Q4 2024 Dingdong (Cayman) Ltd Earnings Call
Director of Photography and Editing Music by Art Direction Music by Art Direction Music by Art Direction Music by
Song Wang, Liang Changlin, Yang Bai, Nicky Zheng Chen, Song Wang, Dingdong Cayman
Speaker Change: Good morning and good evening ladies and gentlemen. Thank you for standing by and welcome to the Dingdong Limited Fourth Quarter, 2024, earning conference call.
Speaker Change: At this time, all participants are in a listen only mode. Please note that this event is being recorded.
Speaker Change: I will now turn the conference over to the first speaker today, Ninky Zheng, Director of Investor Relations. Please go ahead, sir.
Speaker Change: Thank you. Hello, everyone. Welcome to Dingdong's first quarter to 2024. This midday, I'm Mr. Changlin, Liang, our founder and CEO , and Mr. Song Wang, RCA4.
Speaker Change: You can refer to our fourth quarter to 24 financial results on our website at iad100.ne
Speaker Change: You can also access the replay of this call on our website when it becomes available a few hours of this conclusion.
Speaker Change: For today's call, management will go through their prepared remarks which will be followed by a question and answer session. Before we continue, I would like to refer you to a safe harbor statement in our early press release, which also applies to this call.
Speaker Change: As we will be making full-looking statements, please note that all numbers stated in the following measurements prepared remarks are in R&B terms.
Speaker Change: and we will discuss non-GAAP measures today which I am thoroughly explained and reconciled to the most comparable measures reported in our early studies and findings with the SEC.
Speaker Change: I will now turn the call to our first speaker today, the founder and CEO of Dingdong, Mr. Liang
Speaker Change: Revenue has also achieved year-on-year positive growth for four consecutive quarters.
Speaker Change: Stable profitability has also laid a solid foundation for the company's future development. Next, I will first introduce the performance of the fourth quarter, then further analyze the operational aspects, and finally give a brief outlook on the future.
Speaker Change: Hello everyone. Thank you for joining the Dingdong Earnings Call for Q4 2024.
Speaker Change: We achieved non-GAAP profitability for the 9 consecutive quarter and gap profitability for the fourth consecutive quarter.
Speaker Change: Additionally, we have recorded positive year-over-year revenue growth for four straight quarters. This stable profitability has established a solid foundation for the company's future development.
Speaker Change: First, I present our Q4 2024 performance, followed by an analysis of our operating data and concludes with a brief outlook on future development and performance.
Jintong: In Q4 2024, JD Fresh achieved a GNV of 6.55 billion yuan, a year-on-year increase of 18.4%.
Jintong: Revenue of 5.91 billion yuan, an increase of 18.3% year-on-year. Under Long gap standards, net profit is 120 million yuan, more than 6 times the 16 million yuan in the same period last year. Net profit margin is 2%, an increase of 1.7 percentage points year-on-year. Under Gap standards, net profit is 90 million yuan, turning a profit from a loss of 4.39 million yuan in the same period last year. Net profit margin is 1.6%.
Speaker Change: In Q4 2024, Dingdong reported a GMV of 6.5 billion RMB and 18.4% year-over-year increase. The company's revenue grew to 5.91 billion RMB and 18.3% year-over-year increase.
Speaker Change: Under non-GAAP standards, Dingdong achieved a net profit of 120 million RMB, more than 6 times the 16 million RMB reported in Q4 2023.
Speaker Change: This resulted in a net profit margin of 2%, an increase of 1.7 percentage points year-over-year.
Speaker Change: Under gap standards, the net profit was 9 million RMB, a turnaround from a loss of 4.39 million RMB in Q4 2023, leading to a net profit margin of 1.6%.
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回顾2024年全年
Speaker Change: Electric vegetable shopping achieved a GNV of 25.56 billion yuan, a year-on-year increase of 16.3%, with revenue of 23.07 billion yuan, a year-on-year increase of 15.5%.
