Q2 2022 JD.Com Inc Earnings Call

Okay.

[music].

Hello, and thank you for standing by for JD, Com's second quarter and interim 2022 earnings conference call.

Thus far in listen only mode.

After management's prepared remarks, there'll be a question and answer session.

Today's conference is being recorded.

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 day, everyone and welcome to city Dot Com second quarter and entering 2022 earnings conference call.

Let me introduce the management team on the call today.

CEO of <unk>, Mr. Li she will kick off with opening remarks.

Our CFO Mr issue will discuss the financial highlights after that well open the call to questions from analysts.

I'd like to remind you that during this call our comments and responses to your question reflect managements view as of today only.

Will include forward looking statements I'm pleased to be first of all it is all safe Harbor statement in the earnings press release on our IR website.

Which applies to this call.

We will discuss certain non-GAAP financial measures. Please also refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in our press release.

Also please note unless otherwise stated all figures mentioned in this call are in RMB and now I would like to turn the call over to Mr. Hu our seal.

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Before.

Hello, everyone.

Thank you for time Dot.

Dot com.

Quarter earnings call.

A combination of factors has brought unprecedented challenges.

Consumer industry in China, especially as the cognizant stretches across many regions and the complex macroeconomic and external environment.

Well.

Yeah, let's talk TV now.

Oh no.

Yeah, it's like Oh that they manage to help a lot.

And continues to outpace China Okay.

Well I could literally double the improvement in operating loss.

And my friend.

Once again I'll say Jamie.

And how big momentum it was difficult to cycle.

China's economy.

With the rapid development.

Long time, no development is thought to be cyclical create.

The challenge for this metric.

Company.

From my side.

That's correct.

Flowers and capability that it was before.

Well for the long term.

This will enable them to mitigate cyclical fluctuations.

Showcase greater battle.

The foundation for the bottleneck.

It's fundamentally different comes out of the preceding slow thing short term growth.

Didn't know what else I thought I forgot.

Chuck I'm not one of them.

In a way that was a very light boxes, if you want to stay the course.

So as you see.

And also don't forget the towboat for Zalviso was India, although its Huntsville, Siam also called personally.

Yeah.

Agenda.

Cleveland cliffs.

He will show you what else, where you'll fall surgical buildout.

How was the chiller and.

And she loves hobby farmers can be the Philadelphia.

It's not how do you know what she ever cheetos ratio shortens that he was at Greenway.

She can shop.

What was the Yo Yo cautions so all of that is that hold yourself.

Arguably what materials, we'll be thoughtful about that.

Okay, well, there's so many there's other popular sports that you mentioned.

Greenwashing, you've put out a well before we call such a lot of that.

Google question cut out.

Sure.

And then the engine choice you can't get hold off for a little over the top it wont be a government cut it off here or there.

I don't know for sure that killed off leaving yourself Sculpsure as it goes without saying annualize at all.

So it doesn't change.

Fish that youll actually see.

It's something that they haven't seen them. Unfortunately.

It wasn't going to let Jason Kolbert yourself before me so I'm glad that you could get a table seven.

Kevin and I quote I don't see that.

But your balance sheet.

Useful.

Now I'd like to share with you why taking the helm coupled into the future and what we're doing and make a challenging macro environment.

He didn't have always focused on reducing.

Cost optimization and efficiency to build a long term business model.

In Q2.

Thank you Sir.

Maybe just a housekeeping.

One J D.

This is what it is essential that position over time.

I don't agree with it.

Page 12.

Hum.

Last month.

And for that propel user quality.

The increases.

Easter shopping frequency.

In particular.

The 25% growth to look like.

Exactly.

Now that.

I want to go off to college.

For the spending.

For several months and plastic surgery.

Lots of luck.

West County.

<unk> also maintains high I believe.

We spent eight times.

Thank you too.

We're pleased to see that the movies. They just have more appreciation in trucks.

A notable increase in occupancy and record high shopping frequency.

Yes.

Female 10 P M.

Thanks to all of it happened over the years almost to the consumer.

Kevin.

This also sets a solid foundation of quality growth and.

And cost improvements.

Yeah.

If you look at some point.

Gulfport top tier tenants Italia, depending on the type of shoppers, who talk about corn until kind of put out since you don't come to you because I don't think that sometimes she don't shutters.

How do you get to the point.

So now she's familiar that Peter welcome.

What do you feel about empowerment comes out.

Of course all of them.

And he continues to drive its long term strategy.

Namely consumer merchandize and shopping scenario.

We have made an effort and exploring launching market building core capabilities in the supply chain leader platform, expanding omni channel going forward.

Thank you.

And quality strengthening our online market place ecosystem.

I liked your market outlook.

For some incremental hardware adaptable.

Addressable market.

We have a long term commitment to it.

And like it's been volatile macro and industry environment.

Fourth we have shifted our whole country efficiency all of this work.

Allocation.

Yeah.

Some of them are appointed and Emilio Pucci. The church. There's also some of the body. So you'll stay unless of course.

Of course, the bundles are going to go higher.

She's only and so although total some high coupon debt without concert total Susan Pleasant find out whether any of those don't go together choices what she wants it all turned Honeywell something enjoyable forgot trimble social expenditure totaled picking a lot well gosh water for some of it will go to some of them. Unfortunately was involved.

For some going into the local culture.

And that's something that you'll hear that shows the population who are attempting to sell it for.

You can do the human culture.

So she could.

Oh sure she'll also looks for the popcorn and make sure our country's ultra dog food.

The one that shows which is a totally kimball.

So somebody from Earth medallion continues to go well this year because it got pulled pork osso. The Koreans you see like Kelvin finish off what do you see it.

Hello.

Tricia you won't gorilla glass five buildings.

Moving to the supply chain to meet our platform, we can leave that.

I would want them to try to improve our gross margin and cost structure its way to tease out the increasing operating efficiency in the retail industry.

Investing in innovation from mature brands and capitalizing basketball bank merchant.

She has integrated three networks, including our transaction network that covers a lot of class Omnichannel shopping scenario.

Husky and a distribution network.

Our information life and extends globally.

Our service network that is enabled by it.

Technology seamless integration of all three networks all that comes to pinpoint a single network not only to ensure the reliability of ge's own supply chain, but also drive digital transformation and efficiency improvement.

In downstream energy plan supporting the high quality development of China's real economy.

In the future high efficient and flexible supply chain capabilities.

Alrighty.

Thinking about development of China's retail and other industry probably to be taken as the complex environment.

That's clear.

Taking that off the company.

He has made significant progress in developing our supply chain capabilities.

There is still room for improvement there he is.

Now positioned.

It provides the industry's fastest class supply chain solution.

Yeah, So Josh Yeah those are the two.

I'll come back at some point you get to know you do I'm not too many sleep country peninsula. So we're doing a traditional chipotle each year.

For the portfolio.

Well did you know whatever you call them.

It really is quite short you judge it.

So as they mature.

Let me give you a clean air shows.

So digital Wisconsin, Ohio.

Arguably scallop agenda, Sean summed up okay, but what you can talk on their total cohort G box are so long as it was all about culture.

Oh sure I'm sure you can do Tau.

So no one area that tissue that jumped to utilize federal funding made up all else equal so I suppose it does.

Or do you want to know in the town.

Flour tortilla chips.

One is the audio cheaper sources of amenities.

Hum.

<unk> logistics, how big development, it's a strong testament to our supply chain capabilities, which are empowering the synergy.

The college resurgence JD logistics once again that no efforts to protect the people listening to it.

That's one of the first batch of companies working with local cities to ensure supply of scaling. The strategy. We have gained wide recognition throughout society at the same time JD logistics collaborators integrated supply chain logistics service capability to stop the supply chain disruption faced by many external.

Customers such as in F. N C E Commerce and finished.

Finished furniture apparel D C automobile and the fresh produce industry.

That's K L achieved steady growth.

In the quarter and maintained a double digit growth in external revenues and the number of external customers.

During the quarter getting out external revenues accounted for nearly 60% of its total revenues. In addition, gilead continues to expand its logistic infrastructure globally by the end of Q2 and operating over 1400 warehouses and nice to total approximately.

Thank you Jasmine.

Too much money at all Yeah was that yes Eagle Bulks Richard.

Hi.

So even though higher controller.

Some of them.

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With Goldman Sachs.

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P J.

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Sure.

Al Qaeda Nicole's syndrome.

So neutral you know, it's you don't have a hard time I'm going to shove issues, especially the larger.

Sure.

I'm out of the corner.

Thanks, everyone.

So fundamentally critical about Jimmy.

I mean at least.

Oh Gosh I'll show you in Chicago.

Which always challenging tissue, though so as you saw.

It's just an unusual high though I'm.

Sorry, you wish you hadn't achieved.

Well go ahead, and kind of op income neutral hung up till that simplify that familiar with that funnel has seemed to me that you do shop, but tougher as you know Moshe you don't choose would only put out all your title changed at all yet.

Our omnichannel business maintained healthy momentum in Q2, although college brought significant challenges to the radio industry. Our interested he retail business continued to deliver triple digit year on year growth and evolution of the retail industry validates our early decision to expand into the arm.

The channel business and we have formed a differentiated perspective.

<unk> around this business first J D as customers naturally associate test with the shopping and while developing our interested in vitro business.

Further explored that association and customer needs in decentralized scenario.

So with strong capabilities in supply chain did you see sales and user management Denise also to establish more comprehensive cooperation with partners to help them efficiently adapt to the market changes and mieczkowski into needs in various scenarios.

Leading the radio industry as cost optimization and improvement in efficiency and user experience right.

We're also pleased to see that the interest in the retail industry is booming PD will further elaborate just existing core capacity to explore new business models improved technical capabilities and expand omni channel with multiple business for them.

Good morning, just I believe makes summed up against silicon customers without penalty tax issue.

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They're all doing a passion of mine.

Okay.

A couple of times, you put us some time.

I'm not sure about Egypt.

So as you come down because as you know.

Great that's frequently to ensure with them well that doesn't.

Catherine.

But yes, you do.

He is thinking about China.

And we'll have somebody in future may sound out you're going to convert into your box will you have that you'll follow Shanghai Geneva.

They're all about that's what you get.

Oh sure.

Sometimes 20 tissue from a general conduct Python following or something that you see on television public owner Julio So Florida.

She has held Congress found out she pay back.

J D has been striving to build a healthy and sustainable ecosystems for merchant and has already laid a solid foundation in Q2, and then those categories, including home appliances sports on auto and cosmetics continued to outperform the industry.

We have been expanding our ecosystem of merchants, including both top friends and ask them. If they are more willing to deepen cooperation with business partners like J D that can bring that can help them navigate the impact from holidays and macro conditions in this quarter, we revamped and operated Jd's main app right.

Structure, they constructed all the traffic allocation mechanism and provided more refined with digital tools to get a better operating environment for merchant during the 618 Grand promotion mentioned achieved a battlefield and contributed a higher proportion of sales compared to a year ago by building a more.

And inclusive ecosystem JD will continue to leverage the supply chain logistics technology and service capabilities to join him and growth together with more merchant.

