JD.com, Inc.

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 Zhang, Director of Investor Relations. Please go ahead.

Thank you. Good day, everyone. Welcome to JD.com's second quarter and interim 2024 earnings conference call. For today's call, CEO of JD.com, Ms. Sandy Xu will kick off with her opening remarks, and our CFO, Mr. 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 the call, our comments and responses to your questions reflect management's view as of today's only, and we will include forward-looking statements. Please refer to our latest Safe Harbor statement in the earnings press release on 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 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.

Thank you, Sean. Hello, everyone. Thanks for joining us today to discuss our Q2 2024 results. Facing a very dynamic and competitive market, we delivered a solid set of results, notably achieving the highest single quarter non-GAAP net profit in our history. Our team did a great job executing our long-term strategy of relentlessly pursuing lower cost higher efficiency, and best-in-class user experience. And we saw a set of key drivers of our business, including user growth, user experience, and engagement. Press competitiveness and platform ecosystem continue to move in the right direction in the quarter. Our results speak strongly about the quality of our business, and our commitment to the healthy long-term growth with financial discipline. Instead of addressing the shifting market environment with hefty subsidies for short-term top-line performance, we continue to focus on leveraging our core strengths in supply chain capabilities to offer competitive prices and better user experience. And at the same time, to grow our business and profits sustainably. This is a proven path to drive sustainable growth and has led us through many market shifts over the past two decades. Despite the seasonal fluctuation of revenue growth in Q2, we are confident that our long-term market position will continue to improve. Now let's discuss our category performance. Revenues of electronics and home appliances were down 4.6% year-on-year in the quarter. This is primarily due to last year's high base, as well as our disciplined strategy during the June 18th promotion, as we prioritized the sustainable growth of our business. Rather than short-term growth fueled by excessive subsidies, We believe, with decades of operating experience in this category and unparalleled supply chain capabilities, we will continue to offer the best-in-class user experience and enhance JD's market position and win over market share in a sustainable way. We see continued strong momentum in our general merchandise category, with revenues up 8.7% year-on-year further accelerating from the previous quarters. To highlight, supermarket revenue saw double-digit young year growth in the quarter, led by strong order volume growth and improving user man-share. This momentum has persisted for two consecutive quarters now and is mainly attributable to our stepped-up efforts to improve user experience across all aspects. of product quality and selection, price competitiveness, and service quality. With this massive time, we expect supermarkets to continue to be an important growth driver for us. Despite mixed top-line performance, we saw broad-based profitability improvement across many categories and segments, which collectively contributed to record highs in both non-GAAP operating profit of 11.6 billion RMB and non-GAAP net profit attributable to ordinary shareholders of 14.5 billion RMB. Non-GAAP net margin in Q2 climbed to 5% for the first time. This was primarily driven by gross margin expansion to a historical level of 15.8% in the quarter. with the improvement in almost every category. As we focus on price competitiveness, our growth margin has been on an upward trend year on year for each and every quarter over the last two years. This underscores our improving supply chain capabilities that enable us to continually benefit from scale and efficiency. Now let me walk you through the progress we made on the key drivers of our business, namely user growth and user engagement, price competitiveness, and platform ecosystem. First, on user growth and user engagement, in Q2, we saw robust user momentum in both the higher tier and the lower tier markets. Collectively, the number of our total quarterly active customers continued to grow at double-digit pace year-on-year in Q2 for the third consecutive quarter. I want to reiterate that our goal is to serve users across different income spectrums and demands with the right product, right price, and service offerings. Our user growth in the quarter was broad-based across user cohorts of both new users and existing users, particularly those who have stayed with us for over two years, as well as PLUS members. It clearly demonstrates JD's value proposition not only resonates with new users, but continues to gain man share and wallet share from the loyal users. In addition, Overall, shipping frequency and order volume on our platform both grew by double digits year-on-year in Q2. We also saw average order value declined year-on-year as a result of soft consumer spending as well as our low-price strategy, category mix shift, and wide range of free shipping service. Such user momentum is a strong proof of our effective user experience programs. In Q2, we further enhanced our industry-leading trading program to provide users with better coordinated services, including delivery and installation of new devices and disassembly of used devices. We also extended our best price guaranteed period to up to 365 days. for certain categories, starting with 1P. In addition, we made solid progress on programs including free shipping, free doorstep pickup for return, cashback for delayed shipping, and expanded their coverage from 1P to more and more 3P offerings. Other initiatives, such as our supermarket categories, direct shipment from suppliers to customers and 24-hour fresh milk delivery, so increasing user appreciation. As a result, our 3PMAT promoter score has improved sequentially for the past two quarters, while our 1PMPS remains at a very high level. Going forward, we will continue to invest in user experience, as we believe it will translate to stronger user man-share and user engagement, which are the fundamental to drive sustainable growth for JD. Second, moving on to the price competitiveness, which we continue to reinforce firmly. On the 1P side, we further built upon our strong supply chain capabilities to provide our users everyday low price in a sustainable way. This is the bedrock of our low-price strategy. While on the 3P side, we stepped up efforts to supplement the products on our platform with more value for many offerings to address a wider spectrum of user demands. In Q2, our NPS for price competitiveness continued to grow year-on-year on both the 1P and 3P sides. We also saw stronger momentum for lower-tier markets on our platform in terms of user base expansion, order volume growth, and shipping frequency, among others. Again, JD's price competitiveness is built on our strengths in lower cost, higher efficiency, and best-in-class user experience. Low price is a result of our core capabilities. Instead of driven by subsidies, This will continue to distinguish us in the e-commerce industry. Thirdly, we have also made encouraging progress on our platform ecosystem. On the 3P side, during the quarter, we continue to provide healthy user traffic and effective supporting measures to help 3P merchants grow their businesses. 3P merchants responded well to our efforts and our active merchant base continued to expand quickly both year-on-year and sequentially in Q2. In addition, we also saw an accelerated year-on-year growth of active buyers who purchased from 3P merchants on our platform. At the same time, such users recorded higher shopping frequency in this quarter. This led to an over 20% year-on-year increase in our 3P order volume in Q2, its fastest pace in the last two years. In terms of monetization, the decline in commission revenues narrowed in the quarter as the impact of our reduced commission fees gradually lapsed. Meanwhile, JD Retail's advertising revenues generated from 3P merchants recorded a double-digit growth. We still have a lot to do, especially to drive better ROI for our merchants. To reiterate, our goal is to build up a thriving platform ecosystem that propels the development of our 1P business and incentivizes 3P merchants to provide diverse product and service offerings as we aim to address a wider array of user demands. In closing, our Q2 results demonstrate our firm commitment to high-quality long-term business growth. We believe this is the best approach to navigate the current market conditions. Our profitability improvement is sustainable as it is driven by our expanding scale efficiency. arising from our supply chain advantages and our focus on creating value for our end users. At the same time, our key business drivers, including user base and engagement, price competitiveness, and platform ecosystem are all trending in the right direction. We are confident that as we stay focused on executing our long-term strategies to offer lower cost higher efficiency, and best user experience, we will maintain a healthy growth of our business scale, profit, and cash flow, and solidify our market position in the long term. With that, I'll turn it over to Ian for our financial highlights. Thank you.