Q4 2019 Earnings Call
<unk> earnings Conference call at this time, all participants are in a listen only mode. After managements prepared remarks, there will be a question answer session. Today's conference is being recorded.
If you have any objections you may disconnect at this time I would now like to trying to meeting over to your host for today's conference.
Thank you and welcome to our fourth quarter full year 2009, <unk> earnings Conference call. Joining me on the call today, I'm going to reach or do Judy Dot Com CEO Mr. Li shoes C. O M Street retail Mr., Joe we will see on Wall Street altruistic scenic while our CFO.
John now our Chief strategy Officer for today's agenda, GT dotcom groups. The old richer view will discuss highlights for the fourth quarter and full year 2019, although I've seen it.
Oh and other management will join the queue when they session.
Well, we continue I refer you to our Safe Harbor statement <unk> earnings press release, we just by today's call.
We will make forward looking statements also this call Incruse discussion self certain non-GAAP financial measures. Please refer to <unk> earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated.
All figures mentioned during this conference call are ours beat.
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Thank you very much Richard for the kind of words.
Hello, everyone. Thank you for joining us today.
I'll go through the quarterly updates and financial outlook before giving a few words on a succession plan.
I'm pleased to deliver another strong set up result for the fourth quarter of 2019.
Net revenue growth exceeded the high end of our guidance, reaching 26.6%.
He's done by a highly successful singles day promotion season.
And our previously announced the reinvestment strategies.
Focusing on everyday low prices.
Since the user engagement and logistic services in go to your regions.
The strong topline growth was accompanied by lupus the user growth and a strong traffic momentum.
In particular, we saw 28 million net additional customers seem to September 2019.
Reaching a total of 362 million active customers in the past 12 month.
This is our biggest quarterly net addition for the past few years.
In the meantime, our mobile you you <unk>, 38% in Q4, the fastest in eight quarters.
We continued to make progress low tier regions across China.
Innovative marketing activities more diverse product offerings and improve the logistics services.
Similar to Q3 over 70% of new customers in Q4 came from low tier cities.
Category Wise general merchandise achieve accelerated growth of 37%.
Hi, it's the growth rate for the past four quarters.
By food and beverage.
Fresh produce.
Medix.
Health care and home products.
Net service revenues grew by 44% year over year and contributed 12.3% to award revenues.
Even by strong momentum from third party logistics and advertising revenues.
For the full year 2019.
Net revenues increased by 24.9% to.
To 577 billion on B.
Oh 83 billion U.S. dollars.
And continued to outgrow the industry across most major categories.
Thanks to the continuously improving and differentiated customer experience.
In particular.
Gross margin gross merchandise.
Excuse me generally general merchandise revenues grew by 34% during the year.
As we successfully cultivated customer shopping behavior.
Additionally, offline focus the categories such as FMCG.
Net service revenues grew over 44% and contributed 11.5%.
Total revenues in 2019.
Up from 9.9% in 2018, that's we leveraged our supply chain and technology capabilities.
To better serve our business partners.
For fuel gross margin define as.
Revenue minus costs and fulfillment expenses and divided by revenue.
Remained relatively stable at a 7.6% in the fourth quarter.
Compared to the same quarter last year.
Despite heavy reinvestment everyday low prices and logistic service level, you know what's your regions.
On a full year basis.
A few to gross margin expanded 88 basis points in 2019.
Which we believe with a better measure of the improving fundamentals across varying categories.
Given by economies of scale and technology base efficiency.
Specifically.
The fulfillment expense ratio in the fourth quarter was 6.4% down from 6.6% in the same quarter of 2018.
For the full year 2019, the perfume expense ratio improved 52 basis points.
To 6.4% the best the level in six years since our IPO.
Even though we have the providing the most the competitive compensation benefits to our logistics stuff well have now become the hallmark of TV dot com premium sogous to consumers a nationwide.
Our marketing expense ratio was he was 4.8% in the fourth quarter 2019 comparable to the same quarter last year.
And the full year marketing expense ratio in 2019.
0.9%.
Down from 4.2% in 2018.
Affecting our more defined the marketing strategy with improving our thing.
Oh on D.N. DNA expenses in the fourth quarter was relatively stable compared to the prior year quarter.
