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spk02: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Kuaishou Technology First Quarter 2024 Financial Results Conference Call. Please know that English simultaneous interpretation will be provided for management's prepared remarks. This English line will be in listen-only mode. I will now turn the call over to Mr. Matthew Zhao, VP of Capital Market and Investor Relations at Kuaishou Technology. Thank you, Operator. Good evening and good morning to everyone. Welcome to our first quarter 2024 financial results conference call. Joining us today are Mr. Cheng Yi Xiao, co-founder, chairman, and CEO. Mr. Jin Beng, chief financial officer. Before we start, please note that today's discussion may contain forward-looking statements which involve a number of risks and uncertainties. Actual results and outcomes may differ from those discussed. The company does not undertake any obligation to update any forward-looking information except as required by law. For all important information about this call, including forward-looking statements, please refer to the company's public information or the first quarter 2024 results announcement for the three months ended March 31, 2024 issued earlier today. During today's call, management will also discuss certain non-FRS financial measures These are provided for additional information and should not replace IFRS-based financial results. For a definition of non-IFRS financial measures, a reconciliation of IFRS to non-IFRS financial results, and related risk factors, please refer to our first quarter 2024 results announcement. For today's call, management will use Chinese as the main language. A third-party interpreter will provide simultaneous English interpretation in the prepared remarks session and consecutive interpretation during the Q&A session. Please know that English interpretation is for convenience purposes only. In the case of any discrepancy, management statements in their original language will prevail. Lastly, unless otherwise stated, all currency units mentioned are in RMB. Now, I'll hand the call over to Yixiao. Hello everyone and welcome to QYSHA's first quarter 2024 earnings conference call. In Q1, our total revenue grew by 16.6% year-over-year to 29.4 billion RMB with a gross margin close to 55%, adjusted net profit of 4.4 billion RMB and adjusted net margin of 14.9%. These results greatly outperformed the market. Despite being the typical slow season, we delivered robust operating and financial performance, highlighting strong business resilience and economic mode created by our users and commercial ecosystems. We're off to a great start in 2024. In Q1, we rolled out traffic recommendation mechanism to all users, boosting user experience and monetization efficiency. Our smart marketing solution helped marketing clients improve performances attracting more budgets. We're committed to creating an excellent shopping experience for users and have steadily grown our e-commerce business with a do-drive approach of live streaming e-commerce and shelf-based e-commerce. In Q1, we continue to foster a healthier live streaming ecosystem, laying a solid foundation for the platform's sustainable development. We also steadily advance the R&D and training of our self-developed large language models to empower various business scenarios with AI technology, enabling growth through increased efficiency. Next, I'll discuss our key business developments in Q1. First, user growth and ecosystem construction. In Q1, average DAUs and MAUs on the Kuaishou app reached 394 million and 697 million, growing by 5.2% and 6.6% year-over-year respectively. The average daily time spent per DAU on the Kuaishou app was 129.5 minutes. Our total user time spent in Q1 grew by 8.6% year over year. These increases reflect our commitment to advancing our high-quality user growth strategy. By catering user needs with great content and continuously improving user experience, we provide more value to our users. For user growth, We optimized our user acquisition channel mix, combining algorithm-based forecast on new user retention rates to increase the ROI of our user growth. We also launched initiatives like exploring diversity of user interest, refining shorter video elements, and enhancing shorter video common ranking strategies. These efforts improve the user experience and increase the user time spent on our platform. For content supply, we backed quality creators with a distinct Kuaishou characteristics and generated differentiated, high-quality, unique Kuaishou IP content for special occasions, giving users more reasons to open the Kuaishou app. For instance, to celebrate the Year of the Dragon with our vast user base of nearly 400 million, we continued our A Taste of Chinese New Year on Kuaishou activities in 2024, offering a variety of Chinese New Year-themed content. A highlight was Dragon Night, a fan celebration on Kuaishou hosted by Jackie Chen, who welcomed numerous celebrity friends and Kuaishou chaos. This event attracted over 260 