Q&A（Question-and-Answer Session）is a session after the company's prepared remarks where institutional investors and analysts ask management questions. In this dialogue, you may find some valuable information that might affect the stock price in the following weeks.
Now let's look at some key points from PDD Q1 2023 Q&A Session Transcript $Pinduoduo Inc.(PDD)$
Q:My question is: noting PDD recently implemented the Co-CEO structure, how does the change affect your group strategies? What are your key growth drivers going forward? Per your announcement, post the Co-CEO structure change, Lei will focus more on the globalization side. Does that mean your globalization strategy now has a higher priority?
A:I can take your first question on strategies. Jiazhen and I have been working together for many years and we have established deep trust. With our goal of high-quality development in mind, we have constructed very clear long-term strategies, and we will continue to lead our team in terms of execution. And on top of that, we will leverage our different backgrounds and ideas and be efficient in decision-making.
Over the past period of time, we are steadily shifting our strategic focus from the speed of growth towards the quality of growth. And we have seen positive feedback from both consumers and sellers on this shift, which is also reflected in this quarter's results. Under our long-term strategies, we are continuously strengthening our supply chain capabilities and also expanding the supply of high-quality merchandise. We will further increase our support for quality sellers by launching our 10 Billion Ecosystem Initiative and further push forward our platform overall quality. And in addition, we will continue to optimize our platform ecosystem.
As a tech-driven company, the value we create is inseparable from our R&D capabilities. So we are also strengthening our R&D capabilities and increasing our R&D investment. Currently, our R&D team makes up about half of our total employees. The China market is huge, and we see big potential for us to further grow. We believe that in the foreseeable future, China market is our biggest market. At the same time, we also note that it is changing very fast and competition is intense, which demonstrates both challenges and opportunities. This is why our Board has appointed Jiazhen as Co-Chief Executive Officer to design and execute strategies together with me and further strengthen our China operations team.
Q:My question is related to top line growth. Your online marketing services revenue increased by 50% year-over-year this quarter, accelerating from the last quarter. How should we think about this reaccelerated momentum, what PDD has done this quarter contributing to this?
A:And let me take your question on revenue growth. In the past quarter, many places introduced policies to support consumption we see a continued improvement in consumer sentiment. And these trends show a good beginning for 2023. We have also benefited from this. And our platform consumption vitality is further boosted. To support consumption recovery, we continue to start from consumer demand and actively mobilize our platform resources. To give consumers more savings, we organized several large-scale sales events in a row and gave out actual coupons to boost consumer sentiment.
We also strive to give better services to our consumers. So we have upgraded consumer protection and also services throughout the entire shopping experience. For example, for most of the product categories, the shipping processing time has been cut down from 72 hours to within 48 hours. Our virtual platform ecosystem of more savings and better services has earned us a decent consumer and seller feedback. Also, our Q1 growth is early testament to our progress in building up the platform ecosystem. Looking ahead, we still need to remain down to earth and further strengthen our core capabilities, so that we can create more value for consumers. For example, we are launching the 10 Billion Ecosystem Initiative to further support quality supply.
Q:Is with June 18 approaching, we see that many of your peers have rolled out this year's promotion, which seems to be very aggressive. Just wondering what's your response and how do you explain how do you plan to maintain your competitive advantage, specifically for pricing? Do you think there will be an endless spiral of increasing discount in short or the list price?
A:Instead of paying too much attention to what competitors are doing, we actually focus more on how we grow in competition. We view competition as a testing ground, and it motivates us to iterate quickly. Just I have mentioned in my remarks, we are always consumer-oriented, and we actively and positively embrace all types of competition. We are accelerating to build up a healthy ecosystem of more savings and better services. Our more savings essentially comes from retail efficiency improvement. And we will continue to strengthen our R&D to help better match supply and demand. We will also root ourselves deeply in more production regions to connect quality products to consumers directly. So for example, in initiatives such as our agriculture initiative -- agricultural cloud initiative, we are leveraging our supply chain expertise to offer more users quality and also affordable agriculture products. And we hope to further improve our efficiency and turn it into a sustainable price advantage for consumers. At the same time, we will also continue to increase discounts and issue more coupons to give back to consumers directly.
And better services is another important area we are optimizing our service quality throughout the entire shopping experience. So for example, we offer extra care to the elderly people and also consumers living in remote areas, and we give them preferential customer services. We have also upgraded our post-sales services such as offering consumers the option to receive a refund without having to return items. And we are launching a dedicated 10 Billion Ecosystem Initiative. And this aims to channel more resources towards high-quality sellers to support SMEs and also quality businesses, and enhance the platform overall service efficiency and quality. And we will continue to focus on sales improvement in competition and strive to create more value for our consumers.
The above Q&A are highlights that are edited for brevity. Click here for the full PDD Q1 2023 Earnings Call Transcript.
If you want to know more details, you can click here to re-watch the PDD Q1 2023 Earnings Conference Call
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