JD.com, Inc.

JD.com's first quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Jong, Director of Investor Relations. Please go ahead.

Thank you. Good day, everyone. Welcome to JD.com first quarter 2024 earnings conference call. For today's call, CEO of JD.com, Ms. Sandy Xu, will share her opening remarks. And our CFO, Ms. Ian Shan, will discuss the financial results. Then we'll open the call to questions from analysts. Before turning the call over to Sandy, 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's only, and will include forward-looking statements. Please refer to our latest Safe Harbor statement in the earnings press release on our 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 press 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, Sandy. Sandy, please.

Thanks, Sean. Hello, everyone, and thanks for joining us today to discuss our Q1 2024 results. We kicked off the year with encouraging momentum in Q1. Our top-line growth accelerated and market share expanded. Well, our bottom line trended healthily in the quarter. More importantly, our users showed strong enthusiasm for our further improved shopping experience and differentiated services. And our net promoter score, the NPS, notably improved year on year. This is a result driven by our strong execution. Amidst evolving industry dynamics, our team stayed focused on our own strengths, strategies, and the pace of development, and continued to drive steady progress across all our strategic initiatives in improving user experience, price competitiveness, and platform ecosystem. Our strong execution is reflected in our improved category performance in Q1. To start with, Our general merchandise had a great quarter as our supermarket category returned to healthy growth, while fashion and home goods maintained robust momentum. Particularly, the bounce back of our supermarket category is a great example of how we are able to drive strong business performance by focusing on the key aspects of user experience, namely product quality and selection, price competitiveness, and service quality. After spending the past year on strengthening procurement capabilities and upgrading fulfillment network and operating efficiency, our supermarket category recorded double-digit GMB and revenue growth in Q1, with increased order volume and shopping frequency. We expect supermarkets' momentum to continue throughout the rest of the year and it to remain an important growth driver in the long run with massive time. Our electronics and home appliances category remains resilient in Q1. We are confident in our market-leading position and proven supply chain capabilities in this category. and we will continue to focus on our own strategies to scale the business and profits with differentiated value-add services, such as one-stop trade-in services, new product launches, more competitive price offerings, and a more dynamic platform ecosystem. Now let me share some operating highlights we achieved in Q1. in executing on our strategies. First, user engagement. We are excited to see a series of positive signs in both our user base and user behavior in Q1. Our quarterly active customers delivered another robust growth year on year during the quarter, driven by growth across all user groups, including new users, existing users, as well as our plus members. As to user behavior, shopping frequency on our platform delivered a substantial double-digit young year growth in Q1, more than offsetting the decrease in average order value as a result of our low price offerings. This led to a relatively stable up-pull in Q1 compared to the same period last year. In addition, driven by our expanding user base and shopping frequency, our order volume continued to increase at a double DJ rate year-on-year in Q1, a pace we have seen for three consecutive quarters. This robust momentum with users makes us confident to say that our relentless focus in user experience are paying off. We rolled out a number of user experience initiatives, and the team made solid progress in executing them. As such, our NPS continued to rise in Q1 on both 1P and 3P. We believe this is an important driver of our sustainable growth along the way. We are leveraging our core capabilities in supply chain to differentiate user experience on our platform. For example, the integrated treat-in services we provide in our electronics and home appliances category are at an industry-leading level. And we are further working on this to provide users hassle-free services, including coordinated delivery, installation of new devices, and dismantling of used devices. In addition, our supermarket category also made full use of its supply chain to roll out differentiated services, including direct shipment from suppliers to end users, and 24-hour fresh milk delivered to users since production. Among others, Our service offerings are catching up on the 3P side as well. For example, our 59 RMB threshold for free shipping now also covers almost all of the 3P products on our platform. We also made progress to expand coverage of our free doorstep picking up for return service among 3P merchants. We are encouraged to see 3P user experience on our platform continue to improve, and our 3P NPS score trended upward in the quarter. Moving on to our low price offerings. Our price NPS continue to increase in Q1, both sequentially and on a year-on-year basis, as our improved price competitiveness increasingly resonates with users. Meanwhile, growth of our user base in lower tier cities accelerated into one, exceeding our growth rate in higher tier cities. Order volume and shopping frequency generated by users in lower tier cities continued to record double-digit young year growth in the quarter, faster than that of our total users. Moreover, growth of low ticket-sized order volume continues to accelerate meaningfully in the quarter. All these reflect our increased attractiveness to price-sensitive customers and our abilities to serve them effectively. With our 1P supply chain capabilities and enriched offerings of 3P, we are strongly positioned to pursue low-price, in a sustainable way. This is the essence of retail, the core of JD business model, and a key competence that helps us stay ahead of price competition. Next, moving on to our platform ecosystem. We were encouraged to see our active merchant base continue to rapidly expand on our platform in Q1. driven by our effective supporting measures and optimized operating tools. Both our 3P user base and 3P order volume continued to grow at a faster pace in Q1 compared to previous quarters. Our marketplace and marketing revenues returned to a positive growth in Q1 as we navigated one-off impacts in the past quarter. This was primarily driven by the growth in our advertising revenues, while commissions remained felt due to our strategy to prioritize ecosystem development over monetization at the current stage. I want to point out that the low 3P monetization rate at the moment does not reflect the true potential of our marketplace and marketing revenues. and we anticipate more upside going forward. That said, we maintain our strategic priority of building a vibrant and thriving platform ecosystem where both our 1P and 3P merchants are adequately incentivized to better serve users. On a separate note, 2024 marks the 10th anniversary of our listing on NASDAQ. Looking back on the past decade, our revenues have scaled up significantly by 16 times from 69 billion RMB in 2013 prior to our listing to over 1 trillion RMB last year. Our non-GAAP income attributable to ordinary shareholders has expanded by an even more impressive 157 times from 224 million RMB to 35 billion RMB. The total amount we returned to our shareholders through dividends and share buybacks has surpassed the total capital raised over the course of the past 10 years. And we have created full-time jobs for over 500,000 employees with social insurance and health insurance benefits. as of the end of 2023, a 13-time increase compared to 10 years ago. We are proud of our achievements in the past as we created tremendous values to our users, employees, shareholders, and the society as a whole. We have a clear vision to navigate the next decade with our ever-improving user experience, stronger price competitiveness, and thriving platform ecosystem. To conclude, 2024 is marked with our consistent strategies and continued execution. And we are pleased to kick the year off with a quarter of accelerated growth and healthy profitability. As we focus on executing our strategies, we will further improve our user experience which leads to stronger demand share and user growth, thus helping to reinforce our market position and expand our market share. This will keep us on a sustainable path of healthy profit and cash flow and allow us to continue to execute and deliver for the rest of the year and the years to come. With that, I will turn it over to Ian for our financial highlights. Thank you.