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spk02: Good morning, ladies and gentlemen, and thank you for standing by for DADA's second quarter 2023 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 call 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.
spk03: Thank you, operator. Hello, everyone, and thank you for joining our second quarter 2023 earnings conference call. On the call today from data, we have Mr. Jack Hu, president, and Mr. Back Chen, CFO. Mr. Hu will talk about our operations in the company highlights. Then Mr. Chen will discuss the financials and guidance. Please kindly note that during the Q&A session, Jeff will answer questions in Chinese and the consecutive translation will be provided. In case of any discrepancy between the original remarks and the translated version, statements in the original remarks should prevail. Before we begin, I'd like to remind you that this conference call contains working statements. Please refer to our latest Steve Harper statement in the earnings press list on our IR website which applies to this call. Also, during this call, we will discuss some non-GAAP financial measures. Please also refer to our earnings press list, which contains a reconciliation of non-GAAP measures to the comparable GAAP measures. Finally, please note that, unlike otherwise stated, all figures mentioned during this conference call are in RMB. It is now my pleasure to introduce our President, Mr. He. Jeff, please go ahead.
spk06: Thank you, Karen, and thank you all for joining us today. In the second quarter of 2023, Dada Group continued to deliver strong level growth with significant increase in our operational efficiency. Our total net level increased by 23 year-over-year. We also achieved an important milestone in this quarter. by recording our first positive adjusted net income, thanks to a more than 17 percentage points improvement in our adjusted net margin. I will begin today's presentation by discussing our cooperation with JD.com, followed by operational highlights for our two platforms. I will then hand over to Bec We will take you through our detailed financial results. Let's start with some updates on Dada's co-operation with JD.com. With changing our branding awareness among JD.com users, we recently unified the display of our on-demand retail services across all touch points on JD app. In Chinese and the shop now, In particular, the Nearby All Fujian tab was renamed Xiaoshida, and the Xiaoshida tag has been added to search results for products offered by our merchant partners. This unified brand emphasized our ability to deliver products within one hour. And we believe it will significantly enhance auto mindshare among JD users. At the same time, we also want to enhance JD DJ's offerings by attractive prices. We met with JD's everyday low price strategy. In this quarter, we utilized the price-based star rating tool and worked with merchants further improved the price compatibilities of Xiaoshida products. So far, we have achieved a 10 percentage point increase in the proportion of HiStar products was March. For the Xiaoshida tab, which was previously known as nearby or tab, more than called G-Pod Year-on-Year. This impressive growth was driven by exposure and quick-through optimization, which helped the Xiaoshi data of WDAU, as well as improvement in convention rate and average basket value. Let's move on to the operational highlights for our two platforms. Start with JDDJ. China's leading on-demand tele-platform. In the second quarter, JDDJ made further progress in the tele- and the brand collaborations and the technology empowerment. We continue to broaden and deepen collaborations with the telers to enrich our product offerings during this quarter. JDDJ cooperated with more than 300,000 annual active retail stores at the end of June 2023. In the supermarket category, based on the list of top 100 supermarket chains in China released by CCFA in June, we now have established partnerships with 92 out of the top 100 super market trends. In June, together with the super market merchants, JDDJ launched a delivery fee waiver campaign in 10 key cities to improve our user experience. During the campaign, these cities saw a 34 percentage point higher user growth rate and a 2% percentage point higher, 15-day repeated purchase rate. There are other cities. During the entire June drought, we have now rolled out delivery rate benefit to major supermarket chains across the country. We have always focused on helping the chains achieve better efficiency through platform tools. such as long lasting specific membership features. But a low chance to attract and manage their own members online. The function notably increased the sales efficiency. With all the conversion data of members, more than 20 percentage point higher than data of non-members. Among the chains that have adopted the membership tool, members already contributed 60% of their total GME in June. In addition to large supermarket chains, we have also made inroads with major convenient store chains. We further strengthened our collaboration with JT convenient store. while forming new partnerships with USMILE and other leading chains. Total GME generated by convenience stores grew by nearby three times year-on-year in the second quarter. We also made good progress in consumer electronics category during the quarter. In the smartphone subcategory, driven by faster delivery on top of its active pricing in the second quarter. The GME or Apple products on our platform grew steadily, while Android brands, such as Xiaomi, continued to see GME grow several