Hello. Thank you for standing by for JD.com's third quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang. Please go ahead. Thank you, Ruckel. Good evening and good day, everyone. Welcome to JD.com's third quarter 2022 earnings conference call. For today's call, CEO of JD.com, Mr. Lei Xu, will kick off with opening remarks. Our CFO, Ms. Sandy Ran Xu, will discuss the financial results. After that, we'll open the call to questions from analysts. I'd like to remind you that during this call, our comments and responses to your questions reflect management's views as of today only and will include forward-looking statements. Please refer to our SEC harbor statements in earnings press release on our IR website, which apply to this call. We'll discuss certain non-GAAP financial measures. Please also refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in the earnings press release. Also, please note that unless otherwise stated, all figures mentioned in this call are in RMB. With that, I'll turn the call over to Mr. Xu, our CEO. Xu. Hello, everyone. This is Xu Lei. Thank you for joining JD.com's third- quarter earnings call. 2022 has been a year full of challenges, a year both momentous and extraordinary. We have withstood nationwide COVID resurgences, challenging macro conditions, sluggish consumption demand, as well as supply chain disruptions. Facing the complex dynamics, JD has been making full use of our supply chain capability and the resilient business model we've built over the years as we strive to provide best possible service to customers, create raise operating certainty for real economy participants, while at the same time delivering steady growth of our own. Moreover, we're delighted to see substantial improvement in our growth quality this year. Given the evolving economic and industry environment, since the beginning of the year, JD made preemptive decisions to focus on our core businesses while reinforcing quality operations and management and attaching great importance to business health. We believe this is the best way to maintain operating stability in times of external stress and ensure rapid rejuvenation when the economy recovers. As a result, along with our steady business growth, we have also experienced better operating quality, stability, and profitability. This validates what we have communicated with investors many times before about the potential for margin improvement in our unique business model. It also builds a solid foundation for our sustainable development throughout different economic cycles. We welcome and support the government's recent moves to further optimize COVID control measures with a more science-based and a targeted approach. We believe this is important to contain virus threats and maintain the stability of economic and social development. There are also supportive policies for companies like JD that play an indispensable part in supporting the industrial belt and people's livelihood. We will fully cooperate with and implement the authorities' relevant decisions and arrangements. It is true that COVID condition will continue to pose challenges to the economy and consumption in the near term. That said, we remain confident in the continuous refinement of the COVID control measures, the resilience of the Chinese economy, and the long-term prospects of the consumption market here. We also see growth opportunities amid all the challenges. 在我们主动调整关注经营质量的同时，京东始终坚持初心，围绕着用户体验、成本和效率来打造核心能力和长期的业务模式。在这样的经营理念的指引下，我们持续取得了消费者的心智和供应链效率的长足的进步。在第三季度，京东的活跃用户规模达到五点八八亿，主要由核心的零售业务用户环比净增超过一千万所拉动。我们的DAU也继续保持着同比双位数的稳健的增长。在规模增长的同时，京东的整体用户结构和质量也取得明显的提升。零售业务的复购用户以及Plus用户规模增长更快，占全部用户的比例持续提升，进一步拉动了用户的平均购物频次和ARPU。在会员规模不断扩大的同时，京东Plus会员也保持了高消费、高活跃度、高忠诚度等特质，平均的年消费水平超过普通用户的八倍。在刚刚过去的双十一大促中，京东在提升高质量店铺和商品丰富度的同时，进一步突出了性价比和超值的心智，大促取得了稳健的增长，并且购物用户数再创佳绩。参与的品牌、商家和线下门店的数量也创造了新的纪录，同时带动了大量的农户和农产品产业带获得实实在在的增长。大促期间近一万种农产品成交额超过十万元。我们的经验表明了高品质的农产品的上行可以切实地提升当地农民的收入，也进一步地带动了消费升级。因此，京东大力地推动从高质量农产品到消费升级再到农民增收的乡村振兴的正循环。此外，大促期间还有一个让我们引以为豪的亮点是超过五亿人次点击申请了一键价保，这是京东多年前提出的一项售后保价服务，不仅体现了京东有责任的供应链的能力，也印证了我们对极致用户体验的承诺，让消费者随时都买得放心。现在我们高兴地看到，这项服务不仅是京东极致购物体验的一面旗帜，更成为了行业的标杆，引领了行业在用户体验领域的探索与前进。 As we make proactive adjustments and focus on our operating quality, we always put the essence of the retail business at the center of our core competencies and business model, namely customer experience, cost optimization, and operation efficiency. With this long-held business philosophy in mind, we continue to achieve great progress in increasing customers' mindshare and supply chain efficiency. In Q3, JD's annual active user base reached 588 million, mainly driven by the net addition of over 10 million active users from our core retail business. Our DAU also recorded a double-digit year-on-year growth. In addition to user base expansion, we also saw better user structure and user quality. In particular, both the number of old users and Plus members delivered higher growth rate than other groups of users and made up a larger proportion of total users. This helped to drive increases in overall average shopping frequency and ARPU. For Plus members, along with the scale expansion, we also saw that each of them on average spent over eight times as much as a non-Plus member, demonstrating their high degree of loyalty, engagement, and purchasing power. During the latest Singles Day Grand Promotion, JD highlighted the dual themes of cost effectiveness and value for money, which helped us to onboard an increasing number of high quality merchants and products. The promotion achieved solid growth with a meaningful increase in the number of shopping users and a record number of participating brands, merchants, and offline stores. In addition, the promotion also boosted growth for many agricultural households and areas, with nearly 10,000 SKUs of agricultural products sold over RMB 100,000. JD is committed to promoting the virtuous cycle of rural revitalization from direct sourcing of high-quality agricultural products to consumption upgrades to increased income for farmers. During the promotion, we are also proud to see that over 500 million users clicked the Best Price Guaranteed program in the app, an after-sales service that JD has provided for many years. This reflects JD's supply chain capabilities and showcases our commitment to providing the best possible user experience, helping users to feel reassured at all times when they shop on our platform. This service has become a hallmark of JD's premium user experience and also pushes the boundaries of what the industry can do to advance user experience. 