Q2 2020 JD.com Inc Earnings Call
[music].
Hello, and thank you for standing by for JD Dot Com second quarter 2020 earnings Conference call.
At this time all participants are in the listen only mode. After managements prepared remarks, there will be a question and answer session.
Today's conference is being recorded if you have any objections you may disconnect at this time.
Ill now like to turn the meeting over to your host for today's conference really.
Hello and.
Welcome to our second quarter.
Oh, joining me today on the call on Mr. Ricardo.
Jamie Welcome group CEO Mr., Li Yu opt TD retail Mr. Jones, <unk> Youre PD logistic sandy.
Yes, bulk and perfect meal, Oliver yes, no for todays agenda.
Yes, most FNB will discuss highlights for the second quarter can he Tempe and other management will join the queue eight fashion.
We continue.
You to other deep Hopper statements No earnings press release, which applies to this call as we will make forward looking statements also this quote unquote discussions.
Non-GAAP financial measures. Please refer to our earnings release, which components on the calculation of the non-GAAP measurements to the most directly comparable GAAP measures. Finally, please note. Other line otherwise stated all Bernard mentioned during this conference call on on be now I would like to.
On the call over two hours Devils and [noise].
Hello, everyone. Thanks.
This is a second quicker itself and whole weakness.
<unk>.
Let me into the second quarter.
Oh, you long macro environment was unprecedented complexity.
Hi.
All that.
Though so helpful.
I do that in basic totally person and contributes to the society.
I said domestic consumption.
From the disruption brought by the company.
The release, the pent up demand and Uh huh.
Okay.
Behavior from Oakland or her Arabic, our strong performance in the <unk>.
Most importantly, we came out.
The other before our long term strategy of investing in.
Technologies.
Logistics capability.
Oh locum focus on Kookmin pivot antero couldn't wholly.
Oh, consistent <unk> parents quota Olson.
Good.
Oh for instance.
Late Oliver.
Oh more sustainable anticipating.
That's a that's out there.
We delivered solid financial and I'll put it out in the second quarter.
To a number of important milestones.
We successfully completed our secondary listing on the menu board Oh, the team I'm tool to our financing I would like three.
Total please.
Coking.
The monthly principal 0.68 in Oklahoma.
Oh, Hi, Peter Yes dollar.
We talk that all secondarily, Hong Kong marks an important step for us to provide physical condition.
Supporting the execution of our long term.
[noise] Intel.
Yes.
Second.
In.
Hi anniversary promotion with accelerated growth.
Ted.
Then if our new users I did in the quarter came from lower to see.
The highest level on record.
Oh, that's driven by 33.8% in the second quarter, So [noise], hopefully sort of hot and workers.
But oh, we decided internally that pacing.
Well like about our successful to.
And with free promotion.
Our general merchandise.
So keep up with that.
Yes.
The higher the growth rate for the past the nine quotas.
Led to that our offices.
[laughter] supermarket and health care.
The electronics and home apart.
Quoted encouraging that probably would it take 8% year over year ago.
It continues to gain market share.
The loop industry cooking.
[noise] big supported by <unk> ability to offer that alone.
So the scale advantage of our team and our.
Okay to pick up you know.
[noise] picking a deeper dive into the performance of different like these.
We want to highlight.
[noise] our purpose KEPCO Nick.
Oh, it's become Arctic Cat's group, including opened since the end growth could be.
Became the single largest product category by revenue in the first half of Twentytwenty.
The policy mobile phone overtime.
Good to our tempting has good.
[noise] reflect the leading position Oh supermarket technically couldn't for their concerns.
Accompanied by stronger <unk> engagement.
We're also doing this that issue.
To our 10th into brand that's machines and its consumer perception I sent a this next door.
Increasingly broad based election.
Particularly consumer demand for Greg produced per dot.
Continued to be there, but in the second terminal.
Doing well over 140% school in the number of fields orders.
Over here.
And strong topline growth falling to one stock.
Yes vision.
We are delighted to see that Oh supermarket technically continues to realize did anything.
Improved operating efficiencies with our we hope the human capacity and let the lead tables effectively with third party continents under our omni channel strategy.
Turning to our didn't help with <unk>.
Not only our online pharmacy field, so style strong topline growth in Q2.
But also the only medical complications brothers volume delivered over 400%.
Year over year due to first half tend to temper.
No. One end users are getting to know <unk> a constant produced no certainly on our platform.
Overall, we are encouraged to see customers are converting all platform for broadband connection hookup and services.
Especially those the you purchased overtime.
And we note.
The customer behavior.
It.
That's being largely sustained in the post have ended the period.
Well the topline growth was back to buy sustained improvement in using the judgment.
Especially from the lower tier city users.
Or any update.
In the past the 12 month.
Reached a total of 417 anything out 40% from a year of [noise].
Hi, good.
In the past 11 corporate.
[noise] 13, moving much additional customer.
The largest increase our features [noise].
I'm, particularly encouraged to see that attracted over 80% of the new Christmas.
Due to some good no excuses.
A step up from the previous quarter.
In the meantime, our mobile do you use [noise].
Year over year medium.
Oh, good gross margin came in it because this is done for the second called <unk>.
Compared to 18%.
Yes.
Excluding the impact I wont find they.
Then secondly to useful resulting in lower Thompson Hills.
[laughter] Golden Monkey.
The food to gross margin would have improved.
[noise] group compared.
[noise] markedly improved.
So.
Eclipsing efficiency, it's easy logistics.
The nation as a result, it could be contributions will quickly [noise].
Partially okay.
Great Lakes shoot.
With our effective cost control measures.
And continuous improvement in operating efficiencies.
I don't see [noise].
Yes, it would be short.
In the second quarter improved by 36 basis points.
[noise] Sun bridges ports.
And no 19 basis points respectively.
Compared to the same quarter last year.
I thought he thought.
Our non-GAAP operating income grew 74% to 5.6, feeling RMB and know that operating margin, yes, 2.8%.
64 basis points.
On the same quarter last year.
Segment basis.
No that all pretax income of TD retail group increased by 41% to 5.7 billion RMB into two with operating margins further improving two or 3%.
Oh 17 basis points.
From the same quarter last year.
We also saw meaningful improvement in profitability from new businesses.
Especially TB logistic.
Which turned profitable Oh, I know that's basis in the quarter driven by higher volume higher order volume in the peak season, and all the technology driven productivity gains.
That we are able to continuously generate from our best in class fulfillment capacity.
Overall, the margin improvement was recorded in both Cuba and Q2 this year.
Not only do like a group of what we can deliver ice receptively execute our long term deep essentially synergy with our scale driven business model.
That's okay, providing a solid foundation for us to continuously vision that you need categories that could become our future weakness.
And our productive user growth.
Moving to the bottom line.
Our non-GAAP net income attributable to ordinary shareholders.
You too grew to 5.9 billion R&D from 3.6 billion R&D in the same period last year.
The increase was mainly driven by the improvement Oh prepayment income Dizzy retail and GP logistics.
[noise] given the strong both of our net profit and financial discipline.
Our free cash flow for the second quarter improved to 26 eating RMB as compared to 18 billion R&D in the same quarter last year.
Capex.
Was 3.4, feeling R&D in the second quarter.
Spending was mainly for the development properties by JV properties.
Offset by 500 meeting our IPO proceeds generated from the sale of development properties.
I took to 30 twentytwenty.
Cash and short term investments.
I had it up to 126, either R&D in total.
Our liquidity position is stronger than ever.
[noise] I couldn't really listed company on Hong Kong Stocky change.
We need to comply with regulations and follow the common practices adopted by public companies in the home market.
Therefore, we will no longer provide guidance on match revenue growth or net income going forward.
That said, we remain committed to deliver sustainable growth, it's steady improvement in profitability into long term quantum.
And creates long term value for our shareholders.
Let me close there I began.
They emphasizing the they didn't have our unique business model.
I know better equipped with stronger user mindshare and engagement.
Higher operating efficiency and strengthened financial position.
Ladies boots on the momentum and to continue to invest in our customers and employees.
Technology and supply chain capabilities for future growth.
This concludes my prepared remarks, and we can now moved to the Q and a session.
Okay.
Okay. Thank you.
Thank you the question and answer session up this conference call will start in a moment in order to be fat you all callers who wish to ask questions. We will take launch question at the time from each caller. If you have more than one question. Please reclass joined a question Q again after your first question.
Has been addressed.
To ask a question today. Please press star one on your telephone and rights for name to be announced if you wish to cancel your rig crash. Please press the pound Oh gosh Kate.
Our first question comes from your line of as we learn from Bank of America Merrill Lynch. Please ask your question.
Good evening. Thank you for taking my question.
Number one could you share more carla on the competitive landscape coffee industry, you, especially given the possible mobile show season, and they're not the upcoming up but we show season, how should we are positioned JD again those are some of the competitors.
And then secondly, just a quick follow up or not youre mentioning up our improving technologies are helping your pieces I'm. Just wondering if you could probably little bit more on that the momentum of grows like you have seemed like in your advertising flesh out marketing services.
So Brian I'll take it.
[noise] [noise] that older Google photos, she might work it out.
This is true like some JV retail answer your question.
No the old off group is working well.
Yeah.
Looking to do all of them well I'm kind of the producers who will give you can go ill go through all of them dilutes. Your commentary. So it's just touching on your line.
For the new order from.
Oh yeah.
Absolutely.
There were some driver wages.
With that comparable.
And first of all all sort of questions Bob about almost 618 grams promotion, we have made up the year and for this year. It isn't the most successful shopping festival. We hope we we held in the past few years. She have not obviously a strong growth in honored this inside but also we have improved to lock in terms.
<unk> user experiences. This has been all conclude summarized do we have done a lot of for the searches and interviews with our users at the same time I'd say, our shopping and we have further strengthened our relationship with that popped nothing supply and all this has resulted in very successful.
Brent promotion events into <unk>.
She is all about middle to recover was it seemed like a ruling or equal hooked up and go up and go to agree I'm sorry to belabor.
Because you've obviously got.
She will your hobby thing.
Got a woman before loan book it I can do not use or portal.
Before I thought it was the so called the total total mosquito.
