Good morning, ladies and gentlemen, and thank you for standing by for Dada's second quarter 2022 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 call is being recorded. I will now turn the meeting over to your host for today's call, Miss Caroline Dong, Head of Investor Relations for Dada. Please proceed, Caroline. Thank you, operator. Hello, everyone, and thank you for joining our Q2 2022 earnings conference call. On the call today from Dada, we have Mr. Philip Kuai, Chairman and CEO, Mr. Jeff Huijian He, incoming President, Mr. Beck Zhaoming Chen, CFO, and Mr. Jun Yang, Co-founder and CTO. Mr. Kuai will talk about our operations and company highlights, then Mr. Chen 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 would like to remind you that this conference call contains forward-looking statements. Please refer to our latest safe harbor statement in the earnings press release on our IR website, which applies to this call. Also, during this call, we will discuss certain non-GAAP financial measures. Please also refer to our earnings press release, which contains a reconciliation of non-GAAP measures to the comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB. It's now my pleasure to introduce our Chairman and CEO, Mr. Kuai. Philip, please go ahead. Thank you, Caroline, and thank you all for joining us today. Today, with mixed emotions, I announce my resignation from Dada as Chairman of the Board and CEO. I would like to take this chance to thank everyone who joined our journey together. I'm inspired and proud of what we have achieved. I believe this transition will take Dada to the next chapter, and we are now more ready than ever before to turn the leaf. I'm extremely pleased to announce that Jeff Huijian He, our Vice President and my trusted business partner, has been appointed as our President. Jeff has been instrumental in our tremendous growth in the past eight years and our deepened collaboration with JD. Such contribution speaks for itself. With demonstrated strategy execution and the leadership capabilities, he has won the trust and support from the team and the board. Meanwhile, I'm also thrilled to welcome Mr. Xin Lijun to join us as the Chairman of the Board. Under leadership of Jeff, Jun, and Beck, and with the longstanding support from Xin Lijun and JD.com, Dada will be in good hands. I look forward to the continued strong partnership with JD to create more compelling value for our shareholders and the society. Now, let's discuss our second quarter results. We're pleased to announce another strong quarter in which Dada Group maintained rapid revenue growth with continuously improving operating efficiency. During the second quarter of 2022, total net revenue increased by 55%, and adjusted net loss margin narrowed by 20 percentage points year-over-year. I would like to highlight some general market developments before providing more updates on the two platforms. Beck Chen will then go through our financial results in greater detail. Starting with the current industry and the regulatory environment, Dada Group fully embraced the pro-employment, pro-consumption policies. Recently, we supported consumption recovery and employment stability through participation in major government-led promotional events, such as 2022 International Consumption Season in Shanghai, as well as the pilot program of work-related injury insurance for riders. Meanwhile, as China aims to promote the robust development of the platform economy, Dada Group firmly supports regulatory policies. We will seize the opportunity of high-quality growth to develop our platform in full compliance with regulations. We believe our innovative and solid business model can play a part in improving the efficiency of resource allocation and facilitating the progress of the domestic economy. On the anti-pandemic front, we actively cooperated with local governments in Shanghai, Beijing, and other cities affected by COVID-19 during the second quarter to maintain the local supply of daily necessities, leveraging our strengths as an on-demand retail and delivery platform to fully embrace our social responsibilities. In June, we received an appreciation letter from the Shanghai Municipal Commission of Commerce. Dada Group's significant contribution to the COVID-19 fight in Shanghai were highly valued by the local government. Next, I would like to provide some updates on our deepened cooperation with JD.com. During the second quarter, the GMV of Shop Now or Xiaoshigou, the unified brands for all on-demand retail services within JD ecosystem, more than tripled year-over-year. For search results optimization, in second quarter, we further expanded Shop Now's merchant base and product offerings to improve the availability of one-hour delivery options in each local grid. As a result, our search exposure rate in JD increased by three percentage points compared with the previous quarter. For Nearby or Fujin tab, Fujin platform, we further roll out this entry point to more cities. So far, Nearby has covered all cities nationwide in which we have launched the Shop Now service. Driven by the improvement in