费 者 。

Chen Pang (Director of Investor Relations)

We are accelerating to build up a healthy ecosystem of more savings and better services. Our more savings essentially comes from retail efficiency improvement, and we will continue to strengthen our R&D to help better match supply and demand. We will also root ourselves deeply in more production regions to connect quality products to consumers directly. For example, in initiatives such as our agriculture initiative, Agricultural Cloud Initiative, we are leveraging our supply chain expertise to offer more users quality and also affordable agricultural produce. We hope to further improve our efficiency and turn it into a sustainable price advantage for consumers. At the same time, we are also continuing to increase discounts and issue more coupons to give back to consumers directly.

Zhao Jiazhen (Director, and Co-CEO)

好 服 务 呢 ， 是 我 们 大 力 发 展 的 另 外 一 个 方 面 。 我 们 目 前 正 在 优 化 覆 盖 售 前 、 售 中 、 售 后 的 这 个 全 流 程 的 服 务 体 验 。 比 如 , 我 们 会 关 照 老 人 以 及 这 个 偏 远 地 区 的 消 费 者 ， 为 他 们 倾 斜 客 服 资 源 。 我 们 也 同 时 升 级 了 这 个 售 后 的 客 服 策 略 ， 为 消 费 者 提 供 仅 退 款 的 服 务 。

Chen Pang (Director of Investor Relations)

A better services is another important area. We are optimizing our service quality throughout the entire shopping experience.

For example, we offer extra care to the elderly people and also consumers living in remote areas, and we give them preferential customer services. We have also upgraded our post-sales services, such as offering consumers the option to receive a refund without having to return the item.

Zhao Jiazhen (Director, and Co-CEO)

那 我 们 将 这 个 建 立 百 亿 生 态 的 专 项 。 对 这 个 优 质 的 商 户 和 商 品 进 行 资 源 的 倾 斜 ， 推 动 中 小 企 业 和 优 质 的 商 家 实 现 有 质 量 的 增 长 ， 提 升 平 台 商 户 的 这 个 整 体 的 服 务 效 率 和 品 质 。 我 们 也 会 继 续 地 坚 持 在 竞 争 中 自 我 完 善 ， 创 造 更 多 的 消 费 者 价 值 。 谢 谢 。

Chen Pang (Director of Investor Relations)

we are launching a dedicated 10 Billion Ecosystem Initiative.

This aims to channel more resources towards high-quality sellers to support SMEs and also quality businesses, and enhance the platform's overall service efficiency and quality. We will continue to focus on self-improvement in competition and strive to create more value for our consumers. Thank you.

Liu Jun (VP of Finance)

This is Jun. Thanks, Natalie, for your questions. I will address your question on profitability. As just Lei pointed out, we have very clear long-term strategies, and we see many areas to further improve. We are executing these strategies with determination. We will continue to nurture the development of a healthy, more savings, and better services platform ecosystem. We firmly believe our patient investment can generate value for consumers, sellers, and the platform ecosystem. Feedback from consumers and sellers also make us more determined in seeking quality development. We plan to further step up our long-term investment. For example, we are launching our 10 Billion Ecosystem Initiative to support quality sellers and improve our overall platform ecosystem. As we deepen our efforts, our profitability level decreased in the past two quarters.

On a quarter-to-quarter basis, we think it is normal for profitability to fluctuate between quarters. Thank you.

Chen Pang (Director of Investor Relations)

Operator, we may take questions from the next analyst on the line.

Operator (participant)

The next question comes from Kenneth Fong with Credit Suisse. Please go ahead.

Kenneth Fong (Analyst)

Hey, 谢 谢 管 理 层 接 受 我 的 提 问 。 我 有 两 个 问 题 啊 ， 第 一 个 是 可 否 跟 我 们 介 绍 一 下 我 们 全 球 业 务 Temu， 现 在 这 个 季 度 的 财 务 影 响 有 多 大 呢 ？ 这 个 业 务 现 在 有 多 少 个 用 户 ？

然 后 管 理 层 也 可 以 跟 我 们 分 享 一 下 ， 比 如 说 现 在 订 单 量 ， 这 个 Temu 有 多 大 吗 ？ 我 第 二 个 问 题 就 是 从 这 个 竞 争 方 面 的 ， 我 们 现 在 看 到 越 来 越 多 商 家 在 多 平 台 运 营 了 ， 也 看 到 不 同 的 平 台 的 商 品 供 给 也 越 来 越 相 似 ， 类 似 。 呃 ...