So long without without causing she's on the call you talked to call attention.

The fact that you do so I don't you shouldn't believe it or not doing it.

Okay.

Do you need.

Obviously that turned out in the lead and it doesn't the one thing that you can find the children to model. This is truly amazing.

Sure Jim called out literally across the country.

Tissue.

Great.

In total.

Got it.

Yes.

This redemption games with a lockdown.

Duane tons sheet, when you're starting two new opportunities for deals with other sugars or something you took this reconstituted fueled the strong dollar. So many elements of Judaism children, you know what kind of hire for suitability to learn how to finance it.

Yeah.

Sure no. It afterwards, you're going to finish out some of our hubs in Germany and central Sandeep.

To conclude I'd like to reiterate our thoughts on the cyclical adjustment of economy, and a long term mindset that companies need to have economic development cycles, but that doesn't mean ambitious long term momentum and we believe that the retail industry has the power to better different cycles.

So if the current macro and industrial adjustments.

Important for J D. G to further strengthen our foreign capabilities increased operating efficiency and ensure a healthy margins and cash flow while at the same time continuing to invest in innovation and take them on.

The strategy at all.

It'll position us well for the future looking ahead, there will there may still be uncertainties, but from a long term perspective, we believe that China's consumer market has a strong vitality and will become the world's largest discount where I'm coming out of the cycle adjustment, we except expect to.

<unk> strong recovering momentum, we will continue to build upon our strengths and capabilities to better capture opportunities and prospects for the long term.

I'd like to keep the floor to 70.

Okay.

Things have been playing a vital go to third hustling really essential to help our partners manage their business efficiency and time off.

And to support their.

Their effort to close the transaction.

Our solid second quarter results continue to demonstrate our ability to serve our customers.

Well manage our business effectively despite the challenging operating environment.

In the second quarter, our Nast revenue reached 268 billion R&D been presenting a solid 5% yeah your growth.

The COVID-19 related disruptions, particularly in higher tier cities.

And the tough comps actually lapsed a strong recovery from last year.

Our T M D.

Paydown canceled order came out from the start.

In April and hacking.

The improvement in golf as Covid related supply chain and logistics disruptions.

I find that starting from the end of May.

Product revenues were up.

Salaries and 3% year on year.

Given the outperformance of our online retail business, which helped to secure a stable supply of essential goods for our users.

Oh, I know active user base remains resilient at 501 million, mainly driven by over 10 million.

Of active users in poor JD retail bank.

From the previous quarter, partially upset.

In our technical thing.

I will elaborate later.

That makes seven year old school by 22% year on year.

One 6 billion RMB and exceeded 15% of total net revenue for the first time in history.

And Martin based operational and logistic bottleneck during the quarter.

Increasingly turn to take these reliable supply chain infrastructure to weather the challenges.

I thought about logistics and other services revenue.

Okay perfect Yeah, Yeah in Q2.

I will talk in detail later on.

Our marketplace and the marketplace revenue grew 9% year on year and exceeded the 20 billion RMB Mark in Q2.

In particular, our advertising revenue reported a healthy double digit percentage growth.

Which is faster than our commission revenue actually proactively build outs relief measures book some reimbursement.

In the quarter, we saw that many business partners and our merchants.

Especially those from the electronics and cosmetics category.

Allocated additional advertising dollars to boost recovery.

Nova Thanks to our improved ecosystem.

Here and new merchants on our platform and more user and sales traction during the June 18, scratch promotion and subsequently countries will have more scale than before.

Now, let's turn to our segment performance.

Taking retail revenue grew 4% year on year and engaged 242 appealing R&D in Q2.

I'd like to share a drink consumption trends that we observed in the second quarter.

Customers continue to shift purchases from discretionary goods to daily essential items.

Which has driven our general merchandise revenue up by 8% year on year you can true.

Notably our largest growth category supermarket.

Tim you want to see if the order volumes growing over 25% yeah, Yeah, I think so yoga staring me anytime and anywhere.

We are also encouraged to see revenue for health care.

Homegoods sports and outdoor cosmetics M M. R O recording double digit growth and outpacing the sector.

The change reflected our expanding user mindshare across many of our emerging category.

[noise] electronics and home appliance category reported a flattish revenue compared to the same quarter last year, both computer at home appliance maintained solid growth in the quarter. Despite the fulfillment bottlenecks in our comments.

Advertising delivery of lapping central billing college resurgence.

Mobile phones experienced a soft performance in the quarter amid a sluggish spectrum moment.

Meanwhile, we are also encouraged to see that.

The logistics bottlenecks.

Our electronics category.

It's a nice rebound and has been outperforming the sector again Sam.

Thanks to our strong customer mind share and industry, leading supply chain capability in this category.

Finally fulfilled gross margin uptick at retail was up by 50 basis points compared to the same quarter last year.

There was a colgate researches either to the operational complexity as well as our fulfillment costs.

Mental cost was more than offset by an increase in gross profit.

One category.

From increased user traffic as J D power customer mind for reliability.

And as a result.

Karen savings on marketing and promotion.

On top of it we also enhanced our operating efficiency.

Okay.

I have a general marketing spending and other opex.

I thought he thought he even took the operating margins reached three 4% in Q2, an improvement of 80 basis points from a year ago.

Taking a logistic soldiers the L. One thing important pillar that underlies our ability to navigate the supply chain complexity.

Q2 revenues grew 20% year on year to 31 billion with a proprietary logistics network.

Al was one of the few companies that could still work alongside the talented and fulfillment services that many customers on the merchant critically needed yeah unsettling time.

Subsequently revenue from it.

Final customers continuing to outgrow Internet revenue.

Further diversifying our revenue stream.

More impressively ppl's ongoing operation and technology optimization, and changing cost discipline more than offset the incremental fulfillment costs.

Pricing for resulting.

South subsidy and protective measures.

With something called the outbreak.

Therefore, the non-GAAP operating margin improved 150 feet from a year ago and part of the positive infantry.

Thank you al.

On track of improving its profitability even in this challenging operating environment.

Scott I reported revenues of $2 3 billion.

And an operating loss of 424 meeting I D.

This year's June 18th promotion back Alpha engaged customers shopping.

Right.

Omnichannel collaboration with 150000 offline stores across China.

As a result, the number of users.

<unk> ordered to shop now increased by over 400% compared to the same period last year.

That all plays a central role in executing our important omnichannel or interested in vitro initiative.

We have been growing triple digit percentage I can speak of jeffs message.

Finally, it was horrific evolving macro conditions was revealed and rationalize our strategies in different parts of our new business segment, our time with.

Proactively implemented cost control measures.

Strategic alignment in our new businesses.

First off the challenging external environment.

Particularly the P&C business.

So the operating loss was reduced both sequentially and on a year on year basis.

On the other hand, we continually pursue long term growth opportunities.

Technology innovation.

And our new <unk> and new business models, well, we may adjust our pace of investments from time to time based on market conditions.

Taking property recently entered into agreements to desktop third logistics property core funds on top of the two core funds that were successfully launched before which will bring the total transport AUR.

To surpass 27 billion upon completion.

Moving to the consolidated bottom line.

And think of the additional costs arising from the macro uncertainties and fulfillment complexity.

We effectively managed our capital allocation across businesses to focus more on our core business and further enhance operating efficiency by pulling different levers.

And cost control.

Got it got it.

non-GAAP net income attributable to ordinary shareholders.

$6 5 billion RMB, we've not gotten a margin of two 4% representing a year on year improvement of 60 basis points.

Our GAAP basis net income attributable to ordinary shareholders also turned positive to $4 4 billion RMB with GAAP net margin of one 6%.

Our free cash flow for the trailing 12 months this quarter sequentially improved to $27 7 billion RMB, mainly driven by robust operating cash flow I suddenly felt healthy margin improvement in business and prudent cash management.

Patients with the seasonality factor.

By the end of Q2 cash and cash equivalents restricted cash and short term investments added up to a total of 207 billion RMB.

From 186 billion last quarter.

During the quarter. We have returned close to have returned close to 15 billion RMB in cash to our shareholders through cash dividends and share repurchases.

Which amounted to over 20% of all our accumulated to retained earnings in the last three years.

Before I close.

Back to emphasize that well the increased uncertainty in the near term mckool can be challenging for every industry players, including taking.

It's also an opportunity for us to strengthen our market position.

We are positioned to grow our business effectively and manage our resources cautiously we.

We are confident to press ahead with a resilient performance primarily due to two drivers.

First.

So our prior trials three.

Our supply chain capabilities, we are able to quickly adapt to the changing environment and support customers and business partners.

We're creeping uncertainty basically in Naples, Florida.

Our consumer mindshare and continue to outperform the industry.

Secondly, the Loveland focus of operating efficiency and investing our resources effectively has always been the bedrock of our unique business model and it is playing a bigger role in securing our long term high quality growth going forward.

With that let's open the call to the Q&A. Thank you.

A question and answer session. This conference call will start in a moment.

In order to be fair to all callers, who wish to ask questions.

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.

If you wish to ask a question please press star.

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Our first question will come from Ronald Keung with Goldman Sachs. You May now go ahead.

This is sandy.

Uh huh.

I can tell you though.

Okay.

Seven and things like that he said don't want a woman she bought your milk seen seen somebody that's easy enough.

I don't know women's opinions chamonix like long speeds and feeds on itself.

Oh, yeah, yeah, that's the only piece.

P <unk> P M.

Yes.

Yeah.

Boy am I always assume that down yet.

I don't see many sub market.

Uh Huh. Thank you management team I would love to hear whether you could share how are you.

Expectations for second half growth have you seen any of the consumer.

Confidence improvement through July and August and I could see that second half last year and during Singles' day.

With very strong much about alcoholic piece there.

The industry so far this year.

Do we have any strategic strategy on categories delivery formats and.

Stopping formats, even like streaming any of those strategies that we are planning to drive that second half growth. Thank you.

[noise], what's you know sterling.

And Sheila.

Yeah.

He muscle arguable, though even though you're sure Kimberly.

So I'm sure you are not doing largely children to bother you with students.

And I need to see that for this quarter were facing a lot of challenge is actually the most intelligent processes, where let's say.

Uh huh.

For Tidewater.

Each a minute or so bad either.

Peter Yes.

Hydro can get.

We know the Moody, who saw the June quarter.

So it's.

Sure.

Gotcha.

And I don't need to be elaborate a lot on the reasons and there are different impacts on the macroeconomics and the coffee comparisons.

Leveraging on J D.

<unk> capability and overstocked user policies were less affected compared with our inventory.

M a C.

Later.

Hum supposedly be all the hydro loosened later, so obviously later and later.

I'm sure that you are with the chinchilla with.

Video tools.

Post quarter close.

Some of you know him and he was about to say.

So it'll show up in the bipolar kitchen Bath tissue.

So material.

The food with some dealers weren't as familiar with.

Jim kind of Athena foods.

And that's just that's a category they are indifferent.

But those kind of grades that are closely related to those.

Central products for the living and accrued expenses.

