万物新生 (RERE) 2026财年第二季度业绩电话会：营收增长32.4%，发布第三季度业绩指引

核心要点

• 万物新生（NYSE: RERE）公布2026财年第二季度营收为66.1亿元人民币，同比增长32.4%，超越此前业绩指引上限。
• 产品净营收同比增长35.9%至61.9亿元人民币，主要受二手消费电子产品线上销售驱动。服务净营收同比下降4.2%至4.10亿元人民币。
• Non-GAAP营业利润增长70.1%至2亿元人民币以上。Non-GAAP营业利润率同比扩大69个基点至约3.1%。
• 自营（1P）毛利率从13.2%提升至15.7%。毛利率更高的自营C端（1P-C）零售占产品营收的48.8%，而上年同期为34.4%。
• 管理层预计2026财年第三季度营收在63.4亿元人民币至64.4亿元人民币之间，相当于同比增长约23.1%至25.1%。
• 海外扩张仍以B2B业务为主。国际B2B业务贡献了约90%的海外营收，6月份海外月度销售额达到1.20亿港元。

主要财务数据

业务与运营表现

万物新生在回收端、合规整备端和精选零售端继续秉持自营（1P）模式。自营整备产品营收同比增长87.8%，自营C端（1P-C）零售营收增长92.4%。

在5月13日至6月18日促销期间，通过爱回收（AHS Recycle）回收手机及消费电子产品的交易额同比增长57%。上门回收和门店回收订单均增长45%，面对面交易占全渠道回收订单的80%。

截至6月底，公司将弹性上门履约人员扩充至近3,000人。配合2,117家爱回收门店，为618购物节期间的回收与客户服务提供了保障。管理层表示，高峰期过后已缩减履约人员规模，以控制前台运营费用。

在平台（3P）业务方面，拍机堂（PJT）在中小商家和专业买家中继续拓展。截至6月底，注册商家数已突破227万户，同时3P入仓质检渗透率达84.4%，同比提升约11.5个百分点。

因万物新生向商家提供服务费折扣与减免以支持其活跃度，拍拍平台服务营收有所下降。但在公司为第三方商家增加仓储能力后，拍拍寄售业务环比增长了22.4%。

多品类回收服务营收增长超30%。由于金价剧烈波动且呈下行趋势，加上给用户的让利增加，黄金回收服务营收下降35%。奢侈品回收服务营收增长77.3%，为进一步开设奢侈品及运动主题门店的计划提供了支撑。

海外B2B是万物新生国际化战略的核心。管理层目标是在三年内将PhoneSquare打造成全球版拍机堂交易平台。公司已在香港建立了质检、运营和销售能力，并计划在迪拜建立区域能力，随后扩展至包括马来西亚在内的市场。海外RERE C端业务仍处于早期探索阶段。

管理层业绩指引

展望2026财年第三季度，管理层预计总营收在63.4亿元人民币至64.4亿元人民币之间，相当于同比增长约23.1%至25.1%。该展望反映了公司对市场和运营状况的初步评估，未来仍可能发生变化。

管理层表示，指引已考量预期中的iPhone 18发布周期的发布时机及产品组合可能带来的影响。公司还预计2026财年全年将保持强劲的营收和利润增长，同时在履约和品牌营销方面继续保持审慎投资。

风险与关注事项

• 受商家补贴、物流激励以及临时性服务费减免影响，服务营收持续承压。
• 管理层强调了主要旗舰智能手机发布时机和产品组合的不确定性，这可能导致交易量在不同季度间发生转移。
• 金价波动影响了第二季度黄金回收服务营收。
• 在经历了快速的网络扩张后，万物新生关闭了部分业绩欠佳的门店，并对选址不佳的网点进行了重新规划。
• 管理层表示，海外出口业务正在增长，但盈利能力的改善尚需时日。海外C端业务也仍处于早期阶段。

分析师问答环节要点

分析师关注的焦点集中在iPhone 18周期、服务营收压力、国际业务扩张以及门店网络调整上。

针对新机销售疲软的问题，管理层指出，销售放缓会提升以旧换新计划对手机厂商和电商平台的战略重要性。更高的出厂新机价格也可能提高回收对用户的价值，并对高品质二手产品的价格形成支撑。