经营质量的持续提升，也为我们持续地投入开放生态建设、全渠道多业态的布局，以及供应链为实体经济赋能等长期的战略打下了重要的基础。在第三季度，零售的开放生态的第三方商家数量连续七个季度取得了20%以上的同比增长。时尚、居家、运动户外等品类的销售也保持了高于行业的良好增长态势。随着Fendi的入驻，京东成为首家与LVMH集团旗下九大顶级的时尚品牌全面合作的企业。同时，Christian Louboutin、La Prairie以及Lululemon等时尚、美妆、运动、顶奢及潮流品牌纷纷入驻京东，进一步扩充了京东的品牌矩阵。京东超市也加速了国家馆项目的建设布局。在此之前，已经开设了七十多个国家馆之外，大促期间又迎来了近二十个国家的国家馆的陆续上线，为消费者提供了来自世界各地的进口特产好物。京东一直在努力为商家构建可持续经营的开放生态，降低商家入驻门槛和经营成本，持续地优化流量分配和平台规则，同时通过发挥京东在供应链、物流、技术和服务的核心能力，提升商家的经营效率，在充满不确定的环境下，为品牌和中小微商家带来可持续的增长。大促期间，商家在京东的运营效果良好，销售贡献占比无论同比还是对比今年的618周年庆大促均有提升。 The continuous improvement of operating quality also lays a solid foundation for us to make further progress in our long-term strategies, mainly our online marketplace ecosystem, omnichannel businesses, and supply chain capabilities to empower the real economy. Our online marketplace ecosystem made solid progress in Q3, with the number of third-party merchants recording over 20% year-on-year growth for the seventh quarter in a row. Fashion, home goods, sports and outdoors categories all outperformed the industry. Notably, with the onboarding of eight top luxury brands recently, JD has become the first platform to establish an all-round partnership with the nine luxury brands under the LVMH Group. A collection of fashion, cosmetic and sportswear brands also joined JD in Q3, such as Christian Louboutin, La Prairie and Lululemon, further expanding our brand base. In addition, our supermarket business, JD Super, continued to roll out its national pavilions program, providing consumers high-quality specialty products worldwide. In addition to the 70 National pavilions already in operation, we welcomed nearly 20 countries to open their national pavilions on JD.com during the latest Singles Day Grand Promotion. Overall, JD is dedicated to build an online marketplace ecosystem where merchants can thrive with lower entry barriers and operating costs, better traffic allocation and marketplace rules, as well as higher operating efficiency driven by the back of JD's supply chain, logistics and technical capabilities. All these efforts have contributed to a sustainable growth of merchants and SMEs in times of uncertainty. During the latest promotion, merchants on our platform reported stellar performance with higher sales contribution both on a year-on-year basis and compared to this year's 618 Grand Promotion. 京东的全渠道的同城零售业务在第三季度保持了快速发展的势头，特别是小时购业务继续取得了同比三位数的增长，并且已经基本完成了对全国大型连锁超市的覆盖，有效地推进了与品牌商和线下商家的合作，帮助实体零售伙伴获得全渠道的增量增长。在iPhone 14系列的新机发售中，京东到家联合小时购作为唯一获得苹果官方授权预售资格的即时零售平台，九月份开售以来，截止双十一大促，共计售出数十万台iPhone 14系列新机，大幅刷新了苹果新机通过即时零售模式发售的记录。此外，大促期间，京东到家和小时购联合超市、便利、手机数码、美妆、家居、母婴、宠物等超二十万家全品类实体门店，线上线下全渠道同步为全国超过一千八百个区县市消费者提供全品类的小时达服务。 JD's omnichannel intercity business maintained strong growth momentum in Q3. In particular, Shop Now, our 1-hour delivery service, recorded a triple-digit year-on-year GMV growth, with the services covering the vast majority of supermarket chains in China. Shop Now has forged close collaborations with brands and offline stores and generated incremental growth through omni-channels for brick-and-mortar partners. During the latest promotion, as the only on-demand retail platform selected by Apple for the pre-sales of new iPhone 14 series, JDDJ worked together with Shop Now and sold hundreds of thousands of new iPhone models, making a record for new iPhone sales using on-demand retail model. In addition, JD DJ and Shop Now also partnered with over 200,000 offline stores during the latest promotion, covering a wide range of categories such as supermarkets, mobile phones and electronics, cosmetics, home goods, baby and maternal and pets, and provided hourly delivery services in over 1,800 cities and counties. 京东物流在充满不确定性的宏观经济中，持续为上下游的企业提供一体化的供应链的解决方案，帮助企业提升协同和抵御风险能力，快速响应市场和降本增效。在这个季度里，京东物流也持续地与快消品、家电、家居、服装、3C、汽车、生鲜等行业的众多的头部客户深化合作范围。在此基础上，京东物流在三季度不仅实现了稳健的收入增长，而且外部一体化供应链收入和客户数持续保持双位数增长，同时外部收入占比已接近七成。此外，京东物流继续稳健推进在全球范围内的物流基础设施布局。截止三季度末，包括Deppon在内，京东物流运营的仓库数量超过1,500个，管理的物流的基础设施总面积超过3,000万平方米。值得一提的是，JD Airlines在第三季度正式投入运营。在未来，JD Airlines不仅将加强京东物流一体化供应链物流服务的能力，也将持续推动全链条的降本增效。 Despite the challenging environment, JD Logistics continued to provide up and downstream industry partners with reliable integrated supply chain solutions, supporting enterprise customers to mitigate risks, respond to rapid external changes, and optimize cost and efficiency. In Q3, JDL also expanded the depth and breadth of collaborations with a variety of leading players in FMCG, home appliance, furniture, apparel, 3C, automobile, and fresh produce industries. As a result, JDL maintained resilient revenue growth in this quarter. Notably, both the number of JDL's external customers and external revenues delivered double-digit year-on-year growth, with the latter contributing nearly 70% of its total revenues in Q3. Moreover, JDL continued to expand its logistics infrastructure around the world. As of the end of Q3, JDL operated over 1,500 warehouses with an aggregate gross floor area of over 13 million square meters. It is also worth highlighting that JD Logistics Airlines, an affiliate of JD Logistics, commenced operation in Q3. In the future, JD Logistics Airlines will strengthen JDL's integrated supply chain services and help drive lower costs and higher efficiencies along the supply chain. 可以看出，面对今年以来外部环境的变化，京东主动有效地做出了关注经营质量、聚焦核心业务的策略调整，确保了我们业务的高质量的增长，带来了健康的利润率和现金流，为未来的发展积累了势能。正如我上次会上所做的展望，现阶段呢，我们正处于宏观的周期性调整的过渡期。在应对短期挑战的同时，我们也清晰地看到行业复苏的动力和正在到来的巨大的发展的机会。