Dada Nexus Limited

Q1 2024 Earnings Conference Call


spk07: Good morning, ladies and gentlemen, and thank you for standing by for DADA's first quarter 2024 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 this meeting over to your host for today's call, Ms. Caroline Dahl, Head of Investor Relations for DADA. Please proceed, Caroline.
spk06: Thank you, operator. Hello, everyone, and thank you for joining our first quarter 2024 earnings conference call. On the call today from Dada, we have Mr. Bing Fu, interim president, and Mr. Henry G. Mao, CFO. Mr. Fu will talk about our operations and company highlights. Then Mr. Mao will discuss the financials. They will both be available to answer your questions during the Q&A session. Please kindly note that Mr. Fu will give his remarks and 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 full looking statements. Please refer to our latest specific corporate statement in the earnings price list on our IR website, which applies to this call. Also, during this call, we will discuss certain non-gap financial measures. Please also refer to our earnings price list, which contains the reconciliation of non-gap measures to the comparable gap 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 interim president, Mr. Fu. Mr. Fu, please go ahead.
spk03: Thank you, Caroline.
spk04: Thank you, Caroline, and thank you all for joining us.
spk03: I believe everyone has noticed that the company has recently made a brand upgrade. Our timely retail business has been fully upgraded to Jindong Miao Su, Jindong Now. With a new brand image, we have more than 500,000 stores,
spk04: I believe it has come to your attention that we recently launched a brand upgrade. Our on-demand retail service has been rebranded as JD Now, delivering quality goods at top-notch speed, partnering with over 500,000 brick-and-mortar stores, JD.NOW provides on-demand shopping experience to consumers in more than 2,300 cities and counties. 目前我們在京東主站原小師達的各類消費者處點已全面更新為秒送, 包括頂部的雙首頁入口名稱,搜索結果標籤等。 此外,京東APP首頁也即將新增秒送專區,秒送商品,
spk03: Our various consumer touchpoints of the former Sao Shida or Shofna service on the JD app have all been renamed, including the Tell-A-Low tab at the top of the homepage and tags of search results.
spk04: In addition, there will soon be a new JD.Now section on the homepage of the JD app, enabling products and merchants on our platform to gain incremental exposure. Today, we'll also kick off a series of consumer-facing awareness campaigns to enhance consumer mindshare of the JD.Now brand. 随着品牌升级,我们也进入了新的篇章,聚焦和持续的平台生态建设。
spk03: This year, the company has fully returned to the user-centered focus, focusing on healthy growth and long-term sustainable development of the business. In the first quarter, the total income of Dada Group was 250 million yuan. Among them, Dada's fast-tracking business grew 57% to 120 million yuan, reaching the highest level in the past eight quarters. In terms of the instant delivery business in the Middle East, we also see that with the effects of strategic focus,
spk04: along with the introduction of our new brand, we've entered a new chapter with a focus on building a sustainable ecosystem. Heading into 2024, we've decided to further strengthen our commitment to customer experience and focus on healthy growth to deliver sustainable long-term development. In the first quarter of 2024, our total net revenues were 2.5 billion RMB. In particular, revenue from DataNow increased about 57% year-on-year to 1.2 billion RMB, accelerating to the highest growth rate in the past eight quarters. For JDNow, we noticed a significant turnaround in our core operating metrics as our investments in the core business to uplift customer experience payoff.
spk03: 现在我们介绍京东秒送和达达快送两个平台的业务亮点。 首先先看京东秒送。 Now let's turn to the operating highlights for our two platforms, JD.Now and DataNow, starting with JD.Now. 第一季度,京东秒送聚焦京东APP场域。 In the quarter, JD now focused on integrating into the ecosystem to drive growth on the JD app.
spk04: to entry points including the former Xiao Shi Da service and the level one ICOM entry point on its home page. Our efforts on the demand and the supply side yielded encouraging results on our user experience and product offerings, driving up the penetration of on-demand retail among JD users.
