Thank you, operator. Hello, everyone, and thank you for joining us today. Pinduoduo's earnings release was distributed earlier and it's available on the IR website at investor.pinduoduo.com, as well as through GlobeNewswire services. On today's call, our CEO, Chen Lei will make some general remarks on our performance for the third quarter of 2020 and our strategic focus going forward. Our VP of Strategy, David Liu, will then elaborate further on our specific strategic initiatives. Our VP of Finance, Tony Ma, will then take us through our financial results for the third quarter ended September 30, 2020. Before we begin, I'd like to refer you to our Safe Harbor statement in the earnings press release, which applies to this call as we will make certain forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. 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. Lei, please go ahead.

Hello, everyone. Thank you for joining us on our third quarter results announcement. Pinduoduo turned five years last month, reaching another milestone on this incredible journey. This year, we continue to deliver strong user growth and build trust and engagement with consumers. We are facilitating more sales every day with the support of our users, merchants and business partners. For the 12-months ended September 30, 2020, Pinduoduo's revenue yield of 731 million active buyers and generated nearly RMB1.5 trillion GMV. During our fifth anniversary campaign early October, the peak daily order volume surpassed 100 million, driven by increased demand for agricultural products. Strong consumer activities continue into Q4. We expect this growth to our continued focus on user experience. And so, better engagement metrics as we offer more selection, more compelling value and more fun and interactive features. In Q3, we observed increase in the frequency of visits, the number of categories visited and average daily time spent, which contributed to our average annual spending per user increasing from RMB1,857 in Q2 to RMB1,993 in Q3, despite a net add of another 48 million active buyers. Fueling our growth scale today, it still feels like we just started yesterday. We recognize that Pinduoduo's achievement today benefited from the growth and evolution of China's Internet, the development of the retail industry and increased consumption power. We always believe that it is the consumers who make enterprises, not other way around. This is why from the beginning we have built our platform with the principle of people first and benefit all in mind. Over the past five years, we witnessed growing support for the new interactive mobile commerce experience that we championed. Our mobile platform has become a mainstream online shopping app. Open ranked first on various app stores. This is because…

Thank you, Lei. Pinduoduo has built one of the world's largest online communities in the past five years by focusing on bringing consumers more savings and more fun. As user behaviors evolve, we have also adapted to meet and exceed their expectations. Five years ago, we started our team purchase model, which led users pin and save together as they browse. Two years ago, we started our New Brand Initiative, which enabled capable manufacturers to launch their own brands with products tailored to our users' preferences. And now, we are pushing ahead on an even bigger user need, fresh, affordable agricultural products. We never choose to do what is the easiest but what is right. We have made the important progress on our New Brand Initiative this past quarter. We launched the New Brand Initiative as part of our C2M effort to help capable merchants and manufacturers gaining valuable insights of their target customers, design and manufacture tailor-made products for our users and leverage our interactive channels to sell with more accurate prediction of the price and quantity they can potentially achieve. It is a new road into reverse and just in time manufacturing, which can potentially solve inventory and supply chain inefficiencies that have been troubling retail sector for decades. Seeing the results, we started helping these capable and proven merchants and manufacturers to establish their own brands and started teaching them, not just about the new channel we have created at Pinduoduo, but marketing tools and tips tailored to the increasing number of users we have accumulated. Even though brand making takes time, we hope that with our help, these new brands could become national or even global brands one day. China has been the world's factory over the past 20 years. It has largely been following the…

