Good morning, ladies and gentlemen, and thank you for standing by for Dada's fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference is being recorded. I'd now like to 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, operator. Hello, everyone, and thank you for joining us today. Our fourth quarter 2021 earnings list was distributed earlier today and is available on our IR website at ir.imdada.cn, as well as on global news source services. On the call today from Dada, we have Mr. Philip Kuai, Chairman and Chief Executive Officer, Mr. Beck Chen, Chief Financial Officer, and Mr. Jun Yang, Co-Founder and Chief Technology Officer. Mr. Kuai will talk about our operations and company highlights, followed by Mr. Chen, who will discuss the financials and guidance. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon the management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results or performance to differ materially. Other information regarding these and other risks, uncertainties, or factors is included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under applicable law. Please note that unless otherwise stated, all figures mentioned during the conference call are in RMB. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Kuai. Philip, please go ahead. Thank you, Caroline, and thank you all for joining us today. We are pleased to announce another excellent quarter and a strong finish to the year. Despite macro weakness in the fourth quarter, Dada Group delivered the revenue growth on a comparable net basis of 80.3% year-over-year. The strong revenue growth is achieved while operating efficiency is greatly improved. I'd like to highlight our recent progress and provide updates on our two platforms. Then Beck will go through our financial results in greater details. The Chinese central government has recently stated that leveraging the advantages in massive data and the rich application scenarios, China shall promote the deep integration of digital technology and the real economy, empower traditional industries to transform and upgrade, create new industries, new formats, and new models to continue to strengthen, optimize, and scale up its digital economy. In this regard, Dada is working hard and striving to be a digital economy enabler. We continue to leverage our strong digital technology capabilities to empower the real economy, promote the integrated development of the digital economy and the real economy, and push forward the application of digital technology in the new development roadmap of China. The central government also proposed to establish a comprehensive cross-departmental supervision system and improve the coordinated supervision of markets, quality, and safety to anticipate issues as well as provide controls and supervision during and after the event. Dada actively supports the government's policies and develops our business in full compliance with regulations. Before jumping into our business updates, I'm pleased to announce that JD.com's investment in Dada obtained regulatory approvals in late February this year and was completed on February 28. We're looking forward to further deepen strategic cooperation with JD.com. Enhancing the mutually beneficial cooperation with JD.com has always been a strategic priority for us. Since we officially launched Shop Now or Xiaoshigou, the unified brand for all on-demand retail services within the JD ecosystem in October 2021, we have been leveraging the collaborative synergies to support the developments of the real economy and jointly lead the development of the on-demand industry. During the fourth quarter, the GMV of Shop Now, Xiaoshigou, maintained a strong growth momentum and increased several times year- over- year. As of the end of 2021, more than 70% of the active stores on JDDJ were available on Shop Now. Going forward, we will further deepen the omni-channel cooperation with JD.com, improve JD users' mindshare for on-demand retail, and jointly expand the product categories of on-demand retail on JD. Now, let's talk deeper about JDDJ, the leading local on-demand retail platform in China. Despite a challenging macro environment, JDDJ still managed to grow its revenue by 80% year-over-year in the fourth quarter, significantly outpacing the overall consumption growth. The government has been encouraging the platform economy to provide supports for high quality economic development and high quality life, guiding the platform economy to be more open, innovative, and empowering. JDDJ has consistently positioned as an open platform and commits to empower the retail industry through technology and service innovation. During the fourth quarter, JDDJ continued to digitize the retail industry with respect to enabling retailers and brands and technology empowerment. Firstly, empowering more retailers and enriching product supplies. With the continuous optimization on the supply side, we strive to provide industry-best one-stop shopping experience for consumers in the on-demand retail space. In 2021, the number of active users on JDDJ increased 51% year-over-year to 62.3 million. Looking to different verticals, in the supermarket category, we have now established partnership with 85 out of the top 100 supermarket chains in China. According to our research, the market share of JDDJ in the supermarket O2O sector increased to 27% in 2021. The gap between JDDJ and the second and the third players remained wide, at 11 and 18 percentage points, respectively. With continuous expansion of merchant partners