Speaker Change: Under non-GAAP standards, the net profit is 420 million yuan, which is more than 8 times the 45 million yuan from the same period last year. The net profit margin is 1.8%, an increase of 1.6 percentage points year-on-year under GAAP standards.
Speaker Change: Three members of parliament turned last year's loss of 91 million yuan in the same period into a profit, with a net profit margin of 1.3%.
Speaker Change: for the full year of 2024. Dingdong reported a GMV of 25.56 billion RMB, a year-over-year increase of 16.3%. Revenue reached 23.07 billion RMB, a 15.5% increase compared to the previous year.
Under the non-GAF standard, Dingdong reported,
Speaker Change: A net profit of 420 million RMB, marking an increase of more than eight times compared to 45 million RMB in the same period last year, representing a net profit margin of 1.8% up by 1.6% at points year over year.
Speaker Change: According to Gap Standards, Dingdong reported a net profit of 300 million RMB, a significant turn around from a loss of 91 million RMB in the same period last year, resulting in a net profit margin of 1.3%
Speaker Change: The rapid growth in performance is mainly attributed to the current region's user penetration rate, user conversion rate, and the continued increase in user ARPU (Average Revenue Per User). In terms of user scale, the average monthly ordering users in Q4 was approximately 7.74 million, a year-on-year increase of 16.1%.
Quarter 4
Speaker Change: The average monthly orders per user is 4.2, a year-on-year increase of 3%.
Speaker Change: Among them, the number of members has decreased 7 times, a year-on-year increase of 4.5%.
Speaker Change: Continuing the strong performance of Q3, we have observed that our user base continues to exhibit characteristics of high engagement and frequent repeat usage. These are the results of our comprehensive efforts across various dimensions such as product operations, user experience, and data-driven strategies.
Speaker Change: Directive performance growth is mainly fueled by the rapidly increasing user penetration, improved user conversion rates, and higher user arpo in existing regions.
Speaker Change: The guarding user's scale in Q4, the average number of monthly transacting users reached approximately 7.74 million, a year over your increase of 16.1%.
Speaker Change: The average monthly transaction conversion rate was 63.6 percent, up 4.7 percentage point year-over-year. Additionally, Arpu saw a rise of 3.7 percent year-over-year.
Speaker Change: As user's scale continues to grow rapidly, user engagement also rose.
Speaker Change: In Q4, users placed an average of 4.2 monthly orders, a 3% increase year-over-year. Among members, the average monthly order frequency rose to 7 orders, a year-over-year increase of 4.5%.
Speaker Change: This continues strong performance built on Q3's results, showcasing high user retention and frequent repurchases.
Speaker Change: These outcomes were attributed to our comprehensive efforts across various dimensions, including product capability development, operational enhancement, improved user experience, and data-driven strategies.
Speaker Change: In another aspect, regionally, the growth rate in the Jiangsu, Zhejiang, and Shanghai area remains fast and is the core source of our growth. This quarter, the GNV in the Shanghai area increased by 16.8% year-on-year, and the GNV in the Jiangsu and Zhejiang areas also grew by more than 20% year-on-year.
Speaker Change: This also exceeded what we discussed during the Q3 earnings report meeting.
Speaker Change: Regarding regional performance, Jiangsu, Chejiang, and Shanghai continue to show relatively rapid growth, serving as the primary drivers of our overexpension.
Speaker Change: This quarter, GMV for the Shanghai region increased by 16.8% year-over-year, while in Zhang Fu and Jiang, a group more than 20% year-over-year.
Speaker Change: Notably, 13 cities within the Jiangsu-Juejiang and Shanghai region achieved a year-over-year GMV growth of over 30%. This quarter's growth rate in these regions was the highest recorded for the year, excluding the peak season in Q3.
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Speaker Change: We accelerated the development of our front lines fulfillment station network in these key regions. By the end of Q4, the company had opened a total of 130 new front lines fulfillment stations throughout the year, with 50 of those opening in Q4 alone.
Speaker Change: This achievement surpassed our annual target of 110 new front line stations that we mentioned during the Q3 quarterly conference.
