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DADA Dada Nexus

Participants
Caroline Dong Head, Investor Relations
Philip Kuai Chairman and CEO
Beck Chen Chief Financial Officer
Jun Yang Co-Founder and CTO
Ronald Keung Goldman Sachs
Eddie Leung Bank of America
Thomas Chong Jefferies
Alicia Yap Citigroup
Ashley Xu Credit Suisse
Wei Xiong UBS
Robin Leung Daiwa
Call transcript
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Operator

Good morning, ladies and gentlemen. Thank you for standing by for Dada Third Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the managements’ prepared remarks, there will be a question-and-answer session.

As a reminder, today’s conference is being recorded. the to turn today’s host now Ms. call, will meeting your over for I of for Investor Head Dong, Caroline Relations Dada. Please proceed, Caroline.

Caroline Dong

Thank and today. you, thank you for everyone, Operator. joining Hello, us

and release Our XXXX well as website was is services. as available GlobeNewswire distributed at third ir.imdada.cn, on earnings earlier quarter on IR our today

about will Jun we Officer. call Mr. Financial Chief Beck Dada, Philip Yang, and company Chairman financials Technology Chen, guidance. available talk and follows. who will have Mr. during They be Chief Mr. Co-Founder operations followed by that the Kuai questions our On from and highlights, Kuai, all Mr. Chen, Officer; Q&A your Mr. today Chief discuss Officer; and to and session the Executive the answer will

I’d forward-looking call current and control. Reform to which other XXXX to this cause Exchange that filings in this based current stated a mentioned factors, does under like statements note company’s These introduce to other of Anyway, any Kuai risks, as required of and defined our Act that please you U.S. Chief in results upon forward-looking or Officer, pleasure contains please Litigation statements and Act the Section and is that with statements, Private Mr. or begin, law. ahead. XXE the in and company obligation conference Philip. during unless of are all SEC. performance risks, the remind otherwise Securities the Executive of unknown of go or call It my Sir, Before beyond of RMB. which the conditions otherwise, market Chairman to may Securities events now and U.S. information, all uncertainties predict operating The future and known result except XXXX. or events are involve on manner as to any figures forward-looking conference a These applicable not to uncertainties these Further differ difficult we relate is risks new regarding the -- included are are materially. as factors company’s management’s expectations undertake information the update other in XXXX company’s actual

Philip Kuai

thank Thank today. you us and for Caroline, all joining you,

are another would and our through results recent our then strong We greater announce go to to will two in pleased highlight I updates And like quarter. details. provide beck progresses platforms. on financial

XXXX. and So and earlier five-year government’s Committee China. CPC the this year, goal XXth this, accelerating With digital of development the year objectives a China’s Central in long strategic plan and the clarify sets range the vision through digital priorities building

So accounted according China GDP are digital a Communication number of leads economy in to Well for China’s average the gap with developed in XX.X% notable countries, XX.X% Academy statistics Technologies, countries. XXXX. still that and Information among developing of total there from

So the the key Such economy. XX.X% to contributes China’s to of economy up the competitive digital engine build economy. Government industrial theme digital promote. which digital wants It’s Chinese digitalization main will drive digitalization, of industrial that a highlights total age country’s in

digital of trends in real development, the industry. the Together retail company, are traditional further local always the delivery retail economy. we to national driving the on-demand and economy empowering committed and in of transformation positioned have development with digital a well is been Group driving as Dada JD.com So leading industry we

needs JD.com program. all cooperation powered access multiple entry on-demand services can JD, JD leads for by brand Shop JD. is Shop of the Fujin with Through or Group potential of retail retail via Now Xiaoshigou, Xiaoshigou, of So accumulation October, launched to this both Dada in channels Shop lead retail Nearby leverage We respective China. will oriented pre-growing on fulfill services Groups. points we all including and the strengths the believe on-demand naturally tab development operational results on LBS Xiaoshigou and strategic user delivery technological bring our the ecosystem. we Shop jointly all of Fujin industry Now of and In Now With local Now for Leveraging to our Dada within and and on-demand experience our strengthened years on-demand both will Group. in winning huge the unified of JD. capabilities this strongly