times on a year-on-year basis. In the computer and accelerators category, GM increased by more than 17 year-on-year. And the brands such as Xiaotiancai, Kedaxingzui, and Dajang all achieved significant growth. Moving next to the home appliance and finishing category, which left out quickly, the home appliance subcategory maintain the laptop close, nearly double GM year-on-year. We continue to enrich our offerings of air conditioners and other major home appliances. And we established partnerships with kitchen appliance brands, such as Funtime. The home furnishing subcategory also grew rapidly. with GMO increasing more than four-fold year-on-year. In particular, we are seeing significant growth in the sales of electronic lock products. Thanks to the wide range of machines on our platform and our ability to offer high quality deliver and registration services within four hours. In addition, We set up new partnerships with sanitary fixture brands such as Kele and whole textile brands such as Fuana. We also continued to expand our offerings in liquid category, onboarding more than 5,000 new stores during this quarter. As a result, CME increased more than four times year-on-year. Next, let's move on to JDDV's efforts to expand and deepen cooperation with brands. In the second quarter, we embarked on new partnerships with rice and cooking oil brands, such as Shiye Daotian. mom-and-baby brands such as Dawang, Jinyalku. We currently have auto marketing partners with about 300 leading domestic and international brands. In terms of branding campaigns, we continue to do deep-end collaboration with brands to promote omni-channel auto marketing. Help brands reach users through multiple channels, both on and off JDDJ. For example, in early May, we collaborated with to launch the brand on campus campaign to promote these new products, which more than 70 percent month-on-month increase in GDS sales on JDTJ. In addition, through the collaboration with JD.com, we have further optimized the process by which we cooperate with brands on exchanging and advertising the source. At present, we have conducted the source exchange with more than 20 brands including , achieving win-win for both sides. Next, I'd like to talk about our efforts to empower both retailers and the brands through technology innovation. As of the end of June, Kaibo, Our omni-channel outdoor operating system for retailers has been deployed in about 11,000 stores across more than 300 retailer chains. In the second quarter, we launched the consumer reviews a system that functions in the hybrid system, which enables merchants to automatically reply to consumer reviews across multiple channels and provides anonymous review tracking, store maintenance, monitoring, and other functions. This capability empowers merchants to provide efficient customer services and to improve user experience. Machines using this feature can generate automated replies to all positive and negative reviews, which gain 60% higher efficiency at handling less favorable ones. Haribo also began to explore collaboration with brands. We recently launched a series of brand promotion tool on the hybrid system to help brands conduct marketing and promotions on the channels, thereby helping branding improve exposure and connection. I will now turn to Dada Lao, China's leading local on-demand delivery platform. In the second quarter, Dalai Lama continued to provide a massive amount of flexible working opportunities, with quarterly active riders increased by over 30 over the year. In terms of business progress, let's start with our K or Champa Champs business. In the second quarter, our annual flow on Demanded Real Services took a chance, increased by more than 20 year-on-year. Thanks to increased order density and sufficient delight of suppliers, our average gross profit per order improved significantly to $0.50 a month Meanwhile, our fulfillment rate increased to 98%. Thanks to our optimized provider fleet structure and the operations. In the supermarket care category, money increased nearly 20 year-on-year. We recently established a new partnership with Fresh First of all, and other supermarket chains. In the category, we continue to increase the penetration in our store. For the 20th quarter, we maintain the year-on-year of more than 100 We also recently formed a new partnership with David Chance. Regarding our co-operations with Douyin local life services, we continue to actively support the national-wide rollout of Douyin's food delivery business by providing cost-efficient and reliable on-demand delivery services across the nation. Moving to our SME and C2C business, the number of SME and C2C areas fulfilled in the second quarter increased by 50 year-on-year. This growth was drawn by our continued penetration into low-tire cities and our expansion into additional traffic acquisition channels and business centers. Lastly, an update on our mastermind sources. In the second quarter, we maintained a steady growth in the number of preferred orders despite the higher base in the year-ago period. Our operations are based for the two platforms. We continue to post strong financial results highlighted about our first-ever positive adjustment net incomes. At the same time, we stay committed to drive the digitalization of retailers and brands, bring great on-demand shopping experience to consumers, and providing flexible employment opportunities to riders. We will seek to build on this maintained in the quarter ahead as we work to create substantial values for our shareholders. I will now pass the call to Doug to go through our financials. Thank you.