exposure, click-through rates, and the conversion rate, the GMV from Nearby tab increased by more than 80% quarter-over-quarter. Now, let me walk you through the operational highlights of our two platforms, JDDJ and Dada Now. Before going into business details, I would like to highlight the results of June eighteenth's Grand Promotion, a major mid-year online shopping festival in China. Both JDDJ and Dada Now made breakthroughs in this year's promotion. For JDDJ, GMV on the peak day surpassed RMB 600 million, and GMV during the promotion increased by more than 70% year-over-year. For Dada Now, number of daily orders delivered exceeded 10 million for two consecutive days. Now, let's spend more time on JDDJ, the leading local on-demand retail platform in China. As of the end of June 2022, the number of annual active users on JDDJ increased by 42% year-over-year to RMB 72.8 million. Retailer empowerment, brand cooperation, and technology innovation continue to be the focus of JDDJ in the second quarter. I will elaborate on each of the three areas. Firstly, we have continued in our efforts to empower retailers. Beginning with the supermarket category, we have now established partnerships with 87 out of the top 100 supermarket chains in China. In addition to onboarding more top 100 supermarket chains, we are also signing up more local original leaders. Moreover, supermarket category is gaining momentum in Shop Now. Thanks to the increase in online traffic and conversion rate, as well as offline customer acquisition. GMV of supermarket merchants in Shop Now channel increased by multiple times year-over-year. Let's move on to the consumer electronics and home appliance category. Based on our consumer insights at a grid level, we continued to move the right product supplies online. During the second quarter, more than 10,000 consumer electronics and home appliance stores were newly launched on JDDJ. In the smartphone subcategory, as the largest O2O sales platform for Xiaomi products, we established an official partnership with Xiaomi brands in the second quarter. As of now, there are more than 3,000 Xiaomi home stores listed on JDDJ. GMV generated by the Xiaomi home stores increased by more than 10 times year-over-year in the second quarter. In the PC and accessories subcategory, we further expanded offerings and penetrated new segments. During the quarter, we formed new partnerships with leading brands, including Canon and Aurora. In the home appliance subcategory, in collaboration with merchants, we enhanced our service capability of integrated delivery, installation, and after-sale service for large home appliance. As a result, the GMV of home appliance subcategory more than doubled on a sequential basis. In the mom and baby category, we facilitated the cooperation between leading retailer chains and mom and baby brands such as Wyeth and Ellie. As a result, GMV of mom and baby chains on JDDJ more than tripled year-over-year. We also work more closely with chains in the liquor category, such as JD Liquor World, Jingdong Jiu Shijie, and 1919, yao jiu yao jiu. With GMV of liquor stores more than doubling year-over-year. In the home and the furniture category, we have further penetrated smart home products. For example, in the second quarter, JDDJ has established partnerships with more than 10 smart lock chains, zhineng suo chains, including like Kaadas, and brought 2,000 smart lock stores online, providing users with a convenient one-stop shopping experience, integrating delivery and installation. Secondly, we continue to push forward our cooperation with brands. During the quarter, we continued to solidify our leadership in the O2O space in terms of both the number of brands we work with and the depth of engagement with the brands. Our online marketing services recorded year-over-year growth exceeding 80% in the quarter. In the second quarter, we further expanded our diversified brand partner base. We struck several new partnerships with food and beverage brands such as Yuanqi Senlin and Dongbei Daban, as well as beverage alcohol brands such as Diageo and Luzhou Laojiao. In addition, we signed up mom and baby brands such as Abbott and pharmaceutical brands such as Jiangzhong. We also saw impressive results from our brand marketing campaigns. On June first, JDDJ teamed up with 11 mom and baby brands, including Wyeth and Huggies, to launch a joint marketing campaign aimed at creating a virtual mom and baby shop that offers extensive products in good price and available for one-hour delivery. Total GMV of participating brands increased nearly fourfold on a year-over-year basis. On June 17th, anchoring with JD's June eighteenth's grand promotion that started at 8 P.M., we partnered with 23 brands, including P&G, PepsiCo, and Yili Dairy, to launch a live streaming campaign with the slogan, "Placing orders at 8 P.M. and get delivered to your doorstep by 9 P.M." On the day of the live streaming campaign, total GMV of these brands increased by more than three times year-over-year. Thirdly, we also continued our efforts to empower retailers and brands with innovative technologies. At the end of June, the