Now experience. options, delivery Shop a supplies shopping For and JD, products better consumers will with enrich providing both

user become Group, for our stronger Dada increase rates a -- our base. development. Shop For vast should drive long-term penetration stronger around Now driver we’ll JD’s This

GMV our There’s Before of in to provide recent two XXX,XXX event like Festival. Double the discussing on the performance of Shopping source this participating platforms, over I some would XX highlights our achieved Xst JDDJ JDDJ total record GMV and XX-day the November November campaign days over XX during XXX% grew day from high year-over-year. year. in and by XXth, the peak the the

ways, on-demand on China. retail move digitalization improve empowering helping brands broader let’s at JDDJ, to Now and technology JDDJ the in innovating platform retail marketing to three solutions. of offline leading the retailers efficiencies local drive scale, in continues

First, empowering scale. broader retailers at

So, users with more increased on shopping offerings hand, year-over-year to XX% by consumers, on bring to million. partnering JDDJ one better and number retailers the XX.X product help enrich us experience more of active

filling On merchants coverage, offline we hand, the digitalization category as capabilities. the we’re other helping and expand retailers more

and chains two Global Xth out enhance have Day were increased Super over year. supermarkets Day supermarkets In established third provides as supermarket quarter, now the a continue leading great the Dada local about And So Super such year the UA smartphone users different sells to XXX expand the exciting with through we Merchant with the me our in developments. weekend on Now the engage of brands. over by to talk We Day, China. category, some position. opportunity Merchant with let winner In the and top we supermarket with take [ph], to Merchant XXX% sessions partnerships for partnerships In continue platform. category, our Super the you recent verticals XX during

XX results launch. On platform than X their with and started Samsung more series. for we XXth, partnerships other. sells iPhone direct for times And remarkable greater saw -- product establish the On are launch XXX the authorized we quarter launch platform JDDJ were our iPhone day XX. new day of we to on a September stores than on This impressive sell Apple

collaboration appliance, as small leading Samsung For and we retailer strengthen the chains home Chondeng such with deepen We Tombai, integration. online/offline [ph].

the free In off. at stores the more consumer’s needs X,XXX Our to about services quarter with quarter-over-quarter. any third GMV than efforts paid on medical time. service The we XXX% assistance. meet to launched delivery pharmacy in Meanwhile, medicine retail for consolidation a online available increased XX-hour platform provide category real-time in by pharmacy and user the also are XX-hour our

the year-over-year, helping go-to as online with to and significant the marketing strategic third platform We marketing sales. Secondly, rates brands on to quarter previous platform quarter by in In marketing more brands our XXX partnerships our the online growth the to online XXX% efficiency. over drive now from further demonstrating improve XXX% than revenue grew service acceleration monetization a jumped for JDDJ X%, from have JDDJ brands.

effectively. to and partners committed are We consumers help efficiency brand improve, engage marketing with

As Day. Super new program called part marketing recently this, of introduced New Product a we

thirdly, innovating increased In this new by August, For under And Unilever solutions. we’re as sales a technology previous campaign week. a results a XXX% program launch launched the from product promotions.

serving be with a of the stores. points to pain retailers products. broad milestone Our and on third continues quickly. X,XXXs understanding We Recently, Based operations retailer in those inventory on Haibo their points new great a in cooperation merchants to Haibo innovate to among solution Now we have support manage retailers. OXO are expenses the promotions, the therefore system popular on of Haibo better and auto able pain reached a holiday stop provides allocation. quarter This module to one launched address synchronization we to module the

improve products high by the times. bundled for processing we efficiency as as result, a XX As

of based tool dollars by This SKU promotion. we the addition, down of on capability brand coupon number merchants products allocate the to tool integrates In brands sales single into expanding to marketing from the expenses subsidies for efficiency. to partners, our improve and one to merchants the ROI platforms a enhance on improve three-in-one launched and level, coupon, help the marketing

tool sales more that offers this the sales XX in than than the for Dada XXXX that enables over around In XXX Group brands. coupons to three-in-one during SKUs across weekends. normal three-in-one coupons times September, weekend daily average example, For create cover the