spk01: Thanks, Jeff. 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 year-over-year basis, and all figures are in renminbi, unless otherwise noted. Our total net revenue in the second quarter increased by 23% to $2.8 billion. Net revenues from data now increased by 20%, to 980 million, mainly driven by the increases in order volume of Intercity delivery service to chain merchants. Net revenues from ADDJ increased by 25% to 1.8 million, mainly due to the increase in GME. The increase in online marketing service 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 the support costs were 1.7 billion. The increase was primarily due to an increase in rider costs as a result of increasing order volume for intra-city delivery services provided to various chain merchants. Selling and marketing expenses decreased to $1.1 billion, primarily due to a decrease in advertising and marketing expenses and a decrease in incentives to JDDJ consumers. G&A expenses decreased to $56 million as a result of our expense control measures and decreased share-based compensation expenses. R&D expenses decreased to 102 million mainly due to the lower R&D personal cost as we enhanced operating efficiency. Our non-GAAP net income attributable to ordinary shareholders of data was 8 million marking the first quarter in our operating history to turn profitable. Non-GAAP net margin was 0.3%, improving by more than 17 percentage points year over year. As of June 30, 2023, we had $3.9 billion in cash, cash equivalents, restricted cash, and short-term investments. In terms of the outlook, For the third quarter of 2023, we expect total revenue to be between $2.8 billion and $3.0 billion, representing a year-over-year growth rate of 18% to 26%. This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session. Thank you.
spk02: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Ronald Kang from Goldman Sachs. Please go ahead.
spk07: Thank you, Jeff Beck and Caroline. Congratulations on the transition from the first record to EBITDA positive, which is a very important milestone. I would like to ask two questions. The first is, we saw the growth index of the third record. For example, in terms of GMV, how do we see the situation of the red crown recently? Especially in July, will it be softer than usual? How do we judge the growth from the perspective of the demand from the red crown? In the second half of the third quarter, how do we look at our cooperation with JD and the growth of the red crown? How do we judge? Second, I would like to ask about our UEE, especially the starting cost. In the 8th quarter, our UEE transfer also had some factors that the starting cost went down. How do we judge the starting cost? Thank you, management, and congratulations on the EBIT turnaround quarter. I want to ask about two questions. One is on macro outlook and our cooperation with JD. Just both of those, how do we see our third quarter growth outlook accompanied with your revenue guidance, with the underlying GMV expectations, and into just probably second half in this current macro environment? And then second, we wonder if the unit economics turnaround, how much of those were contributed from a lower rider cost? And so could you share how rider costs have been and our views on that in the outlook as well? Thank you.
spk01: Yes, thanks for the question, Ronald. So before Jeff, I may just review some financial numbers and Jeff can answer the Marco question. About the second question, yes, we are seeing the year-over-year rider cost decline because the number one factor is we have optimized our algorithm. Number two is we have very robust growth for the number of orders delivered for our data now platform. Number three is just like... Jeff mentioned that in the earlier prepared remarks, in Q2, our quarterly active riders is growing by 30% year-over-year. So the rider supply is sufficient, and we believe which will help us to further optimize the rider cost. And about the GMV, we believe that for the reporting GMV metrics, For the second half of this year, we are still expecting more than 20% year-over-year growth in the second half. I'll leave it to Jeff for the macro question.
spk06: Okay. Thank you, Ma Ma. Let me answer the first question. In the first half of this year, we saw that the global economy and consumption In terms of macro, the economy and consumption was in modest recovery in the first half of this year.
spk10: And we expect uncertainties and consumption recovery in the second half.
spk06: Of course, we have seen a series of support for the private economy, private investment, and other such policies. We also look forward to the gradual improvement of private enterprises and the recovery of private economy. It can bring more jobs and create more income. In addition, we're pleased to see the new policies and measures that are supportive of private sector growth and investment.
spk10: Hopefully, the gradual restoration of private corporate confidence and the high-quality development of the private economy will lead to more job creation and sustained consumer income growth, which will contribute to the further unleash of consumption power. We will remain patient in further enriching our offerings and optimizing our user experience, which we firmly believe will bear fruits in the long run.
spk06: Yes, please.
spk10: In terms of O2O demand, there is some imbalance in the pace of recovery between different types of consumption. The strong rebound in service consumption in the first half has affected the demand for physical goods to some extent, and OTO is no exception. Heading into the summer, we've seen extraordinarily strong travel demand. And in an environment where the overall consumer confidence has yet to fully recover, that may take some more to share from physical goods consumption.
