Dada Nexus Limited

Good morning. Ladies and gentlemen, thank you for staying by for DADA third quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference is being recorded. I will now turn the meeting over to your host for today's call, Ms. Caroline Dong, Head of Investor Relations for DADA. Please proceed, Caroline.

Thank you, Operator. Hello, everyone, and thank you for joining us today. Our third quarter 2021 earnings release was distributed earlier today and is available on our IR website at ir.mdata.cn, as well as on Google Newsword Services. On the call today from data, we have Mr. Philip Kwai, Chairman and the Chief Executive Officer. Mr. Jack Chen, Chief Financial Officer, and Mr. Jun Yang, Co-Founder and Chief Technology Officer. Mr. Kwai 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 follow-up statements as defining the Section 21E of the Securities Exchange Act of 1934 and the U.S. Privacy Securities Litigation Reform Act of 1995. This follow-up statement is a measurement of current expectations and current market and operating conditions and relates to events that involve known or unknown risks on certainties and other factors, all of which are difficult to predict and a matter of which are beyond the company's control. These risks may cause the company's actual results or performance to deform maturely. Further information regarding these and other risks on certainties or other factors is included in the company's filings with the U.S. SEC. The company does not undertake any obligation to update any bulletin statement as a result of new information, including events or otherwise, except as required under applicable law. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in R&B. It is now my pleasure to introduce our Chairman and the Chief Executive Officer, Mr. Quai. Please, please go ahead.

