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What changed in PDD Holdings Inc.'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of PDD Holdings Inc.'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+710 added−586 removedSource: 20-F (2025-04-28) vs 20-F (2024-04-25)

Top changes in PDD Holdings Inc.'s 2024 20-F

710 paragraphs added · 586 removed · 490 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

269 edited+171 added−56 removed590 unchanged
Biggest change(Primary ​ ​ ​ ​ ​ Subsidiaries ​ ​ ​ ​ ​ ​ ​ beneficiary ​ Hangzhou ​ VIE and Its ​ of PDD ​ ​ ​ Consolidated ​ ​ of the VIE) Weimi* Subsidiaries Holdings Inc.** Eliminations Total ​ ​ ​ (RMB in thousands) Current assets: ​ ​ ​ ​ ​ Cash, cash equivalents, restricted cash and short-term investments ​ 3,116 73 ​ 104,637,936 174,554,145 ​ — ​ 279,195,270 Amounts due from Group companies (1) ​ — ​ 1,317,391 ​ 69,254,862 ​ 63,044,270 ​ (133,616,523) ​ — ​ Others ​ 70 ​ 2,955 ​ 8,285,690 ​ 7,266,487 ​ — ​ 15,555,202 ​ Total current assets ​ 3,186 ​ 1,320,419 ​ 182,178,488 ​ 244,864,902 ​ (133,616,523) ​ 294,750,472 ​ Non-current assets: ​ ​ ​ ​ ​ ​ ​ ​ Other non-current assets ​ — 5,001 ​ 29,960,383 17,985,892 ​ — ​ 47,951,276 Investments in subsidiaries, the VIE and its subsidiaries (2) ​ 193,146,679 ​ 2,000 ​ — ​ 1,754,436 ​ (194,903,115) ​ — ​ Others ​ — ​ 63,973 ​ 1,070,678 ​ 4,241,721 ​ — ​ 5,376,372 ​ Total non-current assets ​ 193,146,679 ​ 70,974 ​ 31,031,061 ​ 23,982,049 ​ (194,903,115) ​ 53,327,648 ​ Total assets ​ 193,149,865 1,391,393 ​ 213,209,549 268,846,951 ​ (328,519,638) ​ 348,078,120 Current liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Payable to merchants ​ — — ​ 65,435,469 9,561,783 ​ — ​ 74,997,252 Amounts due to Group companies (1) ​ — ​ 1,314,958 ​ 49,313,408 ​ 164,591,871 ​ (215,220,237) ​ — ​ Convertible bonds, current portion ​ 648,570 ​ — ​ — ​ — ​ — ​ 648,570 ​ Others ​ 28,165 ​ 160,361 ​ 28,761,446 ​ 48,305,107 ​ — ​ 77,255,079 ​ Total current liabilities ​ 676,735 1,475,319 ​ 143,510,323 222,458,761 ​ (215,220,237) ​ 152,900,901 Non-current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible bonds ​ 5,231,523 ​ — ​ — ​ — ​ — ​ 5,231,523 ​ Others ​ — ​ 49,992 ​ 239,982 ​ 2,414,115 ​ — ​ 2,704,089 ​ Total non-current liabilities ​ 5,231,523 ​ 49,992 ​ 239,982 ​ 2,414,115 ​ — ​ 7,935,612 ​ Total liabilities ​ 5,908,258 ​ 1,525,311 ​ 143,750,305 ​ 224,872,876 ​ (215,220,237) ​ 160,836,513 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ PDD Holdings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inc.
Biggest change(Primary ​ ​ ​ ​ ​ Subsidiaries ​ ​ ​ ​ ​ ​ beneficiary ​ Hangzhou ​ VIE and Its ​ of PDD ​ ​ ​ Consolidated ​ of the VIE) Weimi* Subsidiaries Holdings Inc.** Eliminations Total ​ ​ (RMB in thousands) Current assets: ​ ​ ​ ​ ​ Cash, cash equivalents, restricted cash and short-term investments ​ 3,116 73 ​ 104,637,936 174,554,145 ​ — ​ 279,195,270 Amounts due from Group companies (1) ​ — ​ 1,317,391 ​ 69,254,862 ​ 63,044,270 ​ (133,616,523) ​ — Others ​ 70 ​ 2,955 ​ 8,285,690 ​ 7,266,487 ​ — ​ 15,555,202 Total current assets ​ 3,186 ​ 1,320,419 ​ 182,178,488 ​ 244,864,902 ​ (133,616,523) ​ 294,750,472 Non-current assets: ​ ​ ​ ​ ​ ​ ​ ​ Other non-current assets ​ — 5,001 ​ 29,960,383 17,985,892 ​ — ​ 47,951,276 Investments in subsidiaries, the VIE and its subsidiaries (2) ​ 193,146,679 ​ 2,000 ​ — ​ 1,754,436 ​ (194,903,115) ​ — Others ​ — ​ 63,973 ​ 1,070,678 ​ 4,241,721 ​ — ​ 5,376,372 Total non-current assets ​ 193,146,679 ​ 70,974 ​ 31,031,061 ​ 23,982,049 ​ (194,903,115) ​ 53,327,648 Total assets ​ 193,149,865 1,391,393 ​ 213,209,549 268,846,951 ​ (328,519,638) ​ 348,078,120 Current liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Payable to merchants ​ — — ​ 65,435,469 9,561,783 ​ — ​ 74,997,252 Amounts due to Group companies (1) ​ — ​ 1,314,958 ​ 49,313,408 ​ 164,591,871 ​ (215,220,237) ​ — Convertible bonds, current portion ​ 648,570 ​ — ​ — ​ — ​ — ​ 648,570 Others ​ 28,165 ​ 160,361 ​ 28,761,446 ​ 48,305,107 ​ — ​ 77,255,079 Total current liabilities ​ 676,735 1,475,319 ​ 143,510,323 222,458,761 ​ (215,220,237) ​ 152,900,901 Non-current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Convertible bonds ​ 5,231,523 ​ — ​ — ​ — ​ — ​ 5,231,523 Others ​ — ​ 49,992 ​ 239,982 ​ 2,414,115 ​ — ​ 2,704,089 Total non-current liabilities ​ 5,231,523 ​ 49,992 ​ 239,982 ​ 2,414,115 ​ — ​ 7,935,612 Total liabilities ​ 5,908,258 ​ 1,525,311 ​ 143,750,305 ​ 224,872,876 ​ (215,220,237) ​ 160,836,513 ​ ​ 15 Table of Contents Selected Condensed Consolidated Cash Flows Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ PDD Holdings Inc. ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ (Primary ​ ​ ​ ​ ​ Subsidiaries ​ ​ ​ ​ ​ ​ beneficiary ​ Hangzhou ​ VIE and Its ​ of PDD ​ ​ ​ Consolidated ​ of the VIE) Weimi * Subsidiaries Holdings Inc.** Eliminations Total ​ ​ (RMB in thousands) Net cash (used in)/generated from operating activities (3) ​ (46,208) 212,793 ​ 15,819,139 105,943,568 ​ — ​ 121,929,292 Net cash generated from/(used in) investing activities ​ 44,546 ​ (925,796) ​ (36,090,803) ​ (105,414,779) ​ 24,030,796 ​ (118,356,036) Net cash generated from financing activities ​ 1,164 713,003 ​ 20,020,807 3,296,986 ​ (24,030,796) ​ 1,164 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ PDD Holdings Inc. ​ ​ ​ Other ​ ​ ​ (Primary ​ ​ ​ Subsidiaries ​ ​ ​ ​ beneficiary ​ Hangzhou ​ VIE and Its ​ of PDD ​ ​ ​ Consolidated ​ of the VIE) Weimi* Subsidiaries Holdings Inc.** Eliminations Total ​ (RMB in thousands) Net cash generated from/(used in) operating activities (3) ​ 71,615 (206,025) ​ 49,705,625 44,591,316 ​ — ​ 94,162,531 Net cash generated from/(used in) investing activities ​ 8,816,124 ​ (254,396) ​ (43,637,362) ​ (50,505,975) ​ 30,150,331 ​ (55,431,278) Net cash (used in)/generated from financing activities ​ (8,960,626) 460,421 ​ 3,390,438 26,299,472 ​ (30,150,331) ​ (8,960,626) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ PDD Holdings Inc. ​ ​ ​ Other ​ ​ ​ (Primary ​ ​ ​ Subsidiaries ​ ​ ​ ​ beneficiary ​ Hangzhou ​ VIE and Its ​ of PDD ​ ​ ​ Consolidated ​ of the VIE) Weimi* Subsidiaries Holdings Inc.** Eliminations Total ​ (RMB in thousands) Net cash (used in)/generated from operating activities (3) ​ (24,202) 25,830 ​ 25,650,939 22,855,293 — 48,507,860 Net cash generated from/(used in) investing activities ​ 65,707 (93,576) ​ (43,513,150) (1,053,261) 22,232,610 (22,361,670) Net cash generated from financing activities ​ 10,079 66,786 ​ 16,710,269 5,455,555 (22,232,610) 10,079 Notes: * Represents Hangzhou Weimi, a PRC subsidiary of the Company that has entered into contractual arrangements with the VIE, the VIE’s shareholders and, as applicable, their spouses.
(Primary ​ ​ ​ ​ ​ Other Subsidiaries ​ ​ ​ ​ ​ ​ beneficiary ​ Hangzhou ​ VIE and Its ​ of PDD ​ ​ ​ Consolidated ​ of the VIE) Weimi * Subsidiaries Holdings Inc.** Eliminations Total ​ (RMB in thousands) Revenues ​ — 892,863 131,868,973 194,028,064 (79,150,695) ​ 247,639,205 Total costs and operating expenses ​ (156,391) (835,691) (110,080,065) (157,018,991) 79,150,695 ​ (188,940,443) Share of profit from subsidiaries, the VIE and subsidiaries of the VIE ​ 60,112,989 ​ — ​ — ​ — ​ (60,112,989) ​ — Net income ​ 60,026,544 ​ 64,191 ​ 23,398,906 ​ 36,649,892 ​ (60,112,989) ​ 60,026,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ PDD Holdings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inc.
(Primary ​ ​ ​ ​ ​ Subsidiaries ​ ​ ​ ​ ​ ​ beneficiary ​ Hangzhou ​ VIE and Its ​ of PDD ​ ​ ​ Consolidated ​ of the VIE) Weimi * Subsidiaries Holdings Inc.** Eliminations Total ​ (RMB in thousands) Revenues ​ — 892,863 131,868,973 194,028,064 (79,150,695) ​ 247,639,205 Total costs and operating expenses ​ (156,391) (835,691) (110,080,065) (157,018,991) 79,150,695 ​ (188,940,443) Share of profit from subsidiaries, the VIE and subsidiaries of the VIE ​ 60,112,989 ​ — ​ — ​ — ​ (60,112,989) ​ — Net income ​ 60,026,544 ​ 64,191 ​ 23,398,906 ​ 36,649,892 ​ (60,112,989) ​ 60,026,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ PDD Holdings ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ Inc.
We cannot assure you that we will be able to manage or operate these new business initiatives successfully or effectively, including by providing the requisite services to the merchants, attracting and retaining capable employees and partners, or leasing suitable facilities on commercially acceptable terms.
We cannot assure you that we will be able to manage or operate these new business initiatives successfully or effectively, including by providing the requisite services to merchants, attracting and retaining capable employees and partners, or leasing suitable facilities on commercially acceptable terms.
The number and scale of these proceedings have increased, and will likely continue to increase, as our business has expanded in scope and geographic reach, and as our platforms become more complex, available to, and used by more people, and as governments and regulatory authorities seek to regulate us on a pre-emptive basis.
The number and scale of these proceedings have increased, and will likely continue to increase, as our business has expanded in scope and geographic reach, and as our platforms become more complex, available to, and used by more people, and as governments and regulatory authorities seek to regulate us on a pre-emptive basis.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
Consolidated Statements and Other Financial Information—Legal Proceedings.” These putative class action suits could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suits, which could harm our results of operations.
Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.” These putative class action suits could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suits, which could harm our results of operations.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new offerings, solutions and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our brands, our services or our industry; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● convertible arbitrage strategy employed by certain investors in the convertible notes offered in the 2024 Notes and/or the 2025 Notes, including related short selling of our ADS; and ● potential litigation or regulatory investigations.
In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings and cash flow; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new offerings, solutions and expansions by us or our competitors; ● changes in financial estimates by securities analysts; ● detrimental adverse publicity about us, our brands, our services or our industry; ● additions or departures of key personnel; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● convertible arbitrage strategy employed by certain investors in the convertible notes offered in the 2025 Notes, including related short selling of our ADS; and ● potential litigation or regulatory investigations.
We have been, are currently, and may in the future be subject to allegations and lawsuits claiming that products listed or sold through our platforms by third-party merchants are counterfeit, unauthorized, illegal, or otherwise infringe upon third-party copyrights, trademarks, patents or other intellectual property rights, or that content posted on our user interface contains misleading information on description of products and comparable prices.
We have been, are currently, and may in the future be subject to allegations and lawsuits claiming that products listed or sold through our platforms by third-party merchants are counterfeit, unauthorized, illegal, or otherwise infringe upon third-party copyrights, trademarks, patents or other intellectual property rights, or that content posted on our user interface contains misleading or deceptive information on description of products and comparable prices.
If these metrics are perceived to be inaccurate by investors or investors make investment decisions based on operating metrics we disclosed in the past but with their own methodology and assumptions or those published or used by third parties or other companies, our reputation may be harmed, which could negatively affect our business, and we may also face potential lawsuits or disputes.
If these metrics are perceived to be inaccurate by investors or investors make investment decisions based on operating metrics that we disclosed in the past but with their own methodology and assumptions or those published or used by third parties or other companies, our reputation may be harmed, which could negatively affect our business, and we may also face potential lawsuits or disputes.
We may incur significant costs to defend against these activities, which could harm our business and reputation. 21 Table of Contents In the event that counterfeit, illegal, unauthorized or infringing products are sold on our platforms or infringing or misleading content is posted on our user interface, we could face claims or incur penalties.
We may incur significant costs to defend against these activities, which could harm our business and reputation. 21 Table of Contents In the event that counterfeit, illegal, unauthorized or infringing products are sold on our platforms or infringing, misleading or deceptive content is posted on our user interface, we could face claims or incur penalties.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs, payments when due on the 2024 Notes or the 2025 Notes, or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs, payments when due on the 2025 Notes, or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.
Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management’s attention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy.
Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management’s attention. Since PRC administrative and judicial authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy.
The CCPA and CPRA contain requirements regarding the handling of personal information of California consumers and households, including compliance and record keeping obligations, the right of individuals to request access to and deletion of their personal information, and the right to opt out of the sale and other uses of their personal information, and provide a private right of action and statutory damages for data breaches.
The CCPA and CPRA contain requirements regarding the handling of personal information of California consumers and households, including compliance and record keeping obligations, the right of individuals to request access to, correction of, and deletion of their personal information, and the right to opt out of the sale and other uses of their personal information, and provide a private right of action and statutory damages for data breaches.
Complying with these laws and contractual or other obligations relating to privacy, data protection, data transfers, data localization, or information security may require us to make changes to our services to enable us or our customers to meet new legal requirements, incur substantial operational costs, modify our data practices and policies, and restrict our business operations.
Complying with these laws and contractual or other obligations relating to privacy, data protection, data transfers, data localization, or information security may require us to make changes to our services to enable us to meet new legal requirements, incur substantial operational costs, modify our data practices and policies, and restrict our business operations.
We are subject to a variety of risks inherent in doing business on a global scale, including: ● international geopolitical tensions and events; ● the political, social and economic conditions of each jurisdiction where we operate; ● compliance challenges due to the different laws and regulatory environments of the jurisdictions where we operate, including but not limited to those related to trade protection (including import and export control, custom duties and tariffs), data privacy and protection, network security, consumer protection, product liability, online payments and money transmission, funds transfer, currency exchange controls, marketing and advertising, intellectual property protection, employment and labor, trust and safety, supply chain compliance, and competition; ● compliance challenges under different tax regimes and policies in jurisdictions where we operate; ● compliance challenges arising from conflicts in the laws, rules, regulations, policies and orders of different jurisdictions; ● potential damage to our brands and reputation due to compliance with local laws, including requirements to censor content and/or requirements to provide user information to local authorities; ● local and/or regional competition; ● fluctuations in currency exchange rates; ● difficulties in staffing and managing global operations; ● limitations on global, regional and local fulfillment and technology infrastructure; and ● higher costs of doing business globally.
We are subject to a variety of risks inherent in doing business on a global scale, including: ● international geopolitical tensions and events; ● the political, social and economic conditions of each jurisdiction where we operate; ● compliance challenges due to the different laws and regulatory environments of the jurisdictions where we operate, including, but not limited to those related to trade protection (including import and export control, custom duties and tariffs), data privacy and protection, network security, consumer protection, product liability, online payments and money transmission, funds transfer, currency exchange controls, marketing and advertising, intellectual property protection, employment and labor, trust and safety, supply chain compliance, and competition; 45 Table of Contents ● compliance challenges under different tax regimes and policies in jurisdictions where we operate; ● compliance challenges arising from conflicts in the laws, rules, regulations, policies and orders of different jurisdictions; ● potential damage to our brands and reputation due to compliance with local laws, including requirements to censor content and/or requirements to provide user information to local authorities; ● local and/or regional competition; ● fluctuations in currency exchange rates; ● difficulties in staffing and managing global operations; ● limitations on global, regional and local fulfillment and technology infrastructure; and ● higher costs of doing business globally.
These factors include our ability to: ● provide a superior shopping experience to buyers; ● maintain the popularity, attractiveness, diversity, quality and authenticity of the product offerings on our platforms; ● maintain the efficiency, reliability and quality of the fulfillment and delivery services to our buyers; 16 Table of Contents ● maintain or improve buyers’ satisfaction with our after-sale services; ● increase brand awareness through marketing and brand promotion activities; and ● preserve our reputation and goodwill in the event of any negative publicity on our consumer experience or merchant service, internet and data security, product quality, price or authenticity, performance measures, or other issues affecting us or other e-commerce businesses in the countries or regions where we have operations.
These factors include our ability to: ● provide a superior shopping experience to buyers; ● maintain the popularity, attractiveness, diversity, quality and authenticity of the product offerings on our platforms; ● maintain the efficiency, reliability and quality of the fulfillment and delivery services to our buyers; 17 Table of Contents ● maintain or improve buyers’ satisfaction with our after-sale services; ● increase brand awareness through marketing and brand promotion activities; and ● preserve our reputation and goodwill in the event of any negative publicity on our consumer experience or merchant service, internet and data security, product quality, price or authenticity, performance measures, or other issues affecting us or other e-commerce businesses in the countries or regions where we have operations.
We may be adversely affected by the complexity and changes in the PRC’s regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
We may be adversely affected by the complexity, uncertainties and changes in the PRC’s regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
For instance, merchants that offer to sell products into the U.S. are subject to laws and regulations enforced by the U.S. Consumer Product Safety Commission and other similar regulatory authorities at the state level. Merchants that offer to sell products into the European Union are subject to the Product Safety Regulation in the EU.
For instance, merchants that offer to sell products into the U.S. are subject to laws and regulations enforced by the U.S. Consumer Product Safety Commission and other similar regulatory authorities at the state level. Merchants that offer to sell products into the European Union are subject to the General Product Safety Regulation in the EU.
If we are unable to enter into and renew agreements with these providers on acceptable terms, or if any of our existing agreements with such providers are terminated as a result of our breach or otherwise, our ability to provide our services to our buyers could be adversely affected.
If we are unable to enter into or renew agreements with these providers on acceptable terms, or if any of our existing agreements with such providers are terminated as a result of our breach or otherwise, our ability to provide our services to our buyers could be adversely affected.
We may rely upon distributions and advances from our subsidiaries, as well as service fees paid by the VIE and its subsidiaries pursuant to our contractual arrangements with them, to meet our cash requirements, including the payment obligations under the 2024 Notes, the 2025 Notes and our other obligations.
We may rely upon distributions and advances from our subsidiaries, as well as service fees paid by the VIE and its subsidiaries pursuant to our contractual arrangements with them, to meet our cash requirements, including the payment obligations under the 2025 Notes and our other obligations.
If we, the VIE or its subsidiaries are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have discretion to take action in dealing with such violations or failures, including, but not limited to: ● revoking the business license and/or operating license of such entities; ● discontinuing or placing restrictions or onerous conditions on our operations, including by blocking the VIE’s websites or apps; ● imposing fines, confiscating the income from Hangzhou Weimi, the VIE or its subsidiaries, or imposing other requirements with which we, the VIE or its subsidiaries may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or direct the activities of the VIE and its subsidiaries; or 38 Table of Contents ● restricting or prohibiting our use of the proceeds of financings conducted outside of China to finance our business and operations in China.
If we, the VIE or its subsidiaries are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have discretion to take action in dealing with such violations or failures, including, but not limited to: ● revoking the business license and/or operating license of such entities; ● discontinuing or placing restrictions or onerous conditions on our operations, including by blocking the VIE’s websites or apps; ● imposing fines, confiscating the income from Hangzhou Weimi, the VIE or its subsidiaries, or imposing other requirements with which we, the VIE or its subsidiaries may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or direct the activities of the VIE and its subsidiaries; or ● restricting or prohibiting our use of the proceeds of financings conducted outside of China to finance our business and operations in China.
We, through Hangzhou Weimi, entered into a series of contractual arrangements, including a shareholders’ voting rights proxy agreement, equity pledge agreement, spousal consent letter, exclusive consulting and services agreement and exclusive option agreement, with Hangzhou Aimi, its shareholders and, as applicable, their spouses, which enable us to (i) direct the activities of the VIE, (ii) receive substantially all of the economic benefits of the VIE and its subsidiaries, and (iii) have an exclusive option to purchase all or part of the equity interests and assets in the VIE when and to the extent permitted by PRC law.
We, through Hangzhou Weimi, entered into a series of contractual arrangements, including a shareholders’ voting rights proxy agreement, equity pledge agreement, spousal consent letters, exclusive consulting and services agreement and exclusive option agreement, with Hangzhou Aimi, its shareholders and, as applicable, their spouses, which enable us to (i) direct the activities of the VIE, (ii) receive substantially all of the economic benefits of the VIE and its subsidiaries, and (iii) have an exclusive option to purchase all or part of the equity interests and assets in the VIE when and to the extent permitted by PRC law.
These laws establish requirements applicable to the processing of personal data, create new data protection rights for individuals and impose penalties for serious data breaches. Individuals also have a right to compensation under these laws for financial or non-financial losses.
These laws establish requirements applicable to the processing of personal data, create data protection rights for individuals and impose penalties for serious data breaches. Individuals also have a right to compensation under these laws for financial or non-financial losses.
Additionally, while we are a platform that does not control merchants, we nevertheless frequently receive and respond to related inquiries and demands from regulators around the globe, and we expect to continue to receive more inquiries and demands in the future.