We learn about teaching them she had a human who both on bogo vegetable holder overall, probably.
Hello suitable for city so yes.
And together with other got partners, we have invested less resources in ophthalmology did 618 grams promotions and we have done a lot of <unk> and great marketing activities not only on the news sites, but also in a lot of de centralized our traffic platforms. We.
I've invested a lot on these show the since we got a actually beyond our expectations and the same time method of a number of new methods have you taken to be telesales, who blood screening and although it's not membership et cetera.
Did you lose Allegro Mcarthurglen sure I'd rather.
Obviously, rather get all of them gather who go back when we don't let me go higher galore water cooler.
Cool start booking high though gold recovery physiological.
Good who will go from has gotten it would have.
So again related to houses so to the other businesses.
Okay Boardman.
Yes.
The opportunity when she's harder right generally was on the woman with Walgreens really short.
Please remember.
Sure.
And in terms of the competition and we have seen got some do you think are growing and all that industry players in this E. Commerce industry. He has been shown in some more industry reports and we opened notice to that but there's a very high overlapping offer users across.
And ecommerce platform and there will be less and less users who only choose to use only one platform.
In the into future, so I see basis, a very normal situation. I mean this process react JV were very confident that there's still a very lots paid for us to grow over uses and alcorn abilities in a quarter comparisons made equaling all the users it just isn't our very strong.
In supply chains, and other treat other with quality services and other unique business model.
Well it will go live.
No.
Hello Hello.
I will refer to give yung Kim coaches feeder fund all retail networks in the health and light up should go up and volatility pools of fusion quickly.
You go from Yahoo, or commercial now.
And in terms of our advertising strategy. Since then we would see into longer term. We will continue to maintain assistant sustainable growth on advertising site to continues to be provides better values from all the brands and suppliers to provide them more ROI for all their budget based on all the advertising.
Technologies and advanced algorithm.
Oh Jeez, you, obviously don't feel good talking to all our beautiful hope, we're able to reasonably okay.
You can hear some.
Well, the food or groups who are using.
Humor to countries are going to people.
And a closer look at performance cellphone advertising revenues in Q2 become wonderful access and with a higher growth may spend a lot because until we expected the situation will continue.
When he was the worst private Reits on me.
Probably more third to cause watching the ongoing we are now closer for reporting. So you should have about how we should see so about it also go vertical integration costs out which is only one on April.
Oh, we will now make a very dramatic dramatic our resources opening off on advertising businesses. Our many sites. However, well you got to do that on technology, and inventing new advertising products and the conditional flowing through the advertising efficiencies to drive the on ADVATE.
And I got in its all immensely and politically group you know you go one way or do them closely follow suit shop, who have a walk all of that might be.
As it compares Ivy Hill, Ctwo tubular goods horrible shovel ready I will say bucks a share shop in shop Southern Africa rough dollar, although you go through the holiday.
And we'll also like to share with you that we have also carried out so some applying gets to like advertising and and exploration with our partner and the result is pretty good so far in the future will continue to do that Oliver Digitalized advertising ecosystem with a combination of.
I don't online offline inside and outside resources figure if if your question.
[laughter] I went down one point actually if you look at our Q2 advertising driven entre growth is faster than our product revenue on so really there was some I shot from the third Party Commission revenue because the third party merchants are there we do not work work.
On a little bit slower than the one p. once you business and in the early April in April and early might.
[noise] [noise]. Thank you. All next question comes from the line to Verano come from Goldman Sachs. Please go ahead.
[noise]. Thank you.
Thank you Sandy.
Thank you.
So congratulations on the strong results and it's.
Moving to hear that FMCG and fresh has become the single largest category can you just share more on your supermarket kind of gross initiatives your targets, there and particularly do you want to hear about the margins because at Genie retail margin was 3.0 and I believe a lot of mature categories. Our mid single digit just how are we see.
Saying that the margin profile for supermarket and as we aim to grow the scale further I believe with no not in a rush to aim for margins at where do we see going to ultimate margins could be an but particularly for fulfillment never logistic side, what it initiatives to drive that improvement in margins for this segment. Thank you.
[noise] [noise], maybe what sort of diabetes.
Sure right.
Gumtree retail [noise].
I will probably move up.
So if you will go to go wrong I'm not sure sooner.
Even though you're going to hurt films.
And to be in the category Oh, I can see G.N. sets. Paul do you have seen some major op profit improvement.
Earlier this summer globally books, so in general So you know one or both.
Yes, but can live with you might remember too. This is already which is on them. We go in paid off she will continue to touch on cotwo or [noise].
We all know right.
We work, we will show a woman who is I'd be guessing.
You bet, she shops younger parcels and decelerate also about treating countries all figured out the most notably with young ships a good Q4 branches off the older can if we were one of.
Yes, John Dibella study, we don't they don't say Oh the robot.
So let me go home together.
Sorry.
As for the reasons up improvements not for profit I think there arming the blueberries and principal it's Albert increasing market share in these categories. I mean, there's and then be something I'm not by other through a strength in cooperation with other partners and secondly, I believe kind of the scale effect has been taking.
Picking back and Oh, we have been all working very closely with our we have also improving over fulfillment expense rate. So the fulfillment expenses continue to going down and thirdly, I think to on omni channel development, we have been moving from a product that.
Seat for other offline sales channels were getting them to off our to all the offline partner and all these three factors contribute to the improvement.
FMT Kinda Grace improvements.
We will echo who do hope is embodied into what their jobs bizarre bizarre [noise].
Oh, no doubt, we wouldn't Douglas elliman, either here or do something Minot button carbon neutral or they don't really going on a global I've been talking to them.
Within the quarter, they don't really have though.
Yes.
Good.
[noise] Brinci.
So, yes, but you're going to though the job.
And is due to continued to step up all the efforts to be other didnt super Unlike supermarket at QB don't Tom So far to the Super has now become the largest away to learn I ended pedigree online and offline in China and either a step up for effort to be over our supply chain.
He will help us to provide better services and as compatible become pets competitive price to other customers and these will be enable us to have a better performance in various on sales scenarios under different platforms.
Are you might want to Burger do though.
Got it wasn't going to go though on a.
Oh go no go no go from here on TV Dot com.
Well a true.
She's Olivia Tong from Europe.
And open it to join hands. They did you know just stick to continue article published an investment in the nation wide or where how much work on construction and in terms now from the cold chain sending out [noise].
To bring down although I'm assuming.
<unk>.
And we hope so but didn't produce French developers will linger, we look at high School says I didn't hear though.
[noise] each one job with Macquarie.
John Waldron, though only anonymous people want to pull though.
John This European parcels materialized, yet or is she loves outcomes.
On a unit growth.
And we'll also I guess in other words under construction off all the omni channel solutions no matter, if all the self operated platform or other offline on stores and over hundreds of millions of other partners offline to all provide other supply chain ability to create more value to all of our partner. This is also the mainly.
And for once more brand partners, which true Austin's in collaboration with JP.
Joining me, though what are you know when there is no longer a.
This is one thing for them to do logistics, just I don't feel words about the other omni channel solution with us to do logistics.
We can actually do.
You know will be that union.
Hey, Bob parcel in Calgary within onto him up right. When we say journeys home would have gotten good outcome, who can chunky sensors hone she shops somebody would assumption when gold shares with all.
Yes, it home cooked cope wouldn't boots, yeah, it's all good opportunities.
And for this year well approved our Oh my third the JV supermarket markets business at a quick enough on that onto one of them and especially in our bidding work a warehouse networks in the lower two cities to bring more high quality products to all the customers in the literature cities and let them to enjoy the superior.
Service experience with the TV Dot com.
Hello, among that group room on enrollment.
Oh, you do cope with the accident line those are all about a four year old recently entered into I'm going to blue tomato touchy each year.
Or timing issue, but just business on Wanda come quite sure no stock ought to be.
On cohesion girls.
And for side those are more popular services, including the same day and next they deliver raised I'll be here to do logistic will continue to offer collectively to get the speaking to provide a more faster delivery services. For example, but this is one hour depends on different.
Product category.
Yes.
Thank you.
Thank you. All next question comes from the line of Alicia Yap from Citigroup. Please ask your question.
Hi, Thank you I'm good evening management, Thanks for taking my questions and congrats on the strong results I have a questions on the seasonality. So wondering if you could describe any different office seasonality pattern that you have off surf Oh, what are you know the past one and a half months right into that.
Three Q in comes off the years I'd be sure situation versus the previous year. So have you seen any at normal strength off these FMCG or even appliance category a into the threeq. Despite the strong 60 teen or radio strong you know first half already if.
These three Q is a bit befriend seasonality pattern than the previous yet and then quickly on any colors in comes off the S. P and the category pet chased out for those that coming from the lower tier city, especially those that you newly acquired a this quarter in terms of the basket size.
The order frequency. Thank you.
[noise] [noise] Oh.
If you will see methodology.
Yes, you're right.
As you may see though when you are resolved.
Operating programs, where much of this year.
Citizenship <unk> combo.
So we are watching role models with or without a doubt so look a lot or whatever so sometimes you you anymore.
Well go into wouldn't even though the lose all Hugo Sonny Bono a number somewhere towards the how is that you'll see I got it okay.
It's hard to know go there. This is David. Please proceed ma'am you may consider exiting the year.
Okay.
No.
You want me back and go here does for dialing a tissue both for the future.
Oh, and indeed, I didn't see that because that's the calling a virus situation with the faces.
Turning to situations in the first half of the yeah into place the quota a lot of for the consumption demand has been surprised because that's the pandemic and entering the second quarter. Thanks to the leap year Grant promotion to 56008 shopping festival, we have seen consumption demand is coming back.
Entering the third quarter, we also see that across industries somewhat categories I'm not performing Robertson cold air conditioning limitation, because that's the style and itself due to the weather as well as though they real estate industry performance industry development.
However, under these circumstances, Judy has been pulling them had been taking the leading opposition and a bunch of market share categories and industries and so good luck.
He has done a bigger shortages so.
The so called.
Got it which is really around the world Haagen Dazs coupon is good.
Oh, Oh this is not.
So the girl, whether they get their father Hollywood sort of holding more she's also better seasonal.
Welcome to broader socket.
Both wouldn't.