million views with over 690 million cumulative likes and over 6.63 million peak concurrent users. Additionally, themed programs like Kuaishou 1001 Nights, Fans Gala, Online Festival Fairs, and the Village Basketball Association not only provide a stage for creators to showcase their talent, but also increase the user's thickness on Kuaishou. During the Chinese New Year season, 20 titles of Kuaishou Astro short plays received more than 100 million views, with seven exceeding 300 million views. More various diverse short play series like Super Powered Team and Grandpa and I generated huge social buzz. From celebrity-led to koala-led, Kuaishou's short play is making great advancement. Regarding our search business, we optimized the search function by leveraging large language model technology and refining the landing page for search after watching feature to enhance the user experience. These efforts resulted in improved user penetration and overall search experience. In Q1, the monthly average users for Kuaishou's search increased by more than 15% a year over year. With the daily searches reaching a peak of nearly 800 million, we actively promoted search commercialization revenue from such. Search marketing services grew by over 50% a year over year in Q1. Second, online marketing services. In Q1, with the macroeconomy and consumer markets showing signs of stabilization and gradual recovery, our revenue from online marketing services rose by 27.4% a year over year to 16.7 billion RMB, accounting for 56.6% of our total revenue. We vigorously promoted the use of our smart marketing solution across various scenarios, boosting active marketing clients by nearly 90% a year over year in Q1, Furthermore, we guided traditional external marketing clients to shift their operations natively onto Kuaisha through our self-developed sales funnel conversion path. This transition helped them convert targeted users and complete closed-loop transactions on our platform, enriching our insights to users. By using algorithms to model the conversion of active users into transactions through our marketing activities, we further unlocked the monetization potential of our online marketing services. In Q1, leveraging our AI and LLM capabilities, our smart marketing solution provided clients with end-to-end solutions to improve efficiency, covering smart creation, smart replacement, smart connection. With our AIGC capabilities for smart creation, we could quickly generate higher quality creative content, diversifying our creative deployments. In Q1, the peak daily spending from the clients with AIGC marketing materials exceeded 10 million RMB. Regarding smart placement, our UAX product and Omni platform marketing solution offer clients a range of automated placement functions, like beating real-time tracking and adjustments. In terms of a smart connection, our AI-driven customer service helps clients communicate with targeted users, significantly improving marketing conversion efficiency. In specific industries, the conversion rate from content exposures to lead generation has increased by over 40%. In Q1, Revenue from our enclosed loop marketing services grew rapidly year-over-year, outpacing the overall e-commerce GMV growth. We further iterated our Omni platform marketing solution strategy and capabilities. Especially, our Omni platform merchandise marketing solution introduced new core features like marketing material data disclosure, content creation, and editing optimization. We provided all clients with access to these new features in March to help them explore high-quality traffic and expand their GMV. Regarding smart hosting products, we tested and unveiled live streaming hosting functions for major promotion scenarios, improving clients' marketing performance and a willingness to place ads with us. Merchants' total marketing spending through our Omni platform marketing solution or smart hosting products accounted for 30% of overall enclosed closed-loop marketing spending in Q1. In Q1, our year-over-year revenue growth in external marketing services continued to outperform the market, especially in new media information gaming education sectors. Within the media information sector, average daily spending in marketing for paid short videos short plays rose over fourfold year-over-year. This was fueled by our ongoing optimization of the self-developed sales funnel conversion path and increased supply and demand resulting from incentives policies. On the gaming front, in Q1, we validated the effectiveness of the IAA marketing model for Kuaishou's mini-program games, boosting the marketing spending of our gaming clients. Marketing spending in the education sector nearly doubled year-over-year in Q1, driven by our ability to meet growing user demand, resulting in increased budget from marketing clients. Our smart placement product under external marketing services, UEX, provides tailored full lifecycle automated marketing solutions to clients in diverse industries, enhancing their marketing conversion efficiency, total marketing