关于服务营收，管理层将其第二季度的下滑归因于对拍机堂中小商家的支持以及对拍拍商家的费率减免。万物新生预计，在质检技术和会员计划的支持下，随着中国二手消费电子市场的健康扩张，拍机堂营收将保持增长。

关于国际业务，管理层表示B2B约占海外营收的90%。PhoneSquare初期将专注于扩充供货与买家网络、提升质检自动化水平及拓展交易平台功能，而RERE的海外C端业务尝试将谨慎推进。

关于门店调整，管理层将门店数量环比减少归因于关闭业绩欠佳的网点以及为推行多层级专业品类店策略做准备。管理层表示，这些调整所需的资金将主要通过在现有预算内重新分配资源来解决。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to ATRenew Inc.'s Second Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please note today's event is being recorded. I will now turn the call over to the first speaker today, [ Ms. Jenny Jin ], Head of Investor Relations. Please go ahead, ma'am.

Unknown Executive

Thank you. Hello, everyone, and welcome to ATRenew Second Quarter 2026 Earnings Conference Call. Speaking first today is Kerry Chen, our Founder, Chairman and CEO; and he will be followed by Rex Chen, our CFO. After that, we will open the call to questions from the analysts.

The second quarter 2026 financial results were released earlier today. The earnings press release and investor slides accompanying this call are now available at our IR website. ir.atrenew.com. There will also be a transcript following this call for your convenience.

For today's agenda, Kerry will share his thoughts on our quarterly performance and business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will participate during the Q&A session.

Please note, our safe harbor statements. Some of the information you will hear during our discussion today will consist of forward-looking statements, and I refer you to our safe harbor statement in the earnings press release.

Any forward-looking statements that management makes on this call are based on assumptions as of today, and that ATRenew does not take any obligation to upgrade our assumptions on the statements.

Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures.

Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis.

I'd now like to turn the call over to Kerry for business and strategy updates.

Xuefeng Chen Kerry

[Foreign Language]

[Interpreted] Hello, everyone, and thank you for joining ATRenew's Second Quarter 2026 Earnings Conference Call. We are pleased to review our operating results for the quarter and share our views on industry trends and our strategy.

[Foreign Language]

[Interpreted] In the second quarter, total net revenues exceeded the high end of our guidance, increasing 32.4% year-over-year to RMB 6.61 billion, our continued focus on 1P has strengthened our end-to-end capabilities and have driven rapid growth in product revenue, up 35.9% year-over-year to RMB 6.9 billion, non-GAAP operating profit grew 70.1% year-over-year to RMB 210 million, while non-GAAP operating profit margin expanded by 69 basis points year-over-year to 3.16%.

[Foreign Language]

[Interpreted] First of all, I'd like to share four key external shifts and trends. The first dynamic is the year-over-year decline in new device sales. The intuitive thinking is that this could drive our recycling business. But compared intuitively, when new devices are selling well, recycling and trade-in programs are just supplementary value-added services and are not a top priority.

Conversely, when new device sales soften, trade-in programs become the most critical and effective promotional tool, major manufacturers and platforms place greater emphasis on and allocate more resources to trade-in initiatives. We have seen this clearly in our business trends over the past few years.

[Foreign Language]

[Interpreted] Second is macroeconomic headwinds in consumption and significant growth in demand for high-quality, affordable preowned smartphones and other secondhand products. This is clearly reflected in the sustained robust growth of our curated B2C business.

[Foreign Language] The third shift is increasingly strengthened regulation, including taxation and device refurbishment. AHS has always been committed to compliant operations while tighter regulations disproportionately impact fragmented small-scale and noncompliant operators, they benefit from our business, they benefit our 1P business.

[Foreign Language]

[Interpreted] The fourth shift is the accelerating trend of exporting domestic for own devices. As the penetration rate of trading and reception programs continues to rise in China, Domestic supply is expanding rapidly. China has shifted from a net importer to a net exporter of preowned smartphones, establishing a clear industry trend where high-end models are sold domestically while mid- to high-end and low-end modules are exported. With that, let us now move to our business update.