and product offerings, deepening cooperation with JD.com, and improving delivery fulfillment capability, JDDJ continues to win more users and become a primary on-demand retail channel for more users. For our supermarket partners, we are committed to helping them create incremental sales through innovative tools and campaigns. Recall that in the last earnings call, I introduced the three-in-one coupon that helps improve sales efficiencies for retailers, brands, and platform. In early December, JDDJ further expanded the coverage of three-in-one coupons and partnered with around 20 regional leading players, including CP Lotus and AEON, to launch the first shopping carnival campaign covering more than 10,000 stores in over 100 cities. The GMV of participating stores increased by more than 200% over regular weekends in November. Meanwhile, the conversion rates increased by over 10 percentage points. In addition to cementing the leadership in the supermarket category, JDDJ continued to grow its influence in the 3C, the consumer electronics category. The GMV of the 3C category increased by more than three times year-over-year. In the smartphone subcategory, by the end of December, we had onboarded more than 12,000 stores on JDDJ. In the fourth quarter, we strengthened our partnership with JD Baitiao, or JD Buy Now and the Pay Later service, to further enhance the experience for consumers purchasing smartphones on our platform. In the PC and accessory category, we established new partnership with more well-known brands, including Gome, Logitech and Razer. In the home appliance subsector, total GMV continued to grow by more than 100% on a sequential basis in the fourth quarter. In addition, we launched a strategic partnership with Dyson, and we are gradually onboarding more than 800 Dyson stores onto JDDJ across China. Secondly, JDDJ continues to drive marketing efficiencies for brands. In the first quarter, our online marketing service revenue increased by more than 140% year-over-year. For full year 2021, online marketing revenue growth was over 130% as JDDJ onboards more brand partners and capture a larger share of their marketing spending. In addition to deepening cooperation with more FMCG brands, JDDJ started to collaborate with the cosmetics business of major international brands such as L'Oréal, P&G, and Johnson & Johnson. Our innovative marketing campaigns have always been welcomed by brand partners. In January 2022, JDDJ launched the Super Alliance campaign to help brand partners achieve explosive growth in the influence, customer traffic, and sales. This campaign integrates current affairs and engage with consumers across multiple social media channels. Just ahead of the 2022 Winter Olympic Games, JDDJ roll out the first Super Alliance campaign together with P&G, Coca-Cola, Snickers, and Yili. The GMV during the campaign increased by approximately 200% year-over-year. Moving on to our technology empowerment. As of the end of January 2022, our omni-channel operating system, Haibo, covered around 6,000 retail chain stores. Haibo's value in boosting retailers sales while improving cost efficiency not only help us continue to acquire new merchants, but also enable us to maintain a very high retention rate. In 2021, the renewal rate of the merchants using Haibo system was more than 98%. In terms of feature iteration and optimization, we upgraded the fulfillment module on Haibo in the first quarter to improve order picking efficiency and optimize labor cost. The upgraded module enables stores to pick items in different zones based on SKU distribution, sales heat map, and the labor capacity, and then aggregate orders efficiently. With the launch of the upgraded module, the picking time at stores can be reduced by an average of 40%. At present, more than 80% of the merchants using Haibo system have adopted this module. Regarding our digitized in-store picking service, Dada Picking, the number of stores covered by Dada Picking continued to expand, and is increasingly recognized by merchants. As of the end of 2021, Dada Picking covered around 500 stores of supermarket chains, with number of orders fulfilled in the first quarter growing more than 8 times year-over-year. Let's now move on to Dada Now, the leading local on-demand delivery platform in China. In early 2022, the State Council issued the development plan for a modern, comprehensive transportation system during the Fourteenth Five-Year Plan to clarify the major tasks for the transportation industry. One important task set out in the plan is to expand the supply of high-quality transport services, including supporting the development of new modules like on-demand delivery. With a leading local delivery network that provides service nationwide, Dada Now is always committed to meeting people's needs for a better life with higher quality, higher efficiency, and a lower cost service. In addition to supporting domestic consumption with solid logistics infrastructure, Dada Now also continues to take measures to safeguard riders' interests. In January, we attended the administrative guidance meetings held by the Ministry of Human Resources and Social Security, and three other ministries. During the meeting, our efforts and achievements in protecting the rights and interests of workers engaging in the new form of employment and improving rider experience were fully recognized by the government. In terms of the business progresses, our revenue from on-demand delivery services to key accounts or KA chain merchants increased 