Q2 2023 Dada Nexus Ltd Earnings Call

August 16, 2023

Speaker 1: Good morning ladies and gentlemen and thank you for standing by for DADA's second quarter 2023 earnings conference call.

Speaker 1: At this time, all participants are in listen-only mode.

After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded.

I will now turn the meeting over to your host for today's call, Ms Caroline Dong, Head of Investor Relations for DADA. Please proceed Caroline.

Thank you operators. Hello everyone and thank you for joining our second quarter 2020 three earnings conference call. On the call today from data we have Mr. Jeff for president. And Mr. back to see our full.

Mr. Hu will talk about our operations in the complaint highlights. Then Mr. Chen will discuss the credentials and guidance. Please kindly note that during the Q&A session, Jeff will answer questions in Chinese and the consecutive translation will be provided in case of any discrepancy between the original remarks and the translated version. Statements in the original remarks should prevail. Before we begin, I would like to remind you that this conference call contains working statements. Please refer to our latest safe harbor statement in the earnings press list on our IRY site, which applies to this call. Also, during this call, we will discuss some non-GAAP financial measures.

Please also refer to our links press list, which contains a reconciliation of non-GAAP measures to the comparable GAAP measures. Finally, please know that, unlike otherwise stated, all figures mentioned during this conference call are in RMB.

It is now my pleasure to introduce our president, Mr. Hu. Jeff, please go ahead.

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

in the second quarter of 2023.

BADA group continues to do a strong, level growth with significant increase in concentration or operational efficiency.

Our total net level is increased by 23 year-old year. We also achieved an important milestone in this quarter, by the coding of first-level testing adjusted net income.

Thanks to more than 17% improvement in our adjusted math margin.

I will begin today's presentation by discussing our cooperation with Jadve.com.

Bon appétit!

Operation High bulge

to platforms. I will hand over to back

We will take you through our detailed financial results.

This is the update on Dada's collaboration with JD.com.

Please change your branding and values among JD.com users.

We recently unified the discipline of our on-demand repair services across...

touchpoints on JZ-APP.

S. Xiao Sida in Chinese and shop now.

In particular,

The nearby or fusion tap was landed in Shao Shou Da.

And the XiaoSuda tag has been added to search results for products offered by our mix.

Let's end the panel.

This unified plan identified

emphasize our ability to deliver products within one hour.

And we believe that if we are significantly enhanced auto mindshare among JT users.

At the same time...

We also want to enhance JTTJ's offerings by attractive prices.

We now read J.T.'s Everyday Law Price Strategy.

In this quarter, we utilize the price-based star-lating tool and work with machines to further improve the price compatible with the star-lating tool.

or she alsowaitra.com

So far, we have achieved a 10% increase in the number of cases in the US.

in the proportion of high-start products was much.

For the Xiao Si Da tab, which was previously known as Nearby or Fudging tab.

Thank you.

And that concludes today's webinar. Thank you very much.

Thank you again.

Yeah, oh yeah.

This impressive growth will jump by exposure and quick through optimization.

which helped the Xiao Shi Da type WHDAU, as well as improvement in intervention rate and thy outreach particle value.

Let's move on to the operational highlights for our two platforms.

Start with J-D-D-J.

China's meeting on demand at the telephone.

In the second quarter, JT DJ made further progress.

in the teller and the formed the corporations.

and the technology empowerment.

We continue to broaden and deepen cooperation with the talents to enrich our product offerings.

during this quarter.

am I muted?

300,000 annual active detail scores at the end of June .

from located at this rate

in the ship as they calculate.

based on the list of top.

100 Supermarket Chances in China released by CCFE.

Enjoy!

We now have established partnerships with 92 out of the top 100 supermarket chains.

Thank you.

Enjoy!

Together with the supermarket machines, JDDL launched a deliver-free framework campaign in 10 key cities to improve our user experience.

Feelings that can bend.

then.

34% higher user growth rate.

and 2 percentage points higher.

15 days repeated but just late

There are the cities.

This is an encouraging job. We are not allowed.

to do a fair way to benefit to major supermarket chains across the country.

Thank you.

We have always focused on helping Meteors achieve better efficiency through platform tools, such as long-lasting Meteors specific membership features.

but a low chance to attract and manage their own members online.

The function notably increases the self-efficiency.

With all the convention of members.

more than 20 percentage point higher than that of long members.

Am I on my test?

I have adopted the membership tool.

members potentially

60 percent.

of their total journey in June .

In addition to a large supermarket chance,

We have also admitted that no Swiss major can run in the school tents.

We further strengthen the occupation with J.T. Conventing Store.

We are forming new partnerships.

Punishing sleaze.

Your smile and other leading chans.

Total GME generated by the convenience store grew by nearby three times year on year in the second quarter.

We also made good progress in consumer electronics.

That's all we do, sir.

Kota.

in the Smartphone category.

Traveling by fast, we were on top of active pricing in the second quarter.

To GME our Apple products on our platform to study.

While other brands such as Xiaomi continue to see GME growth several times year-on-year, these things continue to be changing from month to year.

in the computer and accelerate these subcategories.

GM increased by more than

17 year on year.

And the brands such as Xiao Qiantai, C descend and start Bass.

or achieved a significant grace.

Move next to the home appliance and the finishing category.

which laugh out quickly.

The home appliance kept subject to it, maintained the laptop closed.

Nìrith?bo jiàn nìyèo nìyèo.

We continue doing mutual offerings of air conditioners and other major home appliances.

And they established partnerships with kitchen appliance brands such as FonThaen.

The home finishing subcategories also grew naturally.

With GME increasing more than...

Fourfold, year on year.

In particular,

We are seeing significant growth in the sales of electronic lock products.

Thanks to the wide range of maintenance on our platform and our pretty 2-of-4 high quality video and the respiration service is within 4 hours.

In addition

We set up a new partnership with Sanitary

fixture brands such as Cooler and the whole textile brands such as Fuana.

We also continue to expand our offerings in the liquid category.

onboarding more than 5,000 new stores during this quarter.

That's a result.

DME includes more than four times year-on-year.

Next, let's move on to JDDS efforts to expand the deep-end cooperation with brands.

Thank you..

Ladies and gentlemen,

We embarked on new partnerships with rice and cooking all your friends.

such as Xi Yatou-Kian and the mom and the baby prince such as

Huh?

We currently have auto-marketed panels with about 300 leading domestic and international brands.

In terms of branding campaigns, we continue the different collaboration with brands to promote omnichannel auto marketing.

Help brands with users who...

multiple times.

both on oursex.

For example, in early May, we collaborated with Jidea to launch the

planned on campus.

campaign to promote these new products.

This child more than...

more than some key.

present months on months increasing in GDS cells on JBDJ.

In addition,

Adrian Srinath mechanics

Come.

We have further optimized that process.

by which we cooperate with brands on exchanging the world's tithing resource.

At present

We have conducted sourcing exchange with more than

20 brands including senators hatred GS yelling

Achieving minimum for both sites.

Next.

I'd like to talk about our efforts to empower both retailers and the blind-view technology innovation.

Thank you.

That's the end of June .

or OmniChang outdoor operating system.

for the tellers.

in about

the Air Force in 2011. We are almost out of time.

across more than 300 Taylor Tents.