作为始终坚持服务实体经济的新型实体企业，京东既能为扩大内需贡献力量，也有能力参与到深化供给侧结构性改革，推动实体经济实现质的有效提升和量的合理增长。展望未来，我们相信京东长期打造的供应链基础设施、技术能力以及肩负的社会责任，可以让我们更好地融入中国新的发展格局，并发挥重要的价值。唯有矢志不渝，笃定不怠，方能不负时代。以上是我今天的分享。下面我把话筒交给京东集团CEO Sandy。 To conclude, amid evolving external environment this year, JD had the foresight to double down on operating quality and the core business. This has enabled us to constantly deliver high-quality growth, generate healthy margins and cash flow, and accumulate strength for long-term development down the road. As I mentioned the last quarter, as we navigate through the cyclical economic adjustment amid short-term challenges, we start to see the momentum and the tremendous growth opportunities ahead of us. As a company that is rooted in and serves the real economy, JD supports the expansion of the demand side and the structural reform of the supply side in China, helping the real economy to achieve better-quality and sustainable growth. Looking ahead, our well-established supply chain infrastructure, technical capabilities, and the social responsibilities we are committed to will enable us to play a more important role in China's new development phase. We believe that only through unwavering determination and perseverance can we live up to the times. With that, I'd like to give the floor to Sandy. Thank you, Lei, and hello, everyone. As many of you can feel here on the ground, the COVID situation is still evolving and may add complexities to consumer sentiment and the operational environment from time to time. Nevertheless, in the third quarter, we recorded a set of improving metrics and encouraging milestones across our financials and business operation. Our solid results in the quarter demonstrated our ability to cope with difficult external dynamics while improving our core competencies to support a more sustainable growth trajectory going forward. In the third quarter, our net revenues grew by 11% year-on-year to RMB 244 billion, returning to a healthy growth track. We navigated through a challenging time impacted by COVID resurgence and macro uncertainties. Our annual active user base also returned to growth and reached 588 million in total, representing a net addition of 7.5 million customers sequentially, despite a partial drag due to our Jingxi business adjustment. More encouragingly, we saw more customers staying with us for a longer time, and average spending per customer has been consistently increasing as well. All of these improving metrics demonstrated deeper user engagement and enhanced customer trust. Looking down the revenue mix, product revenues were up 6% year-on-year, a recovery compared to 3% year-on-year growth in Q2. Service revenues grew by 42% year-on-year to RMB 46.5 billion, achieving a historic high of 19% of total net revenues. Logistics and other services revenues grew by 73% year-on-year in Q3. Excluding the consolidation effect of Deppon, it still delivered a year-on-year growth rate of 36%. Continuing the momentum from Q2, I will elaborate more on the underlying drivers later. Marketplace and marketing revenue grew by 13% year-on-year, up from 9% year-on-year growth in Q2. In order to drive recovery, we saw merchants becoming more active again and invested additional advertising budget on our platform, which helped to accelerate our advertising revenue growth. Also, thanks to our relentless focus in improving the 3P ecosystem, we successfully onboarded an increasing number of merchants onto our platform, including a few notable wins in the apparel category. This brought our merchant base to a new height, laying a solid foundation for our open ecosystem. Now let's turn to our segment performance. JD Retail maintained solid top-line growth with a healthier business mix and a continued margin improvement on a year-on-year basis. JD Retail's revenues reached RMB 212 billion in Q3, growing at a solid 7% year-on-year. Electronics and home appliance category returned to an impressive 8% year-on-year growth, up from flat growth in Q2. During the quarter, as a result of our supply chain capability and strong consumer mindshare, we swiftly matched the demand spike for air conditioners due to the unusual weather pattern, driving double-digit revenue growth in the home appliance category. Meanwhile, the launch of the latest mobile phone models in September helped to lift consumer demand and sales. General merchandise revenues were up 3% year-on-year in Q3. COVID situation helped macro continue to dampen spending in consumer discretionary products such as cosmetics, beverages, and partially contributed to the soft growth of general merchandise. Meanwhile, we started to proactively optimize our product mix, particularly in the supermarket category, to improve operating efficiency and profitability, which we expect to impact its growth rate for a transitionary period. However, we believe it is important for us to stay focused on our core categories and capabilities in order to establish a healthier and more sustainable growth trajectory for the long term. That said, for the emerging categories such as healthcare, home goods, pets, and sports and outdoors, we continued to experience double-digit top-line growth in the quarter, demonstrating our expanding user mindshare across a wide range of categories. We are seeing the results of our business optimization. JD Retail's fulfilled gross margin was up 80 basis points compared to the same quarter last year, mainly driven by our optimization efforts and the improving economies of scale. Also, as we continue to expand gross margin for most categories and remained disciplined in OpEx, JD Retail's operating margin was up 115 basis points on a year-over-year basis to 5.2% in Q3, above the 5% mark for the first time since the founding of the company. JD Logistics, or JDL, maintained a solid top-line growth in Q3 and has achieved breakeven for two quarters in a row. JD Logistics' Q3 revenues grew by 39% year-on-year to RMB 36 billion, partially because JDL acquired a majority stake in Deppon, which