100% year-over-year in the first quarter. In full year 2021, our KA revenue growth was over 120%. This was the third consecutive year that our KA revenue grow at 100% and above. The strong growth momentum is a result of our enhancing service offerings and expanding customer bases. While maintaining rapid revenue growth, we continue to improve our service quality and operational efficiencies for the KA merchants. In the first quarter, we achieved higher delivery fulfillment rates while reducing fulfillment costs by strengthening standardized management, deepening cooperation with merchants, and optimizing operational strategies. Moving on to SMEs. Orders fulfilled for SME merchants in the first quarter increased 100% year-over-year. The fast growth of SME orders also led to the increase of overall order density of Dada Now delivery network, contributing to delivery efficiency improvement. For last mile service, with improving service capabilities, delivery orders experienced steady growth, and our pickup orders maintained a rapid growth. In addition to offering pickup services to individual consumers and the small business, we have also made significant progress in on-site pickup services for large customers, comprehensively catering to the needs of JD Logistics. Lastly, on autonomous delivery. Since the open platform was officially launched in July 2021, we continued to empower our upstream and downstream partners in the unmanned delivery value chain through strong technology and operational support. At present, the platform has delivered over 30,000 orders for supermarket partners. Meanwhile, our delivery fulfillment rates remain stable at over 95% even during heavy promotional periods and bad weather. While we've made these encouraging progresses, ESG efforts are integrated across our businesses. Recently, in recognition of our socially responsible practice, such as anti-pandemic assistance and poverty relief, we were named as a Charity Star of Shanghai in the tenth edition of the awards, being the only internet and online new economy enterprise awarded. In January this year, JDDJ was among the first batch of applications to pass the agent-friendly and a barrier-free assessment launched by the Ministry of Industry and Information Technology. As a group, we'll continue to stick to our ESG strategy and drive sustainable value creation. With that, I will now pass the call over to Beck Chen to go over our financials for the quarter and the full year. Thank you. Thanks for that. Before we go over the numbers, just a few housekeeping items in advance. We believe year-over-year comparisons are the most useful ways 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 renminbi unless otherwise noted. I'll start with the Q4 numbers first. The total net revenue increased to RMB 2.03 billion, aligning the revenue recognition method of Dada Now last mile delivery service to a comparable net basis. The pro forma revenue growth would have been 80.3% year-over-year. The net revenues from Dada Now were RMB 718 million. The pro forma revenue growth rate was 80.5% year-over-year, mainly driven by the increases in order volume of intracity delivery service to chain merchants. Net revenues from JDDJ increased by 80.1% to CNY 1.3 billion, mainly due to the increase in GMV, which was driven by increases in the number of active consumers and average order size. Increase in online marketing services revenue as a result of the increasing promotional activities also contributed to the revenue growth of JDDJ. Moving over to the expenses side. Operating and supporting expenses was CNY 1.4 billion. The decrease was primarily due to the decrease of rider-related costs incurred by business upgrade of last mile delivery services, partially offset by an increase in rider costs as a result of increasing order volume for intracity delivery services provided to various chain merchants on the Dada Now platform and the retailers on the JDDJ platform. Selling and marketing expenses were CNY 1.0 billion. The increase was primarily due to the growing absolute dollar amount of incentives to JDDJ consumers and an increase in personnel costs in connection with the company's growing businesses. G&A expenses decreased to RMB 99 million, primarily due to the decreased share-based compensation expenses. R&D expenses rose to RMB 169 million, mainly attributable to the increase in research and development personnel costs as the company continues to strengthen its technology capabilities. Non-GAAP net loss attributable to ordinary shareholders of Dada was RMB 485 million. I will now quickly run through a few key full year 2021 financial results, and further details can be found in the earnings release. The total net revenue for the full year was RMB 6.9 billion. The pro forma revenue growth rate was 78%. Operations and the supporting costs were CNY 5.1 billion, compared with CNY 4.7 billion in 2020. Selling and marketing expenses was CNY 3.4 billion, compared with CNY 1.8 billion in 2020. The G&A expenses were CNY 400 million, compared with CNY 499 million in 2020. R&D expenses were CNY 574 million, compared with CNY 429 million in 2020. Non-GAAP net loss attributable to ordinary shareholders of Dada was CNY 2.1 billion. As of December 31, 2021, the company had CNY 1.8 billion in cash equivalents, restricted cash, and short-term investments. As Philip mentioned earlier, JD additional investment in Dada has been completed last week, which further boosted our cash position by $546 million. Our strong cash reserve gives us great