Thank you, David. For the 12 months ended September 30, 2020, our GMV increased 73% to nearly RMB1.5 trillion from RMB840 billion a year ago. As a result of continued growth in our user base and increased spending per user, our average monthly active users in the third quarter increased by 74.6 million from the previous quarter to 643.4 million, or an increase of 50% from a year ago. Our annual active buyers for the 12 months ended September 30, 2020, grew 36% year-over-year to reach 731.3 million. This represents a net add of 195 million in the past 12 months. The annual spending per active buyer in the 12-month period ended September 30, 2020, increased 27% to RMB1993 from RMB1567 for the same period in 2019. The increase in annual spending per active buyer was moderated by significant number of new users added, who contributed less than 12 months of purchases to our GMV. Our strategy of investing in user engagement contributed to increase in user activities in Q3 and higher average spending per active buyer. During the third quarter, China continued its recovery from pandemic. Consumer behaviors continue to normalize, resulting in pickup in online -- offline retail activities. Compared to the year-over-year increase of 22% observed during the high seasonality of Q2, according to MDS data, the value of physical goods sold online in the third quarter grew slower in Q3 at 17% versus a year ago. Pinduoduo's GMV growth continued to exceed the industry and saw in contrast that pick up on GMV growth rate in Q3. For the nine months ended September 30, 2020, total parcel shipment volume in China continued to grow rapidly at 27.9% from the same period last year. In comparison, the value of physical goods sold online only grew 15.1% during…

Thank you. Ladies and gentlemen we will now begin the question-and-answer session. [Operator Instructions] First question comes from the line of Thomas Chong of Jefferies. Please go ahead.

Hi. Thanks, management for taking my questions. Can you comment about our strategies in community group purchase? And how we see the competitive landscape going forward? And how big is the addressable market? Thank you.

Hi. Thank you for your question. So first, I want to clarify the misconception now many people have. Duo Duo Maicai is not really a community group buy business. Yes, it is location-based and our customers pickup their purchase from the places close to them. But I believe it is different from the prior community buying models we have been seeing in the past seven years. To us, as I cannot comment on the difference, because we really don't know what others are thinking or doing, but we can speak for ourselves. So, for us, Maicai, I think, is a natural extension of our current business, given our know-how of the agriculture sectors and its ecosystem players. And we -- why bring Maicai because we see -- we saw this new emerging customer need that our current infrastructure in the platform cannot meet. And we sensed a strong need from our users that now -- ever since the first half year of this year, actually, want to -- they want to buy fresh grocery more conveniently and more frequently. And our existing offering of agricultural produce, I think cannot meet users' these new preferences, which is about fresh and the next day consumption needs. So, let's say, we are now running Maicai as a stand-alone business. It's an integrated offering with our existing platform, users actually can choose different services and service offered, it can be next day pickup or door-to-door delivery with three to five days with Maicai. But we think this is very important need from our customers. So, we are committed to invest in the infrastructure to make this happen to make the whole package deliver the consumer need from farm to their home faster and cheaper. And in terms of landscape, I think we need to think about this in two-fold. First is, for Maicai stand-alone, and I do believe that a significant portion of consumers in the future will complete their grocery shopping totally online. And just like this change for buying daily grocery online, I think is very similar to what we saw five to seven years ago with the -- with apparel category. And I think no one today would have imagined then -- no one would have imagined that significant number of consumers who are using online shopping to choose to try out purchases and return coats. That is the value are seeing today. So, in terms of grocery shopping, I think a similar thing will happen. The other fold is about this synergy between Maicai and our main ecommerce platform, basically as Maicai has a high purchase frequency. So, our user will have higher engagement with our platform. So, they can pick other full spectrum of category of products from our ecommerce platform.

Thank you. Next question is from the line of Joyce Ju of Bank of America. Please go ahead.

Good evening, management. Congrats on the very strong results this quarter and thanks for taking my questions. I would like to take this opportunity to get more colors on the -- your strategic new initiative, Duo Duo Maicai. As we all know, like you mentioned in the opening remarks, you guys actually chose the 3P marketplace model to conduct its business, and -- but we all know, like in this business from, probably we have seen 1P models, 3P models. Could you elaborate a little bit more and why the platform decided to do so? And is there any like special advantage or like key advantage we have seen, like why we particularly chose this model? And how we are differentiated compared to other major players on your entrance in this market? And secondly, also I think a lot of like industry experts are kind of comment this is a business actually heavily rely on the supply chain. While from our Company perspective, like because we typically in a more light business model. So we don't really have like heavy offline investment for infrastructures before. So, are we going to spend a lot of money to actually invest for like logistics or supply chain? How big will be the capex related? And also on investments front, I also would like to know, like what's the plan for the sales and marketing budget investment to acquire like new users for this business? Thanks.