was consolidated since the end of July. Excluding the impact from the consolidation of Deppon, JDL's revenues were up 16% year-over-year, mainly driven by the resilient growth in revenues from external customers, which also saw acceleration on a sequential basis. As a result, revenues from external customers once again achieved a record high revenue contribution of nearly 70%. More encouragingly, as JDL relentlessly focused on improving customer mix, optimizing operations, and realizing the economies of scale, its operating margin was up 350 basis points from a year ago to 0.7% in a seasonally low quarter. These results demonstrate JDL's ability to maintain a resilient growth even in a challenging environment, while remaining well on track of improving its profitability. Dada reported revenues of RMB 2.4 billion, and its operating loss narrowed sequentially to RMB 300 million. Dada continued to work closely with both internal and external business partners. Notably, JD Super, our supermarket business within JD Retail, has been collaborating with Dada to broaden product portfolio that offers intra-city on-demand retail services. The Shop Now service to consumers achieved a triple-digit GMV growth in Q3. This initiative also contributed positively to the margin of supermarket category. Dada also established collaboration with a variety of external brands. For example, Dada Now has been expanding instant delivery services to the coffee and the beverage category, which is now available in over 2,000 cities and counties nationwide. As you can see, with a broader spectrum of use cases offered by Dada, JD is in a much better position to serve our customers anytime, anywhere. Finally, as I shared in the last quarter, we continued to pursue rational development across our new business segment. It's reported revenue of RMB 5 billion and operating profits of RMB 280 million with a positive operating margin in the quarter. This was mainly due to the gain from the first tranche closing of JD Property's third property core fund in Q3, and the narrowing loss from Jingxi business. As JD Property has a well-proven business model with total transferred AUM surpassing RMB 27 billion, we remain committed to further expanding this business in line with our prudent investment philosophy. In the face of the complex macro conditions, both domestically and internationally, we have also been pursuing strategic realignment in other non-core business, such as the Jingxi business. These measures resulted in a more moderate revenue growth, but continued to narrow the operating loss sequentially, even after excluding the gain from JD Property. Moving to the consolidated bottom line. As we proactively adopted measures to focus on our core businesses and improve operating efficiency, our bottom line reached a new milestone in Q3. Non-GAAP net income attributable to ordinary shareholders surpassed the CNY 10 billion mark for a single quarter for the first time in history. Non-GAAP net margin was 4.1%, representing an impressive year-on-year improvement of 180 basis points and reaching a historic high. On a GAAP basis, net income attributable to ordinary shareholders also improved to CNY 6 billion with GAAP net margin of 2.4%. Our free cash flow for the trailing 12 months this quarter was 25.8 billion RMB. This was mainly driven by our improving operating cash flow, where partially offset by an increase of CapEx in our infrastructure expansion that would position us well for the future growth. By the end of Q3, cash and cash equivalents, restricted cash, and short-term investments added up to a total of 218 billion RMB, up from 207 billion RMB last quarter. To close my remark, the solid set of Q3 results demonstrated JD's business resilience in the face of rapidly evolving macro conditions. There may be no better time than now to review the progress across our business initiatives and make positive changes where needed. We believe it's vital, especially in a time of uncertainty, to stay focused on delivering better operating efficiency, lower costs, and best-in-class user experience, which represents the essence of the retail business and the bedrock of JD's long-term success. Our focus on building resilient business means that we are well-positioned to help our users and business partners to cope with external challenges and make meaningful contributions to the society. All of these factors will make sure we are well prepared to benefit the next phase of great growth opportunities, which we believe won't be too far ahead. With that, let's open the call to the Q&A. Thank you. Thank you. The question and answer session of this conference call will start in a moment. To ask a question, please press star then 1 on your touchtone phone. To remove yourself from queue, please press star then 2. In order to be fair to all callers who wish to ask a question, we will take 2 questions at a time from each caller. If you have more than 2 questions, please rejoin the question queue again after your first question has been addressed. Today's first question comes from Ronald Keung with Goldman Sachs. Please go ahead. Hey, Thank you, Xu Lei, Sandy, and Sean, and congratulations on the strong third quarter results. Want to ask about the investment phase and mixed growth drivers as we could see from the third quarter that logistics, Dada, and new businesses are no longer dragging the group earnings. Where are we thinking on next investments and growth areas? Within JD Logistics, we've seen that the general merchandise supermarket growth had moderated while margin level for JD Retail reached a new high. Heading into next year, how are we thinking about balancing growth, price advantage, and stable margins? Thank you. 我来回答这个问题。我先说一下，京东十九年以来，无论是做什么样的业务，我十九年以来一直没有变的坚持的东西，就是我们在集团所有的业务层面上，我们都会去坚持看这个体验、成本和效率，这是我们做任何新业务、老业务，做得好都要坚持的这三点。另外，以及在To C业务上面，我们非常关注的就是产品、价格、服务。我相信很多的分析朋友应该都知道，其实这里面最难的就是如何去坚持十九年。 