Almost like this and how can they can category as well as omnichannel business and for intra regional.

Based on business and seeing a quicker.

Quick growth and also getting has been deploying all of our online and offline.

This development.

It helped us to maintain a healthy and safe.

Okay.

A number of children.

You guys are talking about a free country. It appeared that it was I forgot.

She's only been on TV.

Terrific.

Joe Lebel, Joe later took autonomy to muscle agenda here.

We'll never know Sudan, and the hydrocarbon pool that you shouldn't be my daughters, So differently.

Oh come on you don't worry about China.

For most people to talk to you again talked so what gives you optimism.

And for some other categories that are long tail and sexual harassment prepared them, having a week a month until June the alcohol category kind of fair shocking thing I believe is limited.

However on these categories to continue to expand our market share also worth mentioning is the mobile phone industry.

Yeah.

Total hotel again.

Yeah.

Along with alcohol tend to cycle.

Frontier, well, there's always without which our mono or combo, but.

But she likes what are.

But he is here for a minute to share how we look at.

So that's where your initial budget.

But it's the central government.

Well the showbiz.

As you know what we can do that.

One in the media.

Got it.

Truthfully I'm not sure how did you pick up from them.

It was all here.

No way.

She won't come true.

So it was one O.

Uh huh.

So I certainly don't want to do the field trials in dogs over Photoshop Dischinger production. Therefore, the level 120 in due course.

Jim.

But at the shipyard in Korea.

And so for the short term in nature.

We will continue to face some headwinds.

The long term.

Okay.

I'll turn China's macro economy and consumption trends and they say why don't we.

We start to build our supply chain capabilities, and we do have things that they see the.

Value of these capabilities and we think we have also we have a responsibility to do so.

<unk> ability to support a protracted development of the whole industry. So in a couple of times, we will continue to focus on quality growth and continue.

Our market share the amount of consumers expand our market share and I spoke.

Two our margins and healthy cash flow.

What do you see that our scientists can go to a point.

I think it was something that really comes out as well.

You guys said that regarding the phosphate.

Yeah.

What's more they got.

You'll get to them in Egypt.

Shouldn't that you laid out well talk with Toshiba.

<unk> yeah yeah.

Yeah.

So we got a little into that is what the German social are doing.

Out of Korea.

She began her chief of Peru, which you shouldn't think automobile Tvs are conscious.

You can actually easily because again.

And a lot of people are okay.

Okay lots of attention to our strategy.

Back to your sort of strategy it won't change it will stay for a long time and the portfolio is that it will continue and will always continue to be our main forecast.

But it's users' experience and second our building out the supply chain capabilities.

There's a lot of space for us.

We need to improve on our cost and.

Fishing.

Fourth is our investment in technology.

We continue to take off you know they can business under.

And in a disciplined approach.

I'll try to comment upon the shelter as you know with me here he was.

Actually all tissue.

Right.

I agree with your daughter, she did a tariff on the highway.

Yeah.

<unk>.

So it's a little tougher.

So volume to the schedule.

Some of the strategic bolt ons.

No major phase two element in the vessel and Jamie.

How do you see the premium noni juice.

Oh no no.

On conventional tissue samples.

And then we're taking a little.

Hum.

From a tactical perspective member, while continuing to deepen our lowest tier market to extend our reach to consumers and things.

We will deploy interest safety retail business.

Working they're shopping scenario to deepen our understanding and insights on consumer beauty, and certainly where the continued to deal with our supply chain capabilities and this is from a merchandising perspective, even though we are in a leading position in terms of the supply chain.

It's out there are still a lot of room to improve and for continuing to build and open platform ecosystem and these four assets will remain a long term tactic for them to continue to you. Thank you. Thank you. The next question for you guys.

Our next question will come from Kenneth Fong with Credit Suisse. You May now go ahead.

Oh, excuse me I'm going to be home I guess, what did you learn the Gucci.

What should we use two women shall.

I mean, you know you go to Brazil.

It seems like kind of a who didnt want groceries, you guys doing so well, but you got to move.

What did you guys <unk>.

Due to sue them and they told me they shouldnt do pizza dough.

Thank you Michelle.

Congrats on the strong results and thanks for taking my question, we saw a very meaningful uplift.

<unk> deficiency in the second quarter.

As Internet companies continue to grow through cost optimization, how should we think about the margin upside for our business, especially we are already very efficient. Thank you.

Yeah.

Oh, Thanks for the question. The study let me take this one overall I'm looking ahead as mentioned before given the increased macro uncertainty and fulfillment complexity due to COVID-19.

We are more focused on the effectiveness of our capital allocation.

They find that they consume it as the improvement of operating efficiency. This year to ensure our company. Our book is in healthy cash flow and balance sheet positions us well prepared for the next billing cycle.

Specifically for JD retail, we pass back to the fulfilled gross margin off of more a core category towards continuing to improve in Q3 year over year and quarter over quarter, especially the supermarket category.

And the profitability improvement actually comes from a better marketing and operating efficiency and our expanding economies of scale I think hill is.

Fundamentally is that a business of scale and we believe that shaky retail long term margin improvement trajectory will continue to be from a ticket.

I'm forgetting about it takes even though we still expect to incur.

Additional costs due to valleys are past us cohorts cut here and there are so far the Mexican kid is not as significant as back in Q2.

So PDL continues to demonstrate the value they could bring to their partners I E. The efficiency savings and the excellent service quality, which are reflected in taking out improving gross margin, we're going to try to maintain the full year bottom line talking because I think it out.

And that's a new business I feel although we started to adjust our investment pace.

New business since the end of Q1.

I sent him are more focused on cash flow and profitability.

That's always going back to the scale.

This will.

It will decline both year on year and quarter over quarter.

So for the group has a whole we have better control over and confidence in our bottom line performance with patch the near term profitability after the whole cycle.

Improved meaningfully year over here and we will continue to focus on quality growth and creating value for our shareholders well continue to gain market share in our core businesses.

Maintaining our claim until you're back for the long term.

Thank you.

What is that.

Go ahead please.

Just a few words about this.

She loved them so.

Uh huh.

Okay.

You guys are sick when they suddenly like orthopedics from them.

And I think many people think I'm kidding supply chain capability.

Asia and China.

Oh My gosh.

If I can ask in our hydro fleet on board.

Please keep in Buda.

Total women's business.

Genesis is going down.

Excuse me for that one.

Even though we also think sometimes.

It's there.

One thing for us to improve.

So we have been making a loss.

Our mission to improve all those.

That's a really cheap.

It was off a woman.

I'm going to order, 50% Chicago.

Hum.

Each company.

Alright.

Okay.

So for example in it.

We are thinking about unchanged from our own perspective, but for now we are more taking a more holistic approach and just thinking about all the continents.

Internal and external collaboration between unfortunately, a bunch in building the level of kind of our mantra of Portland, Oregon the leisure.

Hum.

Shimon.

Sure.

And then when you do something to help get me Josh.

So from internally we have seen.

I can't tell the difference.

Categories are different so we're improving those and making a high standard.

For the ongoing capability.

And the whole category.

Do you hold me Josef Shagong yogurt.

Can you kind of put all those yourself what went through the quarter through a radical departure.

Since inception.

Yeah.

So before we think a lot of thinking what are mainly focused on all of our supply chain.

All of these developments.

Applying these learnings in collaboration with external partners.

I Hoffman externally.

So instead of going to a commercial account.

So each enjoying himself from that cohort.

<unk> costs are two elements to Chicago.

So can Michelle.

It's almost like Holly I think you're going to get all that.

Cosmos you pointed.

But it should have them.

In the past, we think we are operating in a normal situation, but given the outbreak of the crisis and the special situations, even though were less affected.

Looking into our consideration of how we come back.

Can you explain more special situations to run all of our supply chain.

But others are too.

Notable things in the.

Gotcha Gotcha.

Rishi holding onto the platform.

And lots of lots of things like even though I hear a lot of companies are talking about.

What about improving that.

The one thing.

The city is on Kimball.

Jonathan Osman to visa.

The total will you do that you get your view on the year washer she knows it.

You guys will stay in the Caribbean or meal foodstuff, the granular detail.

Sovereign funds you're on mute.

As usual I'm going to go.

Do you think there's sort of a jump ball.

But I'd also point out that JV has been developed through our supply chain.

Bourbon.

You can see in funding our development.

Investing in it.

Robyn.

Thank you.

Is that a long time.

To say that.

And really continue to serve all the supply chain.

According to our own understanding of our own direction.

Hello.

Got it thank you.

Please proceed.

Our next question will come from Thomas Chong with Jefferies. You May now go ahead.

So if you think about it.

Okay. So what if you in the market.

Tim when you found out that you've got all wound up putting a.

The Utah, Idaho teaching a P I N T.

Well, we didn't get that much detail that's up on NAND momentary champions.

We wanted to find out associated with our Omnichannel a feedback.

Seems like that that's all the time.

I'll be like a cabinet, where you've got both of them.

What do you think when do you see Diebold Linda.

I mean, something in a woman that pets, what are you doing.

Does that mean I guess I was hoping somebody told me that.

He's got a big chunk of that with management, but taking my questions and congratulations on a really strong set of people I have a few questions.

It's more about the macro headwinds.

All right.

What happens to the properties back to catch up with the hotbed that these days.

Should we think about the outlook for the consumer electronics in the second half and then my second question you talked about our Omnichannel strategies depicts our strong execution in omni channels may I ask about the revenue contribution.

The people are in coming years, and the third one is about our membership.

The progress we have made can we talk about our strategies. That's about what we are seeing in terms of the consumer.

Consumer behavior.

And thank.

Thank you.

Or could that be even 30 Sullivan sheets include either a bunch of them.

I'll say that first and second question first think about home appliances.

Sure I'll cover some good job of one year each of us in this action to.

To do so or silver she showed a pure going into 'twenty one.

The audio for summer and longer.

She was a figure on that.

And in Q2 or for the home appliances industry, they're facing multiple challenges, including a downward economy and some peak consumption demands and the disruption from a supply chain and a bunch of things.

Service to Portland.

Voice services.

No.

I don't know.

Brazil was down.

I'm going to Mcdonald's to treat children.

One of the triggers in the social.

Thank God.

Oh yeah.

But the other thing too is that they don't walk on a can do those go away.

Go for it but its almost neutral.

So I've got that all people sitting here with Jessica.

Paresh I think unfortunately, the sugar that could be.

And from a branding perspective, they are taking a more cautious attitude and focus on.

That can bring more certainty refined operation and healthy profitability. This has been a consensus in the industry.

Also make safety a more preferred partner.

With them with that.

So I believe.

Caught up or in the coming months J D will continue they will continue to attach great importance to the collaboration with King.

Our people are.

Let them do it.

Yes.

So I'm going to sit on a Tuesday.

Not all of them and brought them into other segments.

Okay.

Almost nothing.

So it is a singer.

Politically.

It uses the same vendor.

A woman could you please.

Tony.

Could you guys just somebody on T V shape.

Yes, it was before.

For Q2 and J D.

This category has outperformed the industry.