confidence in our ability to execute long-term sustainable strategy, which we believe will create value for both investors and society. In terms of the outlook for the first quarter of 2022, we expect total revenue to be between CNY 2 billion and CNY 2.05 billion, representing a pro forma growth rate of 72%-76%, adjusting 2021 Q1 and 2022 Q1 Dada Now last mile revenue to a comparable basis. In addition, we expect pro forma net loss margin based on comparable net basis revenue to continue to experience significant year-over-year improvement in the first quarter of 2022. This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session. Thank you. Thank you. We will now begin the question-and-answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you need to cancel your request, please press the pound or hash key. Our first question comes from Ronald Keung at Goldman Sachs. Please go ahead. Thank you. Thank you, Philip, Beck, Jun Yang, and Caroline. Congratulations on the solid growth in the fourth quarter and annual guidance. I think I want to ask two questions. One is just, I think we have delivered strong growth since listing and very pretty on track in a very fast growth. But on the subsidy levels and on a kind of order loss basis, I wonder on a fourth quarter kind of apples-to-apples basis and how have we tracked in subsidy rates in the fourth quarter. I think investors do want to see a track of continuing reducing in subsidy rates while maintaining very strong growth. Want to hear what is management's expectations on the subsidy levels and also on unit economic basis, how that will look for 2022. Then my second question would be on the JD cooperation. If we kinda further split that unit economics, could you share how the Shop Now channel and the different JD channels are we seeing improved unit economics in those JD specific channels versus our traditional app and the JDDJ mini program? Just wanna see as our mix of GMV increases through the JD channel, would that be one of the drivers of our improving unit economics ahead? Thank you. Okay, thank you, Ronald. Let me take the two questions and see whether or not Philip has anything to add. First of all, in the past several quarters of 2021, we continuously optimized our subsidy ratio, which is like consumer incentives we've given to the consumers. In example, in Q4, our consumer incentives is decreased by 120 basis points on a year-over-year basis, and also decreased by 20 basis points on a Q-on-Q level. This is the major factor for us to further optimize our JDDJ direct margin. In Q4, our JDDJ direct margin is further optimized by 20 basis points compared to Q3. Going forward in 2022, we believe that we will further prioritize to further optimize the consumer incentives, which is also mentioned in the prepared remarks that some of which are driven by, like, promotion of the three-in-one coupon. With more and more three-in-one coupon applied in platform, we expect our profit level will be further improved. The other factor is to further, you know, to be integrated with JD, especially JD Retail. We believe that just like you mentioned, with more revenues and GMVs contributed through the JD Retail and our overall direct marketing level and the profit level will be improved as well. We foresee that in, you know, in the last earnings call, we mentioned that we believe in Q2 2022 we can achieve the breakeven of the JDDJ direct margin level. Right now, we believe that we can achieve positive direct margin level of JDDJ in Q2 this year. In Q1, we believe it's very close to breakeven for the JDDJ's margin on the quarterly basis, and maybe for some of the months, it's already positive. This is the answer. Yeah. Yeah. I would just add some more color, so as you can see that during the last few quarters, our profitability have been greatly improved, continuously improving, and we'll continue to improve that. We're very confident that at the same time, we grow our top line very fast, at the same time, we improve the profitability. As we can see that the on-demand retail, the whole industry is still at a relatively early stage with the entire industry growing fast. We believe it is quite important to keep the scale growing and to strengthen our market leadership. We will do both things right. Also, regarding the JD cooperation and how that can help us to improve our profitability. One of the key costs is to acquire customers and users. We have shifted our user acquisition strategy since we deepened the cooperation with JD. Before, most of our costs are spent to acquire users to the JDDJ app. Now, as we have got the open Shop Now and a lot of JD resources to do business, we are shifting our focus to acquire users within the JD user base. That can also saves a lot of user acquisition costs. Among others, there are a lot of positive values can be generated through the cooperation with JD that I just want to mention how that user acquisition will help us. Thank you. Wonderful. Thank you, Philip and Beck. Our next question comes from Eddie Leung at Bank of America. Please go ahead. Good morning, guys. Two questions, if I may. The first one is about different retail categories. Given the current consumption environment, especially heading into 2022, could you talk a little bit about the relative strength and weakness that you have seen from your different client segments, both under JDDJ and Dada Now? Just a quick follow-up on Philip's comment on user acquisition. Could you also talk a little bit about your strategy on your JDDJ app? 