service, quarter, orders picking third Picking, In Dada fueled Dada in-store were the digitized Dada [ph] Our Picking grew the momentum. growth over have Picking strong by enhanced quarter-over-quarter. XX%

while volume periods, on-time During to XXth the order XX I move merchants fulfillment Festival, costs. June would improve selling with more Double like than Shopping Now. rates effectively Dada doubles on compared helping promotional to

our additional on services virtually the we over each investment. fast delivery the or on-demand help tea delivery continued and delivery key more to from XX% KA quarter from to supermarkets increase to XXX% those In food beverage Revenue revenue functions merchants than merchants added from the area geofencing to The without Orders KA. Revenue restaurants third determine accounts from KA by chains increased for by service chains significantly. accurately increased increase XXX% year-over-year. year-over-year. year-over-year. demand store Our

our Data Smart strategy orders SMEs, fulfillment driven This refined to operational SME we Data the launch based capabilities. the and the moving year-over-year. merchants So the by delivery. over our SaaS, quarter announced September, officially our rates Now third Dada pay of mainly number the to of of software-as-a-service, was on logistics optimization continued completed that in increase In XX% to

and providers who own and delivery product tools develop manage this merchants So service dispatching with orders. orders, -- for delivery delivery to who suite fleets their the provides a omni-channel of on-demand digital deploy third-party routing

in delivery several and system of number service the hope the by now industry. quarter. Our And in from This in doubling our SaaS last growth helped we our Logistics JD pickup with digital services, improving the in efficiency in And and types. years. the capability product, logistic orders orders penetration of in strong built efficiency upon standardized delivery, we a the integration has pickup the with opening enhance a growth third saw for lot our on-demand further increased whole platform to previous various enhanced is the quarter up operation form lastly, last-mile technology

last-mile services driver now our you. for pickup over pass Chen go the for I the We expect another to over that, call our to will With Beck business. quarter. to be Thank financials

Beck Chen

Thank you, Philip.

in from Pro revenues revenues Net Data order rate increased billion, was online of driven of JDDJ. net percentage marketing GMV, merchants. in growth in aligning intra-city method mainly was XX% the ways services which revenues RMBX.X mainly the net by Now comparable owners quarter. consumers XX% million. by advance. activities unless increased comparisons revenue basis, our I’m in contributed the accelerated an increases delivery size. were order revenue numbers performance. last promotional year-over-year, give services to and Therefore, over JDDJ the believe compared few are result by billion, to revenue are of Total will a revenues have year-over-year, the Before forma would average delivery also revenue increase increases all noted. to otherwise all XX% housekeeping to just items increase been of due basis XX% year-over-year the we our the recognition RMBXXX which increasing number and numbers, changes rate, with services be driven to useful in of judge Dada by Now launched We Net represents pro growth in a RMBX.X last-mile brand growth in forma to a growth to go growth the The a the volume on going most from active as revenue to renminbi chain year-over-year

with to and connection share-based decreased expenses research negative to the on company’s compensation and a primarily cost million, the inter-city QX expenses was RMBXX consumers order due and rider increase supporting million, in in per to growing to the mainly to marketing due decreased attributable volume of the Moving The last Selling increase business on incentives for retailers RMBX.X rose technological the to million. business. were due RMBXXX delivery services. to in QX loss expense G&A in R&D by incurred rider was offset million, and and with shareholders with decrease operating by upgrade primarily growing as the dollar company expenses increase in last-mile partially an was negative of last diluted The personnel of development merchants personnel million expenses. in billion. the cost RMBX.XX, compared attributable continues RMBXXX absolute to the JDDJ basic to and perform costs net various was rise net Non-GAAP year. capabilities. an strengthen related year. Dada its as RMBXXX primarily RMBXXX compared delivery loss platform over share Non-GAAP ordinary increase RMBX.XX were result provided our amount Data of increasing the Now to and JDDJ costs costs chain services to side,

So, company June US$XXX under cash, cash of million the as repurchase of repurchased approximately million cash short-term October XXXX, in have and we in billion investments. And announced September equivalents, had ADS. XXst, XX, XXXX, RMBX program US$XXX have restricted share as the