They have delivered quite outstanding margins from JD com.

And maybe just to.

To give you the supply chain and also our key partners.

Inventory.

From my chair among consumers and our partners since solution.

Hum.

Persimmon colleagues disciplined approach into our cost control.

Sure.

I know in the Colorado regenerative apps and data.

Hopefully you saw with Tricia.

Hopefully, that's what they'll do it but if he was able to show.

Uhm.

Thank you.

Uh huh.

And she also fall.

At seven nanometer with each and go from open to anything that you gave us for that.

One of them actually reporting to Joe to go through that.

So that you get the message.

And John will go through January $23 1 million.

And that's located in the southern part of the whole.

It seems like the U S College I didn't give an idea.

C J.

What else is sort of a sense out there.

Alright.

The other woman gigantic absolutely.

Somebody figured out there.

You know to call that yet.

Uh huh.

You can see.

Excuse me, we see these categories.

Jack and slightly improving.

Joy level I've never overwhelmed.

Marketing.

And we're still facing some uncertainty from the macro.

Surgical environment so.

Hum.

And also I'll point out that thanks to our development and Omni channel Commerce Mike's been category is developing fast on the Omnichannel side.

This is also thanks to our strategy to go in to the lowest your thinking and all of our development.

Hum.

That's up almost five five star appliances, and other formats offer physical stores, but it also helps us.

Just over half this category.

Thank God only knows market and bring some new growth opportunities for the home.

Industry.

Where do you go to the farmer.

You guys have to go.

So what you've got the other people.

Sure.

Relative to what you do.

Ladies and gentlemen.

Quite a bit about Fisher.

Geneva No.

But with the issue so really what you're bringing a woman she viewed during their two children.

Sure.

And if Q2 is also a very challenging quarter and there are various reasons, both outside and internally and also like we have the coffee and the shopping power Mac and internally. We have also taken initiatives to adjust our user growth strategy.

Well what else do.

You want me to shield the algebra children English walnuts.

With that I did it go to a cheaper to video for the North Sea infection or digital of course in the corner box legal Goldstein.

Yeah.

So if at all.

And because of the restructuring of our business in the short term we might be.

However, with active users of our core retail business, we have seen a very high quality growth.

You can find all of those are you know, Florida.

So a good option for them.

And the daughter of several weeks ago.

Does he see the shearwater excuses after that all of a sudden a lot of cingal.

Yeah.

Okay.

Sure.

And just what I'm gonna users there are.

Their shopping frequency is an awful lot of rising earnings.

Especially for the new users their shopping frequency and also adversely significantly enriched in three months time.

That's almost forgot to do that.

That's well known heidrick was pretty solid even the shop in Chicago.

No.

You have to lead our Chicago.

Some of you saw elimination that yeah sure so don't think of it.

There are many children because they are going to be a hot E. T. So either cost or even if they don't come to us.

And in terms of the different segments of consumers in lower tier markets represent important shopping group and also we will attach great importance to the super groups. The elderly group of people. According to China's demographic changes and if there are shopping self empowered Tianjin.

Thank you.

Jordan Jeez Jimmy.

As you know Clos, you won't need to move faster.

She wasn't a less good.

So phase to the execution engine.

Hello.

When you go to Al Dor shoot you did should they be up to speed.

Egypt, I mean do you want to switch.

Perfect.

You would put a father Showbizzy Street by Jim There you go.

Sure.

To further push outs.

And most of you know the fact that he has worked.

Not all of the women.

P J.

Sure.

Coming out of a downturn.

It would show a bit later after there's some.

Daughter, you should.

Thompson.

And lastly, I want to share.

Sure a little bit more of a lot of.

JV plus membership this is a very.

I'll take a look what I can say.

Oh understanding and the features of our platform.

Thank you.

It's not really comparable with others.

Membership system in China and outside China.

Development, we see this as members of the JD membership into.

Good success, and we have expectations and bring them up and.

And in the future will continue to be without a membership system and create.

Okay.

It could be some membership.

Thank you.

This is Andy let me pick the Omnichannel definitely competition question.

When we talk about omni channel type of internally that actually include quite a number of things, including our texstar upfront our home appliance business, our Hum uptime franchise store business, our southern fresh the fish.

Omnichannel business.

So with the simpler interface with all of that to come back.

Great.

But interestingly they show the shop now initiative so some of this.

Business that contributes the one teed up and you buy some of them like shop now they contribute.

And commission revenue so in terms of the revenue contribution.

Significantly this quarter.

Around 10% from the Omnichannel.

Business at our hope them to be to be honest the alpine fitness work disrupted more seriously are compared to a lot of business during the quarter.

Except for our truckload business that is building or these hyper growth stage or the other on some of the other Oh fine.

And they did not perform as well as our online.

Yeah.

Okay. Okay. Thank you.

Can we take the next question please.

Our next question will come from Eddie Wong with Morgan Stanley You May now go ahead.

I was just just related on Sandy Sean just one would've went nowhere.

She shops, which are challenging.

Oh, well I want to share on that Joe Schwartz.

What kind of timing are tied to the quarter about combat attitude to what you said.

Sure sure.

Sure. She leaves only so that's a good thing so do children to somebody that should be good.

Especially the essentials for mail in the school bus.

Bulk or just a short two you've got you should take some to the Chinese kind of touch base on your part.

So I'm going to start to show up when they should start to what should be and so what you own that you could do for sure.

Second thought yoga fitness equipment as well.

Hum.

But you want to touch on tissue.

Father took a chunk of chemo.

You'll be able to quite some way to sort of trilogy also cholewa machine that you're good.

Thank.

Thank you management for taking my question my.

My question is about the Oh.

On demand.

Our retail so we've noticed that we have.

And the relationship between that Julien.

And so do.

Do we think you will.

Increased its investment in here demanded a returning them.

And given the overall consumption is slowing down do we think the demand return and could potentially become the next growth driver to both JD. Thank you.

Oh, well, that's what I thought.

Sure I'll take that question.

So we're going to do so.

Uh huh.

Not only you are hiring back up and look at all the old Florida centric answer.

Partially.

Actually two years ago.

But I don't think I'm deliberately we're talking about two O clock.

No no no.

The automotive with them you complete them for all the answers. So I don't really know what you're doing that you can choose their tongues could you do anything crazy.

People know women. So he told US he got to Fabio said Gee you want them.

She led the bogey for you.

Took a stranger or something that we can continue to function.

Thank you.

And actually elsewhere.

Go to aftermarket like we're ready we've got four months back and do you have to start with I'm, just thickness on that and Wow.

Okay.

Countries on five hour.

We're waiting to see how to better make fulfillment category effects will carry a higher fulfillment fee.

Okay gentlemen.

Yes.

But in total it will come in.

Sure.

So the question from Dol.

You can see why you don't Schindler showcased puncture.

Hello.

And it's great.

I realized that I can use this demand for on demand.

Going back to school.

I dunno, especially but that's really been a halfway through his you're not eat showa shell shocked or since you bought something that's in our strip off the water.

Countries.

Sure sure.

So just on the chicken.

Submissions.

The most.

So I just want to call you switch it off of a partner she doesn't cause tremendous food shop at home.

And is it possible we do all my shopping we are offering more physical products, but also you have to think that people.

Are they spending to more benefits, especially for the top sort of thing or the aftermarket automotive industry.

Hum.

So I don't know why.

To expand our.

Offering to consumers.

So we kind of see myself some pie charts for these and so we don't see a commentary on your call you called out how bad it's a concern.

Well you solve that.

So you'll see on a go shop in shops, she's reached in dialogue.

Sudhakar.

And certainly from the perspective of all.

Our bank partner, what they are doing more e-commerce, they're facing some difficulties in managing their own membership and managing their users and doing their marketing their own intelligence funding to more than cover.

Bob I was wondering if it was already got 30 ton crane.

Shouldn't the Cuba, Yeah of course.

Well Sheila pool, I too sure she's got a double win.

Unfortunately, the timeshare shoot.

She for nine months.

Okay.

No.

Oh, sorry.

Sure.

No.

Okay perspective. So this makes us think is a nice ratio.

Importantly service is going to need to design.

Designed.

Or a different party.

So we're coming out with.

And different products and different services of symptoms.

Symptoms.

Great.

Not even close.

I mean.

Hum.

So I don't think I've got sensors and those holiday everyone through center are being done, but you put on your questions.

I should be should it.

Sundar, she thought leadership to the.

So if we shift to the tundra.

Yeah.

Even though we have seen the whole.

Industry a lot of players are interested in this field and it's running these companies and also on the JV side, we have seen on orders are growing rapidly.

I want to cover.

Make some rational adjustment.

So showbiz showbiz shoes are doing sort of figure out what else it looks to come home.

She too.

Don't go through Indiana, Shooshan, accordion, and only the top dollar disorder with both of you.

Got it.

Defend Georgia, Florida, but still seem quite cautious.

Oh sure.

And with them.

Well do something well do it.

Sure.

You shouldn't call.

Q2.

Food is better.

Sure Don.

Well, Michelle tumor table, I'd say tuna mango receptor the use of credit people. So you've got what you may want to shoot for a jeopardy. If you will.

You got to ask you to sort of mobile.

As you know Jeremy Simpson measure.

Don't be shy.

And.

Fitness, we need to continue to strengthen consumer mindshare and also need to explore in real time.

Change, which is challenging for everybody now and thirdly, we will also make sure the survey.

Reliability and stability.

So there's a lot of work to do and we will continue to see the penetration of this thing.

To the consumer.

And then deliberately delivery.

Performance of the beer business so forefront.

That's the kind of short term T M D.

However, we can see.

On T V.

Hum.

It's Tony.

And a good track.

We continue either woman.

So, but you know motor shop, the literature, you can flesh it out she is return Chuck Siegel from internal.

Or the English soldiers, who live alone so long so either successor to the <unk>.

Most of the civil claims to cheat sheet.

You've got to draw the line.

I also need to point out.

It's not the right thing for the economy.

Now I'm going to wrap in the market.

Houston with the brand.

Merchant we need.

Hum.

But those are the three parties are all can benefit from it.

Okay. Thank you.

I just really don't.

Sure.

If you don't have it yet.

Okay.

Yeah.

We are now approaching the end of the conference call.

I'll turn the call over to JD Com's, Sean Zhang for closing remarks.

Thank you for joining us today on the call and for your questions. If you have further questions. Please contact me and our team. We appreciate your interest and looking forward to talking with you again next quarter. Thank you very much.

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

Yeah.

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[music].

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[music].

Yes.

[music].

Hello, and thank you for standing by for JD, Com's second quarter and interim 2022 earnings conference call.

I have to say.

Are in listen only mode.

After management's prepared remarks, there'll be a question and answer session.

Today's conference is being recorded.

If you have any objections you may disconnect at this time I don't know.

I'd 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 day, everyone and welcome to city Dot Com second quarter and entering 2022 earnings conference call.

Let me introduce the management team on the call today.

CEO of <unk>, Mr. Li she will kick off with opening remarks.