Additionally, while we are a platform that does not control merchants, we nevertheless frequently receive and respond to inquiries and demands related to merchants from regulators around the globe, and we expect to continue to receive more such inquiries and demands in the future.
Any compromise of our information security or the information security measures of our contracted third-party payment service providers that results in data being improperly used or disclosed could also materially and adversely affect us.
Any compromise of our information security or the information security of our contracted third-party payment service providers that results in data being improperly used or disclosed could also materially and adversely affect us.
Conversion of the 2024 Notes or the 2025 Notes may dilute the ownership interest of the existing shareholders, including holders who had previously converted their 2024 Notes or 2025 Notes. The conversion of some or all of the 2024 Notes and/or the 2025 Notes, will dilute the ownership interests of existing shareholders and existing holders of our ADSs.
Conversion of the 2025 Notes may dilute the ownership interest of the existing shareholders, including holders who had previously converted their 2025 Notes. The conversion of some or all of the 2025 Notes, will dilute the ownership interests of existing shareholders and existing holders of our ADSs.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. 59 Table of Contents The voting rights of holders of ADSs are limited by the terms of the deposit agreements, and you may not be able to exercise your right to vote your Class A ordinary shares.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. 64 Table of Contents The voting rights of holders of ADSs are limited by the terms of the deposit agreements, and you may not be able to exercise your right to vote your Class A ordinary shares.
Any disruptions to or malfunctions of the e-waybill systems used by our merchants could prevent the timely or proper delivery of products to consumers, which would damage our reputation, harm our business, and diminish the value of our brand name. 17 Table of Contents We face intense competition, and if we fail to compete effectively, we may lose market share, buyers and merchants.
Any disruptions to or malfunctions of the e-waybill systems used by our merchants could prevent the timely or proper delivery of products to consumers, which would damage our reputation, harm our business, and diminish the value of our brand name. 18 Table of Contents We face intense competition, and if we fail to compete effectively, we may lose market share, buyers and merchants.
On April 23, 2021, seven PRC regulatory authorities jointly promulgated the Administrative Measures on Online Livestreaming Marketing (Trial), effective May 25, 2021, which requires livestreaming platforms to adopt measures to (i) intervene in risky or illegal transactions by limiting traffic, suspending livestreaming or other methods, and (ii) prominently warn users of the risks involved in transactions conducted outside of the livestreaming platforms.
On April 23, 2021, seven PRC regulatory authorities jointly promulgated the Administrative Measures on Online Livestreaming Marketing (Trial), effective May 25, 2021, which require livestreaming platforms to adopt measures to (i) intervene in risky or illegal transactions by limiting traffic, suspending livestreaming or other methods, and (ii) prominently warn users of the risks involved in transactions conducted outside of the livestreaming platforms.
Risk Factors—Risks Related to Our Business and Industry—Any lack of additional requisite approvals, licenses or permits or failure to comply with any requirements of the applicable laws, regulations and policies may materially and adversely affect our daily operations and hinder our growth.” The PRC governmental authorities have promulgated PRC laws and regulations relating to cybersecurity review and listings outside of mainland China.
Risk Factors—Risks Related to Our Business and Industry—Any lack of additional requisite approvals, licenses or permits or failure to comply with any requirements of the applicable laws, regulations and policies may materially and adversely affect our daily operations and hinder our growth.” The PRC governmental authorities have promulgated PRC laws and regulations relating to listings outside of mainland China.
If we fail to generate revenue globally in an effective and efficient manner, our business, financial condition and results of operations may be materially and adversely affected. · Our business is subject to a large number of laws across the many jurisdictions where we operate, including without limitation those relating to international trade, investment restrictions, product liability, employment and labor, taxation, consumer protection, marketing and advertising, online payments and money transmission, data privacy and protection, intellectual property protection, trust and safety, and supply chain compliance.
If we fail to generate revenue globally in an effective and efficient manner, our business, financial condition and results of operations may be materially and adversely affected. 10 Table of Contents · Our business is subject to a large number of laws across the many jurisdictions where we operate, including, without limitation, those relating to international trade, investment restrictions, product liability, employment and labor, taxation, consumer protection, marketing and advertising, online payments and money transmission, data privacy and protection, intellectual property protection, trust and safety, and supply chain compliance.
The Pinduoduo platform may lose existing or potential merchants who do not or are unwilling to comply with the registration and related requirements, and the Pinduoduo platform may be found liable under the E-Commerce Law and related regulations if it is deemed to have failed to implement the required procedures. 23 Table of Contents ● In October 2020, the SAMR issued the Interim Provisions for Regulating Promotional Activities, which require platform operators to design rules and procedures to foster fair and transparent merchandise promotional activities, and assist the authorities in their investigation of violations by platform merchants.
The Pinduoduo platform may lose existing or potential merchants who do not or are unwilling to comply with the registration and related requirements, and the Pinduoduo platform may be found liable under the E-Commerce Law and related regulations if it is deemed to have failed to implement the required procedures. ● In October 2020, the SAMR issued the Interim Provisions for Regulating Promotional Activities, which require platform operators to design rules and procedures to foster fair and transparent merchandise promotional activities, and assist the authorities in their investigation of violations by platform merchants.
The VIE structure consists of a series of contractual arrangements, including a shareholders’ voting rights proxy agreement, equity pledge agreement, spousal consent letter, exclusive consulting and services agreement and exclusive option agreement, that have been entered into by and among Hangzhou Weimi, the VIE, the VIE’s shareholders and, as applicable, their spouses.
The VIE structure consists of a series of contractual arrangements, including a shareholders’ voting rights proxy agreement, equity pledge agreement, spousal consent letters, exclusive consulting and services agreement and exclusive option agreement, that have been entered into by and among Hangzhou Weimi, the VIE, the VIE’s shareholders and, as applicable, their spouses.
Liquidity and Capital Resources—Holding Company Structure.” 10 Table of Contents Under PRC laws and regulations, our mainland China subsidiaries, the VIE and its subsidiaries are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us.
Liquidity and Capital Resources—Holding Company Structure.” 12 Table of Contents Under PRC laws and regulations, our mainland China subsidiaries, the VIE and its subsidiaries are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us.
Regulatory authorities around the world have adopted laws and regulations or are considering legislative and regulatory proposals concerning privacy and data protection, including in the PRC, U.S. and the European Union. These laws and regulations regulate the way we collect, use, store, transfer, disclose and secure data and protect the privacy of our users.
Regulatory authorities around the world have adopted laws and regulations or are considering legislative and regulatory proposals concerning privacy and data protection, including in Asia, the U.S. and the European Union. These laws and regulations regulate the way we collect, use, store, transfer, disclose and secure data and protect the privacy of our users.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIE and its shareholders for a large portion of our business operations, which may not be as effective as direct ownership in providing operational control” and “—The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.” In addition, the PRC authorities may also disallow the use of VIE structures.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIE and its shareholders for a large portion of our business operations, which may not be as effective as direct ownership in providing operational control” and “—The shareholders of the VIE may have potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.” 6 Table of Contents In addition, the PRC authorities may also disallow the use of VIE structures.
Any failure to attract or retain management and key personnel could severely disrupt our business and growth. 20 Table of Contents If we are unable to manage our growth or execute our strategies effectively, our business and prospects may be materially and adversely affected. We expect to further expand our businesses.
Any failure to attract or retain management and key personnel could severely disrupt our business and growth. 27 Table of Contents If we are unable to manage our growth or execute our strategies effectively, our business and prospects may be materially and adversely affected. We expect to further expand our businesses.
In August 2020, as an extension to the Pinduoduo platform, we started Duo Duo Grocery, a next-day grocery pick-up service that allows users to order groceries and related products online and collect their orders the next day at nearby designated pickup points.
For example, in August 2020, as an extension to the Pinduoduo platform, we started Duo Duo Grocery, a next-day grocery pick-up service that allows users to order groceries and related products online and collect their orders the next day at nearby designated pickup points.
Complying with applicable laws and regulations relating to data security and personal information protection may be costly and result in additional expenses to us, and any material failure to do so may subject us to potential liability, regulatory investigations, costly litigation or negative publicity, harm our reputation and business operations, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline.
Complying with applicable laws and regulations relating to data security and personal information protection may be costly and result in additional expenses to us, and any actual or perceived failure to do so may subject us to potential liability, regulatory investigations, costly litigation or negative publicity, harm our reputation and business operations, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline.
In addition, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2023. See “Item 15.
In addition, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management has concluded that our internal control over financial reporting was effective as of December 31, 2024. See “Item 15.
Business Overview—Regulations in the PRC—Regulations Relating to E-Commerce—The E-Commerce Law” for details. ● The E-Commerce Law requires certain e-commerce operators, including, but not limited to, e-commerce platform operators and merchants on these platforms, to register with the relevant local branches of the SAMR, and requires that e-commerce platform operators should provide the identity information of the merchants on their platforms to local branches of the SAMR and procure those merchants who fail to make such registrations to comply with the registration requirements.
Business Overview—Regulations in the PRC—Regulations Relating to E-Commerce—The E-Commerce Law” for details. 23 Table of Contents ● The E-Commerce Law requires certain e-commerce operators, including, but not limited to, e-commerce platform operators and merchants on these platforms, to register with the relevant local branches of the SAMR, and requires that e-commerce platform operators should provide the identity information of the merchants on their platforms to local branches of the SAMR and procure those merchants who fail to make such registrations to comply with the registration requirements.
Risk Factors—Risks Related to Our Corporate Structure—Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.” Therefore, our contractual arrangements with the VIE may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be. 40 Table of Contents Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.
Risk Factors—Risks Related to Our Corporate Structure—Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.” Therefore, our contractual arrangements with the VIE may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be.
Taxation.” Financial Information Related to the VIE The following table presents the condensed consolidating schedule of financial position and results for (i) PDD Holdings Inc., (ii) Hangzhou Weimi, a PRC subsidiary of the Company that has entered into contractual arrangements with the VIE, the VIE’s shareholders and, as applicable, their spouses, (iii) the VIE and its subsidiaries, and (iv) the Company’s subsidiaries other than Hangzhou Weimi as of the dates or for the periods presented. 11 Table of Contents Selected Condensed Consolidated Statements of Income Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ PDD Holdings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Inc.
Taxation.” Financial Information Related to the VIE The following table presents the condensed consolidating schedule of financial position and results for (i) PDD Holdings Inc., (ii) Hangzhou Weimi, a PRC subsidiary of the Company that has entered into contractual arrangements with the VIE, the VIE’s shareholders and, as applicable, their spouses, (iii) the VIE and its subsidiaries, and (iv) the Company’s subsidiaries other than Hangzhou Weimi as of the dates or for the periods presented. 13 Table of Contents Selected Condensed Consolidated Statements of Income Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ PDD Holdings ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ Inc.
We face a number of challenges relating to data from transactions and other activities on our platforms, including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees, and securely transmitting such data over public networks; ● addressing concerns related to privacy, sharing, safety, security and other factors; and ● complying with applicable laws and regulations relating to the collection, use, storage, transfer, disclosure and security of personal data, including any requests from regulatory and government authorities relating to these data.
We face a number of demanding expectations relating to processing data from transactions and other activities on our platforms, including: ● protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees, and securely transmitting such data over public networks; ● addressing concerns related to privacy, sharing, safety, security and other factors; and ● complying with applicable laws and regulations relating to the collection, use, storage, transfer, disclosure and security of personal data, including any requests from regulatory and government authorities relating to these data.
As a result, our ability to expand our user base may be hindered if potential users experience difficulties in or are barred from accessing our mobile apps. In the past, our mobile apps were taken down from certain third-party app stores. We cannot assure you that we will not experience such an incident of a similar nature in the future.
As a result, our ability to expand our user base may be hindered if potential users experience difficulties in or are barred from accessing our mobile apps. In the past, our mobile apps were taken down from certain third-party app stores. We cannot assure you that we will not experience such incidents of a similar nature in the future.
Risk Factors—Risks Related to Our Business and Industry,” may also apply to operating in Hong Kong and Macau. 15 Table of Contents Risks Related to Our Business and Industry Our historical performance may not be indicative of our future growth or financial results.
Risk Factors—Risks Related to Our Business and Industry,” may also apply to operating in Hong Kong and Macau. 16 Table of Contents Risks Related to Our Business and Industry Our historical performance may not be indicative of our future growth or financial results.
We have limited control or influence over the security policies or measures adopted by third-party providers of online payment services through which some of our buyers may choose to make payment for purchases.
Despite our efforts, we have limited control or influence over the security policies or measures adopted by third-party providers of online payment services through which some of our buyers may choose to make payment for purchases.
Pursuant to the 2021 Negative List, a mainland China company that is engaged in business prohibited by the 2021 Negative List must obtain approval from the competent governmental authorities to seek an offering and listing of securities outside of mainland China.
Pursuant to the 2024 Negative List, a mainland China company that is engaged in business prohibited by the 2024 Negative List must obtain approval from the competent governmental authorities to seek an offering and listing of securities outside of mainland China.
In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. 45 Table of Contents The Chinese government also influences and drives China’s economic growth by allocating resources, controlling payment of obligations denominated in currencies other than Renminbi, setting monetary policy, and providing preferential treatment to particular industries or companies.
In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also influences and drives China’s economic growth by allocating resources, controlling payment of obligations denominated in currencies other than Renminbi, setting monetary policy, and providing preferential treatment to particular industries or companies.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “—Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.” ● Our ADSs may be prohibited from trading in the United States under the HFCA Act in the future if the PCAOB is unable to inspect or fully investigate auditors located in mainland China or Hong Kong.
Risk Factors—Risks Related to Doing Business in China—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “—Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.” ● Our ADSs may be prohibited from trading in the United States under the HFCA Act in the future if the PCAOB is unable to inspect or fully investigate auditors located in mainland China or Hong Kong.
They could result in significant investments and goodwill impairment charges and amortization expenses for other intangible assets, which would adversely affect our financial condition and operating results. Undetected programming errors or flaws could negatively affect user experience, damage our reputation or even cause direct loss to us, which would materially and adversely affect our results of operations.
They could result in significant investments and goodwill impairment charges and amortization expenses for other intangible assets, which would adversely affect our financial condition and operating results. 29 Table of Contents Undetected programming errors or flaws could negatively affect user experience, damage our reputation or even cause direct loss to us, which would materially and adversely affect our results of operations.
We may not be able to prevent third parties, especially hackers or other individuals or entities engaging in similar activities through viruses, Trojan horses, malicious software, break-ins, phishing attacks, third-party manipulation or security breaches, from illegally obtaining the confidential or private data we hold on our platforms.
We may not be able to prevent third parties, especially hackers or other individuals or entities engaging in similar activities through viruses, ransomware, malicious software, break-ins, phishing attacks, third-party manipulation or security breaches, from illegally obtaining the confidential or private data we hold on our platforms.
In April 2020, Shanghai Xunmeng, a subsidiary of the VIE, entered into a business cooperation agreement with Shanghai Fufeitong Information Service Co., Ltd., or Shanghai Fufeitong, pursuant to which both parties agreed to conduct comprehensive business cooperation in payment services, technical resources and other related professional areas. As Shanghai Fufeitong is a company in which Mr. Lei Chen and Mr.
In April 2020, Shanghai Xunmeng, a subsidiary of the VIE, entered into a business cooperation agreement with Shanghai Fufeitong Information Service Co., Ltd., or Shanghai Fufeitong, pursuant to which both parties agreed to conduct comprehensive business cooperation in payment services, technical resources and other related professional areas. Mr. Lei Chen and Mr.
Any negative publicity on our platforms’ data safety or privacy protection mechanisms and policies, and any claims asserted or investigations against us or fines imposed upon us as a result of actual or perceived failures, could have a material and adverse effect on our public image, reputation, financial condition and results of operations.
Any negative publicity on our platforms’ data safety or privacy protection mechanisms and policies, and any claims asserted or investigations against us or fines that may be imposed upon us as a result of actual or perceived failures, could have a material and adverse effect on our public image, reputation, financial condition and results of operations.
Business Overview—Regulations in the PRC—Regulations Relating to Foreign Investment” and “—Licenses, Permits and Filings.” As of the date of this annual report, we have not been subject to material penalties or other material disciplinary action from the governmental authorities regarding conducting our business without proper approvals, licenses and permits.
Business Overview—Regulations in the PRC—Regulations Relating to Foreign Investment” and “—Licenses, Permits and Filings.” As of the date of this annual report, other than as disclosed elsewhere in this annual report, we have not been subject to material penalties or other material disciplinary action from the governmental authorities regarding conducting our business without proper approvals, licenses and permits.
Any such negative developments could have a material adverse effect on our business, financial condition, results of operations and cash flow. 25 Table of Contents Our financial results could be adversely affected by our investments or acquisitions. The investments and acquired assets or businesses may not generate anticipated synergies with our business or achieve anticipated financial growth.
Any such negative developments could have a material adverse effect on our business, financial condition, results of operations and cash flow. Our financial results could be adversely affected by our investments or acquisitions. The investments and acquired assets or businesses may not generate anticipated synergies with our business or achieve anticipated financial growth.
Business involving online payment services is subject to a number of risks that could materially and adversely affect third-party payment service providers’ ability to provide payment processing and escrow services to us, including: ● dissatisfaction with these online payment services or decreased use of their services by buyers and merchants; ● increasing competition, including from other established internet companies, payment service providers and companies engaged in other financial technology services; ● changes to rules or practices applicable to payment systems that link to third-party payment service providers; ● breach of buyers’ personal information and concerns over the use and security of information collected from buyers; ● service outages, system failures or failures to effectively scale the system to handle large and growing transaction volumes; ● increasing costs to third-party payment service providers, including fees charged by banks to process transactions through online payment channels, which would also increase our costs of revenues; and ● failure to manage funds accurately or loss of funds, whether due to employee fraud, security breaches, technical errors or otherwise. ​ 29 Table of Contents Our reliance on third-party payment service providers subjects us to limitations imposed by the providers.
Business involving online payment services is subject to a number of risks that could materially and adversely affect third-party payment service providers’ ability to provide payment processing and escrow services to us, including: ● dissatisfaction with these online payment services or decreased use of their services by buyers and merchants; ● increasing competition, including from other established internet companies, payment service providers and companies engaged in other financial technology services; ● changes to rules or practices applicable to payment systems that link to third-party payment service providers; ● breach of buyers’ personal information and concerns over the use and security of information collected from buyers; ● service outages, system failures or failures to effectively scale the system to handle large and growing transaction volumes; ● increasing costs to third-party payment service providers, including fees charged by banks to process transactions through online payment channels, which would also increase our costs of revenues; and ● failure to manage funds accurately or loss of funds, whether due to employee fraud, security breaches, technical errors or otherwise.
Holders of our ADSs therefore do not have direct or indirect equity interests in the VIE and its subsidiaries. 4 Table of Contents The VIE structure allows foreign investors to have exposure to China-based operating companies that are subject to restrictions on direct foreign investment under Chinese law.
Holders of our ADSs therefore do not have direct or indirect equity interests in the VIE and its subsidiaries. The VIE structure allows foreign investors to have exposure to China-based operating companies that are subject to restrictions on direct foreign investment under Chinese law.
If our buyers are dissatisfied with their experience on our platforms as a result of such delays, our results of operations as well as our reputation could be adversely affected. Additionally, we must continue to upgrade and improve our technology infrastructure to support the growth of our business.
If our buyers are dissatisfied with their experience on our platforms as a result of such delays, our results of operations as well as our reputation could be adversely affected. 26 Table of Contents Additionally, we must continue to upgrade and improve our technology infrastructure to support the growth of our business.
If more stringent privacy legislation arises in the United States, it could increase our potential liability and adversely affect our business, results of operations, and financial condition. In the European Union and the United Kingdom, we are also subject to laws and regulations regarding data privacy and protection.
If more stringent privacy legislation arises in the United States, it could increase our potential liability and adversely affect our business, results of operations, and financial condition. 20 Table of Contents In the European Union and the United Kingdom, we are also subject to laws and regulations regarding data privacy and protection.
Successful infringement or licensing claims made against us may result in significant monetary liabilities and may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual property in question. Finally, we use open-source software in connection with our products and services.
Successful infringement or licensing claims made against us may result in significant monetary liabilities and may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual property in question. 35 Table of Contents Finally, we use open-source software in connection with our products and services.
Any occurrence of the circumstances mentioned above may have a material adverse effect on our business, financial condition and results of operations. 18 Table of Contents We are dependent on app stores to disseminate our mobile apps. Consumers primarily access our services through the Pinduoduo and Temu mobile apps.
Any occurrence of the circumstances mentioned above may have a material adverse effect on our business, financial condition and results of operations. We are dependent on app stores to disseminate our mobile apps. Consumers primarily access our services through the Pinduoduo and Temu mobile apps.
Risk Factors—Risks Related to Our Business and Industry,” may also apply to operating in Hong Kong and Macau. 7 Table of Contents Risks Related to Our Business and Industry Risks and uncertainties related to our business and industry include, but are not limited to, the following: ● Our historical performance may not be indicative of our future growth or financial results.
Risk Factors—Risks Related to Our Business and Industry,” may also apply to operating in Hong Kong and Macau. Risks Related to Our Business and Industry Risks and uncertainties related to our business and industry include, but are not limited to, the following: ● Our historical performance may not be indicative of our future growth or financial results.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “—Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.” Under PRC law, PDD Holdings Inc. may provide funding to our mainland China subsidiaries only through capital contributions or loans, and to the VIE only through loans, subject to satisfaction of applicable government registration and approval requirements.
Risk Factors—Risks Related to Doing Business in China—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “—Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.” Under PRC law, PDD Holdings Inc. may provide funding to our mainland China subsidiaries only through capital contributions or loans, and to the VIE only through loans, subject to satisfaction of applicable government registration and approval requirements.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors of the benefits of such inspections” and “—Our ADSs may be prohibited from trading in the United States under the HFCA Act in the future if the PCAOB is unable to inspect or investigate completely auditors located in mainland China or Hong Kong.
Risk Factors— Risks Related to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors of the benefits of such inspections” and “—Our ADSs may be prohibited from trading in the United States under the HFCA Act in the future if the PCAOB is unable to inspect or investigate completely auditors located in mainland China or Hong Kong.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors of the benefits of such inspections” and “—Our ADSs may be prohibited from trading in the United States under the HFCA Act in the future if the PCAOB is unable to inspect or investigate completely auditors located in mainland China or Hong Kong.
Risk Factors—Risks Related to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors of the benefits of such inspections” and “—Our ADSs may be prohibited from trading in the United States under the HFCA Act in the future if the PCAOB is unable to inspect or investigate completely auditors located in mainland China or Hong Kong.
Business Overview—Regulations in the PRC—Regulations Relating to Foreign Exchange—Regulations on Stock Incentive Plans.” 51 Table of Contents Our use of some leased properties could be challenged by third parties or government authorities, which may cause interruptions to our business operations.