XXXX, pro XX% adjusting quarter the be of XXXX forma For of RMBX to the revenue last-mile net a billion to we Now revenue and expect XX%, basis. fourth and Dada representing to QX RMBX.X XXXX billion rate between QX gross total comparable

the we the In quarter ready revenue session. revenue margin forma in significant experience now prepared of XXXX. based comparable Q&A net to addition on continue we to loss begin to the acceleration in net concludes This remarks. you. to year-over-year pro Operator, fourth the the our further are expect Thank growth, basis improvement

Operator

Your Goldman Hi, Ronald. your Instructions] comes question you. of Keung Please from question. Thank [Operator Ronald ask first Sachs.

You may unmute. be

Ronald Keung

you Hello. Can me? hear Hello.

Operator

Yes. Go ahead.

Ronald Keung

Okay.

Beck, Sorry Hello, about results. Philip questions. on and and that. Two the congratulations

how And the Firstly, -- our revenue, And for costs that to subsidy say function that do trend sales through going you. is you Now that nearby that channel JD clicking lower efficiencies that guided? Now Thank kind Is that revenue -- mainly the percentage with Could the how is button? year driving next the new this that driving one quarter we’ve that has fourth see new which is is is contributed and users on the marketing is we just has down rate Shop additional how and share seen that channel function with channel as -- is acceleration in of we a growth encouraging? how the been company? of come have that seen rates? progress Shop we from traction will subsidy and how then leading grew

Philip Kuai

Ronald. Hi, Okay.

certainly of one of been the a has key growth Now Shop quickly driver traction expect we is see very is the to So key good. and growing the future and happy we’re will become it very our

not nearby includes points Now also collaborations. Shop entry the various the only so channel, And the but Fujin and

as you searching click and then if results and the purchaser search on of example, part on the the are using you search JD engine consider For Shop the also Now.

about and we launched brand from the So growing both Now potential. the Xiaoshigou. very are will the in up growth the this contribution And us Shop And absolutely unified JD of for foreseeable October confident future. the

building So I the up on be think the on-demand around consumers retail mentality the will JD.

JD see time have I agreement also think we over we And all will of the with Shop the potential going joint XX% way user to user of the up. to the Xiaoshigou grow penetration. Retail penetration a Now

drive helps level. Now, since that’s that time, traffic. we to think down Shop see at our happy time, efficiencies the the channel the looking subsidy overall, we’re the future marketing the to to At I same going are same very also new So also at. the down partially the level improving the and new we’re And subsidy

the are about and both we in confident the growth profitability future. quite So

Ronald Keung

you, Philip. Thank Great.

Operator

you. Thank

comes America. of ask Leung of Please Eddie question your question. from next Bank Your

Eddie Leung

some forward? the and sales in of this landscape the affect reduction you. strategy in bit might in So on subsidies guys. you overall have bit and subsidies fresh subsidies category, a and Good I And question competitive still whether the related on could with you point? in of produce that potential on just on to grocery Ronald’s sales Thank could breakeven elaborate and morning, have we how and other because the some track elaborate unit question going marketing trend follow-up wondering heard that, our our economics also then marketing, terms target category? formats previous and a the about is of

Beck Chen

first me So, Eddie, protect the question. let

said, just like earnings last communicated like yeah, in have So, just QX, Philip the we in call order.

JDDJ So more -- expectation than significantly, interestingly half, we to this decreased and will first compared we consumer the our second expect was half expected in given incentive the decrease of ratios incentives before. consumers to year actually

was So QX, first for of consumer -- versus incentive the X.X% this it the the for year. a incentive in in X% half

level. So of contributor our this main to direct-to-margin is our improvement greater the

was X.X%, seen the significantly which to I to improvement our they’ve is -- So incentives. incentive improved in direct-to-margin like for minus XXX% think the QX, consumer so

cost So Now the businesses. is of or of the those Shop this improved contribution actually Xiaoshigou

efficiency implemented like created mentioned for and have platform is we money the example, brand the improve other in three-in-one earlier tours The of subsidies. to Philip money that, combine to the just merchant script coupon the the also together money, the owners

lot. improve us help level more no which QX. improve And believe our us ratio further helped expectation to to also be X%, shall for direct-to-margin in this in the will a than the also quarter, in fourth subsidy So the we

