Q4 2021 JD.Com Inc Earnings Call

Yeah.

Hello, and thank you for standing by for JD Dot Com fourth quarter and full year 2021 earnings conference call.

At this time all participants are in a listen only mode.

After the 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 I would now like to turn the meeting over to your host for today's conference Mr. Sean Zhang Director of Investor Relations. Please go ahead.

Thank you good evening and good morning, everyone welcome to our fourth quarter and full year 2021 earnings conference call joining us on the call today are Mr. Lacy, President of Judy Dot Com and myths and issue our CFO .

For today's call <unk> will kick off with opening remarks, and Sandy will discuss the financial highlights.

We will open the call.

Two questions from analyst.

Before we continue let me remind you of today's call will include forward looking statements.

Please refer to our latest safe Harbor statement in the earnings press release on our IR website, which applies to this call also during this call, we'll discuss certain non-GAAP financial measures.

Please also refer to our earnings release, which contains a reconciliation of non-GAAP measures to the comparable GAAP measures.

Please note unless otherwise stated all figures mentioned in this call are in RMB.

And now I'd like to turn the call over to our president Mr shoot.

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Hello, everyone. This is Chile. Thank you for joining JD com 2021 fourth quarter and full year earnings call.

J D continues to deliver high quality growth and meet the evolving macro consumption in.

And industry environment in the fourth quarter total revenues recorded a 23% year on year growth in Q4 on high comps at nearly 28% for the full year of 2021. This shows that we continue to outperform the industry and continued to contribute.

Contributing to the high quality expansion of China's consumption at the same time.

The healthy profit growth in this quarter, thanks to improvements in efficiency driven by technology.

Quest demonstrates the increasing appreciation JD has earned among consumers and business partners. It also validates that type of real economy based enterprises have become important driving forces for growth in the retail industry and oven downstream entities.

Jd's business and investment strategies have always centered on users and business partners through different economic cycles, and our strategic determination and focus.

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For close in September and components in 2021.

570 million, maintaining efficient and healthy growth, while the overall consumption in the 301 for recovery.

Fortunately, we still use the shopping frequency range of categories.

Meaningfully improve.

This was driven by our stronger user engagement and Omnichannel initiatives.

I would like to encourage you.

Sure.

Thanks Jay.

To take high growth.

<unk> operating and financial metrics.

We focus on healthy and sustainable growth of our business.

Second of China's Internet industry has developed into a more mature stage the traffic driven growth model driven by subsea is being replaced.

These are quality and operating efficiency oriented model is such a new environment with a lead that user growth and business operation.

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Jd's ecosystem and it's very common for brands to run both <unk> and Threep businesses at the same time.

Motto bring them different value.

We are glad to see that lumpy and supply chain have become mainstream topics in this industry in recent years with more company working on each such initiatives. We are willing to share all experiments to contribute to the industry is healthy development. However, we have to point out that we don't think lumpy nearly.

It means product procurement, where even advanced payment for securing inventory.

We believe lumpy us building a comprehensive system of supply chain management.

Strength of the <unk> model is to provide high quality shopping experience to users and great operating efficiency along the supply chain. So that's business partners can enjoy better capital and inventory turnover.

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In a time of uncertainty JD has helped our business partners to cope with external changes with better operating efficiency and lower cost service stability and certainty with them. As a result, JD has gained increasing recognition from all kinds of business partners in the fourth quarter, both the size and number of this.

As partners in our ecosystem continues to expand in particular, the number one key supplier achieved a double digit percentage growth, while further expanding coverage across all cycles.

The growth of third party merchants also accelerated to the highest level in the past three years as we added more new merchant in Q4 than we did in the previous three quarters combined.

I believe that the number of our business partners and.

To grow healthily in the future. Meanwhile, we have been constantly strengthening of our leading cooperation with other business partners before the shortened inventory turnover days to the lowest levels in the industry. Despite the number of Skus that we manage is now close to $10 million.

Our accounts payable days also shortened which helped to improve the business partners capital turnover efficiency as such JD has helped millions of online and offline suppliers and Anthony to gained as their growth opportunity and a reasonable profit in support of the real economy going forward.

Cooperates with more partners generate mutual benefits and facilitate growth.

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So healthy growth momentum of our foreign retail businesses.

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I would further enhance supply chain capabilities and operational efficiency have put us in a strong 14 to firmly execute our long term strategy now, let's take a closer look at the recent development of JD logistics and new businesses.

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<unk> achieved a series of milestones through 2021, Firstly, if total revenue grew rapidly and exceeded the 100 billion RMB hikes for the full year second the long term investment in J D. Al made in establishing integrated supply chain logistics services started to bear fruit.

Is it fair to more external customers and expanded its total addressable market.

This also led to a better revenue structure for J D. L. As revenues from external customers grew at a faster faster pace and accounted for over 50% of total revenue for the first time on a full year basis, our business partners can better focus on their core operations and achieve high quality growth.

JD, our integrated supply chain logistics services helps to drive their overall efficiency and competitiveness.

We are proud to see that revenues from customers using <unk> integrated supply chain logistics services contributed two contributed over 70% of its total revenue for the full year.

Moreover, driven by the expanding economic economies of scale and operations optimization <unk> achieved sequential margin improvement in 2021 .

Future steady al will continue to invest and upgrade it infrastructure capabilities and resources to provide larger scale and more diversified supply chain based products and services to our business partners in China and abroad, and further strengthened its industry, leading position as well as expand market share.

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Certainly <unk> syndrome, which are higher the pilots.

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On the new business.

Which focuses on lower tier markets and took a series of iterations and optimization measures in 2021.

Moving supply chain and fulfillment efficiency technology markets, particularly with fresh produce and general merchandise as well as lower re merchandised circulation.

<unk> provided better services to customers and help to local merchants generates more revenue with higher efficiency and cost savings is.

Since the second half of 2021.

<unk> led the industry in proactively focusing on selected markets as well as efficiency and user experience to drive local supply chain capabilities actually assignment of the new model.

Results, we are seeing better supply chain efficiency and cost structure in our selected markets.

Particular fulfillment cost per order continued to come down while net promoter scores and merchant satisfaction levels. Further improve we believe this is the factor that requires a long term commitment over the next five to 10 years in order to build up supply chain infrastructure and gain customer mindshare.

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JD achieved healthy and sustainable growth across all business lines. In 2021, we also opened up our supply chain and service capabilities to provide reliable and steady support to our business partners and consumers amid a challenging macro environment.

He has and will continue to develop new growth driver for the industry and create greater value for society.

'twenty two is the third year since the pandemic broke out.

We are still in the midst of many challenges and uncertainty and the competitive.

Competitive landscape in China is ever evolving and sometimes can be intense companies must have collapsed the corn business logic and predictably deliver on the long term strategy in 2022, and also 2022 at the 19th year J D. C section throughout our history, we have never talked long.

Our short term and local gains and losses.

Our corn business logic is clear.

This model and strategic positioning all of his remarks about consumers and business partners. The resilience of our business model has been proven many times in the past.

We've we have a highly differentiated core competence that will lead us to a healthier and more sustainable growth trajectory in the long run.

The results we achieved in 2020 months have also set a strong foundation for our growth and market share expansion in 2022, we truly appreciate all your trust and support along the way. This concludes my remarks, now I'll give the floor to assembly.

Hello, everyone. We are pleased to finish 2021 with another strong set of results in the fourth quarter, well 2021 brought many uncertainties in the macro environment supply chain and the consumption tax change.

We executed and delivered on our strategic priorities continued to gain market share with our robust topline growth and achieved a solid I'll come back.

Results speak volumes.

The strength of our supply chain base.

A lot of the ATM filing for both our users.

Got it.

And driving long term sustainable growth of our business in 2022 and beyond.

Our net revenues achieved 23% year on year to 276 million RMB in the fourth quarter and 28% year on year growth to 915 2 billion 952 billion for the full year of 2020 plan.

We continue to demonstrate not only feeling in our business and persistently outperformed industry growth despite relatively soft consumption trend in recent quarters.

Our solid topline growth comps alongside our proactive strategic priorities, improving user engagement and lifetime filings.

Our annual <unk> user base achieved reached a total of 570 million by the end of 2000 tens or when I joined nearly 100 million users from a year ago.

Particular, our quarterly average Ta new grew over 25% year on year and hit an all time high in Q4.

This reflects the results of our strategic focus on improving user mentioned and engagement.

We are also gaining more wallet share from our expanding user base.

As we increasingly become the go to destination for consumers regular shopping LTM DMV per user has been steadily trending up overtime overtime and increased year over year in every quarter in 2021.

Even as we continue to expand our total user base.

The mall, our J plasma box.

25 million in the quarter and average members spending increased by double digit percentage points from a year ago.

By the end of Q4, the average annual spending of tax numbers with 10 times as much as that is non stop slippage.

The encouraging progress in high quality user growth and improving user engagement validates our investments okay.

Superior customer experience over the years.

Our revenue base. So further diversification in Q4, our net product revenues grew at a solid 22% year on year.

Service revenue grew faster at 28% year on year.

Against a high comp comparable base.

Over a two year period contribution from net service revenues increased from 12% to 15% of total revenue.

Our marketplace the marketing revenues exceeded the two.

20 billion RMB Mark in a single quarter for the first time in our history in Q4 growing at 27% year on year.

This is a testament to our ongoing improvement in our platform ecosystem.

Logistics and other services revenues grew by 30% year on year in Q4, maintaining hyper growth momentum.

Now, let's turn to our segment performance.

First in Q4, our core business is retail delivered both solid top line growth and healthy margin improvement.

Retail revenue reached 250 billion RMB is growing.

Growing at 21% year on year in the quarter.

For the full year of 2021 continued retail revenue grew 35% year on year to 866 billion RMB.

Category Wise, we continue to see the ceilings in electronics and home appliance category with a 22% revenue growth year on year in Q4.