spk03: 我们通过满29元免运,产品功能优化等举措持续优化用户体验。 On the demand side, we enhanced user experience with initiatives, including a delivery fee waiver campaign for orders over 29 RMB and better interface designs. 二十年第一季度,我们逐渐连动商家将免运门槛从59元下降至29元。 In the first quarter of 2024, we reduced the
spk04: We further reduced the free delivery threshold to 29 RMB from 59 RMB in cooperation with our merchant partners. By the end of March, nearly 80% of active stores on our platform were enrolled in the campaign, which has significantly improved our new user acquisition efficiency and user stickiness. Compared with pre-campaign levels, the conversion rate of new users improved by 20%. The seven-day retention rate of new users rose by about 10%, and the repeat purchase rate among existing users were up by nearly 30%.
spk03: At the same time, we continue to optimize the product functions to improve the continuity of full-line shopping. For example, we made a new change to the second-hand channel. Search shows that we have further enriched the purchase decision information.
spk04: In the meantime, we continue to work on upgrading our platform features and interfaces to enable seamless shopping experience. For instance, we redesigned the page layout of the JD Now tab, adding more decision-useful information and search results. The revamp helped improve The user conversion rate of both the JD.NOW tab and search result exposure in the first quarter by around 1 percentage point year-on-year.
spk03: As mentioned above, the penetration rate of instant sales in JD.NOW users continues to increase. In the first quarter, the number of monthly orders and orders in the JD.NOW app field has increased by more than 70% compared to the previous quarter. In the fourth quarter of last year, the number of monthly orders and orders increased by more than 50%. Given by these initiatives, our penetration rate among JD users continued to rise
spk04: In the first quarter, those are monthly transacting users and orders through the JD app recorded year-on-year growth rates of above 70% and with a significant acceleration of over 50 percentage points, sequentially. What's more, we are encouraged to see these two metrics gain even stronger momentum, varying by more than 100% year-on-year in April. Meanwhile, our user stickiness is also improving. In March, the 30-day repeat purchase rate of consumers on the JD app increased by over 30% year-on-year, indicating stronger user mindshare.
spk03: 使用户体验的优化和规模的增长 第一季度 来自京东APP场域的GMV同比增长超30% 其中表送频道的GMV同比增长超200%
spk04: As user experience improves and our user base grows, our GMV on the JD app grew by over 30% year-on-year, among which GMV generated by the JD Now tab more than tripled year-on-year.
spk03: In the supply side, we continue to enrich the platform's high-quality supply by increasing door-to-door coverage, On the supply side, we focused on expanding store coverage and enhancing price competitiveness. To further increase the store density on our platform,
spk04: we onboarded more high-quality merchants across various verticals, such as liquor stores, home appliance stores, fresh produce stores, and flower shops. In the first quarter, the number of active stores on the JD app had increased by more than 80% from a year earlier.
spk03: To be more competitive on prices, we are working with merchants
spk04: to enhance the price competitiveness of JDNOW products, leveraging the price-based star rating pool, thereby increasing users' mindshare of JDNOW's price competitiveness. As of the end of March, the proportion of high-star JDNOW products on the JD app increased by more than six percentage points from a year earlier.
spk03: Now let's move on to business updates by category. In the convenience store category, GMV increased by more than five times year-on-year.
spk04: In particular, we became more involved with top convenience store chains like Meijia, the number one convenience store chain by the number of stores in China. In the first quarter, we onboarded more than 5,000 new convenience stores.
spk03: 在消费电子品类,手机方面一纪录小米等品牌GMV同比增长近100%, Turning to consumer electronics, in the smart phones, practically, GMV of Xiaomi, among other mobile phone brands, nearly doubled from a year earlier in the quarter.
spk04: In the computer and accessories subcategory, we expanded our slate of offerings by adding more than 3,000 new stores, and Total GMV maintained rapid growth of nearly 40% year-on-year. Specifically, GMV for Xiao Tian Cai, a local watch firm brand, and Hewlett Packard more than doubled year-on-year.
