PDD Holdings Inc.
CEO : Mr. Lei Chen
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2024 Q2 | 85.7% YoY | 156.0% | 124.1% | 2024-11-21 |
Chen Lei says,
Financial Performance and Revenue Growth
- Revenues and net income for Q3 2024 reached $25 billion.
- There was a noted decline in revenue growth and profits compared to the previous quarter.
- The downturn in financial results was attributed to intensified competition and strategic investments.
- The company emphasized that the short-term financial impact was expected due to ecosystem development investments.
Key Initiatives and Ecosystem Upgrades
- A $10 billion fee reduction program was launched in mid-August, benefitting over ten million merchants.
- Measures include service fee refunds, bill reductions, lower security deposits, and enhanced fund withdrawal processes.
- The merchant support policies have received positive feedback and are seen as beneficial for long-term growth.
- The initiatives are designed to inject fresh energy into the platform, creating opportunities for growth and transformation.
Regional and Logistics Support
- Logistics support was extended to remote regions in Western China, eliminating transshipment fees for orders.
- This initiative marked a significant upgrade in fulfillment experiences, further enabling underserved markets.
- The logistics support measures have driven significant order volume growth from remote areas compared to the last quarter.
High-Quality Merchant and Consumer Focus
- Launched a high-quality merchant support program focusing on product and technology innovation.
- The program has been implemented in dozens of agricultural regions and industrial zones.
- There is a growing consumer shift towards quality and personalization, which the company aims to meet through its initiatives.
- The innovation by merchants in response to these initiatives is creating a positive cycle of demand and supply.
Research, Innovation, and Social Responsibility
- Hosted the fourth Smart Agriculture Competition, exploring cutting-edge agriculture digitalization technologies.
- The Global AppriIno Challenge 2024 brought innovative digital solutions to tackle agricultural challenges.
- The company reaffirms its commitment to driving innovation, adapting to change, and supporting global agricultural ventures.
- Emphasis on taking greater social responsibility and giving back to society across the globe.
Zhao Jiajun says,
Platform Ecosystem Optimization and Merchant Support
- Introduction of $10 Billion Fee Reduction Program: This initiative has significantly lowered transaction fees for high-quality merchants, particularly benefiting those in agriculture and national goods sectors.
- Hundreds of thousands of RMB saved annually by merchants, allowing for investment in product redevelopment and technology upgrades.
- Enhancement of after-sales support, including a green channel and dedicated team, leading to compensation for approved merchant appeals.
- Logistic support for Western China, with up to 70% reduction in delivery fees for agricultural products and daily essentials.
High-Quality Merchant Support Program
- Allocation of $1 billion RMB in subsidies and $2 billion in online traffic resources during the harvest festival for high-quality agricultural merchants.
- Collaboration with manufacturers to explore full supply chain models, aiding in brand recognition and process advancements.
- Partnership with national brands during the W11 shopping festival, resulting in a more than tenfold increase in sales quarter-on-quarter.
Expansion of Product Offerings
- Introduction of new product categories such as smartphones, cosmetics, and healthy food, targeting first and second-tier city consumers.
- Focus on premium home appliances, maternity, baby products, and fresh produce for third and fourth-tier cities and rural areas.
- Adaptation to shifting consumption trends by catering to personalized demands of urban professionals and younger generations.
Future Commitments and Strategic Focus
- Continuation of the high-quality development strategy in upcoming quarters, with ongoing fee reductions and merchant support initiatives.
- Expansion of support to more agricultural and industrial regions, driving industry transformation.
- Commitment to enhancing platform capabilities to meet evolving consumer preferences and navigate future challenges.
Financial Performance and Outlook
| Area of Focus | Details |
|---|---|
| Third Quarter Performance | Robust business performance attributed to macro consumption recovery and high-quality development strategy. |
| Upcoming Quarters | Further broadening of support for high-quality merchants and continuous adaptation to consumer trends. |
Q & A sessions,
Merchant Support Initiatives
- The company has launched a substantial $10 billion fee reduction program to support high-quality merchants.
- Key policies include service fee rebates, reduced security deposits, and improved shipment fees for remote regions.
- These initiatives aim to lower operational costs and enhance efficiency, thereby enabling merchants to invest in improving their products and services.
- Logistics fee reductions have eliminated transshipment fees for Western region orders, broadening customer reach and lowering costs.
- Substantial positive feedback from merchants highlights the success of these initiatives.
Compliance and Regulation
- The company has ramped up investments to build a strong compliance team for tracking regulatory changes.
- New trust and safety initiatives are in place to enhance compliance systems and ensure a high-quality shopping environment.
- Investments in technologies have improved merchant onboarding and product listing processes.
- Proactive product quality checks are now a combination of technology and manual procedures to identify and mitigate risks.
- The aim is to achieve supply chain upgrades by empowering top merchants and eliminating non-compliant actors.
Domestic Consumption and Shopping Festivals
- Consumer spending and online consumption have seen a strong recovery, fueled by shopping festivals.
- The $10 billion voter campaign during Double Eleven offered direct consumer benefits, leading to positive sales growth.
- Strong sales were observed in categories like agricultural products, small home appliances, and daily necessities.
- National brands used the platform to launch new products, increasing consumer choice and trust.
- The company plans to continue long-term investments in consumption, supply chain, and ecosystem.
Competitive Landscape and Challenges
- The company acknowledges intensified competition in the e-commerce sector.
- Revenue growth slowdown is anticipated due to market dynamics and operational limitations.
- Macroeconomic policies provide opportunities, yet also pose challenges due to current strategic limitations.
- High costs to stay competitive impact profitability, potentially disadvantaging the company compared to peers.
- Long-term investments in product chain and ecosystem are planned to enhance core capabilities and competitiveness.
Global Business Strategy
- The goal is to provide unique value to consumers globally, maintaining a proactive approach to external feedback.
- Engagement with stakeholders has led to improvements in service standards and compliance.
- Intensifying global market competition poses challenges, but the focus remains on delivering better shopping experiences.
- Despite external pressures, the company aims to strengthen its global capabilities to meet market expectations.
No bad stock 