spending through UAX, increased by over four times, quarter over quarter in Q1. In brand marketing services, we've established a rich brand marketing metrics and customized solutions for our clients. By leveraging our superior content, precise demographics, targeting, and efficient conversion, we help clients achieve their marketing goals of improving brand awareness and sales conversion. As a result, we have successfully attracted customers budgets from a wider range of brand clients, and the number of brand marketing clients during the 2024 Chinese New Year soared by more than 120% year-over-year. The blockbusters from Kuaishou Astro Short Plays delivered highly effective exposure and targeted demographics reach for brands like Tmall.com and Honor Smartphones, among others. We upgraded our marketing solutions, integrating brand awareness, operational marketing, and sales conversion for clients, in the automotive industry, aiming to a more efficient brand marketing and lead operation. Recently, we collaborated with Dongfeng Nissan to attract traffic using celebrity IPs and KOL recommendations. Our auto dealer network on the platform then engaged with this traffic, converting it into sales. This resulted in nearly 800 million views for the brand-related content, achieving omni-domain operations for the launch of new vehicle models. Third, our e-commerce business. In Q1, we enhanced buyer conversion efficiency by our refining operations, further enriching merchandise offerings, and expanding e-commerce scenarios. As a result, our e-commerce GMB grew by 28.8% year-over-year to R288.1 billion. On the user front, our e-commerce monthly active paying users grew by 22.4% to R126 million in Q1, mainly due to the expanding shopping scenarios like shelf-based and short-video e-commerce and the ongoing upgrade of marketing tools and features. We also reinforced policy guidance to enhance the end-to-end experience for consumers during and after sales. These policies, including speedy refund and proactive service takeover by platform, greatly improved the overall customer experience. During the Chinese New Year promotion, the number of paying users surged by over 60% compared with the last few years. On the supply side, the number of monthly active merchants grew by nearly 70% year-over-year in Q1, mainly due to the sustained activity level of newly onboarded merchants. We greatly optimized our policies to attract merchants and augmented marketing capabilities to cover a diverse range of supplier types, from brands and large merchants to small and medium-sized merchants. Consequently, the number of newly Onboarded monthly active merchants continue to grow with a high speed year-over-year in Q1. For small and medium-sized merchants, we rolled out generous incentives for new merchants under the gold-bound policy, supporting their co-start with initiatives for deposits, traffic generation, distribution, and training. The improved incubation and educational resources have equipped merchants to scale up their business on our platform. We maintained strong growth among branded merchants in Q1. During the Chinese New Year promotion, brand GMV surged by over 70% compared with last year. Brand merchants significantly increased their focus on both short videos and shelf-based e-commerce. In Q1, brand GMV leaped by more than 110% in short video segment and over 80% in shelf-based segment year-over-year. Across verticals like consumer electronics and home appliances, men's apparel and sports and gems and jewelry contributed relatively high growth rates. We encourage new small and medium-sized companies KOLs to collaborate with brands in live streaming through the Supermona initiative. We also provided additional marketing tools for large-scale live streaming to assist leading KOLs in making breakthroughs. For KOL distribution, we recommended high-quality merchandise to KOLs and helped small and medium-sized KOLs to select merchandise via external coordinators. This strategy strengthens our platform's matching capabilities greatly in our streamers' willingness to host live streaming sessions and amplify their commercial contributions. in short video and other e-commerce scenarios. Our shelf-based e-commerce continued its strong growth in Q1. Shelf-based e-commerce GMV outpaced the overall platform growth, accounting for a promising 25% of total GMV. We achieved remarkable strides on both the supply and demand fronts, with more than 50% and 60% of year-over-year increases in average daily active merchants and average daily paying users, respectively, in Q1. We also further enhanced the merchandise infrastructure, enriched merchandise offerings and improved the price management system. These efforts enable us to fulfill core user groups' needs in key categories such as fresh produce, food, personal care, and daily necessities. Meanwhile, our short video e-commerce GMV maintained its rapid growth in Q1, nearly doubling year-over-year. Within short video e-commerce, monthly and daily active paying users continue to rise, supported by