spk06: But from a long-term perspective, we still think that consumers want to change their consumption patterns to a higher level. That said, consumer migration towards more convenient and efficient shopping is a secular trend.
spk10: we are convinced that as consumer demand continues to evolve and more local supplies become available online, the O2O penetration rate will further trend up to double digits.
spk06: Yes, please.
spk10: From our perspective, in Q2, JDBJ recorded over 20% GMV growth year-over-year despite a relatively high base in the year-ago period and continuous optimization in our subsidy ratio. Yes.
spk06: And in terms of our collaboration with JD.com,
spk10: Since we deepened our partnership, Xiaoshida has become our primary user acquisition channel. Currently, the penetration among JD users has steadily rose to mid-high single digits. 我们将通过增加高客单价竞争率的商品的供给
spk06: We will increase our acquisition and retention efficiency through enriching the supply of attractively priced products, waiving delivery fees,
spk10: in July, and so far in August, we've seen better user retention.
spk06: Thank you. Thank you.
spk02: Thank you. Your next question comes from Thomas Chong from Jefferies. Please go ahead.
spk04: Hello, Mr. Chow. Thank you for accepting my question. Congratulations to Q2 on achieving profitability. My question is to ask about our take rate and direct margin, and our future vision. Then we will look at our take rate growth driver, and how we view the growth of advertising revenue in the second half of the year. Another question is also about our GDDJ product mix. Can you share with us the trend in this quarter and the product mix in the second half of the year and AOB's view? Thanks, management, for taking my questions. And congratulations on reaching profitability in the second quarter. I have two questions. My first question is, It's about the tick rate trend as well as the direct margin outlook in the second half. What are the growth drivers and how should we think about the momentum for online advertising in the second half of the year? And my next question is about JDDJ product mix. Can management share about the product mix in Q2 as well as the trend in the coming quarters as well as the AOV for the year? Thank you.
spk01: Thank you, Thomas. Let me answer the financial question. So in terms of the take rate and direct margin of JDDJ in Q2, the take rate is 9.9%. And the direct margin is 1.8% as percentage of GMV. And for the outlook for the second half of this year, we expect that the overall monetization rate will still maintain stable and grow. healthily, and we are still targeting to grow our direct margin level above 2-3% for the second half of this year. And the main growth driver for the TechCrate will be still driven by the online marketing services provided to brand partners while maybe some of it will be we will be more prudent on that but still we will keep to grow this part as the main driver for our optimization of the search margin level in terms of the product mix so for this For second quarter, our overall supermarket contribution is 45% of the GMV. And just like Jeff mentioned in the earlier prepared remarks, our different other physical merchandise categories, like smartphone categories, computer and accessories categories, home and home furnishing categories, home appliance categories, liquor categories. So all those categories is growing by several times on a year-over-year basis. So we expect for the second half of this year, all these new categories could contribute more to overall GMV and the GMV Max. So in terms of the an average order value metric. So for the second half, the overall AOV of the platform is 260 RMB. we are still targeting to maintain the overall marketplace AOV and maybe still will grow the AOV for the second half. But in terms of the supermarket categories, it's like 190 RMB. So maybe there will be some, for example, like preferential iterate fee waiver to some of the customers So, for the second half, we expect the AOV of supermarket will be at least stable on a Q and Q level. Thank you.
spk02: Thank you. Your next question comes from Alicia Yap from Citigroup. Please go ahead.
spk11: Hi, 管理層, 谢谢接受我的提问, 也恭喜我们达到这个收入, 这个profitability, 然后我其实想跟进一下, 就是京东到家这一块, 刚刚您说的这个消费品, 跟非消费品之间, 其实就是出现了还蛮大的, 这个消费者的这个行为, 其实您觉得这个, The trend is that it will continue in the second half of the year, especially in the big stores. It seems that we have made it clear in this quarter. I would like to know if we have to guess here, how much will the big store stand in the GNV quarter or in the second half of the year? Another question is about brand ads. So my question is to follow up on the category demand shift. Obviously the non-FMCG has been growing very well. Can management give a little bit more color in terms of the behavior shift? Especially I think management mentioned about the big appliance seems to be one of the important driver. If you can share about the percentage of GNV coming out from the big appliance, home appliance specifically. And the second question is on the online advertising. Given the macro continue to remain weak, what are the brand, you know, willingness in terms of their ad budget spent on our platform? Thank you.