Hello symbolism exactly going to focus on cross selling off.
Well I guess you gave a room today, you got sitting on the minimum Bobby.
Overall, we hope that it.
Wasser please.
We wouldn't do that she was a hubris fuel.
What we would be though she optical.
And at the same time, we also see some categories have been experiencing some strong growth, especially the consumer goods fresh produce health care products and a household oh supplies the factual and we have through that time, the overall in China E Comm E Commerce.
Okay. The ecommerce shopping penetration rate is going up leasing Naples, more and more customers more than some of them haven't used to internet. We're only something before they have ownership age their shopping online and thanks to strong capacities and advantages water supply chain all the super.
We were services and the over it can be commitment to provides a straight truck the wealthy and straightforward services and products for our customers. We have from acquiring an increasing number of new customers on a platform as and at same time, we also see and more active engagement from all exists.
Some customers onto this platform.
Using sort of hold some lately.
Your next Warner Soviet.
Since you're assuming no changes in product and that could I never even though do you see as is our become though because you do though shooting for UGC ER visits introduction.
Got it much here today, so I'm, sorry, which in part due to supplement some of them into the current job with Asia, Latin America, or who are who I know senior when somebody buys a woman data is going to option for sure the new Pago.
He or she loved to or something we had Chinese.
You will no longer.
So people understand hoping you about how to Usone Okada.
And but looking at and consumption kind of the category from the largest city customers. They are buying more all consumer goods and a fresh continues on the platform in these platform within these categories. There <unk> value I refer to be lower than the average at values. So.
Also we have realized that the new customers coming from electricity accounted for Meli big amount I'm part of it percentage.
In the overload customers, we acquired in this quarter and Liberty is that something more precise operation RPC says to increase their shopping frequency our platform by over a superior quality services and products and getting more benefits to these customers I will graduate into.
Who they are your pension rate and lucky side I'm JV.
Hi. Thank you next question comes from your line of Alex Yao from JP Morgan. Please ask your question.
Yes.
Thank you mentioned before taking your question, congrats and sometimes to quarter I'm, sorry, I understand the you Gershman November give financial guidance given the from Congress chamber.
And these two qualitatively help us understand your second part, particularly third quarter financial.
Oh for example, or should we expect to Rob you choose these jobs meaningfully into stripping costs given the tough to benefit September Colby 19, Ash and also a high comes into second half.
And then from margin perspective, or how should we think about the circus circus.
Second half and Oh given the.
Thanks will normalize suffer the merchant activity will for the recover so pricing you're potentially you will.
Go faster than for first quarter.
First oh, so any color on Chicago, particularly so quarter would be appreciated. Thank you.
Yeah.
Oh sure the vessels and oftentimes elements job onions endeavor.
As.
You go remember indoor comes out.
This is sure right I'm sure. If you some key working areas, we're going to focus on the second half of the year, So which is about three years old girl Linda COBOL Carafano, Tim Hortons. You know these are pretty hot summer mill and the open border due by the Ono, maybe off when I look ideal them.
Nobody has ever should put up though.
And it would you guys are becoming the leader.
And first of all we'll we'll continue to strengthen our opening up our supply chain ability you have seen a number off the cooperation and opening up over supply chains with partners. This year and this will continue.
The October locally here borderless, you're going to shoppers.
That's the most anymore tendency for goodness and they just a time, yet I'm not sure should pay.
Thank you.
Hi, good dynamically lesser you guys true nobody nobody was.
And on a one [laughter] Q3 dollars sure, but I'll tell you that number bogo.
Through the father Gabriel.
For that.
No that April some conversions and piss off don't have shown telephony services.
Okay, that's what he will become $2.
And the second as we will continue to depending on where do you have a development in the lower tier cities. This is more customer focused as well as depending on a collaboration lifestyle and industrial bouncing time. This is more safe to finding more.
Digital products, the customer and nowadays in China.
Over 200 indefinitely without across the country and we're identifying some suitable partners with this industrial bounce and to help them with their digital transformation is having problem is on water supply chains, and a two design more suitable and value for money products not to.
Got it.
If you don't know liquid usage is centered older. Joseph Oh, you went into those fees or not really sure you go through.
Through the noise reduction huh.
We don't hear the she launches you though.
Moodys downgraded to Breo, though.
Sharper she found that the reported volume.
Yup.
Ginger.
What you might almost hold off on the border so to your work.
Florida shale plays out.
She told us into the usual.
And we'll go after strengthen almost complete construction of over our omni channel solutions.
We put this repositioning omni channel I from ability when ecosystem rather than a means business. So a building up the omni channel solutions would be helpful for other customers and to help them to when they're shopping they can shift freely mom difference platform for memory online offline no matter whenever.
Her and wherever they shop, they will enjoy the same quality services from TV Dot com and Robert our brand partners on omni channel will be beneficial for them to increase their sales opportunities and Oh. This will also in the long run and helpful for asking for an hour cooperation in different time, inc. or do you see them.
Oh Billboard news over some good movie partner.
You said that Josh on repo men.
Okay got you be broken down.
She had a walk a multi jones.
With that who's our hybrid critical guidance mutualism.
Okay got you assumed on legal settlement cost recovery Cuban Ventas Yom Kippur done much you told me vertical.
Unfortunately, we will continue invest in over technology service businesses, and just sent them on a quad recently more business partner Enterprises partners and these will open new market opportunities through other close relationship with enterprise partner to increase every revenues home.
Of course, I before that these new longtime investment.
Oh Im sorry.
Work in Kosovo portion is there is always repeat on the books issue though.
Okay.
Judiciary Korea, but some Dom colder winter. Please access our voices out in here seem to do that.
No.
Our culture woman table tissue.
The TV radio show.
[noise] sand or can feel a sense and Albert investment in probably new categories, such as the healthcare fresh produce et cetera, and we will always putting back before the into our traffic platforms, both online and offline and to perform more disciplined in back to them to ensure ROI.
Thank you.
I can add some color on the on look for the second half.
As we mentioned earlier, we had stronger controls overspending in the first half years, given the uncertainty in the macroeconomics.
So given the Kobe mentioned situation is now largely stabilized in China, we tend to go back to our original prepaid plans for the second half so I would say or the first growth the topline growth and the bottom line marketing see largely in line with our original plan.
At the beginning of the yes.
So looking at second half and Q3, I would say, we see stronger seasonality this year and we believe the trend will continue in the second half.
And don't forget there were some pent up demand for leasing the second quarter, especially for lunch home appliance.
So the average growth for the first half or we took 28% I would say it hits more comparable lung considering the outlook for the second half subject to the healthy recovery of our overall consumption.
And there were actually some nonrecurring sales up there could be 19 related prevention and protection products in the first half such as the fifth marks and Surmont thermometers.
So we truly hope these are non recurring business.
So putting all these factors into consideration I, you can then mode or Apple to Apple outlook for the second half.
Having said that we see very strong demand and user engagement continues in the supplement.
Mobile products into light as Julie just mentioned, even without any sizable promotion activities. So we can clearly see the trend of shifting from offline to online is ongoing especially for the supermarket catch me and people without.
So we entered into Q3 with good momentum for user growth and we will continue to focus on user engagement and the new user acquisition, particularly in the lower tier markets. This will fit our puts basis for the upcoming truthfully promotion season.
[noise] so looking at the profitability I want to emphasize that our Canadian commitment to steadily improving marketing has not changed Oh, we will continue to invest in new initiatives for future growth.
[noise] [noise] [noise] right. Thank you. All next question comes from a line of Thomas Schall from Jefferies. Please go ahead.
Hi, our friends management ball, taking my questions and congratulations on a very strong results I have oppression, though relating to go up here diffused penetration October determine comments about our strategy.
The second half and on that front I understand that Oh, we have strong due to quote them I mean, that's ah, but they all the comments about GDC in our strategy in the second half and then a.
A question about our M&A strategy, how should we think about our acquisition strategy in the second half occupant that I think we've been the we have been somar Emily Thank you.
Okay.
Okay.
Looking forward, what will you be equal view because as.
Well, if he wishes hormones and troubling injection.
Double edged sword since we Didnt brings you have trouble somebody who she wishes because I'm sort of refusal doses are harder to.
Sure.
Really.
You see leverage we're not muscle has your facilities.
The two later the life, whether they get although there was agencies engine.
Relative to maybe you're talking about our blow down which is that yes.
Which has led.
Correct.
Jason This is not.
We believe all the time.
Yes.
So what it was four meters, what we've got a diligent to me conjecture.
Oh, Yeah. This is a shoe like I would like to share a little bit more about Oliver I'll know, what's your market strategies. This how did you have to be working well in the hopper after a year. So we're going to continue.
The larger markets has in contributing a lot in our new customer acquisition. These have been achieved in several different oh. It wasn't novel approaches for some other teams to eat a social E Commerce platform and also the light for us and want to city version also them out.
Driving the new customers from electricity to our Judy and everything time I. Just mentioned you know lots of questions. We have a certain kind of categories that have favored mortified lower GCG users such as filed the consumer groups fresh called used essentially no.
Helpful. Beginning our new customers you know what your city and in addition, the deep central [noise] subjects, Mike [noise].
Also played an important go to how how fast can acquire more customers on the military city. So these are generally in total the on strategies, we have been coming off to a going deeper into China merger cities.
It definitely I know they do.
You got things you know atrophy.
So the lochinvar table I Didnt hear his locking the two dollarsthree urgently gundog he said.
Awesome, but you got me feet on the cool I see them that they do.
And just a few words about kinky GT, one up so I cannot be acquiring new customers.
Actually I'm amazed side is also performing route in acquiring new customers bahir onto onto your more about teaching.
Google to either she looks stable solely so you should use in commercial we are assuming you're going to give on drug would give a brief it up because the weather does she loves the RGB don't priorities are they feel they used to be developing them or other due to the history that puts you probably.
Yeah, the journey that there's going to really build as usual.
And in Q1 because of the kind of our situation in a lot of merchants cannot operates normally so the GC platform performance as the flash floods or come into Q2, I'm thinking has to be showing strength in terms of them close on the users around the scale, it's been taking off and.
I'm doing amazing contributor to overarching and he is when the phone Booth mobility has gotta love. The good thing this is.