On the full year basis on D., and DNA expense ratios improved nine basis points, and 17 basis points, respectively compared to 2018.
That's the reason.
Our non-GAAP income increased 125%.
To 704 million on be in Q4.
On the who your basis.
Our non-GAAP operating income jumped 364% <unk>.
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Our GAAP operating income reached a 90 then on B.
Slightly higher than the non-GAAP measure as we conservatively excluded the 3.9 billion gain on sale of development properties during 2019.
This is nevertheless, a core income flawed logistics asset management business.
So it is part of a new business.
Operating income.
From the group level, we continue to exclude it from our non-GAAP operating income and non-GAAP net income due to its relatively nonrecurring nature at this time.
On a segment basis.
Non-GAAP operating income of Kt retail group increased by 95% to 13.8 billion on be in 2019.
From an operating margin up 2.5%.
Up 92 basis points from the 2018 level.
The non-GAAP expense ratio dropped to.
12.3%.
The lowest level in four years.
Moving to the bottom line.
Our who your non-GAAP net income attributable to ordinary shareholders increased by 211% to 10.7 billion on be in 2019.
Mainly supported by all expanding for field gross margin and improving operating efficiency.
Both driven by economies of scale.
On the GAAP basis, net income attributable to ordinary shareholders reached a record 12.2 billion on B, which included.
3.5 billion on be a fair value change in long term investments.
Our free cash flow for the trailing 12 month also set a new record.
Oh from 19.5 billion on be driven by over 20 billion of operating cash flow and over 2 billion of net cash flow from our logistics property management business.
Our trailing 12 month free cash flow was 86% higher than our non-GAAP net income in the same period.
In summary.
80, Dot com finished a remarkable year with robust revenue growth solid profitability and free cash flow and most importantly, accelerating user growth.
This is supported by our customer centric focus.
Evidenced by the continuously improving net promotion scores our number one ton okay <unk>.
As well as our persistent investments in tech based infrastructure.
And our people.
This long term approach to running our business has also proven its a unique advantage.
As we provide aid and support in the battle against the Corona virus during recent weeks.
Thanks to our use of investments.
In our self operated proprietary supply chain and logistics network security Dot Com was able to resume full operations very quickly after the Chinese new year.
Has been in a unique position.
Provide a broad product selection.
And interrupted timely service to our customers in most parts of the country.
As people tons to E commerce for daily groceries and other necessities.
We have very privileged to have been a unique force you fighting this challenging battle.
As a result.
While large ticket durable goods and discretionary products.
I have been negatively affected by the outbreak.
The consumer staple categories, such as groceries fresh produce health care and household products.
He grader online demand during the past five weeks.
And Judy Dot Com was among the few companies.
And in many cases, the only major problems that critical for field the orders.
Although these are not the most the pocketable categories.
And the we also incremented strict policies to prohibit any price increases during this time.
We're happy to be in a position to support People's likelihood in this difficult time and become a lifeline for millions of existing and new customers.
Now on the financial outlook.
It is obviously difficult to assess given the uncertain nature of the Corona virus situation.
However, based on a path to among preliminary results.
We do expect our net revenues to continue growing double digits in the first quarter.
Thanks to the resilience of our unique business model.
In fact, the level of user activities on our platform has accelerated in recent weeks.
Daily active customers.
And the number of feud orders have proposed in growing at a faster pace than the level in the prior year.
So we hope.
After the Cobot 19 is open.
We can quickly resumed the robust growth momentum.
As well as the improving marketing trend.
[noise] with the greater consumer Mindshare, we have earned during this turbulent time with our existing and new engaged customers.
I'm more confident about our market position and our mid to long term growth prospects.
Lastly, regarding the CFO succession plan.
I would love to point out this is a pre plant and a well prepared to transition.
Many of you have met with Sandy industry International NDRC, we conducted together last year.
He is a highly seasoned financial executive and has also earned tremendous respect internally through her outstanding contribution to GDB tells the financial and operational improvement in 2019 Esprit de Vito CFO.
So I feel fortunate to have been able to pass might go into good hence before I reach 55, the ideal retirement age I had a plan for myself.
It's being truly an honor to have served Katy dotcom over the past the fix in half years.
And the work with so many talented colleagues who have grown the company by over 700% in six years.