In the second quarter.

We launched the tension-wise real assistant function in the hydro system.

which enables my chance to automatically apply to consumer reviews across multiple channels and provides an almost noveal checking.

Storinating, monitoring, and other functions.

This capability is empowered by a chance to provide efficient...

customer services and improve our user experience.

The chance using this feature can generate automated replies to our positive and negative views.

which can

60 higher efficiency at handling less

fellowscenes

I will also begin to explore formation with plants.

We recently launched a series of brand promotion tools on the Hybor system to help brands conduct armoured pumps on the Hybor system either to provide more commercial support or to provide

marketing and promotions on the China's own sales channels.

thereby helping branding improve exposure and vaccination.

And you lao p-m indication

China's leading local on demand at the level of platform.

In the second quadrant.

Dada now continues to provide a massive amount of flexible working opportunities.

this massacres that heyr system

So to you, yeah, oh, yeah.

in terms of business progress.

Let's start with our K or Chen by Chen's business.

In the second photo.

Our annual flow on demand at the real services took came a chance.

It increased by more than 20 year on year.

Thanks to increased out order density and sufficient deadline suppliers, our average growth profit for other input Agency to

50 cents, lemonade.

My dear friends let's go. While.

For female normality, it increased to 88%.

Thanks to our optimized slider feed structure and refined operations.

Thank you.

Longing includes nearly 20 year on year.

We recently established a real partnership with Frustral.

or HOMA and access to come up with a chance.

Thatriis H Proceeden characters

We continue to increase the penetration in our panel in the Science Store.

There's your crowds

20 was...

constructing quarter in a 10-year-on-year language closure of more than 500.

We also recently formed a new partnership with Starvigy.

Thanks.

Regarding our quotations, we stay in local life sources.

We continue to actively support the nationwide rollout of the used food through the regions.

by providing cost-efficient and reliable on-demand delivery services across the country.

Thank you. Thank you.

Welcome to our SME and the C2C previews.

The number of SME and CTCR's for further units of second-quarter increase by 50.

Yeah, yeah.

This course was drawn by our continued adaptation into low-tiles distribution.

and our expansion into additional traffic addition channels and the businesses and owners.

Must be. And update our master mail sources.

In the second quarter, we maintain the steady close in the lambda of it.

for further orders despite the higher pace in the year of the GOP audio.

for college or operation updates for the two platforms.

to LAPA.

We continue to post strong financial results.

Connected the dial to first air work plus two adjustment letting it comes.

at the same time.

We thank the committee for their joy and the digitalization of the pillars and the plans.

and create on-demand shopping experience to consumers.

and provide flexible employment opportunities to riders.

We will seek to build on this momentum in the photons.

ahead as we work to create substantial values for our shareholders.

I will oppose your cruelty back.

to push through our finances.

to go through our finances. Thank you.

And before we go over the numbers, just a few housekeeping items in advance. We believe year-over-year comparisons are the most useful way to judge our performance. Therefore, all percentage changes I'm going to give will be on year-over-year basis. All figures are in Remin B and less otherwise are noted.

Our total net revenue in the second quarter increased by 23% to $2.8 billion.

Net revenues from data now increased by 20% to 980 million, mainly driven by the increases in order volume of intercity delivery service to chain merchants.

Net revenues from ADDJ increased by 25% to 1.8 billion, mainly due to the increase in GME. The increase in online marketing service revenue as a result of the increase in promotional activities also contributed to the increase in online marketing service revenue. The increase in online marketing service revenue increased by 25% to 1.8 billion, mainly due to the increase in promotional activities.

to the revenue growth of JDDJ. Moving over to the expenses side, operations and support costs were $1.7 billion. The increase was primarily due to an increase in rider costs as a result of increasing auto volume.

for intercity delivery services provided to various chain merchants. Setting the marketing expenses decreased to $1.1 billion primarily due to a decrease in advertising and marketing expenses and a decrease in incentives to JDDJ consumers.

Our GNA expenses decreased to 56 million as a result of our expense control measures and decreased our share-based compensation expenses.

R&D expenses decreased to 102 million mainly due to the lower R&D personal costs as we enhanced operating efficiency.

expenses decreased to 102 million, mainly due to the lower R&D personal costs as we enhanced operating efficiency. Double net Student nationaignments Did you increase the rate of tuition by 800 dat- acres?

Attributable to ordinary shareholders of Dada was 8 million, marking the first quarter in our operating history to turn profitable.

then gap net margin was

0.3 percent, improving by more than 17 percentage points year over year.

As of June 30, 2023, we had $3.9 billion in cash, cash equivalents, restricted cash, and short-term investments.

In terms of the outlook for the third quarter of 2023, we expect total revenue to be between 2.8 billion and 3.0 billion, representing a year-over-year growth rate of 18% to 26%.

In terms of the outlook for the third quarter of 2023, we expect total revenue to be between 2.8 billion and 3.0 billion, representing a year-over-year growth rate of 18% to 26%. This concludes our prepared remarks.

And operator, we are now ready to begin the Q&A session. Thank you. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced.

If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question.

Your first question comes from Ronald Kang from Goldman Sachs. Please go ahead. Hi, this is Jeff Beck, Caroline. I'm a member of the EBIT positive team at the National Institute of Technology. I'm a member of the EBIT positive team at the National Institute of Technology.

contined to a home granet team Park would grou she should be pin town kind of Ho. Southeast year. Now I want come up the hand blan J, per home suutual to homeand adult door suto do woman untto GA santi dodoor under a saaban Le to make that onem and the super.

I hope you will continue to watch our interviews for ongoing discussion, and I mean more list of virtual interviews that are available for review and production. Without further ado, a deep voice on this topic. We would like to show you the v Use is a new opportunity for marine research into the world in remote population development as the mute environment to provide plug and plug for us.

Thank you management and congratulations on the EBIT turnaround quarter. I want to ask about two questions. One is on macro outlook and our cooperation with JD. Just both of those, how do we see our third quarter growth outlook company with your revenue guidance with our audit with the underlying GMV expectations.

on how much of those were contributed from a lower rider cost. And so could you share how rider costs have been and our views on that in the outlook as well. Thank you.

Yes, thanks for the question, Rona. So, before Jeff, I may just review some financial numbers and Jeff can answer the Marco question. So, about the second question, yes, we are seeing the year over year.

a rider cost decline because the number one factor is we have optimized our algorithm. Number two is we have very robust growth like for the number of orders delivered.

for the now the platform. Number three is just like...

Jeff mentioned in the earlier prepared remarks, our quarterly active riders is growing by 30% year over year. So the rider supply is sufficient and we believe which will help us to further optimize.

the rider cost. And the GMV would be that for the reporting GMV metrics, for the second half of this year, we are expecting more than, still expecting more than 20% year-over-year growth in the second half.

Yeah, I'll leave it to Jeff for the macro question.

Okay's, I have to get. When not make a what we thought had, take a de Act.

But you us someany and I can a woman doing going ING gy or she Fe D chego.

for all three reasons.

Or med, just happ end sofly the sea. You know some deload through per hand bter contribution.

