A：In response to the challenges faced by merchants, PDD Holdings made a strategic decision to launch the 'Hood Billion Support Program', a major initiative within the high-quality development strategy. This program is designed to further lower fees for merchants, improve the business environment on the platform, and invest more in driving sales and helping them adapt to new challenges.

A：In PDD Holdings Inc's first quarter ended March 31, 2022, the company reported revenues of RMB 95.7 billion and experienced a notable slowdown in revenue growth due to a mismatch between the business environment and revenue growth within the ecosystem. The profit was significantly impacted by the investment in the platform ecosystem.

A：The slower growth rate and reduced profit in the first quarter were attributed to the intensification of competition in the Chinese e-commerce sector, limitations in passing on policy incentives to consumers, external policy environment changes like tariffs creating pressure on merchants, and the significant expansion of the fee reduction program.

A：PDD Holdings views its investments in the platform ecosystem during uncertain times as a tangible commitment backed by significant resources. The company believes it is essential to support merchants in challenging times to ensure their endurance and resilience, which aligns with the long-term sustainability and quality of the platform. These investments are seen as crucial for the collective success of merchants and for maintaining the quality of products and services available to consumers.

A：PDD Holdings prioritizes the needs and interests of merchants and consumers over those of the platform because the management team recognizes it as their obligation in a fast-changing market where merchants face challenges. The company believes that prioritizing merchants and consumers and investing in their growth will ultimately lead to a stronger and higher-quality merchant ecosystem and position the platform for long-term sustainable growth.

A：PDD Holdings anticipates that its investment in the platform ecosystem will likely weigh on platform profitability in the short term and possibly for an extended period. However, the company is committed to long-term investments and does not evaluate its strategic decisions based on quarterly financial results. Instead, the focus is on generating long-term intrinsic value, extending over several years, and the belief is that long-term investors will share this perspective.

A：The overarching factor that contributed to the decline in profit for the quarter is considered to be the company's emergency port initiative and long-term investment, which are treated as accounting expenses. The timing mismatch between when expenses are recorded and when the long-term returns materialize is expected to persist, continuing to weigh on profitability.

A：The main focuses of the hundred billion support program include further increasing investments in high-quality supply, expanding support for merchants from top and mid-tier to small and medium-sized, exploring fee reduction initiatives, and providing comprehensive support such as traffic resources, flat label, premium store programs, digital resources, and technology capabilities to small and medium-sized merchants.

A：The dedicated team for the high-quality merchant program has visited various manufacturing bases, and it is noted that merchants and the broader supply chain have made notable progress in transformation with the platform's support. Many merchants have transitioned from traditional OEM and distribution思维 to user-oriented and brand-driven approaches, enabling them to pursue differentiated development paths amid homogeneous competition. Additionally, fee savings are being reinvested into new product development, warehouse upgrades, and supply chain transformation, accelerating high-quality transitions across major industries.

A：The goal of the 2025 Do Specialty Initiative is to enhance support for agricultural products and explore new models for agricultural product attribute enhancement, adding value to the agricultural industry. The initiative has covered key agricultural regions in several provinces and is implementing tailored strategies across agricultural product categories such as local farm products, fruit, seafood, and poultry.

A：The papaya producing region has developed a digital system for agriculture product operations with the support from the platform, which addresses key industry pain points such as unclear pricing and high spoilage rates. This system drives the transition from experience-based to data-driven operations, enabling modernization of the traditional agricultural supply chain.

A：The 10 billion merchant gift bag program includes a RMB 10 billion consumer coupons rollout as part of the 10 billion program. It also features dedicated campaigns like the 10 billion coupon program and the 10 billion level-up program, which deliver additional coupons across all product categories to meet consumers' functional and personalized needs while improving supply-demand matching efficiency.

A：The enhanced direct discount program fully safeguards merchants' interests by benchmarking prices against the national subsidy program across multiple categories to provide real savings to consumers. This stimulates consumer demand while ensuring that merchants' advantages under the national subsidy schemes are maintained, helping them strengthen their overall market position.

A：The company remains committed to building a business ecosystem where users, merchants, and the platform thrive. Investments on both the supply and demand sides are being increased to help merchants emerge stronger from uncertainties, create valuable consumer experiences, and generate a positive societal impact.