Haibo system, our omni-channel tool operating system for retailers, had been deployed by more than 200 merchants in around 7,700 retailer stores. In addition, Haibo have successfully penetrated new categories, including like pet stores and mom and baby stores, while serving more supermarkets and convenience stores. We continue to roll out new Haibo features to address what merchants need most and help them wherever they see challenges. One example is that we launched a new module enabling merchants to directly connect to JD's warehouse system through Haibo once they source supplies from JD. This helps retailers' procurement staff save significant labor hours. As a result, merchants adopting this module saw their procurement efficiency improved by three times. Our Earth Grid System or Kunce, which helps brands boost sales by providing them with by grid or by store sales data, has been welcomed by a growing number of brands. In addition, as Shop Now becomes an increasingly important channel for brands' sales growth, we upgraded Kunce's SKU analysis feature to help brands simultaneously monitor the availability of their goods at both JDDJ and Shop Now, so that brands can improve the product supply and sales. Our digitized in-store picking service, Dada Picking, also made significant progress. Since the establishment of our partnership with Carrefour, we have helped them improve picking fulfillment rate, customer experience, and cost efficiency. For example, customer complaint rates related with picking was lowered by a half three months after stores started to utilize Dada Picking. As a result of the impressive results, we have continued to deepen our collaboration with Carrefour. Now, Dada Picking covers all of the chain, the key O2O stores. Driven by expanded store coverage and increased penetration of Dada Picking in partnering stores, the total number of orders fulfilled by Dada Picking in the second quarter increased by more than three times year-over-year. Now, let's move to Dada Now, the leading local on-demand delivery platform in China. While total revenue maintained rapid growth, Dada Now's operating efficiency also improved significantly as we optimized pricing strategy and the merchant portfolios. I will start with our KA or chain merchants business. Revenue of our on-demand and delivery services to KA merchants increased by 45% year-over-year, while average gross profit per order turned positive. Our ability to provide integrated fulfillment services consisting of warehousing management, picking, and delivery gives us unique advantages. Therefore, we continue to consolidate our leading position in the supermarket KA category. In the second quarter, revenue generated from supermarket KAs increased by over 50% year-over-year. In addition, we signed up new supermarket chains like Wumart, WuMai. In the restaurant and beverage KA category, revenue generated from beverage KAs maintained rapid growth, more than doubling year-over-year. Moving on to our SME and C2C business. Orders fulfilled increased by over 30% year-over-year, while we continued to optimize unit economies significantly year-over-year. Thanks to our further penetration into lower-tier cities, orders fulfilled for SME merchants increased by more than 40% year-over-year. Lastly, on last-mile services. For last-mile delivery, we continue to leverage our flexible crowdsourcing network to ensure the fulfillment of JD Logistics orders, especially amid the pandemic and during peak promotional campaigns. For pickup service, orders maintained strong growth momentum, mainly driven by our further penetration into various picking scenarios. To wrap up, I would like to say a few words on ESG. As sustainable development plays an increasingly important role in China's economic strategy, we are committed to creating value, integrating social responsibility with corporate strategy, empowering our partners, caring for our employees' development, and then satisfying consumer needs so that we can achieve results that bring benefits to the company, our shareholders, and the society at large. At the end of June, we released our first ESG report, providing stakeholders with a comprehensive overview of our efforts and progress on key ESG issues. Going forward, we will continue to integrate ESG initiatives into our long-term development strategy and actively shoulder our corporate social responsibility. With that, I will now pass the call over to Beck Chen to go over our financials for the quarter. Thank you. Thanks, Philip. 