Speaker Change: We continue to enhance the density and efficiency of our frontline fulfillment station that work in these core areas. Our goal was to further strengthen our order for fulfillment capabilities, reduce distribution costs, improved operational efficiency and establish a solid foundation for 2025.
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Speaker Change: Additionally, I would like to update everyone on the performance of electric grocery shopping during the Spring Festival.
Speaker Change: During the period from New Year's Eve to the sixth day of the Lunar New Year, the national GNV increased by more than 15% year-on-year, with the core market in Shanghai growing by 10%, and places like Ningbo, Nanjing, and Changzhou also experiencing growth.
Speaker Change: Growth exceeded 30% during this period, and some high-quality products from Dingdong, such as salmon in the seafood category, taro wine in the alcohol category, and New Year's dishes, experienced year-on-year growth of 50% to over 120%. These quality products are the core drivers of Dingdong's continuous growth.
Speaker Change: I'd like to update you on Dingdong's performance during the Lunar New Year. From New Year's Eve to the sixth day of the first Lunar month, the National GMV increased by more than 15% year-over-year. It grew 10% in the core market of Shanghai, while regions such as Ning [inaudible]
Nanjing and Changzhou saw growth of over 30%.
Speaker Change: During this period, some high-quality products experience significant increases, including salmon in the seafood sector, premakes alcoholic beverages, and traditional loonian
Speaker Change: which saw a growth of 50% and even more than 120% over year in some cases. These sent-out products are a key driving force behind Dingdong's continued growth.
Speaker Change: We have been continuously reflecting on our business model and competitive landscape in multiple areas to save more.
Speaker Change: Among the four module attributes, as a company focused on deeply engaging in business, our opportunities lie in four specific areas: good users, good products, good services, and good mindset.
Speaker Change: Here, I would like to further introduce to everyone our development and creation approach for good products.
Speaker Change: First, we create value for users by matching or mining their true needs and developing good products. Second, we ensure that the developed food has good and stable quality. No product development can be perfect in one go. What we need to do is focus on every piece of user feedback and continuously iterate to make the product approach perfection. Third, we create differentiated products and structurally low-priced products.
Speaker Change: Fourth, tell a good product story. Our products have good packaging, good looks, and a good product story. Fifth, be interesting and soulful, with a clear price proposition. If we want to attract valuable users, we must create good products and good services. We must first make ourselves interesting souls and build a garden that can attract butterflies.
Speaker Change: In the past year, we have developed a variety of products, such as the highly praised boxed crab, Dingdong customized Beibei pumpkin, fresh milk, and more. In the future, we will continue and actively expand our approach to creating excellent products, ensuring that they are truly good and reasonably priced. Our mission and original intention are to make great products and serve our users well.
Speaker Change: We've been reflecting on our business model and the competitive landscape among the four key Asheville's of more faster, better and cheaper, our company, which focusing on fresh groceries, sees the greatest opportunity in better.
Speaker Change: This involves four key areas, better users, better products, better services, and better mindshare. Here are our ideas for developing high quality products. One, we create great products by aligning with or discovering users' real needs and ultimately delivering value to our customers.
Speaker Change: So, we ensure that our food products maintain high and consistent quality. While perfection may not be achievable in a single product development cycle, we focus on responding to user feedback and iterating our products, continuously working to improve our offerings.
Speaker Change: Three, we aim to create differentiated products or those available as structurally lower prices. Four, we believe in storytelling for our products. Our offering feature visually appealing packaging, attractive designs, and engaging stories that resonate with customers.
Speaker Change: 5. Our goal is to be captivating, soulful, and to provide distinct value propositions. To attract valuable users, we must first create compelling products and services, positioning ourselves as interesting entities that naturally captivate an audience.
Speaker Change: Over the past year, we have developed a variety of products including our popular crops and from Dingdong's customized pumpkin raw milk.
Speaker Change: Looking ahead, we're committed to expanding our mission of creating high-quality products that are also reasonably priced, better products, better service to the clients, our own mission in original aspiration.