Thank you almost in terms of macro, the economy and consumption was in modest recovery in the 1st, the half of this year. And we expect uncertainties and consumption recovery and the 2nd, the half.

No don't want we a conduct ag ING tickets we've had an issue just together the engg in Jian Ho souit and in jgeneration So.

The example was published in champion's new campaign we were passionate about, where somebody think the candidate is Burreorse

Now two hour go previleg in shel due with with the phone.

The president and I both are members of a strong coalition of leaders on how to we neighbor each other in the

Now it's in ention to the townshoet that I see the fully puul.

In addition, we're pleased to see the new policies and measures that are supportive of private sector growth and investment.

Hopefully, the gradual restoration of private corporate confidence and the high quality development of the private economy will lead to more job creation and sustained consumer income growth.

which will contribute to the further unleash of consumption power.

we will remain patient in further enriching our offerings and optimizing our user experience.

Which we firmly believe will bear fruit in the long run.

Yes, please. And in terms of all demand, there is some imbalance in the pace of recovery between different types of consumption. There's strong rebound in service consumption in the first half.

has affected the demand for physical goods to some extent and OTO is no exception.

And heading into the summer, we've seen extraordinarily strong travel demand in an environment where the overall consumer confidence has yet to fully recover.

that may take some more to share from physical goods consumption.

poco Institute qug, that's ncle sumion. We told that to sympathy has. So isite ding is also partic? ically sweking.

That said, consumer migration towards more convenient and efficient shopping is a secular trend. Financial media is a

We are convinced that as consumer demand continues to evolve and more local supplies become available online, the O2O penetration rate will further turn up to double digits.

continues to evolve and more local supplies become available online, the O2O penetration rate will further change up to double digits.

Now if you start pleion, our otherb take, like hanma you, you to imber, Jud chinion, each something to without you, should that mojia?

I also sued a chunk de of member to cararry me a brion share ition that I Ned as sound to the gme comion thankso.

She Chun you MEM, that hearing me the being Sha that I annoed as sounded to the gmmy conion, andil this peace.

From our perspective, in Q2, daily DJ recorded over 20% GMV growth year-over-year, its eyes are relatively high-based in the year-over period, and continuous optimization in ourHAHA Beta Governmentigguser machined theient Botanical Autocad.

that

Q3. Q4. Q5. Q6. Q7. Q8. Q9. Q11. Q12. Q13. Q14. Q15. Q16. Q17. Q18. Q19. Q20. Q21. Q22. Q23. Q24. Q25. Q26. Q27. Q28. Q29. Q30. Q31. Q32.

Not just won continue those singdo OD if you homa. So such that is a woman to do. Hope that you thought.

So that's how you input devotees. Actually the company that's used at Houston would change years and events to the

In terms of our collaboration with JD.com, since we depend on partnerships, Xiao Shi Da has become our primary user acquisition channel. Currently, the penetration among JD users is very high.

have steadily rose to mid-high single digits.

Now, for me, John , people are taking a good job.

Thank you for your attention.

We can touch now and then take

Thank you for your attention.

We will increase our acquisition and retention efficiency through enriching the supply of attractively priced products, waiving delivery fees.

In July and so far in August we've seen better her user retention.

Thank you.

Thank you. Your next question comes from Thomas Chong from Jefferies. Please go ahead.

Does our house is a money CH herear and you CAn't see a woman Q to draw up profitability. What the rentailer's anang when you saw one new woman, the techick rate hier barct margin way like the you do. Cana, your whole can woman. The pick rate that both driver. Higher woman, the more can.

guany woman J D Kate the pot of miter doa crees andanisa direed the T to ohier svanian, to the cot up mix who patatrition hier a OP they, you got canva.

Thanks, management, for taking my questions. My question and congratulations on reaching profitability in the second quarter. I have two questions. My first question is about the peak rate trend as well as the direct margin outlook in the second half.

What are the growth drivers and how should we think about the momentum for online advertising in the second half of the year?

And my next question is about JDDJ product mix. Can management share about the product mix in Q2, as well as the trend in the coming quarters, as well as the AOV for the year? Thank you.

Thank you, Thomas, let me answer the financial question. So.

In terms of the tick rate and direct margin of JDJ and Q2, the tick rate is 9.9% and the direct margin is 1.8%.

as percentage of GME. And for the outlook for the second half of this year, we expect that the GME is also limiting theDiagonal

Overall, monetization rate will still maintain stable and grow healthily, and we are still targeting to grow our air conversion level above 2-3%.

and for the second half of this year. And the main growth driver for the TechQuery will be still driven by the online marketing services provided to you.

of brand panelists. While maybe some of it will be more prudent on that, but still we will keep to grow this part as the main driver for our optimization of the surge margin level.

In terms of the.

product mix. So for second quarter, our overall supermassive contribution is 45% of the GME. And just like in the last slide, we

As mentioned in the earlier prepared remarks, our different other physical merchandise categories like a smartphone category is...

computer and accessories categories, home and the home furnishing categories, home appliance categories, liquor categories. So all those categories is going by several times on a year over year basis.

So we expect for the second half of this year, all these new categories could attach to more to overall GME and then

GME Max. So in terms of the.

an average order value metric.

Uh.

for the second half

So for the second half...

Let's see. The overall AOV of the platform is...

260nB.

260 on B. So.

We are still targeting to maintain the overall marketplace AOV and maybe still will grow the AOV for the second half. But in terms of the supermarket categories, we are still targeting to maintain the overall market AOV.

It's like 190 RMB. So maybe there will be some, for example, like preferential iterate fee waiver to some of the customers. So for the second half, we expect that the AOV of Supermarket will be...

is stable on Q-on-Q level.

Thank you.

Thank you. Your next question comes from Alicia Yap from Citigroup. Please go ahead.

High UH money. He transcyated over that. He you going F woman. That was the show. The took the profitabrelated Hu now whole. What is I'm conking is that you should UH, do you no doubt Y are to requiet ang B.

Sh ER Ju Ger sou pink and face sou aing there. She TRU her Manda J Ger souages to the sigways children D took a she svan, have we? She MAR you? She the took a quarter woman Ho your means and Shor up. Was Daga, that woman Serbian.

Fact guy TI tried about back at yet fan bat that G M me, took a quarter or she ST in that guy who you G had out out the doorshop- the only one I go when he Su want need- took P piwan call. Gu took go Ty one out to the end, took selfie. You made them go home.

So my question is to follow up on the category demand shift. Obviously, the non-FMCG has been growing very well. Can management give a little bit more color in terms of the...

behavior shift, especially I think management mentioned about the big appliance seems to be one of the important drivers. If you can share about the percentage of GMB coming out from the big appliance, home appliance specifically. And the second question is on the online advertising.

willingness in terms of their ad budget spend on our platform. Thank you.

Nor idiz have that half at a comand person appro soon.

the special person's login for free, the Secretarry Member if you like your university call. To confirm your trip to Mental Health University, please request a upward

Now since happing in that kind were, then J take. So add, then be look kind. Having to achieve the tion.

Can she find you?

Thank you for your question. In terms of the category mix of consumer electronics and home appliances, we believe the contribution will further go up in the second half.

Sally from. So the Tre you couldn't oculate to U and should high, which is esssially that can highire to and seven ion. It choose to me that to yet to the syjury of fple or havinging of our eupean work under.