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 that basis. All figures are in renminbi unless otherwise noted. The total net revenues in the second quarter increased by 55% to RMB 2.3 billion. Net revenue from Dada Now increased by 37% to RMB 816 million, mainly driven by the increases in order volume of intracity delivery services to chain merchants. Net revenues from JDDJ increased by 66% to RMB 1.5 billion, mainly due to the increase in GMV, which was driven by increases in the number of active consumers and the average order size. The 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. Operations and support expenses were RMB 1.4 billion. The increase was primarily due to 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 RMB 1.2 billion. The increase was primarily due to the growing absolute dollar amount of incentives to JDDJ consumers, an increase in advertising and the marketing expenses to attract new consumers to JDDJ platform, and the amortization of the Venus cooperation agreement arising from a share subscription transaction with JD.com in February this year. G&A expenses were RMB 100 million, flat year-over-year as a result of our expense control measures. R&D expenses rose to RMB 160 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 396 million. Non-GAAP net loss margin was 17%, improving by more than 20 percentage points year-over-year, and 6 percentage points quarter-over-quarter. In addition, JDDJ's direct margin turned positive during the quarter, making a remarkable milestone in our path to profitability. As of June 30th, 2022, the company had RMB 4.35 billion in cash equivalents, restricted cash, and short-term investments. Let's turn to our $70 million share repurchase authorization announced in March 2022. As of June 30, 2022, we had repurchased approximately $33 million of ADSs under this purchase program. In terms of our outlook for the third quarter of 2022, we expect the total net revenue to be between RMB 2.35 billion and RMB 2.45 billion, representing a year-over-year growth rate of 39%-45%. In addition, we expect the net loss margin in the third quarter of 2022 to continue to significantly narrow year-over-year and achieve sequential improvement for the sixth consecutive quarter. This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up your handset to ask your question. We will wait for a moment while the question queue assembles. Our first question is from the line of Ronald Keung from Goldman Sachs. Please go ahead. Thank you. Thank you, Philip, Beck and Caroline. I have two questions. First is how should we think about this executive and board changes? Would there be a future CEO role, as I think it's, you've now filled the president and chairman roles respectively. I also see an increase in independent directors. Is that part of a kind of board change to align with some of the Hong Kong Stock Exchange guidelines? Any comments on eventual listing or dual primary listing in Hong Kong? My second question is on the encouraging 18 percentage points improvement in net margins, if you'd flag that, Beck. Where has user subsidy rates trended so far? Are we continuing to expect the direct margin breakeven this year and EBIT turnaround by next year? Thank you. Okay. Thank you for the question, Ronald Keung. For the first question, we have actually net added one independent director. Now actually three out of six directors are independent, which is fully compliant with the potential Hong Kong listing rule. Right now four out of six board directors are female directors, which are very diversified, and they all have very solid international backgrounds. We hope that all those directors will contribute to the growth of the company in the future. Also we will be proactively, you know, move forward with the Hong Kong listing procedures to protect our shareholders' interest. We want to thank for the contribution of Philip Kuai to the company for the past eight years. After internal discussion, we are not positioning a CEO role, and actually, President Jeff will be executing, and be responsible and in charge of the daily operation and then report to the board in the future. About the second question, yes. Actually, our overall subsidy ratio is actually decreased by 20 basis points compared to the first quarter. In Q2 actually, our consumer incentives decreased to 4.5% as a percentage of JDDJ's GMV. In the third quarter, we expect the incentive ratios will be decreased more, and they will all be contributing to our direct margin level. For the whole year, we maintain the, you know, forecast that the direct margin will be turning positive and the company will be turning positive profit in the first half of next year. Wonderful. Thank you. Thanks, Philip. Thank you, Ronald. Thank you. Our next question comes from the line of Thomas Chong from Jefferies. Please go ahead. Hi, good morning. Thanks, management, for taking my questions. My first question is about the competitive landscape as we are seeing an increasing number of entrants entering into the space these days. For example, like, short-form video and different players also launch some O2O services. How should we think about the competitive advantage of JDDJ? My second question is about after the board change, how should we think about our cooperation with JD going forward? Should we see accelerating synergies with JD? Thank you. 现在第一个问题，对比这个友商，我觉得我们还是有以下的这些差异化的优势的。第一个是关于合作商家的差异化和供给的优势。京东大家的这个中立的定位以及数字化赋能的能力，使得我们的合作的领先的商家和品牌更加广泛，从而保证我们平台的供给在丰富度、质量和价格上具备竞争力。 This is Jeff. First and foremost, our positioning as a pure play marketplace and our enabling digitalization capabilities has enabled us to work more extensively with those leading trend merchants and brands, which makes us more competitive in the variety, quality and prices of products. 