Our CFO Mr. Andy issue will discuss the financial highlights after that we'll open the call to questions from analysts.

To remind you that during this call our comments and responses to your question reflect managements view as of today only.

We include forward looking statements and please refer to our latest <unk> Safe Harbor statement in the earnings press release.

Right.

Applies to this call.

We will discuss certain non-GAAP financial measures. Please also refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in our press release.

Also 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 Mr shoot or steel.

So a couple of things.

And the automotive IR and PR people.

But going forward through the article you can.

So I'm wondering at what level.

What I thought.

It will go down.

So how are you.

Just your thoughts on that.

So what GDP is who do you summed up actually next week.

Surely what can be shut down.

June 23.

Okay.

Good luck.

Some of them.

And of course, we get you to that.

Shanghai, Beijing, Guangzhou, and what will the economy, but altogether.

Total you may someday agenda.

Oh yeah.

It was represented to you.

We don't usually go harder at things.

P J in Charlotte.

So I can tell you that those individuals who are financially.

From what any general update on trying to get a global product.

Can you talk about when they.

What is your use of liquid rich product that I think it was Matilda.

She has shown through the accounting it's the portfolio. She doesn't hold the CLO two times, Sheila startup would you call them et cetera.

So people don't see but yes, I'm sorry.

Alright, you had called out the judge for the contango.

So it does look like Chipotle, I think someone else that team together.

Attributable.

Hello, everyone. Thank you for trying to take dotcom 2022 second quarter earnings call in the second quarter, a combination of factors textbox unprecedented challenges to the retail and consumer industry in China.

Resurgence across many regions and the complex macroeconomic and external environment.

GDP growth.

Yeah, well, it's total vehicle sales fell four 6%.

Keeping the lowest level of the top two yet.

It's like Oh that didn't manage to help excuses importantly, you've got to do that.

Difficulties and continued to outpace China corporate elevated inventory, while delivering steady improvement in operating efficiency and margin.

This once again demonstrates Jamie dimon and healthy momentum through a difficult cycle.

The economy has experienced a rapid development for a long time, but economic development is thought to be cyclical, creating theoretical challenges for businesses.

We need to have a long term pipeline.

Suddenly the strategies and capabilities that will support growth for the long term this will enable them to mitigate cyclical fluctuations.

And children as great of a battle and lay a strong foundation for the moment at least mindset, it's fundamentally different from that of pursuing explosive short term growth.

With that I figured out.

To your children.

First off on them.

The realized box assistance, if you want.

Sure.

It looks as though you were just talking about with Xiaomi, India about tons showing a more simple question Duffy.

Arguably if you look at flow.

Hello agenda.

Just real quickly you're pushing the initial year, where there were issues with Wall Street Journal dog.

Children's homework whichever.

Introductory performance can be.

Uh huh.

So not only do you work with.

The qdoba ratio shortly.

We moved to La Quinta.

Over to you Bill will go into all of that is that what you saw.

<unk> argued to.

Absolutely.

Okay, well then so many pitch opportunity. There's other partners that you mentioned to you we won't put out or whatever.

Before thinking about that.

Google Coca Cola for sure.

Who has an engine choice with can you talk a little bit above it.

We are going to cut it off here.

Oh for sure.

Our.

It goes without saying that I think I'll.

Good morning Julien.

Some fish value so you got to.

So that did consume them appropriately.

Like Jason Kolbert yourself before me so I'm glad that you can get a table if at one 7%.

We must build off without Houston.

Now I'd like to share with you why we remain confident in the future.

We are doing and make a challenging macro environment.

It didn't have always focus on user experience.

So my vision and efficiencies to build a long term business model and core competencies in Q2.

Active user base remained strong mainly thinking about how can we get to closing one J D racing business, which recorded a sequential net addition of over 10 million views it that way.

This percentage growth.

On top of it.

Last Sunday.

Lynn Bourdon propel user quality as evidenced by the increases.

User shopping frequency and.

In particular.

Have you achieved the 25% year on year growth in Q2 looking at different user segments.

Black numbers.

A lot of the users with the highest consumption power and stickiness.

Bye bye.

First for seven months and passive searching memories of milestone lots in the west.

Scaling up plus members also maintains high athletes.

I mean spending which was eight times.

Number two we're also pleased to see that when you have more appreciation in truck engine with a notable increase in occupancy and record high shopping frequency.

Yes.

Female Gen Z and.

I'll be covering a lot of users.

Thanks to all the efforts over the years to almost to the consumer.

Kevin.

This also sets a solid foundation carbon futures growth and cost improvement in the second half of the year.

Uh huh.

Can you give some color there.

Core top secret solvency target hitting in the type of shot. This is all about Corning to kind of put a sense you don't come to you.

I don't think that's enough she don't charters.

As you know, Turkey chips with little to no she's familiar to you too well. So here what do you feel empowered with Google.

Yeah.

<unk> continues to drive forward its long term strategy.

Sheila mainly consumer merchandize and shopping scenarios.

We have made efforts in exploring lotion market building core capabilities in the supply chain leader platform, expanding omnichannel, what's interesting business and further strengthening our online market place ecosystem the molecule market.

An important incremental.

Addressable market.

We think we have made a long term commitment to it and love, it's been volatile macro and industry environment.

We have shifted our focus to efficiency all of this work.

Allocations in this area.

Two more quick.

Emilio Pucci. The church has always wanted to vote you will stay on the sofa correspond with of course, she's only in so Paulo totals impactful for giving you would've considered total season quite well.

Shimon.

Yellow choices web search trends Honeywell some enjoyable forgot your award for such a little tougher because they want more water.

So some of them. Unfortunately.

For some going into the future.

Shanghai, you'll hear the full population of.

So you can do the.

Human culture.

Villa towards initial Chico culture.

<unk> was about getting them to make sure you've got approval to do so.

So which is a totally kimball brushy.

Bruce you ought to assume a default.

The integration continues to go well this year from.

Congrats also talk also the Korean tissue like Kelvin.

Thank you.

Electricity is critical if you will.

Europe continues to defy.

Moving to the supply chain leader platform. We believe that this is more kind of driver to improve our gross margin and cost structure in place the key though to increasing operating efficiencies and the retail industry.

Investing in innovation for mature brands and capitalizing rapid development emerging from Ginny has integrated and finish I think networks, including our transaction network that covers a lot of class Omnichannel shopping spree gobbling away.

Our warehousing and distribution network that serves nationwide and extends globally and our service network that is enabled by intelligent technology seamless integration of all three networks overcome the pinpoint a single network and our own insurance the reliability of Ge's own supply.

But also drive digital transformation and efficiency improvement, both up and downstream industry players supporting a high quality development of China's real economy, and a future high efficient and flexible supply chain capabilities.

Obviously for the sustainable development of China's retail and other inventory probably to the surgeon and the complex environment. These are clearer to an increasing number of companies have.

We have made significant progress in developing our supply chain capabilities.

There is still room for improvement there he is well positioned as determined to provide the industry's best of class supply chain solution.

On the corner.

So just forget those are slow to come on that.

So I'm going to get to low although you do on the opportunities for leap.

But mutual assured daughter, torrential chipotle each year.

So can you quantify them.

What did you know what all you can get if you work with them.

What else.

Georgia, Georgia.

So is the Q2 level.

Clean air shows.

So digital shops.

So arguably put extra Gallup agenda Shaw summed up.

But what you can talk on their total cohort G box are strongest with Cingal closure, but we're sure you can do tau.

You know what.

Oh, yeah that tissue that Gen. Two design changes they made a hulu digital social projects.

Or do you want to load up in the total food out for what you talked about.

One of the audio control surface and amenity.

Hum.

JD logistics, how big development, it's a strong testament to our supply chain capabilities, which are empowering industry amidst the college resurgence JD logistics once against that no efforts to protect to People's lives.

That's one of the first batch of companies working with local cities to ensure supply of gaming. The strategy. We have gained wide recognition throughout society at the same time JD logistics collaborators integrated supply chain logistics service capabilities to stop the supply chain disruption faced by many external.

Customers such as in F. N B e-commerce type vintage furniture apparel, BC automobile and the fresh produce industry.

The results <unk> achieved steady growth in total.

For the quarter and maintained a double digit growth in external revenues and the number of external customers during the quarter Genie out external revenues accounted for nearly 60% of its total revenues. In addition, <unk> continued to expand its logistic infrastructure globally by the end of Q2.

It operates over 1400 warehouses and manage for total G&A of.

Approximately 26 million square meters.

Yes, Hugo boss Richard.

So even Ohio controller.

Some of them go on until he or she go up 20%.

Sure. Yeah. So you don't see samples you transferred all year with trying to P.

P J.

Hi, Vijay.

Okay Nicola syndrome.

So it's you don't have a hard time I'm going to push obvious you sort of see the logic.

Sure.

So I'm out of the corner.

It will be shown on the only constraint.

What anybody is critical.

Jimmy.

This is almost.

Gotcha.

<unk>, which always challenging tissue, though so as you saw.

Once you sell diesel hydro.

Surely you wish you hadn't achieved.

Well I'm going to kind of neutral hung up till now.

With a full Hershey Liberty to shop, but also as you know Moshe do you don't choose to.

Boy you tie that changed at all.

Our omnichannel business maintained healthy momentum in Q2, although college brought significant challenges to the radio industry, our intra city Rachel business continued to deliver triple digit year on year growth.

Lucian after Rachel industry validates our early decision to expand into the Omnichannel business and we have formed a differentiated perspective and strategies around this business first J D customers naturally associate test with shopping and while developing our interest in the radio business we thought.

<unk> explored that association and customer needs in decentralized scenarios also with strong capabilities in supply chain. We do see sales end user management, Denise also to establish more comprehensive cooperation with partners to help them efficiently adapt to the market changes and mieczkowski.

Insulin needs in various scenarios, that's leading the radio industry as cost optimization and improvement in efficiency and user experience.

We're also pleased to see that the interest in the retail industry is booming PD will further elaborate just existing core capacity to explore new business models improved technical capabilities and expand omni channel with multiple bid response.

Good morning.

Can you make some doubtful debt.

The promotions actually ship.

So you can the G tube.

Yes.

You know who I am.

Sure.

Two noncash items.

Okay.

A couple of times, you put out some of that impact.

So when you ask about Egypt.

If you come down because I can tell you that our trading team to ensure with them.

Josh.

But yes, you do.

Just thinking about China.

Now somebody future based on that you won't go on blood tissue box will you have once you you'll follow ups on the opportunity.

They are all about occupancy yet so I know that you normally even showing oh.

Several things in terms of your 'twenty tissue.

General conduct type on the phone I shouldn't actually shift to mobile and TV public owner Julio.

She was all Congress found out she payback.

Jamie has been striving to build a healthy and sustainable ecosystems for merchant and has already laid a solid foundation in Q2, and then those categories, including home appliances sports on auto and cosmetics continued to outperform the industry, we have been expanding our ecosystem for merchant.

Including both top brands and ask them. If they are more willing to deepen cooperation with business partners like J D.