spk03: Now I would like to move on to discuss the home appliance and home furnishing category. During the quarter, we launched new partnerships with smart home appliance brands
spk04: including Xiaomi, the leading IoT at-home technology company in China, and added more than 6,000 new stores onto our platform. As a result, in the first quarter, GMV for home appliances increased by nearly 150% from a year earlier, while GMV of home furnishing merchants increased by more than 40% on a year-on-year basis.
spk03: In the liquor category, we continued to deepen our partnerships with leading alcohol retailers. In the first quarter, GMV of the category nearly tripled year on year. For the apparel category, we made greater inroads with sports and outdoor brands as demand for outdoor sports products boomed.
spk04: driving GMB for the whole apparel category to more than double from a year earlier, among which some outdoor footwear and apparel brands like Camel, a leading player in China, increased by more than seven times year-on-year. This covers JB Now's efforts and results on both demand and supply. I would now like to turn to Bada Now, a leading local on-demand delivery platform for venture merchants and individual centers across various industries and product categories. In the first quarter of 2024, net revenues from DataNow reached 1.2 billion RMB. And the year-over-year growth rate accelerated to 57%, reaching the highest rate in the past eight quarters. 从业务线看,首先是K,也就是连锁商家业务。
spk03: Thank you. Thank you. Thank you. Thank you. Thank you.
spk04: In terms of business progress, let's start with our KA or chain merchants business. The net revenues maintained a solid momentum and continued to drive the overall revenue growth of the data now segment, with revenues in the restaurants and beverage KA categories growing even faster. We expanded into more restaurant KAs and made breakthroughs with top brands like Yum China. In our SME and C2C business, the number of fulfilled SME and C2C orders grew steadily in the quarter, driven by further penetration into vertical markets, enhanced service quality and customer experience of high-value orders, and optimized pricing strategy.
spk03: These are the two platforms' business progress. In general, the company has been focusing on a healthy growth strategy for the past year, and has completed a comprehensive process for all business lines. We will continue to focus on improving user experience, strengthening timely retail and new construction, and at the same time, further play out the joint effect of timely retail and timely delivery business. Next, let's have Henry introduce our financial performance in the first quarter. Thank you.
spk04: This concludes our operational update. To sum up, since the beginning of this year, we've conducted a comprehensive review of our various businesses, which is now nearly complete. Going forward, we'll continue to focus on healthy growth by stacking up our efforts to improve user experience, increase the mindshare of on-demand retail, and further exploit the synergies between the on-demand retail business, and the on-demand delivery business. I'll now pass the call to Henry to go through our financials. Thank you.
spk02: Thank you, Mr. Fu. Before we go over the numbers, just a few housekeeping items. We believe year-over-year comparisons are the most useful way to evaluate our performance. And as a result, all percentage changes that I'm going to give will be on a year-on-year basis, and all figures are in RMB unless otherwise noted. Our total net revenues in the first quarter of 2024 was $2.5 billion. Net revenues from JD now was $1.3 billion, meaning due to a decrease in online advertising and marketing service revenues and a decrease in fulfillment service revenues, as a result of the full rollout of delivery fee waiver program for orders exceeding 59 RMB in August 23, which was further lowered to 29 RMB starting February 2024. Net revenues from DataNow increased by 57% to 1.2 billion, meaning driven by an increase in order volume of intra-city delivery services provided to various chain merchants. Moving over to cost and expense side, operations and the support cost were $1.8 billion. The increase was primarily due to an increase in rider cost as a result of the increase in order volume for intra-city delivery services provided to various chain merchants. Setting and marketing expenses decreased to $818 million. primarily due to a decrease in promotion activities conducted on the JDNow platform. General and administrative expenses decreased to $51 million as a result of a decrease in the amortization of intangibles arising from the acquisition of JDNow in 2016. Research and development expenses decreased to $94 million, meaning attributable to a decrease in research and development personnel costs. Our non-GAAP net loss for the first quarter of 2024 was $195 million, and the non-GAAP net loss margin was 7.9%. As of March 31, 2024, we had $3.8 billion in cash, cash equivalents, restrict cash, and short-term investments. Pursuant to our $40 million share repurchase program announced in March 2024, as of April 30, 2024, we had repurchased approximately $8.4 million of ADS under this repurchase program. This concludes our prepared remarks. Operator, we are now ready to begin the Q&A session. Thank you.