The growth driver for the consumer electronics category will be the brand who will introduce several new models in the second half, including from Xiaomi, Huawei, and Apple.

Now that again you might be, but C be CLO that terms. R you ieving may or N? E per from fourth or twoper some cheaper for?

And in terms of major home appliances, the GME for this category will remain on the fast growth trajectory, given by our further enriched product supply and the service of integrated delivery and installation.

However, the mix of major home appliances and total GMV is only in the single digits.

She me go back to con and you use me uppport number.

Nothing to add from my time.

Okay. Can you confirm that? Okay.

nowp know what we on out to prellusion that in the swords in human and ions how the sense.

Thank you for your attention.

And to answer the second question about the online marketing services revenue, in the second quarter, our commission and online marketing services revenue combined grew by over 30% year-over-year, mainly driven by the growth in online marketing.

Once I don't you see take compared. So I take a few. On the concourses, rel little to gash flow.

We all told that ticts sheutdown chender, heatan higher and doum P two bush also turned on to quite a sugar.

So have by the bank King, by the provuning world, we Ed that's insued in gaava.

You asked about a brand potentially cutting their ad budgets and the macro environment. However, we are seeing that. Our revenue from. Brands are increasing since has become the fastest.

Do no. Look at your take, see take. You need a closure and look atature of Su IA yourself. We don't acqu that mion by your CE had in the new yor take 1, does't a perure.

And another driver for our online marketing service revenue is the increase in our advertiser base. We are now collaborating with about 300 brands in auto online marketing.

Could sum tend D if small take also tend down, better it should we doing less TH out to has time for each need function.

And in addition, the revenue growth level for online marketing services is...

our ability to innovate our product and technology and marketing.

capability to innovate our product and the technology and marketing on top of sales growth.

No and M Q I'm not. You Don I happ, if is not ING longong, that it on CA hmpion in a short Qu.

Thank you for your attention.

changaning today will be: you should want to compare you with the gender.

In Q3, we will launch a key ad product, which will further drive our ad revenue growth. In a testing period, we are seeing very encouraging results from the new products.

Thank you.

Your next question comes from Li Zeng from Bank of America Securities. Please go ahead.

Hi 1, he turned some. How, this is just old that you are. How going't see you. When you drank Jo, how do you go? And he, your example of these. Ma how woman happ happ, hold chay, and so go you. When you do 3, how go. And he's 1, he that, your woman, he you don't you. So the think of mal from a single you go T single gr that J D D holders.

That I now jamme a high. Also, you when in done HI, hit out con go. Or you go hold the penetration without doing those and dgbal without do woman fromum P V D, D did or G M with the conent back Act down. Said there was the ENT's manageurement for taking a question and congrats on.

profit break even and follow this. Can you share with us the second half of the full year's margin trend? Secondly, I want to have some updates on our cooperation with JD Group. Any new initiatives you can share and if I may, may I follow up on the GMOA contribution?

for the first question, so.

For the second half of this year, we will still balance the growth rate of our top line, especially the growth rate of JDDJ, despite of the growth rate of JDDJ.

right now the current macro outlook in China. So we have balanced the growth rate and the improvement of the profitability of the bottom line. So, and this is just the first quarter for us to break even. So of course we don't expect it to grow the bottom line.

profitability and margin are very quickly in a very short term, especially under the current macro

economic outlook. So we still will grow stably and grow the bottom line in a healthy way, and we will also balance the top-line growth because if you don't have any top-line growth then you're...

profitability in the long term will be also negatively impacted.

And for the same question, so I will leave to Jeff for the cooperation with JD.

for the same question, so I will leave to Jeff for the cooperation with JD. I'll switch it.

De any second side. I with I Juris you the jimney changender.

Thank you.

We just touched a little bit upon our cooperation with JADI.com just now that I'll summarize a few key initiatives.

ieag to you take. If you know that, take process of that by bet to V. we are conducting the area shall be quite a money to to that cution.

First, we unified our brand identity under Jia Shida and we've seen an improvement in user conversion.

G J in out convinions us the whole in conduct value. That's finsome decition. The unance to develop last season.

For instance, the conversion rate in the Xiao Shi Da path is now 20% higher after we change the name to Xiao Shi Da from city names.

Now given us say: conward to somethingmpt the oation you Cho to the J.

Thank you for your attention.

Secondly, we improved the price competitiveness of RSR Shada products by leveraging our price-based star rating system.

Now just about pure J, So when that cut cautioning sumption, the sort point PE is muchsip Chang in goingout is anmisse.

As of the end of Q2, the number of high-style products or the products with high competitiveness in pricing grew eightfold sequentially, and the average exposure per item increased by more than 10%.

That are quite something, quite woman that issued the chance. How you can see a poort of ritual. mayn Sha take qon I you know if you good huning that take.

Ali missed the first meeting andstrapped some of our guests.

proposit can that side of which, since Ger some C chenses, how iting doneyou you should have a and out, somight think that think done can be to get out others. So the you associated the reason.

For example, we recently again working with the front-end warehouse business unit and we are providing the on-demand delivery service for all of its orders and we've seen an increase in JD's contribution in data analysis for the volume.

J Tim thir in aand to me that question. ucent ncent bcoic in the Shi pursuyou hold bunch you.

A stable source of orders is very beneficial to our business stability and profits as well as long term development.

Thank you for your question.

And then the GME contribution from JD in Q2 is 67%. And we are expecting the penetration from JD will be further enhanced in the second half.

Thank you. Your next question comes from Andre Chang from JP Morgan. Please go ahead.

Hello, everyone. We don't directly concern about VPN services. In my opinion, much for the

I have a question here. So with all the questions on cooperation with JD group, I'd like to ask a question about other customers, namely Douyin.

to adjust their strategy recently, according to the news. I wonder if the management can provide us with some updates about the cooperation as well as the outlook here. Thank you.

Seeing M aterial inyou that the you mind like timeco CRE your PR I from con servit. When that is you pre or you want mention sens is that you need the channel.

Thank you very much.

Thank you for your attention.

Only me that you talk to you some. So we change why to be pushion to high? Good tangion.

Thank you for your question.

Boeing recently launched its full delivery service in more cities and we have actively supported its geographic expansion. However, the business is still in the early days with limited number of merchants on board. Therefore, they implement whole orders.

is not significant yet to our TA business. And to our knowledge, Darlene's contribution to our peers is similarly a substantial amount.

significant yet to pay a business and to our knowledge, Darlene's contribution to our peers is similarly substantial now.

Thank you for your attention.

David could be whole. You Su how has it be at suia. But you appass on that. It gets something. Sha vehicle for you can call one little the focus on the use, the musific institions, hunches. At the you can have coconduct something.

service-giving profitable out-of-volume growth on the building platform.

Thanks to our edge and cost efficiency service quality network coverage, we are highly confident in gaining a meaningful market share on Google in the longer term.

No when did look rualyour should? I might be why it should happen on in.

or because more of us essentially have lives that where we need to choose. Our Data-Now business not only fulfills Dh overhead delivery orders, but also the 1-hour delivery orders offering allostore stocked einklement segments.

Don we want to quite take should up meal with the take conion haveythe ion Z.