So what do you think you'll know feet of it'll go ahead go previously.
They did it seems you bought everything you know some through.
Goal to shape.
Just as it should already with the Baby places not reoccur.
If you look and this year or whatever do what you guys Jamie for over a year or something.
Yes, you shaping up to the future.
And at the time that uses for growing uncertainty. We have also seen they're repurchase rate is growing reaches is very important indicator for the Puerto Rico QC goodwill I continue to perform more precise are useless operations on TV users and some of them are.
Making the transition over if you would have thought something with 'em TV. They are transitioning to honor main sites already.
He was the Q1 T cells to achieve some darfur there should be used to be done. So basically you have that gives you. Some got oh, we do sort of going into those two product. If you include are due to the view.
The prices.
Okay that go have you ever tried up until you get corrected War saga.
That's true, but we want to work physics radar, there's really no go in the previous launches.
To go go broader saavedra, how should that assumption.
So I'm not done a member of burdens on PC platform.
Mmm too I mean, my time ever we see a merchant some huge I'm very act.
And Oh, they also playing an important no I think its business, which is very important go to connect speaking for that's too about the submission before leaving doctoral bounce will bring on more and more much in the future ski Entergy that's one.
Rich industry resources and product our goal is to present.
I'm good quality product to the customers in the low what your city to taking through there.
[noise] it was on the number of we'd like to make.
The conference on their Kids Trust investment and Uh Huh.
The corporate JV or investment is too expensive extend JV school engine by listening into context, let us strategically complimentary to JV in terms of scale scope completely and that's what's the most people do model.
It is to create long term.
But could you value to both parties.
Well financially and strategically.
[music].
Got you along with the JV signals to the production we remain strong interest in all considered mismatch in local cities or supply chain of technology service as western reconstruction.
So let me see there are quite a number of investments or acquisitions announced recently and I guess simply because a lot of VC investment pages were delayed because of the pandemic in Q1.
[noise], sorry, seven tendency have not changed.
The merger and acquisition.
[noise] alright. Thank you next question comes from the liner Jerry Lear from U.P.S.. Please ask your question.
Hey, Thank you.
Yeah, I've heard a quite a bit of for a discussion about partnerships and de centralized.
Commerce, just now I wanted to ask a specifically about.
Kind of partnership JD has switched quite show so.
Maybe you know in the future more in the live streaming area.
Just I just wonder what does management think of T. A partnership so far and tell what can we do more of in my streaming.
There's seven could a user engagement or GMB or anything like that just a few data points on the commercial partnerships and then secondarily.
On logistics could we see a.
Stability to the margin improvement sustain or could we see a reinvestments in the next few quarters. Thank you.
So as to that answer let it ought to go going crazy.
Yes.
Do you like what a question about cooperation with Crisil antibodies are being incurred for digital gives you look we look at home or you got the highly Romeo couldn't walk.
The border I'll leave the most when it's a new partial traditionally you go.
Got it safely.
So they'll go bundled approach here, there's a couple of days ago gondola, considering that can do.
And these corporation was quite sure. It's a typical case JV opening our supply chain strategy actually had been working with number of partners I'm just not with the new supply chain claims. So it's a very potentially maybe platforms in the current situation so actually horrible.
Operationally question as being a lot of attention.
Uh huh.
During the winter hurdle to warn us within those regions I assume that you didn't go no go not future.
Oh renewal at University for agenda, Jeffrey just before natural.
I don't think.
Okay.
We have started you know collaboration was quite so since a year ago. However, our corporate spend almost approaching western reached or within a week time.
ER credit political leveraging the Linda maybe some 'cause it turned out to rebalance yet to come and go live look quite show.
There is older yes.
Yes.
But oh.
I'm quite sure O'malley, the most instituted platform because we can provide the superior supply chain ability and a high quality products and services, which are very beneficial for their ecommerce in all of them. So they see us it's very important partner.
If you can create opportunity are searching shrunk.
Feed her wonder what are you going to what else recommence resort southwest Okay.
I heard you do that with our would become a bigger on getting people using species.
Michael to teaching.
Shifting gears, okay, so folks who knew they do the Tokyo.
Locally relevant.
Okay, obviously with the goal for shareholder to Europe [noise].
True religion might only be color you gross.
Yes.
And also question has seen a favor favorites are traffic platform for lots of them.
These brands they have already conducted a lot of marketing and sales events and why so we've done a good he joined they prefer to work JB do up to work with quest will be duty platform. Because we can provide some overall, but he's on the services and testing services and fulfillment abilities and hopefully.
Used to the difficulties for these bank partners to work on did you live streaming platform.
They agreed or you can put has all of the Obama was windows, while the logic.
Well nickel watershed yourself dialogue, but then by 4 billion reduction later on this.
Yes, it's on a sequential beadle Sheila.
You are doing in their Phillips, let's take ownership.
Other properties the green interest rates are just shortly before October six when they.
Grams promotions, so our occupying age operationally quite so focused.
Our two categories. One is a consumer electronics. Another these general merchandising gifts category has been supplementary to what I'm quite sure capital already have I'm quite sure.
We do have a she spent in their supply chain in these areas.
Okay.
Going to use it if we would do for vetoes users from local we'll do that but he did you ever for home or go to go through some of those are three in the centrifuge on what I guess the bird.
Good job values are you should look a wearable nobody on home.
Good luck.
Sure live appealable liquids okay.
And we see that the convergence. After your first question give me a different. So this is also good platform for us to acquire waterfront.
And enjoying our collaboration essentially full kind of those hours. So operates its product. We have offered 400 ASCII use opex on questions platform will be cooperation based on a favorable prices on in the future will continue to open I see some actions and more.
Together with Michael.
Chris you really don't you know really sure why or how could they can go mill mills and I'm sure mill.
Until adopting.
So that convert solely hurricane.
Hi, great often by that I feel really I know, we're dealing with limited you from Andrew.
For all the details about 1002, you might from Endo for yourself.
Got it I'll quickly.
Let me be resolved normal within the business here.
Okay.
Good.
And in terms of 'em SCADA system integration between GBM quite so there's still a lot of work. We also continues to do it should come back to two system, that's working group and should be and experiences together in charter. There are two mode. We will keep getting workable collaboration one he joins promotion.
Similar to the six my six so my skin, mostly due to the sequential trends within the second it's more a daily sales model, we were leveraging start hope under control platform Cuprum more normalized.
Marketing activities together.
Oh, no real honestly.
I, just wondered way from TD logistics.
No. We also shall I see our Oh.
On the coach number over the medium, we'll do that once you saying.
And I would just emphasize platinum liberal I'm always puts the customers experiences and on the operating efficiency at a core off on business development.
I think what you'd have to deal with your time, all Sidoti <unk> co, which you have in southern she's in each year when maturity.
Welcome to accrue who sooner you know what are the.
Oh Wow.
So with all of whom amount of India.
So near chunky or whatever you see that epidemic.
[music].
I would have skin in the past to be a month, because our increasing usage experience and operating efficiency and over continued investment in technology Center member growth not the users on revenues and scale continue to rise and we believe these were all dry bulk profitability on her business.
In alone.
[noise] freight. Thank you. All next question comes from the line of James Lee from Mizuho. Please ask your question.
Great. Thanks.
Oh my questions relating to online pharmacy here.
Can you talk about general demand are you seeing the market is it fair to think that most of the demand happening and the top tier markets and maybe can you guys talk about plans to expand into lower tier markets.
And is it too early to think about bad and secondly related to that or any new learnings here in terms or user behavior and in new product services you plan to rollout to take advantage of the market and also lastly, maybe a little bit reminder, about your differentiation versus although my peers.
Thank you so much.
Oh.
Yes.
Well she loves it was elected only got wage moving hundreds from home.
And so he will do the lingering ordinary though so youre getting hard usual.
Ladies and girls Taser has been job with little or no signature stock so consumer higher yields really the illusion that you're talking to the user.
And this is truly I would like to introduce a better boss RCD housekeeping and Oh flexibly no kidding, how is the largest oh pharmaceutical retailers in these out healthcare industry in China, and moving that getting house I first I used the front runner, where a person move.
In the international on Health care area.
Well, maybe they were looking away lesser harder you know they close enough who you go through April 20 people, though so rather than at today's release some good sheets for growth.
Ah Tony budget Honda plenty to.
Well I wouldn't break.
Yes on in the nominees jostle, because he or she filled I haven't looked a little sooner than we do have anybody with again.
None of the positioning of kidney house, and its or health care management system that is due to our remote advantage.
Okay, and focusing on providing medical.
Services.
And John will provide more tax reason I sheiks is for all the customers in their health care. They may take a constant in the old lifecycle and go station and the scenarios when the mood healthcare services. So this exhibition and positioning of student.
So beautiful guarantee under each of those loans moving from a year in the documents, which is different wholly where do probably.
Bush legal fees from go to use or pursue them are closer now to normal winter Elmo. Please if you feel about vendors to basal.
We made history that potential.
After the outbreak of those kind of violence, our JV house I'm going to rapidly, especially in terms on the users penetration on engagement on the platform and introduce a high engagement continues at a high level.
Second quarter, and especially in the I'll be first half the year.
The interim online medical consultation volume has increased over 400% compares on your own here and the consumers are becoming one went into active Judy house platform.
So when you take their news over the last one or are you haven't projection, but there is all you though.
So they can do to looking at associate torture keep it simple Mrs. At other times you.
There's a fairly low bidder for member states, where the treasury yards cents contributing into and good day to shoot budgeted in some years ago.
And in terms of the consumer structure I'm, beginning house consumer structure similar to our ecommerce platforms. However in terms now from the online medical complications services, we have seen that people from the higher tier cities for instance, like interested eastern young people have a much higher level of acceptance.
Right.
He was there how you know kind not yet.
There was little popular Lemaitre, Showself Raila yodle more sure, yes, which along with regard to keep our people triggers for sort of ego, what's your level of where you're on your daughter too.
You know sort of innovation a motion around surveys or.
Good article today.
What was mentioning that up would be potentially how does China's mankind University University has some established the first Internet hospital model together entry.