Speaker Change: Finally, I would like to update everyone on the outlook for QE in 2025. We expect QE in 2025 to maintain year-on-year growth in scale and continue to achieve profitability on a non-GAAP basis. However, we will face more intense competition in 2025, and we are in a transition from pursuing short-term scale and profitability to focusing on quality and long-term competitiveness. This may have some impact on us, but in the long run, we are full of confidence in the future.
Bassy, let's try and draw a look for Q1 of 2025.
Speaker Change: We expect to achieve your earlier scale growth and maintain non-GAAP profitability in the first quarter of 2025.
Speaker Change: However, in 2025, the competition we face will be more intense.
Speaker Change: and we're also in the process of transitioning from pursuing short-term scale and profitability to focusing on quality and long-term competitiveness, which may impact us. Nonetheless, we're confident in the long-term development of the company's business.
Speaker Change: This concludes my speech, thank you everyone. Next, please welcome the company's CFO , Wang Song, to introduce the company's financial situation.
Speaker Change: This concludes my prepared remarks. Thank you all for listening. I would like to turn to call over to our CFL Wang Feng to go over our financials.
Wang Song: Thank you, General Manager Liang. Hello everyone. Before introducing our financial situation, let me first clarify that all our figures are in RMB.
Speaker Change: Thank you, Mr. Liang, and hello everyone. Before I review off financial performance for the fourth quarter, please note that all of our figures are in RMB.
In 2024, JD Fresh achieved high-quality growth and overall profitability.
Speaker Change: The total GNV for the year is 25.56 billion yuan, with a revenue of 23.07 billion yuan.
Year-on-year growth was 16.3% and 15.5% respectively, with 22 cities achieving significant double-digit growth in GNV. At the same time, our annual profit reached a historical high, achieving a net profit margin of 1.8% for the year under this standard, an increase of 1.6 percentage points year-on-year. The net profit amount was 420 million yuan, a substantial year-on-year increase of 8.3 times.
Speaker Change: Under this law amendment, we achieved an annual profit for the first time, with a net profit margin of 1.3%, an increase of 1.8 percentage points year-on-year, and a net profit of 300 million yuan.
Speaker Change: In addition, high-quality growth is also reflected in our cash flow profile, with the annual operating cash inflow reaching a historical high of 930 million yuan, a significant year-on-year increase of 1.16 billion yuan. The annual free cash flow was 830 million yuan, marking the first time it has turned positive in history.
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Speaker Change: The annual GMV reached 25.56 billion RMB while revenue amounted to 23.07 billion RMB, reflecting year-over-year increases of 16.3% and 15.5% respectively. Notably, GMV in 22 cities experienced substantial double-digit growth.
Additionally, our profits for the year reach an all-time high.
Speaker Change: non-GAAP net profit margin was 1.8% and increase of 1.6% to 0.0% over the year, but the net profit of 420 million RMB, an impressive 8.3-fold increase compared to the previous year.
Speaker Change: Under GAAP standards, we achieved profitability for the first time, recording a net profit margin of 1.3%, which is 1.8% at points higher than a previous year, but the net profit of 300 million R.B.
Furthermore, our strong growth is evident in our cash flow.
Speaker Change: The four-year net operating cash inflow reached a historic high of 930 million RMB.
Speaker Change: A significant increase of 1.16 billion RMB year over year. For the first time in our history, the full year free cash flow turned positive, amounting to 830 million RMB.
Speaker Change: It has been four consecutive quarters of year-on-year growth with an average profit margin of 2%, marking the ninth consecutive quarter of profitability.
Speaker Change: GAP's net flow rate is 1.6%, maintaining four consecutive quarters of profitability. The operating net cash flow is 190 million yuan, maintaining positive net cash flow for six consecutive quarters.
Speaker Change: In Q4, Dingdong reported revenue of 5.91 billion RMB and 18.3% year-old year increase. This marks the fourth consecutive quarter of positive year-old year growth.
Speaker Change: Nonggap net profit margin was 2% indicating profitability for the 9th consecutive quarter. While Gap net profit margin stood at 1.6% maintaining four straight quarters of profitability.