spk07: 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 Thomas Chong with Jefferies.
spk00: Good morning. Thank you for accepting my question. 我有兩個問題。第一個是關於2024年關於京東秒送還有快送的業務的趨勢。 另外一個問題是我們看京東那邊我們可以分享一下未來的協同的一個進展。 Thanks, management, for taking my question. My first question is about the business trend for JD Now and Data Now in 2024. And my second question is about the progress of JD Now on the JD app and synergy with JD going forward. Thank you.
spk03: Thank you, Jeffrey. Let me answer the first question first. From the perspective of JD MyoSong, we have recently officially upgraded our online sales business to JD MyoSong. With the new brand image, we provide consumers with an unparalleled shopping experience. With users as the center, we have built a sustainable platform. Thank you, Thomas.
spk04: I'll take the first question first. For our on-demand retail business, we've recently officially upgraded the brand to JD Now, aiming to bring quality goods to consumers at top-notch speeds under our new brand identity. build a customer-centric, sustainable platform ecosystem. Given the tremendous potential of the on-demand retail market, JD.NOW's primary goal is to pursue high-quality growth.
spk03: Let's talk about some specific measures. One is that at the demand level, our strategy is focused on the field of JD.NOW apps to help JD.NOW achieve a full-fledged practical upgrade. In the Jingdong app field, in addition to the original main MiaoFeng channel, search, output, and icon, we will also launch MiaoFeng exclusive in the first page of Jingdong. This also reflects the great resource support of Jingdong and the importance of instant sales to Jingdong's strategy. At the same time, we will surround the promotion, transformation, and resale of comprehensive products and operating capabilities through a rich supply of refined products. Now I'd like to share some operating initiatives that we've taken, starting with on-demand side efforts. We're strategically focusing on the daily app
spk04: to help JD achieve a comprehensive upgrade and fulfillment timeliness. Within the JD app, in addition to our primary entry points, including the JD Now tab, search exposure, and the Level 1 icon entry point, we will soon launch a new JD Now section on the JD homepage. This also demonstrates the substantial traffic support from, which underscores the strategic significance of on-demand retail for JD. Secondly, we plan to enhance consumer interface and operational capabilities around exposure, conversion, and repeat purchase to meet the diverse needs of JD users across multiple scenarios through enriched supplies and refined marketing initiatives. We are also making ongoing investments to enhance user experience, including further upgrades to our fulfillment services and the full rollout of the delivery-free waiver program.
spk03: In the supply side, our goal is not only to do well, but also to do well. While we continue to consolidate the advantages of the商超, mobile phone, and other categories, we will also focus on the focus on the focus on the focus on the focus on On the supply side, our aim is to improve supply in both threats and deaths.
spk04: While continuing to solidify our advantages and categories, including supermarkets and mobile phone stores, we're also focusing on categories including liquor stores, small hand appliance stores, and flower shops. At the same time, we are exploring new forms of supply. In addition, we're focusing on improving our supply capabilities from five aspects, namely coverage, pricing, inventory, content, and service, to onboard more active stores, boost the price competitiveness of our products, lower the stock-out ratio, and enhance off-the-sale service.
spk03: In the first quarter, we achieved initial progress from the above statements. And in the second quarter, we also saw that various operating indicators improved further. is very strong. In the first quarter of 2024, JDF's monthly sales, number of users and number of orders increased by more than 70%. In the fourth quarter of 2023, it accelerated by about 50%. In April, it accelerated by more than 100%. In the first quarter of 2024, JDF's GMV increased by 33%, and in the fourth quarter of 2023, it also accelerated significantly. In the first quarter, these efforts made initial progress, and entering into the second quarter, we've seen a strong momentum of further improvements in various operational metrics.
