JD.com, Inc.

thank you for standing by for JD.com's third quarter 2024 earnings conference call. At this time all participants are in a 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 Zhang, Director, Investor Relations. Please go ahead.

Thank you. Good day, everyone. Welcome to JD.com's third quarter 2024 earnings conference call. For today's call, CEO of JD.com, Ms. Sandy Xu, will kick off with her opening remarks, and our central, Ms. Yiyan Shen, will discuss the financial results. and 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 only, and will include forward-looking statements. And 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 R&D, unless otherwise stated. Now, let me turn the call over to our CEO, Sandy.

Thank you, Sean. Hello, everyone. Thanks for joining us today to discuss our Q3 2024 results. We had a solid Q3 with improved operating and financial results. our top-line growth accelerated sequentially, our active user base and shopping frequency expanded with stronger momentum, and our bottom line achieved another substantial uplift. At the heart of this achievement is our relentless focus on building supply chain capabilities and logistics infrastructure, which enable us to continuously unleash strength in delivering lower cost, higher efficiency, and best-in-class user experience. This is the key competitive strength that we are focused on as we face an ever-changing macro and competitive landscape. Citi has been dedicated to establishing core supply chain capabilities since day one, along with putting significant efforts into building out retail and logistics infrastructures around the country to better serve consumers and contribute to the real economy of local areas nationwide. This enables us to play a key role in contributing in the treating program, both online and offline. JD is best positioned to support this program not only with our strong user man-share in home appliance and 3C categories, but more importantly, with our supply chain capabilities and our fulfillment infrastructure. Consumers are attracted to JD's platform for the wealth of product selections, our integrated service, covering every step from dismantling, shipment to installation of the heavy bulkhead appliances, and smooth checkout process using trade-in subsidies. The trade-in program has proven to be very effective in unlocking consumption potential and driving the technological upgrade of the entire industry chain. and we expect to continue to play our role in this effort to better serve customers and suppliers, stimulate consumption, and promote healthy industry development. Turning to general merchandise category, in Q3, its revenues increased by 8% year-on-year, a healthy momentum that has been sustained for three consecutive quarters this year. it was primarily attributable to our supermarket category, which delivered another double-digit revenue growth year-on-year in the quarter. As a key growth driver for us, the supermarket category continued to enrich its product portfolio in the quarter to cover different price tiers. It has also launched many initiatives, such as direct shipment from suppliers to customers that gained strong traction among our users. As such, with improving user experience, we saw healthy increase in both user base and user engagement in supermarkets, particularly with a robust 20% increase in shopping frequency during the quarter. Also notably, within our fashion category, apparel and sports and outdoor both recorded double-digit revenue growth year-on-year during the quarter, thanks to our efforts to enrich product selection, enhance user experience, and drive user man-share of shopping for clothing on JD. It's clear that our supply chain strength is at the core of our progress in operations and financials. In addition to that, Going forward, we will continue to focus on a few key areas to drive our high-quality, sustainable growth in the long run. First, user growth and engagement. We've seen a set of encouraging results resulting from our efforts and investments in users. The number of our quarterly active customers has been growing at double-digit rates year-on-year for the last four quarters in a row, with Q3 being the highest. The growth was distributed across market tiers and user groups, including new and existing users. In addition, in Q3, user shopping frequency maintained double-digit young year goals, primarily driven by our increased price competitiveness, category mix shift, and wider coverage of free shipping service. Our JD Plus program is on the right track, as we saw a set of metrics, including active class number and shopping frequency, continue to improve. All this progress in user growth and engagement really speaks to the fact that we've been providing best-in-class experience to users of different income spectrums and demands. with the right products, price, and service offerings. On such robust momentum, we will continue to invest with discipline in user growth and user experience. In addition to users, let me share some progress we made on price competitiveness and platform ecosystem. We further improved our price competitiveness as we continue to leverage on the strength of our 1P supply chain capabilities, as well as our enriched 3P product offerings and white label goods. As a result, we are better able to serve both our existing users and new users, and our NPS for price competitiveness increased year-on-year for another quarter, particularly we saw a steeper trajectory of user base expansion and other volume growth in lower tier markets compared to that of higher tier markets on our platform. Low price is the very essence of retail and our commitment to that will never change. To reinforce our everyday low price user mindshare, we have launched a series of campaigns such as the monthly Super 18 sales that offers a selection of discounted products on the 18th of every month, the weekly Black Friday offering deals that mainly cover supermarket categories, the daily late-night flash sales, offering deep discounts for a limited time and limited supply, as well as the half-price clothing promotions. These offerings are highly welcomed by our users. Last but not least, we also continue to make progress on our platform ecosystem. We onboarded more 3P merchants during the quarter, particularly SMEs and those from industry belts, to expand our product offerings at different price tiers. As such, our active merchant base maintained a very healthy year-on-year growth. More importantly, we also made solid progress in the quarter in user engagement, which led to accelerated year-on-year growth in 3P order volume and the number of users who purchased 3P products on our platform, both of which reached record high growth levels in Q3. Our NPF for 3P offerings rose year-on-year as well. As to monetization, commission revenues returned to a positive growth in Q3, in line with our expectations as the impact of discounted commission fees fully lapsed. Advertising revenues in our retail business grew by double digits year-on-year. thanks to the healthy growth of our ecosystem and improving traffic allocation efficiency for both 1P and 3P merchants. That said, we are still at the very beginning of exploring the potential of our platform ecosystem to drive our business scale and profitability. We will continue to prioritize further optimizing our tools and infrastructure to better empower merchants, hence further improving user experience on our platform. That's the wrap-up for our Q3. Moving to Q4, we've just concluded Singles Day grant promotion. With this year's theme of cheaper and better, our supply chain trends were brought into full display. Our team did a great job expanding product assortment for both our 1P and 3P offerings, providing competitive prices and serving users with best-in-class experience. We saw users respond well with user number and order volume, both recording double-digit goals during the promotion. Finally, we are very encouraged by a more supportive policy environment that aims to realize the huge potential of consumption in China. and at the same time drive industry upgrades, create employment, and lift household income, which will further fuel consumption confidence. While we see consumer sentiment starts to improve, we understand it takes time for the benefits of the policies to feed through. We will continue to focus on executing our strategies in place, building up supply chain capabilities, and fully tapping into our potentials to drive lower cost, higher efficiency, and best-in-class user experience. We believe this will lead us to further expand our market share and profits. With that, I'll turn it over to Ian for our financial highlights. Thank you.