PDD Holdings' Q1 2025 Earnings Call: Unpacking Contradictions in Growth Strategy and Investment Priorities

Earnings growth and strategic focus, investment strategy and profitability, platform model and competition, support for small and medium merchants, investment focus and impact on profitability are the key contradictions discussed in PDD Holdings' latest 2025Q1 earnings call.



Revenue Slowdown and Profitability Drop:
- PDD Holdings reported RMB95.7 billion in total revenues for Q1 2025, which showed a notable slowdown amid rapid changes in the external environment.
- The significant drop in profit was attributed to factors such as intensified competition, challenges in adapting to external policy changes, and the platform's strategic decision to launch the 100 billion support program.

Merchant Support Initiatives:
- The company implemented the 100 billion support program, committing substantial resources to support merchants through uncertain times, with a focus on small and medium-sized merchants.
- This initiative is aimed at helping merchants reduce costs and increase sales, enabling them to adapt to new challenges and pursue long-term growth.

Investments in Platform Ecosystem:
- PDD Holdings increased platform ecosystem investments through initiatives such as fee reductions and marketing support for high-quality merchants.
- This focus on ecosystem investments is driven by the belief that supporting merchants and consumers is crucial for long-term sustainable growth.

Macro Policy Changes and Tariff Pressures:
- The company acknowledged that recent macro policy changes, including tariffs, have placed considerable pressure on merchants.
- To mitigate these challenges, PDD Holdings is proactively adjusting its business model and increasing support for merchants to help them adapt to these uncertainties.

Competitive Advantages and Challenges:
- PDD Holdings acknowledged that, as a third-party marketplace, it faces inherent limitations in passing on policy incentives to consumers, putting its merchants at a disadvantage compared to competitors with first-party businesses.
- The company is addressing this by leveraging internal resources and investing in measures to protect the interests of consumers and merchants.