This is Xu Lei, let me start question by sharing with you our long-term philosophy to do business. This has remained unchanged for the 19 years of JD.com. We will always put great importance to the user experience and the cost and efficiency. No matter what kind of old and new business we do, we will stick to these three points. In terms of our to-customer businesses, we attach great importance to the quality of our products and good prices and premier services. Many of our investors know this is very difficult to always stick to these philosophies and concepts through the 19 years of JD's development. 那么如果要说有变化的呢，应该是今年我们最大的变化就是我们进行了战略的主航道的聚焦，也是基于年初我们基于整个经济形势和供应链的状况来进行判断。那么目前看起来的话，我们当时的变化或者叫调整应该是非常及时的，在行业里面应该也是最快的。 And In terms of some changes this year, I would say that we make more concentration and focus on our core businesses. This is based on our analysis early this year, and we have made some proactive measures according to our early analysis, which to date we think it's very timely adjustment we have made and also taking the leading action among this industry. 我们可以看的，我们可以确认的是，尽管疫情和经济的下行呢，那么今年造成了很多的企业的困难，但我们可以确定的是，应该说未来的话应该是向好的，已经在开始有复苏的迹象，明确的迹象，但不确定的是这个复苏的迹象的速度会有多快。所以说对于我们管理层来说，我们更重要的是，在坚持目前的我们的整个的战略方向的情况下，来看清楚未来的整个市场的行业的变化发展和经济复苏的力度，来保持资源的投入。在这点上呢，我们还是非常清楚的。 And we are certain that even though many enterprises are facing challenges, we do see a brighter future and there's some obvious signs on the economic recovery. Even though the sign is very clear, but we are still not very clear about how fast the speed of the recovery. From the management perspective, what we want to do is that we stick to our current strategies and we should have a very clear view on the future in terms of which directions and what will be changing in this industry, in this market, and how strong is this momentum so as to make our resources investment in a more clear pace. 具体到零售的战略的话，我们应该在上几个月已经提到了，我们未来也不会变的，就是零售的四大战略，包括了供应链中台的能力的提升、下沉市场、开放的生态和同城零售，这四个我们也不会轻易地发生变化。 And in terms of the strategies for JD Retail, we will continue to stick to the big four strategies, which are the building of the supply chain capability and expansion into the lower-tier market and building our open ecosystem and the intra-city retail. We will stick to these four. 具体到大商超品类，三季度的增速跟以前相比确实是下滑，那么这里面有多种原因，其中疫情的影响还是比较明显的。但同时，我可以非常明确地告诉大家，就是大商超业务的这个健康度、利润和这个品类的管理能力，今年应该上了一个新的台阶。而且我们的大商超用户在主站的渗透率已经超过了50%，消费用户数的这种增长也是远远高于我们的整个大盘的增长。同时当然我们还做了很多同城业务、下沉市场的一些创新或者叫布局。谢谢。 And in terms of the supermarket business indeed mainly affected by the COVID resurgences. Its growth is going in the down way. However, there's a many progresses is made in this categories, including its healthiness, its profitability and its ability to manage categories. Its overall for the JD Super users has accounts for 50% of the overall JD.com platform and we are confident for the future growth of this category. We also make some new experiments in this category for our intra-city and lower-tier market expansion this quarter. Thank you. Thank you. Our next question comes from Thomas Chong at Jefferies. Please go ahead. 晚上好，谢谢管理层接受我的提问。我的一个问题是关于近期看到物流受到疫情比较大的一个影响，想看管理层这个会对消费者的情绪，还有用户体验会受到多大的影响呢？然后如果我们看一个短期的GMV，还有一个收入的增长呢，我们应该怎么去理解这个物流的问题呢？第二个问题呢，就是关于我们在未来一段时间，我们对不同的品类，手机、家电、快消品、服饰，还有其他的品类，最近的情况可以分享一下吗？ Thanks management for taking my questions and congratulations on a very solid set of results. My first question is about the logistics disruption due to the pandemic recently. How should we think about impact to consumer sentiment and user experience? On that one, how should we think about the short-term impact to GMV and revenue growth momentum? My second question is about the latest product category trend across smartphones, consumer electronics, FMCG and apparels. Thank you. 确实，如您所说，整个物流今年受到的疫情的影响应该是疫情三年以来最大的时候。我可以跟大家分享一个数据，就是从九月份开始的话，一直到现在的话，京东自己地址的这个静止大概已经超过了17%，这是三年以来最高的这个数字。所以地址就应该能够送到用户的家里。当然这个17%呢，并不代表着订单量的影响和这个销售额的影响，但是足以看到，就是对整个物流的履约，应该是在全国范围内，全行业内应该是最高的。 Indeed, as you pointed out that the logistic fulfillment has been severely impacted by the COVID situation, actually in the past three years, this year is the most heavily affected. I want to share with you a JD data here that in September to present, in terms of our logistic fulfillment, 17% of our customer home addresses have been affected by this COVID control measures. This doesn't mean that it affects the orders amount and the sales on JD. But indeed, this is the worst year in terms of fulfillment. 整个的状况肯定会对我们的履约和销售有影响。但同时，我想跟大家分享一下，就是最新的国家邮政总局关于整个行业的物流履约的整个行业的体验，那京东最新的数据应该在行业里排第一。我想这应该就是我们这么多年来我们的供应链能力打造，在这种非常困难的情况下，我们能够在行业里面能够继续地赢得消费者的认可的一个最重要的原因。 Indeed, difficult situations will affect our sales and fulfillment. Also, I'm proud to share with you, according to State Post Bureau's service recently, in terms of the service experiences, JD Logistics stand number 1 among the industry, which once again validated our efforts made in our supply chain capability building to help us to stand out and gain consumers' trust in this difficult time. 结合双十一的数据，我们可以看到的是，因为上面提到的一些原因，所以说订单的取消率确实比往年会略高，因为有些物流履约的一些困难，或者是更长的一些时间。但是可以再次分享的是，因为京东的整个购物平台是确定性购物，确定性购物的一个消费者的习惯，也就意味着在冲动型、兴趣型购物方面，他们所带来的订单取消和退货将会更高。 And just also basing our data from the Singles Day Grand Promotion, we do see there are higher rates of order cancellation. It's a higher cancellation rate than the past years, because of the fulfillment difficulties and the longer waiting time. However, I want to emphasize here that people come to JD.com for more planned shopping, so we believe the cancellation rate for those platforms with more impulsive shopping or shopping based on their interests, the cancellation rates should be higher. 另外一个群体也是我们非常在意的，就是品牌商和商家。实际上，京东的这种确定性的购物以及较好的购物体验给他们带来的经营成本，综合的经营成本以及盈利性是目前看起来整个平台里最好的。 Another group of people has attach great importance are our brand partners and merchants. Based on JD's shopping features with more planned shopping and premier shopping experiences, this can translate to the better operating cost and the profitability for merchants and brands, and make us stand out among all the other e-commerce platforms. 