Business Overview—Regulations in the PRC—Regulations Relating to Foreign Exchange—Regulations on Stock Incentive Plans.” Our use of some leased properties could be challenged by third parties or government authorities, which may cause interruptions to our business operations.
You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs. 57 Table of Contents Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs.
You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs. Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs.
Moreover, consumer protection laws in China provide that a platform will be held liable for failing to meet any undertaking that it made to consumers with regard to products listed on it, and the Pinduoduo platform is required to report violations of applicable consumer protection laws, regulations or administrative rules by merchants on the platform to the State Administration for Market Regulation of the PRC, or the SAMR, or its local branches, and to take appropriate remedial measures, including ceasing to provide services to those merchants, as a platform.
Moreover, consumer protection laws in China provide that a platform will be held liable for failing to meet any undertaking that it made to consumers with regard to products listed on it, and the Pinduoduo platform is required to report violations of applicable consumer protection laws, regulations or administrative rules by merchants on the platform to the SAMR or its local branches, and to take appropriate remedial measures, including ceasing to provide services to those merchants, as a platform.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in certain jurisdictions, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements to be filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
For instance, the Pinduoduo platform is required to hold a number of licenses and permits in connection with its business operations, including the ICP license and approvals for the establishment of PRC foreign-invested enterprises engaging in the sale of goods over the internet.
For instance, the Pinduoduo platform is required to hold a number of licenses and permits in connection with its business operations, including VATS Licenses and approvals for the establishment of PRC foreign-invested enterprises engaging in the sale of goods over the internet.
We may not have sufficient funds to fulfill our payment obligations under the 2024 Notes and the 2025 Notes, including to repay the 2024 Notes and/or the 2025 Notes upon maturity, to settle conversions of the 2024 Notes and/or the 2025 Notes in cash, to repurchase the 2024 Notes and/or the 2025 Notes upon a tax redemption or an optional redemption thereof or, at the holders’ election, upon a fundamental change (as defined in the terms of the 2024 Notes and the 2025 Notes, respectively) or on the specified dates set forth in the terms of the 2024 Notes and/or the 2025 Notes.
We may not have sufficient funds to fulfill our payment obligations under the 2025 Notes, including to repay the 2025 Notes upon maturity, to settle conversions of the 2025 Notes in cash, to repurchase the 2025 Notes upon a tax redemption or an optional redemption thereof or, at the holders’ election, upon a fundamental change (as defined in the 2025 Notes) or on the specified dates set forth in the 2025 Notes.
According to SAT Circular 82, an enterprise incorporated outside of mainland China that is controlled by a mainland China enterprise or enterprise group will be regarded as a tax resident of mainland China by virtue of having its “de facto management body” in mainland China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in mainland China; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in mainland China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in mainland China; and (iv) at least 50% of voting board members or senior executives habitually reside in mainland China.
According to SAT Circular 82, an enterprise incorporated outside of mainland China that is controlled by a mainland China enterprise or enterprise group will be regarded as a tax resident of mainland China by virtue of having its “de facto management body” in mainland China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in mainland China; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in mainland China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in mainland China; and (iv) at least 50% of voting board members or senior executives habitually reside in mainland China. 57 Table of Contents We believe that we are not a mainland China resident enterprise for PRC tax purposes.
Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects. It may be difficult for non-PRC regulators to conduct investigations or collect evidence within China.
Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects. 60 Table of Contents It may be difficult for non-PRC regulators to conduct investigations or collect evidence within China.
We cannot assure you that we will not be found in violation of any of the laws and regulations currently in effect due to the evolving interpretation and implementation of these laws and regulations. We are subject to the labor laws and regulations of the jurisdictions in which we have employees.
We cannot assure you that we will not be found in violation of any of the laws and regulations currently in effect due to the evolving interpretation and implementation of these laws and regulations. 33 Table of Contents We are subject to the labor laws and regulations of the jurisdictions in which we have employees.
However, we can provide no assurance that we will prevail in these ongoing actions or any other future litigation, and even if we do prevail, we may not obtain a meaningful recovery. 34 Table of Contents In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors.
However, we can provide no assurance that we will prevail in these ongoing actions or any other future litigation, and even if we do prevail, we may not obtain a meaningful recovery. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors.
While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2010. According to the National Bureau of Statistics of China, China’s real GDP growth rate was 8.1%, 3.0% and 5.2% in 2021, 2022 and 2023, respectively.
While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2010. According to the National Bureau of Statistics of China, China’s real GDP growth rate was 3.0%, 5.2% and 5.0% in 2022, 2023 and 2024, respectively.
In particular, we have been and may continue to be subject to negative publicity based on claims and allegations related to intellectual property. For example, the Office of the U.S. Trade Representative, or USTR, has identified the Pinduoduo platform as a “notorious market” since 2019.
In particular, we have been and may continue to be subject to negative publicity based on claims and allegations related to intellectual property and consumer protection, among others. For example, the Office of the U.S. Trade Representative, or USTR, has identified the Pinduoduo platform as a “notorious market” since 2019.
Changes to the regulations on cookies and similar technologies may increase regulatory scrutiny and increase potential civil liability under data protection or consumer protection laws. We may incur liabilities, expenses, costs, and other operational losses under applicable laws in connection with any measures we take to comply with them.
Changes to the regulations on cookies and similar technologies may increase regulatory scrutiny and expose us to increased potential liability under data protection or consumer protection laws. We may incur liabilities, expenses, costs, and other operational losses under applicable laws in connection with any measures we take to comply with them.
The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIE and its principal subsidiary, as of the date of this annual report: (1) Mr. Lei Chen and Mr. Jianchong Zhu hold 86.6% and 13.4% equity interests in Hangzhou Aimi, respectively.
The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIE and its principal subsidiary, as of the date of this annual report: (1) Mr. Lei Chen and Mr. Jiazhen Zhao hold 86.6% and 13.4% equity interests in Hangzhou Aimi, respectively.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeRegulations Relating to Anti-unfair Competition and Anti-monopoly On April 23, 2019, the Standing Committee of the National People’s Congress amended the PRC Anti-unfair Competition Law, pursuant to which business operators may not engage in anti-competitive activities including but not limited to, unduly influencing transactions, confusing or defrauding consumers, commercial bribery, trade secret infringement and commercial libel.
Biggest changeWe are subject to the PRC Civil Code, the PRC Consumer Rights and Interests Protection Law, the Regulations for the Implementation of the PRC Consumer Rights and Interests Protection Law, and the Measures for the Supervision and Administration of Online Transactions as an e-commerce platform service provider and believe that we are currently in compliance with these regulations in all material aspects. 80 Table of Contents Regulations Relating to Anti-unfair Competition and Anti-monopoly On April 23, 2019, the Standing Committee of the National People’s Congress amended the PRC Anti-unfair Competition Law, pursuant to which business operators may not engage in anti-competitive activities including but not limited to, unduly influencing transactions, confusing or defrauding consumers, commercial bribery, trade secret infringement and commercial libel.
These provisions will govern, among other things, potential liability for illegal products on online platforms as well as obligations around traceability of merchants/business users and require enhanced transparency measures including in relation to any recommendation systems used to present product options to a user.
These provisions govern, among other things, potential liability for illegal products on online platforms as well as obligations around traceability of merchants/business users and require enhanced transparency measures including in relation to any recommendation systems used to present product options to a user.
In the United Kingdom, we are subject to the United Kingdom General Data Protection Regulation and Data Protection Act 2018, known as the UK GDPR, which is substantially similar to the EU GDPR. These laws establish requirements applicable to the processing of personal data, create new data protection rights for individuals and impose penalties for serious data breaches.
In the United Kingdom, we are subject to the United Kingdom General Data Protection Regulation and Data Protection Act 2018, known as the UK GDPR, which is substantially similar to the EU GDPR. These laws establish requirements applicable to the processing of personal data, create data protection rights for individuals and impose penalties for serious data breaches.
Temu empowers merchants with value-added services that enables a broader market reach. Merchants provide product listings that buyers can browse and order on the Temu mobile app or website. Temu enables merchants to streamline their manufacturing and commercial operations, leading to lower prices and reduced waste.
Temu empowers merchants with value-added services that enable a broader market reach. Merchants provide product listings that buyers can browse and order on the Temu mobile app or website. Temu enables merchants to streamline their manufacturing and commercial operations, leading to lower prices and reduced waste.
In addition, pursuant to the Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business, which was issued by the MIIT in July 2006, a PRC company that holds a VATS License is prohibited from leasing, transferring or selling such license to foreign investors in any form, and from providing any assistance, including providing resources, sites or facilities, to foreign investors that conduct value-added telecommunications business illegally in China. 67 Table of Contents To comply with PRC laws and regulations, we rely on contractual arrangements with the VIE to operate our e-commerce business in China.
In addition, pursuant to the Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business, which was issued by the MIIT in July 2006, a PRC company that holds a VATS License is prohibited from leasing, transferring or selling such license to foreign investors in any form, and from providing any assistance, including providing resources, sites or facilities, to foreign investors that conduct value-added telecommunications business illegally in China. 72 Table of Contents To comply with PRC laws and regulations, we rely on contractual arrangements with the VIE to operate our e-commerce business in China.
If the employees fail to pay or the mainland China subsidiaries fail to withhold their income taxes according to the laws and regulations, the mainland China subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities. 81 Table of Contents Regulations Relating to Listings and M&A Outside of Mainland China The M&A Rules On August 8, 2006, six PRC governmental and regulatory agencies, including the Ministry of Commerce and the CSRC, jointly promulgated the M&A Rules, which became effective on September 8, 2006 and was subsequently amended on June 22, 2009.
If the employees fail to pay or the mainland China subsidiaries fail to withhold their income taxes according to the laws and regulations, the mainland China subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities. 86 Table of Contents Regulations Relating to Listings and M&A Outside of Mainland China The M&A Rules On August 8, 2006, six PRC governmental and regulatory agencies, including the Ministry of Commerce and the CSRC, jointly promulgated the M&A Rules, which became effective on September 8, 2006 and was subsequently amended on June 22, 2009.
Pursuant to these opinions, the e-commerce platform operators must provide the identity information of merchants on their platform to the local branches of the SAMR and prompt the merchants failing to make such registrations to comply with the registration requirements. 70 Table of Contents Regulations on Cross-Border E-Commerce In March 2016, the State Administration of Taxation, the Ministry of Finance, and the General Administration of Customs jointly issued the Circular on Tax Policy for Cross-Border E-commerce Retail Imports, which took effect in April 2016.
Pursuant to these opinions, the e-commerce platform operators must provide the identity information of merchants on their platform to the local branches of the SAMR and prompt the merchants failing to make such registrations to comply with the registration requirements. 75 Table of Contents Regulations on Cross-Border E-Commerce In March 2016, the State Administration of Taxation, the Ministry of Finance, and the General Administration of Customs jointly issued the Circular on Tax Policy for Cross-Border E-commerce Retail Imports, which took effect in April 2016.
If an internet information service provider violates these measures, the Ministry of Public Security and its local branches may revoke its operating license and shut down its websites. 71 Table of Contents Personal Information and Data Privacy On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which unified a number of hitherto separate rules with respect to personal information rights and privacy protection, and took effect on November 1, 2021.
If an internet information service provider violates these measures, the Ministry of Public Security and its local branches may revoke its operating license and shut down its websites. 76 Table of Contents Personal Information and Data Privacy On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which unified a number of hitherto separate rules with respect to personal information rights and privacy protection, and took effect on November 1, 2021.
These opinions emphasized the need to, among other things, strengthen the supervision of listings outside of mainland China. 82 Table of Contents On February 17, 2023, the CSRC released a set of regulations, including the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, or, collectively, the Filing Measures, which took effect on March 31, 2023.
These opinions emphasized the need to, among other things, strengthen the supervision of listings outside of mainland China. 87 Table of Contents On February 17, 2023, the CSRC released a set of regulations, including the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, or, collectively, the Filing Measures, which took effect on March 31, 2023.
We cooperate with most leading third-party payment service providers and are not dependent on any particular provider for these services. 64 Table of Contents Data Security and Protection Our comprehensive security systems are supported by network situational awareness and risk management systems designed to protect individual end users and ensure the security of the data and services of our platforms.
We cooperate with most leading third-party payment service providers and are not dependent on any particular provider for these services. 69 Table of Contents Data Security and Protection Our comprehensive security systems are supported by network situational awareness and risk management systems designed to protect individual end users and ensure the security of the data and services of our platforms.
Shanghai Xunmeng has completed the requisite procedures with the publication authority. 69 Table of Contents Filing by Third-Party Platforms Providers for Medical Device Online Trading Services The State Food and Drug Administration promulgated the Measures for the Supervision and Administration of Online Sale of Medical Devices in December 2017, which became effective in March 2018.
Shanghai Xunmeng has completed the requisite procedures with the publication authority. 74 Table of Contents Filing by Third-Party Platforms Providers for Medical Device Online Trading Services The State Food and Drug Administration promulgated the Measures for the Supervision and Administration of Online Sale of Medical Devices in December 2017, which became effective in March 2018.
Subsequently, on December 26, 2019, the State Council promulgated the Implementation Regulations on the PRC Foreign Investment Law, which came into effect on January 1, 2020. 66 Table of Contents Under the PRC Foreign Investment Law, “foreign investment” refers to the investment activities directly or indirectly conducted by foreign individuals, enterprises or other foreign entities in China.
Subsequently, on December 26, 2019, the State Council promulgated the Implementation Regulations on the PRC Foreign Investment Law, which came into effect on January 1, 2020. 71 Table of Contents Under the PRC Foreign Investment Law, “foreign investment” refers to the investment activities directly or indirectly conducted by foreign individuals, enterprises or other foreign entities in China.
These lists were promulgated, and are amended from time to time, by the Ministry of Commerce and the NDRC. The 2021 Negative List limits the industries in which foreign investors may invest. It sets out a list of “restricted” and “prohibited” industries. Foreign investors may only invest in restricted industries if they satisfy certain conditions, including government approval.
These lists were promulgated, and are amended from time to time, by the Ministry of Commerce and the NDRC. The 2024 Negative List limits the industries in which foreign investors may invest. It sets out a list of “restricted” and “prohibited” industries. Foreign investors may only invest in restricted industries if they satisfy certain conditions, including government approval.
This catalog also specifies that the scope of information service business includes information release and delivery services, information search and query services, information community platform services, information real-time interactive services, and information protection and processing services. 68 Table of Contents Under the Telecommunications Regulations, telecommunications service providers are required to obtain operating licenses before they commence operations.
This catalog also specifies that the scope of information service business includes information release and delivery services, information search and query services, information community platform services, information real-time interactive services, and information protection and processing services. 73 Table of Contents Under the Telecommunications Regulations, telecommunications service providers are required to obtain operating licenses before they commence operations.
This patchwork of legislation and regulations regarding security, privacy and data protection may give rise to conflicts or differing views of personal privacy rights.
This patchwork of legislation and regulations regarding security, privacy and data protection may give rise to conflicts or differing views of privacy rights.
As a general principle, under the PRC Foreign Investment Law, foreign investment is accorded pre-entry national treatment, which means that the treatment given to foreign investors and their investments must not be less favorable than those given to PRC investors and their investments, except if a foreign investment falls under a negative list, such as the 2021 Negative List.
As a general principle, under the PRC Foreign Investment Law, foreign investment is accorded pre-entry national treatment, which means that the treatment given to foreign investors and their investments must not be less favorable than those given to PRC investors and their investments, except if a foreign investment falls under a negative list, such as the 2024 Negative List.
Foreign investors may not invest in prohibited industries. By contrast, the 2022 Encouraged Industries Catalog includes a list of “encouraged” industries in which foreign investors are incentivized to invest. Foreign investment in industries that are not listed in the 2021 Negative List or the 2022 Encouraged Industries Catalog is generally permitted, unless specifically restricted by other PRC laws.
Foreign investors may not invest in prohibited industries. By contrast, the 2022 Encouraged Industries Catalog includes a list of “encouraged” industries in which foreign investors are incentivized to invest. Foreign investment in industries that are not listed in the 2024 Negative List or the 2022 Encouraged Industries Catalog is generally permitted, unless specifically restricted by other PRC laws.
Risk Factors—Risks Related to Our Corporate Structure—We face uncertainties with respect to the implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.” The 2021 Negative List and the 2022 Encouraged Industries Catalog The industries in which foreign investors and PRC foreign-invested enterprises may make investments in the PRC are regulated by the Catalog of Industries in which Foreign Investment is Encouraged (2022 edition), or the 2022 Encouraged Industries Catalog, and the Special Administrative Measures for Foreign Investment Access (Negative List 2021), or the 2021 Negative List.
Risk Factors—Risks Related to Our Corporate Structure—We face uncertainties with respect to the implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.” The 2024 Negative List and the 2022 Encouraged Industries Catalog The industries in which foreign investors and PRC foreign-invested enterprises may make investments in the PRC are regulated by the Catalog of Industries in which Foreign Investment is Encouraged (2022 edition), or the 2022 Encouraged Industries Catalog, and the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version), or the 2024 Negative List.
The sorted goods are then delivered from regional warehouses to designated pickup points the next day, where consumers can pick up their purchases. 63 Table of Contents The Temu Platform Temu was founded in September 2022 in Boston, Massachusetts, the United States.
The sorted goods are then delivered from regional warehouses to designated pickup points the next day, where consumers can pick up their purchases. 68 Table of Contents The Temu Platform Temu was founded in September 2022 in Boston, Massachusetts, the United States.
Pursuant to the 2021 Negative List, if a PRC company that is engaged in a prohibited business under the 2021 Negative List seeks an offering and listing of securities outside of mainland China, it must obtain approval from the competent governmental authorities.
Pursuant to the 2024 Negative List, if a PRC company that is engaged in a prohibited business under the 2024 Negative List seeks an offering and listing of securities outside of mainland China, it must obtain approval from the competent governmental authorities.
Risk Factors—Risks Related to Our Business and Industry—Any lack of additional requisite approvals, licenses or permits or failure to comply with any requirements of the applicable laws, regulations and policies may materially and adversely affect our daily operations and hinder our growth.” Regulations Relating to Tax in the PRC Income Tax The PRC Enterprise Income Tax Law was recently amended in December 2018.
Risk Factors—Risks Related to Our Business and Industry—Any lack of additional requisite approvals, licenses or permits or failure to comply with any requirements of the applicable laws, regulations and policies may materially and adversely affect our daily operations and hinder our growth.” 83 Table of Contents Regulations Relating to Tax in the PRC Income Tax The PRC Enterprise Income Tax Law was recently amended in December 2018.
As SAFE Circular 16 is newly issued, and SAFE has not provided detailed guidelines with respect to its interpretation or implementations, it is uncertain how these rules will be interpreted and implemented. 80 Table of Contents In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, or SAFE Circular 3.
As SAFE Circular 16 is newly issued, and SAFE has not provided detailed guidelines with respect to its interpretation or implementations, it is uncertain how these rules will be interpreted and implemented. In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, or SAFE Circular 3.
In September 2022, we offered to repurchase the 2024 Notes at the election of the holders thereof pursuant to such holders’ right to repurchase their notes on the specified date set forth in the terms of the 2024 Notes (the “Repurchase Right Offer”), and we completed the Repurchase Right Offer relating to the 2024 Notes in October 2022.
In September 2022, we offered to repurchase the 2024 Notes at the election of the holders thereof pursuant to such holders’ right to repurchase their notes on the specified date set forth in the terms of the 2024 Notes, and we completed the repurchase right offer relating to the 2024 Notes in October 2022.
As the 2021 Negative List is relatively new, there are substantial uncertainties as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies like us will be subject to these new requirements.
As the 2024 Negative List is relatively new, there are substantial uncertainties as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies like us will be subject to these new requirements.
Each of the shareholders of Hangzhou Aimi undertakes that, without the prior written consent of Hangzhou Weimi or us, they may not increase or decrease the registered capital, dispose of its assets, incur any debts or guarantee liabilities, enter into any material purchase agreements, enter into any merger, acquisition or investments, amend its articles of association or provide any loans to third parties.
The shareholders of Hangzhou Aimi undertake that, without the prior written consent of Hangzhou Weimi or us, they may not increase or decrease the registered capital, dispose of its assets, incur any debts or guarantee liabilities, enter into any material purchase agreements, enter into any merger, acquisition or investments, amend its articles of association or provide any loans to third parties.
Information on the Company—B. Business Overview—Regulations in the PRC—Regulations Relating to Dividend Distributions.” As a result of our direct ownership in Hangzhou Weimi and the VIE contractual arrangements, we are regarded as the primary beneficiary of the VIE and its subsidiaries. We treat it and its subsidiaries as our consolidated affiliated entities under U.S.
Information on the Company—B. Business Overview—Regulations in the PRC—Regulations Relating to Dividend Distributions.” As a result of our direct ownership in Hangzhou Weimi and the VIE contractual arrangements, we are regarded as the primary beneficiary of the VIE and its subsidiaries for accounting purposes. We treat it and its subsidiaries as our consolidated affiliated entities under U.S.
Shanghai Xunmeng holds an Internet Drug Information Service Qualification Certificate issued by the Shanghai Municipal Food and Drug Administration for the provision of internet medical information services, and this license will expire in 2024.
Shanghai Xunmeng holds an Internet Drug Information Service Qualification Certificate issued by the Shanghai Municipal Food and Drug Administration for the provision of internet medical information services, and this license will expire in 2029.
In February 2023, we renamed our company “PDD Holdings Inc.” 62 Table of Contents In October 2023, we offered to repurchase the 2025 Notes at the election of the holders thereof pursuant to such holders’ right to repurchase their notes on the specified date set forth in the terms of the 2025 Notes, and we completed the repurchase right offer relating to the 2025 Notes in December 2023.
In February 2023, we renamed our company “PDD Holdings Inc.” In October 2023, we offered to repurchase the 2025 Notes at the election of the holders thereof pursuant to such holders’ right to repurchase their notes on the specified date set forth in the terms of the 2025 Notes, and we completed the repurchase right offer relating to the 2025 Notes in December 2023.
According to the Regulations on the Administration of Housing Provident Fund, housing provident fund contributions by an individual employee and housing provident fund contributions by his or her employer shall belong to the individual employee. 77 Table of Contents The employer must timely pay up and deposit housing provident fund contributions in the full amount and late or insufficient payments shall be prohibited.
According to the Regulations on the Administration of Housing Provident Fund, housing provident fund contributions by an individual employee and housing provident fund contributions by his or her employer shall belong to the individual employee. The employer must timely pay up and deposit housing provident fund contributions in the full amount and late or insufficient payments shall be prohibited.
Internet Drug Information Service Qualification Certificate The State Food and Drug Administration (which has now been merged into the SAMR), promulgated the Administrative Measures on Internet Drug Information Service in July 2004, most recently amended in November 2017, and certain implementing rules and notices thereafter.
Internet Drug Information Service Filing The State Food and Drug Administration (which has now been merged into the SAMR), promulgated the Administrative Measures on Internet Drug Information Service in July 2004, most recently amended in November 2017, and certain implementing rules and notices thereafter.