Joyce, thank you for that question. It's very comprehensive. Let me point out a few things. So first of all, as Lei have mentioned in his remarks, we see Duo Duo Maicai really as a natural extension of our e-commerce model and our emphasis on agriculture. What we have seen is that, as the country emerged from COVID-19, consumers behaviors are changing, and how they are looking to address their needs for daily groceries are evolving. And what we have seen is that, users are now increasingly looking to be able to buy more things online. They are trying to identify an alternative venue to wet market and supermarkets and they want their deliver time to be quick, so next day. And also, again, continue to be great value. So, looking at this equation and looking at the use cases that PDD's e-commerce platform addresses on a stand-alone basis, we recognized that there are certain deficiencies. For example, the next day kind of logistic delivery isn't something that PDD's platform to date have been optimized for. So, the extension to Duo Duo Maicai for us is very natural. We can't really comment on other players' decision to enter into similar businesses. And whether they are more likely -- more like a community purchase or not. But from our perspective, what we see in Duo Duo Maicai is really addressing this different way of engaging with consumers, fulfilling that different type of usage patterns and needs. And again, you are right to point out that we do think this will require a much better infrastructure tailored specifically for their agricultural produce -- agricultural products. So we are prepared to go heavy in building, we're accelerating the development that this agriculture infrastructure. Today, what we have been doing is investing in people, so we have teams on the ground working with third-party services provider today. But in some instances, we have been got them involved in establishing the SOPs for the warehouses to getting involve in the workflows. We have already invested in warehouse and fleet management systems and we are looking for ways to continue to optimize that, leveraging the technology platform we have from our e-commerce platform. But specifically, though, we do think that there will be scenarios where we will need to make certain investments in order to facilitate development of that infrastructure, including potentially a build-out, but more localized coaching operation that is demand-driven, and therefore, can be most cost-efficient. We are looking to leverage existing services provider to do this, but in some instances, we may need to develop and test cases and do it ourselves. Let me pause there and let Tony address the question regarding sales and marketing on Duo Duo Maicai.

Yes. And as David just mentioned and also Lei mentioned in his remarks, Duo Duo Maicai to us is a natural extension from our main e-commerce model. So, we will budget our sales and marketing investment in Duo Duo Maicai as the same way as we invest in our e-commerce platform. And the guiding principle is, we focus on the long-term ROI we can generate from the business, not instead of the short-term profitability.

Got it. May I have a, like a quick follow-up is just may we get colors, like what's the current overlap between like suppliers for our main PDD marketplace and Duo Duo Maicai, like in terms of like agricultural or fresh produce like suppliers?

Joyce, I'm actually not quite sure was that question is that meaningful. The reason I say this is, we offer Duo Duo Maicai as an integrated part of our e-commerce platform. The merchants who work with us in the Maicai scenario can also be merchants online. So, it really depends on their capabilities and whether they can work with on the localized scenario in Maicai and, of course, they can -- and they are more than welcomed to continue to dispatch nationwide to working with the delivery forces on our platform. In fact, I would say that the credibility we have as China's second largest e-commerce platform by users, give us incredible leverage with merchants and we see a lot of merchants looking to work with us in the localized scenario as well.

Got it. Thanks a lot.

Thank you.

Next question, please.

Yes. Next question is from the line of Eddy Wang of Morgan Stanley. Please go ahead.

Hi. Thank you management for taking my question and congratulations on the very great results. So, yeah, I also have a follow-up question on Duo Duo Maicai as well. So basically, can you share with us -- we understand that we just started the business in August. But I would appreciate if you can give us more color on how is the -- both the momentum of the Duo Duo Maicai have been in the past three months? And if you look at this AOV and the ASP user of this business wise, if we compare -- I understand that it's much integrated into our agriculture product business. But if I compare with AOV compared with the user frequency wise, how is Duo Duo Maicai in the past three months, compared with the -- your -- the users behavior of the agricultural product purchase? Yeah. Thank you.