Speaker Change: is operating net cash inflow with 190 million RB, resulting in positive net cash, inflow
Speaker Change: We have validated the model of front cabin upgrade e-commerce through high-quality growth and sustained profitability.
It also verified our combat capability and rapid response ability.
Speaker Change: As the consumer industry moves towards a buyer's market, structural changes are taking place in Chinese retail. High-efficiency formats will continuously replace low-efficiency ones, presenting both opportunities and challenges.
Speaker Change: Past successes have built a strong infrastructure and valuable experience for us.
With this as a cornerstone, we are standing at a new starting point.
Speaker Change: Through high quality growth and sustained profitability, we have validated our first grocery e-commerce business model, which is supported by a network of frontline fulfillment stations. This has demonstrated our efficiency and quick response capabilities.
Speaker Change: As the consumer industry transitions to a fire-centric era, China's retail sector is experiencing significant structural changes.
Highly efficient businesses are increasingly replacing inefficient ones.
Speaker Change: presenting both opportunities and challenges. Our past successes have built a strong infrastructure and provided us with valuable experience.
Speaker Change: From this foundation, we find ourselves at a new starting point.
Speaker Change: Dingdong will continue to tackle challenging tasks with a pragmatic approach, aiming to satisfy consumers with excellent products and services, while establishing our own differentiated tasks through stable quality and supply capabilities.
Speaker Change: Next, let's take a look at the specific financial situation for Q4. The revenue for Q4 was 5.91 billion yuan, an increase of 18.3% year-on-year, and the GMA was 6.55 billion yuan, an increase of 18.4% year-on-year.
Speaker Change: We will firmly focus on making good products, using quality products to attract consumers, and improving order conversion efficiency and repeat purchases.
Q4 MAU increased by 4.7% year-on-year
Speaker Change: The conversion rate from MAU to monthly ordering users also reached a new high this year, averaging 63.6%, an increase of 4.7 percentage points year-on-year.
Speaker Change: Let's break down the results for Q4. Revenue reached $5.91 billion in increase of 18.3% compared to previous year. Meanwhile, GMV total $6.55 billion in 18.4% year-over-year rise.
Speaker Change: We were made committed to producing high quality products that attract consumers and improved all their conversion rates and repeat purchases.
Speaker Change: Additionally, Q4MAU experience a year-over-year increase of 4.7%. The conversion rate of MAU to monthly transacting users also hit a record high in recent years, averaging 63.6%.
Speaker Change: and increased a 4.7% point year-over-year. Furthermore, the number of users placing orders more than 8 times a month, essentially those who shop about twice a week grew by 19.6% year-over-year.
Speaker Change: The gross margin of the city is 30.2%, a decrease of 0.4 percentage points year-on-year. We will increase investment in the supply chain to improve the efficiency of the entire industry chain by shortening the supply chain. The proportion of fresh produce sourced directly from the origin has been steadily increasing year by year, stabilizing around 85% in August .
Speaker Change: In 2024, the average turnover days for reinsurance products that can be collected within 28 days was 2.3 days, with an efficiency improvement of 6.4% year-on-year. While the loss rate remained stable, the out-of-stock rate for poverty alleviation still decreased by 1.3 percentage points year-on-year.
Speaker Change: Rose Provin margin was 30.2%, a decrease of 0.4% is 0.0 over year. We plan to enhance our investment in the supply chain to improve overall industry efficiency by shortening the supply chain.
Speaker Change: The proportion of direct sourcing of fresh groceries has consistently increased each year, stabilizing at around 85% in 2024.
Speaker Change: Leveraging our ability to build intelligence forecasting and operational scheduling systems, we can better match user needs and improve the efficiency and de-fact management of our products.
Speaker Change: In 2024, the average turnover days for short-term products with the receivable life of less than 28 days was 2.3 days.
Speaker Change: Demonstrating our efficiency increase of 6.4% year-over-year, while the loss rate remained stable the out-of-stop rate for our top products decreased by 1.3% points from the previous year.