The proportion of Discretional Foreign Exchange Settlement of the foreign exchange capital of a PRC foreign-invested enterprise is temporarily determined to be 100%. SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16.
The proportion of Discretional Foreign Exchange Settlement of the foreign exchange capital of a PRC foreign-invested enterprise is temporarily determined to be 100%. 85 Table of Contents SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16.
This agreement will remain effective for a ten-year term and then be automatically renewed, unless Hangzhou Weimi gives Hangzhou Aimi a termination notice 90 days before the term ends. Agreements that provide us with the option to purchase the equity interests in the VIE Exclusive Option Agreement .
This agreement will remain effective for a ten-year term and then be automatically renewed, unless Hangzhou Weimi gives Hangzhou Aimi a termination notice 90 days before the term ends. 91 Table of Contents Agreements that provide us with the option to purchase the equity interests in the VIE Exclusive Option Agreement .
Pursuant to the amended and restated shareholders’ voting rights proxy agreement dated July 15, 2020, by and among Hangzhou Weimi, Hangzhou Aimi and the shareholders of Hangzhou Aimi, each shareholder of Hangzhou Aimi irrevocably authorized Hangzhou Weimi or any person(s) designated by Hangzhou Weimi to exercise such shareholder’s rights in Hangzhou Aimi, including without limitation, the power to participate in and vote at shareholder’s meetings, the power to nominate and appoint the directors, senior management, the power to sell or transfer such shareholder’s equity interest in Hangzhou Aimi, the power to propose to convene an extraordinary shareholders meeting, and other shareholders’ voting rights permitted by the Articles of Association of Hangzhou Aimi.
Pursuant to the amended and restated shareholders’ voting rights proxy agreement dated January 3, 2025, by and among Hangzhou Weimi, Hangzhou Aimi and the shareholders of Hangzhou Aimi, each shareholder of Hangzhou Aimi irrevocably authorized Hangzhou Weimi or any person(s) designated by Hangzhou Weimi to exercise such shareholder’s rights in Hangzhou Aimi, including without limitation, the power to participate in and vote at shareholder’s meetings, the power to nominate and appoint the directors, senior management, the power to sell or transfer such shareholder’s equity interest in Hangzhou Aimi, the power to propose to convene an extraordinary shareholders meeting, and other shareholders’ voting rights permitted by the Articles of Association of Hangzhou Aimi.
Due to our limited operating history, the seasonal trends that we have experienced in the past may not apply to, or be indicative of, our future operating results. Intellectual Property As of December 31, 2023, we had 144 registered computer software copyrights relating to various aspects of our operations.
Due to our limited operating history, the seasonal trends that we have experienced in the past may not apply to, or be indicative of, our future operating results. Intellectual Property As of December 31, 2024, we had 187 registered computer software copyrights relating to various aspects of our operations.
Import and Customs In the United States, Section 321 of the Tariff Act of 1930 provides for an administrative exemption from duty and taxes for shipments of merchandise (other than bona-fide gifts and certain personal and household goods) imported by one person on one day, so long as the aggregate fair retail value of the shipments in the country of shipment is less than a prescribed monetary value specified in the Tariff Act. 84 Table of Contents C.
Import and Customs In the United States, Section 321 of the Tariff Act of 1930 provides for an administrative exemption from duty and taxes for shipments of merchandise (other than bona-fide gifts and certain personal and household goods) imported by one person on one day, so long as the aggregate fair retail value of the shipments in the country of shipment is less than a prescribed de minimis monetary value specified in the Tariff Act.
Pursuant to the amended and restated equity pledge agreement dated July 15, 2020, by and among Hangzhou Weimi, Hangzhou Aimi and the shareholders of Hangzhou Aimi, the shareholders of Hangzhou Aimi pledged all of their equity interests in Hangzhou Aimi to Hangzhou Weimi to guarantee their and Hangzhou Aimi’s obligations under the contractual arrangements including the exclusive consulting and services agreement, the exclusive option agreement and the shareholders’ voting rights proxy agreement and this equity pledge agreement, as well as any loss incurred due to events of default defined therein and all expenses incurred by Hangzhou Weimi in enforcing such obligations of Hangzhou Aimi or its shareholders.
Pursuant to the amended and restated equity pledge agreement dated January 3, 2025, by and among Hangzhou Weimi, Hangzhou Aimi and the shareholders of Hangzhou Aimi, the shareholders of Hangzhou Aimi pledged all of their equity interests in Hangzhou Aimi to Hangzhou Weimi to guarantee their and Hangzhou Aimi’s obligations under the contractual arrangements including the exclusive consulting and services agreement, the exclusive option agreement and the shareholders’ voting rights proxy agreement and this equity pledge agreement, as well as any loss incurred due to events of default defined therein and all expenses incurred by Hangzhou Weimi in enforcing such obligations of Hangzhou Aimi or its shareholders.
The State Council, the MIIT, the Ministry of Commerce, the SAIC (which has now been merged into the SAMR), the former State Administration of Press, Publication, Radio, Film and Television (which has been replaced by the State Administration of Radio and Television), and other government authorities have promulgated an extensive regulatory scheme governing telecommunications, online sales and e-commerce.
The State Council, the MIIT, the Ministry of Commerce, the SAMR, the former State Administration of Press, Publication, Radio, Film and Television (which has been replaced by the State Administration of Radio and Television), and other government authorities have promulgated an extensive regulatory scheme governing telecommunications, online sales and e-commerce.
We continue to invest decisively in areas such as agri-tech, supply chain technology, and our core R&D capabilities. 65 Table of Contents Competition The e-commerce industry in which we compete is intensely competitive, and our platforms compete on a global scale with industry players such as (i) major e-commerce operators, (ii) major traditional and brick-and-mortar retailers, (iii) retail companies focused on specific product categories and (iv) major companies that do not operate an e-commerce business now but may enter the e-commerce industry or are in the process of initiating their e-commerce businesses.
We continue to invest decisively in areas such as agri-tech, supply chain technology, and our core R&D capabilities. 70 Table of Contents Competition The e-commerce industry in which we compete is intensely competitive, and our platforms compete on a global scale with industry players such as (i) major e-commerce operators, (ii) major traditional and brick-and-mortar retailers, (iii) retail companies focused on specific product categories, and (iv) major internet companies that do not operate e-commerce businesses now but are in the process of initiating their e-commerce businesses or may launch e-commerce businesses in the future.
Our back-end security systems are capable of withstanding a large number of cybersecurity attacks at any given time, enabling us to safeguard the security of our platforms and protect the privacy of our buyers and merchants.
Our back-end security systems are designed to be capable of withstanding a large number of cybersecurity attacks at any given time and designed to enable us to safeguard our platforms and protect the privacy of our buyers and merchants.
The Cybersecurity Law provides for various security protection obligations for network operators, which are defined as “owners and administrators of networks and network service providers.” In particular, network operators must, among other obligations, comply with requirements regarding the use of tiered cyber protection systems, verify users’ real identity, store personal data and important data gathered and produced by key information infrastructure operators within the PRC, and assist government authorities to the extent necessary for protecting national security and investigating crimes.
The Cybersecurity Law provides for various security protection obligations for network operators, which are defined as “owners and administrators of networks and network service providers.” In particular, network operators must, among other obligations, comply with requirements regarding the use of tiered cyber protection systems, verify users’ real identity, store personal data and important data gathered and produced by key information infrastructure operators within the PRC, and assist government authorities to the extent necessary for protecting national security and investigating crimes. 77 Table of Contents Critical information infrastructure operators are subject to specific cybersecurity regulations under PRC laws and regulations.
Risk Factors—Risks Related to Our Multi-Jurisdictional Operations—Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.” In addition, the State Administration of Taxation has issued certain circulars concerning employee share options or restricted shares.
Risk Factors—Risks Related to Doing Business in China—Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.” In addition, the State Administration of Taxation has issued certain circulars concerning employee share options or restricted shares.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “Item 4.
Risk Factors—Risks Related to Doing Business in China—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” and “Item 4.
Pursuant to the amended and restated exclusive option agreement dated July 15, 2020, by and among Hangzhou Weimi, Hangzhou Aimi and each of the shareholders of Hangzhou Aimi, each of the shareholders of Hangzhou Aimi irrevocably granted Hangzhou Weimi an exclusive call option to purchase, or have its designated person(s) to purchase, at its discretion, all or part of their equity interests in Hangzhou Aimi, and the purchase price shall be the lowest price permitted by applicable PRC law.
Pursuant to the amended and restated exclusive option agreement dated January 3, 2025, by and among Hangzhou Weimi, Hangzhou Aimi and the shareholders of Hangzhou Aimi, the shareholders of Hangzhou Aimi irrevocably granted Hangzhou Weimi an exclusive call option to purchase, or have its designated person(s) to purchase, at its discretion, all or part of their equity interests in Hangzhou Aimi, and the purchase price shall be the lowest price permitted by applicable PRC law.
As of the same date, we had approximately 2,349 trademark registrations and 964 trademark applications in China, the United States and other jurisdictions. Our registered domain names include www.pddholdings.com , www.pinduoduo.com and www.temu.com , among others.
As of the same date, we had approximately 2,667 trademark registrations and 1,019 trademark applications in China, the United States and other jurisdictions. Our registered domain names include www.pddholdings.com , www.pinduoduo.com and www.temu.com , among others .
Property, Plant and Equipment Our principal executive offices are located in Dublin, Ireland. We also maintain offices in North America, Asia and Europe. As of December 31, 2023, our main office facilities worldwide had an aggregate gross floor area of approximately 89,727 square meters.
Property, Plant and Equipment Our principal executive offices are located in Dublin, Ireland. We also maintain offices in North America, Asia and Europe. As of December 31, 2024, our main office facilities worldwide had an aggregate gross floor area of approximately 144,657 square meters.
Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands. Our agent for service of process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711.
Our registered office in the Cayman Islands is located at the offices of Vistra (Cayman) Limited, P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands. Our agent for service of process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711.
In terms of legal rights and duties, the Regulations on the Protection of Critical Information Infrastructure provide, among other things, that (i) no individual or organization may intrude into, interfere with, sabotage or endanger the security of critical information infrastructure; and (ii) critical information infrastructure operators must establish a cybersecurity protection system and accountability system, and the main responsible person of a critical information infrastructure operator must take full responsibility for protecting that operator’s critical information infrastructure. 72 Table of Contents PRC laws and regulations impose cybersecurity review obligations on critical information infrastructure operators and network platform operators.
In terms of legal rights and duties, the Regulations on the Protection of Critical Information Infrastructure provide, among other things, that (i) no individual or organization may intrude into, interfere with, sabotage or endanger the security of critical information infrastructure; and (ii) critical information infrastructure operators must establish a cybersecurity protection system and accountability system, and the main responsible person of a critical information infrastructure operator must take full responsibility for protecting that operator’s critical information infrastructure.
The CCPA and CPRA contain requirements regarding the handling of personal information of California consumers and households, including compliance and record keeping obligations, the right of individuals to request access to and deletion of their personal information, and the right to opt out of the sale and other uses of their personal information, and provides a private right of action and statutory damages for data breaches.
The CCPA and CPRA contain requirements regarding the handling of personal data of California consumers and households, including providing the right of individuals to request access to, correction of, and deletion of personal information, and the right to opt out of the sale and certain other uses of personal information, and provides a private right of action and statutory damages for data breaches.
Much of such legislation focuses on notification to data subjects and regulators in the event of a data breach, but as privacy becomes more of a focus for both regulators and the general public, many states have amended their original data-breach legislation to address a broader scope of personal information and to impose additional requirements on companies in the event of a data breach.
As data protection becomes more of a focus for both regulators and the general public, many states have amended their original data breach notification legislation to address a broader scope of personal data and to impose additional requirements on companies in the event of a data breach.
These contractual arrangements enable us to (i) direct the activities of the VIE and its subsidiaries; (ii) receive substantially all of the economic benefits of the VIE and its subsidiaries; and (iii) have an exclusive option to purchase all or part of the equity interests in and assets of the VIE when and to the extent permitted by PRC law. 85 Table of Contents Arrangements that enable us to direct the activities of the VIE and its subsidiaries Shareholders’ Voting Rights Proxy Agreement .
These contractual arrangements enable us to (i) direct the activities of the VIE and its subsidiaries; (ii) receive substantially all of the economic benefits of the VIE and its subsidiaries; and (iii) have an exclusive option to purchase all or part of the equity interests in and assets of the VIE when and to the extent permitted by PRC law.
As of December 31, 2023, we had a technology team of more than 7,300 engineers. Many of our engineers have post-graduate degrees and prior working experience in leading technology companies.
As of December 31, 2024, we had a technology team of more than 8,900 engineers. Many of our engineers have post-graduate degrees and prior working experience in leading technology companies.
In addition, a mainland China company is required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until its cumulative total reserve funds reaches 50% of its registered capital.
In addition, a mainland China company is required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until its cumulative total reserve funds reaches 50% of its registered capital. These reserve funds, however, may not be distributed as cash dividends.
Specifically, SAT Circular 37 provides that where the transfer income subject to withholding at source is derived by a non-resident enterprise in instalments, the instalments may first be treated as recovery of costs of previous investments.
Specifically, SAT Circular 37 provides that where the transfer income subject to withholding at source is derived by a non-resident enterprise in instalments, the instalments may first be treated as recovery of costs of previous investments. Upon recovery of all costs, the tax amount to be withheld must then be computed and withheld.
US$1,000 aggregate principal amount of the 2024 Notes were validly surrendered and repurchased.
US$1,000 aggregate principal amount of the 2024 Notes were validly surrendered and repurchased. The remaining principal amount matured on October 1, 2024.
These reserve funds, however, may not be distributed as cash dividends. 79 Table of Contents Regulations Relating to Foreign Exchange Regulations on Foreign Exchange Registration of Overseas Investment by mainland China Residents The Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE in and effective July 2014, regulates foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by mainland China residents or entities to seek investment and financing outside of mainland China and conduct round trip investment in mainland China.
Regulations Relating to Foreign Exchange Regulations on Foreign Exchange Registration of Overseas Investment by mainland China Residents The Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE in and effective July 2014, regulates foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by mainland China residents or entities to seek investment and financing outside of mainland China and conduct round trip investment in mainland China.
In particular, on August 17, 2021, the SAMR issued the Draft Provisions on the Prohibition of Unfair Competition on the Internet for public comment. These draft provisions prohibit business operators from using data, algorithms and other technical methods to hijack traffic or influence users’ choices, or use technical means to illegally capture or use other business operators’ data.
In particular, on May 6, 2024, the SAMR issued the Interim Provisions on the Prohibition of Unfair Competition on the Internet. These provisions prohibit business operators from using data, algorithms and other technical methods to hijack traffic or influence users’ choices, or use technical means to illegally capture or use other business operators’ data.
Due to restrictions imposed by PRC laws and regulations on foreign ownership of companies that engage in internet and other related business, Hangzhou Weimi entered into a series of contractual arrangements with Hangzhou Aimi, which we refer to as the VIE in this annual report, and its shareholders.
Subsequently, in 2022, we incorporated Whaleco Technology Limited under the laws of Ireland, and Whaleco Inc. under the laws of Delaware. 66 Table of Contents Due to restrictions imposed by PRC laws and regulations on foreign ownership of companies that engage in internet and other related business, Hangzhou Weimi entered into a series of contractual arrangements with Hangzhou Aimi, which we refer to as the VIE in this annual report, and its shareholders.
US$1,261,366,000 aggregate principal amount of the 2025 Notes was validly surrendered and repurchased. Our principal executive offices are located at First Floor, 25 St Stephen’s Green, Dublin 2, D02 XF99, Ireland. Our telephone number at this address is +353-1-5397938. Our registered office in the Cayman Islands is located at the offices of Vistra (Cayman) Limited, P.O.
As a result, a total of US$1,261,366,000 in principal amount of the 2025 Notes was validly surrendered and repurchased. Our principal executive offices are located at First Floor, 25 St Stephen’s Green, Dublin 2, D02 XF99, Ireland. Our telephone number at this address is +353-1-5397938.
State laws are changing rapidly as other states in the United States have adopted or are considering adopting similar laws. There is also discussion in Congress of a new comprehensive federal data protection law to which our U.S. operations would become subject if it were enacted. All U.S. states have enacted legislation that addresses certain aspects of data privacy.
State laws are changing rapidly as other states in the United States have adopted or are considering adopting similar laws. There has also been discussion in Congress of a new comprehensive federal data protection law to which our collection of U.S. personal data would likely become subject if it were enacted.
The CPSC may seek penalties for regulatory non-compliance under certain circumstances. 83 Table of Contents In the European Union, the Digital Services Act, which is known as the DSA, came into force on November 16, 2022. The majority of the substantive provisions took effect or will take effect between 2023 and 2024.
The CPSC may seek penalties for regulatory non-compliance under certain circumstances. 88 Table of Contents In the European Union, the Digital Services Act, which is known as the DSA, came into force on November 16, 2022 and took full effect on February 17, 2024.
These obligations are imposed by the Cybersecurity Review Measures and the Regulations on the Protection of Critical Information Infrastructure.
PRC laws and regulations impose cybersecurity review obligations on critical information infrastructure operators and network platform operators. These obligations are imposed by the Cybersecurity Review Measures and the Regulations on the Protection of Critical Information Infrastructure.
However, the interpretation and application of the regulations could change so that we may need to obtain the CSRC’s approval with respect to our previous or future offerings. The 2021 Negative List On December 27, 2021, the NDRC and the Ministry of Commerce jointly issued the 2021 Negative List, which became effective on January 1, 2022.
However, the interpretation and application of the regulations could change so that we may need to obtain the CSRC’s approval with respect to our previous or future offerings. The 2024 Negative List On September 6, 2024, the NDRC issued the 2024 Negative List, which became effective on November 1, 2024.
Individuals also have a right to compensation under these laws for financial or non-financial losses. Failure to comply with the EU GDPR or the UK GDPR can result in significant monetary penalties, regulatory investigations, reputational damage, orders to cease or change our data processing activities, enforcement notices, assessment notices (for a compulsory audit), or civil claims (including class actions).
Failure to comply with the EU GDPR or the UK GDPR can result in significant monetary penalties, regulatory investigations, reputational damage, orders to cease or change our data processing activities that are subject to the EU/UK GDPR, enforcement notices, assessment notices (for a compulsory audit), or civil claims (including class actions).
For example, mobile internet application operators may not prevent users from using the basic functions and services of their mobile apps solely because such users do not agree to provide their non-essential personal information. Under China’s Criminal Law, certain activities that infringe upon personal information privacy are criminal offenses.
For example, mobile internet application operators may not prevent users from using the basic functions and services of their mobile apps solely because such users do not agree to provide their non-essential personal information.
Business Overview PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. We aim to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from increased productivity and new opportunities.
Business Overview PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. We aim to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from increased productivity and new opportunities. 67 Table of Contents Our customers are third-party merchants who sell their products on our platforms.
Any organization or individual may file an application for settlement with the domain names dispute resolution institution or file a lawsuit in the people’s court in accordance with the law, if such organization or individual consider its/his legal rights and interests to be infringed by domain names registered or used by others.
Any organization or individual may file an application for settlement with the domain names dispute resolution institution or file a lawsuit in the people’s court in accordance with the law, if such organization or individual consider its/his legal rights and interests to be infringed by domain names registered or used by others. 82 Table of Contents Regulations Relating to Labor Protection in the PRC According to the Labor Law of the PRC, an employer must develop and improve its rules and regulations to safeguard the rights of its workers.
In November 2017, the People’s Bank of China published the Notice on Further Strengthening the Rectification of Payment Business Operation without a Certificate, on the investigation and administration of illegal offering of settlement services by financial institutions and third-party payment service providers to unlicensed entities.
Without approval from the People’s Bank of China, a non-bank institution or individual may not engage in payment business whether explicitly or in a disguised form. 81 Table of Contents In November 2017, the People’s Bank of China published the Notice on Further Strengthening the Rectification of Payment Business Operation without a Certificate, on the investigation and administration of illegal offering of settlement services by financial institutions and third-party payment service providers to unlicensed entities.
Contractual Arrangements with the VIE and Its Shareholders The following is a summary of the currently effective contractual arrangements by and among our wholly owned subsidiary, Hangzhou Weimi, the VIE and its shareholders.
(4) These entities provide services to users of Temu. 90 Table of Contents Contractual Arrangements with the VIE and Its Shareholders The following is a summary of the currently effective contractual arrangements by and among our wholly owned subsidiary, Hangzhou Weimi, the VIE and its shareholders.
Similarly, for data classified as important data, the Data Security Law requires the processors of such important data to regularly conduct risk assessments and submit the resultant risk assessment reports to regulators. 73 Table of Contents The Data Security Law imposes limitations on the cross-border transfer of data.
National core data is subject to more stringent regulatory control by central and local governments. Similarly, for data classified as important data, the Data Security Law requires the processors of such important data to regularly conduct risk assessments and submit the resultant risk assessment reports to regulators. The Data Security Law imposes limitations on the cross-border transfer of data.
Unless terminated by Hangzhou Weimi at its sole discretion, the exclusive option agreement will remain effective until all equity interests in Hangzhou Aimi held by the shareholders of Hangzhou Aimi and all assets of Hangzhou Aimi are transferred or assigned to Hangzhou Weimi or its designated representatives. 86 Table of Contents In the opinion of King & Wood Mallesons, our PRC legal counsel, (i) the structures of Hangzhou Weimi and Hangzhou Aimi are not in any violation of the PRC laws or regulations currently in effect; and (ii) the contractual arrangements among Hangzhou Weimi and Hangzhou Aimi and its shareholders governed by PRC law are legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws, and do not and will not result in any violation of the PRC laws or regulations currently in effect.
In the opinion of King & Wood Mallesons, our PRC legal counsel, (i) the structures of Hangzhou Weimi and Hangzhou Aimi are not in any violation of the PRC laws or regulations currently in effect; and (ii) the contractual arrangements among Hangzhou Weimi and Hangzhou Aimi and its shareholders governed by PRC law are legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws, and do not and will not result in any violation of the PRC laws or regulations currently in effect.
After products are listed, we continue to monitor and conduct semantic analysis on buyer reviews, the results of which are used to evaluate the associated merchant’s compliance with our policies.
After products are listed, we continue to monitor and conduct semantic analysis on buyer reviews, the results of which are used to evaluate the associated merchant’s compliance with our policies. If a merchant is found to have violated our policies, the merchant is required to compensate the buyers in accordance with that merchant’s service agreement.
We have completed the registration of the equity pledges with the relevant office of the SAIC in accordance with the PRC Property Rights Law. Spousal Consent Letter .
We have completed the registration of the equity pledges with the relevant office of the SAMR in accordance with the PRC Civil Code. Spousal Consent Letters .
Regulations Relating to Dividend Distributions The principal regulations governing the distribution of dividends paid by our mainland China subsidiaries include the PRC Company Law and the PRC Foreign Investment Law. Under these regulations, PRC foreign-invested enterprises in mainland China may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations.