Power of JD supply chain capability has been on full display against the global supply chain disruption.

Our general merchandise revenues grew 23% year on year in Q4, outperforming the market amidst a challenging consumption environment.

Other volume in our supermarket category has been consistently growing at around 30% two year kicker in every quarter in 2021.

The strong growth of our supermarket category has helped to drive more frequent user engagement and continued to continued the breakeven number of new users.

Our three key ecosystem also saw encouraging progress.

A small merchants appreciates the increase the value delivered by our ecosystem. We are pleased to see higher engagement and spending from our existing merchant.

It's worth mentioning that we added more merchants to our markets business in Q4 than we did in the first three quarters combined.

Our omnichannel business has been growing rapidly as our offline stores and business partners, including some including home appliance franchise stores first star and some fresh as well as our <unk> initiatives.

<unk> close to 80% year on year GMB growth in the full year of 2021.

I can progress in our Omnichannel business further demonstrating <unk> position as a new type of really economy based enterprise.

It also bodes well for our growth in the coming years.

Moving onto JD retail its profitability.

Operating margin increased to 12, 1% this quarter up from $1 nine a year ago.

As to the expansion in fulfilled gross margin.

A full year basis, <unk> Retail's operating margin reached three 1%.

Okay.

10 basis points improvement from a year ago, and 32 bit improvement from two years ago.

Our core business is well on track to realize those.

Favorable margin improvement well optimizing for a healthy category mix and exploring new business strategies to expand our Tam in the long run.

<unk> logistics RTL achieved remarkable milestones in 2021 and concluded the year with strong top line growth and sequential margin improvement.

Its Q4 revenue grew by 28% year on year to 30 billion RMB.

On a full year basis, <unk> revenues grew 43% year on year tool.

105 billion RMB.

This was mainly driven by the growth in the number of external integrated supply chain logistics customers.

Well after increasing our pool.

Contribution of internal revenue reached a historic high and accounted for 57% of <unk> total revenue for the full year of 2021.

We are proud to see JBL deliver a margin improvement well quickly ramping up is external business.

PDL achieved positive operating margin in both Q4 and the second half of 2021.

These results also demonstrate <unk> ability to both infrastructure utilization and improve operating efficiency, while maintaining robust topline growth.

Revenues of our new business segment accelerated its growth is growth pace sequentially to 45% year on year to reach $8 2 billion RMB in Q4 and grew 48% to 26 billion RMB a full year basis.

Revenues of our TNC business grew over 40% quarter on quarter in Q4.

Mainly led by the <unk> business with shrinking.

Growth momentum after we proactively focused resources in selected markets in Q3 last year.

We are committed to better allocating resources to improve our local supply chain capabilities to empower a broader spectrum.

This is Thomas menu.

Many of which are local smbs.

And to serve new and existing customers.

We will continuously drive innovation and improvement in the supply chain infrastructure.

Now firmly committing to better <unk> for our new business.

Moving to the consolidated bottom line, our Q4 non-GAAP net income attributable to ordinary shareholders was $3 6 billion RMB with non-GAAP net margin of one 3% up from $1. One in the same period last year.

Our full year non-GAAP net income attributable to ordinary shareholders was 17 point to.

2 billion RMB up from $16 8 billion a year ago.

Well, we continued to deliver solid operational and financial results. We also increased support to our business partners in a time of uncertainty.

We have consistently kept our inventory Culver well below 35 day, despite that the number of banks pay us under our management continued to expand.

We continue to share our efficiency gains with our business partners as we shortened the RPM accounts payable tells our base from 47 days a year ago to 45 days at the end of 2021.

Our business panic highly appreciate the increased supply chain efficiency and faster turnover of cash inflow from their collaboration with us.

As we are getting stronger.

Creating greater value for everyone along the supply chain.

Our free cash flow for trailing 12 months this quarter remained healthy at $26 2 billion RMB.

At the end of Q4 cash cash equivalents restricted cash and short term investments added up to a sum of 191 billion RMB.

In summary, GTS capped off a year of increased uncertainties and macro headwinds with remarkably resilient performance.

This is a cumulative result of our 19 years.

Wavering efforts in building, our core competence and committing to our great way to subtract Fitments philosophy.

We believe we have set a solid foundation for long term sustainable growth.

Looking ahead to 2022, well, we remain mindful about the near term macro volatility.

Aim to continue to gain market share with a set of proactive sustainable and high quality growth strategy.

And at the same time remained on track of our long term margin improvement trajectory.

I would also like to take this time to welcome our new shareholders. Many of whom are old friends to join the journey with us soon.

This concludes my prepared remarks, we can now to the Q&A. Thank you.

Yes.

Thank you the question and answer session of this conference call will start in a moment in order to be fair to all callers who wish to ask question. We will take one question at a time from each caller.

If you have more than one question. Please request to join the question queue again. After your first question has been addressed.

And our first question comes from Ronald Keung from Goldman Sachs. Your line is open.

Thank you, thank you sandy and Sean and team.

So we've seen the recent macro weakness in Chile, So we talked about that and cope with disruption higher oil price I'm just wondering what management could you share just how do you see JD retail growth this year.

Right.

Some moderation in general merchandise revenue that we've seen in the fourth quarter, what are the strategies with JD supermarket and marketplace and with these in mind.

Implications for margins this year.

Paul.

Okay.

People.

Great.

<unk> continued our children.

We're trading team football watching the solar issue.

Sean.

No that was helpful.

Joe.

Sure.

What are you investing.

Sure.

Royalty revenue to each.

One of them.

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Okay.

Some of it will be.

We're trying to do it.

Okay.

Some of them here.

And this is Julie to answer your question or the macro environment, we do face a slowdown macro environment with a lot of uncertainties such as the macroeconomic.

Additional and a weak consumption demands and the rising price of raw materials on the supply chain and fears industry competition enter COVID-19 disruptions and oldest artist post pressures on China's retail industries and in face of all these uncertainties, we continue to stick to our business logic and our strategies.

And this will be carried out in three ways.

So as you know.

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So this will come up with.

Jonathan overtime.

Richard.

Ddos.

So it was similar.

No.

And first to this development has always been centered on creating unique value for our customers matters on products services and user experience and this has helped us to enhance the mind share among our customers and deliver.

Delivered sustained development to sustained growth.

Yes.

Yes.

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Some consumers shop.

Good.

So all of them.

Thank you Katrina.

And second we pay high attention all of our business partners and in a time of uncertainty we are making full use of our capacities on supply chain to support our business brands and merchants to help them on the financial and the goods inventory turnover. So by oldest reports their April .

To deliver predictable and stable growth and her oldest external changes.

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And thirdly in face of those Covid challenges.

By leveraging JV is fundamental capabilities on supply chain and warehousing et cetera, we can maintain a stable sales momentum in those COVID-19 hit areas at the same time, we are supporting the government and the people to provide the leading necessities to the people in need and to.

To fulfill our social responsibilities and oldest effort has been widely recognized by the people and by the government and further enhance Albert.

Brand or our Jd's reputation in the society.

When discussing this option deal with them.

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The portrait only.

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And the way that hydro box, presumably low enterprises.

Shimon.

You've got Yieldco virtual GM Honda Thats for sure.

No.

No.

In the last quarter.

So we are confident in our.

Our resilient business model and our core capacity subsequent change and all of this has proven to be a viable in the past and it will also help us to outperform the market and for the outlook in the future, we will continue and optimistic attitude and to achieve sustainable and healthy growth.

Each different category and the different each business and also gaining a greater market share.

There is a great feature.

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Good afternoon.

Shimon.

Im showing further conduct.

And also I want to share my feelings on the facts as we pay a lot of visits to our business partners.

End of last year and early this year. They have all expressed that they will pay great attention and attach great importance to the collaboration with JD and <unk> have a high expectation on the collaboration with JD in the year 2022.

But when you take.

So introduction Dino.

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Let me go down to the hiring of Bill Paul Bob Hawke.

Jagoda, Utah.

The divestiture.

Hi, Jonathan.

But we're shoulder to shoulder parts of the funnel.

Leisure contract.

So those should all their projects.

Got it.

So bottom ups are showing the change in the opportunity.

And a few words on the <unk>.

<unk> market category.

A lot of changes are taking place and other brand partners. They are feeling the pressures.

From the rising price from the upstream and also a faster changing consumption demands and in the past few years to traditional sales channels has been affected by various factors and all of this has brought a lot of uncertainty for the manufacturers operation.

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<unk> dose reduction inventory shortage or Shanghai.

Sure.

Ginger.

So we're going to address these categories and core aspects first to the consumers, we will focus on bringing new products and new categories to the new consumers and bringing them quality products and build up their mindshare as J J D. Super is their go to place to buy different market category product.

Got it very helpful Me alone. So you don't want to get to based on.

The ship will ensure that circle.

Sampson.

Congress solution. Thank you.

And on the cooperation with our business and our brand partners, we will strengthen synergies with them on supply chain from marketing and warehousing et cetera to deepen our cooperation and synergy from all aspects.

Of $23 for doing so.

No material thoughts on calling on you guys with general insurance.

Simple frameworks.

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But you are right.

Great.

Coming into Q4, although the Salvador.

And also Jamie steel price is very important categories in our Omnichannel strategies. It has the highest penetration rate across all the categories and in the future will continue to collaborate with more and more business partners to develop omnichannel strategies in different.

In diversified.

Okay scenario.

But linda and Sean from them.

The broader OEM.

On a constant dollars, we've gotten orders from them.

Okay.

Over a quarter.

There is room to move up from there.

Gentlemen, themself.

Our research and generation Netherlands region.

Okay.

And for the supermarket categories, we continue to improve its supply chain and made a lot of innovations in this aspect of such as our.

Warehouse warehouse stores and other methods and other new innovations and with this category its profitability and continue to improve and we are close to the breakeven point.