Philip Kuai

terms the consider channel, so is allocate and time, certainly can than economy provide we I think, brands so at market for time, overall are landscape willing now first are And Yeah. more JDDJ That’s channel and efficiency as general most helping them under channel. under are and all the the retail the all improvements. this of can certainly same the for pressure, JDDJ But see the of of for marketing are the more and can looking we’re while landscape, in competitive seeing with looking growth to to improve at same both of the we’ve and of why the And the most pressure, brands channels been people the all the brands that retailers pressure. resources working most our fastest all, also through as growing efficiencies.

by time, three-in-one search same dollars coupons. we of the at the So ROI marketing improve the

I seen landscape, group player used to buying. the or certainly most you had only the also the player provinces the market the one group be But more as And not that’s as very markets the group improving active. think, the probably the recently key in community tighten community the buying at ROI. are is resources they community competitive but up well. us, the brands terms and slowdown in we’re subsidies the from for why that’s key buying are of and of been now have that least marketing buying So all from on regulations in reduced getting certainly some seeing And group for of has

the year-over-year QX. We of XXX% seeing GMV growth in are

grow are community the buying. again, despite So, able group the to competition we from

the of that looking think much as the economic I reasonable would too with a burning like and envision we instead more of in forward subsidies. rational, regulations, as the will well player be each pressure, market

that certainly getting a more we’re So happy healthy to see are we as environment. to competition

I think the same a And stressing JD Retail both for certainly improve at win-win increase that’s efficiencies good we’re for JDDJ. achieve everybody. to collaboration situation, time, with so and JD and the scale our both the to

are we So edge competitive about going very forward. our confident

Eddie Leung

That’s again. helpful. very Thanks

Operator

question Your Chong of next Jefferies. Thomas from Please ask comes your question.

Thomas Chong

question morning. Thanks is momentum growth two under KA business I questions. about Good is The taking Hi. first strong. questions. very my our for management My business Dada have Now.

about the in category online marketing future? and Just should hand, the also is how as well and average think on this we want in should segment? mix management to can growth, as segment, about into with second you. X% XXXX get rate Thank in investment the momentum ambition a that given in we about KA my how about this the competition value? the right enter online it as we comments take how to now, revenue made is should question our to marketing And also growth going are order for strong On the about think we we be sense other the JDDJ, that regard the QX

Beck Chen

you, Thomas. Thank

Philip. me and to the So, firstly on will elaborate questions question competition I let leave

platform. order So RMBXXX for JDDJ, average the of the so things, in was value for number first QX our

further category forward our increase QX, that we -- in be platform, also go and coming of And was terms further appliances tabs. still we And it diversify so in is and the two-thirds the the up will C like as will supermarket home from in so this the quarters. going further in XX% categories was QX supermarket mixture -- three smartphones, be category for we categories following including high RMBXXX the and very think will mix expect that from mix, PC cost, coming even and category it

by monetization more services, contribute terms less X% But the So, for we should the expect growing we that and Dada should GMV rate be merchants now Dada for businesses we and accounts, few is maintained will it be grow delivery and following further following will still marketing the triple-digit the QX in revenues. by more for more than online competition Now quarters, I I think believe chain the And in year-over-year we so services for if will yeah, quarters. And following X% expect a XXX% the it like least to no also that that categories supermarket Now quarters quarters. at than online on of the will gradually be the we be this monetize question of the in basis. in for be And Philip. leave key in QX in next -- also will further prudently QX a marketing

Philip Kuai

Yeah.