Sure, Eddy. Thank you for that. As you rightly pointed out, the Duo Duo Maicai is still a very new business for us. So, we are also fine-tuning our operations. So we are not going to be able to comment on the specifics. But you would note that the Maicai function is now available across most of the provinces in China and we featured an entry way for Maicai on the main app itself very prominently. So, we are seeing good momentum and good user pickup and great adoption. Then, in particular, I would say that, the visibility on the main app is also helping to drive our traffic to the Maicai business itself. You also asked about the AOV, I think it's fair to say that the Maicai scenario is cater or it's meant to address the daily grocery needs of the consumers on our platform. So, naturally this lends itself to a higher frequency of purchases and engagements on the platform. And it is also true that the AOV today for those orders are lower relative to the AOV -- our average AOV on our platform today. However, it is compensated by a much higher frequency. The way we are looking at the Maicai business is, if we continue to serve the consumers well, the frequencies will increase and as we build out the infrastructure over time, the AOV will also increase. So, we do see a tremendous amount of potential in this business, and for now we are just focused on providing them the best experiences for the daily grocery needs.

Thank you. Next question is from Piyush Mubayi of Goldman Sachs. Please go ahead.

Thank you for taking my question. Congratulations, Lei, David, on super results. When I look at the active buyer number you obtained of 731 million, you are not that far away from the market leader. The question now is, after what we've seen thus far, what is the next step you'd like to pursue? And the second question is, we're trying to better understand on the community buying side. What is the profitability level? So, if you go through on a city-by-city basis, could you just take us through examples of where profitability could be? Or how should we be thinking of the cost side of the equation? I'd appreciate that. Thank you.

Okay. So let me first answer your first question. So, and we are currently have 731 million active customers. It's inevitable that the growth will slow down. And that being said, we do see there are still room for us to grow in terms of expand our user base. However, the bigger issue we have here is, we're still lagging behind all the users my share, therefore, their trust with us. That is the one key area we are focusing on now. And I think I believe it is also one of the reasons we launched Maicai. I think we launched Maicai to meet their changing behaviors and preferences, and I do believe that this is a very key approach for us to win their trust. But if we take a look at a little bit further, and I do think that we are currently at a very quick point about our integration of online and offline work. And we do see the structural trend as a result of the high mobile Internet penetration. And this whole process is also expedited by COVID-19 pandemic. And our young generations, they fall into this mobile Internet era and to them, I think there is no such kind of consumption of online, offline. All these things are integrated. If you take a look at the mobile payment, live streaming, they are both good examples of it. And things, technology and online channels, they typically provide a bit higher efficiency. And I do believe that most of activities will be focused online. And I think in area of e-commerce, we will see this shift earlier than other areas. And we will potentially see that the majority of retail purchases will be performed online. And we definitely hope to capture this kind of opportunity. But you need to realize that, in this new world, this new integrated world, new kind of new type of infrastructure is needed. That's why sort of we are committed to do more infrastructure buildup to help in this integration process. Let's do something, which I think it will never change, which is I think in order to be successful in long run you really need to constantly meet user satisfaction and meet their expectation. To us, it boils down to two factors, one is value for money. The other is expanded interactive experience the user will have. So, hopefully, that will answer your first question.

Yeah. I will pick up on the second one. Thank you, Lei. And speak of the profitability on Maicai, I think Maicai to us is a long-term opportunity, which will help us to address and fulfill the user needs, which is today, I guess, limited by the agriculture infrastructure. So as long as we committed to invest and keep innovating on this initiative, we're trying to reduce the additional layers in the process, try to cut some of the waste in the process, therefore, creating more value for the users. With that, the economic outlook for Maicai will be very different from today. For us, the monetization model can be built along the evolvement of this journey, which -- and include advertising, but not limited to it. So, in summary, I think it's too early to tell after only two or three months in operation. And there is a lot to be determined after we haven't rollout, cover all the cities yet in China. We will keep all the investors informed about our progress.

Thank you very much.

Thank you.

Thank you. Next question is from the line of Natalie Wu of Haitong International. Please go ahead.