And I want to thank Richard for giving me this invaluable opportunity and the for the friendship and trust we have built along the way.
This concludes my prepared remarks, and the we cannot move to the QNX session.
The question and answer session. If this conference call will start in.
In order to be fair to all callers, who wish to ask questions. We will take one question at a time from each caller. If he has more than one question. Please request to join the question Q again. After your first question has been addressed.
Ladies and gentlemen, if you wish to ask a question. Please press star one on your telephone now and wait for your name to be announced if you wish to cancel your request police breast about or Heskey.
Your first question comes from the kind of Eddie alone.
Bank of America. Please ask your question.
Thanks for taking my question best wishes tool, everyone and thank you Cindy full all to help I came to pause, but just a follow up question on now what you guys mentioned.
The pause Oh, Youre stretchy, Vietnam for whatever perhaps our near term before the outbreak I remember you guys mentioned that.
Yeah, Tom would you plan to even as a jewel was a one time gains is my first half of 2019, even now sales and marketing enough for what the Hell also just wondering how much.
We would help us pessina like because of these reshaping of 10, how much was on an ongoing basis and then my second the Oh I also remember a one scratchy you mentioned that would be to drive to evaluate the services such as our appetite in life and the reason which is PICC revenues.
And would not be aggressive fleet.
Shameful Commission based or the supply, yes, 40, m., we face and potentially the so called commission rates well off first party gross margins may not be rolling off very fast. So just when do they go to give us and I'll say on the top.
He commission rates such barrels to gross margin trends of your <unk>, a one key pieces I keep on July stretch you mention cooked up before thank you.
Okay. Thank you Andy let me try to answer your question. The this is city.
Yeah, we have mentioned in the prior earnings on this call that we had a onetime gain in the first half a we also have mentioned in our last earnings call that we have spent part of it.
In Q3, and basically we have spent the remaining balance in the fourth quarter.
So you know that's why you see that off a few months gross margin I didn't really expand much.
As we reinvested, but our operating margin for Q4.
Still improved from the same quarter last year.
Because Q4 was seasonally.
Seasonal quarter that you know that.
We will be basically giving priority.
Two promotions and giving back to customers. So it's not a quarter to pursue profitability to begin with.
Second question I don't know you fight get your question right, but yes, we you know if you're asking about our strategy between commission advertising to we giving certain merchants on volume based discounts and we are.
Not at a stage to provide oh pursue commissions, but rather a encouraging merchants to be more active.
By spending more on advertising, whereby driving a topic and growth.
So so that's really has not changed.
Okay, but you also talk about the gross margin trend off your one PPS is a similarly I think you guys mentioned that probably would not be operates to push fall a high cartel a supplier we face in the near term.
You want Atms to Las pad more marketing dollars. Thanks.
Oh sure yes. So so if it's on gross margin. We are planning this on the full year basis. So if you look at our full year gross margin. It was definitely no showed improving trend and but as I mentioned.
HM Hi coin as well as on this call we would like investors to pay more attention to for fuel gross margin, which is gross margin minus fulfillment expense ratio.
This is because different categories have different gross margin and fulfillment cost characteristics.
Some categories May have higher gross margin, but also higher fulfillment expense ratio.
So if you want to understand and also analyze.
The different products categories will analyze the companys overall margin gross margin trend.
It would be better to look at a fuel gross margin, which I mentioned earlier improved 88 basis points for full year 2019.
Thank you.
Your next question comes from the line up around not Kim of Goldman Sachs. Please ask your question.
Thank you for taking my question I, just went on and congratulations on the strong results for.
Richard I want on Sydney and now it's all so my question would be on the virus impact and kind of the longer term implications of that so I've heard some of the near term strength end user growth and just thinking on the longer term perspective, what's our strategy in retaining these users, particularly maybe for some first time users that came to.
Your platform over the past month buying JD supermarket, and buying groceries hotel strategy and retaining those customers for long term growth and management aim to provide maybe a for your profit guidance I'm thinking would it is it a managed planned to maybe guide this only after settling up the virus outbreak on any color.
On on the full year profit guidance would also be appreciated. Thank you management.
Sure, Yes, so let me take a first shot and then see if other management will have anything to add.