spk04: In the first quarter, our average monthly transacting users and orders through the JD app grew by over 70% year on year, accelerating by about 50 percentage points from the growth rate of the fourth quarter in 2023. In April of 2024, the two metrics further surged by over 100% year on year. Also in the first quarter, our GMV through the JD app increased by 33% year-on-year, a significant acceleration from the growth rate of the fourth quarter of 2023, with March accelerating by 14 percentage points over January and February. Furthermore, in April, the year-over-year growth rate further accelerated by 18 percentage points compared with the growth rate in the first quarter to over 50%.
spk03: Next, I would like to introduce Dada Express. In the past two years, we have achieved significant progress in terms of market rate improvement and profit-making ability improvement. Among them, the income of the first quarter of this year is more than 50%. This is also far more than the industry growth of the time. Next, we will continue to work hard on the PA business. to promote order volume and high-quality income growth, and become the largest third-party timely delivery platform. In terms of ability construction, we continue to focus on timely ecosystem construction, increase in delivery capacity, and increase the efficiency of order matching. For Jindong Miaosong and a wide range of external customers, we provide consistent cost-effectiveness and timely delivery services. In terms of products, we will consolidate the leading position of commercial supermarkets, Now let's turn to Dada now. Over the past two years, we've made significant progress in increasing our market share and improving our profitability.
spk04: In particular, the year-over-year revenue growth rate of over 50% in the first quarter significantly outpaced the industry growth of on-demand delivery. Going forward, we will continue to focus on our KA or chain merchants business to drive high quality growth in both order volume and revenue to become the largest third-party on-demand delivery platform. In terms of service capability, we will remain committed to improving our rider ecosystem, enhancing fulfillment capabilities, and upgrading our order matching efficiency. This will allow us to provide cost-efficient and high-quality intercity delivery services, both daily now and extensive external clients. In terms of industry focus, While solidifying our leading position in supermarkets, we will actively expand into chain restaurants and beverage customers to further increase our market share.
spk02: Thank you, Thomas. I'm Henry. From a financial perspective, I'd like to add some information. I'll answer in Chinese first, then I'll translate it into English. Thank you, Thomas, for your question. I will supplement from financial perspective. I will first respond in Mandarin and then translate in English. First of all, it is the part of Jindong Miaosong. In fact, you can see from the just-released financial report, the overall income of Jindong Miaosong in the first quarter has undergone some challenges. In general, it is affected by the following three factors. The first one is that since the new management team of the entire company took office this year, we have led the entire business team from the first quarter to the present, and we have done a comprehensive business process, and we have reached a consensus. We also focus on the new Jingdong App field. As Mr. Fubing mentioned, users and GMPs from the Jingdong field have achieved an accelerated effect. From the first quarter, our overall commission income is relatively stable. The positive performance of high-quality users partially compensated for the negative impact of low-performance business cleaning on income. I believe that after a period of time, with the further expansion of the core indicators in the Jindong field, the commission income of Jindong Miao Song can return to the trend of positive growth. The second is that for the core of, we have already steadily continued to increase the investment on user experience. For example, our platform is actually continuously strengthening the right to immunization. In August last year, we launched a full 59 yuan immunization project. In February 2024, we further lowered the threshold of this immunization to 29 yuan. We also hope that through the reduction of the immune threshold, we can reduce the hindrance for users to place orders, and strengthen the mindsets of users to buy and sell in a timely manner. So, as you can see, in the first quarter, the turnover has dropped a little, but this measure has actually effectively promoted the long-term high-quality customers of Jingdong Miaosong. We also believe that in the long term, it can lead to the growth of GMV and cash sales. Lastly, advertising revenue. With the transition of the main channel, we are optimizing our LBS advertising products with Jindong Group. At present, we are gradually launching new products in the face of business and brands. Of course, large-scale promotion still needs time. So, in the first quarter, advertising revenue has also dropped significantly. But with the