ZKH Group Ltd. announced its unaudited financial results for the second quarter of 2025, revealing a decrease in net revenues to RMB 2.167 billion (US$302.5 million), down 3.7% from RMB 2.250 billion in the same period of 2024. This decline was attributed mainly to reduced revenues from the marketplace model, which had a high base in the prior year due to low-margin businesses with extended customer credit terms. Despite a decrease in overall gross margin from 17.0% in 2024 to 16.5% in 2025, the gross margin as a percentage of GMV increased from 13.9% to 14.8%, driven by optimized procurement costs and a larger proportion of GMV from higher-margin private label products. The company's GMV saw a decline of 12.1% year-over-year, reaching RMB 2.420 billion, with the ZKH Platform contributing RMB 2.144 billion, a drop of 13.5%. In contrast, the GBB Platform's GMV slightly increased by 0.4% to RMB 275.9 million. ZKH Group reported gross profit of RMB 357 million, a decrease of 6.8% from RMB 383 million in the same quarter of the previous year. The number of customers, however, showed significant growth, increasing by 53.5% to 74,854 in the second quarter of 2025. In terms of business operations, the company emphasized its strategic focus on enhancing business quality and operational efficiency, which involved optimizing its business model away from low-margin, extended-credit operations. ZKH is also reinforcing its talent pipeline in critical functions such as product lines, IT, and overseas business. Overall, while ZKH Group faced a modest decline in GMV and revenue, it successfully shifted towards higher-margin private-label products, which are expected to underpin future growth.