我们坚持我们的平台定位，不从事和零售商竞争的业务。 Yes, as we always tell our partners as a pure marketplace, we never compete with our retail partners, so we are not engaging in retailing ourselves. That's why, you know, those retailers are more willing to work with us. 即使这友商在大量地补贴，其实对我们的补贴的影响也是非常有限的。那原因是，补贴只能短期地刺激需求，而持续地要更好地去满足消费者的需求，需要更加优质的这些供给。我们合作的这些领先的零售商，相比于友商平台的长尾的这些商家，在供应链上啊，显然是有显著的这些优势。 Even though our competitors are subsidizing cities more, but the impact to our profits to us is very limited. Our, as I said, so our incentive ratios are decreased sequentially. The rationale behind is that the subsidies only drive up the demand, but it needs to be continuously fulfilled with high quality supplies. Partnering with those leading retailers gave us a clear edge on the supply chain front over our peer. For the long term. 另外一个非常重要的差异化的优势是数字化赋能的能力。首先我们的海博系统持续地在做功能的迭代，来帮助这些零售商去解决O2O运营中的痛点，去实现在整个O2O运营中的降本增效。目前已经覆盖了七千七百个零售商的门店。而我们的仓捡配的一体化的解决方案，这些解决方案不同于餐饮的外卖配送，食物的O2O的配送在履约的各个环节，包括捡货打包的各个环节。我们的仓捡配一体化的解决方案能够帮助零售商缩短整个捡货时长。然后我们拿来优选的数字化众包捡货模式也帮助零售商应对人员短缺的问题，已经得到了很多合作伙伴的高度认可。最后，我们坤测的系统在助力品牌商在网格的维度去优化他们的供给，创造了真量的销售机会。 We also enable our retail partners with our capabilities in digitalization. For example, take Haibo system as an example. We continue rolling out our new Haibo features to address what merchants need most and help them reduce costs while enhancing the operating efficiencies. As of June 30th, it has been deployed in around 7,700 retail chain stores. Another example is our integrated fulfillment solutions consisting of warehousing, management, picking and delivery. There is a key difference between the on-demand retail and the food delivery. This is the picking and the packing in the retail stores. Our integrated fulfillment solutions enable retailers to reduce the order picking time while our Dada Picking service help them mitigate labor shortage through its innovative digitized crowdsourcing model, which are more and highly valued by our retail partners. Lastly, our Kunce or the earth grid system helps brands boost sales by optimizing channel supply down to each like the grid of the area. 在产品类的拓展上，我们也是有显著优势的。我们的数字化赋能的系统和能力已经在复杂的商超品类得到了证明，然后可以快速地运用到其他的品类，因此品类的扩展会更加容易。 We are also proactively to expand across different categories. So, our capabilities in the system and of digitalization can easily help us to expand from the most complicated supermarket categories to other categories like 3C categories, appliance categories, as we have said before. So this is also a clearly added capability of our platform compared to our peer company. Uh, Also the brand partnerships. Apart from the top retailers, we have extensive partnerships with the brands. Since the retail chains on our platform are critical offline distribution channels to many consumer product brands. We can offer our brand partners integrated marketing service across both online and offline channels, and also as well as digitization tools. Through our collaboration, brands are not only able to generate more sales, but also improve their consumer insights and the channel insights. We can also leverage JD's resources to bring more brands on board, and in particular, like brands in consumer electronics, where JD enjoys strong consumer mind share. Our peers are actually lagging us in terms of both number of the brands and the depths of the engagement with the brands. Uh, Yeah. Let's talk about the collaboration with JD. We continue to deepen cooperation with JD.com. During the quarter, the second quarter of this year, GMV of Shop Now, Xiaoshigou more than tripled year-over-year. In the second quarter, we further expanded the Shop Now's merchant base and the product offerings to improve the availability of one-hour delivery options in each local grid. As a result, our search exposure rate in JD increased by 3 percentage points quarter-over-quarter. Uh, For nearby or Fujin tab, we further rolled out this entry points to more cities. So far, the nearby tab has covered all cities nationwide in which we have launched the Shop Now services. Driven by the improvement in exposure, click through rate and conversion rate, the GMV from nearby tab increased by more than 80% quarter-over-quarter, contributing 10% of Shop Now's GMV. Thank you, Thomas. Thank you. Thank you. Our next question comes from the line of Eddie Leung from Bank of America Merrill Lynch. Please go ahead. Good morning, guys. I have two quick questions. The first one is about consumer behavior. Could you give us an update on your observations of what consumers are doing in the recent months after the reopening of Shanghai and amid inflation? For example, any change in their preferences for product categories? Secondly, could you also remind us the AOV of JDDJ? I think you mentioned that you have seen that AOV continuously going up. Thank you. Okay. Eddie, let me answer the second question first, and I will pass the first to Philip to answer. The average order value of our JDDJ and Xiaoshigou platform in Q2 was RMB 225, which is increasing by RMB 10 compared to first quarter. In the long term, we think we will continue to drive up the average order value