optimization of the product and the continuous growth of high-quality users, and the technical capabilities of LBS, which is the leading industry in the market, we are full of confidence in the potential of the long-term advertising business. These above major adjustments to the business and continuous investment in users will bring some challenges and influences to our income and profits in the short term. But in the long term, we believe that these mistakes will further drive the growth of high-quality users and businesses. Lastly, fast delivery. As you can see, in the first quarter, our orders and revenues have increased rapidly. We have been able to obtain market share in the fast delivery market. This year, we believe that fast delivery will be a priority with a high growth rate. We are also confident that we can maintain a growth rate higher than the industry. At the same time, we will ensure the improvement of operating efficiency. For JD now, as you can see from our earnings release earlier, we encountered some challenges in revenue growth in the first quarter of 2024, primarily due to the following factors. Firstly, since our new management team assumed roles earlier this year, we have led our business team through a very comprehensive review of our business. and reached a consensus to gradually clear out inefficient channels in the business. At the same time, we have strategically focused more on the JD app as our core channel. As Mr. Fu mentioned earlier, the growth rate of users and GMB through the JD app has significantly accelerated. As a result, our commission revenue remain relatively stable year-on-year in the first quarter, with the positive performance of high-quality users partially offset the negative impact of clearing inefficient operations. We believe that after some time, as our core metrics on the JD app continue to grow, JD Now's commission revenue can return to a positive year-on-year growth trend. Our core JDF channel will have consistently increased our investment in user experience and will continue to do so. For example, we have enhanced free delivery benefits. Starting in August 23, we launched a free delivery program for orders exceeding 59 RMB. And in February this year, we further lowered the free delivery threshold to 29 RMB. By reducing the pre-delivery threshold, we aim to lower the barriers for users placing orders and reinforce the perception of JD Now's on-demand retail service as both cost-effective and fast. Therefore, in the first quarter, fulfillment service revenue saw a notable year-over-year decline, but I want to emphasize that this initiative effectively enables JD Now to acquire high-quality users thereby boosting GMV and commission revenue growth in the long term. Thirdly, in our advertising business, with a shift in channel focus, we are collaborating with JD Group to optimize our location-based advertising products. We are gradually introducing new advertising products to merchants and brand owners, but large-scale adoption will take time. As a result, advertising revenues saw a notable year-on-year decline in the first quarter. However, with production optimization and the continuous growth of high-quality users, along with our industry-leading LBS technological capabilities, we are confident in the long-term potential of JTNOW's advertising business. As Bob mentioned, the voluntary Business adjustments and investment in user experience will bring challenges to our revenue and profitability in the near term. However, these initiatives will drive high-quality growth in users and in business in the long run. For DataNow, in the first quarter, our orders and revenue achieved rapid growth, continuously gaining market share in the on-demand delivery industry. Throughout the year, our priority will remain on high-quality growth and is confident in maintaining growth rates higher than the industry average, while also focusing on improving operational efficiency. That's my part. And then, Mr. Fu, please go ahead with the second question regarding the progress of JD now on the JD app and the synergy with JD.
spk03: Next, I will talk about the progress in cooperation with Jindong. In this quarter, Jindong Miaosong began to fully embrace Jindong Ecology, cooperate with Jindong's production and operation teams to upgrade the brand, and strengthen exposure and transformation at each entrance of Jindong's first business. As for Miaosong Channel, we have made a full-scale revision to improve the smoothness of shopping on the whole road. In the first quarter, the exposure increased by 30%, The click rate increased by more than 0.4%, and the conversion rate increased by 1%. As for the search output, we significantly enriched the decision-making information of the purchase, such as the full display, and carried out a detailed operation based on the users' categories. The low-gloss coverage increased by more than 60%, the click rate increased by more than 1%, and the conversion rate increased by nearly 1%. In addition, this week, we will continue to expand the user focus in the first page of JD. This also reflects the great support of JD and the importance of the JD strategy.