Go ahead Paul.

No women.

To what extent you I'm not sure the label change.

Thank you.

Yeah, sure John Peeler stronger in combo with <unk>.

You can do either.

Sure.

Sure thing.

You've done a bunch of Shanghai.

Thank you.

She probably turned out being shown.

Sure Labour financial logic.

I'll jump off.

Jim in your region.

And also on our marketplace and <unk>.

And the ecosystem, we have done the following four efforts and first is too is that we continue to do to be find management.

Our third party merchants and third and second we make efforts to help them to lower down their operating costs and alleviate the burden to run off of our platform and thirdly, we provide.

Toolkit to help them to do better.

Operations of our platform and at the same time, we're also exploring more and more ways to support those small and medium sized companies and brands to drive our pop.

Or the marketplace ecosystem.

Okay hold on.

China Changzhou.

Can you hold on here.

Okay.

Oh no.

Each year.

So some of the other titles.

Thank God.

The other question.

And as mentioned that in this quarter for the three P merchants their overall number.

Even more than Q1 to Q3 combined and they have demonstrated very high engagement during the singles day Grand promotion.

Thank you. So this is sandy.

I'll look for JD retail.

So first in terms of the macro environment in consumption. So far we see that the overall consumption in Q1 or even first half year 2022.

To be relatively conservative.

And then secondly category wise, we expect that the supermarket home products health care products corporate business, including <unk>.

We'll generate higher growth compared to our overall average.

Third Omnichannel business as Lee mentioned, we will continue to be.

One of our strategic focuses.

And deliver hyper growth in 2022 and fourth we also expect that to a key to grow faster than <unk> as we have been optimizing our ecosystem and tools for merchants as Les just mentioned.

So we expect steady retail continue to deliver quality growth in terms of user base user engagement.

<unk>, which is our long term growth driver for our retail business.

Although the retail consumption is currently under pressure to certain content.

We are confident that we will deliver higher growth than the industry average.

Okay. Thank you. Thank you your next question.

Thank you Ron.

Thank you. Our next question comes from Eddie Leung from Bank of America. Your line is open.

Hi, good evening guys.

Just a question on competition.

Could you share your thoughts with us on.

The growing market share.

E Commerce platforms.

How do you think about the impact on the pieces.

And how.

How are you going to deal with there.

Growing market share. Thank you.

Okay.

Okay.

Yeah.

Carnival.

But certainly no one related.

Chicago.

Our critical products easier for all of them.

Thank you Sheila.

What are your geometry <unk> Lynch.

Sure sure.

Sure sure sure.

Hum.

Each other people do lockdown.

You might have at Cheyenne boiler controller, particularly.

If you take some question looking back as we go through what their tranquility, Egypt correlation though.

Actual contractual.

About the e-commerce .

E Commerce by a large stream and short video platform.

Still undergoing development periods, which is in line with our previous prediction for these business models and attract and satisfy.

Some shopping demand of some people based on their interests and Theyre still.

Developing fast thanks to the traffic dividend and given their business models and People's recognition of this platform. We believe this live streaming e-commerce will generate a long term impact to those platform E Commerce players.

Further one cannot charter Shlomi Carlos Garcia abortions are achievable.

No other single failure.

While we see some challenges at the same time, we do see those opportunities and expect to collaborate with Vista.

Traffic platforms.

So it's always useful to loyalty.

Thanks <unk>.

Jumping show here it was a huge concern.

Sure.

Jonathan <unk>.

Even.

Consumers are shopping demands are diversified Virginia dot com, we see most of the people come to our platform for planned shopping or shopping for their families. So we are less affected by their emergence.

Yeah.

Chip I was showing down there, but we can show in Shanghai teasers to that maturity.

The equivalent.

And second we see that Brandon merchants, while they enter these traffic field to do operations in their operating efficiencies, they're encountering a lot of up quite a lot of difficulties and they also need some help.

No.

Simba, Washington about 20, Fedex or holdover global fleet.

The only trajectory.

With Germany's push our visuals.

Although product.

And.

And thirdly, we believe that for all kinds of new business models. After the past their dividend periods, the only to come down to the work and serve their customers and better provide a win win collaboration with their business partners.

<unk>.

Two to 4 million people suffering.

Congratulate on Cushing Nokia.

Davidson.

<unk> showed a 74 million leading to go down a different type of user.

So compared with platform E Commerce players JD rehab liquidity dot com, we have complete supply chain infrastructure and fulfillment capabilities, our customer services and.

And the skills for the platform governance and so on all of this can.

Can help us to reduce to the supply chain.

Circulation cost, which puts us at a very unique and differentiated competitiveness.

Additional ammonia support type options on the table when should all startup would you.

Similar to handle either.

Gotcha.

Sure.

<unk>.

Government through a seven year basis.

Gotcha.

You may reach them.

Sure.

Hi, Good evening 19 issue.

Okay.

Sure.

Sure.

The accounting.

Yes.

So we continue to have an open attitude towards emerging new business models and by building our capacities omnichannel and supply chain, we are exploring diversified touch points to reach our customers in diversified shopping channels and user cases.

And we will also continue to collaborate with these content platforms and supports merchant partners to operate all this traffic field.

Got it.

For media towards removing so Judy.

<unk> audio traditional side.

Mr. Here at Jabil for their blood sugar, Shanghai, Yucatan, Doyle, Shanghai Lozano Tunisia.

What's after becoming CEO of <unk>.

And I also want to add that the slides JD retail farmer JD logistics. They also have a collaboration with those live streaming short video platforms to provide both way transportation the logistics support which also presents represents a huge opportunities for JD logistics.

Thank you.

Thank you. Thank you thanks, Chris.

Thank you. Our next question comes from Thomas Chong from Jefferies. Your line is open.

Once that I'll I'll take that one.

So that would be it.

<unk> saw a woman.

And while a woman so a woman the Crewe who's at Samsung.

Yes.

Don't shoot Goldman die, but what's the penetration.

The strategies <unk> typo.

Joe.

Should one woman.

Sorry about that.

Alright Gung Ho.

Mi band.

Could you bring some of these problem and you guys can realize the opex that you can properly <unk> margin.

Sure.

Got you I don't want that tissue, but we didn't guide the macondo well maintained.

But at the margin profile.

But without a great quarter.

Distributable.

If you go to higher dose.

Credit cards, obviously stronger in the future or should be obviously right now either.

For sure.

So can you talk to those items.

Paul.

Personal wellness with Walter Hydro.

200000, which yes, so along with that.

<unk> this is Jim.

Cingal.

Hello, Amit.

Nicole.

Now let me answer your question about the user growth in this quarter and on the overall industry, we have seen a weak growth.

No matter in general on the online site for Virginia Dot Com, we continue to build our business surrounding our users experience and when you achieved healthy growth and hit our yearly target.

They're going to deal with the channel.

So what is <unk>.

Sure.

<unk>.

Digital membership Philadelphia Eagles.

You could run through them.

Chad Congo sure she could differ.

<unk> singular engine the opportunity to use all of our history.

Cohort options sooner.

The new album occasional about them.

And we're going to approach this year.

No.

So here I just want to emphasize again that our business principle is to deliver sustainable and quality growth. So in terms of the new users acquisition. In Q4, we have seen there has been improved by 11% and for our existing core.

Customers.

They're shopping frequencies has been improved by 3% and Theyre up has increased by four 5% and all this has demonstrated again, our principle for sustainability and quality growth.

Some of them are realized Lenovo unless you go to our portfolio.

Yeah.

Martin.

With tissue tumors with Google.

Total.

Total amount of level two trauma Hasnt go well then realizing the operational deposits Jim Connor.

Thanks Sheila.

And for 2022, we'll continue to focus on.

On the user growth quality and to refine to users management.

And also make dynamic policy adjustment.

During this process, we see our users growth ceiling is still very high and we expect a healthy user growth in the following years.

Limo, not so long the other two larger pharma opdivo mesh reduction laser enrollment wound up should lead a quote online which is with us today.

We will go to <unk>.

Hi, Sean.

If you're launching.

Sure.

No.

Selling soda simply repeat our two countries dug into that number.

For Chillers.

This evolution.

Josh I'm going to do for them.

And it uses growths are mainly coming from two aspects first of all our categories as we are successfully.

Spending our categories. This will continue to drive our user's acquisition for example for the JV Super supermarket categories with FMC Jeep continue to be the engine for the new user acquisition and for the other category.

The consumer electronics.

We have a very strong mindshare, among our consumers even though we are under this supply shortage at this moment, we continue to see more and more.

Consumers' mindshare speeding up in this category and we continue to gain larger wallet share in this category.

Dr about local China production for Qdoba Pablo congressional habit, Joseph I'll assure you put an island of contract volume.

For some of the option.

Key battleground.

Total digital congressional shipyard Yorkshire fiduciary would've been.

Sure.

And second part of the.

Users growth opportunity come from our marketplace ecosystem, and our Omnichannel business and this will bring us diversified channels and diversified approaches to reach new consumers.

Users and the ecosystem with <unk> with our merchants and brands as well as our offline ecosystem will also contribute to the growth of new users.

Okay, Let me take the question on Opex and margins.

On the bottom line of JD retail.

We need to take into consideration of a few changes in our business model and category mix shift.

The supermarket category will continue to outgrow our overall retail business.

Its operating margin is.

On the trend of steady improvement, but still lower than our average margin level.

<unk>.

Three P business will grow faster than lumpy.

That somehow mitigate the impact from the category mix shift and third omnichannel growth factor than online retail.

As this business model is still in relatively early stage. So it is currently stealing a slight loss, making position, but will again improve there.

Year over year.

So.

While we are facing dynamic turn on macro environment.

Changes and which will affect our bottom line performance the management team will adjust our investment strategy.

Time to time.

And for Q1, I want to remind everyone that at the.