Under these regulations, PRC foreign-invested enterprises in mainland China may pay dividends only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations.
It is prohibited to deceive or mislead users into clicking on or browsing an advertisement by using deceptive prompts about system or software updates, fake media control symbols, fake promises of rewards, or any other method that misleads users into clicking on or browsing advertisements. 75 Table of Contents Regulations Relating to Payment Services In April 2020, the People’s Bank of China amended the Administrative Measures for the Payment Services of Non-Financial Institutions.
It is prohibited to deceive or mislead users into clicking on or browsing an advertisement by using deceptive prompts about system or software updates, fake media control symbols, fake promises of rewards, or any other method that misleads users into clicking on or browsing advertisements.
If a merchant is found to have violated our policies, the merchant is required to compensate the buyers in accordance with that merchant’s service agreement.A merchant’s record of compliance may affect its sales volume. We invest in technical capabilities relating to keyword identification, filtering images, text and video recognition and a blacklisting mechanism.
A merchant’s record of compliance may affect its sales volume. We invest in technical capabilities relating to keyword identification, filtering images, text and video recognition and a blacklisting mechanism.
Once the infringement of patent is confirmed, the infringer shall, in accordance with the regulations, undertake to cease the infringement, take remedial action, and pay damages, etc. 76 Table of Contents Domain Name Pursuant to the Measures for the Administration of Internet Domain Names of China, “domain name” shall refer to the character mark of hierarchical structure, which identifies and locates a computer on the internet and corresponds to the internet protocol (IP) address of that computer.
Domain Name Pursuant to the Measures for the Administration of Internet Domain Names of China, “domain name” shall refer to the character mark of hierarchical structure, which identifies and locates a computer on the internet and corresponds to the internet protocol (IP) address of that computer.
In addition, e-commerce platform providers may be jointly and severally liable with sellers and manufacturers if they are aware or should be aware that any seller or manufacturer is using the online platform to infringe upon the lawful rights and interests of consumers and fail to take measures necessary to prevent or stop such activity. 74 Table of Contents The Civil Code of the PRC, effective January 1, 2021, also provides that if an online service provider is aware that an online user is committing infringing activities, such as selling counterfeit products, through its internet services and fails to take necessary measures, it shall be jointly liable with the said online user for such infringement.
The PRC Civil Code, effective January 1, 2021, also provides that if an online service provider is aware that an online user is committing infringing activities, such as selling counterfeit products, through its internet services and fails to take necessary measures, it shall be jointly liable with the said online user for such infringement.
Overview of Our Platforms The Pinduoduo Platform Founded in 2015, the Pinduoduo platform provides buyers with a comprehensive selection of value-for-money merchandise and fun and interactive shopping experiences.
Operating Results— Key Line Items and Specific Factors Affecting Our Results of Operations—Revenues” for a breakdown of our total revenues by category of activity for each of the last three financial years. Overview of Our Platforms The Pinduoduo Platform Founded in 2015, the Pinduoduo platform provides buyers with a comprehensive selection of value-for-money merchandise and fun and interactive shopping experiences.
Organizational Structure We conduct our businesses through a number of operating entities incorporated in jurisdictions across the globe. The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIE and its principal subsidiary, as of the date of this annual report: ​ (1) Mr. Lei Chen and Mr.
The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIE and its principal subsidiary, as of the date of this annual report: (1) Mr. Lei Chen and Mr. Jiazhen Zhao hold 86.6% and 13.4% equity interests in Hangzhou Aimi, respectively.
The Civil Code, promulgated in 2020, also provides specific provisions regarding the protection of personal information. Data Security On June 10, 2021, the Standing Committee of the National People’s Congress published the Data Security Law of the PRC, which took effect on September 1, 2021.
The PRC Civil Code, promulgated in 2020, also provides specific provisions regarding the protection of personal information.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

63 edited+5 added−16 removed66 unchanged
Biggest changeWe adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) on January 1, 2022, which simplified the accounting for convertible instruments by removing the separation models for convertible debt with cash conversion features and convertible instruments with a beneficial conversion feature. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Online marketing services and others 79,809,490 ​ 84.9 102,931,095 ​ 78.8 ​ 153,540,553 21,625,735 62.0 Transaction services ​ 14,140,449 ​ 15.1 ​ 27,626,494 ​ 21.2 ​ 94,098,652 ​ 13,253,518 ​ 38.0 Total revenues 93,949,939 ​ 100.0 130,557,589 ​ 100.0 ​ 247,639,205 34,879,253 100.0 Costs of revenues (1) (31,718,093) ​ (33.8) (31,462,298) ​ (24.1) ​ (91,723,577) (12,918,996) (37.0) Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing expenses (1) (44,801,720) ​ (47.7) (54,343,719) ​ (41.6) ​ (82,188,870) (11,576,060) (33.2) General and administrative expenses (1) (1,540,774) ​ (1.6) (3,964,935) ​ (3.0) ​ (4,075,622) (574,039) (1.7) Research and development expenses (1) (8,992,590) ​ (9.6) (10,384,716) ​ (8.0) ​ (10,952,374) (1,542,610) (4.4) Total operating expenses (55,335,084) ​ (58.9) (68,693,370) ​ (52.6) ​ (97,216,866) (13,692,709) (39.3) Operating profit 6,896,762 ​ 7.3 30,401,921 ​ 23.3 ​ 58,698,762 8,267,548 23.7 Other income/(expenses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest and investment income, net 3,061,662 ​ 3.3 3,997,100 ​ 3.1 ​ 10,238,080 ​ 1,442,003 ​ 4.1 Interest expenses (1,231,002) ​ (1.3) (51,655) ​ (0.0) ​ (43,987) (6,195) (0.0) Foreign exchange gain/(loss) 71,750 ​ 0.1 (149,710) ​ (0.1) ​ 35,721 5,031 0.0 Other income, net 656,255 ​ 0.7 2,221,358 ​ 1.7 ​ 2,952,579 415,862 1.2 Profit before income tax and share of results of equity investees 9,455,427 ​ 10.1 36,419,014 ​ 27.9 ​ 71,881,155 10,124,249 29.0 Income tax expenses (1,933,585) ​ (2.1) (4,725,667) ​ (3.6) ​ (11,849,904) (1,669,024) (4.8) Share of results of equity investees 246,828 ​ 0.3 (155,285) ​ (0.1) ​ (4,707) (663) (0.0) Net income 7,768,670 ​ 8.3 31,538,062 ​ 24.2 ​ 60,026,544 8,454,562 24.2 Note: (1) Share-based compensation expenses were allocated as follows: ​ 91 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Costs of revenues 26,624 ​ 33,788 ​ 132,470 18,658 Sales and marketing expenses 1,612,219 ​ 2,158,676 ​ 2,354,097 331,568 General and administrative expenses 792,421 ​ 3,004,327 ​ 2,289,272 322,437 Research and development expenses 2,343,466 ​ 2,521,574 ​ 2,302,955 324,364 Total 4,774,730 ​ 7,718,365 ​ 7,078,794 997,027 ​ Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues Our revenues, which consist of revenues from online marketing services and others, and transaction services, increased by 89.7% from RMB130,557.6 million in 2022 to RMB247,639.2 million (US$34,879.3 million) in 2023.
Biggest changeWe adopted ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) on January 1, 2024, which, among other things, improved reportable segment disclosure requirements through enhanced disclosures about significant segment expenses, and provided new segment disclosure requirements for entities with a single reportable segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Online marketing services and others 102,931,095 ​ 78.8 153,540,553 ​ 62.0 ​ 197,934,192 27,116,873 50.3 Transaction services ​ 27,626,494 ​ 21.2 ​ 94,098,652 ​ 38.0 ​ 195,901,905 ​ 26,838,451 ​ 49.7 Total revenues 130,557,589 ​ 100.0 247,639,205 ​ 100.0 ​ 393,836,097 53,955,324 100.0 Costs of revenues (1) (31,462,298) ​ (24.1) (91,723,577) ​ (37.0) ​ (153,900,374) (21,084,265) (39.1) Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing expenses (1) (54,343,719) ​ (41.6) (82,188,870) ​ (33.2) ​ (111,300,533) (15,248,111) (28.3) General and administrative expenses (1) (3,964,935) ​ (3.0) (4,075,622) ​ (1.7) ​ (7,552,967) (1,034,752) (1.9) Research and development expenses (1) (10,384,716) ​ (8.0) (10,952,374) ​ (4.4) ​ (12,659,361) (1,734,325) (3.2) Total operating expenses (68,693,370) ​ (52.6) (97,216,866) ​ (39.3) ​ (131,512,861) (18,017,188) (33.4) Operating profit 30,401,921 ​ 23.3 58,698,762 ​ 23.7 ​ 108,422,862 14,853,871 27.5 Other income/(expenses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest and investment income, net 3,997,100 ​ 3.1 10,238,080 ​ 4.1 ​ 20,553,493 ​ 2,815,817 ​ 5.2 Interest expenses (51,655) ​ (0.0) (43,987) ​ (0.0) ​ — — — Foreign exchange (loss)/gain (149,710) ​ (0.1) 35,721 ​ 0.0 ​ 587,866 80,537 0.1 Other income, net 2,221,358 ​ 1.7 2,952,579 ​ 1.2 ​ 3,119,847 427,417 0.8 Profit before income tax and share of results of equity investees 36,419,014 ​ 27.9 71,881,155 ​ 29.0 ​ 132,684,068 18,177,642 33.6 Income tax expenses (4,725,667) ​ (3.6) (11,849,904) ​ (4.8) ​ (20,266,781) (2,776,538) (5.1) Share of results of equity investees (155,285) ​ (0.1) (4,707) ​ (0.0) ​ 17,225 2,360 0.0 Net income 31,538,062 ​ 24.2 60,026,544 ​ 24.2 ​ 112,434,512 15,403,464 28.5 Note: 96 Table of Contents (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB RMB RMB US$ ​ ​ (in thousands) Costs of revenues 33,788 ​ 132,470 ​ 412,721 56,543 Sales and marketing expenses 2,158,676 ​ 2,354,097 ​ 2,216,792 303,699 General and administrative expenses 3,004,327 ​ 2,289,272 ​ 4,742,816 649,763 Research and development expenses 2,521,574 ​ 2,302,955 ​ 2,511,235 344,038 Total 7,718,365 ​ 7,078,794 ​ 9,883,564 1,354,043 ​ Year ended December 31, 2024 compared to year ended December 31, 2023 Revenues Our revenues, which consist of revenues from online marketing services and others, and transaction services, increased by 59.0% from RMB247,639.2 million in 2023 to RMB393,836.1 million (US$53,955.3 million) in 2024.
We are also subject to surcharges on value-added tax payments in accordance with PRC law. 90 Table of Contents Under PRC laws, a withholding tax rate of up to 10% will be applicable to dividends payable by mainland China companies to non-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-resident enterprises are incorporated.
We are also subject to surcharges on value-added tax payments in accordance with PRC law. 95 Table of Contents Under PRC laws, a withholding tax rate of up to 10% will be applicable to dividends payable by mainland China companies to non-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-resident enterprises are incorporated.
Our costs of revenues consist primarily of payment processing fees paid to third-party payment service providers, costs associated with the operation of our platforms and others, such as costs and expenses attributable to merchandise sales, fulfillment fees, merchant support services, bandwidth and server costs, amortizations, depreciation and maintenance costs, payroll, employee benefits and share-based compensation expenses, call center, surcharges and other expenses directly attributable to the online platform services.
Our costs of revenues consist primarily of payment processing fees paid to third-party payment service providers, costs associated with the operation of our platforms and others, such as costs and expenses attributable to fulfillment fees, merchant support services, bandwidth and server costs, amortizations, depreciation and maintenance costs, payroll, employee benefits and share-based compensation expenses, call center, surcharges and other expenses directly attributable to the online platform services.
Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates. 94 Table of Contents The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this annual report.
Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates. 99 Table of Contents The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this annual report.
When reviewing our financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgments and other uncertainties affecting the application of such policies, and (iii) the sensitivity of reported results to changes in conditions and assumptions. Revenue recognition Revenues are principally comprised of those generated from online platform services and merchandise sales.
When reviewing our financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgments and other uncertainties affecting the application of such policies, and (iii) the sensitivity of reported results to changes in conditions and assumptions. Revenue recognition Revenues are principally comprised of those generated from online platform services.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Risk Factors—Risks Related to Doing Business in China—We may rely on distributions and advances paid by our mainland China subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our mainland China subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Revenues from online marketing services and others increased from RMB102,931.1 million in 2022 to RMB153,540.6 million (US$21,625.7 million) in 2023, primarily attributable to interrelated factors, including our stronger brand and market position as a result of our branding campaigns, more active merchants offering a greater breadth of products and our continued focus on offering a wide selection of merchandise at attractive prices, as well as fun and interactive shopping experiences for consumers, which contributed to an increase in user engagement and activities.
Revenues from online marketing services and others increased from RMB102,931.1 million in 2022 to RMB153,540.6 million in 2023, primarily attributable to interrelated factors, including our stronger brand and market position as a result of our branding campaigns, more active merchants offering a greater breadth of products and our continued focus on offering a wide selection of merchandise at attractive prices, as well as fun and interactive shopping experiences for consumers, which contributed to an increase in user engagement and activities.
Liquidity and Capital Resources—Holding Company Structure.” In utilizing the proceeds we received from our initial public offerings, follow-on offerings, convertible senior notes offerings and private placements, we may make additional capital contributions to or make loans to our existing or new mainland China subsidiaries, or acquire entities with operations in mainland China in transactions consummated outside of mainland China.
Liquidity and Capital Resources—Holding Company Structure.” 101 Table of Contents In utilizing the proceeds we received from our initial public offerings, follow-on offerings, convertible senior notes offerings and private placements, we may make additional capital contributions to or make loans to our existing or new mainland China subsidiaries, or acquire entities with operations in mainland China in transactions consummated outside of mainland China.
The increases in accrued expenses and other liabilities and payable to merchants were primarily attributable to our business expansion and the increase of number of merchants on our platforms. The principal non-cash items affecting the difference between our net income and our net cash generated from operating activities in 2023 were RMB7,078.8 million (US$997.0 million) in share-based compensation expenses.
The increases in accrued expenses and other liabilities and payable to merchants were primarily attributable to our business expansion and the increase of number of merchants on our platforms. The principal non-cash items affecting the difference between our net income and our net cash generated from operating activities in 2023 were RMB7,078.8 million in share-based compensation expenses.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—PRC regulations on loans to and direct investment in mainland China entities may delay or prevent us from using the proceeds of any financing conducted outside of mainland China to make loans or additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” A majority of our future revenues are likely to continue to be in the form of Renminbi.
Risk Factors—Risks Related to Doing Business in China—PRC regulations on loans to and direct investment in mainland China entities may delay or prevent us from using the proceeds of any financing conducted outside of mainland China to make loans or additional capital contributions to our mainland China subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” A majority of our future revenues are likely to continue to be in the form of Renminbi.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F. A.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F. 92 Table of Contents A.
We believe this value proposition will make our platforms more attractive to merchants and further increase their sales and spending on our platforms. 88 Table of Contents Key Line Items and Specific Factors Affecting Our Results of Operations Revenues Under our current business model, we primarily generate revenues from online marketing services and transaction services.
We believe this value proposition will make our platforms more attractive to merchants and further increase their sales and spending on our platforms. Key Line Items and Specific Factors Affecting Our Results of Operations Revenues Under our current business model, we primarily generate revenues from online marketing services and transaction services.
Risk Factors—Risks Related to Our Multi-jurisdictional Operations—If we are classified as a mainland China resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amount and as a percentage of our revenues for the periods presented.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amount and as a percentage of our revenues for the periods presented.
While our business is influenced by general factors affecting our industry, our results of operations are more directly affected by certain company specific factors, including: 87 Table of Contents Our ability to further enhance buyer and merchant engagement on our platforms Our key ecosystem partners are the buyers and merchants who transact on our platforms.
While our business is influenced by general factors affecting our industry, our results of operations are more directly affected by certain company specific factors, including: Our ability to further enhance buyer and merchant engagement on our platforms Our key ecosystem partners are the buyers and merchants who transact on our platforms.
If we have determined that incentives provided to the consumers are not considered as payments to the merchant-customers, we record these incentives as marketing expenses. 95 Table of Contents Income taxes We follow the liability method of accounting for income taxes in accordance with ASC 740 (“ASC 740”), Income Taxes .
If we have determined that incentives provided to the consumers are not considered as payments to the merchant-customers, we record these incentives as marketing expenses. Income taxes We follow the liability method of accounting for income taxes in accordance with ASC 740 (“ASC 740”), Income Taxes.
Revenues from transaction services increased from RMB27,626.5 million in 2022 to RMB94,098.7 million (US$13,253.5 million) in 2023, primarily due to the increase in average transaction services revenues per active merchant and the increase in the number of active merchants on our platforms. Average transaction services revenues per active merchant increased from RMB2,125 in 2022 to RMB6,627 in 2023.
Revenues from transaction services increased from RMB27,626.5 million in 2022 to RMB94,098.7 million in 2023, primarily due to the increase in average transaction services revenues per active merchant and the increase in the number of active merchants on our platforms. Average transaction services revenues per active merchant increased from RMB2,125 in 2022 to RMB6,627 in 2023.
Other income, net . We had other net income of RMB2,952.6 million (US$415.9 million) in 2023, compared to other net income of RMB2,221.4 million in 2022, primarily due to the increase in the amount of subsidies received, such as tax refunds and other non-operating income items.
We had other net income of RMB2,952.6 million in 2023, compared to other net income of RMB2,221.4 million in 2022, primarily due to the increase in the amount of subsidies received, such as tax refunds and other non-operating income items.
Our sales and marketing expenses increased from RMB54,343.7 million in 2022 to RMB82,188.9 million (US$11,576.1 million) in 2023, primarily attributable to the increase of RMB26,457.4 million in advertising expenses and promotion and coupon expenses, which was focused on promoting our brands and driving user growth and engagement on our platforms. General and administrative expenses .
Our sales and marketing expenses increased from RMB54,343.7 million in 2022 to RMB82,188.9 million in 2023, primarily attributable to the increase of RMB26,457.4 million in advertising expenses and promotion and coupon expenses, which was focused on promoting our brands and driving user growth and engagement on our platforms. General and administrative expenses .
The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. We accounted for uncertainties in income taxes in accordance with ASC 740.
The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. 100 Table of Contents We accounted for uncertainties in income taxes in accordance with ASC 740.
Income tax expenses We had income tax expenses of RMB11,849.9 million (US$1,669.0 million) in 2023, compared to RMB4,725.7 million in 2022, primarily due to the increased profit before income tax expenses. Share of results of equity investees We had share of losses of equity investees of RMB4.7 million (US$0.7 million) in 2023, compared to RMB155.3 million in 2022.
Income tax expenses We had income tax expenses of RMB11,849.9 million in 2023, compared to RMB4,725.7 million in 2022, primarily due to the increased profit before income tax expenses. Share of results of equity investees We had share of losses of equity investees of RMB4.7 million in 2023, compared to RMB155.3 million in 2022.
We had net interest and investment income of RMB3,997.1 million in 2022 and RMB10,238.1 million (US$1,442.0 million) in 2023. The increase was primarily attributable to the increase of our time deposits and debt securities. Interest expenses . We had interest expenses of RMB44.0 million (US$6.2 million) in 2023, compared to interest expenses of RMB51.7 million in 2022.
We had net interest and investment income of RMB3,997.1 million in 2022 and RMB10,238.1 million in 2023. The increase was primarily attributable to the increase of our time deposits and debt securities. Interest expenses . We had interest expenses of RMB44.0 million in 2023, compared to interest expenses of RMB51.7 million in 2022. Other income, net .
Operating profit As a result of the foregoing, we recorded operating profit of RMB58,698.8 million (US$8,267.5 million) in 2023, compared to operating profit of RMB30,401.9 million in 2022. 92 Table of Contents Other income/(expenses) Interest and investment income, net . Net interest and investment income mainly represents interest earned on demand deposits, time deposits and debt securities.
Operating profit As a result of the foregoing, we recorded operating profit of RMB58,698.8 million in 2023, compared to operating profit of RMB30,401.9 million in 2022. Other income/(expenses) Interest and investment income, net . Net interest and investment income mainly represents interest earned on demand deposits, time deposits and debt securities.
The difference was primarily due to an increase of RMB34,258.2 million (US$4,825.2 million) in accrued expenses and other liabilities and an increase of RMB11,623.1 million (US$1,637.1 million) in payable to merchants, partially offset by an increase of RMB13,857.0 million (US$1,951.7 million) in short-term investments and an increase of RMB3,326.4 million (US$468.5 million) in receivables from online payment platforms.
The difference was primarily due to an increase of RMB34,258.2 million in accrued expenses and other liabilities and an increase of RMB11,623.1 million in payable to merchants, partially offset by an increase of RMB13,857.0 million in short-term investments and an increase of RMB3,326.4 million in receivables from online payment platforms.
Net income As a result of the foregoing, we had net income of RMB60,026.5 million (US$8,454.6 million) in 2023, compared to RMB31,538.1 million in 2022.
Net income As a result of the foregoing, we had net income of RMB60,026.5 million in 2023, compared to RMB31,538.1 million in 2022.
The outstanding 2024 Notes will mature on October 1, 2024. In October 2023, we offered to repurchase the 2025 Notes, as required under the terms of the notes. On this occasion, US$1,261,366,000 aggregate principal amount was validly surrendered and repurchased. The outstanding 2025 Notes will mature on December 1, 2025.
The outstanding 2024 Notes matured on October 1, 2024. In October 2023, we offered to repurchase the 2025 Notes, as required under the terms of the notes. A total of US$1,261,366,000 in principal amount of the 2025 Notes was validly surrendered and repurchased. The outstanding 2025 Notes will mature on December 1, 2025.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2023 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Each of Shanghai Xunmeng and Walnut Shanghai was recognized as a “high and new technology enterprise” and is eligible for a preferential corporate income tax rate of 15% until 2023. Xinzhijiang is also eligible for a preferential corporate income tax rate of 15% until 2025.
Each of Shanghai Xunmeng and Walnut Shanghai has been recognized as a “high and new technology enterprise” and is eligible for a preferential corporate income tax rate of 15% until 2026. Xinzhijiang is also eligible for a preferential corporate income tax rate of 15% until 2025.
Our general and administrative expenses amounted to RMB4,075.6 million (US$574.0 million) in 2023, compared to RMB3,964.9 million in 2022. Research and development expenses . Our research and development expenses amounted to RMB10,952.4 million (US$1,542.6 million) in 2023, compared to RMB10,384.7 million in 2022.
Our general and administrative expenses amounted to RMB4,075.6 million in 2023, compared to RMB3,964.9 million in 2022. Research and development expenses . Our research and development expenses amounted to RMB10,952.4 million in 2023, compared to RMB10,384.7 million in 2022.