consistently enriched content offerings. For example, the order volume of our shopping mall during the Chinese New Year promotion soared by 98% compared with the last year, with impressive performances across short video search-induced and shelf-based e-commerce. GMV from short video embedded shopping link search-induced e-commerce and shelf-based e-commerce surged by 345%, 164%, and 383% respectively compared with the last year. These stellar results highlighted how our new engine of live streaming and shelf-based e-commerce have been unlocking has been unlocked, you know, more new business opportunity for merchants. Next, regarding our live streaming businesses, in Q1, we continued to build a healthy live stream ecosystem, laying a solid foundation for long-term and sustainable growth. We strongly supported a mid-tier streamers improving their activity and quality through online training, offline lectures, and streamer tasks. This approach accelerated a new streamer's growth and incentivized talent agencies to drive their evidence. We also continue to promote emerging categories such as multi-host live streaming and grand stage, iterating product features and reaching our live streaming ecosystem. By the end of Q1, we had partnered with 50% of more talent agencies and grown the number of talent agency-managed streamers on Kuaishou by 50% year-over-year. In addition, as examples of our live streaming plus services empowering traditional industries, Kuaishou launched the New Year job fair in Q1 to address job-seeking and recruitment needs following the Chinese New Year. The event featured various online activities hosted by KOLs and well-known enterprises. In Q1, daily average number of resume submissions soared by over 180% and the daily average number of users submitting resumes increased by over 120% both on a year-over-year basis. Additionally, by the end of Q1, IDU Housing expanded its reach to over 100 cities nationwide and established partnerships with over 50,000 streamers. Finally, regarding our overseas business progress, We've established differentiated advantages in key overseas markets by effectively expanding our user base and implementing a robust localization strategy. With a focus on localized original content generation, we rapidly grow our content supply by optimizing our platform's traffic mechanism and diversifying creators' income sources. We capitalize on events like Brazilian Carnival and Brazil's largest reality show, BBB24, among others, to consistently increase user activities. These initiatives helped to fortify Kuwait's bearing awareness and recognition, laying the groundwork for enhancing monetization. As one of the BBB sponsors, Kuwait created related topics on social media specifically for BBB. By the time the show ended on April 16th, it had attracted 14 billion cumulative views. In Q1, DAUs in our key markets grew rapidly, with average daily time spent per DAU improving both year-on-year and quarter-of-quarter. Notably, DAUs in Brazil rose by 13% year-over-year, and the average daily time spent per DAU exceeded 75 minutes. As a result, revenue from overseas business reached R191 million, being Q1, up 193.2% year-over-year. As we continued to boost operating efficiency, we successfully narrowed our overseas operating loss by 67.4% year-over-year, with operating loss also reduced quarter-over-quarter. In terms of overseas online marketing services, we continuously refine our localized marketing capabilities and enhance our product ecosystem. These efforts have further improved advertisers' marketing efficiency and placement stability. Additionally, we focus on developing platform credibility, service quality, and creativity. By leveraging marketing opportunities from events such as the Brazilian Carnival, we've also boosted both brand awareness and sales conversion for international and Chinese brands operating overseas. In Q1, marketing revenue from overseas business surged by nearly threefold year-over-year, During the Brazilian Carnival, CAI helped Chinese smartphone brand Realme create a blockbuster marketing campaign through diversified creative solutions, leading to a total of 95.6 million exposures. This successful event shaped Realme's brand awareness and product reputation in the Brazilian market. CAI also developed a detailed user profile analysis for Realme, providing valuable data points for the brand's ongoing expansion efforts in Brazil and targeted promotional strategies and long-term operations. To sum up the business model and the future potential of short video combined with the live streaming continues to be where we see one of the greatest opportunities for our business. We are also committed to building healthier and more sustainable community content and commercial ecosystem, investing in AI technology and empowering more business scenarios. Dedicating our resources to those areas will help us elevate users' content consumption experience and deliver augmented value to our users, providing more possibilities for quality and efficient improvements for merchants