管 理 层 可 不 可 以 跟 我 们 聊 一 下 ， 从 供 应 端 ， 尤 其 是 在 农 产 品 方 面 ， 公 司 在 供 给 方 面 有 什 么 特 性 呢 ？ 我 继 续 翻 译 一 下 。Thank you, management for taking my questions. I have two questions. First, for your global business, may management share what is the level of financial impact from Temu? How many users, do you serve now? Could you, maybe able to give us an update matrix, such as, order volume? I have a second question. Now, we see more sellers are opening up stores across multiple platforms, so it seems the merchant style selection on different platforms are becoming more and more similar.

Can management share with us what's your differentiation, on the supply side, especially for your agricultural products? Thank you.

Liu Jun (VP of Finance)

Thanks, Kenneth. I will take your first questions about the financial impact of Temu. This business is currently in its early stage, compared to our overall scale, its revenue contribution is small. For Temu, as we mentioned before, our focus always how to better understand customer needs and how to satisfy this needs. Financial metrics will be a natural result of our value creation. We will follow our financial discipline and ROI driven approach when evaluating each investment opportunity. Thank you.

Zhao Jiazhen (Director, and Co-CEO)

你 好 ， 我 是 赵 占 森 。 我 来 回 答 一 下 关 于 供 应 链 和 农 业 方 面 的 问 题 。 在 许 多 品 类 上 呢 ， 我 们 其 实 看 到 了 进 一 步 拓 宽 和 优 化 供 给 的 广 阔 的 机 会 。 比 如 说 农 产 品 的 这 个 线 上 化 率 依 然 非 常 低 ， 我 们 看 到 了 有 巨 大 的 这 个 用 户 需 求 没 有 被 满 足 ， 也 有 很 多 这 个 优 质 的 农 产 品 ， 没 有 进 入 高 效 的 这 个 流 通 体 系 。

Chen Pang (Director of Investor Relations)

hi, this is Zhao Jiazhen. Let me take your question on supply chain and agriculture.

In many categories, we see a lot of room to expand and optimize supply. For example, the digitization rate of agricultural produce is still low. We see a lot of unmet demand, and we also see a lot of quality agricultural produce are not efficiently distributed.

Zhao Jiazhen (Director, and Co-CEO)

我 们 致 力 于 发 挥 这 个 平 台 的 能 量, 提 升 供 应 链 的 效 率, 希 望 能 够 帮 助 更 多 的 优 质 农 货 进 入 流 通 端. 通 过 电 商 的 专 项 培 训, 以 及 为 这 个 农 产 品 带 来 的 商 家 对 接 这 个 物 流 的 基 础 设 施, 我 们 帮 助 了 更 多 的 这 个 农 产 品, 扩 大 了 流 通 范 围, 并 且 在 路 途 中 减 少 了 品 质 和 营 养 物 质 的 损 耗.

另 外, 我 们 的 Duoduo Maicai 业 务 其 实 也 在 持 续 地 探 索 创 新. 在 提 供 便 捷 的 服 务 的 同 时, 进 一 步 丰 富 了 消 费 者 的 菜 篮 子 的 选 择.

Chen Pang (Director of Investor Relations)

We are committed to leveraging our resources to increase supply chain efficiency and also to help more quality produce connect to the nationwide market. We provide e-commerce training and connect farmers with every focused logistics resources, which helps more produce expand their distribution radius, and also helps preserve quality as well as nutrition during transportation. On top of that, our total grocery business continues to explore innovation, and we help consumers get convenience as well as a broader selection of fresh produce.

Speaker 9

Uh,

Chen Pang (Director of Investor Relations)

We also continue to drive agritech innovation as well as adoption. We are deepening our cooperation with top economic institutes. For example, we recently donated RMB 100 million to support a cutting-edge research at China Agricultural University. In addition to that, our platform sales can allow more research findings quickly reach the market, which can help bring more quality products to consumers.

Speaker 9

Uh,

Chen Pang (Director of Investor Relations)

We also proactively support every seller with our platform resources, including traffic, to help our quality produce reach more end consumers. In this way, the quality sellers and the platform can grow together healthily and constantly improve our product and service quality. Agriculture is our long-term strategy. We will continue to mobilize platform resources and also our influence, go deep into the supply chain and bring more quality of produce to consumers. Thank you. Okay, it's about time, and thank you everybody for joining us on the conference call today. Thank you, and have a great day.