Thank you, Caroline. And thank you all for joining us today. We're pleased to announce another strong quarter. I would like to highlight recent progress and then provide updates on our two platforms. And that will go through our financial results in greater details. So earlier this year, the CPC Central Committee clarified China's strategic vision and the government's priorities in the 14th Five-Year Plan and long-range objectives through the year 2035. With this, it sets the goal of accelerating digital development and building digital China. So according to statistics from China Academy of Information and Communication Technologies, China's digital economy accounted for 38.6% of total GDP in 2020. While that number leads among developing countries, there is still a notable gap with the 54.3% average in developed countries. So the main engine to drive China's digital economy lies in industrial digitization, which contributes 80.9% of the total digital economy. First, industrial digitalization will build up the country's competitive edge of digital economy. It's a key theme that the Chinese government wants to promote. So Data Group is well positioned in the national trend of digital economic development. As a leading local on-demand delivery and retail company, we have always being committed to driving digital transformation in the retail industry. Together with JD.com, we are further empowering traditional industry and driving the development of the real economy. So this naturally leads to our strengthened strategic cooperation with JD. In October, Data Group and JD.com jointly launched ShopNow, or Xiaoshigou, a unified brand for all on-demand retail services within the JD ecosystem. Through ShopNow, users can access on-demand services via multiple channels on JD, including the Nearby, Fujin, Tab, and all the entry points of Wu Jing Tian Ze program. ShopNow is powered by Dada Group. Leveraging our years of LBS-oriented operational experience and accumulation of technological capabilities will fulfill all needs of local on-demand retail and delivery on JD. We both strongly believe in the huge potential of on-demand retail in China. With ShopNow, we will leverage our respective strengths to lead the development of this quick-growing industry and bring win-win results for both groups. For JD, ShopNow will enrich both product supplies and delivery options, providing consumers with a better shopping experience. For Dada Group, ShopNow will increase our penetration rate among JD's vast user base. This should become a stronger driver for our long-term development. Before discussing the recent performance of our two platforms, I would like to provide some highlights of our Level 11 Shopping Festival. With over 150,000 stores on JD.DJ participating in the event this year, JDDJ achieved record high in the peak day GMV and grew the total GMV during the 11 days from November 1st to November 11th. The 11-day campaign by over 100% year over year. Now let's move on to JDDJ, the leading local on-demand retail platform in China. KDDGA continues to drive the digitalization of offline retail in three ways. Empowering retailers at broader scale, helping brands improve marketing efficiencies, and innovating technology solutions. First, empowering retailers at broader scale. On one hand, Partnering with more retailers, helpers enrich product offerings and bring better shopping experience to more consumers. The number of active users on JDDJ increased by 53% year-over-year to 57.1 million. On the other hand, as we expand the merchants and category coverage, we're helping more offline retailers building digitalization capabilities. So let me take you through a few two different verticals and talk about some exciting recent developments. So in the supermarket category, we continue to enhance our leading position. We now have established partnerships with 82 out of the top 100 supermarket chains in China. And the super merchant day. The Super Merchant Day provides supermarkets with a great opportunity to engage with users on our platform. In the third quarter, during the eight Super Merchant Day sessions for local winner supermarkets, such as Jiajia Yue and Bubu Gao, the weekend sales all increased by over 200% year-over-year. In the smartphone category, we continue to expand partnerships with brands, This quarter, we established direct partnerships with Samsung and Honor. For Apple, we saw impressive results for new product launch. On September 24th, more than 900 authorized stores on the JDDJ platform started to sell the iPhone 13 series. On launch day, Sales on our platform were a remarkable seven times greater than the launch day of iPhone 12. For small home appliance, we deepened collaboration with the leading retailer chains, such as and to strengthen online-offline integration. Our efforts paid off. The GMV in the third quarter increased by about 100% quarter over quarter. In the pharmacy category, we launched a 24-hour free online medical consultation service to provide users with real-time assistance. Meanwhile, 24-hour retail and delivery services are also available in more than 3,300 pharmacy stores on our platform to meet consumers' needs for medicine at any time. Secondly, helping brands to improve marketing efficiency. In the third quarter, revenue from online marketing service on our JDDJ platform grew by over 140% year-over-year. a significant acceleration from the 110% growth in the previous quarter. In online marketing, monetization rates jumped to 3%, further demonstrating GDDJ as the go-to platform for brands to drive auto sales. We now have strategic partnerships with more than 200 brands. We are committed to help brand partners improve marketing efficiency and engage with consumers effectively. As part of this, we recently introduced a new marketing program called Super New Prada Day for product launch promotions. In August, Unilever launched a campaign under this new program. As a result, sales increased by 190% from the previous week. And thirdly, we're innovating technology solutions. Our HYBOR system continues to be popular among retailers. Recently, HYBOR now reached the milestone of serving 5,000 retailer stores. Based on the broad cooperation with retailers, we have a great understanding of their standpoint in O2O operations and are able to innovate quickly. For example, in the third quarter, to better support merchants holiday bundle promotions, we launched a new module on Hyboard to manage bundled products. This module provides a one-stop solution to address the pinpoints in inventory synchronization and expenses allocation. As a result, it could improve the processing efficiency for bundled products by as high as 20 times. In addition, Based on our capability to allocate expenses down to the SKU level, we launched a tool to enhance marketing efficiency. This tool integrates the subsidies from brand partners, merchants, and platforms into one single coupon, the three-in-one coupon, to improve the ROI of marketing dollars for brands and help merchants to improve sales by expanding the number of products on promotion. For example, this tool enables Jiajia Yue to create 3-in-1 coupons that cover around 2,000 SKUs across over 100 brands. In September, the average daily sales during the weekend that offered 3-in-1 coupons were more than 10 times than the sales in normal weekends. Our digitized in-store picking service, the Dada Picking, Dada Youjie, maintains strong growth momentum. In the third quarter, orders fulfilled by Dada Picking grew over 70% quarter over quarter. During the Double Eleven Shopping Festival, order volume more than doubled compared with June 18 promotional period, effectively helping merchants to improve downtime fulfillment rates while saving costs. I would like to move on to data now. Our revenue from on-demand delivery services to key accounts, or KA, the merchants increased more than 110% year-over-year. Revenue from supermarkets, KA, increased by over 90% year-over-year. In the third quarter, we added geofencing functions to our on-demand delivery service. Function enables merchants to accurately determine the delivery area for each store without additional investment. Revenue from restaurants' KA increased by 150% year-over-year. Orders from fast food chains and the tea beverage chains continued to increase significantly. So moving to SMEs. The number of SME merchants that completed orders on DataNow in the third quarter increased over 90% year-over-year. This was mainly driven by our refined, great-based operational strategy and continued optimization of our fulfillment capabilities. In September, we officially announced the launch of our logistics SaaS software as a service, the Dada Zhipei, the Dada Smart Delivery. So this product provides the third-party delivery service providers and merchants who deploy their own delivery fleets with a suite of digital tools to manage orders, dispatching, and routing for omnichannel on-demand delivery orders. Our digital logistics platform has helped a lot in improving our operation efficiency in the last seven years. And now, by opening up our technology in the form of a centralized SaaS product, we hope to further enhance the service capability and efficiency for the whole on-demand delivery industry. And lastly, last mile delivery. We saw strong growth in pickup services with the number of pickup orders in the third quarter doubling from the previous quarter. This growth is built upon our enhanced system integration with JD Logistics and increased penetration in various other types. Expect pickup services to be another driver for our last mile business. With that, I'll now pass the call over to Bai Chen to go over our financials for the quarter. Thank you.