A：In the first quarter of 2024, the company's total revenues increased 10% year over year to RMB 95.7 billion. Revenues from online marketing services and transaction services were up, driven by an increase in fulfillment fees and payment processing fees. Total costs of revenues and GAAP operating expenses grew, while non-GAAP operating expenses as a percentage of total revenues was 30%, compared to 20% in the third quarter of the previous year. Non-GAAP sales and marketing expenses increased by 44%, and non-GAAP general and administrative expenses were RMB 735 million, up from RMB 572 million in the same quarter of 2024. Non-GAAP research and development expenses were RMB 3.6 billion, up 3% year over year. Non-GAAP operating profit margin was 19%, down from 28.6% in the same quarter of the previous year. Net income attributable to ordinary shareholders decreased to RMB 14.7 billion from RMB 28 billion in the same quarter of 2024, and non-GAAP net income attributable to ordinary shareholders was RMB 16.9 billion, down from RMB 30 billion in the same quarter of 2024.

A：The platform is responding to these pressures by continuing to take proactive actions while strictly adhering to regulatory compliance. This includes focusing on core business and enhancing competitive strength through investments in supply chain service capabilities. A significant effort is being made to increase support for merchants, with the Script Billion support program designed to stabilize sales, lower costs, and help them manage risks in the rapidly evolving market environment.

A：The Script Billion support program is designed to increase support efforts for small and medium-sized merchants, helping them manage risks and pursue sustained growth by stabilizing sales and lowering costs. It is significant because it addresses the challenges faced by merchants in the current market environment and aligns with the platform's obligation to support them.

A：The company is responding to the decline in net profit margins by acknowledging the slow-down in growth rate due to a combination of a competitive business environment, external uncertainties, and changes in the external environment. A significant drop in profit this quarter is attributed to a mismatch between the business investment and return cycles. The company continues to invest in the platform ecosystem to support merchants and customers, which is resulting in short-term challenges for profitability but is viewed as essential for building a sustainable ecosystem.

A：The management believes it is their responsibility as a platform to strengthen ecosystem support and prioritize the interests of both merchants and consumers. In the face of increasing external uncertainties, the company's strategy includes backing the upgraded 100 billion support program with substantial financial commitments. However, specific plans to address the limitations and disadvantages related to macro policy initiatives are not detailed in the provided text.

A：The core components of the upgraded 100 billion support program include a significant increase in investments on both supply and demand sides. On the supply side, the program aims to extend high-quality merchant support to small and medium-sized merchants. On the demand side, it entails new gift back initiatives, such as the 'Hood Billion Merchants Give back program' offering additional coupons across all categories and the upgrading of the direct discount program to offer real savings to consumers while improving sales from merchants.

A：The platform supports the needs of consumers and merchants by being a network of interconnected merchants working together to deliver high-quality products and services to consumers. The company believes in long-term investment in the platform ecosystem and prioritizing the needs of consumers and merchants amidst external uncertainties to achieve long-term, high-quality, and sustainable growth.

A：The limitations of the third-party marketplace model in the current market environment include inherent limitations with certain policy incentives, which affect the price competitiveness of merchants in specific categories when compared to platforms primarily operating under a first-party model.

A：To protect the interest of both consumers and merchants, the platform has utilized internal resources to increase investments, helping medium-sized merchants maintain competitiveness and improve. Specific measures include launching a dedicated page for the national subsidy program, providing wireless support for merchants, and enhancing promotional efforts on the consumer side, such as offering additional coupons on top of government subsidies.

A：While such investments may weigh on short-term profitability, the platform believes they are necessary and worthwhile as they help merchants improve inventory positions, manage capacity, and allow small and medium-sized merchants to focus on high-quality, differentiated growth.

A：The company believes that during shopping festivals, e-commerce platforms should prioritize simplified mechanisms and real savings for consumers. The company has aligned this philosophy with their approach and, in the case of the June 16 shopping festival, combined the campaign with their 10 billion program to enable consumers to access high-quality products at attractive prices while driving sales for merchants.

A：To further improve consumer shopping experience, the platform has introduced the Price Drop Protection Service for products participating in the June Ed promotion.