PDD Holdings Inc released its financial results for the first quarter ending March 31, 2026. The report shows first-quarter revenue of 106.2 billion yuan, an 11% increase year-over-year, and a net profit of 12.5 billion yuan, a 15% decrease year-over-year. This performance is primarily attributed to ongoing "billion-yuan support" initiatives and sustained heavy investment in the supply chain, which have impacted short-term results to some extent.

Following the earnings release, Chairman and Co-CEO Chen Lei, Executive Director and Co-CEO Zhao Jiazhen, and Group CFO Li Jiong attended the subsequent earnings conference call to discuss key financial highlights and address analyst inquiries.

Citi analyst Alicia Yap posed two questions. First, noting PDD's traditional positioning as an "e-commerce platform" and the recent launch of a brand self-operated project last quarter, she asked management to explain the primary considerations behind initiating brand self-operation at this juncture and whether this should be understood as a strategic transformation for the company overall. Second, citing third-party data indicating solid user growth in PDD's global business, she inquired about the company's upcoming focus areas for this segment, whether user growth has met expectations from management's perspective, and how the company plans to retain and serve these consumers effectively.

Zhao Jiazhen addressed the first question, stating that since the beginning of the year, the company has been driving a profound internal organizational restructuring focused on safety, compliance, and social responsibility. It is actively embracing the social responsibilities of a platform enterprise, striving to create more value for users, industries, and society. The establishment of a dedicated company and the implementation of the brand self-operated model in the first quarter represent extensions of this direction.

Through years of deep cultivation in industrial clusters, the company has gained an increasingly clear understanding of the series of challenges currently facing the supply chain. Many excellent manufacturing enterprises, constrained by factors such as talent, information, and scale, have not yet completed their brand transformation and are facing homogenized competition. As a platform, PDD has the responsibility and capability to deepen its investment in the supply chain and propose solutions to the industry's challenges. The establishment of the dedicated company aims to integrate platform resources, enabling more proactive and in-depth participation in product research and development and standard setting, thereby advancing the new brand self-operated model.

Through brand self-operation, the platform assumes more responsibility and risk, allowing industrial cluster partners to focus on high-quality production and manufacturing. Management believes this is an essential path to propel the platform and the entire e-commerce ecosystem toward the next stage of high-quality development. Leveraging the platform's scale, PDD hopes to share risks and rewards with supply chain manufacturers, providing certainty for participants in the ecosystem.

This certainty is expected to significantly enhance the operational efficiency of the entire chain, giving factories the confidence to invest in product R&D and technological innovation, forming a positive cycle. In a complex and volatile market environment, the platform believes it must assume more responsibility and operate more deeply. PDD will maintain a high level of focus, continuing to prioritize the supply chain and drive its next-stage high-quality development.

Chen Lei commented that after nearly three years of development, the global business has gained support from many consumers worldwide. As the business grows, management continuously reflects on how to provide consumers with more sustainable, differentiated long-term value in such a fiercely competitive global market. The key, they believe, lies in returning to the essence of e-commerce and focusing on building supply chain capabilities.

Centered on this key, the company will focus on two areas moving forward. First, it will continue to advance the integration and optimization of supply chain resources, addressing bottlenecks at various stages. This will not only enrich the platform's product categories but also substantially enhance the consumer shopping experience. During this process, PDD will actively attract high-quality merchants and ecosystem partners, integrating the platform into the commercial landscapes of various markets. Second, the company will develop the brand self-operated model, particularly in global markets, aiming to strengthen consumer perception of the platform's products as "high-quality and reasonably priced" through brand-building efforts. Simultaneously, brand development serves as an important pathway to further elevate product quality standards, enhancing the platform's compliance capabilities in an increasingly complex regulatory environment.

Competition in the e-commerce industry is intense, and it is observed that consumer switching costs between different platforms are low. While platforms compete for consumers through marketing tactics, longer-term, more sustainable advantages stem from these underlying, less visible supply chain capabilities.

Investment in the supply chain is also a long-term systematic project. Regardless of short-term fluctuations or challenges, PDD will remain true to its original aspirations, continuously driving profound transformations in teams, business processes, and organizational management. The company aims to use tangible supply chain investments to fuel the next phase of growth for its global business.