So, Now to KA -- the and KA like more regarding would Dada color give I background. business, the

accounts reason and continue you. among players. order So reputation to key -- all, in of need up to There’s one a the get grow to can fast first are need KOL, win to you in serve why trust confidence -- the we is, very of people’s grow we you solid building the the

as are serving quarters-after-quarters. for names, like So all we the big well,

segment require key and restaurants knowhow. now pharmaceutical the including win how chains. we good and trust and the up the different are There a very very building a build knowhow in are are to solid of also that’s few in segments we to supermarkets, are capabilities. a serving, And able reputation, KA and -- market. a Each now up we addition So capabilities reputation

leveraging Delivery. of Dada integrated Picking been from as Dada imagine integrated to our and you -- heavy like our also -- handle packaging that’s can our is with example, packages process complex, very Now and has delivery, the to service is For bulky requires why supermarkets, like quite so

why of is them are we That’s for most of using for are And imagine. very lot most like you as chains supermarket supermarket’s. in from a value the may restaurants different of leading providing the China, adds service. supermarkets, So our

So supermarkets. the level, supermarkets. than the stores be can fewer, the restaurant, are per But the number than much fewer store of at orders more much

different pharmaceutical, operations. So to and need It be And order very bundling hours. different for deliver you routing clock, requires it XX to requires able capabilities. the also very around

the this, So and can KAs, we delivery been platform last all of we That’s efficiencies valuable over all and considered building the we years. are capabilities knowhow not independence have third-party but least, how is such win a so the customers. And Now as player. by Dada a very

picking or for Alomi like example, owns not as independent. they’re platform, they’re unlike, So order the considered [ph], which -- considered Metwans

So they to delivery much tightened platforms. to to don’t most because independent the be services, the use of KA order taking wants want too

this, time, on the we grow it Thank the at all to very as next fast So I the we’re carry same and Now, confident mentioned, are improving Dada year you. explains for profitability to why so. and continue to or able

Thomas Chong

Got you. it. Thank

Operator

ask next Your of comes your Please question. Yap from question Citigroup. Alicia

Alicia Yap

my Hi. Thanks for questions. management. questions. two Good taking I morning, have

First to other KAs. our SaaS mentions you service launched just about, digital logistics think, this is, I opening management

Singles So road think is down management over growth. then these achieve JDDJ wondering And if revenue performance? from you’re the on any service licensing there’s I second opportunity out? the mentioned Day that XXX%

the category Singles much performance three during a assume category the the will C Day could non-supermarket. Day. probably contributed on bit percentage supermarket management the higher Just the during versus I Singles the a little elaborate

then slowdown, change consumer any behavior you. Singles you mix if -- demand the guess, experience the category Singles the of just on to these -- helpful? in any of and And given the terms be macro or during seen behavior. So I preference? consumer colors sure of on Day during just have is Day have related the the not category will the Thank that

Beck Chen

Okay.

questions. there actually, So, are three

let the question first me questions. two leave Philip. take So, I to macro will Alicia, so

be which those pure service those Dada’s a SaaS the can delivery SaaS pay, So to product, providers. about platform, it’s -- all provided providers Dada to logistic merchants the service third-party or

implemented up So like to or was it by stores. now X,XXX used

think, still those our or provide to by be like like physically to billion product very Dada, is So to fill minimum, we it, our even Dada it the orders I RMBX filled right but per our to service riders, a revenue now so contributing will we merchants. expand by year filled software further the don’t scope can need revenue

So the we development right review close, in product. are the about logistic like, SaaS now of

So better I further growth and And about the mix, the for revenue think talk contribution the also, will expectations the maybe call. in it earnings category Singles be for those Day Singles to Day few next like the mix.

Double You’re revenue C fast, growth JDDJ more called, category, is supermarket supermarket online still guidance -- like so is still the but much right, categories. categories, including the that Campaign the monetization, categories generally three rate and why supermarket supermarket XX promising the believe like we will is and we for contributed very QX the period our of more C also the which for factors growing now, be by product right mainly and very think given revenues is that’s three growing marketing and services is categories than

-- the XX I Double be detail satisfied Campaign at rate but all I Campaign actually period, those the the like don’t results overall So don’t for look period should mix promotion merchants. very the Double I to growth believe XX

Walmart, Walmart, XX% is but supermarket like Singles like like annual XXth November For is for, campaign, campaign Day Promotion selling growing Day category there to August their still so by the even the for August compared like usually They’re Xth all peak the example, Xth. for annual products.