And that can help them navigate the impact from holidays and macro conditions in this quarter, we revamped and operated Jd's maniac rape structured way constructed all the traffic allocation mechanism and provided more refined with digital tools to get a better operating environment for merchant during <unk>.

Six eight Grand promotion mentioned achieved a better growth and contributed a higher proportion of sales compared to a year ago by building a more open and inclusive ecosystem JD will continue to leverage the supply chain logistics technology and service capabilities to join him and growth together with more.

More merchant.

So what's up with all kinds of fees on the way you talk to her and she does the cough.

The fact that you do.

Gotcha.

The EBIT the soldier.

You bet.

You'll see that come out in the lead.

And it doesn't so wondering if you can find the children T. Mobile this is Julian.

Sure Jim kind of the earlier questions.

Okay tissue.

Turning to the trends in total.

Got it.

Yes.

Redemptions due to the lockdown.

We have a term sheet where were starting to move between waste and Youll see that our soldiers are Tom you gave us your tonsils you feel about shutting down there. So many elements to it even children, you think what kind of higher facility.

Right.

Thank you Julie.

Sure No. It's also what youre going to finish out some older hydrogel gratitude androgen central Sydney.

To conclude I'd like to reiterate our thoughts on the cyclical adjustment of economy, and a long term mindset that companies need to have economic development cycles, but that doesn't mean, a list as long term momentum and globally at the radio industry has the power to buy the different cycles.

Based off the current macro and industrial adjustments.

Important for JV is to further strengthen our foreign capabilities increased operating efficiency and speed and ensure a healthy margins and cash flow while at the same time continuing to invest in innovation and tech.

And the strategies that will position us well for the future looking ahead their wealth.

There may still be uncertainties as kind of a long term perspective, we believe that China's consumer market has strong vitality and will become the world's largest discount.

I'm coming out of the cycle adjustment, we expect to see strong recovering momentum we will continue to build upon our strengths and capabilities to better capture opportunities and prospects for the long term with that I'd like to keep the floor to 70.

Okay.

Thinking has been claiming a bikes will go to serve customers with daily essentials.

To help our business partners manage their business efficiency and time to conclude.

And to support when you think he's in their effort to close the transaction.

Solid second quarter results continue to demonstrate our ability to serve our customers and business partners well manage our business effectively despite the challenging operating environment.

In the second quarter, our net revenues reached 268 billion RMB, representing a solid 5% yeah. Your growth is tied to the COVID-19 related disruptions, particularly in higher tier cities and the tough comps actually lapsed a strong recovery from last year.

Our T M D. Excluding unpaid ban canceled order came out from that.

So in April attracting a gradual improvement in growth.

Related supply chain and logistics disruptions affected starting from the end of May.

Products revenue were up a solid 3% year on year.

The outperformance of our online retail business, which helped to secure a stable supply of the special for our users.

Or I know active user base remained resilient at 501 million, mainly driven by over 10 million not the proportion of active users in poor JD retail pick up from the previous quarter, partially offset by adjustments in our typical thing.

I will elaborate later.

That makes revenue grew by 22% year on year to $41 6 billion RMB and exceeded 15% of total net revenue for the first time in history.

You mentioned operational and logistic bottleneck during the quarter.

And increasingly turned to date these reliable supply chain infrastructure to weather the challenges.

I thought about logistics and other services revenue.

38% year on year in Q2.

I will talk in detail later.

Our MX, our marketplace and the marketplace revenue grew 9% year on year and exceeded the 20 billion RMB Mark in Q2 in particular, our advertising revenue reported a healthy double digit percentage growth, which is faster than our commission revenue I believe.

So actually filled out relief measures for some emerging.

In the quarter, we saw that many business partners and the merchant, especially those from the electronics and cosmetics category.

I look at the additional advertising dollars to oppose to recovery.

Moreover, thanks to our improved ecosystem this year and new merchants on our platform is more user and sales traction during the June 18th Grand promotion and subsequently contributed more than before.

Now, let's turn to our segment performance.

Taking they tell us revenue.

Thank you Amir and engaged 242 billion R&D in Q2, I'd like to share a drink consumption trends that we observed in the second quarter.

Customers continue to shift purchases from discretionary goods to daily essential items.

Which has driven our general merchandise revenue up by 8% year on year.

In Q2.

Notably our largest growth category supermarket cut.

Opinion to see if the order volumes growing over 25%, yeah, Yeah, I think so.

They didn't mean anytime and anywhere.

We are also encouraged to see revenues for health care.

Homegoods sports and outdoor cosmetics, and MRO recording double digit growth and outpacing the sector.

The change reflected our expanding user mindshare across many of our emerging category.

[noise] electronics and home appliance category reported a flattish revenue compared to the same quarter last year, both computer at home appliance maintained solid growth in the quarter. Despite the fulfillment bottlenecks in our commitment to prioritizing delivery of luxury essentials.

During college resurgence.

Mobile phones experienced a soft performance in the quarter.

A sluggish spectrum momentum.

Meanwhile, we are also encouraged to see that.

The logistics bottlenecks.

Our electronics category.

It's a nice rebound and has been outperforming the sector again Sam.

Thanks to our strong customer mind share and industry, leading supply chain capability in this category.

Finally fulfilled gross margin uptick at retail was up by 50 basis points compared to the same quarter last year.

There was a college researches either to the operational complexity as well.

At our procurement costs.

Rental cost was more than offset by an increase in gross profit.

Most categories have MEP.

They take some increased user traffic as they do.

<unk> top customers minds.

Reliability.

And as a result, we experienced savings on marketing and promotion.

On top of it we also enhanced our operating efficiency and focused on our general marketing spending and other opex.

I believe that Didnt really took the operating margins reached three 4% in Q2, an improvement of 80 basis points from a year ago.

Taking logistic soldiers the L. One thing important to peanuts that underlies our ability to navigate the supply chain complexity.

Q2 revenues grew 10, 3% down year to 31, leaving us with.

Leading proprietary logistics network.

Al was one of the few companies that could still work alongside the talented and support fulfillment services.

Let me touch on the merchant critically needed yeah. Unfortunately high.

Subsequently revenues from external customers continuing to outgrow Internet revenue.

Further diversifying our revenue stream.

More impressively.

<unk> ongoing operations and technology optimization, and changing cost discipline more than offset the incremental procurement costs.

Arising from the voting.

Subsidy.

This metric during the Covid outbreak.

Therefore, the non-GAAP operating margin improved 156 from a year ago and part of the positive infantry.

Hey, al is well on track of improving its profitability.

This challenging operating environment.

Thought I reported revenues of $2 3 billion R&D and operating loss of 424, maybe RMB.

This year's June 18th promotion.

Engaged customers shopping.

I think omnichannel collaboration with 150000 offline stores across China.

As a result, the number of users who placed orders to shop now increased by over 400% compared to the same period last year.

That all plays a central role in executing our important omnichannel or interested in vitro initiative.

We have been growing triple digit percentage I can see some just magic.

Finally, he was hoping evolving macro condition was revealed and rationalized our strategies in different parts of our new business segment, our weapons, we proactively implemented cost control measures.

Strategic alignment in our new businesses.

First off the challenging external environment.

Particularly.

Thank goodness.

So the operating loss was reduced both sequentially and on a year on year basis.

On the other hand, we continually pursue long term growth opportunity.

Technology innovation.

And our new <unk> and new business model, where all we may adjust our pace of investments from time to time based on market conditions.

Taking properties recently entered into agreements to settle.

Third the logistics property core fund on top of the two core Fox. That's worked successfully launched before which will bring the total transport AUR to surpass 27 building.

Upon the completion.

Moving to the consolidated bottom line.

Do you think of the additional costs arising from the macro uncertainties and fulfillment complexity.

<unk> effectively managed our capital allocation across businesses to focus more on our core business and further enhance operating efficiency by pulling different levers.

Cost control.

As a result.

non-GAAP net income attributable to ordinary shareholders was $6 5 billion RMB with non-GAAP net margin of two 4% representing a year on year improvement of 60 basis points.

Our GAAP basis net income attributable to ordinary shareholders also turned positive to $4 4 billion RMB with GAAP margin of one 6%.

Our free cash flow for the trailing 12 months this quarter sequentially improved to $27 7 billion RMB.

<unk> driven by robust operating cash flow as a result of healthy margin improvement in business and prudent cash management.

So the seasonality factor.

At the end of Q2 cash and cash equivalents.

Cash and short term investments added up to a total of 207 billion RMB.

From 186 billion last quarter.

During the quarter, we have charged close tool will have returned close to 15 billion RMB in cash to our shareholders through cash dividends and share repurchases.

Which amounted to over 20% of all our accumulative typically clean earnings in the last three years.

Before I close.

Like to emphasize that well the increased uncertainty in the near term to be challenging for every industry players, including taking.

It's also an opportunity for us to strengthen our market position.

We are positioned to grow our business effectively and manage our resources cautiously we.

We are confident to press ahead with a resilient performance primarily due to two drivers.

First.

Our prior trial tree.

Our supply chain capabilities, we are able to quickly adapt to the changing environment and support customers and business partners.

We're proving for frequency basically in Naples, Florida.

Our consumer mindshare and continue to outperform the industry.

Secondly, the Loveland focus of operating efficiency and investing our resources effectively has always been the bedrock of our unique business model and it is playing a bigger hill in securing our long term high quality growth going forward.

With that let's open the call to the Q&A. Thank you.

A question and answer session. This conference call will start in a moment.

In order to be fair to all callers, who wish to ask questions.

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.

If you wish to ask a question. Please press star one.

One on your telephone and wait for your name to.

If you wish to cancel your question. Please press Star then two.

If you're on a speakerphone please pick up your handset to ask your question.

Our first question will come from Ronald Keung with Goldman Sachs. You May now go ahead.

This is sandy.

Uh huh.

17.

And I'm Gonna go please.

And Thats something that you said a woman she buys milk seen soon so I think that's easy enough.

I don't know women tune in Chamonix like long speeds and feeds on itself.

Oh, Yeah, Yeah, that's one.

<unk>, yes.

Yes.

But boy they always have.

Seen that done yet.

I don't see many chevron.

Uh Huh, Thank you management team.

Whether you could share how you like.

Patients with second half growth have you seen any of that.

Consumer confidence improvement through July and August and I could see that second half last year and during Singles' day. Your performance was very strong much about alcoholic piece the industry. So far this year is.

Do we have any strategic strategy on categories delivery format.

Shopping formats, even like streaming any of those strategies that we are planning to drive that this second half growth. Thank you.

Yeah.

Well as you know.

And Sheila.

Yeah.

He knows what our people know, even though you're sure Kimberly.

So I'm sorry, not to isolate children say Bobby.

And you can see that for this quarter were facing a lot of challenges actually is the most intelligent processes, where let's say.

Uh huh.

I'd, rather them, each a minute or so bad either.

Gotcha.

Uh huh.

Sure Yeah, so we've looked at missiles.

So that it is absolutely crucial.

And I don't mean to me I elaborated a lot on the grades of sand or other different impact of the macroeconomics and the coffee in comparison.