Integrated medical, finishing and food internet platforms, including the only payment medical insurance I believe that we'll have more and more partners and new models on these healthcare sector to provide better user experience on a customer.
[noise] [noise] [noise] [noise]. Thank you we're now approaching the end of the conference.
Coal I'll now turn the call over to JD comps right you Lee for closing remarks.
Thanks, operator that he will join us today seats feel free to concept I think you'll have any further questions when looking forward.
[noise]. Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.
[noise].
[music].
Hello, and thank you for standing by for JD Dot Com second quarter 2020 earnings Conference call.
At this time all participants are in listen only mode. After managements prepared remarks, there will be a question and answer session.
Today's conference is being recorded if you haven't objections you may disconnect at this time.
I'll now like to turn the meeting over to your host for today's conference really [noise].
[noise] benchtop like ours and welcome to our second quarter can be 20 of them all joining me today on a call I missed the return Neil.
Gee okon groups the own mess delays, you feel opportunity retail Mr jumped quite a long CR P.D. logistics Sunday shoot hover CFO and perfect. The now our Seattle for todays agenda Orencia phone can be will discuss highlights for the second quarter compete Tempe and.
Management will join the queue eight fashion.
We continue I refer you to other sleepovers payments no earnings press release, which applies to this call as we will make forward looking statements also fits called Newport discussions certain non-GAAP financial measures. Please refer to our earnings release, which compare on a calculation opt out.
Non-GAAP measurements to the most directly comparable GAAP measures. Finally, please note other life otherwise stated offering Bernard mentioned during this conference call I'm I'm be now I would like to turn the call over two hours that phone Sandeep [noise].
That's true Hello, everyone.
But they are today to discuss our second quicker itself and how we position our business.
That leads into the second quarter.
Well, it's constantly evolving macro environments, where the unprecedented complexity.
Hello.
Paul that he played an important though to help her quality.
Rooted in basic totally person and contributes to the surprise.
That's the domestic consumption.
From the disruption brought by the company.
The they lose the pent up demand and kept her she's.
Purchasing behavior from open car has added to our strong performance in the pump.
Most importantly, we came out [noise].
[laughter] ever before our long term strategy of investing in Boston.
Relative as logistics capability.
Oh locum focus on Christmas period and carefully.
Oh, consistent took parents products up and.
Good.
For instance at Lake Oliver second homeless more sustainable anticipating.
That's what we've got.
We delivered solid financial and I'll put it up in the second quarter.
To a number of important milestones.
We successfully completed our secondary listing on the mainboard, Oh stuff tends to an eight.
Our clinical anniversary.
With political post.
Proceeds of approximately 54.68 and corporate color.
All hoping quite appealing to us dollar.
[noise] returns that are looking to go live Oh marks an important there for us to provide physical condition.
Supporting the execution of or lung cancer.
[noise] Intel.
[noise] second [noise].
In quite a red hot anniversary promotion with a fairly typical.
But.
Well what.
Our new users.
But in the quarter came from relative.
The highest level on record.
Oh, that's revenues grew by 33.8% in the second quarter.
[noise], it's sort of hot and one of it.
About.
Simon and I like that pacing.
Well like about our successful to Incent anniversary promotion.
Our general merchandise grew by 45% year over year.
Hi, it's the growth rate.
For the past the nine quota.
Let the hours are costly.
To sum up and health care.
Electronics and home apart.
It is encouraging because it depends 8% year over year goal.
It continues to gain market share.
Amid the weak industry performance.
Big supported by our ability to offer that alone.
So the scale.
Okay, our exciting.
Our.
Did pick up you know.
[noise], putting a deeper dive into the performance difference.
Well I would like.
[noise] our purpose KEPCO Nick.
Oh, it's the come up with cats, good including opened since he empress could be.
Became the single largest product category by revenue in the first half of 10 to 20.
The parking mobile phone.
Upon computer our members Tencent has good.
With the leading position Oh supermarket technically couldn't for their parents and accompanied by stronger group and engagement.
Once again this that issue.
Turning to our Sensenbrenner second person asked consumer perception.
Other since the war, we increasingly broad based election.
Particularly.
Consumer demand for fresh produce put up continued to be there, but in the second problem.
Moving to over 140% school in the number of sales orders year over year.
And strong top and growth.
Following the west though.
Yes vision, we are delighted to see that Oh supermarket technically continues to realize the if anything.
Improved operating efficiencies with our Nicole the human capacity and collaborative and effectively with third party content.
Our omni channel capability.
Turning to our didn't help business.
Not only our online pharmacy sales so style don't call cycle in Q2.
But also the only medical complications beverage volume delivered over 400%.
Year over year do the first half tend to pencil.
More and end users are getting to know accustomed to this minnesota on our platform.
Overall, we are encouraged to see customers are committing to a platform for broadband connections per passenger services.
Especially those business purchase overtime.
And we know.
The customer behavior.
That's being largely the same linda posed by the end of period.
Well the topline growth was bought by sustained improvement in within the business.
Especially from the lowest to assist the user.
HM.
In the past the 12 month.
Reached a total of 417.
I'll, 40% from a year ago.
Hi, good.
In the past 11 corporate.
[noise] estimating that additional customers.
The largest to increase our features [noise].
I'm, particularly encouraged to see that attracted over 80% of the new Christmas.
Due to fund growth North kids business.
A step up from the previous quarter.
In the meantime, our mobile news.
[noise] year over year into it.
Oh, good gross margin came in a post this was done for the second call message.
Compared to eight.
Okay.
Yes.
Excluding the impact of onetime benefit sensibly useful.
But then lower total square.
Well the lights and.
So good to gross margin how to improve.
Robert.
[noise] could compete.
[noise] Chris.
So.
Eclipsing efficiency, but they do logistics.
The nation as a result, because he contribution book.
[noise], partially offset [noise].
Great Liberty's shape.
[noise] with our effective cost control measures.
And continuous improvement or christening efficiencies.
[noise] I don't think [noise].
Yeah.
In the second quarter improved by 36 basis point [noise].
Expiring leases ports.
And many 19 basis points respectively.
Compared to the same quarter last year.
It doesn't stop.
Our non-GAAP operating income grew 74% to 5.6, feeling RMB and non-GAAP operating margin was 2.8%.
64 basis points.
On the same quarter last year.
Segment basis.
Non-GAAP operating income of TD retail group increased by 41% to 5.7 billion R&D in Q2, we've always been watching further improving two or 3%.
17 basis points.
From the same quarter last year.
We also saw meaningful improvement in profitability from new businesses.
Especially TV logistics.
Which turned profitable Oh, I know that's basis.
In the quarter driven by higher volumes have all their volume in the peak season, and all the technology driven productivity gain.
That we are able to continuously generally.
From our best in class fulfillment capacity.
Overall, the margin improvement was recorded in both Cuba and Q2 this year.
Not only pay like a group of what we can deliver actually effectively execute our long term nuclear centric synergy with our scale driven business model, but also provided a quality foundation for us to continuously visit that you know categories.
That could become our future weakness.
And our productive youth apparel.
Moving to the bottom line.
Our non-GAAP net income attributable to ordinary shareholders. In Q2 grew to 5.9 billion I'd from 3.6 billion R&D in the same period last year.
The increase was mainly driven by the improvement Oh prepayment income dinky rutile and to be logistics.
[noise] given the strong growth of our net profits and financial discipline.
Our free cash flow for the second quarter improved two touches fixed even R&D as compared to 18 billion R&D in the same quarter last year.
Capex.
Or 3.4 appealing R&D in the second quarter.
Spending with mainly for the development properties by de property.
Offset by 500, moving our IPO proceeds generated from the sale of development properties.
I took to 30 twentytwenty.
Cash and short term investments.
I had it up to 126, even R&D in total [noise].
Our liquidity position.
Longer than ever.
[noise] I think clearly listed company on Hong Kong stock exchange.
We need to comply with regulations and follow the common practices adopted by public companies in the home market.
Therefore, we will no longer provide guidance on match revenue gross or net income going forward.
That said, we remain committed to deliver sustainable cool with steady improvement in profitability in the long long time.
As creates long term value for our shareholders.
Let me close there I began.
They emphasizing that they didn't have our unique business model.
No better equipped with a stronger user mindshare and engagement.
Higher operating efficiency and strengthened financial position.
We will build on the momentum and continue to invest in our customers and employees.
Technology and supply chain capabilities.
For future growth.
This concludes my prepared remarks, and we can now makes to the QL eight session.
[noise] oftentimes it wouldnt kinase and two.
Thank you the question and answer session up this conference call will start in a moment in order to be fat, you're all color. So much Josh question.
We will take one question at the time from H. color.
If you have more than one question. Please request to join to question Q again. After your first question has been addressed.
You asked the question today. Please press star one on your telephone and rights for name to be announced if you wish to cancel your Reclass. Please press the pound all Hasz case.
Our first question comes from your line of as we learn from Bank of America Merrill Lynch. Please ask your question.
Good evening. Thank you for taking my question.
Number one could you share more Carla.
The competitive landscape of the industry, especially given the possible motor show season, and they're not the coming up but we show season, how should we are positioned J.D. again those are some of the competitors and then secondly, just a quick follow up or not.
Youre mentioning up our improving technologies are helping your pieces I'm just wondering if you could probably little bit more awed by the momentum of grows like you have seemed in your advertising flesh out marketing shove. It says offers clients I think it [noise].
[noise] [noise] [noise] older. So when we were told US you late workout.
[noise] this issue like some JV Rachel I answer your question.
No the old awfully, whose wonder woman.
Yeah.
Well, if you're looking to do all of them all in Canada, and producers, who will give you put all those are well and that he wasn't here from and those would always just touching on the lives.
For the unit order from one area.
Well, absolutely part of course on Java worthy.
He did not comparable.
Oh.
And first of all all sort of question as far above our 618 grams promotion, we had Amit just a year and for this year. It is if the most successful shopping festival. We hope we we held in the past few years, not obviously, a strong growth in on a different side, but also we haven't put a lot in terms of users experience.
This is has been all conclude summarized the ones we have done a lot of by the searches and interviews with all the users at the same time opportunities that are shopping and we how further strengthened our relationship ways that partner since the flight and all this has resulted in very successful.