'Cause you mentioned that you have switched some of the resources to acquire users within JD. Thank you. Sure. I'll give my answer and see if Philip Kuai have anything to add. I believe the first question you have is regarding the different retail categories and how that evolve on our platform. As you know that we start off with the supermarkets category, and we keep strengthening our market leadership in that category. We have gradually evolved to many other categories. Consumer electronics, for example, has been growing really fast, and that also benefit a lot from the synergies with JD. We are very happy to see that, for example, like the parenting sector and the cosmetics sector, all those have been growing very fast. Because as you may have noticed that the offline business are seeing some challenges, especially during the COVID and economic slowdown. The merchants are more willing than ever before to work with us. That's why we are able to acquire a lot of retail partners from different verticals. I think going forward, we will eventually achieve our vision to be basically the everything on demand. We will be there, and we're getting close, so everything will be on demand. In terms of the user acquisition. First of all, there are still our loyal customers stick to the JDDJ app because this app is tailor-made for on-demand retail and a lot of loyal customers love that. We will keep our user retention program and to keep this app alive and acquire more users. At the same time, we are seeing that the JD has really opened the door for us, and we're able to acquire from the over 500 million JD users. As you may have noticed that during the last few months, we have now got more and more entry point and resources. We have been innovating with JD team, trying to improve the conversion rate and to get more access points within the JD app. We're very confident that we will be able to grow the user base within JD very quickly. At the same time, it's also very beneficial for JD because now the JD app not only provides a B2C model of e-commerce, but also provides on-demand e-commerce. JD app become much more attractive to both new users and existing users. This will also help to drive the JD user acquisition and the JD's user retention. It's highly win-win. Yeah. No add on. Got it. Thank you very much. Okay. Our next question comes from Thomas Chong at Jefferies. Please go ahead. Hi. Good morning. Thank you, management, for taking my questions. I would like to take a step back and looking at the big picture about the space right now. Can management comments about how we should think about the competitive landscape in 2022? Are we seeing the competitive environment is a lot more rational compared to last year? Regarding the consumption recovery, the impact on the macro headwinds together with about the recent COVID situation, how should we think about our business trend in subsequent quarters? My second question is about our Haibo monetization. Given the increasing number of stores are using our SaaS systems, just want to get a sense with regard to the revenue potential as well as the competitive landscape on this front. Thank you. Sure, Thomas. I will give you my answer and see if Beck have anything to add. The first one regarding the competition environment. As you mentioned, we are seeing that the players in the markets are now more rational than year before, and people are more cautious in burning cash or have more willingness to improve the profitability. I think overall, the competitive environment has been more rational. At the same time, we're seeing that the business model really matters, and we are very confident, as we have been in the last two to three years since we first roadshow for our IPO and for the last two years. We have always been confident about our business model, which is, first of all, we are a platform play, so we don't host any inventory, so that means we are not competing with any retailers on board. I think this has continued to be very important. This is very unlike some other platform play who also do their first party business and sell inventory. Over the last year, we are even more confident about our model. If you want to compare our model versus the dark store model, I think over time, people are more clear about the pros and cons of different models. again, as we have demonstrated that we are able to grow our top line while quickly improving the profitability, I think people will have been realizing that our model has more benefits. also the community group buying. as a community group buying, the government's regulations and the macro environment impact, I think that is less relevant and less competitive than a year ago. that's the competition environment, and we're confident about our strengths going forward. In terms of Haibo, first of all, we are very happy to see that Haibo is well received by almost all of our merchants partners, and the retention rates for Haibo paying customers is nearly 100%. It's eighty... It's 98%, so it's very, very high. People are really loving our features and so on. The revenues generated from Haibo is about 200% year-over-year. Although the Haibo revenue itself has not been that big, but the growth has really encouraging. We will continue to make Haibo a more powerful tool and system for everybody. We'll continue to explore other monetization opportunities around Haibo systems. Also, as we mentioned earlier, in terms of the supermarket O2O sector, in 2021, the market share of JDDJ increased to 27%. The gap between