[Foreign Language]

[Interpreted] In recent years, we have firmly prioritized 1P business because trust and efficiency are credible in the secondhand consumer electronics industry. Our 1P model starts with potent supply from C2B channels, we add depth to the value chain through compliant refurbishment, strengthen B2C retail for premium curated products and leverage B2C retail pricing capabilities to offer better pricing and user experience on the restructuring side. Together, those efforts enhance our end-to-end capabilities across the value chain.

[Foreign Language]

[Interpreted] On recycling, we capitalized on opportunities as brand e-commerce player, e-commerce platforms and offline retailers prioritize and invest in trading programs. Leveraging AHS recycles increasingly extensive fulfillment network to enhance the user experience. Trade-in and recycling demand was drawn during the June 18 [indiscernible] festival. In response, we expanded our nationwide to door fulfillment team, including flexible capacity to nearly 3,000 by the end of June, up sharply from the end of March.

Together with our 2,117 AHS stores, this gave us strong advantages in sourcing and customer service over industry peers. During the major promotional period from May 13 through June 18. The restructuring value of mobile phones and consumer electronics at AHS recycle increased 57% year-over-year. both door and in-store recessing orders grew 45% year-over-year. while face-to-face orders accounted for 80% of recycling orders across all channels. multiple user experience metrics also continued to improve.

[Foreign Language]

[Interpreted] Our compliance refurbishment business also continues to accelerate. Revenue from 1P refurbished products increased 87.8% year-over-year with higher new device prices, stable pre-owned market sentiments and more refined pricing strategies and operations 1P-C retail revenue grew 92.4% year-over-year in the second quarter. As a percentage of product revenue, 1P-C retail revenue increased 3.6 percentage points sequentially to 48.8% and allowing us to meet user demand better for curative or on phones, computers, smart devices and other products.

[Foreign Language]

[Interpreted] Turning to our 3P businesses. Service revenue decreased 4.2% year-over-year in the second quarter. Within 3P business, we maintained our industry-leading position in B2B, while B2C 3P services faced pressure from merchant activity. In [ multicat reflecting ], we navigated the headwinds from gold price fluctuations and continue to focus on more refined operations.

[Foreign Language]

[Interpreted] Specifically PJT marketplace continue to expand into fragmented markets, reaching more small-sized merchants, mom-and-pop shops and specialty buyers. By the end of June, total registered merchants on the platform exceeded RMB 2.27 million.

For sellers, we offer free shipping on the first three orders and align inspection standards upfront lowering selling costs and barriers to trial and error for new small-sized merchants.

For buyers, we launched the PJT themed campaign in Douyin and other platforms, video views grew sharply, driving rapid growth in our specialty buyer model. Together with 1P minimum quantity ordering, this initiative made it easier for small merchants to start buying on a platform. after their first transaction, buyers gradually become more engaged on the platform through repeat purchases, very key membership and participation in the like new device marketplace, showing consistent improvement in transactions in it.

Throughout this process of user expansion and support, PJT's 3P warehouse inspection penetration rate reached 84.4% this quarter. up around 11.5% year-over-year, delivering rapid scale expansion with solid growth in service revenue.

[Foreign Language]

[Interpreted] For pipeline, platform service revenue decreased year-over-year in the second quarter, mainly due to subsidies provided to pulp merchants to boost activity during the promotional campaign, our strategic reduction of service fees.

Meanwhile, we continue to refine the consignment model by introducing warehousing capabilities for third-party merchants, improving price competitiveness and sales and sell-through and optimizing financial economic [ pipeline ] consignment business grew 22.4% sequentially.

[Foreign Language]

[Interpreted] In [ multicat ] recycling services, service revenue maintained a year-over-year growth of over 30%. Gold prices were volatile and trended lower in the second quarter. We also chose to give more back to users. Together, these factors led to a 35% year-over-year decline in Gold service revenue.