Sponsorship fee for the CCTV Spring Festival gala.

As a related promotion expenses were all reported in one single quarter.

Our marketing expense ratio and operating margin will.

We will be.

Slightly affected in the short term, but we will adjust our pace of annual marketing spending and.

The impact to our marketing spending for the whole year 2022 is manageable.

So I want to emphasize again that particularly retail we will pursue sustainable quality growth and we are well on track of our long term margin trajectory.

And for JD logistics.

Believe their management team also share some color in their earnings call.

For the margin performance.

Remember, we've made heavy investments in capacity in the second half of 2020 and gradually ramped up the utilization in 2021.

In 2002, the investments in capacity will be in line with largely in line with the business development. So the utilization of capacity.

It will be further optimized.

At the same time, we will continue to improve the operating efficiency. So that Youll particular testing will also improved compared to 2021.

For our new business.

We see that the competitor competitors industries linked now become more rational company.

Companies.

Compete on the core capabilities, rather than burning capital. So we see that the competitive environment is more healthy.

<unk> has been pursuing sustainable growth and we will continue to do so so we always balance investments in new initiatives and our profitability of our core business. So for new business initiative. We are very we are always very cautious in investments.

To ensure the investments can generate adequate.

For our investors and create true value for the supply chain and business partners.

We never pursued short term kpis, so subsidy, we will evaluate the market situation and make.

Adjustments from time to time to our investments again, so overall given the uncertainties in external macro environment, we would put more weight on profitability. This year under management's kpis that growth.

First of all for new business initiatives, we expect we expect them to deliver hyper growth well control the investment team.

To improve the UAE and annual investment will not exceed what we incurred in 2021.

Finally at group level as a reminder, we completed the acquisition of <unk> in Q1, and we will start to consolidate down from March this year, well, we don't expect them to have a significant or material impact on the topline and bottom line, but due to we prep.

Basically reported investments in data as an equity method investment so the P&L presentation or loss pick up from that that will be changed to different line items.

Got it thank you.

Thank you Thomas can we have the last question. Please.

Thank you our last question comes from James Lee from Mizuho. Your line is open.

Great. Thanks for taking my questions.

Just wonder if you could share maybe some of the new learning So J D. D. J as you integrate more of this omnichannel delivery on your platform just curious what you've seen through the cross selling rate.

Key reasons people are buying omnichannel versus not buying and how should we think about the demand in general is it more incremental or substitution old versus your core ecommerce offering. Thank you.

Yes.

Okay.

Sure.

Sure Shlomo.

Can you elaborate on the divestiture.

Gene fusion that shortage.

Dave.

As usual.

Should they come through.

What sort of Williams capital.

I'm not shooting off between being sold.

Nicole Richie Florida.

Tissue being shown in English.

Sure.

Sure.

The price will drop.

You will adopt.

And then on the question.

On demand retail as I.

<unk> shared with you in the previous calls that JD are building different kinds of supply chain based on the changing demands of our consumers and for the on demand video is one of the.

Fast growing competition.

Competition for yield.

Given schoen Jacob <unk> approaches.

And gold bar Chiba controller, Chihuahua merchant single distributor issues.

You control.

Sure.

Neutral.

Toyota.

Sure.

We think that the on demand ratio does not help us to break the ceiling for our long term retail sales growth, but it also helped helped us to create deep connections with the real economy based on offline retail ecosystem and to support the overall retail industry digital.

Our transformation.

So Jim has already transferred alternatives.

<unk> shown us assume that.

You will shape autonomous.

Hum.

So you go back in queue.

<unk> thousand square feet on that one.

Equally too.

Sean will be which will go through.

Sure.

Due to the full year.

And demand for retail.

Important parts of JD Omnichannel strategies, adding eight an important extension of our existing shopping scenario and itself. Its a trillion dollar market with a lot of potential and we also want to take full we want to fully use our current capacity is our supply chain to use this business model.

To provide greater choice based oncology products to serve our customers in a more timely manner.

A poll.

We can charter Joseph from Golar due to Joe Mcneely.

Thank you <unk>.

<unk> energy.

But if you have people.

Promotion of <unk>.

Okay.

Net.

So you can go from there.

Hum.

And also for some heavy weights products or those products that require cold chain will hire standout transportation like fresh foods and other coaching products.

We'll elaborate the lbs space L.

Lps based local delivery services, which has a better.

User experience for our customers compared with our DTC model, because they have a lower cost and will be more.

Time sensitive to reach our customers.

Sure.

Julian will pop out sugar.

And are you sure.

Congrats on the quarter.

Shut them down.

Hum.

Good option.

And shop now program, which also which is our on demand ratio surveys can help us to expand our good resources to connect with the market resources and supplements to our online inventory. So we can collaborate with more offline stores.

Two two.

To create more traffic and a win win collaborations.

Our Union, though we'll continue to move our formula.

They don't even show solid share to screw the control.

Sure.

We will determine the dose.

Yellow tumor tissue.

Good morning.

Zero.

And in 2021 based on JD to supply chain logics, we have make some explorations attempt on the on demand retail based on our users' demands and tens of millions of users from J D has experienced for that and for this business. It has achieved.

10 billion dollar scale at this moment.

Already I know John tissue.

Good for them.

Joe It sounds like it was introduced.

<unk> on the program.

Additionally, our automotive <unk>.

Just to touch on.

Some of the output of <unk> holdings.

Our push into higher quality team will to Sundar.

Genie oil delineation.

Just one correction for this JV as online retail it has achieved 10 billion RMB not dollars scale market scale at this moment and for 2022, we will continue to build our supply chain and fulfillment capabilities and strengthen.

Consumers my share of this business and also we will continue to construct our capabilities on this business surrounding our local community resources and other <unk> operating system to further empower all of our merchants and partners and to enable them more.

Detail on demand radio services and also the <unk> ratio will help JD to increase the stickiness and engagement on the auto value of JD users. There's a lot of work for us to do.

Sure.

Thank you.

Thank you.

Thank you.

Now approaching the end of the conference call I will now turn the call over to J D Dot Com, Sean Zhang for closing remarks.

Thanks for joining us on the call today and for your questions. So you can have any further questions. Please contact us and our team. We appreciate your interest in <unk> Com and look forward to talking to you next quarter. Thank you.

Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.

Yeah.

[music].

[music].

[music].

Hello, and thank you for standing by for JD Dot Com fourth quarter and full year 2021 earnings conference call.

At this time all participants are in a listen only mode.

After the 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.

I would now like to turn the meeting over to your host for today's conference Mr. Sean Zhang Director of Investor Relations. Please go ahead.

Thank you.

Good evening and good morning, everyone welcome to our fourth quarter and full year 2021 earnings conference call joining us on the call today are in installation president of <unk> Dot com and myths and issued our sample.

For today's call <unk> will kick off with opening remarks, and Sandy will discuss the financial highlights.

That will open the call.

Two questions from analyst.

Before we continue let me remind you of today's call will include forward looking statements and please refer to our safe Harbor statement in the earnings press release on our IR website, which applies to this call also during this call, we'll discuss certain non-GAAP financial measures.

Please also refer to our earnings release, which contains a reconciliation of non-GAAP measures to the comparable GAAP measures.

Please note unless otherwise stated all figures mentioned in this call are RMB.

And now I'd like to turn the call over to our President Mr. Hu <unk>.

Thanks.

Okay.

Excellent.

Annual meeting.

Thank you.

Sure.

So we're all set.

It's also the culture.

<unk> total debt to negotiate with yourself.

Yes.

Is that part of our Union.

Julien not available.

<unk>.

And switching to shove it quarter on quarter.

Closer towards even Cumulus Sheldon with synergies.

Yes.

Some color John .

<unk> talked to me about <unk>.

Sure.

Nevada conversion.

The team at <unk> since we don't have one in Ohio.

Yes.

Peter.

Turning up with looking at OTT launch.

This level of political that Youll find our hotels in total reported total woman that's kind of a thing.

Hello, everyone. This is Julie thank you for joining JD com 2021 fourth quarter and full year earnings call.

J D continues to deliver high quality growth and meet the evolving macro consumption and industry environment in the fourth quarter total revenues recorded at 23% year on year growth in Q4 on a high comp at <unk>.

Nearly 28% for the full year of 2021. This shows that we continue to outperform the industry and continue to contribute.

Contributing to the high quality expansion of China's consumption at the same time, we have.

A healthy profit growth in this quarter, thanks to improvements in efficiency driven by technology.

Quest demonstrates the increasing appreciation J D has earned among consumers and business partners. It also validates that the type of real economy based enterprises have become important driving forces for growth in the retail industry and oven downstream entities.

Jd's business and investment strategies have always centered on users and business partners through different economic cycles, and our strategic determination and focus.

Sure.

Thank you.

<unk> will pay more looks at all about what you saw party Arlington.

I don't know would achieve.

I would've achieved service.

So this should help loan chief voucher wafer test results will allow gosh I'll jump on that build out.

It goes in the handoff from what do you what you love all your question on transactions.

Okay.

Kendall <unk> <unk> T cells.

It was around 14 to $17 one yeah.

In local regional diluted the other questions on Dr. Wendell Tony Jeff Konkle <unk> yeah.

To move whatever higher Fuddruckers was helpful. Jonathan it's being Chi, which had him to Honolulu, She's done a bunch of our geologic teams you want <unk> John .

John You got Schindler human legal it was wonderful.

Total bullshit.

I also have a familiar voice usual.

<unk> I'll comment.

Momentum from easily or Colorado, maybe hopefully onshore.

In terms of you said we saw synchronized.

<unk> is a member and components in <unk>.

'twenty one.

<unk> 30.

$570 million, maintaining efficient and healthy growth, while the overall consumption in the 301 for recovery.

Fortunately, we still use the shopping frequency range of categories.

Meaningful improvement.