那么在分析一下品类的情况，整个三季度里面我们增长增速比较好的品类是家电、生鲜、健康、运动、宠物等这些品类，还有就是京东小时购这种同城的业务，以及包括五星在内的线下全渠道业务，应该整体表现呢是优于整个平均大盘的。 In terms of the faster growing categories, in Q3, we've seen that home appliances, fresh foods, health, sports, and pets are doing a good job, also including our Shop Now services for the intracity retail and our offline business Five Star Appliance. 那么，如果说增速不理想的品类呢，应该有美妆和手机这两个品类应该是受到比较大的挑战的。大家也可以看到行业的数据。但是随着新机在九月中下旬的陆续发布来说，手机品类的近期的改善，包括也是延续到四季度，应该还是一个改善的。大商超品类里面的像酒类和母婴类呢，应该还是受到整个消费场景受限的影响，包括人口的、消费人口的影响还是比较大的。但同时呢，因为京东整个的品类，我们有三十多个一级类目，我们今年会对一些长期亏损的一些类目，我们会做一些判断，所以说我们会对这些业务做一些调整。所以说我们能看到是今年整个各个品类的健康度和用户体验，包括商家的满意度都在提升，而且整体的基本上所有的品类都在提升市占率。 For those less ideal performing categories includes cosmetics and mobile phones. We see that since September, as some new phone models releases, the situation is getting better and this will continue in the lead up to Q4. For this alcohol category, it's affected by the limited shopping scenarios due to the COVID and also the baby and the mother category affected due to the reduced the newborns. There are many 52 categories on JD.com, and we are regularly reviewing those loss-making categories and make dynamic adjustments to maintain healthiness across all categories. We have seen improvements on the performance of all categories and better satisfaction from our brand and merchants. Despite of all the off, we see their market share all continue to increase. 好，谢谢。 Thank you. This is Sandy. I can add more color on the short-term GMV trends. So as Xu Lei just mentioned, we are still facing some short-term challenges due to the COVID control measures. And also, we view the 20 rules guiding COVID control policies to be very positive and constructive for the recovery of domestic supply chain and consumer confidence. But it will take some time to actually see the positive impact on consumption data given the current situation. In the short-term, we recommend analysts to be more conservative in modeling the top-line performance. But you know, we are more confident in the long-term strategies and the growth in next year, specifically for JD Retail. Yes, we see that the resurging of COVID situation affects more regions in the country at this time. There are disruptions to logistics and fulfillment, resulting a decrease in the successful fulfillment rate, as Xu Lei just mentioned, as well as an increase in the order cancel or return rate compared to prior years. The consumers also become more conservative or rational under the current macro environment. In fact, the demand was good during the major promotions, but softer before and after the promotion. So in Q4, we see that, you know, different categories performed differently. In general, you know, the essential daily necessity products performed stronger than the discretionary products. In particular, you know, for apparels and other discretionary products remain relatively soft. The management team is paying more attention to operating quality this year, taking proactive initiatives, including making some structural adjustments to the SKUs or subcategories with heavy investments. So, we st ill have some negative impact on the short-term top-line growth. We believe, you know, it will build very good foundation for our long-term top-line performance. With all these factors considered, the top-line growth trend will continue in Q4 but may slow down a bit moderately from Q3. For JD Logistics, its organic top line growth will be similar in Q3 to Q3, and the internal revenue will again be affected by the decrease of the orders of Jingxi business. JD Logistics' external revenue growth will significantly outpace that of the internal revenue again in the fourth quarter. Deppon was consolidated at the end of July, and it will contribute more to external revenue in Q4. On the new business segment side. The revenue growth opportunity will still be negative, will be a drag for our overall revenue performance. International business strategy has also been adjusted to a certain extent to improve the operating efficiency. Well, our JD Property maintains a relatively high growth momentum. Thank you. Thank you. Next question, please. Our next question comes from Eddie Wang with Morgan Stanley. Please go ahead. 徐总、刘总、Sean，感谢接受我的提问，我也恭喜一下这个非常好的利润的beat。我这边其实有个问题，就是说之前刘总也提到了，就是说这个疫情管控的这个逐步放松，对这个消费带来的复苏可能还是存在一些不确定性。那我想问，因为我们的确是在on the ground是看到了，就是说整个疫情政策的放松，这个是有很明确的信号，那明年就是说在这个放松的情况下能带来消费进一步的复苏的话，我们在现有的情况下会做出一些怎么样的，就是现在战略上的一些微调或者准备，这个可能是包括我们在货客方面，或者说品类的这个mix方面，或者是促销的方面。然后紧跟的一个问题就是说，因为的确是看到我们的这个margin，JD Retail这边margin的这个爆发力是很强的，改善的空间在过去两个季度。那如果明年整个消费复苏在这个前提下，就是说，我们有没有可能是说，这个margin的改善和这个收入和GMV的增长是同步，会非常大的，还是说这个可能会，如果整个消费复苏比较明显的话，我们可能会把margin稍微拉回来一点，然后就是把这个，更加注重这个，来看这个消费复苏，我们能得到更多的一个这个top line的增长。那我自己也翻译一下。Uh, thank you management for taking my question. My question is that we have already witness part of signal in terms of the COVID policy relaxation as well as the, you know, potential reopening in early next year. So, just want to hear your view that, assuming that this reopening will gradually to happen in next year, what kind of preparation or you know, strategy change based on our current, you know, strategy in this year? And the follow-up question is that we have seen very strong margin improvement in terms of the JD Retail business and other business. So if assuming that there will be a very strong, you know, recovery in terms of consumption next year, are we able to achieve both, you know, strong margin improvement together with the top-line acceleration? It will be a balance between, you know, the margin improvement and the top-line growth. Thank you. 我先回答第一个问题，第二个问题一会儿丹妮再来做一些补充吧。我想稍微纠正一点的是，这里面包括了确定和不确定，我可以确定的是现在是在准备复苏当中，也就意味着我认为现在是最坏的时刻，已经基本过去了，就是未来应该都会有不断的利好或者是不断的正面的一些因素和信息，这是非常非常明确的、确定的。但是不确定的，刚才讲的是，具体反弹的速度和力度是在什么时候能够反弹多高。因为坦率地说，这个经济是一个非常复杂的，那么涉及到了具体到了消费，尤其中国，尤其京东又是一个覆盖全中国的一二三四五线的这个一个平台，那么也就意味着可能在不同的人群和不同的地区上，它反弹是不一样的。另外呢，就是今年的话呢，因为年初我们跟很多品牌商沟通的时候发现几乎所有的品牌商今年更关注的是利润，因为他们也做了预判，以及呢年初的俄乌战争会对部分品类的供应链也会受影响。