During the quarter, we upgraded a select number of AHS stores to luxury stores with improvements to store design and functional areas. Together with more refined here, pricing and enhanced hedge-specific service capabilities, Luxury resecting service revenue grew 77.3% year-over-year.

Building on those positive results and experience. We plan to open more same [ multicat ] resource this year, including luxury theme stores and sports theme stores. This will give more users a better and more engaging experience when they're recycling and buying pre-owned products.

[Foreign Language]

[Interpreted] Our long-term strategy has remained focused and consistent. Here, we would like to reiterate our three straight stage development strategy.

Stage 1, we continue to solidify the healthy growth of our core secondhand consumer electronics business. In 2026, the smartphone and consumer electronics market has faced substantial price hikes across the upstream supply chain brand manufacturers are actively adjusting their product portfolios and placing greater emphasis on trade-in programs.

At the same time, e-commerce platforms are also introducing subsidy programs to support device upgrades. Against this backdrop, we have captured this opportunity through our 1P model. Leveraging our front and fulfillment capabilities and targeted trading scenarios, we drove flat growth in our core secondhand consumer electronics business.

At the same time, we are strengthening merchant capabilities with a decentralized strategy to penetrate fragmented markets while leveraging AI-powered automated inspection to reinforce the infrastructure we have built for the industry.

[Foreign Language]

[Interpreted] Stage 2, we are strengthening AHS Recycle position as China's leading recycling brand. In the pre-owned industry, word-of-mouth brand names remain scarce. We continue to make prudent investments in building the AHS Recycle brand. As it new marks its 15th anniversary, we invited [ Lu ] to serve as the test recycled global brand ambassador. Through his useful energetic, stylish and environmentally conscious image, we encourage users to embrace a simpler lifestyle and choose high-quality pre-owned products.

This initiative has generated broad positive feedback and engagement from users. From secondhand consumer electronics reacting to multicategories acting further into consumer retail, we aim to leverage the recycle brand name to provide users with the resulting and purchasing experiences.

[Foreign Language]

[Interpreted] Stage 3. We continue to advance breakthroughs in our overseas strategy. Over the past year, our overseas export business has grown rapidly. In June this year, we hit a milestone with HKD 120 million in monthly sales. Building on our solid progress. On July 28, we held our overseas strategy launch event in Hong Kong and updated our global expansion strategy.

[Foreign Language]

[Interpreted] First, we see a huge pre-owned phone market globally with the scale of USD 100 billion in Hong Kong, Dubai and Miami [ AHS ] Hub. As China is changing from a consumer to a supplier of pre-owned phones globally, we see a chance to build an international B2B marketplace leveraging PJT's success domestically.

As such, we launched [ PhoneSquare ]. It relies on two core strengthens of our growing NPS for supply and automated quality inspection technology. We will follow our domestic experience and gradually expand from 1P to 3P supply while establishing global standards. We will also optimize cost and efficiency through automated quality inspections. And improved transaction transparency, building a more efficient B2B marketplace and traditional trading platform, aiming to give pre-owned goods a second life globally.

While exports are growing for us. Fourth were to need time to improve, and we appreciate your patience and support. We also launched our overseas consumer brands [indiscernible] RERE, that is we value what you own renew the way you choose. We will cautiously explore the 2C business model through refuting kiosks and physical stores with a small amount of investment. We will share more updates on our overseas business as of corporate.

[Foreign Language]

[Interpreted] Looking at 2026 as a whole, we will continue to enhance supply sourcing, customer or merchant services and operating efficiency. We look forward to giving you the better experience, more choices and more value in pre-owned transactions.

[Foreign Language]

[Interpreted] Now I'd like to turn the call over to our CFO, Rex for financial updates.

Chen Chen

[Foreign Language]

[Interpreted] Good day, everyone. I'm pleased to share our outstanding financial performance for the second quarter of 2026. Both revenues and profits reached record high. During the quarter, the ongoing rollout of China trade-in programs for consumer electronics together with the June 18 shopping festival, further boosted consumer demand for device upgrades and expanded the supply of first-hand devices available for recycling. We actively captured these market opportunities continue to support recycling and trade-in scenarios and fully leverage the synergies between our supply chain and retail capabilities. As a result, we sustained solid growth momentum over the quarter.