Similarly, the contribution from the E-commerce team.

Segment is not significant to our business.

to our business. Thanks.

Thank you. Thank you. Your next question comes from Weiziong from UBS. Please go ahead. Hello, everyone. This is Weiziong from UBS. Please go ahead.

as them oh i car come jata at a moment here order

How should we think about the margin trend for each of the segments and their contribution to the longer term margin improvement? And second, just very quickly, how should we think about the revenue outlook for data now in the second half? Thank you. OK, thanks for the question, Xiongui. So for the long term margin outlook, we need to have a Parents angry, a analysts angry, ch gesturing, category conquering, Oyey- Kevin crowding Zero

We actually didn't change the long-term margin outlook. So separately, JDJ is a local version of e-commerce marketplace. So an S percentage of GME would be that the long-term margin should be 3%.

of the GME, operating margin, and also for the

And then now, VNUTs. So for example, like the chamber chains at the very VNUTs, in Q2, our unit economics is about $0.50 on the after tax. So generally, the gross margin is about $0.50.

after taxes above 5%. So we still expected to grow the growth margin at least like to 10% in a three year timeframe. And we believe that as compared to other express and logistic companies, we believe it's totally.

achievable. And in terms of the data analysis, I'm going to have rows upload.

we are confident that they will keep to grow above, at least above 20% on year-over-year basis.

Thank you.

Thank you. Thank you, management.

Thank you. There are no further questions at this time. I'll now hand back to Ms. Caroline Doan for closing remarks.

Thank you, operator. In closing, on behalf of Dada's management team, we'd like to thank you for the participation in today's call. If you require any further information, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call. Thank you. This does conclude our call.

Good morning, ladies and gentlemen, and thank you for standing by for Dada's second quarter 2023 earnings conference call.

At this time, all participants are in listen-only mode.

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

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

Thank you operators. Hello everyone and thank you for joining our second quarter 2020-2023 earnings conference call. On the call today from Dada, we have Mr. Jeff He, President and Mr. Bekhian, CFO .

Mr. Hu will talk about our operations in the company highlights. Then Mr. Chen will discuss the financials and guidance. Please kindly note that during the Q&A session, Jeff will answer questions in Chinese and the consecutive translation will be provided in case of any discrepancy between the original mark and the translated version.

Statements in the original remarks should prevail. Before we begin, I'd like to remind you that this conference call contains working statements. Please refer to our latest state cover statement in the earnings press list on our IRY site, which applies to this call. Also, during this call, we will discuss the non-GAAP financial measures.

It is now my pleasure to introduce our president, Mr. Hu. Jeff, please go ahead.

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

in the second quarter of 2023.

Data group continues to produce strong, level growth with significant increase in operation efficiency.

Our total net net loss increased by 23 year-old-year.

We also achieved an important milestone in this quarter. By recording our first nerve of positive adjustment and mapping time.

Thanks to a more than 17 percentage points improvement in our adjusted math margin. I will begin today's presentation by discussing our cooperation with JD.com.

followed by operational highlights for our two platforms. Our handle to page

We will take you through our detailed financial results. Let's start with some updates on Dada's collaboration with JD.com.

Who's changing our branding and awareness among JD.com users?

We recently unified the surveillance of our on-demand health services across...

touchpoints on JZ-APP.

S. Xiao Sida in Chinese and shop now.

in Chinese and shopping now. In particular,

The Nearby or FUJIN tab was renamed to XIAOSUDA. And XIAOSUDA tag has been added to search results for products offered by our mix.

Let's mention the panels. This unified plan identifies...

emphasize our ability to deliver products within one hour.

And we believe we can significantly enhance auto line share among data users.

At the same time, we also want to enhance JTT's offerings by attracting prices. We manage JTT's everyday low price strategy.

In this quarter, we utilize the price-based star-lating tool and work with machines to further improve the price compatible with the star-lating tool.

of Xiaozhu Dao products. So far, we have achieved 10% increase in the product.

in the proportion of high-start products was much.

For the Xiao Zou Da tab, which was previously known as Nearby or Fusion tab,

And, thank you very much for your remained cinema questions.

Quah pushed to powder yo. Yeah

This impressive growth was shown by exposure and quick-sore optimization, which helped the Xiao-Shi data to double its DAU, as well as improvement in convention rate and LH-passed value.

Let's move on to the operational highlights for our two platforms. Start with JD-DJ.

China's meeting on demand at the Terra platform. In the second quarter, JTTJ made further progress.

in the teller and the brand the corporations.

in the tele and the brand collaborations and the technology empowerment.

We continue to broaden and deepen collaboration with the tellers to enrich our product offerings during this quarter.

We continue to broaden and deepen cooperation with the talents to enrich our product offerings during this quarter. They starting to get more Demand to this sequence among other units cause the growth to screen out more thanks to the environment as they start developing their product and supporting their supply richness.

300,000 annual activities retail sports at the end of June 2023.

300,000 annual activities detail scores at the end of June 2023. In the ship, are they calculate?

Based on the list of top 100 Supermarket Chances in China released by CCFAE.

in June . We now have established partnerships with 92 out of the top 100 supermarket chains.

In June , the girl with the supermarket machines, JDJ, launched a deliver-free framework campaign in 10 key cities to improve our user experience.

Where is it can then?

in the campaign.

34% higher user growth rate and 2% higher user growth rate.

15th day repeated pictures, late.

There are other cities. Kim is an encouraging child. We are not allowed.

deliver a free way of benefit to major supermarket chains across the country.

We have always focused on helping Meteors achieve better efficiency through platform tools, such as our long-lasting Meteors specific membership features. For more information, visit www.meteors.com

chance to attract and manage their own members online. The function notably increases the self-efficiency.

with all the convention of members.

more than 20 percentage point higher than that of non-members.

20 percentage point higher than that of long members. The moment has.

I have adopted the membership tool. cow Climbing

60% of their total journey in June .

In addition to a large supermarket chance,

We have also demanded that no Swiss major can land at the store tents.

We further strengthen the occupation with JT Conventing Store.

We further strengthen the occupation with J.T. Conventing Store. We are forming new partnerships.

partnerships with YourSmile and other leading channels. Total GME generated by convenience stores grew by nearby three times year-on-year in the second quarter. We also made good progress in consumer electronics.

In the Smartphone subcategory,

Traveling by fast, the driver on top of him had to do pricing in the second quarter.

Let's GME our Apple products on our platform to study.

While other brands such as Xiaomi continue to see GME growth several times on year-on-year basis. People directly associate

GM increased by more than 17 year on year.

and the brands such as Xiao Qiantai, Q1 6

or achieve the significant growth. Moving next to the home appliance and finishing category, which laugh out quickly.

The home appliance kept subject to maintain the left close.

Nearly double journey year on year. We continue to enrich our offerings of air conditioners and other major home appliances.

and establish partnerships with kitchen appliance brands such as Fungtai.

The home finishing Everett category, also gluteal doing.

Is GME increasing more than...

with GME increasing more than fourfold year on year.

In particular, we are seeing significant growth in the sales of electronic lock products.

Thanks to the wide range of maintenance on our platform and our 3T2 of high quality deliver and respiration Celsius within 4 hours.