spk06: You want to answer it? Okay. Then you can add to it. The first question is about the trend of 13C home appliances in the future. Thank you for your question. In terms of the category mix of consumer electronics and home appliances, we believe the contribution will further go up in the second half. The growth driver for the consumer electronics category will be the brands who will introduce several
spk10: new models in the second half, including from Xiaomi, Huawei, and Apple. And in terms of major home appliances, the GMV for this category will remain on the fast growth trajectory, given by our further enriched product supply and the service of integrated delivery and installation.
spk06: But the overall GMV of Bajia Store is still only available to buyers.
spk10: However, the mix of major home appliances and total GMV is only in the single digit.
spk06: Thank you. Let's see if you have anything to add to this question.
spk01: I don't have anything to add from my side.
spk06: Okay. Regarding the advertising industry, we must remember that the overall income of advertising and wages is more than 30%.
spk10: And to answer the second question about the online marketing services revenue, in the second quarter, our commission and online marketing services revenue combined grew by over 30% year-over-year, mainly driven by the growth in online marketing.
spk06: Um,
spk10: You asked about a brand potentially cutting their ad budget in the macro environment. However, we are seeing that our revenue from brands are increasing since OTO has become the fastest growing sales channel in China for more and more brands. So they are allocating more ad dollars on our platform.
spk06: With the expansion of this product, the number of brands we work with is also constantly expanding. Currently, there are about 300 brands and we have this high-end cooperation.
spk10: And another driver for our online marketing service revenue is the increase in our advertiser base. We are now collaborating with about 300 brands in OTO online marketing.
spk06: In addition to the growth of sales, what is more important to us is the innovation of products and impact capabilities.
spk10: And in addition, the revenue growth driver for our online marketing services is our capability to innovate our product and technology and marketing on top of sales growth.
spk06: Q3 will have very promising advertising products. In Q3, we will launch key ad products which will further drive our ad revenue growth.
spk10: And in the testing period, we are seeing very encouraging results from the new products.
spk06: Thank you.
spk10: Thank you.
spk02: Thank you. Your next question comes from Li Zheng from Bank of America Securities. Please go ahead.
spk08: Hi, Director Guan. Good morning. Thank you for accepting my question. Then congratulations on the return on profit. Then my first question is that I want to follow up on how to see the trend of our profit rate in the second half of the year or the whole year. Then the second question is that I want to ask about our cooperation with Jindong Group in general. Is there anything new that can be updated recently, whether it is in JDDJ or Dada Now? Also, because you just mentioned the penetration of a user who may be small enough, Thank you, Benjamin, for taking my question. Congrats on the profit breakeven and follow this. Can you share with us the second half of four years margin trend? Secondly, I want to have some updates on our cooperation with JD Group. Any new initiatives you can share, and if I may, may I follow up on the GMOA contribution from JD across different channels? Thank you.
spk01: Okay. Thank you for the question, Lei. So, for the first question. For the second half of this year, we will still balance the growth rate of our top lines, especially the growth rate of JDDJ, despite the current market outlook in China. So we will balance the growth rate and the improvement of the profitability of the bottom line. And this is just the first quarter for us to break even. So, of course, we don't expect to grow the bottom line profitability and margin very quickly in a very short time, especially under the current macro economic outlook. So we still will grow stably and grow the bottom line in a healthy way. And we will also balance the top line growth Because if you don't have any top-line growth, your profitability in the long term will be also negatively impacted. And for the second question, so I will leave it to Jeff for the cooperation with JD.
spk06: Okay, thank you. You just mentioned some important progress. Thank you.
spk10: So we just touched a little bit upon our cooperation with Shady.com just now. I'll summarize a few key initiatives now.
spk06: The first one is Shady.com. You can see that the overall flow rate has improved.
spk10: First, we unified our brand identity under Xiaoshida, and we've seen an improvement in user conversion.
spk06: For instance, the conversion rate
spk10: and the Xiao Shi Da pep is now 20% higher after we changed the name to Xiao Shi Da from city names.
spk06: Secondly, we improved the price competitiveness of our Xiao Shi Da products
spk10: by leveraging our price-based star rating system.
spk06: As of the end of Q2, the number of high-star products or the products with high competitiveness in pricing
spk10: grew eight-fold sequentially, and the average exposure per item increased by more than 10%.