[Foreign Language]

[Interpreted] In the second quarter, total revenue exceeded the high end of our guidance, increasing by 32.4% year-over-year to RMB 6.61 billion, while non-GAAP operating income surged by 70.1% to over RMB 200 million.

[Foreign Language]

[Interpreted] Before we review the financials in detail, please note that all figures are in RMB and all comparisons are on a year-over-year basis unless otherwise stated.

[Foreign Language]

[Interpreted] In the second quarter, total revenue growth was primarily driven by continued growth in net product revenue Net product revenues increased by 35.9% to RMB 6.19 billion, largely attributable to the growth in online sales of pre-owned consumer electronics.

[Foreign Language]

[Interpreted] Net service revenues were RMB 410 million in the second quarter, representing a decrease of 4.2%. The decrease was primarily due to the discretionary discounts on service fees provided to merchants during the extended June 18 grand promotion event period.

[Foreign Language]

[Interpreted] Now let's discuss operating expenses to provide greater clarity on the trends of our actual operating base expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP to non-GAAP results are available in our earnings release and the refining Form 6-K furnished with the U.S. SEC.

[Foreign Language]

[Interpreted] Merchandise costs increased by 31.9% to RMB 5.22 billion, in line with the growth in product sales. Gross profit margin for our 1P business was 15.7% compared with 13.2% in the same period last year. The gross margin improvement in our 1P business. This was primarily driven by high efficiency C2B recycling scenarios, compliant with refurbishment capabilities incorporating in our supply chains and an increasingly diversified retail channel mix. This allowed us to increase the proportion of higher-margin retail sales with 1P-C revenue accounting for 48.8% of product revenue in the second quarter of 2026, up from 34.4% in the same period last year.

[Foreign Language]

[Interpreted] Fulfillment expenses increased by 31.1% to RMB 540 million, non-GAAP fulfillment expenses increased by 30.5% to RMB 530 million. Under the non-GAAP measures, it increase was primarily driven by higher personnel costs resulting from the growth of our business compared to the same period in 2025 as well as higher logistics expenses in line with the increased product sales.

Additionally, operating center-related expenses rose along with the increasing volumes of recycling and transactions. Non-GAAP fulfillment expenses as a percentage of total revenues decreased to 8.1% from 8.2%.

[Foreign Language]

[Interpreted] Selling and marketing expenses increased by 24.8% to RMB 510 million. Non-GAAP selling and marketing expenses increased by 29.9% to RMB 500 million primarily driven by an increase in commission expenses in relation to channel service fees. Non-GAAP selling and marketing expenses as a percentage of total revenues decreased to 7.6% from 7.8%.

[Foreign Language]

[Interpreted] General and administrative expenses increased by 23.5% to RMB 95.7 million. Non-GAAP G&A expenses also increased by 13.6% to RMB 85.3 million, primarily due to an increase in personnel costs. Non-GAAP G&A expenses as a percentage of total revenues decreased to 1.3% from 1.5%.

[Foreign Language]

[Interpreted] Research and development expenses increased by 23.5% to RMB 77.2 million. Net debt R&D expenses increased by 24.2% to RMB 72.3 million probably due to an increase in personnel costs. Non-GAAP R&D expenses as a percentage of total revenues decreased to 1.1% from 1.2%.

[Foreign Language]

[Interpreted] As a result, our non-GAAP operating income exceeded RMB 200 million in the second quarter of 2026 compared to non-GAAP opening income of RMB 120 million in the second quarter of 2025. representing an increase of 70.1% year-over-year increase. Non-GAAP operating profit margin was 3.1% for the quarter, compared to 2.4% in the second quarter of 2025, representing an increase of 69 basis points.

[Foreign Language]

[Interpreted] As of June 30, 2026, cash and cash equivalents, restricted cash, short-term investments and funds receivable from third-party payment service provider totaled RMB 2.16 billion. Our financial reserves are sufficient to support reinvestment in business development and shareholder returns.