Philip Kuai

the right the news. interesting bit situations, small seen stock the Right. that, there’s the accelerator, an I And the before and Day Singles little in to is say, up of behavior a home, at will consumers in you encourage might have terms governments consumer market the -- Singles for on Day

bit. also on-demand is, this more big little two sales helps used things now the are if you think the consumers and at seeing But look One overall, a I think, more retail. I thing So boost to happening. to the picture, we’re

get and delivered on So historically, on-demand. large consumers like now of are restaurant buy number demand. buy used to everything a foods they may now And

trends liquid and a retailers is same like important the more absolutely us consumer this vertical cosmetics alcohol. to like a think and seeing. pet get also care like than or from see work now we’re more for example, a listed, I At supplies smartphone a year mostly with that this we and are personal very parenting or and time, or a like more willing also willing electronics like, and

And they with online didn’t an stores, So all are verticals strong we’re vertical this a consumers online. kind this to that year, instead the visit getting very get supplies much while willing same like stores. platform those they of the very are they before. But us. time, seeing going quality work situation, stores, and specialty retail work used delivered think the of to all to the retailers At I -- with good a are especially creates now on-demand trend more offline use -- are now

So we’re this happy to see combination.

Alicia Yap

Thank Great. you.

Operator

question. of Please from your question next Your Ashley Xu Credit Suisse. comes ask

Ashley Xu

But point? still the our and regions, seen users? more by taking Understand from the does want I our how reflect up out nearby out same Thank that And has you. year it rolled new that our could for attracting been XQ those question. rolling guidance, contribution end? point. to what the have we entry on their for more test color this target or any on time, follow -- Thanks At on recent actually share effectiveness progress stage. my in management plan management and for entry gradually

Philip Kuai

Yeah.

can background some color will you there. give this have will nearby, and perhaps, and -- I about So Beck anything

available all, of is the first now access. So, nearby for channel

tier So the Tier X cities X in the of some cities. lower Tier and most of and

lot be app a transforming clock technology very now technology with app are there from the to app that JD working happen. BXC are and closely based and to of location we’re around engineering behind and the happy So can imagine, channel since see the see literally a the -- to to are as when June, lot nearby behind may done a scene. we the to team technology launched, happy the that JD Because work and we’re make needs we’re as it, engineering you there of you

will the and to most supplies the Tier supplies the So Tier store X, consumers are with our same we the and of happening, X to the time that At geographic product cities. enriching roll out expanding service happy to the keep coverage. we

the retailers get up seeing So listed sign every week, we on channels. nearby are like and more

broad I ever matrix because the nearby that’s need have supplies around quality to the time, improve fundamental, So see you and has since continued operation launch. same the to think we’re also to coverage. happy channels At

conversion up the of Now into on base, plan forward, brands levels going JD to of the time, to the cities, improve conversion top channel. to cities consumers So, among and to focusing also penetration order key consumers at the build Shop to rates improving improve the the the same we be mentality and this the user nearby

grow to with future. significant looking very significant, still and so so certainly expand and this it the I we’re step forward early or far, so is think seeing five So channel like, very as we still and a in months, are a this just it six stage to far, months very

Beck Chen

And guidance, QX. tab are Fujin coming in the nearby we in from tab, the also in very benefits the XQ calculating prudent

businesses Note it Fujin because the more listing on the results and like, those product our, and more search traditional few tab in I this time shopping. of the takes consumer nearby do up and Fujin think, improve further. a this like build and for Philip the product merchants all mature mind said, for to -- a ecosystem it’s through JD shall QX, still, those for from the the So coming be came

Ashley Xu

Thank you.

Operator

next of your Please question Wei Your comes ask UBS. Xiong from question.

