Pinduoduo Performance Exchange Meeting: Differentiated Platform Services Achieve Positive Cycle At present, it is still in the growth stage of focusing on long-term investment

Recently, Pinduoduo (PDD. US) held its 2023 annual results briefing. Pinduoduo's annual report data shows that Q4 revenue in 2023 will be 88.881 billion yuan, a year-on-year increase of 123%, net profit for the quarter will be 23.28 billion yuan, a year-on-year increase of 146%, and adjusted net profit will be 25.477 billion yuan, a year-on-year increase of 110%. Pinduoduo's full-year revenue in 2023 was 247.639 billion yuan, a year-on-year increase of 90%, net profit was 60.027 billion yuan, a year-on-year increase of 90%, and adjusted net profit was 67.899 billion yuan, a year-on-year increase of 72%.

"2023 is a pivotal chapter in our corporate history, and we are transitioning to high-quality development," said Mr. Chen Lei, Chairman and Co-CEO of Pinduoduo. "In 2024, we remain committed to further improving the consumer experience, enhancing technological innovation, and making a positive impact on our communities. ”

"In the fourth quarter, we saw growing demand, encouraged by consumer sentiment," said Mr. Zhao Jiazhen, Executive Director and Co-Chief Executive Officer of Pinduoduo. "We will continue our high-quality development strategy, remain committed to delivering great value and exceptional service, and continue to build thriving communities that benefit all. ”

"In 2023, our R&D investment exceeded RMB10 billion for the second year in a row, highlighting our dedication to technological and agricultural advancement," said Ms. Jun Liu, Vice President of Finance at Pinduoduo. "Our focus remains on creating lasting value through strategic initiatives that have a sustainable and positive impact. ”

Q&A：

Q: First, from the perspective of strategy, 23 years is a year with strategy, evaluate the implementation of strategy, look forward to 2024, and the medium and long term, is there any change in strategic priorities?Second, 23Q4 e-commerce promotion season, how does this year's Q4 perform, is there any new trend to share? Q4 season, what is the financial relationship between promotion and this quarter?

A: First, regarding strategy, 23 years is the first year of PDD's high-quality development, and good progress has been made in the ecology, which strengthens the company's confidence in high-quality development investment. At present, the introduction of many countries remains unchanged in the consumer's demand for more affordable e-commerce platforms, and Q4 continues the previous rhythm, focusing on high-quality development and firm investment. On the consumer side, to meet consumer demand first, Q4 is the peak season of e-commerce, and each market has launched special promotional services according to local conditions, reducing the consumption threshold of consumers on the platform, and getting good feedback. On the supply side, we will continue to tilt towards high-quality supply and merchants to help businesses increase production, reduce costs, and in turn, reduce product prices to form a virtuous circle.

A healthy ecology is the premise of the long-term development of the platform, and it is worth continuing to invest in platform governance, technical means, active identification of risks, copyright protection, and systematic governance of goods and stores. Assume platform responsibility.

After seeing the positive changes brought about by the high-quality development strategy in the past year, the focus of the follow-up strategy will not change, and the high-quality development will be deepened and solidified, creating value for consumers and society.

Second, regarding the big promotion, last year's Double 11 and 1212 provided simple discounts, tens of billions of subsidies, and a single reduction to meet the needs of consumption upgrades. With continuous investment, 1111, the number of users exceeded 6.2e, orders doubled year-on-year, and the value of the platform was recognized. Realize the common growth of the platform and merchants.

Pay more attention to the long-term construction of the platform to meet the uninterrupted needs of consumers. PDD has been established for 8 years, focusing on its main business. Continue to invest and accumulate minds. Today's results are not a quarterly promotion, but a return on long-term investment in the past. Users' trust in the platform has increased. Get support and reach new users. We are confident in the direction of high-quality development.

On the supply side, we use the advantages of technology and scale to bring differentiated platform services, help small and medium-sized businesses around the world through services, bring categories, and realize the positive cycle of the platform. Subsequently, we will firmly make long-term investment, create long-term value, and lay a solid foundation.

Q: First, the overall consumption industry, in the coming year, what is the view of domestic PDD on domestic consumption?24Q1 Do you see a new trend?Second, profit vs shareholder return, under the intensification of competition, to achieve good profits, how to see the subsequent profit margin development trend? What is the level of profit margin in 24 years? Shareholder returns, considering Internet companies to do dividends, buyback, does the company have any plans?

A: In the first consumer market, in the past year, I felt that the consumer market was deep and resilient, and I have confidence in the future. From the trend of its own platform, we feel the improvement of consumer confidence, and the recovery momentum is expected to be further consolidated and strengthened in the new year. Seeing that many consumption is driving for the better, the yearning for a better life is the underlying support, the new retail model improves the penetration rate, and finally, industrial upgrading, new domestic products bring new opportunities.

In the long-term good consumption environment, we will invest in the long term, serve consumers together with merchants, and create value.

Second, in terms of profit margin, the company is still in the growth stage, focusing on the value of high-quality platforms, and will continue to invest in key areas and R&D, which will bring long-term ROI value. The financial data for 23Q4 cannot be used as a guide for subsequent full years.

Every company has different stages of development, and the company is still in the growth stage of focusing on long-term investment.

Q: From the perspective of global business, PDD has achieved good development, how is the plan? How does the platform weigh legal compliance and business development? From a domestic point of view, how does the company's main opponent adjust its strategy and low-price mentality strategy, and does it have an impact on the company's new positioning? How does the company adjust its strategy?

A: From the perspective of global business, the original intention of developing and using its own supply chain to help global consumers realize their dreams is in the early stage, and there are challenges in the future. Deal with the unknown, grasp it yourself, cultivate internal skills, learn from the market, explore model innovation, and meet adjustments. No matter how the market competition pattern changes, consumers' demand for more affordable and good services on e-commerce platforms remains unchanged. High-quality development will also be implemented in the global business and long-term strategy. Welcome partners to join us and create value for global consumers.

Compliance has always been the foundation of business development, and legal compliance is an important part of strategic planning. Continuously improve the mechanism, humbly understand the legal trends of the industry, and communicate and cooperate with other countries.

The requirements for the company are to be in line with the high standards in the industry.

The high-quality development strategy of the platform will be grasped and empowered in all aspects of the platform. Paying attention to the needs of consumers, giving back to consumers, and strengthening the minds of platform users require continuous investment. A good consumer experience is not only the price, good service, shopping process, and consumer protection are comprehensively upgraded, so you can buy with confidence.

Science and technology enterprises, continue to be R&D-oriented, and constantly promote the upgrading of agricultural products and enhance added value. The platform ecology, the foundation of high-quality supply and service, and R&D further drive the positive development of the platform. Go back to basics, focus on long-term investment, and keep the platform attractive.