spk04: Hello, I'd like to address the second part of Tom's question on the progress of JD Now on the JD app and synergies with JD. For JD.Now, starting this quarter, we have fully embraced the JD ecosystem, collaborating with JD's R&D and operational teams to upgrade the brand and enhance exposure and conversion at various entry points on the JD homepage. Specifically, the JD.Now tab has undergone a complete redesign to improve the end-to-end shopping experience. In the first quarter, exposure of the Daily Now tab increased by over 30%, the click-through rate by over 0.4 percentage points, and the conversion rate by 1 percentage point year-on-year. For the search exposure, we have significantly enriched the display of decision-useful information, including discounts and user benefits, and refined operations based on user segmentation. In the first quarter, search exposure increased by over 60%. The click-through rate of search results by over one percentage point and can exaggerate by nearly one percentage point year-on-year. In addition, later this week, we will launch a new JD Now section on the JD homepage for expanding our touchpoints among JD users. This also demonstrates the substantial traffic support from JD, which underscores the significance of on-demand retail for
spk03: In the first quarter, the penetration rate of on-demand retail among JD users
spk04: was still in single-digit percentage, indicating substantial upside in the long run. We will continue to invest in supply expansion and user experience improvement to further increase user penetration.
spk01: Thank you. Your next question comes from Lei Zhang with B of A. Hi.
spk05: I have two questions. The first question is about the red line. I would like to ask the management team to help us analyze the red line trend that you see here and the potential impact on our business. The second question is that the management team has mentioned the word user experience many times in today's call. Then, can you help us summarize and analyze the overall future of the company in terms of user experience investment? Thank you. I will translate it myself. Thank you, management, for taking my question. The fourth question is regarding the macro. Can you give us more color on the macro consumption trend and the potential impact to our business? Secondly, I think you mentioned several times about the user experience. and any matters you can share to improve our user experience, especially after we upgrade our brand. Thank you.
spk03: Thank you for your question. Let me answer the first question, which is the impact of the red-light trend on business. For the entire Jindong Myofeng business, our core focus is on the will and trend of the entire consumer. In the first quarter of 2024, the total number of customers was 4.4% in 2019, which is 1% faster than in the first quarter of 2023. This shows that customers' confidence and desire are continuing to grow. On the one hand, the trend is that consumers are more interested in new products. On the other hand, consumers' demand for convenience is still growing. As a temporary retail platform, on the one hand, we naturally occupy the advantage of retailing, and on the other hand, we continuously optimize the entire retail experience. Thank you, Wei, for your question. To address the first part of your question,
spk04: on the macro consumption trend and impact on our business. So for JD Now, we focus on the overall consumption willingness or the willingness to spend and the consumption trend. In the first quarter of 2024, total retail sales grew at a tagger of 4.4% from the same period in 2019, accelerating by one percentage point compared with the CAGR in the fourth quarter of 2023. This reflects a continuous recovery in overall consumer confidence and willingness to spend. On one hand, consumers are increasingly seeking value for money. On the other hand, the demand for convenience continues to grow. So as an on-demand delivery platform, we are inherently and well-positioned in convenience. And on top of that, we are constantly optimizing the fulfillment experience on our platform. Additionally, by collaborating with merchants to enhance the price competitiveness of products and implementing measures such as the delivery fee waiver, we continually strengthen the mindset of value for money among our consumers. Therefore, we firmly believe that the penetration rate of on-demand retail in the overall retail market will continue to rise. And indeed, we've seen that JD Now's GMV through the JD App Channel accelerating in year-over-year growth rate in April and month-to-date in May.
spk01: OK. Next, I will talk about Dada delivery business.
spk03: Our core focus is on the flexible employment trend of the market and the need for timely delivery of customers. From the first quarter of 2020, Dada delivery has slowed down in terms of delivery speed and delivery speed. But the overall supply is still sufficient. And we observed that the growth of the number of drivers in the fourth quarter is accelerating. The growth of the number of drivers in the fourth quarter is accelerating. In terms of the needs of the entire business, we also observed that the number of delivery orders for the chain of products and products is constantly growing. And the business is pursuing more channels to run the hospital. This all helps us to promote the rapid growth of the number of delivery orders for the third party driver.