Promotion events interim.
Oh, no real about mill to come over to embark on rolling.
As you hooked up on board would agree or start to the.
Thank you Robert you got me he or she was your hobby [laughter].
Well now open the call onboard we don't believe though you know portal.
Well I thought it was a social mobile which you don't.
We love that she she does she had a human who go by the Bogo vegetable Hogan overall Bob.
No. It was notable equivalent so yes.
And together with other got partners, the having backstage well obviously for say in ophthalmology based 618 grams promotions and we have done a lot of brought on all the great marketing activities not only are they may sites, but also in a lot of de centralized traffic platforms, we bought.
By invested a lot on these show the since we got a actually beyond our expectations at the same time method of a number of new methods have you taken too we've done a sales who blood screening and although it's not membership et cetera.
Thank you lose a little our global Mcarthurglen sure rather Robertson, rather get all of 'em gather who go back when we go from a while ago Malone's water cooler.
Cool start booking higher gold production physiological.
Google Golden has gotten it would have each was our second or later do houses so too.
Okay and this is a woman.
Good evening.
Yeah.
Yes, the opportunity when she's harder.
We will join the woman to go up we really should be abnormally remember.
Sorry.
And in terms of the competition and we have seen that some of the users are growing all older industry players in this E commerce industry, which has been shown in some more industry reports and we also notice to that but there's been very high overlapping up users.
Across different ecommerce platform and there will be less and less users who only choose to use only one platform in that in the future. So I see basis of them almost deflation and of course as we actually were very confident that there's still a very lots paid for us to grow all the leases.
And there will be alcorn abilities on a core competitive moves in growing all the uses it just isn't always very strong supply chains and other creep up over with quality services and other unique business model.
Well, we have a world.
Hello, Hello. She bought this is going to balancing purchases are coming off a there's philadelphia held down right.
Good luck with all the talent pool confusion so.
People from Jaco commercial though.
And in terms of advertising strategy. Since then we would see in the longer term, we will continue to maintain assistant sustainable growth advertising site to continuously provides better value to all the brands and suppliers to provide them more ROI for our budget based on all the advertising.
Technologies and advanced algorithm.
Oh Jeez, you, obviously don't feel great combo RVP local operator will you need to know who can you do you can hear some.
Well, the food are pretty cool, resulting from vertical to horizontal people.
And of course, and they've had to perform and south on advertising revenues include to become one access and with a higher growth may spend a lot the quota and though we expect to the situation will continue.
Well be looking similar type deals I suddenly.
Probably more better to cut watching the on golf. We are now also for the poor T. So you should have evolved we shouldn't parts you. So.
Okay got you don't shuttling costs out to control normally pool.
Oh, we will now make other domestic dramatic our sources opening off all the advertising the surface. Our latest site. However, well you back before the on technology and inventing new advertising products and the conditional Clinton shooting to advertising efficiencies to drive the.
The Tyson I think it's all and things like political you include Pillow you got a woman do then I suppose to shake up through the powerful call.
As it compares Ivy Hill goodwill tubular fourth quarter.
So that I would say that shows up chose Jive W Hotel.
By going to go through the holiday.
And we'll also like to share with you that we have also carried out so some alpine digitalized advertising and all the exploration with all their partner and the result is pretty good fault block in the future will continue to do that although digitalized advertising ecosystem with a combination of.
Other online offline inside and outside resources figure if if your question.
[laughter] I went down one point actually if you look at our acute advertising driven on the goal is faster than our puts up revenue on severely there was some I track from the third Party Commission revenue because the third party merchants, they're receiving must work work.
A little bit slower than the one p. once you business and in the early April I in April and already made.
[noise] [noise]. Thank you. All next question comes from your line of Renault come from Goldman Sachs. Please go ahead.
[noise]. Thank you.
Thank you Sandy Vicki.
Congratulations on a strong results and it's.
Moving to hear that FMCG and fresh has become the single largest category can you just share more on your supermarket kind of gross initiatives your targets, there and particularly you want to hear about the margins because at Genie retail margin was 3.0 and I believe a lot of mature categories on mid single digit just how are we see.
That's a margin profile for supermarket and as we aim to grow the scale further I believe we're not in a rush to aim for margins or where do we see going to ultimate margins could be in it but particularly for fulfillment never logistics side, what are the initiatives to to drive further improvement in margins for this segment Becky.
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Children, who will comment I'm not sure sooner or do you.
Even though the younger hard for them.
Thank you need in the category, although I think Fuji and Thats, probably would have seen some major profit improvement.
Really the best Gonna grow go away, but also getting lurches molnar or both.
Does that too late what you might remember too early to control would go.
She will continue to touch on Cotwo or.
We all know wave critical work, we will show a woman who's I'd be guessing.
You bet, which as you saw the on the parcels and December will show up about three weeks into dop $60 among and between the young we shipped a considerable addresses all of the older people. If we were warmer among the do it down to about 30 without getting don't pick up.
So long as Gokul.
Hi.
And it really goes up improvement the for profit I think there are many do they businesses double H Albert increasing market share in these categories and users and then the testing but by over 20 <unk> strength in cooperation with other partners and secondly, I believe the scale effect has been taking.
Kidneys back and Oh, we have seen all working very closely with all their we have also improving all her fulfillment expense rate. So the fulfillment expenses seeking to going down and certainly I think to I'm kinda development, we have being moving some pullback.
Food for other offline sales channels were getting them to offer a two other offline partner and all these three factors contribute to the placement mall.
FMT all kinda Grace improvements.
Okay.
That's all go or a general motors inroads into the water losses, our revolver.
The world political dormitories, Douglas elliman, either here or pushing them in your garden carbon neutral.
Welcome to sell them on a global and good policy.
Moving people are going over the three later.
Yes.
Good good though.
Okay.
Okay.
To and who's already.
But you didn't give though the jobs.
And the any future will continue to step up all the efforts to be other didnt superbly Oh, my supermarket TV Dot com.
Hard to be Super has now become the largest retailers.
Pedigree online and offline in China, and either a step up our effort to be over our supply chain ability.
How quest to all provide better services and at compatible compared to competitive price to other customers and these would be enable us to have a better performance in various on sales scenarios under different platforms.
Are you might want to sort of good due diligence.
So what we're going to go though on a.
Vocal, though we are doing Oklahoma or TV dot com.
Cool or true.
She's all of your choice of yours.
And all the little Jong hence they typically logistics to continue article published in any back them and in the nationwide all where how much work our construction and in terms now from the cocaine spending old [noise].
To bring down although all fulfillment.
When people go with the president and $2 legal linger, who look they're hard to work towards I'll guarantee over.
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John Waldron, though.
Equal.
Oh, just for though hormel without a doubt leadership in partially because we are yet or is she loves outcome.
Or you have slowed.
And we'll also I guess in other words on the construction off all the omni channel solutions no matter if all the self operated platform for all the offline all stores and although hundreds of millions of our partners offline to all provide all the supply chain ability to create more value to our partner. This is also the movie.
Then four or more and more brand partners, which two office in collaboration with JV.
Even though we knew we obviously did you no longer a.
This is one thing for them to do logistics just add on few words about the omni channel solution with us to do logistic.
You can ask you know were down do you know will be that union.
Hey, Bob thoughts on property within onto an acute right. When we say journeys home could have gotten.
Who can Sean lesions is home she shops long before the phone human gold shares with all.
Yes, Cook Cook wouldn't lose yet dog themselves you wouldn't it.
And for this year, we'll put our off I suppose the JV supermarket market business at the core on an ongoing development, especially in our beauty Werent a warehouse networks in the larger cities to bring more high quality products to all the customers in the larger cities and let them to enjoy the superior.
Service experience with the TV Dot com.
Hello, among that we do on a rolling and Oh Gosh, you do cope with the auction one as you know areal talking about a 40 year old recently entered into a lot of Brinci move touchy each year.
Or Tom you soon but Q citizen someone going quite well not stopping fool gone cohesion girl.
And for side those are more popular services, including the same day and next they deliver raised I'll be here could you know just take well continue to offer collapse. They see fit the sticky to provide more faster delivery services. For example, but this is why malware depends on different.
Product categories.
Thank you.
Thank you. All next question comes from the line of Alicia Yap from Citigroup. Please ask your question.
Hi, Thank you I'm good evening management, Thanks for taking my questions and congrats on the strong results I have a question Todd the seasonality. So wondering if you could describe any different office seasonality pattern that you have off surf Oh, what are you know the past a one and a half months right into it.
The three Q income for the years does your situation worse the previous year. So have you seen any at normal strength off these FMCG or even appliance category into the tricky. Despite the strong fixate teen already our strong you know first half already.
Steve tweak here, it's a bit befriend seasonality pattern than the previous yet and then quickly on any colors in comes off the S. P and that category Pet chased act for those that coming from the lower tier cities, especially those that you newly acquired a these quadro interpret the basket size.
And order frequency. Thank you.
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If you like.
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So we are watching Robert Wetenhall with all the deal so local regardless if somebody were once you used to Jordan for those who were so based on their.
Doctors on the though I'll do the which is all about or you may recall to Washington Children's Hospital.
But all in so we'll be doing though to Google she'll go Sonny Bono a younger so there was a hearing and adoption.
Yeah, it's hard to know go there. This is April we thought it looks as Matt.
We made since you dug into the year.
Hold on to Utah memo.
We wouldn't be back of the Hyatt extraditing or TV, both for the future.
And indeed, as we would do that because of the quantify the situation for faces.
Turning to situations in the first half of the yeah.
In the quota on a lot of for the consumption demand has been surprised to become stuff, though pandemic and entering the second quarter. Thanks to the mid year Grant promotion between 6008 shopping festival, we have seen consumption demand is coming back entering the third quarter. We also see that.
Crosses industries, some up kind of grades are not performing walmarts on cold air conditioning, no later than because that's de Sal and it's all due to the weather as well as though they real estate industries, coupled and industry development. However, under these circumstances Judy has been.
I had been taking the leading opposition and a bunch of market share categories and industries, Inc. So low.
Yes.
So the issue.
Yes.
Got to call to GAAP figure, which is really around the world, having adult tobacco consumers really from ball and pushing off or sort of global or whether they get their father taught me that shouldn't holding more she's also that people or local rather shopping.