As of the same date, we had restricted cash of RMB61,985.4 million (US$8,730.5 million), mainly representing cash received from buyers and reserved in a bank supervised account for payments to merchants. In September 2022, we offered to repurchase the 2024 Notes, as required under the terms of the notes. Only US$1,000 aggregate principal amount was validly surrendered and repurchased.
As of the same date, we had restricted cash of RMB68,426.4 million (US$9,374.4 million), mainly representing cash received from buyers and reserved in a bank supervised account for payments to merchants. In September 2022, we offered to repurchase the 2024 Notes, as required under the terms of the notes. US$1,000 aggregate principal amount was validly surrendered and repurchased.
Remittance of dividends by our PRC wholly foreign owned enterprises is subject to examination by the banks designated by SAFE. Our mainland China subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Research and Development, Patents and Licenses, etc. See “Item 4.
Remittance of dividends by our PRC wholly foreign owned enterprises is subject to examination by the banks designated by SAFE. Our mainland China subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. 103 Table of Contents C.
We have not entered into contractual arrangements that support the credit, liquidity or market risk for transferred assets.
We do not have retained or contingent interests in assets transferred. We have not entered into contractual arrangements that support the credit, liquidity or market risk for transferred assets.
Operating expenses Our total operating expenses increased by 41.5% from RMB68,693.4 million in 2022 to RMB97,216.9 million (US$13,692.7 million) in 2023, primarily due to the increases in sales and marketing expenses. Sales and marketing expenses .
Operating expenses Our total operating expenses increased by 41.5% from RMB68,693.4 million in 2022 to RMB97,216.9 million in 2023, primarily due to the increases in sales and marketing expenses. 98 Table of Contents Sales and marketing expenses .
Please see “convertible bonds” under Note 11 to our audited consolidated financial statements. As of December 31, 2023, the aggregate amount of payments due under our convertible bonds obligations amounted to RMB5,880.1 million (US$828.2 million). Our operating lease commitments mainly represent our obligations for leasing offices and warehouses, which include all future cash outflows under ASC Topic 842, Leases.
As of December 31, 2024, the aggregate amount of payments due under our convertible bonds obligations amounted to RMB5,309.6 million (US$727.4 million). Our operating lease commitments mainly represent our obligations for leasing offices and warehouses, which include all future cash outflows under ASC Topic 842, Leases. Please see “Leases” under Note 7 to our audited consolidated financial statements.
Revenues from online marketing services and others increased from RMB79,809.5 million in 2021 to RMB102,931.1 million in 2022, primarily attributable to interrelated factors, including our stronger brand and market position as a result of our branding campaigns, more active merchants offering a greater breadth of products and our continued focus on offering a wide selection of merchandise at attractive prices, as well as fun and interactive shopping experiences for consumers, which contributed to an increase in user engagement and activities.
Revenues from online marketing services and others increased from RMB153,540.6 million in 2023 to RMB197,934.2 million (US$27,116.9 million) in 2024, primarily attributable to interrelated factors, including our stronger brand and market position as a result of our branding campaigns, more active merchants offering a greater breadth of products and our continued focus on offering a wide selection of merchandise at attractive prices, as well as fun and interactive shopping experiences for consumers, which contributed to an increase in user engagement and activities.
Net cash used in investing activities in 2022 was RMB22,361.7 million, primarily due to purchase of short-term time deposits, held to maturities and other investments of RMB160,414.5 million, purchase of long-term time deposits, held to maturities and other investments of RMB6,795.8 million and purchases of available-for-sale investments of RMB3,581.9 million, partially offset by proceeds from sales of short-term time deposits, held to maturities and other investments of RMB141,928.4 million and proceeds from sales of long-term time deposits, held to maturities and other investments of RMB7,137.8 million.
Net cash used in investing activities in 2023 was RMB55,431.3 million, primarily due to purchase of short-term time deposits, held to maturities and other investments of RMB147,131.7 million, purchase of long-term time deposits, held to maturities and other investments of RMB25,051.2 million and purchase of available-for-sale debt securities of RMB17,318.3 million, partially offset by proceeds from sales of short-term time deposits, held to maturities and other investments of RMB130,317.2 million. 102 Table of Contents Net cash used in investing activities in 2022 was RMB22,361.7 million, primarily due to purchase of short-term time deposits, held to maturities and other investments of RMB160,414.5 million, purchase of long-term time deposits, held to maturities and other investments of RMB6,795.8 million and purchases of available-for-sale investments of RMB3,581.9 million, partially offset by proceeds from sales of short-term time deposits, held to maturities and other investments of RMB141,928.4 million and proceeds from sales of long-term time deposits, held to maturities and other investments of RMB7,137.8 million.
Incentives provided to the consumers In order to promote our online platforms and attract more registered consumers who are not our customers, we at our own discretion provide various forms of incentives.
Adjustments to the estimated variable consideration related to prior reporting periods were not material. Incentives provided to the consumers In order to promote our online platforms and attract more registered consumers who are not our customers, we at our own discretion provide various forms of incentives.
Financing activities Net cash used in financing activities in 2023 was RMB8,960.6 million (US$1,262.1 million), primarily attributable to repurchase of convertible bonds of RMB8,968.8 (US$1,263.2 million). Net cash generated from financing activities in 2022 was RMB10.1 million. Net cash used in financing activities in 2021 was RMB1,875.2 million, primarily attributable to the repayment of short-term borrowings.
Financing activities Net cash generated from financing activities in 2024 was RMB1.2 million (US$0.2 million). Net cash used in financing activities in 2023 was RMB8,960.6 million, primarily attributable to repurchase of convertible bonds of RMB8,968.8 million. Net cash generated from financing activities in 2022 was RMB10.1 million.
The principal non-cash items affecting the difference between our net income and our net cash generated from operating activities in 2022 were RMB7,718.4 million in share-based compensation expenses and RMB2,224.2 million in depreciation and amortization. Net cash generated from operating activities in 2021 was RMB28,783.0 million, as compared to net income of RMB7,768.7 million in the same period.
The principal non-cash items affecting the difference between our net income and our net cash generated from operating activities in 2022 were RMB7,718.4 million in share-based compensation expenses and RMB2,224.2 million in depreciation and amortization.
Year ended December 31, 2022 compared to year ended December 31, 2021 Revenues Our revenues, which consist of revenues from online marketing services and others, and transaction services, increased by 39.0% from RMB93,949.9 million in 2021 to RMB130,557.6 million in 2022.
Year ended December 31, 2023 compared to year ended December 31, 2022 Revenues Our revenues, which consist of revenues from online marketing services and others, and transaction services, increased by 89.7% from RMB130,557.6 million in 2022 to RMB247,639.2 million in 2023.
Costs of revenues The following table sets forth the components of our costs of revenues by amounts and percentages of costs of revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Costs of revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment processing fees (3,108,086) ​ 9.8 (3,450,929) ​ 11.0 ​ (6,824,386) (961,195) 7.4 Costs associated with the operation of our platforms and others (28,610,007) ​ 90.2 (28,011,369) ​ 89.0 ​ (84,899,191) (11,957,801) 92.6 Total costs of revenues (31,718,093) ​ 100.0 (31,462,298) ​ 100.0 ​ (91,723,577) (12,918,996) 100.0 ​ Costs of revenues consist primarily of payment processing fees paid to third-party payment service providers, costs associated with the operation of our platforms and others, such as costs and expenses attributable to merchandise sales, fulfillment fees, merchant support services, bandwidth and server costs, amortization, depreciation and maintenance costs, payroll, employee benefits, share-based compensation expenses, call center, surcharges and other expenses directly attributable to the online platform services. 89 Table of Contents Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing expenses (44,801,720) ​ 80.9 (54,343,719) ​ 79.1 ​ (82,188,870) (11,576,060) 84.5 General and administrative expenses (1,540,774) ​ 2.8 (3,964,935) ​ 5.8 ​ (4,075,622) (574,039) 4.2 Research and development expenses (8,992,590) ​ 16.3 (10,384,716) ​ 15.1 ​ (10,952,374) (1,542,610) 11.3 Total operating expenses (55,335,084) ​ 100.0 (68,693,370) ​ 100.0 ​ (97,216,866) (13,692,709) 100.0 ​ Sales and marketing expenses .
Costs of revenues The following table sets forth the components of our costs of revenues by amounts and percentages of costs of revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Costs of revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment processing fees (3,450,929) ​ 11.0 (6,824,386) ​ 7.4 ​ (11,355,177) (1,555,653) 7.4 Costs associated with the operation of our platforms and others (28,011,369) ​ 89.0 (84,899,191) ​ 92.6 ​ (142,545,197) (19,528,612) 92.6 Total costs of revenues (31,462,298) ​ 100.0 (91,723,577) ​ 100.0 ​ (153,900,374) (21,084,265) 100.0 ​ Costs of revenues consist primarily of payment processing fees paid to third-party payment service providers, costs associated with the operation of our platforms and others, such as costs and expenses attributable to fulfillment fees, merchant support services, bandwidth and server costs, amortization, depreciation and maintenance costs, payroll, employee benefits, share-based compensation expenses, call center, surcharges and other expenses directly attributable to the online platform services. 94 Table of Contents Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing expenses (54,343,719) ​ 79.1 (82,188,870) ​ 84.5 ​ (111,300,533) (15,248,111) 84.7 General and administrative expenses (3,964,935) ​ 5.8 (4,075,622) ​ 4.2 ​ (7,552,967) (1,034,752) 5.7 Research and development expenses (10,384,716) ​ 15.1 (10,952,374) ​ 11.3 ​ (12,659,361) (1,734,325) 9.6 Total operating expenses (68,693,370) ​ 100.0 (97,216,866) ​ 100.0 ​ (131,512,861) (18,017,188) 100.0 ​ Sales and marketing expenses .
Information on the Company—B. Business Overview—Technology” and “—Intellectual Property.” D.
Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Technology” and “—Intellectual Property.” D.
The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in an increase in fixed obligations and could result in operating covenants that would restrict our operations.
The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in an increase in fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
Costs of revenues Our costs of revenues increased from RMB31,462.3 million in 2022 to RMB91,723.6 million (US$12,919.0 million) in 2023, primarily attributable to the increase in fulfillment fees, payment processing fees, maintenance costs, and call center expenses.
Our merchant-customers are attracted to our platforms by the plentiful sales opportunities on our platforms and the value of the transaction services we provide. Costs of revenues Our costs of revenues increased from RMB31,462.3 million in 2022 to RMB91,723.6 million in 2023, primarily attributable to the increase in fulfillment fees, payment processing fees, maintenance costs, and call center expenses.
Please see “Leases” under Note 8 to our audited consolidated financial statements. As of December 31, 2023, the aggregate amount of payments due under our operating lease commitments amounted to RMB4,528.9 million (US$637.9 million). Our investment commitments primarily relate to capital contributions obligation under certain arrangement which does not have contractual maturity date.
As of December 31, 2024, the aggregate amount of payments due under our operating lease commitments amounted to RMB5,599.4 million (US$767.1 million). Our investment commitments primarily relate to capital contributions obligation under certain arrangement which does not have contractual maturity date. As of December 31, 2024, the aggregate amount of our investment commitments amounted to RMB115.2 million (US$15.8 million).
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ ​ ​ ​ ​ ​ ​ Net cash generated from operating activities 28,783,011 ​ 48,507,860 ​ 94,162,531 13,262,515 Net cash used in investing activities (35,562,365) ​ (22,361,670) ​ (55,431,278) (7,807,332) Net cash (used in)/generated from financing activities (1,875,154) ​ 10,079 ​ (8,960,626) (1,262,078) Exchange rate effect on cash, cash equivalents and restricted cash (145,157) ​ 100,177 ​ (291,139) (41,006) (Decrease)/increase in cash, cash equivalents and restricted cash (8,799,665) ​ 26,256,446 ​ 29,479,488 4,152,099 Cash, cash equivalents and restricted cash at beginning of the year 74,843,636 ​ 66,043,971 ​ 92,300,417 13,000,242 Cash, cash equivalents and restricted cash at end of the year 66,043,971 ​ 92,300,417 ​ 121,779,905 17,152,341 ​ We had net cash generated from operating activities of RMB28,783.0 million, RMB48,507.9 million and RMB94,162.5 million (US$13,262.5 million) in 2021, 2022 and 2023, respectively.
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB RMB RMB US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ ​ ​ ​ ​ ​ ​ Net cash generated from operating activities 48,507,860 ​ 94,162,531 ​ 121,929,292 16,704,245 Net cash used in investing activities (22,361,670) ​ (55,431,278) ​ (118,356,036) (16,214,711) Net cash generated from/ (used in) financing activities 10,079 ​ (8,960,626) ​ 1,164 159 Exchange rate effect on cash, cash equivalents and restricted cash 100,177 ​ (291,139) ​ 840,096 115,093 Increase in cash, cash equivalents and restricted cash 26,256,446 ​ 29,479,488 ​ 4,414,516 604,786 Cash, cash equivalents and restricted cash at beginning of the year 66,043,971 ​ 92,300,417 ​ 121,779,905 16,683,779 Cash, cash equivalents and restricted cash at end of the year 92,300,417 ​ 121,779,905 ​ 126,194,421 17,288,565 ​ We had net cash generated from operating activities of RMB48,507.9 million, RMB94,162.5 million and RMB121,929.3 million (US$16,704.2 million) in 2022, 2023 and 2024, respectively.
Average transaction services revenues per active merchant increased from RMB1,230 in 2021 to RMB2,125 in 2022, as a result of the growth of our merchants’ businesses and the increase in merchant demand for more value-added services driven by the increased diversity of transactions placed under different consumption scenarios and product categories on our platforms.
The increase reflects the growth of our merchants’ businesses and the increase in merchant demand for more value-added services driven by the growing diversity of transactions placed under different consumption scenarios and product categories on our platforms. The number of our active merchants increased from 14.2 million in 2023 to 15.8 million in 2024.
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Online marketing services and others ​ 79,809,490 ​ 84.9 102,931,095 ​ 78.8 ​ 153,540,553 21,625,735 62.0 Transaction services ​ 14,140,449 ​ 15.1 27,626,494 ​ 21.2 ​ 94,098,652 13,253,518 38.0 Total revenues 93,949,939 ​ 100.0 130,557,589 ​ 100.0 ​ 247,639,205 34,879,253 100.0 ​ Online marketing services and others .
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Online marketing services and others ​ 102,931,095 ​ 78.8 153,540,553 ​ 62.0 ​ 197,934,192 27,116,873 50.3 Transaction services ​ 27,626,494 ​ 21.2 94,098,652 ​ 38.0 ​ 195,901,905 26,838,451 49.7 Total revenues 130,557,589 ​ 100.0 247,639,205 ​ 100.0 ​ 393,836,097 53,955,324 100.0 ​ Online marketing services and others .
As of December 31, 2023, our cash and cash equivalents were RMB59,794.5 million (US$8,421.9 million). Our cash and cash equivalents primarily consist of cash at banks and other highly liquid investments.
As of December 31, 2024, our cash and cash equivalents were RMB57,768.1 million (US$7,914.2 million). Our cash and cash equivalents primarily consist of cash at banks and other highly liquid investments.
Material cash requirements Our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include our capital expenditures, convertible bonds obligations, operating lease commitments and investment commitments.
Material cash requirements Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our capital expenditures, convertible bonds obligations, operating lease commitments and investment commitments. Our capital expenditures are primarily incurred for purchases of computer equipment relating to the operation of our platforms, furniture, office equipment, leasehold improvements and software.
We will continue to make cash commitments, including capital expenditures, to meet the expected growth of our business. 98 Table of Contents We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We do not have retained or contingent interests in assets transferred.
We intend to fund our future capital expenditures with anticipated cash flows from operations, our existing cash balance and short-term investments. We will continue to make cash commitments, including capital expenditures, to meet the expected growth of our business. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
We believe our business model has significant operating leverage and enables us to realize structural cost savings. We achieve economies of scale in our operation as a wider selection of merchandise attracts and retains a larger number of buyers, which in turn drives an increase in our scale and attracts more merchants to our platforms.
We achieve economies of scale in our operation as a wider selection of merchandise attracts and retains a larger number of buyers, which in turn drives an increase in our scale and attracts more merchants to our platforms. In addition, our scale creates value for our merchants by providing an effective channel for selling large volumes of products.
Our sales and marketing expenses increased from RMB44,801.7 million in 2021 to RMB54,343.7 million in 2022 and further to RMB82,188.9 million (US$11,576.1 million) in 2023, while sales and marketing expenses as a percentage of our revenues decreased from 47.7% in 2021 to 41.6% in 2022, and further decreased to 33.2% in 2023.
Our sales and marketing expenses increased from RMB54,343.7 million in 2022 to RMB82,188.9 million in 2023 and further to RMB111,300.5 million (US$15,248.1 million) in 2024, while sales and marketing expenses as a percentage of our revenues decreased from 41.6% in 2022 to 33.2% in 2023 and further decreased to 28.3% in 2024. 93 Table of Contents We believe our business model has significant operating leverage and enables us to realize structural cost savings.
Operating activities Net cash generated from operating activities in 2023 was RMB94,162.5 million (US$13,262.5 million), as compared to net income of RMB60,026.5 million (US$8,454.6 million) in the same period.
The increases in accrued expenses and other liabilities and payable to merchants were primarily attributable to our business expansion and the increase of number of merchants on our platforms. Net cash generated from operating activities in 2023 was RMB94,162.5 million, as compared to net income of RMB60,026.5 million in the same period.
Revenues from transaction services increased from RMB14,140.4 million in 2021 to RMB27,626.5 million in 2022, primarily due to the increase in the number of active merchants on our platforms and the increase in average transaction services revenues per active merchant. The number of our active merchants increased from 11.5 million in 2021 to 13.0 million in 2022.
Revenues from transaction services increased from RMB94,098.7 million in 2023 to RMB195,901.9 million (US$26,838.5 million) in 2024, primarily due to the increase in average transaction services revenues per active merchant and the increase in the number of active merchants on our platforms. Average transaction services revenues per active merchant increased from RMB6,627 in 2023 to RMB12,399 (US$1,699) in 2024.
Net cash used in investing activities in 2021 was RMB35,562.4 million, primarily due to purchase of short - term time deposits, held to maturities and other investments of RMB116,639.6 million, purchase of long - term time deposits, held to maturities and other investments of RMB13,628.1 million, and purchase of property, equipment, software and intangible assets of RMB3,287.2 million, partially offset by proceeds from sales of short - term time deposits, held to maturities and other investments of RMB97,547.0 million.
Investing activities Net cash used in investing activities in 2024 was RMB118,356.0 million (US$16,214.7 million), primarily due to purchase of short-term time deposits, held to maturities and other investments of RMB210,272.8 million (US$28,807.3 million), purchase of long-term time deposits, held to maturities and other investments of RMB43,847.0 million (US$6,007.0 million) and purchase of available-for-sale debt securities of RMB13,733.0 million (US$1,881.4 million), partially offset by proceeds from sales of short-term time deposits, held to maturities and other investments of RMB147,287.7 million (US$20,178.3 million).
Our merchant-customers are attracted to our platforms by the plentiful sales opportunities on our platforms and the value of the transaction services we provide.
Our merchant-customers are attracted to our platforms by the plentiful sales opportunities on our platforms and the value of the transaction services we provide. Costs of revenues Our costs of revenues increased from RMB91,723.6 million in 2023 to RMB153,900.4 million (US$21,084.3 million) in 2024, primarily attributable to the increase in fulfillment fees and payment processing fees.
Our sales and marketing expenses increased from RMB44,801.7 million in 2021 to RMB54,343.7 million in 2022, primarily attributable to the increase of RMB8,514.6 million in advertising expenses and promotion and coupon expenses, which was focused on building our brand awareness and driving user growth and engagement on our platforms. General and administrative expenses .
Our sales and marketing expenses increased from RMB82,188.9 million in 2023 to RMB111,300.5 million (US$15,248.1 million) in 2024, primarily attributable to an increase of RMB27,888.8 million in advertising expenses and promotion and coupon expenses, which were focused on promoting our brands and driving user growth and engagement on our platforms. General and administrative expenses .
Operating profit As a result of the foregoing, we recorded operating profit of RMB30,401.9 million in 2022, compared to operating profit of RMB6,896.8 million in 2021. Other income/(expenses) Interest and investment income, net . Net interest and investment income mainly represents interest earned on demand deposits, time deposits and wealth management products in financial institutions.
Operating profit As a result of the foregoing, we recorded operating profit of RMB108,422.9 million (US$14,853.9 million) in 2024, compared to RMB58,698.8 million in 2023. 97 Table of Contents Other income/(expenses) Interest and investment income, net . Net interest and investment income mainly represents interest earned on short-term investments and debt investments included in other non-current assets.
Operating expenses Our total operating expenses increased by 24.1% from RMB55,335.1 million in 2021 to RMB68,693.4 million in 2022 primarily due to the increases in sales and marketing expenses and general and administrative expenses. 93 Table of Contents Sales and marketing expenses .
Operating expenses Our total operating expenses increased by 35.3% from RMB97,216.9 million in 2023 to RMB131,512.9 million (US$18,017.2 million) in 2024, primarily due to the increases in sales and marketing expenses. Sales and marketing expenses .
We had net interest and investment income of RMB3,061.7 million and RMB3,997.1 million in 2021 and 2022, respectively. The increase was primarily attributable to the increase of our time deposits and wealth management products. Interest expenses .
Our net interest and investment income increased from RMB10,238.1 million in 2023 to RMB20,553.5 million (US$2,815.8 million) in 2024. The increase was primarily attributable to the increase of our short-term investments. Interest expenses . We had interest expenses of nil in 2024, compared to interest expenses of RMB44.0 million in 2023. Other income, net .
The difference was primarily due to the increase of RMB8,686.5 million in payable to merchants, an increase of RMB2,651.2 million in merchant deposits, an increase of RMB3,492.0 million in accrued expenses and other liabilities, and a decrease of RMB1,744.6 million in prepayments and other current assets, partially offset by a decrease of RMB1,422.9 million in amounts due to related parties and a decrease of RMB1,256.4 million in customer advances and deferred revenues.
The difference was primarily due to an increase of RMB13,781.2 million (US$1,888.0 million) in accrued expenses and other liabilities and an increase of RMB16,885.2 million (US$2,313.3 million) in payable to merchants, partially offset by an increase of RMB21,356.7 million (US$2,925.9 million) in short-term investments.
Net income As a result of the foregoing, we had net income of RMB31,538.1 million in 2022, compared to RMB7,768.7 million in 2021.
Share of results of equity investees We had share of profits of equity investees of RMB17.2 million (US$2.4 million) in 2024, compared to share of losses of RMB4.7 million in 2023. Net income As a result of the foregoing, we had net income of RMB112,434.5 million (US$15,403.5 million) in 2024, compared to RMB60,026.5 million in 2023.