所以说，接下来的话，那么各个品类的品牌商基于目前的情况，他们对明年的这种态度在利润还是增长上面，以及全球供应链的恢复状况，其实都决定了我们明年在不同的时间点，我们还会采用什么样的恢复投资或者是新增投资的策略。我现在没法确实给出一个非常明确的。 And let me answer the first question. First I want to make a bit of correction. There are certainties and uncertainties. By the certainties I mean is that we do see there is some new signals and we are getting ready for the good things to come. I believe that the worst time has been passed and we do receive some signals and some good information and factors for a brighter future. However, for the rebound, the question is when and how strong? These are the uncertainties. We are not quite sure what's the time the recovery will come. For JD.com, we are such a large company that covering the whole country from the first to fifth tier cities, and we believe the recovery will coming in different formats and different times on different group of people in different regions. Based on our communications with our brand partners, they all expressed their strategy to focus on profit this year. This also coupled with their concerns on the supply chain impact made by the Ukraine War. Whether or not next year they will focus more on profitability or on the growth, it's really hard to tell at this moment. We will also make our dynamic evaluation and to make investment decisions at the right time next year. Hope this answers your question. 另外，关于今年利润的情况，我也想做一个解释。就是京东这么多年来利润的增长，其实主要驱动是来自于两个方面的，一个方面是品类结构的变化，那么有的品类的占比越来越高，可能这个品类的毛利率也会越来越高，以及我们服务性收入的提升，这是第一个重要的变化。第二个就是企业经营中，全世界所有的行业大家都会提到的叫降本增效。这两个事实际上是这么多年以来我们一直能够去持续不断提升利润的一个非常重要的原因。但是今年的利润最重要的变化，或者要去改善的，应该是在降本增效里的降本。比如说我们更聚焦，比如说我们在内部的管理上面。增效我们也像往年一样做，但是我认为，从明后年我们看的话，其实我们更多的会在增效上，因为在我的角度看来，整个集团还有太多的效率可以提升。好，谢谢。 On the profit, I want to make a further explanation here. For JD's growth, throughout the years, there are two main drivers. One is for the product structure changes with a higher percentage of certain products, their gross margins will improve steadily, and also the increasing revenue from the services we provide. Throughout the years, as you can hear that all the companies are talking about lower the cost and improve efficiency. And for JD.com this year, we focus more on lower the cost and to improve the ability for the internal management. And I believe in next year and the next two years, we will focus more on the improvement of efficiency. I can see there are so many areas we can continue to improve efficiency. That's what I want to add. Thank you. This is Sandy. I want to emphasize that our long-term margin target hasn't changed, which is based on the industry-level margin and the operating efficiency we can generate through technology and the scale of our business operations. If the consumer confidence is largely recovered, we will add more investments to drive growth in users and market share. However, at the same time, we will also gain additional operating efficiency, as Xu Lei just mentioned, due to scale of benefit, due to technology, and due to the, you know, increased contribution of our service income. So this is the beauty of our retail business. Although we achieved a very important milestone for net income this quarter at the group level, but on an annual basis, our margin is still below the industry level for almost all business segments. There is still room for us to, you know, continue to improve our bottom-line performance. JD always pursue sustainable growth, and we will try to deliver stable margin with steady improvement year-over-year until our long-term margin target is met. Of course, during the journey, we will make dynamic adjustments based on the market situation. Thank you. Thank you. Our next question today comes from Lingyi Zhao with SWS Research. Please go ahead. 管理层晚上好，我是申万宏源证券赵灵怡。恭喜京东本季度再次取得大超预期的成绩，也感谢管理层接受我的提问。我的第一个问题是关于同城零售。那目前同城零售的势能很强，我们怎么看未来长期的趋势和发展空间？达达并入之后都做了哪些融合方面的调整，会在哪些领域协同发展？同时我们也关注到了徐雷总在人民日报上的文章，促进数字经济和实体经济深度融合。我的第二个问题是，可否谈一谈京东在数字经济和实体经济融合上的举措？ 我 翻译 一 下 。 Good evening. This is Lingyi Zhao from SWS Research. I would like to congratulate the Management team on the great results, and thank you for taking my questions. My first question is about on-demand retail. What is the long-term vision we see in on-demand retail market? After Dada integration, what adjustments have been made and which fields will be summarized? We all see the article by Mr. Xu Lei in People's Daily, which talks about promoting the deep integration of digital and real sectors of economy. My next question is, could you please introduce JD's measures in these big trends? Thank you. 好，因为之前也回答过很多次关于同城零售业，我今天想给大家几个更新，就更新一些我看到的和我们的思考。首先我想分享的就是京东进入同城零售完全是基于用户的需求，用户的需求，而不是说我们基于一个生意的增长机会。我想这个可以非常明确地告诉大家。然后呢，而且我们会用供应链的方式去理解这个业务。我不想揣测其他的公司进入到这个领域里面是基于什么样的一个，反正这是京东认为自己非常明确的，是第一点。 Thank you for the question. I have shared a lot about the intra-city retail before, and now I want to give you some update on our thoughts and observations. The first I want to say that for JD.com to enter into the intra-city retail business is purely based on the need drive of the users. It's not some business opportunities we jumped in. It's based on the users' demand, and we're looking at this business, and our understanding is based on the perspective of supply chain. I don't want to like think in other people's brain about how they think about intra-city retail. This is where we start from. 第二个就是我们可能大家切入的维度是不太一样的，比如说我们更多的先从KA的商超、连锁、大型的KA这个角度先切入。品类上呢，我们先从3C和这个商超便利店这个品类去切入，但是可能有的公司会从中小开始切入，这个我觉得大家可能也和自身的优劣势切入的角度是不太一样的。 In terms of the entering point, different companies adopted different dimensions. For JD.com, we enter this market by building a relations with the big supermarket chains as our KA. In terms of the categories, we start with our 3C and supermarket categories. For other players, they might start with some SME stores. We are entering in different directions. 还有呢，就是品牌商是我们在做同城零售，跟其他公司相比来说，应该是我们具备的优势。因为品牌商在B2C的业务上跟我们产生了已经非常大的体量的合作，以及双方的各个维度的，然后包括在供应链协同上，在产品销售上，在新品上市，在怎么提高营销效率上面，其实我们有多年的合作。所以说我们在做同城零售的时候，品牌商是一个我们非常非常好的合作伙伴，我们跟品牌商一起去结合线下的商超便利店，形成了三方的共同的受益，所以说可能会更坚固一些。 