PDD Holdings to increase investment to strengthen platform ecosystem

On PDD Holdings (PDD)’ Q2 call, executives stated in part: “In the past quarter, industry competition intensified further as the major market participants invested heavily in new business models. And again, this backdrop our revenue growth slowed further in Q2 while operating profit declined meaningfully. The second consecutive quarter. And in response to the intensified competition, we will adopt a proactive and long term approach taking the competition as an opportunity to strengthen the high quality development of the platform ecosystem. And then accordingly, we have chosen to increase investment and to forgo part of the profits in order to create growth opportunities for the SME merchants. And from management’s perspective, we believe this is a responsibility that the platform is best placed to take on and at the same time, represents a long term investment in strengthening our ecosystem. We do not believe this quarter’s profit level are sustainable and fluctuations in profitability is likely to continue in the coming quarters.”