Elaborating on JD and supply chain capability and all that stuff.

Your policy were less affected compared with the old inventory.

Hum.

Later, we'll know Cognos proposal hydro Newsome later.

So obviously later and later.

I'm sure that you work with the change.

Video tools.

Post quarter close.

It's about as close as I'll say, it's out of the Portuguese So it'll show up in the price volatility.

So say Shlomo.

We still realize what industry the legal team kind of ease off.

And that different categories. They are requiring different conditions for those kind of grades that are closer related to them.

In central products for the living medical expenses consumer product, almost blackbird, and how to make that category as well as omnichannel business and for intra.

Rental business.

Quicker growth and also discussing deployment.

Online and offline.

Development has also helped us to maintain a healthy.

Thank you.

A number of.

Children.

So a lot of you guys are talking about a free country.

She's only been on TV.

Terrific.

Joe Lebel.

Tony reach commercial agenda here.

I don't know what level they should all be in the hydrographic would've been my daughters, So differently.

Kind of like VW about charter.

And what she loves it.

So it looks at the Scripps networks.

And for some other categories that are long tail and central Texas, a problem, you're having in weeks and months.

Even the alcohol category kind of fair on shopping scenario.

And I'll never on these categories.

To expand our market share also what's happening is the mobile phone industry.

Yeah.

For context, as we see the consumers there.

Along with alcohol tend to cycle.

Frontier well there so obviously the electric bono condos, but she lives.

The shipment of usual highway to share how we opened another charge after your initial visit.

But central Florida.

Well the showbiz.

Our dealerships.

So what would you do that.

So we look at that is to go digital publishing the truthful I'm not sure.

There's no way to go here too she won't come to so.

So it was going to look at the.

Total summer so I shouldn't be off one quarter. So youll see I think all over Florida. Subsequent exchanger production. Therefore, when Nicole went to zero in due course.

But it should be.

Yeah.

And so for the short term in nature.

We will continue to face some headwinds.

Long term.

Sure.

As a company.

For the long term, China's macro economy and consumption trends.

If they want of J D. We start to build our supply chain capabilities and we do have things that would be the value of these capabilities and we think we have also we have a responsibility to do so.

<unk> ability to support a protracted development of the whole industry. So in the coming time, we will continue to focus on quality growth.

Our market share the amount of consumers expand our market share and that's fine.

Two our margins and healthy cash flow.

What do you assume that southern our scientists to go to a poll.

Which is I think it works out and as I said he called out.

Because it sounded like you guys are really fast.

Phosphate.

Uh huh.

What was the last one.

Egypt was a teacher shouldn't that you laid out when you took a township water <unk> when do you put it.

Yeah.

December .

And so that is what the German social argument.

Yeah.

I will explain the chief of Peru.

You should assume one module Tvs are conscious to deal with.

It actually is.

Yeah.

And a lot of people.

Okay, that's attention to our strategy.

Back to your sort of strategy it won't change it will stay for a long time and the portfolio is that it will continue.

We'll always have continued to be our main forecast.

Okay.

It's a beautiful theory and second other beauty after supply chain capability.

It's a lot of space for us to continue to improve on our cost.

Fishing.

And fourth is our investment in technology.

We continue to develop you know they can business under.

Disciplined approach.

It's hard to comment upon the shelter.

He was our initiative.

Actually all tissue.

I agree with you.

A daughter, she did I touch on the highway side.

Yeah.

<unk>, including the initial some guys are.

Tom.

So those are some volume to the schedule.

Some of those tissue.

We don't measure for two element in the vessel and Jamie.

Hi, good activity the premium noni juice.

Hum.

I have one or two hotels.

On conventional tissue samples.

You guys are taking a little.

A little bit hot.

From a tactical perspective.

Number one continuing to deepen our lowest your market to expand our route to consumer and second well.

We will deploy interest 50 retail business.

Working shopping scenario to deepen our understanding and insights on consumer D I'm sorry.

We will continue to be with our supply chain capabilities and this is from a merchandising perspective, even though we are in a leading position in terms of the supply chain.

You know its out there are still a lot.

Due to improved and fourth we'll continue to do the open platform ecosystem and these four assets will remain a long term tactic for them to continue to talk to you.

Thank you. Thank you. The next question did you guys see they don't.

Our next question will come from Kenneth Fong with Credit Suisse. You May now go ahead.

Oh, excuse me, whom I guess, what did you want you can see you go for your time.

When are we going to do to womens Division.

I mean, you go to Brazil.

Who didnt want groceries.

So when you got the <unk>.

In general due to Sue woman or you're telling me they are competing with them.

What do you think Asia Quinn.

Congrats on the strong results and thanks for taking my question, we saw a very meaningful uplift.

<unk> deficiency in the second quarter.

Internet companies continue to grow through cost optimization, how should we think about the margin upside for our business, especially we are already very efficient. Thank you.

Thanks for the question are they society, let me take this.

Right.

Overall I'm looking ahead as mentioned before given the increased macro uncertainty and fulfillment complexity due to call me.

We are more focused on the effectiveness of our capital allocation.

<unk> done it as the improvement of operating efficiency. This year as we ensure our company. Our book is in healthy cash flow and balance sheet positions us well prepared for the next billing cycle.

Specifically 40 retail we pass back to the fulfilled gross margin from both our core categories to continue to improve in Q3 year over year and quarter over quarter.

Especially the supermarket category.

And the profitability in Portland actually come from our pet Chem market and operating efficiency and our expanding economies of scale our retail is.

Fundamentally is that a business of scale and we believe that's taken Gainesville long term margin improvement trajectory will continue to be boneless chicken.

And for JD logistics, even though we still expect to incur some additional costs due to valleys are past us corporate cut here and there are so far the macro point.

It's not as significant as that in Q2.

PDL continues to demonstrate the value they could bring to their customers I E. The efficiency savings in excess of its poverty, which are reflected in our improving gross margin. We will try to maintain the full year bottom line target. So I think the app.

And that's a new business I feel although we started to adjust our investment pace or your new business. Since the end of Q1, I mentioned him are more focused on cash flow and profitability.

Pat that's always going back to the scale.

This will.

It will decline both year on year and quarter over quarter.

So for the group has a whole we have better control over and confidence in our bottom line performance with patch the near term profitability after the whole cycle.

Improved meaningfully year over here and we will continue to focus on quality growth and creating value for our shareholders well continue to gain market share in our core businesses.

Maintaining our clean until you're in fact quite a long time.

Thank you.

What is that.

Williams Lake.

Just a few months.

Sure enough.

Uh huh.

No no Canadian Lima, you, guys, who have somebody like Russia, China.

And I think many people think I'm kidding.

<unk> supply chain capabilities in a leading position.

Position in China.

Oh, My gosh, if I can ask in a hydro freedom boat.

Corey Jim Bordeaux.

The total numbers.

Genesis without calling them.

With that mantra.

Even though we think so.

Also because it's there.

There.

One thing for us to improve.

So we happy hour.

Our mission to improve all those.

Margin capability.

It was off.

They're going to order, 50% Chicago.

No.

Each to call it.

Alright.

Thank you.

So for example in the past we are thinking about unchanged from our own perspective, but for now we are more taking a more holistic approach to thinking about our partners.

Internal and external collaboration between Fortunately a bunch in beauty.

I kind of our Portland, Oregon, the leisure.

Shimon.

Sure.

And then when you do something to optimize <unk>.

So internally we have seen them.

Banking capabilities on different categories or different so we are improving those.

Making our high standards.

For the overall capabilities of the functions across all categories.

Beautiful with Lee Joseph Shagong, yogurt, which isn't that kind of put us yourself what went through the quarter.

Sure do you want to hold workshops with what you've seen.

Yeah.

So I'll go for it we think a lot of thinking what are mainly focused on a lot of supply chain.

Without a development plan.

This is in collaboration with external partners.

The online offline externally.

You've already sort of go into a commercial account.

Each make himself.

Which of course are two elements to Chicago yourself can Michele.

Real quick how should I think you're going to get out.

Bedroom Christmas you want that appointment.

Sudhakar.

In the past we think we are all.

In a normal situation, but given the outbreak of the crisis and the special situations, even though when I go back to.

Right.

Looking into our consideration of the how.

Let me come back to one extreme or special situations to run all of our supply chain.

Well, it's always about others are too volatile.

Notable political things in the Gulf.

Joshua bringing them to us.

Accordingly, the dotcom.

And lots of lots of things that even though I hear a lot of companies are talking a lot about improving there.

Hey.

The city is on Kimball.

Johnny.

Besides the.

Total you do you view the year, what's your because you know we're not sure. If you guys have faced challenging well Neil foodstuff the granular detail.

Following a function, particularly useful for you all.

Do you think this sort of jump ball.

Uh huh.

But I'd also point out that JV has been going on.

Our supply chain.

Separately.

The funding of our customer mix.

You are asking.

Evolving our understanding obviously, it's not a long time.

Just to say that we will certainly continue.

Obama supply chain.

According to our own understanding of our own direction.

And other people.

Thank you.

Please proceed.

Great.

Our next question will come from Thomas Chong with Jefferies. You May now go ahead.

Okay. So if you in.

Thank you Tamara.

Tim when we found out that you've got all wound up moving them up.

By the time I know teaching a penalty there wouldn't you know well we didn't get that much easier and that's up on NAND moment that being that you picked up on it.

Like a pharma associated with Omnichannel.

In fact that that's all the time.

Hi.

Right.

So you got both of them.

What do you think about the PC tablet Linda.

I mean, something in a woman that pets, what are you doing.

I guess I was hoping somebody told me.

He got tended to be a.

But you've got to find a job.

Thanks for taking my questions and congratulations on a really strong set of default.

I have a few questions. The first question is more about the macro headwinds as well that would be.

The public sector to catch up with the hotbed that these days.

Should we think about the outlook for the consumer electronics in the second half and then my second question is all about our Omnichannel strategies do you think I was talking to execution.

How many channels may I ask about the revenue contribution.

The people cost areas in coming years, and the third one is about our membership.

The solid progress we have made can we talk about our strategies. That's about what we are seeing in terms of consumer.

Consumer behavior.

And thank.

Thank you.

Or could that be even 30 Sullivan syncrude is a bunch of them.

I'm sorry, the first the second question first is about home appliances.

Sure I'll cover some good job yeah Leach it wasn't really start Sheila to.

To do so or silver Street showed a pure going on between the bulk of the summer.

Some are longer.

Sure.

No doubt about it.

And in Q2 or for the home appliances industry, they're facing multiple challenges, including a downward economy and some peak consumption demands and the disruption from a supply chain and a bunch of things.

Perfect.

Northland purposes.

No I don't.

Okay.

Brazil.

We can measure to treat children.

I mean, one of the.

Traditionally the social.

Thank God, we can kind of do that.

Yeah.

The other issue is that they don't walk on a sort of a nickel.

And that goes for 45 almost neutral.

So I got that.

Are people still do it's only got very light does that suggest.

I don't personally think unfortunately to showcase that could be.

And from a branding perspective, they are taking a more cautious attitude and focus on that.