and marketing clients in the ecosystem. This concludes my prepared remarks. Next, you will hear from our CEO, Mr. Jinbin, who will discuss the company's financial performance for Q1. Thank you, Yixiao, and hello, everyone. In the first quarter, we actively navigated the market challenges adhering to the strategy of high-quality, efficient business growth. By integrating technology and boosting efficiency, we reinforced our core strengths. Our sustainable strategies across all of our business are well-educated, showing a healthy and robust financial position that marks a strong start to the year. Our focus on the user growth and efficiency and equality coupled with significant enhancements in technology and premium content quality has laid a solid foundation for the sustainable monetization and profitability. Our adjusted net profit reached 4.39 billion RMB in Q1, with an adjusted net profit margin close to 15%, showing a substantial increase in profitability. Now let's have a closer look at our financial performance for Q1. Our group's revenue grew by 16.6% a year to 29.4 billion RMB, mainly driven by growth in our online marketing services and e-commerce business. Online marketing services revenue increased by 27.4% to 16.7 billion RMB from 13.1 billion in Q1 last year and accounted for 56.6% of total revenues. This growth was mainly driven by more online marketing clients, higher spending, particularly from e-commerce merchants. Adoption of our smart marketing solutions and enhanced capabilities, our Omni platform marketing products further fueled this growth. Gradual recovery in the macro economy and consumer market also promoted advertisers' budget allocation. Leveraging our AI and LLM model capabilities, we have been able to deeply tap into users' needs, boosting marketing budget allocation opportunities. and conversion efficiency. Other services' revenue grew by 47.6% to 4.2 billion RMB from 2.8 billion RMB in Q1 last year, mainly driven by the continuous increase in e-commerce GMV, which boosted e-commerce commission income. We enriched our diverse shopping scenarios, expanded high-quality content offerings, upgraded marketing tools, and optimized platform policies. These efforts greatly improved the consumer experience and buyer conversion efficiency. leading to a rapid growth in monthly active merchants and monthly active paying users, driving 28.2% year-over-year increase in e-commerce GMV. Our live streaming revenue was 8.6 billion RMB, a decrease of 8% from 9.3 billion RMB in Q1 last year. Despite industry challenges, we continue to innovate live streaming scenarios, promote emerging categories, deepen our focus on high-quality content, to foster a sustainable and healthy live streaming ecosystem. In Q1, our cost of revenues decreased by 1.6% to 13.3 billion RMB and accounted for 45.2% of total revenues, mainly due to technology upgrades such as optimizing the structure of bandwidth resources, which cut down on both bandwidth expenses and the server custody costs year-over-year. Gross profit grew by 37.6% a year over year to 16.1 billion RMB. And our gross profit margin improved to 54.8%, expanding by 8.4% and 1.7% points year over year and quarter over quarter, respectively. Moving to expenses, selling and marketing expenses increased by 7.6% a year over year to 9.4 billion, accounting for 31.9% of total revenues, down from 34.6% in Q1 last year. The year-over-year growth was mainly due to increased spending on business promotions, including e-commerce business, etc. R&D expenses were 2.8 billion RMB, decreasing by 2.6 year-over-year. R&D accounted for 9.7 of total revenues, dropping from 11.6 in Q1 last year. Administrative expenses decreased by 40%. 9.7% year-over-year to 462 million RMB, accounting for 1.6% of total revenues, down from 3.6% in the same period last year. The decrease in R&D and administrative expenses was mainly due to lower employee benefit expenses, including related share-based compensation expenses. Group-level net profit for Q1 rose to 4.1 billion RMB, a significant improvement from a net loss of 876 million RMB in Q1 last year. Group-level adjusted net profit rose to 4.4 billion RMB, a considerable leap from 42 million RMB in Q1 last year. Our balance sheet remains robust with cash and cash equivalents, time deposits, restricted cash, and wealth management products of 63.7 billion RMB as of March 31st. Through our enhanced monetization capabilities and efficient working capital management, we generated a positive operating net cash flow of $5.8 billion in Q1. Looking ahead, we are committed to optimizing the balance between our traffic ecosystem and monetization strategies to cultivate a healthy and sustainable ecosystem for users and merchants. We'll continue improving efficiency and maximizing ROI as our revenues expand. Leveraging our advantages in technology and innovation, we aim to unlock more monetization potential and create long-term value for our shareholders and partners. This concludes our prepared remarks. Operator, please now open the call for questions.
