PDD Holdings Inc (NASDAQ: PDD) released its latest quarterly report, showing second-quarter revenue of 112.4 billion yuan. Second-quarter profit reached 27.2 billion yuan, down 12% year-over-year, while Non-GAAP R&D investment totaled 4.3 billion yuan, up 40% year-over-year.
Following the earnings release, PDD 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 points and address analyst questions. The following is a summary of the main Q&A segment from the call.
Where things stand
Jefferies analyst Thomas Chong asked about the brand direct operations strategy announced last quarter, requesting an update on recent progress and how the market should assess its impact on the business, including the balance between direct-operated goods and third-party (3P) items, as well as pricing considerations for direct-operated products.
Zhao Jiazhen responded that the brand direct operations business represents an important extension of the company's long-term supply chain investment direction. He noted that PDD aims to build deep product co-creation relationships with capable and willing manufacturers, leveraging the platform's strengths in market insight and global channels to enhance the certainty of brand development and value creation across the industry chain, ultimately delivering incremental value to the entire ecosystem.
Regarding pace, Zhao explained that in the initial phase, the company will selectively focus on core categories where the platform and supply chain hold unique advantages, establishing long-term partnerships with manufacturers to jointly participate in product definition, R&D, quality standards, and market validation. While this business requires a longer cultivation and coordination cycle, with launch timelines taking longer than initially anticipated, it remains a clear and long-term strategic direction for the platform. The company will maintain patience and ensure every step is executed thoroughly, expressing confidence in the long-term prospects of brand direct operations.
Platform principles remain intact
On specific operational strategy, Zhao emphasized that the platform's open and fair underlying mechanisms will not change. He stated that consistently providing consumers with quality goods and services depends on a healthy, fair, and diversified supply-side ecosystem. Going forward, brand direct-operated products and third-party merchant offerings will jointly cater to consumers' diverse needs across different scenarios and positioning, ultimately creating a win-win platform ecosystem for all participants.