Yes.
Yeah.
So yeah. So I'm on the long term outlook for how we can leverage these increasing user base. Our strategy has always been to saying is to provide differentiated customer experience.
You know through our everyday low prices.
Our best in class service level.
Expanding product categories, and the better attractive user engagement. So that strategy has never changed and we do hope through this.
They just event through this crew and a virus outlook some of our advantages.
Becoming more recognize.
Hi, all consumer base and so is this is you know you will never.
Exactly know what will happen, but on the other hand, we do become definitely more confident.
In our ability to attract and retain our customers and then.
On the margin no as I mentioned earlier.
We do hope once the Corona virus situation stabilized.
We will resume our.
Increasing margin trend I'm. So, yes, we will be giving the margin full year margin outlook.
We have better comedies on the Corona situation.
And that the tend to will be consistent.
For the period.
The krona virus.
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Todays call virus has or the market has taken a hard hit there. So a lot of challenges for example, the consumer steamboat has been a precedent limited support is what period of time. However, we also see some sorry, such as our we see more oh cost alike are returning to our platform and so.
Ah, Yes, there's always what are becoming more active we can open up.
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So some of the courage traffic structure, we can see that they are more anymore color you I users are being more active.
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In the future by leveraging our they fight operate with these existing.
This is to improve their user experience and create their stickiness with our platform.
And then what image humid Eugene Jingdong, the certainly a more sure no no pool, so come down just a dog June gloom, Josh I'll go though.
Sure.
So useful insight, but who.
You should all the Jeremy you on though.
To conclude or to go down how much easier for you.
And also because south Africa double the epidemic situation.
We have 40 demonstrated the competitive advantage of other business model more or.
Lets has had realized that the significant to our sense in collaboration with US. We have we're working on more dependent in terms of a stockholder <unk> product other warehouses and working to develop the omni channel collaboration and all this effort has been accelerate after the academic computers.
Actual Sofia Solutia cool.
Jim come to the Cios are sure that's it.
The two numbers if at all.
In terms of the categories, we see a very positive growth in the category soft consumer goods fresh produce and health related products.
Sure.
The yield intercompany.
Sure.
Good for each year long term go to the two quarters Ovatwo Hong you suitable for the full quota.
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We believe that's more as more people, including the customer interface, even the government will pay more attention on the significance of the internet an entire less can play a into.
Stabilizing this market, especially for the fresh produce and health related categories and two hour.
Services to provide high quality.
So close to services provides more value to the society.
Okay.
Thank you next question.
I still feel any.
Your next question comes from the line as Jerry <unk> you B.S. Please ask your question.
Hi, Thank you and the Sydney.
The best.
Coming retirement I'm on my question is still on margins. So first is in the first quarter I'm sure just given the virus outbreak in some of the release programs, we have where where should we expect margins I know this is a bit of a one off situation.
And then if we look longer term at a more normalized margins can we talk about what will drive ceighty retail fulfilled margins higher.
And also.
Mystics logistics margins like it.
Okay.
So maybe I'll talk about.
About.
The short term and along to margins on retail and then maybe.
So we will talk a bit on the logistic side.
So yes, you know Q1 is very difficult to assess given.
You know doing to epidemic. Obviously, we were no we spend no cost you know.
No efforts to support.
You know to local people, who pay for example donated a lot of materials.
Provided logistic services for free so various initiatives clearly will impact the bottom line, but you know I'm on the other hand based on the current situation actually we do believe.
Our margins situation, while not as good as an obviously in the prior year quarter, but we should.
Formed relatively on a relative basis or you know compared to other.
Other companies in general that we should.
Do relatively better.
That's all I can say at this point. So I don't think you need to worry about dramatic losses, you don't need to worry about.
Two quick volatility, but there is clearly some negative impact.
And but we are we are holding up relatively just relatively well.
On the long term.
We continue to.
Drive growth.
I will drive at the same time drive our scale and as we communicated in the past.
That with the scale and customer.
Pace that we can have more creative ways to enhance margin most likely from our better relationship with the suppliers with customized products as you know who they mention in the past quarters.
We can do more off dose.
Good luck to from factory to consumers.
Actually in our mature categories and we have you know.
A lot of that made a lot of progress in 2019 and that we expect to makes no to make more progress this year.