spk17: We will now begin the question and answer session. To ask a question, please press star 1 on your telephone keypad. To answer a question, please press star 2. Please ask your question in Chinese first and repeat your question again in English. 我们现在进入问答环节。 第一道问题来自于Goldman Sachs的Lincoln Kong. Your first question comes from Lincoln Kong of Goldman Sachs. 请提问。
spk06: Thank you, Mr. Guan, for accepting my question. Congratulations to Mr. Guan for achieving a very strong performance in the first quarter. My question is about e-commerce. Could you please share with us the latest progress in e-commerce business? 我们最近要推出快手优选这个托管模式的一些考虑。 我自己翻译一下。 So thank you, management, for taking my question, and congrats on a very strong first quarter result. So my question is around the e-commerce business. Can management share the progress of our e-commerce shopping mall business? And any more thoughts around the launching of a快手 select, the sales hosting model here? Thank you. 今天的问题啊,
spk03: The fast-growing e-commerce business is still in a state of rapid development, and the retail area is one of the e-commerce growth engines. In the first quarter of 2024, it achieved a growth of more than 50% from the bottom, which is due to our joint drive of supply and demand.
spk02: Thanks for your question. Our e-commerce business is experiencing rapid growth. As one of the growth engines of our e-commerce business, shelf-based e-commerce achieved high-speed growth of more than 50% year-over-year in Q1 of 2024, driven by increases in both supply and demand.
spk03: From a user's point of view, the value of the turnover value is better to meet the specific needs of users. Thank you. Our users are gradually developing their shopping habits. This also means that our business has a long-term potential. From a business perspective, more and more merchants are finding their way to business in the goods market, helping different business capabilities, different types of merchants and products to better get business opportunities on the platform. Brand merchants and white-collar merchants' demand for business continues to grow. In the first quarter, the number of Japanese-made wholesale merchants reached more than 70% of the total growth. At the same time, we are constantly improving the construction of supply chains. In the first quarter, we opened up a northwestern transport service. Merchants can transport goods to and from northwestern consumers through a mid-transport transport window. At the same time, we greatly reduced transportation costs to help merchants open up the remote market.
spk02: On the user side, shelf-based e-commerce value proposition to users lies in better meeting users' predictable shopping needs, attracting new users to our platform, and heightening the consumption frequency of our active users. Targeting on users' growing predictable needs, we opened full access to the Shopping Mall tab. as well as sections like big brand, big subsidy, and special sale at low prices to significantly strengthen users' mindset of making purchases in our shopping mall. In Q1, the number of average daily buyers of our shopping mall soared by over 70% year over year. The rapid growth indicates a rising consumption demand in our shopping mall scenarios, where users are gradually developing browsing and searching habits, This clearly shows the long-term potential for our shopping mall business. On the merchant side, more and more merchants have found their path to operations in the shelf-based e-commerce realm, thanks to our efforts in helping merchants with different operational capacities and merchandise categories to acquire business opportunities on our platform. As the operational needs of both brand merchants and white-label merchants continually grow, The number of average daily active merchants surged rapidly by more than 70% year-over-year. Meanwhile, we continued to improve our supply chain capabilities and launched a consolidated shipping service for northwest China in Q1, which allows merchants to ship merchandise to consumers in northwest China through transit consolidation warehouses. This service considerably lowered shipping costs while ensuring logistics timeliness. which has helped merchants expand into remote markets.
spk03: We also saw some merchants in the rapid e-commerce high-end development this year, especially the elite stores of traditional merchants, including some of the core merchants of the industrial era. They have a deep accumulation on the supply chain, and they also hope to set up their own business on a new platform like rapid e-commerce. But due to the lack of marketing promotion and sales channels, Many times, we face a situation where good goods cannot be sold. Therefore, we have launched a quick hand selection. Provide official sales and control services for business owners. Reduce the threshold of business owners. Business owners only need to report goods, ship goods, and customers. And the quick hand is responsible for running and promoting product sales. In this relationship, the platform and the business owners have found their appropriate positions to do their best business.
spk02: During the rapid development of our e-commerce business in recent years, we have seen some merchants' operational pain points firsthand, especially traditional merchants, including original manufacturers at the industry zones. These merchants already have deep-seated supply chain expertise and are looking to work with new platforms like Kuaishou to develop their business. They have good quality products but lack marketing and sales channels. To address this pain point, we launched Kuaishou's Choice, providing merchants with platform sales hosting services to give them a pathway to enter the market and lower their operational threshold. Under this model, merchants only need to be responsible for carting, delivering, and providing customer services, while Kuaishou takes care of the FKU operations, marketing, and sales. This cooperative relationship allows both the platform and merchants to do what they do best.