Thanks to the wide range of machines on our platform, and our pretty 2-of-4 high quality deliver, and the inspiration services reserved for ours. In addition,

We set up new partnerships with sanitary fixtures brands such as Kooler and the whole textile brands such as Fuana.

We also continue to expand our offerings in the liquid category.

onboarding more than 5,000 new stores during this quarter. As a result,

DME increases more than four times year on year.

increase more than four times year-on-year.

Let's move on to JDDS efforts to expand the deep-end cooperation with brands.

In the end product, we embarked on new partnerships with rice and cooking all your friends.

such as Xi Yigao Qian, and the mom and the baby prince, drink

Da Wang, Xinyakun. We currently have auto-marketed partners with about 300 leading domestic and international brands. In terms of branding campaigns, we continue the delivery of the product.

depend collaboration with brands to promote omni-channel auto-romosity. Help brands with users through

multiple times, both on and off JDDJ.

For example, in early May, we collaborated with Jidea to launch the

Blender on campus. Campaign to promote these new products.

which drive more than 70 percent month-on-month increase in serious sales on JBDJ.

In addition, soldier collaboration with J-Data

In addition, search the collaboration with JT.com.

We have further optimized the process by which we cooperate with brands on exchanging and tightening the source.

We have further optimized the process by which we cooperate with brands on exchanging and tightening the source at present.

We have conducted source exchange with more than 20 brands including Minful Sanchan, inventes ending andn we're sharing

Achieving win-win for both sides. Next, I'd like to talk about our efforts to empower both retailers and the blind-shrew technology innovation.

As of the end of June , Hi-Boa, Omni-Chang outdoor operating system.

for the tellers.

you're only

11, it's all good, of course.

It costs more than 300 Taylor-Tins.

In the second quarter, we launch the consumer review assistant function in the HIDO system, which enables the chance to automatically apply to consumer reviews across multiple channels and provides an utmost revealed checking.

that customer services and they will improve our user experience.

The chance using this feature can generate automated replies to our positive and negative views.

The chance using this feature can generate automated replies to our positive and negative reviews, which can beclient problem solved, be it a low-HOUSE solution, Firestore. The chance for us tocarve our Wh magnet is to …Poison organization, which is the.' engaging

60 higher efficiency at hand in last favorable ones. I will also begin to explore formation waste plans.

We recently launched a series of brand promotion tools on the Hybor system to help brands conduct theirpreads.

marketing and promotions on the China's own sales channels.

thereby helping branding improve exposure and vaccination.

And recovered him to finance all.

China's leading local on demand at the level of platform.

China's leading local on demand that we work platform in the second quarter

Dada now continues to provide a massive amount of flexible working opportunities.

This quarterly active riders increased by

This quarter they had active riders increased by. Or what?

30 year-over-year in terms of business progress.

Let's start with our K or chance by chance business.

Let's start with our K or Chen by Chen's business. In the second photo.

Our annual flow on demand at the real services took came a chance. It increased by more than 20 year on year.

Thanks to increase the output density and sufficient glider suppliers.

I will to close profit or other improve the city's decision beginning to

50 cents in MND. Meanwhile, our fulfillment rate has increased to 88%.

Thanks to our optimized wider feeder structure and refined operations.

In the supermarket care category, learning increases nearly 20 year-on-year. We recently established a new partnership with First Mile and the address should come up with a chance.

In the battery decay category, we continue to increase the penetration in our polymer and bring in various low Heck houses to increase the penetration in our polymer.

For the 20th consecutive quarter, we obtained a year-on-year language closure of more than 500.

We also recently formed a new partnership with Dogridge Trans.

Regarding our quotations, we stay in local life sources.

We continue to actively support the nationwide layout of Beijing's food delivery business.

by providing cost-efficient and reliable on-demand delivery services across the nation.

Moving to our SME and C2C reviews, the number of SME and C2C orders fulfilled in the second quarter increased by 50 year-on-year. This growth was drawn by our continued penetration into low-tiles appeals and our extension into additional traffic. In addition to the Colonel Jim

second quarter. We maintain the steady close in the number of it.

before the others despite the higher pace in the real world.

for college or operation updates for the two platforms.

Power ship or operation updates for the two platforms. To LAPA.

We continue to post the strong financial results, highlighted about our first-over positive adjustment letter returns. At the same time, we continue to post the strong financial results, highlighted about our first-over positive adjustment letter returns.

We stay committed to the job and digitalization of retailers and brands. We create on-demand shopping experiences to consumers. And providing flexible employment opportunities to riders. We will seek to build on this momentum in the quarter.

ahead as we work to create sustainable values for our shareholders. I will pass the call to you back.

to go through our finances. Thank you.

Thanks Jeff. Before we go over the numbers, just a few housekeeping items in advance. We believe year-over-year comparisons are the most useful way to judge our performance. Therefore, all percentage changes I'm going to give...

will be on year-over-year basis, and all figures are in Remin B unless otherwise noted.

Our total net revenue in the second quarter increased by 23% to $2.8 billion.

Net revenues from data now increased by 20% to 980 million, mainly driven by the increases in order volume of intercity delivery service to chain merchants. Net revenues from ADDJ increased by 25%.

to 1.8 billion, mainly due to the increase in GME. The increase in online marketing service revenue as a result of the increasing promotional activities also contributed to the revenue growth of JDDJ.

Moving over to the expenses side, operations and support costs were $1.7 billion. Increase was primarily due to an increase in rider costs as a result of increasing auto volume for intercity delivery services provided to various chain merchants.

Setting the marketing expenses decreased to $1.1 billion primarily due to a decrease in advertising and marketing expenses and a decrease in incentives to JDDJ consumers.

Our G&A expenses decreased to 56 million as a result of our expense control measures and decreased our share-based compensation expenses.

R&D expenses decreased to 102 million mainly due to the lower R&D personal costs as we enhanced operating efficiency.

R&D expenses decreased to 102 million mainly due to the lower R&D personal costs as we enhanced operating efficiency. O&Ms definite income

Attributable to ordinary shareholders of Dada was 8 million, marking the first quarter in our operating history to turn profitable.

The gap net margin was 0.3%, improving by more than 17 percentage points year-over-year.

As of June 30, 2023, we had $3.9 billion in cash, cash equivalents, restricted cash, and short-term investments. In terms of the outlook for the third quarter of 2023, we expect $3.9 billion in cash.

Total revenue to be between 2.8 billion and 3.0 billion, representing a year-over-year growth rate of 18% to 26%.

This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session. Thank you.

Thank you. If you wish to ask a question please press star 1 on your telephone and wait for your name to be announced.

If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question.

Your first question comes from Ronald Kang from Goldman Sachs. Please go ahead. Hi, this is just back from Caroline. I'm a bit positive about the EBIT positive milestone. I'm wondering if you can tell us a little bit about the EBIT positive milestone.

J home, futual home and adult door you do to done up santi door. Do a SA at that one and the you go guning on her ORA, U her to go home and they don't take a done up woman, the tem, and that the R's out when want you you you, Jia and your teacher? Good he ual truma should.

rider cost and so could you share how rider costs have been and our views on that in the outlook as well. Thank you.