[Foreign Language]

[Interpreted] During the second quarter of 2026, we repurchased a total of approximately 1 million ADS for approximately USD 4.2 million. On June 30, 2025, the Board has authorized a share repurchase program under which the company may repurchase up to USD 50 million of our shares over 12 months. The Board has authorized the extension of this share repurchase program for 12 months from June 30, 2026, with key terms unchanged. As of 2026, we repurchased approximately USD 14.8 million under this program.

[Foreign Language]

[Interpreted] Now turning to the business outlook. For the third quarter of 2026, we anticipate total revenue to be between RMB 6.34 billion to RMB 6.44 billion representing an increase of 23.1% to 25% year-over-year to 25.1% year-over-year. Please note that this focus may only reflect our current and preliminary views on the market and optional operational conditions, which are subject to change.

[Foreign Language]

[Interpreted] this concludes our prepared remarks. Operator, we are now ready to take questions.

Operator

[Operator Instructions] The first question today comes from Mandy Liu with UBS.

分析师问答

Siying Liu

[Foreign Language]

[Interpreted] My question is that as the launch of Apple's iPhone 18 is around the corner, how would you expect the impact towards our financial performance ahead Also, is there any updates on your full year revenue and margin guidance?

Xuefeng Chen Kerry

[Foreign Language]

[Interpreted] Here, I'd like to reiterate a counterintuitive view. When new devices are same, resecting and trade-in programs are just supplementary value-added services when new devices sell soften, trading programs become the most critical and effective promotional tool. Major manufacturers and platform places greater emphasis on and allocate more resources to trade-in. This year, against new device sales headwinds, e-commerce platforms, brand manufacturers and reducers have all increased their investments in trade-in scenarios, making C2B resulting for print on consumer electronics more efficient.

With strong sourcing channels and convenient reflecting fulfillment we have built an industry-leading supply base and further strengthen our supply-side advantage in the print owned value chain.

[Foreign Language]

[Interpreted] For the third quarter guidance, we take into account this year's major flagship smartphone launches take the iPhone 18 lineup as an example, current market expectations are that Apple may introduce more premium models and some standard modules could shift to next spring.

This could extend iPhone 18's volume treatment cycle into the fourth quarter and the first quarter of next year. We monitor this closely. Our third quarter guidance has already factored in the potential impact.

[Foreign Language]

[Interpreted] Should new device prices rise due to higher upstream memory costs, trade-in and recycling could be more valuable for users and prices for high-quality pre-owned products will have room for upside. The second quarter already saw a year-over-year increase in the average order volume of our 1P business.

[Foreign Language]

[Interpreted] On profitability, we continue to make disciplined investments in fulfillment capabilities and consumer brand marketing in the second quarter, benefiting from economies of scale and more refined operations, we delivered the expected year-over-year improvement in non-GAAP operating profit margin. Overall, we expect to maintain strong growth in both revenue and profit this year.

Operator

The next question comes from Wan Jiao with CICC.

Wan Jiao

[Foreign Language]

[Interpreted] Could you please elaborate on the reasons for the decline in service revenue and share our outlook?

Chen Chen

[Foreign Language]

[Interpreted] Strategically, our 1P model will pay an increasing in vital role in the pre-owned smartphones, consumer electronics category. First, it ensures the premium transaction experience for end users and strengthens brand awareness. In addition, the industry's inevitable shift towards greater compliance will further support the development of our 1P business.

[Foreign Language]

[Interpreted] In the second quarter, net service revenue decreased by 4.2% year-over-year, mainly due to two factors. First, we increased subsidies for merchants, including logistic fees, incentives for new users as PJT marketplace expanded into more fragmented markets. Second, during the promotional campaign, we provided discounts or waivers on service fees to pipeline of merchants to boost their transactions.

[Foreign Language]

[Interpreted] Looking ahead, we expect that PJT continues to penetrate lower tier markets. more small-sized merchants will gain easier access to the national pre-owned trade-in market. By leveraging our quality inspection technology, platform services and differentiated membership programs. We expect both PJT for operational efficiency and grow its platform service revenue in line with the healthy expansion of China's renowned consumer electronics and smartphone industry.