You You You You You You
Speaker Change: The travel expense rate for such items is 21.7%, which is an improvement of 1.8 percentage points year-on-year. The optimization of the travel expense rate in 2020 mainly comes from a significant increase in the average revenue per vehicle and an improvement in operational efficiency.
Speaker Change: With the opening of 130 new clamp cabins throughout the year, the average daily ammunition capacity of the clamp cabins throughout the year is close to 1000 rounds.
Year-on-year growth of 22.2%, at the same time we leverage algorithms and supply chain operational capabilities to continuously provide good service to users. In Q4, the delivery time of GSDNY Cafeteria was reduced by 2 minutes year-on-year, reaching 34 minutes.
Speaker Change: In Q4, the fulfillment cost rate was 21.7%, an improvement of 1.8% each point's year-over-year. The fulfillment cost optimization in 2024 was primarily driven by a significant increase in the average number of orders per frontline station and improved operational efficiency.
Speaker Change: Throughout the year, we opened 130 new frontline fulfillment stations with an average daily order volume of nearly 1000 orders per station, which represented a 22.2% euro-bearing increase.
Speaker Change: Additionally, we have continued to deliver excellent service to our users by leveraging our algorithms and supplying chain capabilities. In Q4, we reduced the fulfillment time for instant orders by two minutes compared to the previous year, bringing it down to 34 minutes.
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Speaker Change: The marketing expense ratio for Q4 is 2.3%, an increase of 0.2 percentage points year-on-year. In the future, we will continue to increase investment in the promotion of good products through new channels, using good products as a source of traffic to continuously improve the efficiency of conversion.
Speaker Change: The marketing expense rate was 2.3% and increased of 0.2 percentage points compared to the previous year.
Speaker Change: Looking ahead, we plan to boost our investment in promoting good products on its mind share, leveraging high quality products to drive traffic and will continue to enhance the efficiency of our advertising conversions.
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Speaker Change: The combined management and R&D expenses in Q4 as a percentage of revenue decreased by 0.5 percentage points year-on-year, mainly due to economies of scale.
Speaker Change: We will, as always, continue to invest in research and development in areas such as food research, agricultural technology, and technical data algorithms, constantly enhancing our product development capabilities and overall digitalization capabilities, thereby improving supply chain efficiency.
Speaker Change: The combined management and R&D expense accounted for 0.5 percentage points of revenue, reflecting the larger scale effect we will continue to invest in food R&D, agricultural technology, and technical data algorithms.
Speaker Change: This ongoing investment will enhance our proud of development capabilities and full-chain digital capabilities, ultimately improving supply chain efficiency.
Speaker Change: In Q4 2020, we achieved a net profit margin of 2% under the Naget standard, with a net profit amount of 120 million yuan. At the same time, we also achieved a net profit margin of 1.6% under the Gate standard in this quarter, with a net profit amount of 90 million yuan.
Speaker Change: non-GAAP net profit margin was 2%, resulting in a net profit of 120 million RMB. Additionally, gap net profit margin was 1.6%, which amounted to a net profit of 90 million RMB.
You You You You You You You You You
Speaker Change: As of QSMall, the balance of cash and cash equivalents, short-term restricted funds, and short-term investments was 4.45 billion yuan.
Speaker Change: We continue to optimize the efficiency of fund usage and financing structure. After settling the short-term payment balance, our actual free fund balance is 2.85 billion yuan, an increase of 840 million yuan compared to the end of Ai Sanlian.
Speaker Change: In addition, in order to build long-term partnerships, we continuously provide services to upstream partners. On the basis of the original supplier payment terms being relatively short within the industry, the accounts payable period for the entire year of 2014 was further shortened by 8.6 days year-on-year, reducing it to 35 days.
Speaker Change: As of the end of Q4, the total balance of cash and cash equivalent short-term restricted funds and short-term investment stood at 4.45 billion RMB.
Speaker Change: or continually optimizing the efficiency of capital utilization and financing structure.