Wei Xiong

management. my Good you Thank taking for questions. Hi. morning,

I mentioned shift non-supermarket you. lower will of the our commission also quarter? First, as management the level geographical terms get Can is coverage do And this I geographical update we latest different and of we contribution share to grow could contribution. to different the of categories continue the on that trends an wondering we follow product Thank that appreciated? how affect was that just future mix up and year? a in a the cover can target there of JDDJ further coverage level? If GMV share, the be of counties from the tier expansion. get across commission expanding update will next second, that we an want GMV categories their point have I your market on And update to for on number want cities the you

Philip Kuai

see you view and my Okay. anything will add. give if, have Beck, to I

first GMV tier So by about grew XXX%. low our from in all, JDDJ of QX, the on cities

and focusing we opened. far, we so the, And have existing expansion into have now, counties, And penetrate and development on the covered sorry, over the cities. cities, tier category for and X,XXX continue the cities especially the in cities XXX, that we’ll we will lower be already to

in -- I think, each So -- coverage. the commissions so a improving about from improving have category. categories rates. if monetization and commission different the commissions, the different are of categories different we geographic that’s But and terms And the

with can I’ll brands in are to to more the the segments. categories. collaboration improve add. independent so stronger and value we see the That’s if, generating commissions we retailer, -- different Beck, of the mix And why also we our yeah, from anything can with that’s So improve have

Beck Chen

Yeah.

especially categories, instead So in daily have fees usually they given should those same for because FMCG subsidies we And also home to FMCG categories, owners. products for commissions, C time, purchase non-supermarket more consumers, frequent also dollars lots be from to have of the supermarket and products like, of appliances. are brand products, other three marketing we we

need you other pets overall rate don’t those all than supermarket incentive but to give for much so lower So including them. is home categories, smartphones, rate, manufacturing appliances, newer their so manufacturing products, the to

generated like for order us give direct-to-margin will non-supermarket this positive those category the products. So each for

the emphasize overall platform. category So the contribution products important still platform. margin is that contribute we the of improvement categories also of from to FMCG the non-supermarket the most But will the those

assess some give to to to need incentive them. consumers still we to retain So and subsidies

why for the that’s and the FMCG still supermarket our So direct-to-margin slightly moment, are in negative this have because -- categories. the to we platform the wise investment platform

our long given our improve So to course, we that non-supermarket many ratio overall while and we the to to incentive if while by still don’t rate, of we we direct-to-margin incentives supermarket believe level, other categories, continue the improve categories. can manufacturing improving in incentives FMCG so significantly run, decrease the

overall the to -- direct-to-margin track the whole basis. So our for even is I believe year break we on -- mix through year that next contribution

Operator

question. you. of Instructions] Leung our from Thank Please [Operator comes And question Robin your ask final Daiwa.

Robin Leung

Hi, Thanks follow just up for it’s question. a taking measurement. Actually, question. my

that ecosystem. Looking realize into XXXX, understand acquisition one hand, we some the will JD on I cost user savings in from

On going strong the you. kick you increase like, to ecosystem what the and user the improving, the like strategy if it’s Thank starts actually JDDJ subsidies if some other in, is management it spending of possible in its hand, those, ROI we up are be share within that JD step could is further to will again, if great? categories, mentioned, FMCG our would contribution that

Philip Kuai

Okay.

happy as This user acquisition. terms are stage we early -- journey and for help like we’re this the of -- all, to first of And is we of from journal strong of can the this reach we in and our XX% still the are user penetration. cost in us said, So, support JD are getting reduce you see certainly the to to acquisition. of goal

So we single the are now at digits.

long to the subsidies, go. terms the to trend efficiencies the is a to I and not in goal think, our improve overall, way So there’s and increase subsidies. the of And

from getting dollars explained earlier, marketing from we more resources and the are the retailers. so the and brands more As also we

happy the to ROI combining incentives overall of continued our improve of are instead all efficiencies increasing them grow. and see we So the these to and we’re has

like for the and to rational will way. most continue much the to of And subsidies too all see they now earlier, as that we’re we players general I said that are the happy landscape, think for of not that’s be. parties competitive more we and very burning as used also important

forward. profitability and we are optimistic why, think, So overall, I that’s about both going growth

Robin Leung

Great. Thanks.

Operator

to the Please to continue. conference back now would like I Caroline. hand

Caroline Dong

Dada’s like to Operator. of you, today’s you participation closing, thank we’d team, on call. your In management for Thank behalf on

If any to This you information, us us you feel further reach joining out require today. directly. Thank free to call. concludes for the

Operator

today’s participating. Thank concludes conference This for you call.

may You disconnect. all