[Foreign Language]

[Interpreted] For our pipeline B2C business, we are shifting towards 1P purity retail and 3-tier consignment models, which will affect revenue in the short term. Under the 1P model, we are co-building capabilities with [ JD.com ] to meet consumer demand for curated pre-owned products, helping users upgrade their devices with high-quality affordable auctions.

Under the consignment model, Paipai is continuously form ways to support small merchants. We are expanding merchant recruitment boosting merchant vitality and providing robust support for their store operations, traffic management and after services.

[Foreign Language]

[Interpreted] In our multicategory recycling services, we are launching refined operations to reinforce consumer mind share of the AHS through theme stores and differentiated user experiences. We are confident to continue growing faster than broader industry.

Operator

The next question comes from Brian Lantier with Zacks Small Cap Research.

Brian Lantier

Congratulations on navigating what's turned into a challenging year for the smartphone market. I wonder if you could talk a little bit about your development plans and your performance goals for the international business?

Xuefeng Chen Kerry

[Foreign Language]

[Interpreted] The main part of our overseas strategy is B2B, which is complemented by our 2C business. B2B remains the core revenue contributor, accounting for around 90% of our overseas revenue. Our goal is to build [ PhoneSquare ] into a global version of PJT marketplace in 3 years. We will expand our supply and buyers' network, bring our automation technologies overseas and improve our open platform.

We already have a mature B2B system in Hong Kong, covering inspection operations and sales. We plan to start building new regional capabilities in Dubai and in the second half of this year. [ PhoneSquare ] is now officially available in Hong Kong app stores. And we plan to gradually expand into Middle Eastern markets like Dubai and than Southeast Asian markets like Malaysia.

We continue to optimize [ PhoneSquare ] functionality and user experience and expect to launch the next phase of our user growth initiatives soon.

[Foreign Language]

[Interpreted] In addition, we are cautiously exploring overseas two securities under the RERE brand. Whether through RERE kiosk already deployed in Europe for our first RERE store in Hong Kong -- recently opened in Hong Kong. Our overseas 2C business is still at an early stage of exploration, we will share further updates as we make progress.

Operator

The next question comes from Rafael Tse with DBS.

Wut Hei Tse

[Foreign Language]

[Interpreted] One question from my side. So the group's number of stores declined quarter-over-quarter in the second quarter of 2026, while the number of in-stall business increased significantly. How can we estimate or forecast the change in store numbers for this year?

Xuefeng Chen Kerry

[Foreign Language]

[Interpreted] To begin with, I'd like to note that AHS has seen a solid capabilities in innovation and pacing for store operations. There are two factors to consider in making phased store count adjustments.

First is the need to solidify our operations after rapid expansion. Accordingly, we have repositioned some poorly located stores and closed some underperforming ones. This is standard business practice. Secondly, we are preparing and accumulating experience for our new store strategy. Our luxury themes and sports theme force have already seen good data validation.

Moving forward, we will adopt a tiered store strategy, upgrading select locations into specialized categories in stores. You will soon see us rolling out more of these same stores across different categories.

I also want to emphasize that our budget to build store-based fulfillment capabilities remains disciplined with low incremental investment, we're strengthening these capabilities by reallocating resources within our existing budget.

[Foreign Language]

[Interpreted] Environmental Recycling and Trade-in Services has been strong this year. We expanded our 2-door team to meet higher fulfillment demand in top-tier cities. During the June 18 shopping festival, we use flexible workforce solutions to quickly expand the team to nearly 3,000 people. After the peak period, the 2-door capacity adjusted back down, helping us control front-end orating expenses.

[Foreign Language]

[Interpreted] We will continue to strengthen our in-store and to door fulfillment capabilities to provide users with a trusted and convenient experience. Thank you.

Operator

As there are no further questions at this time, I'd like to turn the conference back to management for closing remarks.

Unknown Executive

Thank you again for joining us. A replay of today's call will be available on our IR website shortly. Followed by transcript when ready. If you have any additional questions, please feel free to email us ir@atrenew.com. Have a good day. Thank you.

Operator

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]