Speaker Change: After deducting the balance of short-term loans, our actual balance of cell phone funds was $2.85 billion RMB, reflecting an increase of $840 million RMB from the end of 2023.
Speaker Change: Furthermore, to strengthen long-term partnerships and maintain our services to upstream suppliers, we have shortened the account payable period for the entire year of 2024 by 8.6 days year over year, bringing it down to 35 days.
Speaker Change: Our speech ends here today, and we can now move on to the Q&A session.
Speaker Change: This concludes my prepare remarks. Operator, we can now start the question and answer session.
We will now begin the question and answer session.
Speaker Change: To ask a question, you may press star, then one, on your touchtone phone.
Speaker Change: If you are using a speaker phone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star and to.
Speaker Change: When asking a question, please state it in Chinese first and then repeat it in English for the convenience of everyone on the Paul.
Speaker Change: At this time, we will pause momentarily to assemble a roster.
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Speaker Change: The first question today comes from Thomas Chong with Jeffrey. Please go ahead.
Thomas Xiong: Thank you to the management for accepting my question. First of all, congratulations to the company for achieving excellent results this quarter. I would like to ask about the importance of good products to the company as previously introduced, and our approach to developing good products.
Thomas Xiong: I would like to ask if, from the supplier's perspective, we have any cases of successful product development in collaboration with suppliers that you can introduce to us?
Thomas Xiong: So I trust myself. Thanks management for taking my question and first congratulations for the excellent result of this quarter. And I would like to ask about the importance of producing quality products for the company and the strategy implemented.
Thomas Xiong: for developing high-quality items. So could you provide examples of how you have collaborated with suppliers to create these quality products? Thanks.
Thomas Xiong: Okay, thank you for your question. In Q4, we continued to achieve good results based on previous records, and the continuous profitability gives us more confidence to make attempts and changes.
Thomas Xiong: Thank you for your question. In Q4, we continue to achieve strong results compared to the previous quarter and the ongoing profitability has given us greater confidence to try and make changes.
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Thomas Xiong: Assist in improving cooperation efficiency, driving the speed and transformation of business. In terms of financial support, we will spare no effort to increase investment, innovating power supply financial models to provide stronger financial assurance for our partners.
Thomas Xiong: In a vast and ever-evolving market with diverse consumer demands, we recognize that our own strengths are not enough to succeed. Therefore, we're eager to collaborate with long-minded partners to create greater value for consumers.
Thomas Xiong: We aim to move beyond the traditional supplier-reteller relationship and foster deeper, more cooperative partnerships where we can support one another effectively.
Thomas Xiong: In terms of our business model, we plan to open up key categories for collaboration with our partners. This approach will allow us to leverage the strength of both parties leading to mutually beneficial and successful outcomes.
Thomas Xiong: On the technical side, we are committed to investing in and sharing our IT capabilities with our partners. This will enhance our cooperative efficiency and facilitate the digital transformation of our business operations.
Thomas Xiong: Regarding financial support, we're dedicated to increasing our investment, innovating supply chain, financing models, and providing our partners with stronger financial backing.
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Thomas Xiong: The control of feed sources to the introduction of specialized production processes are all achieved through continuous communication, feedback, strategic sharing, and professional cooperation between Dingdong Commodity Center and suppliers. This has truly realized mutual business success and mutual achievement. Throughout 2024, the sales of the single product Dingdong Customized Qijun Free-Range Chilled Grass-Fed Chicken reached 40 million, a year-on-year increase of 30%.
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Thomas Xiong: For example, a professional breeding cooperative in Qingjiang has been partnering with Dingdong since 2019 to supply fresh chicken. This collaboration has flourished through ongoing communication, feedback, strategic alignment, and professional cooperation between Dingdong's product center and its suppliers.
Thomas Xiong: Their efforts have span from product research and development to aligning self-strategies, ensuring quality, feed, sourcing, and introducing advanced production processes.
Thomas Xiong: His approach has led to share success for both parties. In 2024, sales of the Dingdong Customize, Xi Jinping's fresh free-range chicken reached 40 million RMB, a 30% year-over-year increase.