JDDJ and the second player remained wide at 11 percentage points. The gap between JDDJ and the third players are even much bigger than the previous year at, like, 18 percentage points. We believe that we will continue to focus on the categories we mentioned in the prepared remarks for the past several quarters, including those new, newer categories in 3C categories and cosmetics. All those newer categories will contribute to our further, you know, the GMV growth and everything sold. Thank you. Our next question comes from Alicia Yap at Citigroup. Please go ahead. Hi. Good morning, management. Thanks for taking my questions. I have two questions. First, I guess maybe Philip or Beck, can you guys elaborate, you know, the major changes that you foresee to happen post the JD stake completion? What are some of the things that Dada will be able to do or, you know, different collaborative initiatives that you are planning in the coming months post the consolidation? Second, quickly, can you share with us the commission take rate this quarter, and also the AOV for the fresh versus the non-fresh category, and also percentage of the orders that coming from the fresh versus the non-fresh? Thank you. Okay. Our partnership with JD has certainly been further strengthened. As you may have recalled, about a year ago, we firstly announced the investment offer from JD, and it took about a year for all the regulatory approval. Over the last year, we are now sitting there and wait. We have done a lot of things already. For example, as you can see, like the Shop Now, the Xiaoshigou has already been developed and now quickly growing. Also from the organizational perspective, over the last year, we have already set up a org within the JD Retail org. Both teams has been working very closely already. I think going forward, since this officially approved and the completion of the transaction, I think a few things will happen. First of all, JD, the entire org, will see us as a real family and include us in all the operation and the financial planning. I think this is very important because within a large organization, while people are setting up the KPIs and OKRs, whether we are included or not will significantly help us to better collaborate with JD teams. Also, while JD team is planning on their annual strategy and operation strategies, I think going forward, we will absolutely be considered and included in each of the JD Retail teams. When they're doing their business planning and when they're seeing their clients, we will be included. For example, as you may have noticed in some of our news release that, we are now having more joint business plans with JD Retail and other, like, brands or retailers. For example, we had a JD Retail, Walmart, JDDJ joint partnership program, and we are having similar programs with many other brands as well. I think all of those will improve the synergies with JD. About the second question, the commission rate is remaining flat compared to the previous 2 quarters. The overall AOV is increased to RMB 210, which is mainly contributed by the increase of the 3C related business. The O2O AOV of the supermarket category still remains RMB 145 in Q4. The overall supermarket category is contributing close to 60% of the total GMV, while the electronics is contributing 30%+ as a percentage. Thank you. Our next question comes from Ashley Xu at Credit Suisse. Please go ahead. Thank you, management, for taking my question. My question is related to our Dada Now KA business. Given current environment is quite tough for quite some small merchants in catering business, and that's actually the area we have been trying to expand into. Want to check on our progress on this and also the outlook. Thank you. Yeah, sure. We're happy to see that our business and service to the chain merchants, to the KA merchants, has been growing really fast. We have for the last three years, each year we grow over 100% year-over-year. This year we will continue to grow fast so for each of the KAs we have already been working with, we will expand our penetration, and we are doing that and achieving that. At the same time, this year, we will be signing up with more KA brands. Now, one of the reasons why we can continue to grow fast is that our service level and our brands are more and more recognized by the KA merchants. They really value our service level, our independence, and such trust will help us to win more clients. Okay, thank you. Our next question comes from Andre Chang at JP Morgan. Please go ahead. Thank you, management, for taking my question. My question is about a longer term path to profit. While we and the investors appreciate the, you know, quick, you know, just progress toward the direct, you know, positive margin of JDDJ's as management mentioned. More investors are nowadays demanding the, you know, fast-growing growth-seeking companies to deliver overall profit. I don't know if, under the current environment, the cooperation JD, etc., what's the latest, thought of, you know, management of, total overall profit, the timing and how to balance between maximizing the potential to grow, etc.? Totally unrelated question, a more short-term one. Now, given the resurgence of COVID across many cities in China right now, have we seen some pickup of our demand? Do we expect that such a thing to improve further if the current situation further deteriorate? Thank you. Okay, thank you, Andre. First, about the profitability for the company operating profit level. Yeah, first of all, our target is