JD.com, Inc.

Hello, and thank you for standing by for JD.com's second quarter and interim 2023 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, Shawn Zhang, Director of Investor Relations. Please go ahead. Thank you, Drew.

Good day, everyone. Welcome to JD.com's second quarter and interim 2023 earnings conference call. For today's call, CEO of JD.com, Ms. Sandy Xu, will kick off with opening remarks. Our CFO, Mr. Ian Shan, will discuss the financial results. After that, we'll open the call to questions from analysts. Let me quickly cover the safe harbor. Please be reminded that during this call, our comments and responses to your questions reflect management's view as of today only, and will include forward-looking statements. And please refer to our latest safe harbor statement in earnings press release on our IR website, which applies 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 price release. Also, please note all figures mentioned in this call are in RMB, unless otherwise stated. Now, let me turn the call over to our CEO, Ms. Sandy Xu.

Thanks, Sean. Hello, everyone, and thanks for joining us today to discuss our Q2 results. Q2 was a productive quarter for JD. We delivered a solid performance with both top-line and bottom-line results, exceeding our expectations. More importantly, during the quarter, we effectively executed our business and organizational development, further improved our supply chain capabilities, and achieved many operational and financial milestones while navigating a challenging industry environment. We are encouraged by the progress we are making on these priorities. And I want to share some of the details with you. Let me start by reiterating JD's operating philosophy since our inception, which is to relentlessly strive for lower cost, higher efficiency, and superior customer experience. This is at the heart of everything we do. And it primarily consists of two critical elements, namely customer experience and supply chain capabilities. First, on customer experience, we always focus on providing best-in-class customer experience and continue to find ways to improve selection, speed, quality, and value in Chinese , particularly Since the beginning of this year, we have gone extra miles to improve our selection and value, while our quality and speed continue to lead the industry. On selection, we are taking solid steps to improve our platform ecosystem, which in JD's case means the prosperous coexistence of both our 1P and third-party marketplace businesses. Our platform ecosystem strategy is guided by our goal to continuously improve customer experience, and both 1P and 3P models are means to this end. It was an exciting quarter for our third-party marketplace business. We feel that we are only at the early stage of realizing JD's marketplace business potential, but we were encouraged to see The number of 3P merchants more than doubled year-on-year and set an all-time record in Q2 as we improved our tools and traffic allocation mechanisms to build a fire and effective operating environment. With the improving operating environment, more 3P merchants brought a broad selection of products to our customers driving 3P marketplace GMV growth to accelerate over the last two consecutive quarters. Moreover, we have seen two consecutive quarters of double-digit 3P revenue growth, mainly driven by robust growth of advertising revenues as more 3P merchants allocate ad budget to JD's platform. On value, since the beginning of the year, we have launched new initiatives to enhance our reputation for providing value to users. Sometimes I hear people make the argument that data's pursuit of low prices will inevitably impact user experience and our profitability. We know this argument is incorrect. Value means providing both low price and extra value or services for the many customers pay. And not surprisingly, JD's supply chain capability is the key to delivering this. With lower cost and higher efficiency generated through our supply chain, we are able to provide more value and extra service to our customers. Take our 10 billion discount program as an example. as we continue to enrich its value for many selections of 3P merchandises, which is resonating with our customers. 3P GMV contribution with this program has gradually increased to over 50% in July. Also, with this program moving ahead, we were still able to maintain a healthy bottom line in Q2, which Ying will elaborate shortly. This is a strong proof of how we leveraged our supply chain and managed our business effectively to serve our users better. Another proof is that our core categories, including 3C and home appliances, continued to benefit from our robust supply chain capabilities. which enable us to provide steady supply at low prices and high quality services at the same time. As a result, we further gained market shares in these core categories in the quarter. During the quarter, we observed strong user engagement trends, including higher purchase frequency and our pull on our app, in particular, The number of repeat customers continued to grow by double digits, while the average GMV per user increased by high single digits. The number of JDplus members continued to grow over 20% year over year and reached 36 million in Q2. All these are strong testaments that are on top of our speed and quality. User recognition of our improved selection and value gets stronger as our supply chain capabilities continue to serve as the bedrock of our resilient business performance. In the last two quarters this year, we have been heads down executing our strategic priorities including our platform ecosystem, and enhancing our customer experience with superior selection, speed, quality, and value. As we have talked a lot about our business development today, now I'd like to share some color on the progress of our organizational restructuring. We launched this initiative in Q2 in which we focused to flatten our management structure and delegate greater decision-making power to the operational units that are closer to users. Our goal is to improve organizational efficiency and incentivize entrepreneurship, even at the frontline level. So far, the restructuring is progressing as expected. We've completed reassigning responsibilities and citing KPIs for each of the operational units and are now in the process of tracking and assessing execution as well as further streamlining the nodes in operation and iterating our business supporting systems. The restructuring involves a lot of efforts and it takes time to bring its effectiveness into full play, but we've seen that Under the new structure, our operational units are more incentivized and showcase enhanced professionalism and executive capabilities. It's really encouraging to see our decisions and efforts start to pay off and yield early positive results. As DD continues to execute these strategies, from a long-term perspective, We are more confident than ever in our ability to deliver healthy and sustainable growth and continue to seize new opportunities to innovate and drive our business goals going forward. At our 20th anniversary this June 18th, we introduced our ambitious 35711 vision. The vision includes our goals in the next 20 years of establishing three enterprises with over one trillion RMB in revenues and seven billion RMB in net profits, having five JD subsidiaries ranked on the Fortune Group 500 list, and seven publicly listed companies with over 100 billion RMB market cap, while contributing 100 billion RMB in taxes and creating over one million jobs as a group. This is a vision that outlines both the path for sustained growth for the next 20 years and our commitment to positive social impact. It also highlights our unshakable confidence in and commitment to China's long-term economic development. As we look ahead to the second half of year and the future, we are focused on the healthy growth of our business and investing in exciting new opportunities, driven by our unchanged long-term strategies that center around cost, efficiency, and customer experience, and a deeper sense of mission. We believe we are well-positioned to create long-term value for our users, business partners, shareholders, and the society at large. With that, I'll turn it over to Ian for our financial highlights. Thank you.