Our capital expenditures are primarily incurred for purchases of computer equipment relating to the operation of our platforms, furniture, office equipment and leasehold improvement for our office facilities and software. Our capital expenditures were RMB3,287.2 million in 2021, RMB635.7 million in 2022, and RMB583.9 million (US$82.2 million) in 2023. Our convertible bonds obligations represent our principal payments.
Our capital expenditures were RMB635.7 million in 2022, RMB583.9 million in 2023, and RMB967.1 million (US$132.5 million) in 2024. Our convertible bonds obligations represent our principal payments. Please see “convertible bonds” under Note 10 to our audited consolidated financial statements.
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In addition, our scale creates value for our merchants by providing an effective channel for selling large volumes of products.
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We adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) on January 1, 2022, which simplified the accounting for convertible instruments by removing the separation models for convertible debt with cash conversion features and convertible instruments with a beneficial conversion feature.
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The increase was partially offset by a decrease in revenues derived from merchandise sales, which decreased from RMB7,246.1 million in 2021 to RMB209.2 million in 2022, as we scaled down this aspect of our business.
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Our general and administrative expenses amounted to RMB7,553.0 million (US$1,034.8 million) in 2024, compared to RMB4,075.6 million in 2023, primarily due to an increase in staff-related costs. Research and development expenses . Our research and development expenses amounted to RMB12,659.4 million (US$1,734.3 million) in 2024, compared to RMB10,952.4 million in 2023.
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Costs of revenues Our costs of revenues amounted to RMB31,462.3 million in 2022, which remained relatively stable compared to our costs of revenues of RMB31,718.1 million in 2021.
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We had other net income of RMB3,119.8 million (US$427.4 million) in 2024, compared to RMB2,952.6 million in 2023. Income tax expenses We had income tax expenses of RMB20,266.8 million (US$2,776.5 million) in 2024, compared to RMB11,849.9 million in 2023, primarily due to the increased profit before income tax expenses.
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Our general and administrative expenses increased from RMB1,540.8 million in 2021 to RMB3,964.9 million in 2022. The increase was primarily attributable to the increase in staff related costs. Research and development expenses .
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As of December 31, 2024, we had a total of RMB172,162.8 million (US$23,586.2 million) in cash and cash equivalents, restricted cash and short-term investments held in China. The VIE and its subsidiaries held a total of RMB120,127.4 million (US$16,457.4 million) in cash and cash equivalents, restricted cash and short-term investments, which were denominated in Renminbi.
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Our research and development expenses increased from RMB8,992.6 million in 2021 to RMB10,384.7 million in 2022, primarily due to the increase of RMB1,064.4 million in staff related costs. The increase in staff costs was primarily attributable to the increase in headcount for our research and development personnel, as we hired additional experienced research and development personnel.
Added
Operating activities Net cash generated from operating activities in 2024 was RMB121,929.3 million (US$16,704.2 million), as compared to net income of RMB112,434.5 million (US$15,403.5 million) in the same period.
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We had interest expenses of RMB51.7 million in 2022, compared to interest expenses of RMB1,231.0 million in 2021, primarily due to the decrease of RMB1,170.2 million in interest expenses related to the convertible bonds’ amortization to face value. Other income, net .
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We had other net income of RMB2,221.4 million in 2022, compared to other net income of RMB656.3 million in 2021, primarily due to the increase in the amount of subsidies received, such as tax refunds and other non-operating income items.
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Income tax expenses We had income tax expenses of RMB4,725.7 million in 2022, compared to RMB1,933.6 million in 2021, primarily due to the increased profit before income tax expenses. Share of results of equity investees We had share of losses of equity investees of RMB155.3 million in 2022, compared to share of profits of RMB246.8 million in 2021.
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Adjustments to the estimated variable consideration related to prior reporting periods were not material. Merchandise sales In certain cases, we acquire merchandise from suppliers and sell directly to the customers.
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We act as a principal as we obtain control of the merchandise, are primarily obligated for the merchandise sold to the customers, bear inventory risks and have latitude in establishing prices.
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Revenues from merchandise sales are recorded on a gross basis, net of discounts and return allowances when the product is delivered and title is passed to customers in this type of transaction. Proceeds received in advance of customer acceptance are recorded as current liabilities in customer advances and deferred revenues.
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We also raised approximately US$1.7 billion from the initial public offering of our ADSs in July 2018, US$1.2 billion from a follow-on offering of our ADSs in February 2019, US$1.0 billion from the offering of the 2024 Notes in September 2019, US$1.1 billion from a private placement in April 2020, US$2.0 billion from the offering of the 2025 Notes and US$4.1 billion from a concurrent follow-on offering of our ADSs in November 2020, and US$500 million from a private placement in December 2020.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeThe following table summarizes, as of December 31, 2023, the number of Class A ordinary shares under outstanding options, restricted share units and other equity awards that we granted to our directors and executive officers, excluding awards that were forfeited or cancelled after their grant dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class A ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Equity Awards ​ Exercise Price ​ ​ ​ ​ Name Granted (US$/Share) Date of Grant Date of Expiration Lei Chen ​ * Nominal Various dates between September 1, 2016 and November 1, 2023 Various dates between August 31, 2036 and October 31, 2043 Jiazhen Zhao ​ * ​ Nominal ​ Various dates between February 1, 2016 and December 1, 2023 ​ Various dates between January 31, 2036 and November 30, 2043 George Yong-Boon Yeo ​ * ​ Nominal ​ Various dates between February 1, 2019 and August 1, 2023 ​ Not applicable Anthony Kam Ping Leung ​ * ​ Nominal ​ Various dates between March 1, 2020 and September 1, 2023 ​ Not applicable Junyun Xiao ​ * Nominal November 1, 2015 and September 1, 2016 October 31, 2035 and August 31, 2036 Zhenwei Zheng ​ * ​ Nominal ​ Various dates between November 1, 2015 and March 1, 2022 ​ Various dates between October 31, 2035 and February 28,2039 Jun Liu ​ * ​ Nominal ​ Various dates between September 1, 2018 and May 1, 2023 ​ Various dates between August 31, 2038 and April 30, 2043 All directors and executive officers as a group ​ 118,866,968 ​ Nominal ​ Various dates between November 1, 2015 and December 1, 2023 ​ Various dates between October 31, 2035 and November 30, 2043 * Less than 1% of our total ordinary shares outstanding.
Biggest changeHowever, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient. 109 Table of Contents The following table summarizes, as of December 31, 2024, the number of Class A ordinary shares under outstanding options, restricted share units and other equity awards that we granted to our directors and executive officers, excluding awards that were forfeited or cancelled after their grant dates. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class A ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Equity Awards ​ Exercise Price ​ ​ ​ ​ Name Granted (US$/Share) Date of Grant Date of Expiration Lei Chen ​ * Nominal Various dates between September 1, 2016 and November 1, 2023 Various dates between August 31, 2036 and October 31, 2043 Jiazhen Zhao ​ * ​ Nominal ​ Various dates between February 1, 2016 and May 1, 2024 ​ Various dates between January 31, 2036 and April 30, 2044 George Yong-Boon Yeo ​ * ​ Nominal ​ Various dates between February 1, 2019 and August 1, 2024 ​ Not applicable Anthony Kam Ping Leung ​ * ​ Nominal ​ Various dates between March 1, 2020 and September 1, 2024 ​ Not applicable Junyun Xiao ​ * Nominal November 1, 2015 and September 1, 2016 October 31, 2035 and August 31, 2036 Zhenwei Zheng ​ * ​ Nominal ​ Various dates between November 1, 2015 and March 1, 2024 ​ Various dates between October 31, 2035 and February 29, 2044 Jun Liu ​ * ​ Nominal ​ Various dates between September 1, 2018 and May 1, 2024 ​ Various dates between August 31, 2038 and April 30, 2044 Ivonne M.C.M.
Pursuant to our currently effective articles of association, our board of directors shall consist of not less than three but not more than nine directors, and shall include (i) two executive directors, if there are no more than five directors, and (ii) three executive directors, if there are more than five but no more than nine directors.
Pursuant to our currently effective articles of association, our board of directors shall consist of not less than three but not more than nine directors, and shall include (i) two executive directors, if there are no more than five directors, and (ii) three executive directors, if there are more than five but no more than nine directors.
Previously, she served as the chairperson of the Dutch Society for Toxicology from 1999 to 2005, a member of the Academic Board at Wageningen University from 2012 to 2017, and a member of the Supervisory Board of Royal Wessanen BV.
Previously, she served as the chairperson of the Dutch Society for Toxicology from 1999 to 2005, as a member of the Academic Board at Wageningen University from 2012 to 2017, and as a member of the Supervisory Board of Royal Wessanen BV from 2012 to 2019.
Anthony Kam Ping Leung, Dr. Ivonne M.C.M. Rietjens and Mr. George Yong-Boon Yeo. Mr. Anthony Kam Ping Leung is the chairman of our audit committee. We have determined that Mr. Anthony Kam Ping Leung, Dr. Ivonne M.C.M. Rietjens and Mr.
Our audit committee consists of Mr. Anthony Kam Ping Leung, Dr. Ivonne M.C.M. Rietjens and Mr. George Yong-Boon Yeo. Mr. Anthony Kam Ping Leung is the chairman of our audit committee. We have determined that Mr. Anthony Kam Ping Leung, Dr. Ivonne M.C.M. Rietjens and Mr.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regard to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regard to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regard to characteristics such as independence, knowledge, skills, experience and diversity; 111 Table of Contents ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and ● advising the board periodically with regard to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The compensation committee is responsible for, among other things: ● reviewing and approving, or participating in the approval by the board of, the aggregate compensation for our co-chief executive officers and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors, including by reviewing and approving any proposed changes thereto; ● reviewing our incentive compensation or equity plans, programs or similar arrangements, including by reviewing and approving any proposed changes thereto; and 106 Table of Contents ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The compensation committee is responsible for, among other things: ● reviewing and approving, or participating in the approval by the board of, the aggregate compensation for our co-chief executive officers and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors, including by reviewing and approving any proposed changes thereto; ● reviewing our incentive compensation or equity plans, programs or similar arrangements, including by reviewing and approving any proposed changes thereto; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
Kam served as the chief financial officer of HSBC Bank (Singapore) Limited (“HSBC Singapore”) from September 2005 to May 2013. In addition to financial accounting and control, management accounting and tax responsibilities, Mr. Kam had direct oversight on specific risk management functions such as treasury product control and asset & liabilities management. Mr.
Prior to that, Mr. Kam served as the chief financial officer of HSBC Bank (Singapore) Limited (“HSBC Singapore”) from September 2005 to May 2013. In addition to financial accounting and control, management accounting and tax responsibilities, Mr. Kam had direct oversight on specific risk management functions such as treasury product control and asset & liabilities management. Mr.
Compensation In the year ended December 31, 2023, we paid an aggregate of US$2.3 million in cash to our directors and executive officers as a group. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Compensation In the year ended December 31, 2024, we paid an aggregate of US$2.3 million in cash to our directors and executive officers as a group. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Awards may not be transferred in any manner by the recipient other than in accordance with the exceptions provided in the 2018 Plan, such as transfers by will or the laws of descent and distribution. Termination and amendment of the 2018 plan. Unless terminated earlier, the 2018 Plan has a term of ten years.
Transfer restrictions . Awards may not be transferred in any manner by the recipient other than in accordance with the exceptions provided in the 2018 Plan, such as transfers by will or the laws of descent and distribution. Termination and amendment of the 2018 plan . Unless terminated earlier, the 2018 Plan has a term of ten years.
For a discussion about our accounting policies and estimates for awards granted pursuant to the 2015 Plan and 2018 Plan, see Item 17 of Part III, “Financial Statements—Note 2—Summary of significant accounting policies—(v) Share-based compensation.” C. Board Practices Board of Directors Our board of directors consists of six directors.
For a discussion about our accounting policies and estimates for awards granted pursuant to the 2015 Plan and 2018 Plan, see Item 17 of Part III, “Financial Statements—Note 2—Summary of significant accounting policies—(s) Share-based compensation.” C. Board Practices Board of Directors Our board of directors consists of six directors.
She was also an active member of several committees on food and occupational safety, including panels and working groups of the European Food Safety Authority and the Dutch Health Council. From 2013 to 2021, she was a member of the Scientific Advisory Board of the National Institute of Public Health & Hygiene (RIVM). Dr.
She was also an active member of several committees on food and occupational safety, including panels and working groups of the European Food Safety Authority from 2003 to 2014 and the Dutch Health Council. From 2013 to 2021, she was a member of the Scientific Advisory Board of the National Institute of Public Health & Hygiene (RIVM). Dr.
Directors and Senior Management—PDD Partnership.” The office of a director will be vacated if the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his or her office by notice in writing to us; (iv) without special leave of absence from the board of directors, is absent from meetings of the board of directors for four consecutive meetings and the board of directors resolves that his office be vacated; or (v) is removed from office pursuant to the provisions of our memorandum and articles of association.
Directors and Senior Management—PDD Partnership.” The office of a director will be vacated if the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his or her office by notice in writing to us; (iv) without special leave of absence from the board of directors, is absent from meetings of the board of directors for four consecutive meetings and the board of directors resolves that his office be vacated; or (v) is removed from office pursuant to the provisions of our memorandum and articles of association. 112 Table of Contents D.
The PDD Partnership will be operated under principles, policies and procedures that evolve with our business and encompass the following major aspects: 99 Table of Contents Nomination and Election of Partners Partners will be elected annually through a nomination process, whereby any existing partner may propose candidates to the partnership committee (the “Partnership Committee”), which reviews the nomination and proposes candidates to the entire partnership for election.
The PDD Partnership will be operated under principles, policies and procedures that evolve with our business and encompass the following major aspects: Nomination and Election of Partners Partners will be elected annually through a nomination process, whereby any existing partner may propose candidates to the partnership committee (the “Partnership Committee”), which reviews the nomination and proposes candidates to the entire partnership for election.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 105 Table of Contents Committees of the Board of Directors As a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq corporate governance listing standards.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors As a Cayman Islands exempted company listed on the Nasdaq Stock Market, we are subject to the Nasdaq corporate governance listing standards.
Prior to joining our company, Mr. Zheng served as chief executive officer of Xinyoudi Studio since 2011. Prior to that, he held various positions at Baidu (Nasdaq: BIDU) from 2008 to 2010. Mr. Zheng received his bachelor’s degree and master’s degree in computer science from Zhejiang University. B.
Zheng served as chief executive officer of Xinyoudi Studio since 2011. Prior to that, he held various positions at Baidu (Nasdaq: BIDU) from 2008 to 2010. Mr. Zheng received his bachelor’s degree and master’s degree in computer science from Zhejiang University. B.
We may grant awards to our employees, directors and consultants of our company. Vesting schedule . In general, the plan administrator determines the vesting schedule, which is specified in the award agreement. Exercise of options . The plan administrator determines the exercise price for each award, which is stated in the award agreement.
We may grant awards to our employees, directors and consultants of our company. Vesting schedule . In general, the plan administrator determines the vesting schedule, which is specified in the award agreement. 108 Table of Contents Exercise of options . The plan administrator determines the exercise price for each award, which is stated in the award agreement.
Prior to that, he was a member of the founding team of Ouku.com and served as operation manager from 2007 to 2010. 102 Table of Contents Zhenwei Zheng is a founding member of our company and has served as our senior vice president of product development since 2016, and our director from April 2018 to July 2018.
Prior to that, he was a member of the founding team of Ouku.com and served as operation manager from 2007 to 2010. Zhenwei Zheng is a founding member of our company and has served as our senior vice president of product development since 2016, and our director from April 2018 to July 2018. Prior to joining our company, Mr.
However, we currently intend to comply with the rules of the Nasdaq in lieu of following home country practice. We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Mr.
However, we currently intend to comply with the rules of the Nasdaq in lieu of following home country practice. We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. Each committee’s members and functions are described below. 110 Table of Contents Audit Committee .
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Class A ordinary shares as of February 29, 2024 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5% of our total outstanding ordinary shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our Class A ordinary shares as of March 31, 2025 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own more than 5% of our total outstanding ordinary shares.
Rietjens 65 Independent Director George Yong-Boon Yeo 69 Independent Director Jun Liu ​ 41 ​ Vice President of Finance Junyun Xiao ​ 44 ​ Senior Vice President of Operation Zhenwei Zheng 40 Senior Vice President of Product Development ​ Lei Chen is a founding member of our company and has served as our chairman of the board of directors since March 2021 and co-chief executive officer since April 2023.
Rietjens 66 Independent Director George Yong-Boon Yeo 70 Independent Director Jun Liu ​ 42 ​ Vice President of Finance Junyun Xiao ​ 45 ​ Senior Vice President of Operation Zhenwei Zheng 41 Senior Vice President of Product Development ​ Lei Chen is a founding member of our company and has served as our chairman of the board of directors since March 2021 and co-chief executive officer since April 2023.
Partnership Committee The Partnership Committee will be the primary management body of the PDD Partnership. The Partnership Committee must consist of no more than five partners, and all decisions of the Partnership Committee will be made by majority vote of the members.
The Partnership Committee must consist of no more than five partners, and all decisions of the Partnership Committee will be made by majority vote of the members.
Our directors shall serve and hold office until expiry of his or her terms or until such time as they are removed from office by ordinary resolutions of the shareholders.
Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors. Our directors shall serve and hold office until expiry of his or her terms or until such time as they are removed from office by ordinary resolutions of the shareholders.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register. 107 Table of Contents Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
Retired partners upon meeting certain requirements may be designated as honorary partners by the Partnership Committee. Honorary partners may not act as partner, but may be entitled to allocations from the deferred portion of the bonus pool. Amendment of Partnership Agreement Pursuant to the partnership agreement, amendment of the partnership agreement requires the approval of 75% of the partners.
Retired partners upon meeting certain requirements may be designated as honorary partners by the Partnership Committee. Honorary partners may not act as partner, but may be entitled to allocations from the deferred portion of the bonus pool.
Such appointment of the executive directors to the board shall become effective immediately upon the delivery by the PDD Partnership of a written notice to us, without the requirement for any further resolution, vote or approval by the shareholders or the board. Mr.
Such appointment of the executive directors to the board shall become effective immediately upon the delivery by the PDD Partnership of a written notice to us, without the requirement for any further resolution, vote or approval by the shareholders or the board. Mr. Lei Chen is an executive director of our company.
Rietjens ​ — — George Yong-Boon Yeo ​ * * Jun Liu ​ * ​ * ​ Junyun Xiao ​ * * Zhenwei Zheng ​ * * All Directors and Executive Officers as a Group ​ 62,225,417 1.1 ​ Principal Shareholders: ​ ​ ​ Entities affiliated with Zheng Huang (1) ​ 1,409,744,080 25.4 Entities affiliated with Tencent (2) ​ 783,468,116 14.1 Entities affiliated with PDD Partnership (3) ​ 370,772,220 ​ 6.7 ​ Notes: 109 Table of Contents * Less than 1% of our total outstanding shares. ** Beneficial ownership information disclosed herein represents direct and indirect holdings of entities owned, controlled or otherwise affiliated with the applicable holder as determined in accordance with the rules and regulations of the SEC.
Rietjens ​ — — George Yong-Boon Yeo ​ * * Jun Liu ​ * ​ * Junyun Xiao ​ * * Zhenwei Zheng ​ * * All Directors and Executive Officers as a Group ​ 76,640,788 1.3 Principal Shareholders: ​ ​ ​ Entities affiliated with Zheng Huang (1) ​ 1,409,744,080 24.8 Entities affiliated with Tencent (2) ​ 783,468,116 13.8 Entities affiliated with PDD Partnership (3) ​ 370,772,220 ​ 6.5 Notes: * Less than 1% of our total outstanding shares. ** Beneficial ownership information disclosed herein represents direct and indirect holdings of entities owned, controlled or otherwise affiliated with the applicable holder as determined in accordance with the rules and regulations of the SEC.
The PDD Partnership’s major rights and functions, such as its right to appoint the executive director to our board and CEO nomination right, will not become effective until the PDD Partnership consists of no less than five limited partners (the “Partnership Condition”). Currently, such rights and functions have yet to come into effect.
The PDD Partnership’s major rights and functions, such as its right to appoint the executive director to our board and CEO nomination right, will not become effective until the PDD Partnership consists of no less than five limited partners (the “Partnership Condition”). Currently, there are fewer than five limited partners in the PDD Partnership.
She currently serves as the chairperson of the Expert Panel of the Flavor and Extract Manufacturers Association (FEMA) of the United States advising on GRAS (Generally Recognized As Safe) notifications for new food flavors and is an elected member of the French Academy of Agriculture.
She has been a member since 2005 and is currently the chairperson of the Expert Panel of the Flavor and Extract Manufacturers Association (FEMA) of the United States, advising on GRAS (Generally Recognized As Safe) notifications for new food flavors, and was an elected member of the French Academy of Agriculture in 2018.
She is also a board member of Skal Biocontrole, an independent organization that supervises and certifies the organic food chain in the Netherlands, and a member of the Fonterra Global Food Safety Science Advisory Panel.
Since 2020, she has been a board member of Skal Biocontrole, an independent organization that supervises and certifies the organic food chain in the Netherlands, and since 2023, a member of the Fonterra Global Food Safety Science Advisory Panel.
Our PRC subsidiaries, the VIE and its subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her medical insurance, maternity insurance, workplace injury insurance, unemployment insurance, pension benefits through a PRC government-mandated multi-employer defined contribution plan and other statutory benefits.
Our PRC subsidiaries, the VIE and its subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her medical insurance, maternity insurance, workplace injury insurance, unemployment insurance, pension benefits through a PRC government-mandated multi-employer defined contribution plan and other statutory benefits. 107 Table of Contents Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Liu served as our director of finance from 2017 to 2021. Prior to joining our company, Ms. Liu served as the director of finance at xiaohongshu.com and an associate director of finance at Light-In-The-Box Limited. From 2005 to 2013, she was an associate and then manager at PricewaterhouseCoopers Consultants (Shenzhen) Limited. Ms.
Prior to joining our company, Ms. Liu served as the director of finance at xiaohongshu.com and an associate director of finance at Light-In-The-Box Limited. From 2005 to 2013, she was an associate and then manager at PricewaterhouseCoopers Consultants (Shenzhen) Limited. Ms. Liu received her bachelor’s degree in economics from Zhongnan University of Economics and Law.
Rietjens received her bachelor’s and master’s degrees in molecular life sciences from Wageningen University and her Ph.D. degree in toxicology from Wageningen University. George Yong-Boon Yeo has served as our independent director and chairman of our nominating and corporate governance committee since July 2018. Mr. Yeo is also a member of our audit committee and compensation committee.
Rietjens received her bachelor’s and master’s degrees in molecular life sciences from Wageningen University and her Ph.D. degree in toxicology from Wageningen University. In 2024, she received the EUROTOX Merit Award. George Yong-Boon Yeo has served as our independent director and chairman of our nominating and corporate governance committee since July 2018. Mr.