as we just said. We will have more diversified various new categories of products, and they are all with higher AOV and contribute positive direct margin to the platform, which would also not only help us to increase the diversity of our products to be offered to the consumers and also contribute to our profit improvement. Eddie Leung, I'll give you some update on both the supply side and demand side from short-term and long-term perspective, our observation. In short-term, we are seeing from the supply side, we are working with the key merchant chains with the strong supply chain capabilities, and they're much more resilient to the turbulence. Therefore, under this challenging environment, the retailers we have been working with are much stronger to deal with the challenge. At the same time, most of the retailers are facing difficulties to get offline customers in store. That's why they really need to expand O2O business. That's why our partnership with the retailers has been further improved over the last couple of quarters. That's from the supply side. From the demand side, we're seeing that for example, in July, after Shanghai reopened and the COVID continued to happen in different cities across July and August, it did absolutely bring some uncertainties. We're seeing the confidence of the consumers and their willingness to pay are still have some way to recover, and it does have some impact on our business as well. I think, going forward, we were confident and we believe that the demand side will pick up over time while our supply side remain very strong. For the long term, I think the on-demand retail penetration as percentage of the local retail is still very low at the single digits. That's why the room for long-term growth is just tremendous. Most of the retailers and the brands believe that O2O is the future, the absolutely number one growth area for the foreseeable future. We are very much confident. Thank you, Philip and Beck. Thank you. Thank you. Our next question comes from the line of Alicia Yap from Citigroup. Please go ahead. Hi. Thank you. Good morning, management. Thanks for taking my questions, and congrats on the solid results. I have a follow-up on the competitive landscape for JDDJ. I think, you know, we're also seeing more players actually more aggressively penetrate to non-supermarket categories that which I think JD and Dada actually used to enjoy the synergies and the advantage. Can management comment if you expect the landscape, especially for the non-supermarket category, to get more intensified? If so, how would that affect the take rate or even the margins and the volume growth in the coming future? Then a follow-up on that is, what do we expect for the direct margins target for JDDJ in the next, I mean, in the medium term, which is in two to three years? Thank you. Hi, Alicia. I will give you some of my thoughts and see if Jeff and Beck have anything to add. We are seeing more players coming on board in the non-supermarket category. More as followers, as we have been quite successful expanding in the non-supermarket category, so they're following us without too much of the development. If you break down the so-called non-supermarket category, you will see that the category we're talking about mainly covers like consumer electronics, the mom and baby parenting, the liquors or home appliance. All those categories have very different consumer mindsets comparing to restaurant food delivery. This is totally different. It's very remote, remotely linked for any consumers to think of, like buying a smartphone or buying a home appliance from a restaurant food delivery platform. I think that's the key. For JD, we are very happy. I think we are very lucky to deeply collaborate with JD that the consumers come on board on JD, they have the strong mindset to buy those category products on JD. With the development of our Shop Now business, we can easily leverage the traffic and the consumer mindset on those categories. I think those are the advantages we enjoy. It is very difficult for all of the other players to build a similar mind share anytime soon. Yeah. Also about the take rate and also about the direct margin. All those new categories, actually we are subsidizing much less compared to the supermarket categories. Which means that they all generate positive direct margin to the company. We are welcoming all those new categories on board. About the trend of our company's direct margin, JDDJ's direct margin level, we actually in Q2, our direct margin turned positive to 0.4%. We are expecting the direct margin level to be further increasing to 1% or more than 1% in the second half of this year. We believe it will be key to increasing 2023, which is very key and essential to the company's overall profit breakeven. Thank you. Thank you. Our next question comes from the line of Andre Chang from JP Morgan. Please go ahead. Thank you management for taking my question. I have a follow-up question regarding our cooperation with JD. Now we saw this, you know, infrastructure laid out, right? The you know, Shop Now and the Nearby tab, the ad load, et cetera. I wonder