That can bring more certainty respond operation and healthy profitability. This has been a comprehensive in the industry.

Also make safety a more preferred.

With them with that.

So I believe.

Caught up or in the coming months J D will continue it will continue to attach great importance to the collaboration with King.

People are starting to let them do it.

Yes.

I was gonna sit on it.

But it wasn't that long ago.

Okay.

Almost nothing.

The singer.

Total used with the same vendor.

Could you please tell.

So stay tuned.

Could you guys just somebody or TBC.

Yeah, what's before us for Q2.

JD is it's almost like the category has outperformed the industry.

They have delivered quite outstanding margins.

Com Inc.

Many countries is two GB supply chain and also our deep understanding images.

Our strong market share among consumers and our partners since solution.

Approximately call it disciplined approach into our cost control.

Steve.

Uh huh.

Colorado instead of an option.

So partially the salvatrucha.

Hopefully, that's what they'll do it but it seems like.

That's useful.

Uhm sort of Virginia.

So actually most of them.

Seven nanometer with each and go from open to anything that you gave us.

We want to actually reporting.

To Joe to go through that.

So to that yet.

John will go through the JV I mean, they've got $22 1 million.

It seems that you guys look into December .

It seems like the U S College that didnt come up yet, but all of them.

Sundar take a tour.

Any sort of sense out there.

Alright.

The other woman gigantic absolutely.

Uh huh.

We used to call it yeah that's helpful.

You can see.

Yes.

Excuse me, we see these categories two tracks and slightly improving based on June level. However, overall.

The market is.

And we're still facing some uncertainties from the macro.

Surgical environment, so all else equal.

Hum.

Experiences.

And also I'd like to point out that thanks to our development and Omni channel Commerce My skin category is developing fast on retirement.

This is also thanks to our strategy to go in to the lower tier cities and all of our development.

Potash storms in.

That's up almost five five star appliances, and other formats off of physical stores, but it's also helped us.

Just over half this category.

The overall market and bring some new growth opportunities for the company.

I find it.

Industry.

Uh huh.

You guys have to go to work.

So what you've got people.

Sure.

Relative to what you do.

Ladies and gentlemen.

Quite a bit about its future.

Geneva No Canadian.

<unk> doubled each year, so really what you're bringing new women Gigi.

Children that will bleed off the hook.

And about what we do disclose if Q2 is also a very challenging quarter and there are various reasons, both outside and internally and also like we have the coffee and the shopping power Mac and.

And internally, we also took initiatives to adjust our user growth strategy.

Well.

You want me to shield the algebra charter in vessels.

With that I did it go to a cheaper to video for the North Sea infection or digital of course looking at unit box legal adulthood.

Yeah.

That was a bit off.

And because of the restructuring of our PC business in the short term we might come up.

However, with active users of our core business, we have seen a very high quality growth.

You can find all of those areas.

So a good option.

And the daughter of several weeks ago.

You see the shearwater excuses after that all of a sudden a lot of cingal.

This will help with that.

Okay.

Sure.

And just what I'll call the users there.

Their shopping frequency is an awful lot of routing and especially for the you said they're shopping.

Frequency and also I would like to significantly enriched in three months time.

Nobody knows that.

Heidrick was pretty strong even a shop in Chicago.

$10 you have to lead our Chicago.

Some of you saw when you did mention that you're sure they don't take it out.

You mean.

Many children.

He can show either via Clos seafood.

If they don't come to ours.

And in terms of the different segments of consumers the lower tier markets consume represent important shopping group and also we will attach great importance to the super groups. The elderly group of people. According to the China demographic changes and that there are shopping self empowered.

Thank you.

Doors on cheese.

<unk> got to move faster.

She didn't go well.

Good.

So further due to execution.

Sort of phenomena.

Should they be all meals.

Egypt LNG with Fuji.

The pool.

You would put a father Showbizzy Street target you go cross border.

Sure.

Todd all of women, who.

Putting features for late June shipments.

Coming back to Joseph Osha with lit up with us on the.

Daughter.

Function.

Lastly, I want to share.

Sure a little bit more of a change.

Kidney plus membership this is a very unique I think in liquid AC.

Oh understanding and features of our platform and shopping behavior.

It's not really comparable with others.

Membership system in China, and outside China, you yourself development, we see this as members of the JD membership into achieving.

Success in these numbers.

Patients and bring them up and in the.

Future will continue to be without a membership system.

Okay.

Thanks.

Who does a membership.

Okay.

This is Andy let me pick the Omnichannel definitely competition question, a moment talk about omni channel type of internally that actually includes quite a number of things.

Our strengths, including our texstar upfront, our home appliance business, our home uptime for franchise and corporate.

Next our southern fresh.

Thanks Al.

Omnichannel business, right, which is simply illustrates the flower to come back at a category.

But interestingly they show the shaft out administrative so some of these.

They contribute the one teed up and you buy some of them like shop now they contribute.

<unk> and commissions up anymore.

Terms of the revenue contribution.

Change significantly this quarter.

Around 10% from the Omnichannel.

Thickness at the hope them to be to be honest, the alpine fitness work disrupted more seriously compared to a lot of business during the quarter, except for our self not business that is building or these hyper growth stage or the other.

Some of the other offline.

And they can be.

Not perform as strong as our.

Right.

Okay. Okay. Thank you.

Just can we take next question please.

Our next question will come from Eddy Wang with Morgan Stanley You May now go ahead.

Actually just related on Sandy Sean I, just want what I want to use.

You can see shoppers are challenging.

Oh, what did you say that Youre short.

So I'm I'm, sorry through the quarter Bob.

That attitude towards institutional quality.

Sure.

So that's a good thing.

Total abstruse umbrella I should be good.

Especially the essential Tamil woman, who shall.

So bulk of just a shorter you've got you should take some to the.

Charlie.

Transportation, so on your block all of which I'm pretty sure we'll machine to machine.

So what you're telling me you could just for sure.

So kind of all the business, we couldn't I'm, sorry, well either crinone.

But what's the Georgetown tissue.

<unk> father took a chunk of chemo.

She'll be able to quite some way to sort of tip is Joseph.

Well done.

Thank you management for taking my question my.

My question is about the.

On demand.

Our retail so we've noticed that we have.

On the relationship between that Julien.

And mix.

Do we think you will increase its investment in here demand returning in China.

And given the overall consumption is slowing down do we think the demand retail it could potentially become.

Mexico gross driver of both JD. Thank you.

Oh, well, that's what I thought.

Sure I'll take your question.

So we don't believe so.

And there's a whole Colorado not only you are hiring back up and look at all the old Honda Civic Center.

Partially.

Actually two years ago, but I don't think I'm deliberately we're talking about two O clock.

No no no.

The automotive with him he's completing saltwater too so it really hurts you Linda you can choose or Tom could you go into the country.

People know element so he told US he got two five years, because you want them.

She led the bogey for you.

Took a syndrome or something else.

Continue to function.

Thank you.

And actually O to O co two I'm demonstrably related can you talk more about that and do you have to start with I'm just thickness like that.

What we're doing.

Despite that as much as one five hour.

We're waiting to see how to better make fulfillment category backfill carrying a high fulfillment fee.

In general women of her thoughts.

But in total it will come in.

So.

So there are parts of the phone call.

She won't eat them Schindler surfing function.

Hello.

And it's great.

Do you like that.

Thank you.

For demand is.

It's growing rapidly.

I dunno, especially but that's really been a halfway through his sheila each showa shell shocked to see something that's in a ship off road.

Thank you.

Okay.

So it is on the Chicago and a bunch of assumptions.

So let's go to college to check all the partners.

Cause tremendous food shelter at home.

And is it possible we do all my shopping we are offering more physical products, but also we have seen that people think about.

Our expanding to more benefits, especially for the past 30 days or the aftermarket automotive industry.

Hum.

Look at the.

Okay.

Our service offerings.

Right.

Sure corruption herself she passed almost through these on the so it looks like all the time.

You called out so of course with all the while himself, but who you are so you'll see on a go shop in shops and dialogue daughter shooter.

And certainly from the perspective of all.

All of our bank partners, what they are doing more ecommerce, they're facing some difficulties in managing their membership managing their users and doing their marketing so they're only challenge in funding to more than cover.

These are the forces of water.

Bob I was wondering if it was already the 30 ton crane.

Schinder, Cuba foreseen.

Well, Sheila pool, I too sure instead of them going away.

In total the timeshare sheath.

Shuffle my months.

Okay.

I thought I'd say you've got shortly.

And they do not offer our perspective. So this makes us think.

That's a nice ratio of 17.

Parts and services, we need to define and create a different party.

First of all when coming up with.

Different products and different services and systems.

Great.

For example.

Sure.

Hum.

Hum.

So you're right.

I think there's who knows how are they going to set up and one for <unk>.

Being done there.

A couple of things.

B shoot zone, B, Kim, though she thought leadership to them.

So if we shift to the tundra.

Even though we have seen the whole.

Australia a lot of players are interested in this field and are joining this competition I'll go untreated side, we have seen the spot orders are growing rapidly.

We need to.

Make some rational judgment.

So showbiz showbiz shoes are doing sort of figure out what else. So it looks like on the hydro.

Until the cooler airports is true.

So we go through Indiana huge and appointed a new leader.

Turning to affordable.

Got it.

The Thunder, Georgia, Florida, but didn't seem quite cautious.

Just to go through them.

When do with them.

Well do something well.

So is that good.

The southern cone.

Our food.

Sure Don.

Well, Michelle tumor table three toone on legal.

It was a crazy thought.

But you may want to sell it to a generally what we're gonna see EBIT Award.

You got to put sufficient immobile.

So that's another.

So don't be shy.

Yes.

Hum.

And fitness, we need to continue to strengthen consumers' mindshare and good luck.

No need to explore new types of supply chain, which is challenging for everybody now and thirdly, we will also make sure that survey.

Lewinsky on stability.

Differently. So theres a lot of work to do and we're continuing to see the penetration of this thickness to the consumer mentality deliberately delivery performance of the year.

So of course short term.

We're not we can't Unfortunately G M D.

Just to go on forever.

Dnb on television on demand and retail.

Yep.

I think what it was on kidney either woman Zumba.

Moshe the literature, you can accomplish it out she has returned shocks from internal.

Or do you mean by soldiers who live alone so long so either the vessel.

Most of the silver tongue in cheek Chicago.

Alright.

I also need to point out sort of profit.

That's one thing.

Now, it's aggressive market competition with the brands like ours.

Our merchant needs.

Well Neal.

But those are the three parties are all can benefit from it.

Okay. Thank you.

I, just really don't show up.

That's going to be for all of it.

Okay.

Yeah.

We are now approaching the end of the conference call.

I'll turn the call over to JD Com's, Sean Zhang for closing remarks.

Thank you for joining us today on the call and for your questions. If you have further questions. Please contact me and our team we.

I appreciate your interest and looking forward to talking with you again next quarter. Thank you very much.

Okay.

Thank you for your participation in today's conference. This concludes the presentation.

Now disconnect good day.