This was driven by our stronger user engagement and Omnichannel initiatives.

I would like to reiterate.

That actually took place.

<unk> goal is not to chase high growth Steve.

Operating with financial matching.

We focus on healthy and sustainable growth of our business.

Many of China's internet industry developed into a more mature phase the traffic driven growth model driven by subsidies is being replaced by the user quality and operating efficiency oriented model is such a new environment, we believe that user growth and business operations are facing so called black.

And we bought hill.

We have much to do and there are still many move to be explored and satisfied all reset how they spend that can go.

Yeah.

Closure.

He says I believe Jessica you got all kind of on a walk or the.

Fit out handled a falsely ammonium sulfur is also another blow past future.

Dr. Jim Wilson that it compares out also globally pulp for Adobe.

Yes.

I don't want to put an adapter.

Nielsen Golden Corral, and Ohio to the guidance.

Yes.

Sure.

Julia you bundle higher sort of identify that settlement.

Ginny and Carlos Hypersound here as soon as I do every quarter won't get until you report a clean view.

Steamboat, either three or more through what will need to Paul <unk>.

According to the projection on the boat yet or is that an important launches ongoing level of fidelity and surety.

<unk> go forward children, four to Nova Mega vulnerable trajectory.

For other business partners, we have been striving to build an open and integrated ecosystem to meet the diversified REIT of both suppliers and third party merchants in Jd's ecosystem, and it's very common for brands to learn both <unk> businesses at the same time as different models bring them different values.

We are glad to see that lumpy and supply chain have become mainstream topic in the industry in recent years with more company working on each of such initiatives. We are willing to share all experiments to contribute to the industry and healthy development. However, we have to point out that we don't think lumpy nearly.

It means product procurement, where even advanced payment for securing inventory.

We believe one piece of the box building a comprehensive system of supply chain management and the strength of the <unk> model is to provide high quality shopping experience to users and great operating efficiency along the supply chain. So that's business partners can enjoy better capital and inventory turnover.

So what we're going to adopt <unk>.

Bundled blah blah blah blah.

<unk> for the 20, <unk>, John <unk> told us <unk> growth, but the issue is.

But in relation to accumulate although that's put on the T cells.

You can go for the political backdrop leg or short accidentally them down.

So I'm wondering with all.

Corn has also done a good chunk of consumable for that.

We also rolled out, especially the voucher slowing as we go down to maybe fund functional industrial now.

Linda.

Jim will provide details on this.

<unk> got a Fuller Travelodge hotel, let you go little girl earlier that all of course, you suddenly Gordon.

While political eventually are junkies yourself.

These are torture.

Political until another hurdle for sure if any of that put on material.

Some of it is clear that you can shop seamlessly able to John Kilo puts ventura careful to hire that we distribute.

So you have that team for Satya.

<unk>.

<unk> shown youthful Julian Bott will also buy back shares all shows up a little bit about her closeout ratio go.

Go down, but what are you doing.

Currently with <unk>.

The city JV Villa <unk> Hydrogeological model globally.

In a time of uncertainty JD has helped our business partners to cope with external changes must better operating efficiency and lower cost service stability uncertainty with that as a result, JD has gained increasing recognition from all kinds of business partner in the fourth quarter, both <unk> and <unk>.

A number of business partners in our ecosystem continues to expand in particular, a number of a one P suppliers achieved double digit percentage growth, while further expanding coverage across all categories.

The growth of third party merchants also accelerating to the highest level in the past three years as we added more new merchant in Q4 than we did in the previous three quarters combined.

We believe that a number of our business partners.

We will healthily in the future. Meanwhile, we have been constantly strengthening of our leading cooperation with our business partners.

For the shortened inventory turnover days to the lowest level in the industry. Despite the number of Skus that we manage is now close to $10 million.

Counts payable days also shortened which helped improve business partners capital turnover efficiency.

Such J has helped millions of online and offline suppliers and Anthony to gauge is there growth opportunity and a reasonable profit in support of the real economy going forward, we will cooperate with more partners generate mutual benefits and facilitate each other's growth.

Two more quick here with our general partner Gwinnett and only heard in Charlotte are so material sure Uganda agenda.

I'll, let other countries.

Some of them were not capable or nothing jumped.

<unk> or 'twenty over <unk>.

So healthy growth momentum of our foreign retail businesses further.

Our quarter in house.

<unk> chain capabilities and operational efficiency have put us in a strong 14 to firmly execute our long term strategy now, let's take a closer look at the recent development of JD logistics 10, new businesses.

Alright and Armenia.

Initially when the original date.

Yes, Hello will control with our Union partners ended up being pulled forward in China and Taiwan.

No.

All of our <unk> Egfr Buena Hulu fall only one question I'll ask Nino type of level.

So yeah that I'll, let you know we're also juggling rollout.

I have a couple of the short term.

<unk> sure.

Look you won't know if you follow me.

This was all Walnut Creek.

Turning briefly to heal.

Some of you called out either Sheldon, but generally not tremendously so she can cause lumpiness.

No.

If you back when we uncovered a shoulder quarter Coca Cola Chico.

<unk> seen annualized.

Oh gosh, we're doomed opportunity of arginine only that's useful to know what are the donkey unique strongbox <unk> gotcha.

Especially with total being some digital only.

Called out grew more.

When they hook what are your political but he won't come down boil Bob.

Our timeshare.

The higher incentive being team will put us in a whole lot.

J D. L achieved a series of milestones in 2021, Firstly, if total revenue grew rapidly and exceeded the 100 billion RMB <unk> with full year second the long term investment in J D. Al made in establishing integrated supply chain logistic services started to bear fruit.

As it served to more external customers and expanded its total addressable market is.

Also lead to better revenue structure for J D. L. As revenues from external customers grew at a faster faster pace and accounted for over 50% of total revenues for the first time on a full year basis.

Other business partners can better focus on their core operations and achieve high quality growth as JD, our integrated supply chain logistics services helped to drive their overall efficiency and competitiveness. We are proud to see that revenues from customers using <unk> integrated supply chain logistics services.

Contributing to contributed over 70% of its total revenue for full year. Moreover, driven by the expanding economic economies of scale and operations optimization, Danielle achieved sequential margin improvement in 2021 .

In the future steady al will continue to invest and upgrade it infrastructure capabilities and resources to provide larger scale and more diversified supply chain based products and services to our business partners in China and abroad.

Further strengthened its industry, leading position as well as expand market share.

Toyota going to shutter Sudan due to yield the RDR Union, who don't get out for you what.

He is already some judgment about it with the shop versus how some formula So generally somebody looking told us.

Without on Zalviso.

But the example, Jonathan she got sold.

Sure.

The high end as well as engines from tonnage result.

So.

Susan can you go into default only Joseph would you imagine that seem to have children.

What would you handle that for him.

So I forgot the clean sheeting.

So how much of our portfolio.

Belgium, the virtual bank.

Yogurt year objective.

So now my family that put on the cash flow.

Just to give us your thoughts shouldn't hold attention setup, what teams are developing a more material contribution toward our target model.

<unk> certainly heard you with syndrome.

Higher finance future as I put my hand.

Sure.

On the new business.

Which focuses on larger market and took a series of iterations and optimization measures in 2021 by improving supply chain and fulfillment efficiency technology markets, particularly for fresh produce and general merchandise as well as lower re merchandize circulations fast Gigi providing better services to customers.

And helped to local merchants generates more revenue with higher efficiency and cost savings since.

Since the second half of 2021 GB has led the industry in proactively focusing on selective markets as well as some.

Efficiency and user experience to drive local supply chain capabilities essentially assignment of the utility model.

The results, we are seeing better supply chain efficiency and cost structure in our selected market.

Particular fulfillment cost per order continued to come down while net promoter scores and merchant satisfaction levels further improve we believe this is the sector.

<unk> long term commitment over the next five to 10 years in order to build up supply chain infrastructure and gain consumer mindshare that.

<unk> latest scale expansion driven by short term marketing expenses are not sustainable.

Recent industry trends also validates our view.

So.

<unk> contributed about <unk> <unk>.

Total chemical Fortunately jumbo product, okay, a little bit about those surveys with that Puma total finally tune up in England.

The higher soda ash embargo this will become a gold on the jobs are.

The audience with <unk> home loan product.

We're trading clean.

For the soldier system.

So some of the current quarter <unk>, pushing the cellular conjecture, how CECO China.

On an ongoing Janullah video here.

Digital Cmos, we'll handle easily you could equally sort of similar question, what do you say no change.

But tonnage possible.

Sure.

And we will not shy on water division put under Tony Let me assure you and one more question the only country of Tiger Baidu shirt. Please resort WNS and Chinese are stemming from genco contribute about it.

Or even the June from what they already are just given vouchers.

I hope to talk with us going forward as our general acute.

By leveraging Moelis unit, Patricia you talked about some.

Some other hospitals that you won't be possible.

Steady achieved healthy and sustainable growth across all business lines. In 2021, we also opened up our supply chain and service capabilities to provide reliable and steady support to our business partners and consumers amid a challenging macro environment.

He has and will continue to develop new growth driver for the industry and create greater value for the society.

2022 is the third year since the pandemic broke out we are still in the midst of many changes and uncertainty and the competitive.

The competitive landscape in China is ever evolving and sometimes can be intense companies must have collapsed the corn business logic and persistently deliver on your long term strategy in 2022, and also 2022 is the 19th year in J D sections throughout our history, we have never drawn too long.

Our short term and local gains and losses.

The corn business logic is clear.

This model and strategic positioning have always revolved around consumers and business partners. The resilience of our business model has been proven many times in the past. We believe we have a highly differentiated core competencies that will lead us to a healthier and more sustainable growth trajectory in the long run the <unk>.

We achieved in 2020 months have also set a strong foundation for our growth and market share expansion in 2022 with truly appreciate all your trust and support along the way. This concludes my remarks, now I'll give the floor to sandy.

