PDD Holdings Inc.

Ladies and gentlemen, thank you for standing by and welcome to Pinduodal Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are listened only mode. After speaker's presentation, there will be a question and answer session. To ask questions during the session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. I would now like to have the conference with the first speaker today, Mr. Jason Chu. Thank you. Please go ahead, sir.

Thank you, AJ. Hello, everyone, and thank you for joining us today. Pinduoduo earnings release was distributed earlier and is available on the IR website at investor.pinduoduo.com, as well as through Global Newswire Services. On today's call, our CEO, Chen Lei, will make some general remarks on our performance for the past year and our strategic focus going forward. Our VP of Strategy, David Liu, will then elaborate further on specific strategic initiatives Our VPL finance, Tony Ma, will then take us through our financial results for the fourth quarter and fiscal year 2020, ended December 31, 2020. So before we begin, I would like to refer you to our state proper statement in the earnings press release, which applies to this call, as we will make certain forward-looking statements. Also, this call includes discussion of certain non-GAAP financial matters. So please refer to our earnings release which contains the reconciliation of the non-GAAP measures to GAAP measures. Now it is my pleasure to introduce our Chief Executive Officer, Chen Lei. Please go ahead.

Thank you, Jason, and hello everyone. Thank you for joining us on our earning call for the fourth quarter in the fiscal year 2020. Pinduoduo delivered another quarter of strong growth and solid execution as our users continue to chat us with their purchases. Our annual active buyers increased 57 million in Q4 to reach 788 million for the trailing 12 months. User engagement has also accelerated. Our MAU increased to 720 million. Total number of orders placed on our platform increased by 94% to reach 38.3 billion in 2020. Total revenues excluding revenues from merchandise sales for Q4 was IMB 21.2 billion, or an increase of 96% from a year ago. Non-GAAP operating loss narrowed in Q4 from the same quarter a year ago. 2020 was a challenging year for Pinduoduo, as it was for many others. The COVID-19 pandemic which by now has already stretched over two winters, has put our team and platform through a tough test since we were founded six years ago. It has been a humbling experience for us. I'm glad that we have responded quickly and responsibly to continue serving our users better, thereby winning their invaluable trust. I would like to thank our users and our team for their continued support. as we transition from 2020 to 2021, I would like to share some takeaways and do a recap of this very long year. First, 2020 has been dictated our view from the get-go, which is that the separation of the online and offline world is increasingly irrelevant. With advent of mobile internet, online and offline are just parts of a single word, branded together more and more seamlessly and complementary to each other. Unlike with desktops, smartphone users could go online anywhere, anytime, and for any length of time. Users no longer had to carve out time and be confined to a specific place, which is common practice for desktop error. This is why six years ago, we insisted on developing a mobile-only platform for our users. In fact, we are the only one among internet companies of our scale to be mobile-only today. If anything, COVID-19 has accelerated this trend. It was already happening fast even pre-COVID-19. Today, the younger generation that grew up with smartphones are not even conscious about the countless and seamless transitions they make each day between online and offline. Among other age groups, China's highly advanced online payment system and mobile communication tools have also made it nearly impossible to do anything purely offline. This has in turn helped increase familiarity and acceptance of this commingled word. With COVID-19, the adjustments that we have had to make our routines have only expanded online space and expedited its branding with offline space. Consumers are able to frequent brick and mortar shops turned to online platforms like Pinduoduo to purchase food and other groceries. An earth-wild preserve of wet markets, which Chinese families visit not just to get grocery, but as a social activity. Users are able to travel back home to spend Chinese New Year with loved ones, and also tap on earth to deliver warmth. They either send care package of food and clothing to loved ones living elsewhere, or order the taste of home for themselves. We rose to a challenge of delivering the best service to our customers. We went further than we had before. Over the Chinese New Year holiday, we worked with merchants to stay open and dispatch orders. We also worked with logistics partners to ensure that around a million deliver men were deployed to deliver parcels. We fulfilled a surge of orders from hometown delicacies. As for fresh produce and groceries, we provided consumers with most of what they wanted quickly and affordably. Consumers did not have to stock up before a long Chinese New Year break. In this way, we helped to fill a gap left by brutal shops, thereby bringing values to our users. Going forward, Pinduoduo, as a pioneer in this space, We will build on the lessons we have learned and double down to improve our offerings to our users. We will always be on the lookout for new ways to create more values for them. Second, 2020 has highlighted that we can and should do more for agriculture sectors and rural communities. Pinduoduo started off by selling fresh produce online. It was a conscious decision because we found them to be a necessity, and optimizing their production, distribution, and consumption would bring the greatest widespread benefit. The online penetration of agriculture sectors has also consistently lacked industry average. We have never lost sight of this beginning, and agriculture has consistently been a strategic priority for us. We are proud to be China's largest agriculture platform. Our GMV for agricultural products doubled to more than RMB 270 billion in 2020. 12 million farmers sold their produce directly to consumers via our platform. We were among the leading technology companies commended for making outstanding contribution for the war on rural poverty. We see this as affirming our investment to bring solutions to optimize every part of agricultural value chain. In 2020, we also launched livestream sessions for farming communities and dedicated channels to promote their products to relieve difficulties brought about by COVID-19. We observed that order volume was so large that our sellers and deliver partners had issues fulfilling them, especially in the summer. To solve this, in August, we launched Dodo Grocery, our next-day grocery pickup service that helps local farmers and distributors to sell directly to consumers, increasing sales and cutting waste and cost for customers. Pinduoduo's vision of Costco plus Disney started from agricultural products in the farmlands. We are now already the largest agricultural platform in China. We can and should do more. We hope that in the next stage, Pinduoduo will become world's largest agriculture and grocery platform and make groceries sourced around the world affordable and available to our users. To this end, we aim to build up an equity-focused logistics infrastructure platform that will reduce waste, lower costs, and speed up delivery to agricultural products. This is a work in progress. We expect to make a few more years of investment before it can realize its full potential and achieve efficiency. We share the vision of contributing to China's agriculture sectors with technology. to help increase the resilience of the food chain and stay off the looming global food crisis. We will continue to invest in agriculture and food technology and look into global investment opportunities in alternative proteins, food safety, and precision farming. Third, 2020 has also made us more committed than ever to continue to promote digital inclusion of rural communities and disadvantaged. Pinduoduo has created a level playing field for business of all sizes, including in the agricultural sector, where margins are thin. In addition, live streaming and online business on our platform has created new rules that prioritize different skill sets and allow inclusion of users who may otherwise be excluded. For instance, Agriculture is traditionally labor intensive. Women and physically weaker people may not be able to participate in it. Livestreams and online business operations do not accept the same physical requirements, and these individuals are able to participate in them. In fact, of all stores actively engaged in the sale of agricultural products, over half are managed by women. This is a win-win situation for everyone. And with our commitment to social responsibility, we definitely want to and will do more here, including by providing further training for them to sell well on our platform. Last but not least, many of you have learned that Colin will be stepping down from his chairman role effect today. On behalf of the board, We would like to thank him for his leadership and contribution to Pinduoduo in the past six years. We will check him on as he explores new frontiers for Pinduoduo in years to come. As the new chairman of the board, I would like to ensure everyone that our strategy remains the same. which is to stay true to our values and provide a more saving, more fun experience to serve our users on our platform. Without that, we have become the world's largest e-commerce platform by user number. We will work hard to deliver even better results in years to come. Now, let me turn it over to David to provide updates on our recent initiative.