So so so that would be one and then two will be on logistic side with the scale economies. We can also.
Have a better and better unit economics on the fulfillment side. So we can drive for fuel gross margin.
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Which is still ongoing all up you have already seen that actually logistics has done tremendous though the job.
Okay. So if it doesn't make no matter, it's probably oh, I see as our responsibility or other fulfillment commitment we have doing over that.
Do you know what else we evaluate.
The agenda.
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All these other topic.
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That makes situation is getting better.
That's what customers are will be our brand and reputation well be while I'm back and recognized by more and more customers and this will ensure our luggage and sustainable value and growth.
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Oh, we have done a co pack that 2008 pool, which as I like where we have.
Made a lot of improvement in other large and what color here well into the same to improve our larger thank you.
Thank you.
Your next question comes from the line of Thomas Chong of Jefferies. Please ask your question.
Hi, good evening.
Picking.
Okay.
Jay.
Okay.
Well.
Strategies.
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My second question.
Good evening.
Okay.
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Over the year was on value.
I mean, it anyway, because we bought.
Yeah.
And we have three purposes and the idea identifier for.
Most of those ads for the first we strive to provide the premier in the best uses a user's experience for our cost a lot.
Tom Heelys apart.
Total illness O'neil.
Oh following Joes jeans.
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Okay.
Yeah.
And thanks to all the three points I, just mentioned that enables us to provide a whole here very sustainable and that a good quality services to other customers as our clients even into these academic turbulent time.
Hi, guys ago, which you boxes on the user or which is.
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Any future will continue over competitively.
Areas, especially two housekeeping just experience and bring more value to our clients.
Thank you.
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And how the aluminum yes, you go for gold over the one month what are some detail do you have.
Which you can look when do you think you should see when do you put in motion duty vehicle Bonnie.
However, as compared with the other lanes that they can see platform.
In terms of the stickiness and every piece itself will penalties are still relatively low and into future. In addition to the.
Customer acquisition efforts, we will do I was just you platform will also pay more attention on the whole life cycle lifecycle of a user's experience on this platform.
Full color John Godyn, you food or how should I will never be Oklahoma Tarnishing do you going to answer the units you should overall, nor do we don't change on the other or can you the who do the usual functional couldn't run you choose to do you should dotcom.
No no loosen the section.
Okay. If I did you say depreciation theres, some other differences compared with our low sites.
It's oversight shopping behaviors to based on a social and colors well gauge men do those more interactive marketing tools.
How about two of which four there to those are all customers and third tier picky.
Yeah. So if you don't draw the potential creep alone.
Im going to try and put a tomato goshen gotten traction again.
And the second different.
It's a they can't keep what one would be helpful for us to.
The extent of Oh, that's in the long tail and helped us to fight will supply chain.
We don't want me you can pull jewelry by Gogo Tanya without the movie Australia, India Chandler tell you that.
We continue to show you showed equally.
Do you feel we'll continue to.
Sure.
Equally if we will begin timber wolves teachers.
So far we have or collaborate closely weight the manufacturers from over 100 industrial about any future will develop this number two was south and industrial about it differs from our existing supply chain for the latest actually [noise].
The other our suppliers I follow so locate satellite locations.
Okay platform supply chain they'll be lately are supplied by those that feel about which he thought manufacturing to producers so because a big difference in the future with little more work more closely what gives you logistics to fulfill.
The whole process.
Supply chain Bill.
<unk> lead shortly when car, though do you think you should have a short hills you, though sometimes says you really mental health parity with them now.
The term loan pool, a person who do you have easy companies, we're talking about woman quit chunghwa.
Do you normally home some in the lead to good because you Tony.
Yes, you choose to should you hurtful.
Also we have been observed a a very explosive growth.
The new apps or the way to platform. So a in addition to developing our own who Oh leasing platform also had raised as I'd suggest alcoholic technology and our products to be more interactive with other apps only chat.
Thank you.
Thank you.
Your next question comes from the line.
18, along of credit Suisse. Please ask your question.
Thank you management for taking my question and best wishes.
I have two quick questions. The first one is on the first quarter.
So we guided for at least 10% revenue growth I can we get a little bit more detailed and letting like a categories as well as one p. Richards sweeps, because I think that because of the logistics constraints I, probably some merchants.