Okay.
Hello, Cinderford, they've got a gold sold is of course alcohol.
I'm a better today than you normally today, you will surely local minimum de.
Overall, we hope that it.
Sure.
So you've got to hubris yet.
You lot liquid.
That's helpful.
And at the same time, we also see some categories have to experiencing some strong growth, especially the consumer goods fresh produce health care products and.
Household oh supplies effectual, and we have to that so the overall in China become ecommerce market. The ecommerce shopping penetration rate is going up leasing Naples, what as more customers more than some of them haven't used to internet or unless something before Dave.
Ownerships page their shopping online and thanks to strong capacities and advantages in water supply chain, all the superior services and no over it can be commitment to provides strat trucks, it won't be and strip or words services and products for our customers, we how come acquiring.
An increasing number of new customers on their platform and I think family office, he and more active engagement.
From all existing customers onto this platform.
Yes, sure gold recovery.
Thats Warner Soviet here since you're sure sure injectable products in that couldn't element or do you see us is RP from though because you do though she knows who UGC video production.
Non-GAAP number here today, so I'm, sorry, which is going to supplement some of the rest of the couldn't go within Asia, Latin America or Google.
Are there some of them off a woman she.
So she feels a new pago. They don't years, you don't think or some to create Chinese.
If you will know medium.
She selfie Booth Anderson hoagland about how to do silly.
Oh.
And but looking at and consumption kind of the category from the largest city customers. They are buying more all consumer goods and a fresh content on the platform. Indeed platform in these categories, there <unk> value I relatively lower than the average I value. So.
Also we have realized that the new customers coming from the electricity account for Meli big amount on the percentage in the overload customers. We acquired in this quarter and liberate that sounds to be more precise operation up. These new says to create there are shopping center.
Our platform by over superior quality services and products and getting more benefit to these customers.
We will gradually improve their retention rate and the market size on JV.
[noise] Alright. Thank you next question comes from your line of Alex Yao from JP Morgan. Please ask your question.
Mm.
Thank you mentioned before taking your question on your congrats and sometimes to quarter I'm, sorry, almost down to you guys will no longer give financial gardens, given to understand but can you and these two qualitatively help us understand your second part, particularly third quarter financial Oh.
For example, or should we expect to revenue to be meaningfully into strict controls given the tough to benefit from a coffee my team.
And also a high comp into second half.
And then from March infrastructure, but how should we think about a there's a circle of although.
Given the.
This will normalize suffer the merchant activity will for the recover so the price you probably are potentially you will.
Well faster than for first quarter, Oh, I mean first oh, so any color I'm struck himself, particularly so quarter would be appreciated. Thank you.
[noise] [noise] all she wrote was a buffer to not be above elements job and you're going again.
[noise] or do you go remained indoor comes out on this issue like I'm sure. If you from a key working areas, we're going to focus on the second half of the year. So what would you go through those little girl do you have the copal.
Current color.
Hi, Jim I'll leave I could become a somewhat normal working abroad.
Provider, who know how youre feeling about Brazil them, Oh Gee, what are they have excess throughput of though so even in southern it would you guys are becoming a meat.
First the whole will continue to strengthen our opening up over supply chain abilities. You have seen a number off the collaboration on the opening up over supply chains with partners.
This year and this will continue.
The auto Merck well hear more about two quarters shoppers.
Okay, and my feeling like others are going in and they just a trend yet I'm not sure should pay or some here, but a good try as either but we look for you guys for nobody nobody was.
And on a one [laughter], so Q3 dollars sure, but a higher number bogo.
Through the pop up again.
For that.
No that April some conversions you Chris off a buildup. So tell me if I'm interested in.
That's what he was able to balance sheet.
And the second as well, we'll continue to dependent Alberta up development in the lower tier cities. This is more customer forecast as well as depending on our collaboration lifestyle and that's how about in China. This is more safe to finding more digital products with the customer.
And now it is in China, there are over 200 industrial about across the country and we're identifying some suitable partners with this industrial bounce and to help them with their digital transformation is having problems on water supply chain and a two design more suitable and valuable.
Money products altogether.
If you don't know liquid you Threed you tend to go the casual doing things, we don't see going really well sure you go through.
Even though he shooting from her.
We really don't really she loves country, though the news about the Alfredo here could create a pure buy shares out there or thereabouts your coveted of gold for you.
Pardon younger kids.
Our religion I don't what she told all over the border. So he was Florida has also got it.
She told us into the nature.
And we will also the strengthen always come to our construction of our omni channel solutions.
We put this repositioning omni channel as an ability when ecosystem rather than a meal business.
So a beauty <unk> the omni channel solutions will be helpful for other customers and to help them to and their shopping they can ship freely mom different platforms. The matters online offline no matter whenever and wherever they shop. They will enjoy the same quality synthesis funky dotcom and Robert our brand partners.
On the omni channel will be beneficial for them to increase their sales opportunities and Oh. This will offer in the long run and helpful. Askington our cooperation in difference on.
Before getting to a Billboard news over 22, good movie partner.
You said that job selling season repo men for you.
Got you may be blood and.
This year, though Youre limited Gonsior website, which is actually with our hybrid critical balancing between new though.
Okay got it was synergies or shouldn't be cautious comments, you put the industrial woman she should be done that your repurchase.
Unfortunately, we will continue invest in our technology service businesses and sent them all the cooperation with more business partners Enterprises partners and these will open new market opportunities to other close relationship with enterprise partner to increase revenues have.
Of course, a before that these new longtime divestment.
Oh Im sorry, you see a billboard given callable cautions, there's always reputed Olympics issue, though.
In.
Judiciary hold you opened up a whole liquids access all four kids out easier seem to do that.
Paul Coster, what most people tissue, though.
Yeah, the TV radio show you, though.
And well continue I sent them over investments in new categories, such as the healthcare fresh produce et cetera, and we will also getting back to pull the into our traffic platforms, both online and offline and to perform more disciplined in back to them to ensure our life sciences. Thank you.
I can add some color on the on look for the second half actually mentioned earlier, we had stronger controls overspending in the first half years, given the uncertainty in the macroeconomics.
So given the clean entering situation is now largely stabilized in China, we kind of go back to our original busy plan for the second half. So I would say either the scope the topline growth and the bottom line marketing see largely in line with our original.
And at the beginning of the year.
So looking at second half in Q3, I would say, we see stronger seasonality this year and we believe the trend will continue in the second half.
And don't forget there were some pent up demand for at least in the second quarter, especially for lunch home appliance. So the every to go for the first half or which was 28% I would say it hits more comparable lung completing the outlook for the second half subject to the healthy recover.
<unk> as the old consumption.
And there were actually some nonrecurring sales up there could be 19 related prevention and protection products in the first half such as the fifth marks and the Fairmont thermometers.
So we truly hope these are non recurring business.
So putting all these factors into consideration I, you can download or Apple to Apple outlook for the second half.
Having said that we see very strong month and user engagement continues to meet the promotion in the mobile products into light as Julie just mentioned.
Even without any sizable promotion activities. So we can clearly see the trend of shifting from offline to online is ongoing, especially for the supermarket catchphrase and people without.
So we entered into Q3 with good momentum for you to go and we will continue to focus on user engagement and the new user acquisition, particularly in the lower tier markets. This will fill up with basis for the upcoming Hussein promotion season.
[noise] so looking at the profitability I want to emphasize that our commencing commitment to steadily improving marketing has not changed.
We will continue to invest in new initiatives for future growth.
[noise] [noise] [noise] [noise] right. Thank you. All next question comes from a line of Thomas Chong from Jefferies. Please go ahead.
Hi, I frankly management bought taking my questions and congratulations on a very strong results I have oppression, though relating to lower tier cities penetration October determine comments about our strategy.
Second half and on that one I understand that Oh, we have strong due to quote them I mean, that's ah, but they don't have comments about do you do see in our strategy in the second half and then I'll.
Question News about our M&A strategy.
How should we think about our acquisition strategies in the second half occupant that I think we've been b, we have been somar Emily Thank you.
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Good luck is only up before Mr should be back into the public conjecture.
Oh, Yeah. This is a shoe like I would like to share a little bit more about Oliver I'll know, what's your market strategy. This how did you have to be working well in the hopper. After a year. So we're going to continue or below what your markets has in contributing a lot in our new customer acquisition.
Sensing achieved in several different quite different than not approaches for example, other ti Dom social E Commerce platform and also the light person went to 50 version also.
The driving the new customers from electricity to RGB and habits anytime I. Just mentioned you know last question, we have a certain kind of categories that have been favored mortified below what you did you lose or is that your father consumer goods fresh called you et cetera.
Okay helpful. Beginning our new customers you know what your city and in addition, the deep Central [noise] I think Mike [noise].
I've also played an important go to how how fast can acquire more customers from the military sticky. So these are we going on in total the on strategies, we have been coming off to a going deeper into China, no what you're thinking.
It doesn't know they lose you do about things you know Trust me.
So the lochinvar to go get it usually is a lucky with all three earthshaking driver he said.
Awesome, but there is only a favorable pool or has that becomes a basis.
And just a few words about kinky heating why not a channel we acquire new customer actually all the main side is also performing round in acquiring new customers. The here onto onto your more about <unk>.
Do you work through either she loves it.
Fully so you should be looking up assuming you're going to give I'm struggling to keep up with other people together.
She loves argued that the priorities are before they get the they did all opens up the most other ER visit the history, though.
She probably this year the Jamie this is Jim do you really billions of people.
And in Q1, because stuff the kind of our situation in a lot of merchants cannot operates normally go. The GDP platform performance has been flashlights are coming into Q2, I'm thinking has that been showing strength in terms of them.
Users onto the scale, it's been taking off and so I'm doing amazing contribute her to I'm overarching and he is the usage.
Moving on to close out along the good thing this which is.
What do you think you'll know free to feel good.
Hello.
It appears you bother data using the sell through.
Goal to she says a lot.
Duties that you'd always it's a baby places like India bunker.
If you look for this year that do what you guys should gain for over a year deals like Youtube dot gives users laid up to the future.