Thank you Li Hello, everyone. We are pleased to finish 2021 with another strong set of results in the fourth quarter.

Well 2021 brought many uncertainties in the macro environment.

And the consumption tax change.

Executed and delivered on our strategic priorities.

<unk> to gain market share with our robust topline growth.

And achieved a solid I'll come back.

The results speak volumes.

Of our supply chain based in Toronto.

Filings for both our users.

Panic.

And driving long term sustainable growth of our business in 2022 and beyond.

Our net revenues achieved 23% year on year growth to 276 million RMB in the fourth quarter and 28% year on year growth to 915 2 billion 952 billion for the full year of 2020 plan. We continue to demonstrate notable refilling our.

And persistency outperformed industry growth, despite the relatively soft consumption check in recent quarters.

Our solid topline growth comps alongside our proactive strategic priorities, improving user engagement and lifetime value our.

Our annual <unk> user base achieved reached a total of 570 million by the end of 2021 ideal nearly 100 million users from a year ago.

Particular, our quarterly average VA, new grew over 25% year on year and hit an all time high in Q4.

This reflects the results of our strategic focus on improving user mindshare and engagement.

We are also gaining more wallet share from our expanding user base.

As we increasingly become the go to destination for consumers regular shopping <unk> per user has been steadily trending up overtime overtime and increased year over year in every quarter in 2021.

As we continue to expand our total user base.

Furthermore, our Gd plus number.

$25 million in the quarter and average members spending increased by double digit percentage points from a year ago.

By the end of Q4, the average annual spending of tax numbers was 10 times as much as that is now class members.

The encouraging progress in high quality user growth and improving user engagement validates our investments okay.

Superior customer experience over the years.

Our revenue base. So further diversification in Q4, our net product revenues grew at a solid 22% year on year.

Net service revenue grew faster at 28% year on year.

Against a high comp comparable base.

Over a two year period contribution from net service revenues increased 12% to 15% of total revenue.

Our market place the marketing revenues exceeded 20 billion RMB, Marc Yes single quarter for the first time in our history in Q4.

<unk> at 27% year on year.

This is a testament to our ongoing improvement in our platform ecosystem.

Logistics and other services revenues grew by 30% year on year in Q4, maintaining hyper growth momentum.

Now, let's turn to our segment performance.

First in Q4, our core business 50 retail delivered both solid top line growth and healthy margin improvement.

<unk> revenue reached 250 billion RMB in Q4.

<unk> growing at 21% year on year in the quarter.

For the full year of 2021 continued retail revenue grew 35% year on year to 866 billion RMB.

Category Wise, we continue to see resilience in electronics and home appliance category with a 22% revenue growth year on year in Q4.

The power of <unk> supply chain capability has been 40 to play against the global supply chain disruption.

Our general merchandise revenues grew 23% year on year in Q4 outperforming the market.

Challenging consumption environment.

All their volume in our supermarket category has been consistently growing at around 30% two year kicker in every quarter in 2021.

The strong growth of our supermarket category has helped to drive more frequent user engagement and continued to continued the greatest number of new users.

Our three key ecosystem also saw encouraging progress at.

A small merchants appreciate the increased value as delivered by our ecosystem. We are pleased to see higher engagement and spending from our existing merchant.

It's worth mentioning that we added more merchants to our marketplace business in Q4 than we did in the first three quarters combined our omnichannel business has been growing rapidly as our offline stores and business partners, including some including home appliance franchise stores.

Our excellent fresh as well as our <unk> initiative.

Achieved close to 80% year on year GMB growth in the full year of 2021.

I can progress in our Omnichannel business further demonstrating <unk> position as a new type of really economy based enterprise.

It also bodes well for our growth in the coming years.

Moving on to JD retail its profitability.

Operating margin increased to 12, 1% this quarter up from $1 nine a year ago.

Thanks to the expansion in fulfilled gross margin.

A full year basis.

Retail operating margin reached three 1%.

10 basis.

There's a ton of improvement from a year ago, and 32 Bips improvement from two years ago.

Core business is well on track to realize.

Sustainable margin improvement well optimizing for a healthy category mix and exploring new business strategies to expand our Tam in the long run.

<unk> logistics RTL achieved remarkable milestones in 2021 and concluded the year with strong top line growth and sequential margin improvement.

Q4 revenues grew by 28% year on year to 30 billion RMB.

Full year basis, <unk> revenues grew 43% year on year tool.

105 billion RMB.

This was mainly driven by the growth in the number of external integrated supply chain logistics customers.

Well at their increasing our pool.

Contribution of external revenue reached a historic high and accounted for 57% of <unk> total revenue for the full year of 2021.

We are proud to see JBL deliver a margin improvement well quickly ramping up is external business.

<unk> achieved positive operating margin in both Q4 and the second half of 2021.

These results also demonstrate <unk> ability to both infrastructure utilization and improve operating efficiency, while maintaining robust top line growth.

Revenues of our new business segment accelerated its growth is growth pace sequentially to 45% year on year to reach $8 2 billion RMB in Q4 and.

<unk> grew 48% to 2000 6 billion RMB, a full year basis.

Revenues of our TNC business grew over 40% quarter on quarter in Q4.

Mainly led by the <unk> business with shrinking.

Growth momentum after with proactively focused resources in selected markets in Q3 last year.

We are committed to better allocating resources to improve our local supply chain capabilities to empower a broader spectrum.

Business panic menu.

Many of which are local smbs and to serve new and existing customers.

We will continuously drive innovation and improvement in our supply chain infrastructure.

Now firmly committing to better <unk> for our new business.

Moving to the consolidated bottom line, our Q4 non-GAAP net income attributable to ordinary shareholders was $3 6 billion RMB with non-GAAP net margin of one 3% up from $1. One in the same period last year.

Our full year non-GAAP net income attributable to ordinary shareholders was 17 point to.

2 billion RMB up from $16 8 billion a year ago.

Well, we continued to deliver solid operational and financial results. We also increased support to our business partners.

Time of uncertainty.

We have consistently kept our inventory cover well below 35 days.

<unk> the number of first pay us under our management to continue to expand.

We continue to share our efficiency gains with our business partners as we shortened the RPM accounts payable tells our base from 47 days a year ago to 45 days at the end of 2021 .

Our business panic highly appreciate the increased supply chain efficiency and faster turnover of cash inflow from their collaboration with us.

We are getting stronger we are creating greater value for everyone along the supply chain.

Our free cash flow for trailing 12 blocks. This quarter remained healthy at $26 2 billion RMB.

At the end of Q4 cash cash equivalents restricted cash and short term investments added up to a sum of 191 billion RMB.

In summary, GTS capped off a year of increased uncertainties and macro headwinds with remarkably resilient performance.

This is a cumulative result of our 19 years.

Wavering efforts in building, our core competence and committing to our graduate to subtract fitness philosophy.

We believe we have set a solid foundation for long term sustainable growth.

Looking ahead to 2022, well, we remain mindful about the near term macro volatility.

Aim to continue to gain market share with a set of proactive sustainable and high quality growth strategy.

And at the same time remained on track with our long term margin profile and trajectory.

I would also like to take this time to welcome our new shareholders. Many of whom are old friends to join the journey with us soon.

This concludes my prepared remarks, we can now to the Q&A. Thank you.

Yes.

Thank you the question and answer session of this conference call will start in a moment in order to be fair to all callers who wish to ask questions. We will take one question at a time from each caller. If you have more than one question. Please request to join the question queue again. After your first question has been addressed.

And our first question comes from Ronald Keung from Goldman Sachs. Your line is open.

Thank you, thank you sandy and Sean and team.

So we've seen the recent macro weakness you guys. When you talked about that and cope with disruption higher oil price I'm just wondering what management could you share just how do you see JD retail growth this year.

Right.

Somewhat duration and general merchandise revenue that we've seen in the fourth quarter, what are the strategies with JD supermarket and major marketplace and with these in mind.

Your implications for margins this year.

Okay.

Okay.

People.

Great.

<unk> continued our children.

We're trading team football.

It can be sold as usual.

Sean.

100 <unk>.

Sure.

What are you seeing with each month.

We will do more engaging more directly to <unk>.

One of the victims.

Got it.

Missouri about Canada attribution of Portland.

You were talking about what the hotel is doing well.

Okay.

Some of them here.

And this is Julie to answer your question on the macro environment, we do face a slowdown macro environment with a lot of uncertainties such as the macroeconomic.

Additional and a weak consumption demands and the rising price of raw materials on the supply chain and fears industry competitions and to Covid disruptions in August at his post pressures on China's retail industries and in face of all these uncertainties, we continue to stick to our business logic and our strategies.

And this will be carried out in the following three ways.

So as enrollment.

Sure.

So this will come up with.

Johnson overtime.

Good day.

I'm coming up with a stronger sort.

Sure.

Sure.

No.

And first to this development has always been centered on creating unique value for our customers matters on products services and the user's experience and they have helped us to enhance the mind share among our customers and.

Delivered sustained development to sustained growth.

Yes.

Yes.

<unk> is a pure one do.

So that did contribute to massawa, new China alone.

Sure.

Thank you Marshall.

Good call.

So all of them do you want to do though.

Between the use of <unk>.

Look producer countries.

Second we pay high attention all of our business partners and in a time of uncertainty we are making full use of our capacities on supply chain to support our business brands and merchants to help them on the financial and the goods inventory turnover. So by all the support they are able to.

Deliver predictable we're in a stable growth and her oldest external changes.

If you looked at olive garden.

Well no.

Carla Camellia.

The key to Cleveland.

And in fact in each agency traditional choosing a complete picture of Athene.

Did you go triangular don't need a mutual going to cover today.

Sure.

Good al.

Neutral.

Cool.

Sure.

<unk> contribution.

Contribution.

And thirdly in face of those Covid challenges.