Having difficulty selling products. So are we also giving them. Some I support and also would that impact at the revenue growth from that sweeps and parts and second question is on the logistics as well. So can you probably give an update on the order.
The percentage of order from external orders as of 2019 as well as probably our targets for 2020 and in terms of the logistic segment margin because in third quarter.
2019, we have already achieved to open margin level break even for that particular quarter. So probably can you give us an update so your margin level or the.
Emerging level for logistics, apart and <unk> as well as she doesn't he thought targets. Thank you.
Okay.
Thank you Tina so for Q1 guidance at this point you know it's.
We we sort of mentioned some of you know de FMCG kinda, who is a fresh produce.
A home products health care products.
These are the categories growing much much faster.
Than usual and we are actually very strong in all of these categories.
Online platform.
Active so so we have seen a lot of growth a lot of new users coming into these kind of race.
So this is what we have seen so far no no. The krona virus situation you know in March is still unknown.
So no we have tried to.
Take into consideration to potential downside.
But you know so far we've been doing relatively well again, just on a relative basis.
And we guided.
Double digit revenue growth and so thats, mainly on our one key business.
Threepi, depending on the type of merchants, obviously, if you know the merchants relying on.
No third party logistics than it would be very difficult at this point for them to for a few.
If they have used to de logistics.
And they operation is much less impacted.
So you know so that's basically on the Q1 guidance.
On on the logistics, we have not disclosed.
The order numbers.
In 2019, and also outlook for two some point you did see because.
No the number of orders have become very.
No depending on the type of.
Products.
And also now we have two platforms you know of both our me up and also Archie So the de I'm optimistic.
The order volume are very different.
So when you when you look then look at the number of orders [noise] is actually it doesn't help providing a useful information unless you actually deep lot deeper.
[laughter] type of the orders. So so I think you know, especially with the social commerce, what I can tell use for TC for example.
Penumbra orders other launch, but average ticket size is very low.
So you know so you Lily.
No I think Indiana, you look at.
The revenue low cat, the GMB contribution and Oney logistics margin. We also look at on a full year basis and so in Q4. We also made some extra investments in customer experience, especially in the lower tier.
Rockets.
We also enhanced the so this level.
Across the country. So Q4 was on a relative basis, we didnt make has made some extra investments, but on the full year basis.
It's simply mentioned earlier.
We saw very meaningful improvement logistics margin and he also expect a module will further improve in 2020.
Okay. Thank you.
Your next question comes from the line of Alicia Yap, let's see the grip. Please ask your question.
Hi, Good evening management, Thanks for taking my questions on congratulations on the solid results.
She any congrats on your plan retirements and also congrats on Sunday for taking on the new role.
My My question. She says some follow up questions on the first quarter topline guidance.
So Sidney just wanted to make sure you are 10% at least a 10% groceries only based on two months.
The indication that you quit she until yesterday.
No sector.
The girls cashed in March and then just on a roughly even advertising Oh, you know well advertising feedback that actually impact that in the first caught up and should we assume it's a factual assume.
Electronics are will be the oneq category, so the electronics and appliance will be the Oneq how does.
Yes, Stephen if you only get decline the rest sabato categories actually still have a you know the yield.
Growth odd and maybe some categories will accelerate.
<unk> freight that we as you.
No I Stevens in the fourth quarter.
And just lastly, similar on the top line is that I understand you when Keith guidance beyond Q, but given the demand and the softness in the big ticket I can likely to be temporarily do you expect a strong pick up a into second quarter.
Especially we feel June 18 promotion that campaign, especially for those big ticket items that you see Patricia Thank you.
Oh.
Similar to other silicon, though [noise].
<unk> individual.
She license.
Advertising question.
Moving kind all the don't go to the intellectual imaging due both to you more sure.
Sure so thats it for each of them to some due in April.
You'll you'll go should be helpful.
The Bianca he knew women's and children's I should know Darla.
So those are the Paul you want you thought.
We will use our Arnie Armenia, a woman women's in the ballpark the Sean Doug do you showing in the U.S, Yes, yes, that's true.
Good.
So how should I wonder if you will know condo, who hold some gardner.
Okay.