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Investing in upstream, having trust, coexisting harmoniously, progressing together, and jointly creating value for consumers is our cooperative development approach with upstream power supply. Thank you.
Thomas Xiong: We invest in and trust our upstream partners working together in harmony to achieve mutual progress, creating value for consumers together. This is the foundation of our cooperative development strategy with the upstream supply chain. Thank you.
Speaker Change: The next question comes from Wu Hongwei with CIC. Please go ahead.
Wu Hongwei: Thank you to the management for accepting my question. First of all, the company has achieved excellent results. I would like to follow up with a question. The company has its own factories and has also invested in food research and production processing. Are there any examples that can demonstrate our ability to develop good products through our independent supply chain? Thank you.
Wu Hongwei: Thanks to management for taking my question. Congratulations to the companies for good
Wu Hongwei: I have a follow-up question. Does the company have examples of developing strong products using its own supply chain, given that it has its own factory for food research, development, production, and processing? Thanks.
Wu Hongwei: Thank you for your question. As the core strategy of our electric grocery shopping, product strength has always been the primary driving force of our development, committed to continuously creating a unique and high-quality product system for consumers. To achieve this goal, we have built a complete independent production and research and development system.
Wu Hongwei: Among them, the construction of the supply chain for self-operated factories serves as a key support to form a continuously optimized and upgraded operational mechanism. Over the past year, our Guyu factory has been completing the transition from a supply chain company to a product brand company.
Wu Hongwei: Thank you for your question. Dingdong's core strategy has always centered around product development capabilities, which serves as the driving force behind our development.
Wu Hongwei: We're dedicated to continuously creating a unique and high quality product system for our consumers. To achieve this goal, we have established a comprehensive independent production in R&D system.
Wu Hongwei: A crucial support for this is the supply chain development of our self-operated factories which has led to an operating mechanism focused on continuous optimization and upgrading. Over the past year, our aggrieved factory has been transitioning from a supply chain company to a product brand company.
[inaudible]
For example, our own brand, Conscience Craftsman, meticulously develops and recreates regional specialty foods, childhood flavors, and traditional memory products, giving the products emotional value. Additionally, the entire product development originates from consumption and Chinese consumption, with product design through research and development in the middle.
Recipe replication factory Chinese machine mass production
The full-link end-to-end B-loop machine's continuous product acquisition capability makes the product innovation of conscientious craftsmen more vibrant.
Speaker Change: For example, our private label, Liang Qing, Zhang Rui, carefully develops and recreates regional specialties, childhood flavors, and products that evoke traditional memories to give them emotional value.
Speaker Change: Moreover, our entire product development process begins with understanding consumer needs and conclusion with the final consumption of the product.
Speaker Change: This process includes research and development, product design, formula replication, pilot production, et al. factory, and mass production.
Speaker Change: Our ability to maintain a close loop in the entire process and continuously iterate products enhances the dynamics of this brand's innovation.
Realizing people's aspirations for a better life is the goal we have always strived for.
Speaker Change: All products manufactured in our own factories are not only folks through our own child but can also be exported. This allows us to compete more effectively in a wider and more direct market environment.
Speaker Change: Currently, our products are available in over 30 countries and regions worldwide.
Speaker Change: In China, we distribute them through K.A. channels such as Tianhua, J.D.7 Fresh, and Huaju. We're committed to showcasing our high-quality products on a larger stage so that more consumers can experience our dedication and efforts.
Speaker Change: All goal is for everyone to achieve their aspirations for a better life.
Xie Xie
Thank you.
Speaker Change: This concludes our question and answer session. I would like to turn the call back over to management for clothing remarks.
Speaker Change: Thank you again for joining our call today. If you have any further questions, please feel free to contact us.
Speaker Change: A request is through our website. We look forward to speaking with everyone in our next earnings call. Have a good day and have a good night.
Speaker Change: The conference is now concluded. Thank you for telling today's presentation. You may now disconnect.
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