Thanks for the question, Ronald. So, before Jeff, I may just review some financial numbers and Jeff can answer the Marco question. So, about the second question, yes, we are seeing year over year, rider cost decline.

because the number one factor is we have optimized our algorithm. Number two is we have very robust growth for the number of orders delivered for data now a platform. Number three is just like

Jeff mentioned in the earlier prepared remarks, our Q2, our quarterly active riders is growing by 30% year over year, so the rider supply is sufficient and we believe which will help us to further optimize.

the rider cost. And the GMV would be that for the reporting GMV metrics for the second half of this year, we are expecting more than, still expecting more than 20% year over year growth in the second half.

I'll leave it to Jeff for the macro question. Okay. Okay.

We four has itsituated to beter Wink quarter force the some time when medg seven ender Shelly that sely unmention dead to the handbtor contribution.

In terms of MACO, the economy and consumption was in modest recovery in the first half of this year. We expect uncertainties in consumption recovery in the second half.

Now when I want me a conduct in jacers who had a issue, just the ingg in Jian Ho ment J is and so now only sheeti. Means she changing that we end the GU G two people partult on a P now and get that I can do to year con way.

It told out, con. Do it missful. Now to our langu preventing the shelfy duting with this, the phone, that to the course in. Do that to go mcy, but Ser to get a nation, that's she that she puts on looking to your harm, the TM now in attention to the townsheet that I F go path.

In addition, we're pleased to see the new policies and measures that are supportive of private sector growth and investment.

Hopefully, the gradual restoration of private corporate confidence and the high quality development of the private economy will lead to more job creation and sustained consumer income growth, which will contribute to the further unleash of consumption power. We will remain patient in further enriching our offerings.

To go home. Yet that take the home of form: I she you, but you can and she CAn't.

From other what you are it a portion the shelphare compampa with be are quite you GI some value on shel to the system room to Don a M sheise chest So that inure.

Yes, please. In terms of all-to-all demand, there is some imbalance in the pace of recovery between different types of consumption. There is strong rebound in service consumption.

and the first half has affected the demand for physical goods to some extent and OTO is no exception.

Now 10 years, are IG your to want in, but temptking deciation how you try you looking for the PD. Could I also tell you on a importce or something that we suly that bottooal.

Heading into the summer, we've seen extraordinarily strong travel demand and in an environment where the overall consumer confidence has yet to fully recover, that may take some water share from physical goods consumption. Because of the pandemic people, afterche

So it can give a car job a shlterly more's to get Chang with to fuses sociin asing thatizationsue that sociated PI Purple Institute qulogy that consumption we told that to somebody has a itut IND it is also that the we.

That said, consumer migration towards more convenient and efficient shopping is a secular trend. We are convinced that as consumer demand continues to evolve and more local supplies become available online, the OTO penetration rate will further turn up to double digits.

Yes, please. I WAKE UP FOR A CH Kos GO THATKarl L fetus

daily VJ recorded over 20% GMV growth year over year, despite a relatively high base in the year-over period and continuous optimization in our subsidy ratio. Now, Thank you all.

The goal is to test the popped arms device'sabalor for safety because Thank you.

In terms of our collaboration with JD.com, since we depend on partnerships, Xiao Shi Da has become our primary user acquisition channel. Currently the penetration among JD users.

have steadily rose to mid-high single digits.

Car could unions need that to go assomething? The whichch E J, jy and Cho UN ATE the means for the iteution on the Co coredution.

Which encion our women. jper fun deliver and ort sura and H ES that socisu H them.

We will increase our acquisition and retention efficiency through enriching the supply of attractively priced products, waiving delivery fees.

And in July , and so far in August , we've seen better user retention.

Thank you.

Thank you. Your next question comes from Thomas Chong from Jefferies. Please go ahead. Hello everyone. My name is Ching. I am the CEO of Q2, Joda profitability. I am the CEO of Q2, Joda sustainability. I am the CEO of Q2, Joda sustainability.

Your whole can woman takeick rate that both driver a higher woman, the makan de gashow youul as haanian the eager Ganga the why goverment here a yes, grany woman GD ATE the produtct mixter.

For now, if you would like to join us for the last session To

What are the growth drivers and how should we think about the momentum for online advertising in the second half of the year?

And my next question is about JDDJ product mix. Can management share about the product mix in Q2 as well as the trend in the coming quarters as well as the AOV for the year? Thank you. Thank you, Thomas. Let me answer the financial question.

In terms of the tick rate and direct margin of JDDJ and Q2, the tick rate is 9.9%, and the direct margin is 1.8% as a percentage of GME.

And for the second half of this year, we expected the

Overall, monetization rate will still maintain stable and grow healthily. And we are still targeting to grow our air-con margin level above like 2 to 3 percent for the second half of this year. And the main growth driver for the tech rate will be...

are still driven by the online marketing services provided to brand partners. While maybe some of it will be more prudent on that, but still we are keep to grow this part.

as the main driver for our optimization of the surge margin level. In terms of the.

product mix. So for second quarter, our overall supermassive contribution is 45% of the GME. And just like a second quarter, our overall supermassive contribution is 45% of the GME.

Jeff mentioned in the earlier prepared remarks, our different other physical merchandise categories, like smartphone categories, computer and accessories categories, home and home furnishing categories, home appliance categories, liquor categories. So all those categories is going by several times.

on a year-over-year basis. So we expect for the second half of this year, all these new categories could attach to more to overall GME and the new

GME max. So in terms of the average order value metric, so average is 12.

For the second half.

For the 2nd, I have.

So for the second half, the overall AOV of the platform is

260 RMB. So we are still targeting to maintain the overall marketplace AOB, and maybe still will grow the AOB for the second half. But in terms of the supermarket categories, it's like 190 RMB. So issued a currency X

Maybe there will be some, for example, like preferential iterate fee waiver to some of the customers. So for the second half, we expect the AOV of supermarket will be at least stable on QMQ level.

Thank you. Thank you. Your next question comes from Alicia Yap from Citigroup. Please go ahead. Hi, Guani Chen, Xixue Jie, I'm from Q1. I'm a professor of profitability. I'm a professor of sustainability.

I Su you she should. Back at the end of the took a quarter a woman, Ho your means. And shorter was out. There is that woman, Serbian guy I tried of about back at the end fan be that G and B took a quarter Qu happ and Gui you G had talk about the wasshop the only way I go. When he one need took think Taiwan car.

Uh side the type and one out to the J selfface: UH, you made them go home. one ticia HY ordion lower heart, soorry put. Allow you talking high UH. one outside the or one out shook to show ang out. two through the B and sualso your easast here. Uh juic, So Ian. What they find is Y? Uh. So my question is to follow up on.

the category demand shift. Obviously the non-FMCG has been growing very well. Can management give a little bit more color in terms of the behavior shift? Especially I think management mentioned about the big appliance seems to be one of the important drivers.

you can share about the percentage of GMB coming out from the big home appliance specifically. And the second question is on the online advertising. Given the macro continue to remain weak, what are the brands...

willingness in terms of their ad budget spend on our platform. Thank you.

Thank you for your question. In terms of the category mix of consumer electronics and home appliances, we believe the contribution will further overlap in the second half.