what will drive further, you know, growth, you know, driven by JD or our cooperation with JD. For example, will there be more ad load or like, there will be more exposure or ad from different category beyond electronics, FMCG, et cetera? We are going to promote more to get more visibility for you know, consumers within JD ecosystem, et cetera. Any color for the drivers in the second half and in next year to increase our traffic contribution from JD will be helpful. Thank you. Hi, Andre. I also give you some of my perspectives and see if the rest of the team has anything more to add. In terms of the driver for growth on JD.com, I think there are a few key things you're looking at. Number one is the penetration of the user base. We are fully aligned with JD.com to increase the penetration of consumer on JD.com. Now the penetration is still at the single-digit, while quickly growing, and then we are aiming at 50% penetration in the long term. I think this is the number one driver in short term and in long term. There are a few things to help us to improve the penetration. For example, like the exposure. We're getting more and more space, if you will, on JD.com. You're able to see us more and more often everywhere. At the same time, we are expanding geographically and also bringing more and more supply from various categories. Therefore, when people are searching or browsing products from various categories, now they can see us more and more often. Because before, we don't even have the supply of the products in that kind of new categories. Now, as we expand and then bring more stores and suppliers on board, the customers are able to see them on JD.com. All those help us to improve the exposure and the penetration. In terms of promotion, I don't think it will be a heavy promotion-driven expansion at all. Other than that, we actually can fully leverage all the existing successful promotion on JD already, like the June eighteenth or Double Eleven and so on and so forth. JD has lot of successful promotion, and now we can ride together with them. I think those are the strategies we are looking at. Uh, Including seckill, including this flash purchase, etc. All these channels will support BS, giving us the opportunity to get more exposure. Finally, in JD's shopping process, including after the user has completed the purchase, we are also getting more exposure to recommend Xiaoshigou's services in the future. For the next step, we are very confident in getting more exposure. Okay. I'll further elaborate on the exposure opportunities. For example, if a consumer is searching the fresh produce products in the search tab, there will be more exposure to the Shop Now choices. For the next step, we will expand it to more category products, for example, those heavier products or big bulk products in the supermarkets. We will further increase exposures in different channels like, you know, the second killing channels. When the consumers are placing the orders, when they finish and complete the orders, there will be recommendation for them for the nearby stores. This all in the testing procedures. We are very confident that we at, you know, Shop Now in the JDDJ will be acquiring more traffic in the consumer minds within the JD ecosystem. Thank you. Andre Chang. Thank you. Our next question comes from the line of Wei Zhong from UBS. Please go ahead. Hi. Thank you management for taking my question. My question is around. I want to follow up on the supply side advantage that you guys mentioned just now. I wonder how do we see the churn rate of merchants, especially on the SME side, after the very challenging second quarter. Will that affect our product supply for certain long tail categories? I understand this might not be an issue with our partnership with the leading supermarket chains, but I do believe we do have a large number of smaller merchants on the platform. Just wanna hear your thoughts on this. Thank you. Sure. Our strategy is to firstly work with the key chains, not only supermarket chains, but also other vertical, specialty store chains, like consumer electronics, mom and baby, liquor and so on. All those key chains retailers are much more resilient, and all of them are still there, and the business are relatively well. We're not seeing any substantial impacts from the supply side. On the other hand, we're actually happily seeing that almost all of our retailer partners have strengthened the partnership with ours because they're seeing more challenges and are looking for our help. I think the partnership with our retailers has actually got improved. We're very much confident that we will be able to going through all the turbulence in any, like, circumstances. Thank you. There are no further questions at this time. I will now hand back the conference 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 your participation in today's call. If you require any further information, feel free to reach out to us directly. Thank you for joining us today. This concludes the call. Thank you. The conference of Dada has now concluded. Thank you for your participation. You may now disconnect your lines.