Hi. Good evening. Thanks for taking my question and congratulations on very strong quarter. My question is regarding the results that you plan to deploy for the Maicai initiative. So, we see that you set aside from personnel of your main side to do the Maicai business across the cities. So, how should we understand your sales and marketing budget planning for that business? Should we understand the Maicai-related sales and marketing budget as purely incremental? Or should we think that as -- that business is together with the main side, so that incremental budget is actually this exercise of choosing that path of the sales and marketing budget for your main side? Thank you.

Okay. Thank you for the question. Like I said previously, we budget our sales and marketing investment in Duo Duo Maicai the same way as we manage our other sales and marketing investment on the main platform. So we evaluate the sales and marketing investment based on our internal ROI metrics case-by-case basically, all the activities, for example. It's exactly the same. We don't dedicate a certain pack of budgeting for sales and marketing for Maicai. It's managed through evaluation on our internal ROI metrics.

So that is purely incremental, is that right?

Yeah. So, Natalie, just to add on to what Tony said, if you look at individual sales and marketing spend, fairly -- and frankly, at a fairly granular level, as we can go as deeper down the user-based -- I mean, the individual user level, right? So, we continue to evaluate every dollar spend and it's a little bit -- I think the question itself is a little bit misleading in the sense that we do see users now only specifically for Maicai, but they will also continue to be a user on the main platform as well. So, we are looking at the deployment in our investments in the users across these different functions or features individually and looking at the dollar that we're getting from our investment. So -- and that's -- so it's really more of a bottom-up approach as opposed to say we're beginning the year with a fixed budget and now we're going to allocate that budget.

Got it. Very clear. Thank you.

Operator, why don't we take one last question?

Sure. Go ahead. Our last question is from the line of Alicia Yap of Citigroup. Please go ahead.

Hi. Good evening management. Thanks for taking my questions. Congratulations on the strong results. I also -- my question is also related to the community grocery shopping. Just looking at intense competitive landscape, what is your -- PDD's commitment, right, and the success factors of winning this battle? Just wondering how much of the investment in infrastructure, supply chain that we need to do as well. Will we consider seeking partnerships with other payers or leverage the cooperations with the ride-sharing players or even the cloud sourcing partner to support our delivery capability? Thank you.

Thank you, Alicia. As I mentioned earlier, we -- Duo Duo Maicai for us -- sorry, the core to delivering those type of experience stuff, we think the consumers deserve or want is to build out a dedicated infrastructure on a localized level for agriculture products. We don't see this type of infrastructure readily available in the market today. We -- and this is why we are committed to go deeper necessary to build this. Obviously, we will be evaluating what is available and looking to work with partners because we believe being more open, being an open platform, it would certainly be the most efficient to deliver the right type of experiences. So, again, we will be informed by how, what the consumers needs and how we can best fulfill that need. And that would mean that we need to invest in certain players to help facilitate or accelerate that deployment. So, we will need to continue do that the way as the Maicai business develops. And in any event, we do think these investments will pay-out for the long-term to the shareholders.

Can I just very quickly follow-up just in case if you indeed need to build up a kind of model, the capital, the structural -- infrastructural investments? Will your profitable quarter this year that we have to be more cautious? It could fluctuate from quarter-to-quarter that may be sometime into the future you could go back temporary to a loss-making quarter?

Okay. Let me comment on this. As we -- Pinduoduo is still a very young platform. And in today's remarks, I think, both Lei, David already mentioned about all these number of opportunities we are pursuing. And when we speed up on these investments, it's likely to impact on the near-term profitability. This improvement -- investments, we talk a lot about agriculture infrastructure, but there's also talent, technology and the continuous investment on our sales and marketing to further engage with our increasing user base. So, we won't focus on profitability on a quarterly basis. But we are very confident all these investments will generate long-term value for our shareholders.

Thank you. And I would like to hand the conference back to Mr. Jason Shu for closing remarks. Please go ahead.

Okay. Thank you, everyone, for joining us on the conference call today. If you have any further follow-up questions, feel free to reach out to the IR team. Thank you, and have a great day.

Thank you, ladies and gentlemen, that concludes the conference for today, and thank you for participating. You may now all disconnect.