to achieve the positive direct margin of JDDJ first. In the same time, for the overall Dada Now business right now, it's already achieved like positive UE, especially like for the chain merchants businesses under Dada Now. In 2021, you know, the unit economics for the chain merchants is relatively breaking even, so for the fast growth of last year. For this year, we just set up a relatively still high growth target while we should achieve a positive unit economics for order. This is also helping us to improve the profit. For the company level, we will still further balance the growth rate of the two sectors and also like the profitability. We still maintain that the company will achieve positive operating profit target in 2022 and maybe starting from the first half of next year. This is about the profitability. About the resurgence of the COVID recently in China. Right now we're still seeing relatively stable costs. We have a very you know a good government to help us to maintain the order of the society in each city. Unless there is anything you know like occurring like two y ears ago, we may see a super like demand from the demand side. Right now we just think the demand side is very stably growing, not like a super like a hike of the demand, suddenly. Right now we think still it's all under our management level and also for us to maintain a very healthy rider network. Thank you, Beck. Our next question comes from Wei Fang at Morgan Stanley. Please go ahead. Thank you, Philip and Beck, for taking my question. I have two small questions about the KA operations under the Dada Now. The first is that we've heard that some of the tea beverage shops, like HEYTEA, they are cutting their retail prices recently. Do you feel like any pressure in potentially price-based competition between the online platforms, because the tea shops, they want to pass on the lower retail prices to delivery cost? Do we see any competition intensifying due to the price cut? And second question is about the UE improvement or the profitability of the KA operation. I mean, if you compare with how to improve the profitability in the future, do you think that it's more easy to improve the UE of the KA delivery, or it is more simple to improve the take rate from the JDDJ's grocery? It looks like that, given your current revenue from the KA operation, it looks like if you can improve the delivery fee by CNY 1 per order, then the whole of the company can be breakeven. Is that achievable way to improve your profitability in the future? Is it more easier than, like, seeking for higher take rate from the JDDJ and grocery operations? Thank you very much. Okay. First of all, some of the, as you say, the tea beverage companies are cutting costs. I think overall, the chain merchants are more cautious about the costs. I think that's the market situation. I think that is our advantages actually, because we do have a very competitive cost base, especially for KA business. Historically, for KA business, the service providers tend to use full-time riders, stationed riders to serve each of the stores. The cost is really high. We come to the market with a better solution. We combine both the stationed riders and the cross-border riders to achieve a better cost base. That's why our cost base is more competitive than most of the other players in the market. At the same time, we are increasing our margin or unit economies for our KA business for the last few quarters, and we envision this improvement will continue in the next few quarters by two things. One is to continue to improve our cost base. We are improving our efficiencies and lower our costs. At the same time, because we have a better brand recognition, and we are able to penetrate into the higher percentage of the market, we're able to enjoy a higher charge as well. We are happy about our KA business and how it goes. In terms of the... Yeah, I think that's how we look at the KA business. As mentioned, actually we will balance the take rate enhancement on key accounts and also the take rate enhancement on monetization increase of JDDJ. Just like you mentioned, when RMB increase high, the hike is too much in the market. That's why we think we will gradually improve our take rate at the same time further optimize our operational efficiency for the chain merchants businesses, while we will also put, you know, emphasis onto the improvement of the monetization rate of JDDJ in 2022. As we mentioned earlier, we will further cut down the subsidy ratios given to the consumers while they are more used to purchasing through JDDJ or Shop Now. Thank you very much. Philip and Beck. Our next question comes from Wei Xiong at UBS. Please go ahead. Hi, good morning management. Thank you for taking my question. I want to ask about the online marketing services. To realize more upside there, are there any other innovative marketing services or campaigns that we can expect this year, similar to the three-in-one coupon that you mentioned, that can help us to gain more wallet share from the brand partners? How will the deepened partnership with JD can help you in this area? Also maybe just wanna get your latest thoughts on what's the level of monetization rate you can realize from online marketing services this year and also longer term. Thank you. Sure. For the sake of time, I will be more brief. Yes, the online marketing service has been always a very key revenue stream for us. One of the key things that we will starting to do from this year is that after the transaction completed with