By leveraging JV is fundamental capabilities on supply chain and warehousing et cetera, we can maintain a stable sales momentum in those COVID-19 hit areas at the same time, we are supporting the government and the people to provide the leading necessities to the people in need.

And to fulfill our social responsibilities and oldest efforts has been widely recognized by the people and by the government and further enhance Albert.

Grant or our Jd's reputation in our society.

When litigation reserves, you deal with them or selling them, which we're pushing Laguna anomalies.

Good luck to new credit policy.

Hydro box, presumably look when the.

Shimon.

You've got Yieldco.

Jim Condo that's for sure.

<unk>.

Syndrome is the last quarter.

So we are confident in our resilient business model and our core capacity and supply chain and all of this has proven to be a viable in the past and it will also help us to outperform the market and for the outlook in the future, we will continue and optimistic attitude.

And to achieve sustainable and healthy growth on each different category and the different each business and also gaining a greater market share.

There is great vision.

Sure sure.

<unk> tools.

Yes.

Bob.

We aspire to.

So.

Gotcha.

Unlucky Python.

Hum.

Our new <unk> product.

Shimon the GM showing further come down.

And also I want to share my feelings in the facts as we pay a lot of visits to our business partners.

By the end of last year and early this year.

All expressed that they will pay great attention and attach great importance to the collaboration with JD and <unk> have a high expectation on the collaboration with JD in the year 2022.

When you take some.

So introduction Dino.

Sure sure.

Can you talk a little bit about the kind of buildup poco joggers.

Thiago the Utah.

The divestiture.

Hi, Jonathan.

But we're shoulder to shoulder.

Please go to <unk>.

Two other projects either.

So total up to myself.

She means opportunity for China.

And a few words.

Supermarket category. It has a lot of changes are taking place and our brand partners.

The pressures.

From the rising price from the upstream and also a faster changing consumption demands and in the past few years to traditional sales channels has been affected by various factors and all of this has brought a lot of uncertainty for the manufacturers operation.

No no no.

We put up further from here.

No.

Sure Susan relationship bulk water sewage since.

Since vishal.

So the triple.

Triple dose reduction inventory shortage or Shanghai.

Oh sure.

The singer.

So we've got to address these categories and core aspects first to the consumers, we will focus on bringing new products and new categories to the new consumers and bringing them quality products and build up their mindshare as J J D Super as their go to place to buy supermarket category products.

There are no gaps.

So you don't want to get to very strong.

And the shift in Charlottesville.

Sumption Dupont.

The Congress to sugarcoat things yet.

And on the cooperation with our brand partners, we will strengthen synergies with them on supply chain from a marketing and warehousing et cetera to deepen our cooperation and synergy from all aspects.

$23 for doing so.

Three material thoughts on hold on you guys with the junior tranches.

Okay.

$60.

Thank you Elena.

Hi, Sean.

Sure.

Turning to Q4 <unk>.

And also <unk>, so very important categories in our Omnichannel strategies. It has the highest penetration rate across all the categories and in the future. We will continue to collaborate with more and more business partners to develop omnichannel strategies in different.

In diversified shopping scenario.

But linda and Sean from them.

The control of the OEM accounts internationally with our order books.

Okay.

Over a quarter.

No problem.

Jonathan from shop franchise dealerships in general.

<unk> <unk>.

And for the supermarket categories, we continue to improve its supply chain and made a lot of innovation in this aspect of such as our.

Warehouse warehouse stores and other methods and other new innovations and with this category its profitability and continue to improve and we are close to the breakeven point.

When you pull all of the women.

Towards the new Shanghai resort, even not sure label changes.

Yeah sure John <unk> John .

Sure.

<unk> genetics.

Sure thing.

You've done a bunch of Shanghai.

Thank you.

What's even Chicago transaction with Green zone.

Sure Labour financial logic.

It will also allow.

Timna region.

And also on our marketplace number three P.

And the ecosystem, we have done the following four efforts and first is too is that we continue to do to refined management.

Our third party merchants and third.

Can we make efforts to help them to lower down their operating costs and alleviate the burden to run all of our platforms and thirdly, we provides the toolkit to help them to do better.

Operations of our platform and at the same time, we're also exploring more and more ways to support those small and medium sized companies and brands to drive an hour.

Mark pop or marketplace ecosystem.

Okay hold on.

China Changzhou.

She's already.

All of that.

<unk>.

So some of the other titles.

The other question.

And as mentioned that in this quarter for the three P merchants their overall number.

Even more than Q1 to Q3 combined and they have demonstrated very high engagement during the singles day brand promotion.

Thank you. So this is sandy.

Some cover.

For JD retail.

So first in terms of the macro environment in consumption. So far we see that the overall consumption in Q1 or even first half year 2022.

<unk> is relatively conservative.

And then secondly category wise, we expect that the supermarket home products health care products corporate business, including MRO will generate higher growth compared to our overall average.

Heard Omnichannel business as Lee mentioned, we will continue to be a.

One of our strategic focuses.

And deliver a hyper growth in 2022 and four.

We also expect that repeat grow faster the lumpy as we have been optimizing our therapy ecosystem and tools for merchants as Les just mentioned.

So we expect steady retail continue to deliver quality growth in terms of user base user engagement.

<unk>, which is our long term growth driver for our retail business overall, although the retail consumption is currently under pressure to certain content.

We are confident that we will deliver higher growth than the industry average.

Thank you. Thank you the next question.

Thank you Ron.

Thank you. Our next question comes from Eddie Leung from Bank of America. Your line is open.

Hi, good evening guys.

Just a question on competition.

Could you share your thoughts with us on.

The growing market share.

E Commerce processing platforms.

How do you think about the impact on your pieces.

And how.

How are you going to deal with there.

Growing market share. Thank you.

Okay.

Okay.

But certainly no one related.

Chicago Theres O'neil.

Although there are questions of Amitiza for returning this year.

What they are telling the truth.

Lynch do.

So you shouldn't shareholders Suzhou through minimal.

Each other people do lockdown.

You made how they're showing them what should open journal, particularly some question looking back as we go through their tranquility, Egypt correlation, though they are not contractual.

Contractual deal.

About the e-commerce .

The e-commerce by live stream and short video platform.

Still undergoing development periods, which is in line with our previous prediction for these business models and attract and satisfied.

Some shopping demand of some people based on their interests and Theyre still.

Developing fox, thanks to the traffic dividend and given their business models and People's recognition of this platform. We believe this live streaming e-commerce will generate a long term impact to those platform E Commerce players.

Further one cannot charter shlomi of Carlos Garcia Ocean.

Yes.

All of those single failure.

While we see some challenges at the same time, we do see those opportunities and expect to collaborate with Vista.

Traffic platforms.

So it's always useful to Toyota kidney function in a cumulative of geographic synergies achieved Sundar jogging show me right.

Sure.

Jonathan I also recapture at <unk>.

Even to consumers shopping demands are diversified Virginia dot com, we see most of the people come to our platform for planned shopping or shopping for their family. So we are less affected by their emergence.

Yeah.

Chip ever shown down there, but she noted on the Odell and Thomas Chong Shanghai teasers to that in terms of dollars per.

Total equivalent Michelle.

Yes.

And second we see the branded merchants, while they enter these traffic field to do operations in their operating efficiencies, they're encountering a lot of up quite a lot of difficulties and they also need some help.

Just on the consumer.

Simba, Washington, or that will be fought extra holdover globally.

We introduced what we call it the Golden understood.

Germany.

Oh sure visuals.

Although product.

And thirdly, we believe that for all kinds of new business models. After the past their dividends periods, the only to come down to the work and serve their customers and better provide a win win collaboration with their business partners.

<unk>.

The two to 4 million people.

To get Kofu congratulate them.

No.

<unk> deployed in the region.

You go down the digital type of unusual.

So compared with platform E Commerce players JV, we have with JD com, we have complete supply chain infrastructures and the fulfillment capabilities, our customer services and the <unk> and.

And the skills for the platform governance and so on all of these.

Can help us to reduce to the supply chain.

Circulation cost, which puts us at a very unique and differentiated competitiveness.

Additional ammonia support type of illness and plan on the table.

I'll start off with you.

Neither.

Although the juncture that transport totaled two.

Sure.

<unk>.

Enrollment was suddenly.

G touchdown.

Maybe you can kind of model.

To ensure.

Hi, Good evening 19 issuance.

Okay.

Sure.

Sure.

We're targeting large vehicles.

So we continue to have an open attitude towards emerging new business models and by building our capacities omnichannel and supply chain, we are exploring diversified touch points to reach our customers in diversified shopping channels and a user cases.

And we will also continue to collaborate with these content platforms and support merchant partners to operate all this traffic field.

They're dealing with other media.

Media towards removing surety bonds due date audio traditionally.

Well the bulk shipping Shanghai.

<unk> Shanghai.

Tunisia.

Hello.

After the economy, obviously, you got straight on to the <unk>.

And I also want to add that the slides JD retail forward JD logistics. We also have our collaborations with both midstream and short video platforms to provide both way transportation and logistics support which also presents.

Presents a huge opportunities for JD logistics.

Thank you.

Thank you. Thank you next question.

Thank you. Our next question comes from Thomas Chong from Jefferies. Your line is open.

Once off I'll ask you said one is digital if you win.

What are your current seasons and then you saw a woman.

The higher a woman so a woman the cohort at Samsung.

Thanks, John .

Don't shoot Goldman die, but what do you think this penetration.

The strategies <unk> typo.

Yes.

Sure.

Woman.

Yes.

Gung Ho Opex Mi band that.

Could you bring some of these problem and you guys have mccann relies on Opex.

<unk> margin.

Sure.

Scott I don't want that tissue, but we didn't guide to macondo.

And I think the margin profile.

Well, Jeff without a great quarter.

Distributor.

She goes too high as well.