spk04: And turning to Dada now, we're watching the dynamics in the flexible employment market and merchants' demand for on-demand delivery. In the first quarter of 2024, the year-over-year growth rate of active riders on our platform slowed down as riders went back home for the Chinese New Year celebration. But the overall rider supply remains sufficient, and we've observed an acceleration in our rider growth in April. And in terms of merchant demand, we note that the on-demand delivery orders from chain merchants and restaurants and beverage categories continue to grow. And these merchants are willing to embrace multiple online business channels, which helps to drive the auto growth of third-party online delivery platforms.
spk03: Okay, let me answer your second question, which is about user experience. For the entire Jindong秒送, we aim to optimize and improve user experience. The penetration rate among Jindong users The direction of specific investment mainly includes the first one, which is to optimize the function of the entire product to improve the smoothness of the purchase. From the first quarter, we actively invested in the resources of the industry for the search, delivery channels, and other entrances. We have made a follow-up upgrade and improved the user's full-line transaction experience, and thus increased the conversion rate. On the other hand, we have improved the practicality and experience of travel. We have optimized the passenger model, upgraded the transport structure, and improved the connectivity of all travel sections. Now I'd like to address the second part of your question on measures to improve our customer experience.
spk04: In terms of JD Now, we are committed to enhancing the penetration of our JD users through optimizing customer experience. Specifically, we are investing in optimizing product features and upgrading the fulfillment timeliness. So firstly, in terms of the product features, that we are optimizing to deliver a smooth shopping journey. In the first quarter, we actively invested in product development and research to iterate and upgrade entry points, including search results and the daily now tab to enhance the end-to-end transaction experience and thereby improve conversion rates. And secondly, in terms of upgrading the fulfillment, timeliness, and service experience. We have improved the accuracy of estimated time of arrival and actual time of arrival by optimizing our predictive models and upgrading our operational capabilities to enhance the integration of various procedures and processes across the fulfillment journey. In the first quarter, the average fulfillment time per order for our JDNOW business on the JD app decreased by 12% year-on-year.
spk03: In the third quarter, we actively promoted the issue of immunity and strengthened the review system. Since August last year, we have launched a $59-a-day free delivery project. In February this year, we have further reduced the threshold of free delivery to $29. By the end of April, the $29-a-day free delivery activity has covered nearly 90% of orders. Through the free delivery activity, the seven-day recovery rate of users has increased by 3%. We have launched order increases that are 20% higher than non-free delivery stores. And in addition, we are promoting the free delivery
spk04: the delivery fee waiver campaign to strengthen the cost-efficiency mindset of our platform. Starting in August last year, we launched a delivery fee waiver campaign for orders exceeding RMB 59, and in February this year, we further reduced the free delivery threshold to 29 RMB. By the end of April, Free Delivery Initiative for orders over 29 RMB covered about 90% of daily-announced orders. The campaign increased users' seven-day repeat purchase rate by three percentage points. Given the encouraging results, we plan to offer the delivery-free waiver as a long-term benefit to our customers. Moreover, the campaign has only a limited impact on the average order value. For the supermarket category, LV, or average order value, remained largely stable year over year in the first quarter and only slightly decreased in April. reflecting a differentiated mindset of one-stop shopping among our users for our platform.
spk03: Thanks to the improvement in user experience,
spk04: We've seen significant enhancements in exposure, conversion, and repeat purchase rates on the JDX. The net promoter score for the supermarket category also improved by seven percentage points in the first quarter. So I hope this addresses your question.
spk07: Thank you. Your next question comes from Jilu Li with CICC.
spk06: Hello, operator, and thank you, everyone, for joining us. For the interest of time, we would like to conclude this call for today. In closing, on behalf of data management team, we'd like to thank you for your participation in our today's earnings 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.

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.