Yeah.
And although we have seen to induce academic people have time to other ones.
The advertising business actually see are quite strong.
Strong growth and secondly, I just love to hear we have on what closely racist I'm off of a merchant and data to support their warehouse and a thoughtful collaboration with US and this has already come down in early Twentytwenty Ldcs open label it adds to enable.
That's one piece of business and products to happen a label for less doing this epidemic time.
Uh huh.
You may well know youre looking social done.
I'd like to talk from the.
Well I'm a common she assertion some dealers with a.
We have become each of the show when people do not show now show.
Hi for most of our suppliers and Ah Ah merchant or most of them are on both sides, where large company. So relatively speaking there aren't any capabilities to.
And I think I like especially their supply chain, it's a more recently that those assets.
Could you talk on call you are Indian already and the hall from go full waterborne, well certainly already quite a feat.
<unk>.
Got it you should enter to go to Washington.
Yeah. So he can.
HM.
The making them more sure.
Okay, how the 4 million Sheboygan Shoretel vertical.
E G woman.
Yes.
You cannot assure woman.
Well the injunction wonderful.
Number two.
To you when she comes on.
Please.
And Oh, the advertising industry, Oh, we have seen overall cost the country. This industry has taken a hard hit and this out a lot for has already been reflected however, I think two cities business models and other advertising business, it's very close to the cat related to two other sales.
And should we also leverage our advantages of other self operated komodo with other alerts and we have a strong advertising ton miles from over one key merchant doing stuff came at a time.
When you going to jump here do actually Oh, I'm sorry, the four children conduct on go though.
Good to talk about what's your thought out in time.
Im going to come behind them.
Sure as Trish.
At the end a assistance.
The category a hallmark like this as many of you have seen that that performance has been quite negative.
They sell special time.
There are no.
When you will hear Kindle and younger Ddas the take or.
I got in the future somebody like that would you.
But could you can now she's once usually I thought home showing through the each umbrella.
Yes, imager difficult industry, social quick little shuffle.
However, there are too.
So we can see index kinda, great first of all believe the cost him a delightful at home appliances are still there is that's already approved by our some of our surveys and interviews with other customers and it would leave us the epidemic situation get under control the Muslim consumers will come alive.
[laughter] do my Eagle she on going the other side a trade you're going to show will choose for you if they don't know them and he will handle.
Uh huh.
So you should not easy you should be you should peachtree table mom and the good momentum.
Holder Barclays will handle that.
In the short in Crusher door Dolly should we.
I show you give us with you.
And the other indeed, there are like eager challenges for those home appliances that.
To have the home delivery services and delay says, but according to all the statistics at the epidemic situation, it's getting better for some regions needs for our.
Our home appliances has been coming back and these will be at this will be a lot better track the situation get under control.
Are you don't go to look.
You you Mitch children got unions are looking ahead.
At home or come from who will pressure doing those things will be uranium each quarter you come behind the Hollywood films were though Jim one sort of either use Oklahoma Voyager Jono is important recent than others.
The us ensures that doesn't like to we do see the girls performance of the home appliances across the industry Ace I'm not satisfied however, the gross in this category I'm sure.
Much higher.
Industry.
Category has been.
Definitely from the law challenges and the difficulty doing this epidemic type Oh makes the legislation.
[noise] however.
Hi, I'm confident that not that both.
Let me also add a couple of data points. So because I didn't show you you actually was referring to electronics categories and the concern or whether it would be a negative growth for the fall into one you know well.
She didn't mention the large appliances were negatively affected but they are actually you know some of the small appliances such as those used a in kitchens.
Well actually doing quite well as people now all stay home and Cook their own food and also you know another bright spot is the computers and laptops, because now students or staying home and the studying the multi and we actually saw pretty healthy.
He demand.
For the computers and the laptops, so I do not see electronics as a whole category, which would be negative in Q1. In fact, we should see we still see positive growth.
Even for electronics doing the first quarter.
[noise] rightly I know approaching the end of the conference call I'll now turn the call over to JD Dot Coms Jia Dong for closing remarks.
Oh once again, thank you for Johnny yesterday, please don't hesitate to contact US. If you have any further questions. Thank you for your continued support and we look forward to talking with you.
Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.
[music].