Credit card loans, as we saw with a huge or should be options.

Another product for sure don't keeping so they can control.

Personal wellness with Walter.

Sure.

<unk> thousand which yes, so it was a twofold approach.

Cingal Hello opportunity I know you guys do not neutral.

And let me answer your question about the user growth in this quarter and on the overall industry, we have seen a weak growth.

No matter in general on the online site for Virginia Dot Com, we continue to build our business surrounding our users' experience and we've achieved healthy growth and hit our yearly target.

I'll start with Shanghai.

Suddenly what issues you are closer to the door.

Sure.

John .

I'll give you a lever for you guys.

You could run through.

As Eva Chino condo sure she could differ.

<unk> agenda.

She has all of our history.

Cohort options sooner.

The new album occasional amount just to them.

<unk> received a phone call.

So here I just want to emphasize again that our business principle is to deliver sustainable and quality growth. So in terms of the new users acquisition. In Q4, we have seen thereof has been improved by 11% and for our existing core.

Customers.

Their shopping frequency has been improved by 3% and their App has increased by four 5% and all this has demonstrated again, our principle towards sustainability and quality growth.

Some of them are that much lower material goes up what we hope will come down.

<unk> Neal.

With tissue tumors, what Google product or total.

Hello, and welcome everyone.

Sure.

All right.

Great.

So you got to.

From a pricing decision.

And for 2022, we'll continue to focus on.

User growth quality and to refine to users management.

And also makes the NAMIC policy adjustments.

During this process, we see our users growth ceiling is still very high and we expect a healthy user growth in the following years.

Not to dwell on the other two ultra is our pharma R&D bonus deduction later.

Women tangled up should lead a quote online which is with us all along.

Great.

We will for Goldman.

Hi, Sean.

All the options there.

One the San Antonio Center.

The country jogger.

Number two for.

Sure Josh.

This evolution.

Gotcha and then we go to Q4.

So you put both of them and it uses growth mainly coming from two aspects first of all of our categories. As we are successfully expanding our categories. This will continue to drive our user's acquisition for example for the JV Super supermarket categories with FMC Jeep continue to be the engine for them.

New user acquisition and for the other category.

The consumer.

Consumer electronics.

We have a very strong mindshare, among our consumers even though we are under this supply shortage at this moment, we continue to see more and more.

Consumer mindshare spilling up in this category and we continue to gain larger wallet share in this category.

Dr Bird Walton Ghanaian terminal production trends with our puzzle.

We have Joseph I'll assure you put a note on our contract volume.

For some adoption.

Backlog.

Although the general congressional type or.

Awesome.

So what would have been.

And second part of the youth.

Users growth opportunity come from our marketplace ecosystem, and our Omnichannel business and this will bring us diversified channels and diversified approaches to reach new consumers.

Users and the ecosystem, we co built with our merchants and brands as well as our offline ecosystem will also contribute to the growth of new users.

Okay. Let me take your question on Opex and margins.

On the bottom line of JD retail.

We need to take into consideration of a few changes in our business model and category mix shift.

The supermarket category will continue to outgrow our overall retail business well its operating margin is.

On the trend of steady improvement.

Deal are lower than our average margin level.

Three.

<unk> business will grow faster than lumpy.

That somehow mitigate the impact from the category mix shift and third Omnichannel growth factor the online retail.

This business model is still in relatively early stage. So it is currently stealing a slight loss, making position, but will again improve there.

E.

Year over year.

So.

While we are facing dynamic turn on macro environment.

Changes and which will affect our bottom line performance the management team will adjust our investment strategy.

From time to time.

And for Q1, I want to remind everyone that at the sponsorship fees for the CCTV Spring Festival gala.

Well as the related promotional expenses were all reported in one single quarter, our marketing expense ratio and operating margin.

We will be.

Slightly affected in the short term, but we will adjust our pace of annual marketing spending and the impact to our marketing spending for the whole year 2022 is manageable.

So I want to emphasize again that projected retail we would pursue sustainable quality growth and we are well on track of our long term margin trajectory.

And for JD logistics I believe their management team also share some color in their earnings call.

For the margin performance you still remember we've made heavy investments in capacity in the second half of 2020 and gradually ramped up the utilization in 2021.

In 2002, the investments in capacity will be in line with largely in line with the business development. So the utilization of capacity.

It will be further optimized.

At the same time, we will continue to improve the operating efficiency. So that Youll particular testing will also improve compared to 2021.

For our new business.

See that the competitor competitors industry linked now become more rational company.

Companies.

Compete on the core capabilities, rather than burning capital. So we see that the competitive environment is more healthy.

<unk> has been pursuing sustainable growth and we will continue to do so so we always balance investments in new initiatives and our profitability of our core business. So for new business initiatives we are.

Barry we are always very cautious in investments.

To ensure the investments can generate adequate.

For our investors and create true value for the supply chain and business partners.

So we have a foreseeable short term kpis. So subsidy, we will evaluate the market situation and make.

Adjustments from time to time to our investments again, so overall given the uncertainty of external macro environment, we would put more weight on profitability. This year under management's kpis that growth.

First of all for new business initiatives. The weeks pad, we expect them to deliver hyper growth while controlling investment to.

To improve the UAE and annual investment will not exceed what we incurred in 2021.

Finally at group level as a reminder, we completed the acquisition of <unk> and the data in Q1, and we will start to consolidate down from March this year, well, we don't expect them to have a significant or material impact on the topline and bottom line, but due to we prep.

Basically reported investment teams that I think.

Equity method investment so the P&L presentation or loss pick up from that that will be changed to different line items.

Got it thank you.

Thank you Thomas can we have the last question. Please.

Thank you our last question comes from James Lee from Mizuho. Your line is open.

Great. Thanks for taking my questions.

Just wonder if you could share maybe some of the new learning So J D. D. J as you integrate more this omnichannel delivery on your platform just curious what you're seeing in terms of cross selling rate.

Key reasons people are buying omnichannel versus not buying and how should we think about the demand in general is it more incremental or substitution old versus your core ecommerce offering. Thank you.

Okay.

Sure.

Sure Shlomo.

Hello, operator.

John .

The new fusion that shortly.

Great.

As usual.

Hum.

Should they come through.

What sort of Orlando.

Im not shooting up between being sold.

Nicole Richie.

Tissue being shown in the industry.

To go higher.

The price of oil.

Thank you both.

Hi, Bob.

And then on the question.

On demand retail as I explained a shared with you in the previous calls that Judy are building different kinds of supply chain based on the changing demands of our consumers and for the on demand retail is one of the.

But a growing.

Competition for yield.

The differential <unk> approaches.

<unk> and golf town Chiba controller, Chihuahua agenda negotiable distribute your Chicago should you control.

<unk> gave us the control.

This was about the question.

But we think that the on demand ratio does not help us to break the ceiling for our long term retail sales growth, but it also helped helped us to create deep connections with the real economy based on offline retail ecosystem and to support the overall retail industry digital.

Transformation.

Also general insurance.

Okay.

Turning Soma, so assume that June shale into Tony Jensen.

No.

Alright, Thank you sure.

We know that what women equally to the.

Sure.

Shawn will go forward for sure.

Georgia the foolishness.

And demand for retail, it's an important part of JD omnichannel strategies, adding an important extension of our existing shopping scenario and itself is a trillion dollar market with a lot of potential and we also want to take full we want to fully use our current capacity subsequent.

Jane.

This business model to provide greater choice based oncology products to serve our customers in a more timely manner.

But she forgot.

Paul do you want to.

We can charter Joseph Golar due to Cynthia.

<unk> shown to the market.

With GE reporting modalities that you have.

Yes.

Sure no problem.

Sure.

Sure.

Hum.

And also for some heavy weights products or those products that require cold chain will hire standout transportation like fresh foods and other coaching products.

Bill elaborates the lbs space L.

Lbs based local delivery services, which has a better.

Users experience for our customers compared with our DTC model, because they have a lower cost and will be more.

Time sensitive to reach our customers.

Our culture shops.

Julian will pop out.

Sure Bob.

Sure.

On the quarter.

I'm going to shut them in contempt.

Hum.

European adoption.

Sure.

And sharpen our program, which is also which is our on demand ratio surveys can help us to expand our goods resources to connect with the market resources and supplements to our online inventory. So we can collaborate with more offline stores too.

To create more traffic and a win win collaborations.

Our Union now we'll continue to monitor.

So it's too early to share the <unk> <unk>.

Sure.

Sure.

We will determine.

You will notice.

Good morning.

Biodiesel.

And in 2021 based on Jd's sequential logic, we have made some explorations attempt on the on demand retail based on our user demand and the tens of millions of users on JD has experienced for that and for this business. It has achieved.

10 billion dollar scale at this moment.

No John tissue.

Good for them.

Josh I only wish into the ocean.

Craig on the program.

Again on behalf of all the UTC Lisa Jackson.

Somebody else one of <unk> holdings.

Please note higher quality Jean will too.

Janine.

Just one correction for this JV as online retail is achieved 10 billion RMB not dollars.

Their market scale at this moment and for 2022, we will continue to build our supply chain and fulfillment capabilities and strengthen.

<unk> my share of this business and also we will continue to construct our capabilities on this business surrounding our local community.

Resources in our <unk> operating system to further empower all of our merchants and partners and to enable them a more retail on demand radio services and also the on demand ratio will help JD to increase the stickiness and engagement on the upper value of JD users.

Lot of work for us to do.

Okay.

Thank you.

Thank you.

Thank you we are now approaching the end of the conference call I will now turn the call over to J D Dotcom, Sean Zhang for closing remarks.

Thanks for joining us on the call today and for your questions. If you have any further questions. Please contact us and our team. We appreciate your interest continue to come and look forward to talking to you next quarter. Thank you.

Thank you for your participation in today's conference. This concludes the presentation you may now disconnect good day.