Our resources and relationship with brand partners is one of the key strengths for us in this intracity business. This has been based on our long time collaboration with our already existed B2C models. We have been collaborating with our brand partners in many way, in many directions, in many dimensions on the supply chain cooperation on marketing and sales, the release of new products, etc. Altogether, we are forging three party winning situation among JD brand partners and the offline supermarkets. 我们用一个品牌来举例，比如说苹果的 iPhone 14，大家应该知道在九月下旬发布，其中呢，在同城零售或者叫即时零售上面，有多家公司都应该说也都利用苹果的这个新机的发布来做销售，做营销。我们拿到的数据是我们应该是在同期，同城零售或者叫即时零售方面是第二名的七到十倍。但是我们从来没拿它去做所谓的营销，因为我们是从服务消费者如何快速便捷地购买苹果手机，以及跟苹果官方来进行合作去提高效率的角度。 Let me make one example about the intracity retail cooperation with Apple. As you know that in this September, Apple released its iPhone 14 and, you know, a lot of companies are taking this opportunity to do marketing. According to all the data we collected on this market during the same period of time, JD.com and our intra-city retailing business topped in terms of the sales and we are seven to nine times higher in terms of sales of iPhone 14 series as opposed to the second place, the runner up retailer platform. However, we do not want to brag about it, because our starting point to do this collaboration is to provide more convenience for consumers to buy the new series of iPhone. We believe the value to collaborate with the official brand and to improve efficiency for this new phone release. 当然，我们从自身跟B2C能力相比来说，这种新型的供应链，我们认为自己还是具备可以大大提升改善的空间。例如说在用户体验方面，比如说在跟品牌商的这个多方面协同合作方面，包括LBS的同城服务能力方面，包括物流怎么去优化履约和运力方面，其实我们觉得还是有很多可以提升的空间。所以现阶段的话，我们更多的对它是关注在用户的体验指标、用户的复购指标以及这个订单的增长的情况，和这个全站的用户渗透情况。更多的是从效率和体验指标上去看这块业务的。 As opposed to traditional B2C model, this intra-city retail is a new type of supply chain we are building. There's still a big improvement room for us to improve in such as users experience, the synergies with our brand partners, the LBS-based services, and optimize the fulfillment and the transportation power improvement. For now, we will focus on several indicators for this business, including user experience, their repurchase rates, improvement of the number of orders, et cetera. Still we focus on the efficiency and experience to develop this business. 关于您提到的我们跟实体经济、数字经济的融合，我们的一些举措，我可以分享。第一个，京东今年我们提出了叫有责任的供应链，因为我们不仅要保证自身的供应链的稳定性跟可靠性，我们还希望能够通过自己能力的开放和服务的开放，带动整个供应链产业链上下游整个企业的数字化转型和降本增效。完了以后，包括去提高上游企业的这种高质量的发展。 In terms of the integration with the real economy, I want to share that JD is building a responsible supply chain, and this does not only provide more stability and reliability for our own supply chain. We also open ourselves with this capabilities to support our partners upstream and downstream to help in their digital transformation and improve cost and efficiency, and to promote a high quality real economy development. 那么我们目前供应链的服务应该超过了800万家的活跃企业客户。其中，在华的世界500强企业，就九成以上。全国应该有将近70%的专精特新的中小企业应该选择京东的服务。同时呢，在特定的一些行业，比如说像制造能源等领域，我们也提供一些专业的供应链的服务。 For JD's supply chain services, we are now serving over 8 million active enterprise customers. This includes over 90% of Global 500 companies who operate in China and nearly 70% of the so-called specialized and sophisticated SMEs. We also provide some specialized supply chain services to the manufacturing and energy fields. 另外就是我们供应链还链接了全国大概三百多个城市的数百万的中小门店，类型很多就不再做分享介绍了。这里面呢，我们不仅帮他们解决销售和服务的这个最后一公里的问题，也把供应链里面的那个最初一公里的一些问题，也能够做到支持和服务。所以说呢，应该说给这些中小的门店，给他们带来的是引流、增收和降本，降本增效。 At the same time, JD's supply chain has been connected with millions of small and medium small stores across China in over 300 cities. There are many forms I won't just elaborate. We are not only providing the last-mile solutions on their sales and services, but also helping them on the first mile of the supply chain in upstream. This has been a very effective support for them to drive more traffic and lower their costs and improve their business efficiency. 在这里我想重点强调的就是，京东本身是一个低成本合理利润的一家运营的公司，所以说我们非常清楚，线下的这些中小企业，实际上他们的经营的难度是非常高的。所以说我们在做跟这些企业合作的时候，我们永远不会采用去分食他们利润的方式，而是大家共同协同去降低成本。在这种情况下，我们再获得合理的这个利润，这可能是我们一直在做，并且未来也坚持在做的。所以在这方面呢，可能不太能像其他的公司能够通过更多的希望通过线下这种方式获得超高的利润，我们认为是不合理的。 Here I just want to add that JD.com generates rational profits, and we're running based on low cost, and we fully understand the difficulties for the SMEs. They build their business in the offline scenario. While we are doing the supply chain support for them, we don't want to eat their profits. We want to form a synergies with them. Together we build the rational profits. This will not make us as some other companies who are entering this offline market and generate ultra profits. This is not something I think rational. Thank you. 最后一点就是关于我们2020年开始启动的乡村振兴的这个奔赴计划。从目前来看的话，我们带动了应该数千亿的产值，帮助数百万的农户来增收，并且我们也应该说有希望能够提前实现我们当年设的三年产值超万亿的这个目标。以上说的所有的应该说都是我们作为一家新兴实体企业，我们的理解和我们正在做的事情。其实呢，从我们自己内部非常清楚，就是我们做得还不够好，也是因为我们的能力还需要去提升，但是我们的目标角度来说，我们是坚定不移的。好，谢谢。 Lastly, I want to mention that since 2020, JD had launched our rural revitalization initiative called March to Rich plan, and this plan has driven tens of billions of industrial output in the rural areas and helping millions of farmers to increase their income. We feel confident that we set a goal to achieve trillions yuan of industrial output under this program in rural areas within three years time, and we can accomplish this ahead of the schedule. All of these are our understandings as a new type real economy company. However, we know we are not doing enough. We are still improving ourselves, improving our capabilities. However, this is the goal we set and we will stick to it. Thank you. Thank you. We are now approaching the end of the conference call. I will now turn the call over to JD.com's Sean Zhang for any closing remarks. Thank you for joining us on the call today and for your questions. If you have further questions, please contact me and our team. We appreciate your interest in JD.com as always and looking forward to talking to you next time again. Thank you. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.