spk06: In terms of fast delivery, we are continuing to strengthen our cooperation with the Department of Industry to provide fast delivery services in various scenarios in today's APB.
spk10: And in terms of data now, we've strengthened our partnership with different business groups across the JD group to provide on-demand delivery services in multiple shopping scenarios in the JD ecosystem.
spk06: For example, we recently began working with the front-end warehouse business unit and
spk10: We are providing the on-demand delivery service for all of its orders, and we've seen an increase in JD's contribution in data analysis order volume. A stable source of orders is very beneficial to our business stability and profit, as well as long-term development. Thank you for your question.
spk01: And the GME contribution from JD in Q2 is 67%. And we are expecting the penetration from JD will be further enhanced in the second half.
spk02: Thank you. Your next question comes from Andre Chang from JP Morgan. Please go ahead.
spk05: Thank you for accepting my question. Because everyone has asked a lot of questions about JD. I will ask a question other than JD. We have been cooperating with Douyin for almost a year now. And then Tiktok seems to be working with us on delivery. The progress seems to be relatively limited. It seems that the other party has been making some adjustments recently. I hope to re-energize. I don't know if the management can give us some updates about this business. And then there will be a half-year exhibition. Let me explain my question here. So with all the questions on cooperation with JD Group, I'd like to ask a question about other customers, namely Douyin. Douyin's food delivery business seems to have so far made limited progress. However, the Douyin Groups, ByteDance Groups are trying to adjust their strategy recently according to the news. I wonder if the management can provide us with some updates about the cooperation as well as the outlook here. Thank you.
spk06: Thank you for your question. Recently, Douyin's group delivery business has started to open up in more cities. We are also actively cooperating with Douyin to complete the secret entry of the new city. Thank you for your question. Boeing recently launched its full delivery service in more cities, and we have actively supported its geographic expansion.
spk10: However, the business is still in the early days with limited number of merchants on board. Therefore, the incremental orders is not significant yet to pay a business. And to our knowledge, Jolin's contribution to our peers is similarly unsubstantial now. 我们的目标是保证盈利性的前提下追求增量的订单。
spk06: Unlike certain peers, we're pursuing profitable out-of-volume growth on the Douyin platform. Thanks to our edge in cost efficiency, service quality, and network coverage,
spk10: We are highly confident in gaining a meaningful market share on Douyin in the longer term. Our data and our business not only fulfills Dorian's full delivery orders, but also the one-hour delivery orders of Dorian's e-commerce segment.
spk06: And similarly, the contribution from Dorian's e-commerce segment is not significant to Thank you.
spk02: Thank you. Your next question comes from Waze Young from UBS. Please go ahead.
spk09: One is about profitability. I would like to ask how we will consider the space and speed of group profitability improvement in the next few years after achieving profit. If we look at the two businesses of Qingdong Daojia and Datanau separately, what is the trend of each margin and the contribution to our long-term profitability improvement? And I would also like to ask Datanau about the growth of sales in the second half of the year. I will translate it quickly. Thank you, management, for taking my questions. Just two follow-ups. First is on the longer-term margin trend. How should we think about the margin expansion pace in the next few years? And if we look at JDDJ and DataNow separately, how should we think about the margin trend for each of the segments and their contribution to the longer-term margin improvement? And second, just very quickly, how should we think about the revenue outlook for DataNow in the second half? Thank you.
spk01: OK, thanks for the question, Shunwei. So for the long-term margin outlook, actually, we didn't change the long-term margin outlook. So separately, JDDJ is a local version of e-commerce marketplace. So as percentage of GME, we believe that the long-term margin should be 3%. of the GMV operating margin. And also for the . So for example, like the chamber chains, they vary . In Q2, our unit economics is about $0.50 RMB after tax. So generally, the gross margin is about after tax is above 5%. So we still expect to grow the growth margin at least to 10% in a three-year time frame. And we believe that as compared to other express and logistic companies, we believe it's totally achievable. And in terms of the data now, second half, growth outlook, we are confident that they will keep to grow at least above 20% on a year-over-year basis. Thank you.
spk09: Thank you, management.
spk02: Thank you. There are no further questions at this time. I'll now hand back to Ms. Caroline Dong for closing remarks.
spk03: 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, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call.
spk02: Thank you. This does conclude our conference for today. Thank you for participating. You may now disconnect.
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