JD, we're now having more and more joint business plans with JD. This will give us a very good opportunity to provide a more comprehensive service to the brands with JD. Brands will see JDDJ and JD Retail as a more integrated solution. Jointly, we will be able to generate more value to the brands. With that, I think we'll be able to generate more sales for the brands, as well as generate more online marketing value for the brands. Yeah. Also for the overall monetization rate, we expect that for the full-year basis, we are able to improve by 30-40 basis points. Also for the cost side, we think we have you know, a great potential to greatly improve. Like, as I just mentioned, we believe that after you know, one year, like Q4 next year, Q4 2022, the improvement should be like almost to 100 basis points and on a year-over-year basis. For the operating costs, including those rider costs, we believe still we have a great room to improve while the order density is increased. Got it. Thank you, Philip and Beck. Our next question comes from Julu Lee at CICC. Please go ahead. Hi. Good morning. Thank you for taking my question. I have two questions. The first one, how do you see the O2 market, especially for local e-commerce, like the market size of O2 market or local e-commerce? What kind of player will JDDJ be here? Or do we have any goal for it? The second question is for the cooperation with JD.com, do we need to pay fee like commission fee to JD.com? If so, is it possible to cancel in the future? By the way, as announcement in February said, JD.com also provides certain strategic resources. Do strategic resources here mainly refer to user and the client acquisition? Could you share more color about it? Yeah. First of all, the market size, I think the on-demand retail, as we explained earlier, during our roadshow, I think the market size is even bigger than two years ago when we see that. I think we are still at a very early stage for the on-demand retail. Especially when we are evolving from just supermarkets to more and more sectors, consumer electronics and the cosmetics, beverage, and so on. There is literally a massive market size. We're not worried at all about the market size. Yeah. In terms of our partnership with JD, we will be exploring different opportunities and scenarios. Previously, actually we are still paying the commissions to JD regarding the Shop Now businesses. Right now, going to March, we are still paying. Of course we will further improve our operating efficiency while further negotiating with JD on that part as well. I think related to the partnership with JD, I think it's very much comprehensive. It's not only related to the user angle, it's also related to those like operating efficiency angle and also integration or cooperation with different vertical categories of JD, like 3C, like cosmetics, all these. For all these vertical categories under JD Retail will be a very close partner of JDDJ. In the future, the ecosystem will not be just like B2C or O2O. It will be like somewhat like B2C plus O2 path. Maybe place online, delivery offline will be the future model and more efficient model of the e-commerce sector. Thank you very much. Very clear. Our next question comes from Wei Fang at Mizuho. Please go ahead. Thank you for taking my questions. Quick one. I remember last quarter management highlighted partnership, right, with the 200 brands and the monetization rate of 3%. I'm not sure if you can give an update. Also just looking at the 140% year-over-year growth for two quarters in a row. I was just wondering, maybe can you help us understand how these brand partnerships typically get started? Do you guys reach out to brands proactively or it's the other way? Also, I think, do they typically sign an annual framework with you guys? If you saw how the 2022 budget looks like. Thank you. Because we are a platform, we are selling like millions of SKUs on our platform. We can see literally what brands are, how they're doing on our platforms, right? We have a very clear picture and also the brands are very interested in how they are doing on our platform, right? Because we are the fastest growing channel for most of the brands in China now. With that, we constantly exchange ideas and insights and the brands really enjoy working with us to achieve a higher growth. That's how we get started with most of the brands. Once we work with some of the brands, it gets bigger, the scale of the size gets bigger, and then we will get into an annual contract or annual framework. For most of the leading brands, we do have annual framework with them. But that framework or annual contract is just a framework. For example, if we grow faster or we have a bigger value generated, we're able to get more revenue even out of the contract as well. I wouldn't see that framework as a ceiling of our business with the brands. Yeah. Also, for like the brands in 3C categories, cosmetics, in the past and in the future. Also in the future, JD Retail will help us to acquire more, and they will actually introduce more those kinds of brands to us and help us to negotiate, and we will just, you know, have met with those 3C and cosmetic brands directly and help them to start O2O businesses. Got it. Thank you. Very helpful. Thank you. That's all the time we have for questions. I will hand back to Caroline for closing comments. Thank you, operator. In closing, on behalf of Dada's management team, we'd like to thank you for your participation on 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.