And at the time that need to for growing uncertainty. We have also seen they're repurchase grade is growing which is very important indicator for the purposes acuity goodwill I continue to one or more precise are useless operations on TV users and some of them.
Our on making the transition over a period of thought something with 'em TV. They are transitioning to onemain sites already.
He was Vicki what gives you better to achieve some darfur there should be used to be drawn to go basically about using some guy, though where things are going to date to present these wins either due to the yearly.
The prices.
Great I cover the rather try that on the they put a good war saga.
The true who go to work physical try that if we all know previous function.
Choose gogo border Soviet or how should what are some ship.
Oh, no done a member of Muslims on PC platform.
Not too I mean, like however, we see a murky some huge I'm very act.
And they also playing an important you know I think its business because it's important to go to connect athletes and one that's too about the mentioned before I'm getting back to bounce will bring on more and more merchants and.
I'm thinking she and her team not doing.
Great industrial resources and product I was going to present.
Good quality product to the customers in electricity to taking through there.
[noise] it was a strong number or would like to make.
The conference on the kids took in Brooklyn, and a man.
Oh, the football, but JV or investment is to expand their extensive your school engine by listening into context, let us to digitally complementary to JV in terms of skill school completely and that's what's going to people do model.
It is to create long term.
But could you value to both parties.
Well financially and strategically.
Got you along with a JV signals to the production we remain strong we just know consider mismatch in local cities.
Cogen.
Good morning service as Wassa reporting structure.
[noise] clearly see there are quite a number of investments or acquisitions are now the recently I guess simply because a lot of this investment activities were delayed because of the pandemic in Q1.
[noise] [noise], sorry, seven tendency have not changed concept merger and acquisition.
[noise] [noise] alright. Thank you next question comes from the liner Jerry layer from U.P.S. Please ask your question.
Hey, Thank you.
Hi, I've heard.
Quite a bit of for a discussion about partnerships and a decentralized E. Commerce, just now I wanted to ask US specifically about the kind of partnership JD has switched quite show so.
Maybe you know in the future more a in the live streaming area I just I just wonder what does management think of the partnership so far and tell what can we do more of in my streaming.
That's just shifting could a user engagement or GMB or anything like that just a few data points on the commercial partnerships and then secondarily.
On logistics could we see.
<unk> stability to the margin improvement sustain or could we see.
Reinvestments in the next few quarters. Thank you.
[noise] borrowers who live in their lives it or don't really crucial.
Yes.
Do you like what a question about cooperation with quite will earn two route or be willing corridor for this litigation look we look at home or you go to hear I read the meal couldn't walk.
Consider our remote religiously Newpark culture. This will you go or just a fatal.
Well go when do those who took a couple of days ago. Good all can deliver locally.
And on the cooperation with quite a bit typical Kate.
It is opening our supply chain strategy actually hobby wasn't good number of partners I'm, just not with the new supply chain claims. So it's a very potentially maybe platforms in the current situation. So actually horse operationally question as being a lot of attention.
Uh huh.
Do they they've been hurdle will be on us. When you go. So you really can't doesn't that you didn't go look we're going on future Oh immediately you ever since you should agenda, Jeffrey just ecological up.
We don't think material.
We have started you know collaboration with Chrysler since a year ago. However, our cooperation almost approaching what does it still within a week time.
Hello.
Linda Linda maybe some coverage or no.
Yes on the new role there are quite show.
There is older yogurt.
Either Bill do you feel comfortable about.
Oh I'm quite sure value. The most instituted platform because we can provide the superior supply chain ability and a high quality products and services, which are very beneficial for their ecommerce development. So that he has a very important partner or people, who can quite opportunity or troops in Iraq.
In one go to you got to what else was there some entries or so of course okay.
Her Julie.
With that we've become a fatal getting who do you think you choose the critical to June.
Two things in these opus overlook, there's a new agent endosheath.
Locally relevant.
Both.
For fiscal year [noise].
True religion, Michael Jungling, you go see or we don't.
Yes.
And also question has seen a fever favorites traffic platform for lots of them brands that have already conducted a lot of marketing and sales I'm quite so we've done a good he joined me they prefer to work they do have to work with quite within the duties platform because we can provide.
Overall, but you've done a services and Tuesday, with services and fulfillment ability with them.
[noise] use the difficulties for these bank partners to work on these new live streaming platform.
Maybe there was there you can put has all of the Obama was little global oil to lock in building a nickel water since you don't dialogue, but anything but for the long ago, Chisholm II or your targets appraisal.
You know she law they go to do.
In the looks like studios.
Although properties are the grain interest rates to just Fortunately before October six when they grams promotion, so our Auckland age operationally quite focused.
Our two categories, one is down and consumer electronics. Another these general merchandising gifts category has been supplementary to what I'm quite sure slap them already have I'm quite sure.
We have to have a two cents in their supply chain do family.
Oh production.
Going to give you that we would do.
She is going to be Yoko, we'll do that.
But you did you do a better for over a good whether those are attributed to three in the soldiers on the basketball shoe.
Do you have got values are you should look like what are the nobody on hold.
Good luck to go over to live appeal to the liquids okay.
And we see that's the convergence. After your first question really are quite different. So this is also good platform for us to acquire lot of time, [laughter] burst and enjoying our collaboration such a full kind of those though our self operated product. We have offered 400 ASCII use caught back.
Questions platform will be cooperation with maybe a favorable prices woman future will continue to open our IP selections and more and together with my.
She was a little room night, as well why or they can go meal middle two I'm sure mill.
Well adopted as we go that convert solely for the girl yet on the likelihood of God I feel really I know, we're dealing with it or do you feel manager.
For older without any problems to life, a little different results you will.
Got it quicker.
When do so number one they choose.
Okay.
Sure.
And in terms cellphones got a system integration between 80 and quite sure. There's a dual our work. We also continues to do to come back to two system. That's what the group should be an experienced this together maybe charter there are two mode. We will keep remarkable collaboration one joins promotion.
I think one or two to six my six now I'd like to humans, we did with sequential changes in the second even more a daily sales model, we will elaborate king.
Start hope and Oh central platform Cuprum more normalized.
Bidding activity pickup.
Oh no longer but.
Just wanted away from giving logistics [noise].
Do we also shall I see our Oh.
Phil Mickelson not whether the huge automobile once you can.
And I would just answered my platinum Liberal Oh, they put the customers experiences and on the operating efficiency at the core off on business development.
Fortunately, we don't you Tomorrow Sidoti <unk> co, which you have to easily keys in each year maturity.
Core can do accrual cool sooner or later this week.
Well.
So as long as we move on but other than that.
So near chunky.
The bulk of Duncan.
[music].
And we have skin in the past to be a month, because our increasing usage experience and acquaintances should never continued investment in technology and member growth how consumers are revenues and scale continued to rise and we believe this will all dry docks comfortability off on that business.
In alone.
[noise] freight. Thank you on next question comes from the line of James Lee from Mizuho. Please ask your question.
Great. Thanks.
Oh my questions relating to online pharmacy here.
Can you talk about general demand they seem to market is it fair to think that most of the demand happening and the top tier markets and maybe you guys talk about plans to expand into low tier markets and is it too early to think about that and secondly related to that.
And then new learning share in terms or user behavior any new product services, you point to rollout to take advantage in a market and also lastly, maybe a little bit reminder, about your differentiation versus although my pure ship. Thank you so much.
Oh.
Well she loves it was elected only got wage move in college football.
And so he will do the lingering ordinary or youre getting hard neutral.
It obviously girls Fraser Whos been job he's lower miniatures dock, so consumer I know you don't really who your vision.
You're talking to the user.
And this is truly I would like to introduce a day to Bob RTT houses move and Oh flexibly no kidding, how is the largest tell all pharmaceutical retailers. It was on healthcare industry in China, and moving that getting house I first I used the front runner where a person.
We're in the international on Health care area.
Well, it's a little bit Realty lately, there should I read Lynn because you know.
We will you go through April 20 people, though so given that today's results for 20 boots for growth.
ER for Tony budget hold up wasn't too.
But I wouldn't put the youll hear from in the knowledge is jostle because she's she's really nice numbers, because you know prudently differently you got delivered.
The positioning of getting how it's health care management system that is built on her <unk> advantage.
Okay, and focusing on providing medical.
The other thing and John will provide more textures and a few weeks and for all the customers do their health care. They may take a constant all my life cycle, and Oh station and the demand is when the mood healthcare services. So this is sufficient positioning of student.
So these will be under Leach ER Doc loans moving on to deal with Duffy material, which is very different wholly where people.
Bush legal fees from go to you go or putting too much closer now.
Yeah.
If you feel about vendors the biodiesel.
She is a critical.
After the outbreak of though I'm, calling a violent.
Our JV house, I'm going to rapidly, especially in terms Moscow users penetration on engagement.
And introduce a heightened kitchen and continued at a high level.
Picking quota and especially in the I'll be first half the year.
The interim online medical consultation volume has increased over 400% compares on your own here and the consumers are becoming one wouldn't <unk> active.
Jimmy House platform.
Okay. They are headed over the last one or are you haven't projections.
You do that so they can do due diligence assays that are true they keep it simple Mrs. At other times you.
There's a fairly low bidder for them, though.
Well the treasury yards centrally should he interior good they do shoot which if we do some years ago.
And in terms of the consumer structure I'm, beginning house consumer structure similar to our ecommerce platforms. However in terms now from the online medical complications services, we have seen that people from the higher tier cities for instance, like interested east and young people have a much higher level of acceptance.
The latter emerge.
Oh, you know tradeoffs you're the.
It goes live popular Lemaitre Showself wherever you are going to more sure, yes, which along with regard to keep our people who those sort of ego well tell you laid out about where you would look a little.
You little bit of additional motor neurons ovatwo.
There are people figure and what was mentioning that up with the quantity house not China's mankind University University has some established the first Internet Hospital model together and you will.
Integrated medical, Tennessee, and food Internet platforms, including the only payment medical insurance I believe that.
No what ends more partners and the new model on these how can a sector to provide better user experience by the customer.
[noise] [noise] [noise] [noise] [noise]. Thank you will know approaching the analyst conference call.
I'll now turn the call over to JD comps right you leave for closing remarks.
Sam.