So only to the children. Youn't oate to to and should't have ition someially that compor to and seven and should Cho to that to to G, the F, the shaing of our eupean work therethe world class for the consumer.

That T you know, think that should be the questiony, that two should madeer and IE the fu fourth for to the Su Che per for the peopleand in numberms of major.

of further enriched product supply and the service of integrated delivery and installation.

However, the mix of major home appliances and total GMV is only in a single digit.

The next speaker will 8 Leave thecer View. Okay, thank you. Thank you.

The second question about the online marketing services revenue. In the second quarter, our commission and online marketing services revenue combined grew by over 30% year over year, mainly driven by the growth in online marketing.

Con I Don want you see to impact, So I take a few more on of conast over the gashflow.

We all told that T get CH balna chender, edon high and doin P two bush also turned on to quite a suutar.

So you asked about a brand potentially cutting their ad budgets in the macro environment. However, we are seeing that our.

revenue from brands are increasing since OTO has become the fastest growing sales channel in China for more and more brands. So they are allocating more ad dollars on our platform.

See the F that you made the prosure on the mature in high yourself. We Don T Qu that which, and by your some back gr high, the new jper does on the perure.

And another driver for our online marketing service revenue is the increase in our advertiser base. We are now collaborating with about 300 brands in auto online marketing.

In addition, the revenue growth driver for online marketing services.

In addition, the revenue growth driver for our online marketing services is the

is our capability to innovate our product and technology and marketing on top of sales growth. Thank you for your attention.

In Q3, we will launch key ad products which will further drive our ad revenue growth.

And in the testing period, we are seeing very encouraging results from the new products.

testing period, we are seeing very encouraging results from the new products. Thank you.

Thank you. Your next question comes from Li Zeng from Bank of America Securities. Please go ahead. Hi, Guangyu. I'm able to see some of your questions.

Thank you management for taking the question and congrats on the profit breakeven and follow this. Please share with us the second half of the full year's margin trend.

Secondly, I want to have some updates on our cooperation with JD group. Any new initiatives you can share? And if I may, may I follow up on the GMOA contribution from JD across different channels? Thank you. Okay. Thank you for the question, Lei. So as...

of JDDJ, despite of the current macro outlook in China. So we have balanced the growth rate and the improvement of the profitability of the bottom line. So this is just the first quarter for us to break even. So.

Of course, we don't expect to grow the bottom line profitability and margin very quickly in the short term, especially under the current macro.

economic outlook. So we still will grow stably and grow the bottom line in a healthy way, and we will also balance the top-line growth because if you don't have any top-line growth then you're...

profitability in the long term will be also negatively impacted. And for the same question, so I will leave to Jeff for the cooperation with JD.

As wer Sha DEP your certain Sol. How in jeris, as you to me out the changer.

So, we just touched a little bit upon our cooperation with JEDI.com just now that I'll summarize a few key initiatives now.

First, we unified our brand identity under Jia Shida.

and we've seen an improvement in user conversion. For instance, the conversion rate

in the Xiao Shi Da test is now 20% higher after we change the name to Xiao Shi Da from city names.

Secondly, we improved the price competitiveness of RSL-SHDAR products by leveraging our price-based star rating system.

Now justud without pure jso, when cuts cautioning something that sort Ant which is in a SIP CH impower cor out is in misses.

As of the end of Q2, the number of high-style products or the products with high competitiveness in pricing grew eightfold sequentially, and the average exposure per item increased by more than 10%. Going back to Q1 xrow 200 studying chatter, positive

And in terms of data now, we've strengthened our partnerships with different business groups across the JD group.

to provide on-demand delivery services in multiple shopping scenarios in the data ecosystem.

You it should have a andund out's like Chang that TE done can be to get other to get is associated season.

For example, we recently again working with the frontend warehouse business unit and we're providing the on-demand delivery service for all of its orders. We've seen an increase in JD's contribution in side-by-side.

The stable source of orders is very beneficial to our business stability and profits as well as long-term development.

Thank you for your question.

Thank you for your questions.

And then the GME contribution from JD in Q2 is 67%. And we are expecting the penetration from JD will be further enhanced in the second half.

Thank you. Your next question comes from Andre Chang from JP Morgan. Please go ahead.

Uh she, money just always went. You know, I want to, when he know what he told. Why one woman and the in know her toions iyears or to go qui cheating her. How though, in which SH or go? Why might it? Quite a huning. The hotel has Jo, no F to be any, and streating TR, your anded she, the he and she on swing. fatheryno OB CK on woman.

other customers, namely Douyin. Douyin's food delivery business seems to so far made limited progress. However, Douyin's groups, Biden's groups, are trying to adjust their strategy recently, according to the news. I wonder if the management can provide us with some updates.

Chi phone con geter soon when you- that is preay good. You want to en Su that. You need a janneal, that more gener a hyitatoutx. You said that.

So ately, some just solution into the data, into the KU, the PON o trition with the Fion or me to you. So you ENT want to be, we can do. highyper, hangionthank you.

And to our knowledge, Zilin's contribution to our peers is similarly insubstantial now.

But you DI on that you get something. Sh vehicle for C P call 1: one the focus on the use the musific anitations. hunches at the. You pass cent cocombust enough.

Unlike certain peers, we are pursuing profitable out-of-volume growth on the growing platform. Thanks to our edge and cost-efficiency service quality and network coverage, we are highly confident in gaining a meaningful market share on food in the longer term.

Our data in our business not only fulfills students' food delivery orders, but also the

but also the one hour delivery orders offering the E-commerce segment. And similarly the contribution from the E-commerce

segment is not significant to our business. Thank you.

significant to our business.

Thank you. Your next question comes from Weiziong from UBS. Please go ahead.

The Co hold quite. I'm not J, but no, quite find.

Thank you management for taking my questions. Just two follow-ups. First is on the longer-term margin trend. How should we think about the margin expansion pace in the next few years? And if we look at JDDJ and DataNow separately, how should we think about the margin trend for each of the segments and their contribution to the longer-term margin improvement?

And second, just very quickly, how should we think about the revenue outlook for data now in the second half? Thank you. OK, thanks for the question, Hsien Wei. So for the long term, I think we have a question.

We actually didn't change the long-term margin outlook. So separately, JDJ is a local version of e-commerce marketplace. So an S percentage of GME would be that the long-term margin should be 3%.

of the GME, operating margin, and also for the now binities. So for example, like the camera change at the rate binities. In Q2, our unit economics is about $0.50 on B.

after tax. So generally the gross margin is above, after tax is above 5%. So we still expect to grow the gross margin at least like to 10% in a three-year timeframe. And we have some guava cubes.

believe that as compared to other express and logistic companies, we believe it's totally achievable. In terms of the data analysis, I'm going to have gross outlook.

we are confident that they will keep to grow above, at least above 20% on year-over-year basis.

Thank you. Thank you, management. Thank you. There are no further questions at this time. I'll now hand back to Ms. Caroline Dong for closing remarks. Thank you, operator. In closing, on behalf of Dada's management team, we'd like to thank you for...

This does conclude our conference for today. Thank you for participating. You may now disconnect.

Q2 2023 Dada Nexus Ltd Earnings Call

Request a DemoDemo

DADA

Dada Nexus

Earnings