Yeo graduated with an MBA (Baker Scholar) from the Harvard Business School in 1985. He was appointed Chief-of-Staff of the Air Staff from 1985 to 1986 and Director of Joint Operations and Planning in the Defence Ministry from 1985 to 1988, attaining the rank of Brigadier-General. Jun Liu has served as our vice president of finance since January 2022. Ms.
He was appointed Chief-of-Staff of the Air Staff from 1985 to 1986 and Director of Joint Operations and Planning in the Defence Ministry from 1985 to 1988, attaining the rank of Brigadier-General. Jun Liu has served as our vice president of finance since January 2022. Ms. Liu served as our director of finance from 2017 to 2021.
Liu received her bachelor’s degree in economics from Zhongnan University of Economics and Law. Junyun Xiao is a founding member of our company and has served as our senior vice president of operation since 2016 and our director from April 2018 to July 2018. Prior to joining our company, Mr. Xiao served as operation director of Xinyoudi Studio since 2011.
Junyun Xiao is a founding member of our company and has served as our senior vice president of operation since 2016 and our director from April 2018 to July 2018. Prior to joining our company, Mr. Xiao served as operation director of Xinyoudi Studio since 2011.
Lin received his bachelor’s degree in engineering from Zhejiang University in June 1997 and his master’s degree in business administration from the Wharton School of the University of Pennsylvania in May 2003. Ivonne M.C.M. Rietjens has served as our independent director since August 2023. Dr. Rietjens is also a member of our audit committee and nominating and corporate governance committee.
Lin received his bachelor’s degree in engineering from Zhejiang University in June 1997 and his master’s degree in business administration from the Wharton School of the University of Pennsylvania in May 2003. 106 Table of Contents Ivonne M.C.M. Rietjens has served as our independent director since August 2023. Dr.
As of December 31, 2023, options to purchase 165,410,224 Class A ordinary shares under the 2015 Plan had been granted and were outstanding under the 2015 plan. The following paragraphs describe the principal terms of the 2015 Plan. Types of awards . The 2015 Plan permits the awards of options or restricted shares. 103 Table of Contents Plan administration .
As of December 31, 2024, options to purchase 149,720,108 Class A ordinary shares under the 2015 Plan had been granted and were outstanding under the 2015 plan. The following paragraphs describe the principal terms of the 2015 Plan. Types of awards . The 2015 Plan permits the awards of options or restricted shares. Plan administration .
Zhao has held several leadership roles across our company. He started our Duo Duo Grocery business and led the operations of a few key product categories in the Pinduoduo platform, including agriculture. He also led our supply chain efforts. Mr.
Zhao has held several leadership roles across our company. He started our Duo Duo Grocery business and led the operations of a few key product categories in the Pinduoduo platform, including agriculture. He also led our supply chain efforts. Mr. Zhao received his bachelor’s degree in e-commerce management from South China University of Technology.
The vested portion of option will expire if not exercised prior to the time as the administration committee determines at the time of its grant. However, the maximum exercisable term is twenty years from the date of a grant. Transfer restrictions .
Exercise of options . The administration committee determines the exercise price for each award, which is stated in the award agreement. The vested portion of option will expire if not exercised prior to the time as the administration committee determines at the time of its grant. However, the maximum exercisable term is twenty years from the date of a grant.
We may grant awards to our employees, directors and consultants of our company. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule .
We may grant awards to our employees, directors and consultants of our company. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule . In general, the administration committee determines the vesting schedule, which is specified in the award agreement.
He currently serves as a Visiting Scholar at the Lee Kuan Yew School of Public Policy of the National University of Singapore, an independent non – executive director of AIA Group Limited (HKEx: 01299) and an independent non-executive director of Creative Technology Ltd. (SGX: C76). Prior to that, Mr.
Yeo is also a member of our audit committee and compensation committee. He currently serves as a Visiting Scholar at the Lee Kuan Yew School of Public Policy of the National University of Singapore, an independent non-executive director of AIA Group Limited (HKEx: 01299), an independent non-executive director of Creative Technology Ltd.
Kam served as the deputy chief executive officer and the executive director of HSBC Bank (China) Company Limited (“HSBC China”) from February 2016 to April 2018 and served as the chief financial officer of HSBC China from May 2013 to February 2016. Prior to that, Mr.
Kam also serves as an independent director of OCBC Bank Ltd. in China since September 2021. Mr. Kam served as the deputy chief executive officer and the executive director of HSBC Bank (China) Company Limited (“HSBC China”) from February 2016 to April 2018 and served as the chief financial officer of HSBC China from May 2013 to February 2016.
As of December 31, 2023, options to purchase 250,035,408 Class A ordinary shares and restricted share units representing 88,462,616 Class A ordinary shares had been granted and were outstanding under the 2018 Plan.The following paragraphs describe the principal terms of the 2018 Plan. Types of awards .
As of December 31, 2024, options to purchase 240,702,416 Class A ordinary shares and restricted share units representing 67,741,348 Class A ordinary shares had been granted and were outstanding under the 2018 Plan. The following paragraphs describe the principal terms of the 2018 Plan. Types of awards .
Prior to each election that takes place once every three years, the Partnership Committee will nominate a number of partners equal to the number of Partnership Committee members plus three additional nominees. After voting, all except the three nominees who receive the least votes from the partners are elected to the Partnership Committee.
Prior to each election that takes place once every three years, the Partnership Committee will nominate a number of partners equal to the number of Partnership Committee members plus three additional nominees.
Directors and Executive Officers The following table sets forth information regarding our directors and executive officers as of the date of this annual report. ​ ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Lei Chen 44 Chairman of the Board of Directors and Co-Chief Executive Officer Jiazhen Zhao ​ 40 ​ Director and Co-Chief Executive Officer Anthony Kam Ping Leung ​ 63 ​ Independent Director Haifeng Lin 47 Director Ivonne M.C.M.
Amendment of Partnership Agreement Pursuant to the partnership agreement, amendment of the partnership agreement requires the approval of 75% of the partners. 105 Table of Contents Directors and Executive Officers The following table sets forth information regarding our directors and executive officers as of the date of this annual report. ​ ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Lei Chen 45 Chairman of the Board of Directors and Co-Chief Executive Officer Jiazhen Zhao ​ 41 ​ Director and Co-Chief Executive Officer Anthony Kam Ping Leung ​ 64 ​ Independent Director Haifeng Lin 48 Director Ivonne M.C.M.
Lei Chen is an executive director of our company. 100 Table of Contents The chief executive officer candidate nominated by the PDD Partnership shall stand for appointment by the nominating and corporate governance committee of the board of directors.
The chief executive officer candidate nominated by the PDD Partnership shall stand for appointment by the nominating and corporate governance committee of the board of directors.
As of December 31, 2023, our employees other than our directors and executive officers as a group held options to purchase 300,266,508 Class A ordinary shares, with nominal exercise prices, and restricted share units representing 84,774,772 Class A ordinary shares.
As of December 31, 2024, our employees other than our directors and executive officers as a group held options to purchase 272,843,400 Class A ordinary shares, with nominal exercise prices, and restricted share units representing 67,662,868 Class A ordinary shares.
The calculations in the table below are based on 5,555,082,460 Class A ordinary shares and no Class B ordinary Shares outstanding as of February 29, 2024. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 5,678,585,848 Class A ordinary shares and no Class B ordinary Shares outstanding as of March 31, 2025. 113 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Qubit GP Limited, an exempted company with limited liability incorporated under the law of the Cayman Islands, is the general partner of Qubit Partners L.P. Mr. Zheng Huang is the sole director of Qubit GP Limited and the sole director of Quantum Dot Limited.
Quantum Dot Limited is a wholly owned subsidiary of Qubit Partners L.P., an exempted limited partnership formed under the laws of the Cayman Islands. Qubit GP Limited, an exempted company with limited liability incorporated under the law of the Cayman Islands, is the general partner of Qubit Partners L.P. Mr.
We are required under PRC law to contribute to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees up to a maximum amount specified by the local government from time to time. We enter into standard labor contracts with our employees.
We are required under PRC law to contribute to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees up to a maximum amount specified by the local government from time to time. We also make payments to other defined contribution plans for the benefit of employees employed by subsidiaries outside of China.
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
Under these agreements, each of our executive officers is employed for a specified time period.
Employees Employees As of December 31, 2023, we had a total of 17,403 employees.
Employees Employees As of December 31, 2024, we had a total of 23,465 employees. We had a total of 12,992 and 17,403 employees as of December 31, 2022 and 2023, respectively.
We also enter into standard confidentiality and non-compete agreements with all of our senior management and employees. The non-compete restricted period typically expires two years after the termination of employment, and we may have to compensate the employee with a certain percentage of his or her pre-departure salary during the restricted period.
The non-compete restricted period typically expires two years after the termination of employment, and we may have to compensate the employee with a certain percentage of his or her pre-departure salary during the restricted period. We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. E.
Kam has more than 30 years of experience in the financial services industry in Asia. He is a Chartered Financial Analyst and a chartered accountant in Singapore. Mr. Kam also serves as an independent director of OCBC Bank Ltd. in China since September 2021. Mr.
Anthony Kam Ping Leung has served as our independent director and chairman of the audit committee since August 2019. Mr. Kam is also chairman of our compensation committee. Mr. Kam has more than 30 years of experience in the financial services industry in Asia. He is a Chartered Financial Analyst and a chartered accountant in Singapore. Mr.
Huang and his family members are the trust’s beneficiaries. Walnut Street Investment, Ltd., Walnut Street Management, Ltd. and Steam Water Limited are collectively referred to as entities affiliated with Mr. Huang. The registered address of each of Walnut Street Investment, Ltd. and Walnut Street Management, Ltd. is Trinity Chambers, P.O. Box 4301, Road Town, Tortola, British Virgin Islands.
Huang and his family members are the trust’s beneficiaries. Walnut Street Investment, Ltd., Walnut Street Management, Ltd. and Steam Water Limited are collectively referred to as entities affiliated with Mr. Huang.
Quantum Dot Limited, Qubit GP Limited and Qubit Partners L.P. are collectively referred to as entities affiliated with PDD Partnership. The registered address of Quantum Dot Limited is Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands.
Zheng Huang is the sole director of Qubit GP Limited and the sole director of Quantum Dot Limited. Quantum Dot Limited, Qubit GP Limited and Qubit Partners L.P. are collectively referred to as entities affiliated with PDD Partnership.
Executive Director Appointment and CEO Nomination Right The PDD Partnership will be entitled to appoint executive directors and nominate and recommend the chief executive officer of our company.
After voting, all except the three nominees who receive the least votes from the partners are elected to the Partnership Committee. 104 Table of Contents Executive Director Appointment and CEO Nomination Right The PDD Partnership will be entitled to appoint executive directors and nominate and recommend the chief executive officer of our company.
We had a total of 9,762 and 12,992 employees as of December 31, 2021 and 2022, respectively. ​ The following table gives breakdowns of our employees as of December 31, 2023 by function: ​ ​ ​ ​ ​ ​ As of ​ December 31, 2023 Function: ​ Sales, marketing and fulfillment ​ 7,158 Product development ​ 7,332 Platform operation ​ 1,339 Management and administration ​ 1,574 Total ​ 17,403 ​ 108 Table of Contents We are dedicated to providing employees with social benefits, diversified work environment and a wide range of career development opportunities.
The following table sets forth a breakdown of our employees as of December 31, 2024 by function: ​ ​ ​ ​ ​ ​ As of ​ December 31, 2024 Function: ​ Sales, marketing and fulfillment ​ 11,206 Product development ​ 8,980 Platform operation ​ 1,278 Management and administration ​ 2,001 Total ​ 23,465 ​ We are dedicated to providing employees with social benefits, diversified work environment and a wide range of career development opportunities.
(3) Represents 370,772,220 Class A ordinary shares directly held by Quantum Dot Limited, a business company limited by shares incorporated in the British Virgin Islands. Quantum Dot Limited is a wholly owned subsidiary of Qubit Partners L.P., an exempted limited partnership formed under the laws of the Cayman Islands.
Tencent Holdings Limited is a limited liability company incorporated in the Cayman Islands and is listed on the Hong Kong Stock Exchange. (3) Represents 370,772,220 Class A ordinary shares directly held by Quantum Dot Limited, a business company limited by shares incorporated in the British Virgin Islands.
Yeo studied Engineering at Cambridge University on a President’s Scholarship, graduating with a Double First in 1976, and became a Signals Officer in the Singapore Armed Forces. After graduating from the Singapore Command and Staff College in 1979, he was posted to the Republic of Singapore Air Force. Mr.
Yeo is also a member of the Board of Trustees of Berggruen Institute on Governance and International Advisory Panel of Peking University, among others. Mr. Yeo studied Engineering at Cambridge University on a President’s Scholarship, graduating with a Double First in 1976, and became a Signals Officer in the Singapore Armed Forces.
Dr. Rietjens has more than 25 years of experience in food safety. She has been a full professor at Wageningen University since 2001 and is currently head of the division of toxicology. She is an elected member of the Royal Netherlands Academy of Arts and Sciences (KNAW) and the chairperson of the KNAW Scientific Council for Natural Sciences and Engineering.
Rietjens is also a member of our audit committee and nominating and corporate governance committee. Dr. Rietjens has more than 25 years of experience in food safety. She has been a full professor at Wageningen University since 2001.
This record holder is Deutsche Bank Trust Company Americas, the depositary of our ADS program. The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.
The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. ​ F.
Yeo served 23 years in the government of Singapore, and was Minister for Information and the Arts, Health, Trade & Industry, and Foreign Affairs of Singapore. Mr. Yeo is also a member of the Board of Trustees of Berggruen Institute on Governance and International Advisory Panel of Peking University, among others. Mr.
(SGX: C76) and an independent non-executive director of Wilmar International (SGX: F34). Prior to that, Mr. Yeo served 23 years in the government of Singapore, and was Minister for Information and the Arts, Health, Trade & Industry, and Foreign Affairs of Singapore. Mr.
Our board of directors has the authority to amend or terminate the plan. However, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient.
Our board of directors has the authority to amend or terminate the plan.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. ​ F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​ 114 Table of Contents
Removed
Zhao received his bachelor’s degree in e-commerce management from South China University of Technology. 101 Table of Contents Anthony Kam Ping Leung has served as our independent director and chairman of the audit committee since August 2019. Mr. Kam is also chairman of our compensation committee. Mr.
Added
As such, these rights and functions have yet to come into effect, and the PDD Partnership currently cannot appoint executive directors. The appointment of Mr. Lei Chen as an executive director is unrelated to the PDD Partnership’s exercise of its rights and functions. Partnership Committee The Partnership Committee will be the primary management body of the PDD Partnership.
Removed
In general, the administration committee determines the vesting schedule, which is specified in the award agreement. 104 Table of Contents Exercise of options . The administration committee determines the exercise price for each award, which is stated in the award agreement.
Added
She has been an elected member of the Royal Netherlands Academy of Arts and Sciences (KNAW) since 2020 and served as the chairperson of the KNAW Scientific Council for Natural Sciences and Engineering from 2020 to 2023.
Removed
Board Diversity ​ ​ ​ Board Diversity Matrix (As of February 29, 2024) Country of Principal Executive Offices: Ireland ​ Foreign Private Issuer ​ Yes ​ Disclosure Prohibited Under Home Country Law ​ No ​ Total Number of Directors ​ 6 ​ Part I: Gender Identity ​ Female Male Non- Binary Did Not Disclose Gender ​ Directors ​ 1 5 0 0 ​ ​ ​ Part II: Demographic Background ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ 0 ​ LGBTQ+ ​ 0 ​ Did Not Disclose Demographic Background ​ 0 ​ ​ D.
Added
After graduating from the Singapore Command and Staff College in 1979, he was posted to the Republic of Singapore Air Force. Mr. Yeo graduated with an MBA (Baker Scholar) from the Harvard Business School in 1985.
Removed
We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. E.
Added
Rietjens ​ * ​ Nominal ​ March 1, 2024 and September 1, 2024 ​ Not applicable All directors and executive officers as a group ​ 117,657,604 ​ Nominal ​ Various dates between November 1, 2015 and September 1, 2024 ​ Various dates between October 31, 2035 and April 30, 2044 * Less than 1% of our total ordinary shares outstanding.
Removed
The registered address of Steam Water Limited is Ritter House, Wickhams Cay II, Road Town, Tortola, British Virgin Islands.
Added
We enter into standard labor contracts with our employees. We also enter into standard confidentiality and non-compete agreements with all of our senior management and employees.
Removed
Tencent Holdings Limited is a limited liability company incorporated in the Cayman Islands and is listed on the Hong Kong Stock Exchange. The registered address of Tencent Mobility Limited is 29/F, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. The registered address of TPP Follow-on I Holding G Limited is P.O.
Added
To our knowledge, as of March 31, 2025, a total of 3,094,169,820 Class A ordinary shares were held by one record holder in the United States, representing approximately 54.5% of our total outstanding shares. This record holder is Deutsche Bank Trust Company Americas, the depositary of our ADS program.
Removed
Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The registered address of Chinese Rose Investment Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. The registered address of Distribution Pool Limited is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
Removed
The registered address of each of Qubit Partners L.P. and Qubit GP Limited is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. To our knowledge, as of February 29, 2024, a total of 2,825,941,920 Class A ordinary shares were held by one record holder in the United States, representing approximately 50.9% of our total outstanding shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

9 edited+1 added−1 removed8 unchanged
Biggest changeRisk Factors—Risks Related to Our Business—We currently rely on commercial banks and third-party payment service providers for payment processing and escrow services.
Biggest changeLoan to Ningbo Hexin and Business Cooperation Agreement with Shanghai Fufeitong We currently rely on commercial banks and third-party payment service providers for payment processing and escrow services. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We currently rely on commercial banks and third-party payment service providers for payment processing and escrow services.
As of December 31, 2023, the loans were still outstanding. In April 2020, Shanghai Xunmeng entered into a business cooperation agreement with Shanghai Fufeitong, pursuant to which both parties agreed to conduct comprehensive business cooperation in payment services, technical resources and other related professional areas.
As of December 31, 2024, the loans were still outstanding. In April 2020, Shanghai Xunmeng entered into a business cooperation agreement with Shanghai Fufeitong, pursuant to which both parties agreed to conduct comprehensive business cooperation in payment services, technical resources and other related professional areas.
Directors, Senior Management and Employees—B. Compensation.” 110 Table of Contents Share Incentive Plans See “Item 6. Directors, Senior Management and Employees—B. Compensation.” Agreement and Business Cooperation with Tencent Strategic Cooperation Framework Agreement . In February 2018, we entered into a Strategic Cooperation Framework Agreement with Tencent, a provider of internet value-added services in China.
Directors, Senior Management and Employees—B. Compensation.” Share Incentive Plans See “Item 6. Directors, Senior Management and Employees—B. Compensation.” Agreement and Business Cooperation with Tencent Strategic Cooperation Framework Agreement . In February 2018, we entered into a Strategic Cooperation Framework Agreement with Tencent, a provider of internet value-added services in China.
Lei Chen and Mr. Zhenwei Zheng, our executive officers, to acquire the controlling equity interests in Shanghai Fufeitong, a licensed payment service company, by providing interest-free loans in the aggregate amount of RMB710.6 million (US$100.1 million) to Ningbo Hexin Equity Investment Partnership, or Ningbo Hexin, a limited partnership controlled by Mr. Lei Chen and Mr. Zhenwei Zheng.
Lei Chen and Mr. Zhenwei Zheng, our executive officers, to acquire the controlling equity interests in Shanghai Fufeitong, a licensed payment service company, by providing interest-free loans in the aggregate amount of RMB710.6 million (US$97.4 million) to Ningbo Hexin Equity Investment Partnership, or Ningbo Hexin, a limited partnership controlled by Mr. Lei Chen and Mr.
As of December 31, 2021, 2022 and 2023, we had a receivable balance from Tencent in the amount of RMB2,803.3 million, RMB2,763.9 million and RMB3,516.2 million (US$495.3 million), respectively, and a payable balance to Tencent in the amount of RMB1,916.5 million, RMB1,539.7 million and RMB1,112.6 million (US$156.7 million), respectively.
As of December 31, 2022, 2023 and 2024, we had a receivable balance from Tencent in the amount of RMB2,763.9 million, RMB3,516.2 million and RMB3,427.8 million (US$469.6 million), respectively, and a payable balance to Tencent in the amount of RMB1,539.7 million, RMB1,112.6 million and RMB669.6 million (US$91.7 million), respectively.
In 2021, 2022 and 2023, we purchased from Tencent certain services, including payment processing, advertising and cloud services, in the total amount of RMB8,416.6 million, RMB7,061.1 million and RMB7,182.5 million (US$1,011.6 million), respectively.
In 2022, 2023 and 2024, we purchased from Tencent certain services, including payment processing, advertising and cloud services, in the total amount of RMB7,061.1 million, RMB7,182.5 million and RMB6,772.2 million (US$927.8 million), respectively.
In 2021, we purchased certain computer equipment from Tencent for a total amount of RMB1,833.5 million. Passive Investments in Related-Party Funds The Company had set up funds as a limited partner with related parties to invest in privately held companies. However, these related parties ceased to be affiliated with the Company after the fourth quarter of 2022.
Passive Investments in Related-Party Funds The Company had set up funds as a limited partner with related parties to invest in privately held companies. However, these related parties ceased to be affiliated with the Company after the fourth quarter of 2022. As of December 31, 2022, the carrying amount for the investments was RMB355.7 million.
As of December 31, 2023, we had a receivable balance from Shanghai Fufeitong and its affiliates of RMB3,201.2 million (US$450.9 million), and a payable balance to Shanghai Fufeitong and its affiliates of RMB126.2 million (US$17.8 million). C. Interests of Experts and Counsel Not applicable. 111 Table of Contents
As of December 31, 2024, we had a receivable balance from Shanghai Fufeitong and its affiliates of RMB3,430.8 million (US$470.0 million), and a payable balance to Shanghai Fufeitong and its affiliates of RMB132.2 million (US$18.1 million). See also “Item 3. Key Information—D.
As of December 31, 2023, Ningbo Hexin beneficially owned 50.01% of the equity interests in Shanghai Fufeitong.
Zhenwei Zheng. 115 Table of Contents Ningbo Hexin beneficially owns 80.52% of the equity interests in Shanghai Fufeitong.
Removed
As of December 31, 2021 and 2022, the carrying amount for the investments was RMB332.6 million and RMB355.7 million. Loan to Ningbo Hexin and Business Cooperation Agreement with Shanghai Fufeitong We currently rely on commercial banks and third-party payment service providers for payment processing and escrow services. See “Item 3. Key Information—D.
Added
Risk Factors—Risks Related to Our Business and Industry—We do not control Shanghai Fufeitong and the majority of its equity interests is indirectly controlled by our executive officers. If any conflict arises between us and Shanghai Fufeitong and cannot be resolved in our favor, our business, financial condition, results of operations and prospects may be materially and adversely affected.” C.

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