spk03: At the same time, thanks to the comprehensive sales data on the fast phone, we can more clearly identify the products that are not sold on the platform, and thus improve the efficiency of the selection and pricing part, and provide a certain sales channel and sales chain to the business owners through flow integration and scale operation, both reducing the cost of the business in the fast phone and realizing the fast transaction of the product on the platform, and solving the problems of the business for the business owners.
spk02: Leveraging the full sales data of our e-commerce platform, we could more clearly identify which product categories or single SKU have the potential to become blockbusters. This helps us elevate the efficiency of product selection and pricing. Moreover, through traffic integration and large-scale operations, we offer merchants predictable sales channels and sales funnel conversion paths. This service reduces merchants' operating costs on Kuaishou and facilitates rapid transactions on our platform, providing merchants with viable solutions for their operations.
spk03: Kuaishou is going to introduce more marketing playlists in the 6.1.8 event to meet the needs of customer purchases and merchant orders. In the future, we hope that the double-deck freight market and the domestic market will further combine in-depth
spk02: Our shopping mall will roll out more marketing features during the June 18th Shopping Festival to meet user shopping needs and help merchants achieve high sales. Going forward, we hope to integrate shelf-based and content-based e-commerce segments more deeply and complementarily. which will become the sustainable driving force of our e-commerce business. This will help more merchants achieve Omni domain operations more effectively and attract more business opportunities.
spk04: Thank you, operator.
spk17: Next question, please. 下一道问题来自于Jefferies的Thomas Chong. Your next question comes from Thomas Chong of Jefferies. 请提问。
spk00: Thanks, management, for taking my question. My question is regarding online marketing service. As companies achieve robust revenue growth in online marketing service in Q1, looking ahead, What will be the driving forces for further revenue growth? Thank you.
spk03: 另一个问题,第一季度我们的线上营销服务收入达到了166.5亿, 同比增长27.4%, 那我们的内外循环均取得了可喜的增长。 我们为客户提供了更好的营销解决方案, 带来了ECPM的提升。 Thanks for your question. In Q1, online marketing services revenue reached 16.65 billion RMB, up 27.4% year-over-year. Both closed-loop e-commerce marketing services
spk02: and external marketing services grew remarkably as we provided better marketing solutions to clients, driving eCPM improvement. Our growth was led by our success in bringing clients deeper sales funnel conversion passes for targeted demographics through measures such as joint modeling, as well as end-to-end efficiency enhancement from our LLM-driven smart marketing solutions.
spk03: In the future, we believe that the growth of online marketing revenue will mainly depend on the improvement of eCPM and AdLoad, especially in eCPM. We will have more space for improvement in the same industry. We will continue to work for customers in the area of deep networking and target transformation, which can bring better customer sales. Based on the smart marketing solution of large-scale capacity, we are already smart manufacturing, smart marketing, and smart interaction have made good profits. In the future, we are looking forward to the large model to help us make greater breakthroughs in user value understanding and marketing content distribution. In terms of the improvement of the load, we will do the original marketing content and the natural content in the flow of the original marketing content through the original marketing material construction. Looking ahead, we believe our online marketing services revenue growth will mainly be led by advancements in eCPN and AdNote.
spk02: ECPM, in particular, is one of the key metrics where we still have significant room for improvement compared with our peers. We will continue to deepen the sales funnel conversion path for our clients' targeted demographics, which will lead to better bids from clients. Our LLM-based smart marketing solutions have already shown promising results in areas such as smart creative content production, smart marketing placements, and smart interaction and connection. Going forward, we also expect LLMs to help us achieve greater breakthroughs in understanding users' preferences and distributing marketing content. In terms of ad load enhancements, we will integrate native marketing content with organic content by refining native marketing materials, achieving a true marketing as content approach, which will increase the ad-low's upper limit. In Q1, the spending of external native marketing materials grew by 30% quarter-over-quarter, with a consistent increase in the share of external marketing spending from native marketing materials.
spk03: In addition, we also discovered some potential industry opportunities. In the automotive industry, many automotive brand manufacturers saw a huge potential for consumption in the new market. In our automotive industry, The sales solution has also brought more customer investment budget for the mobile market and the car market. In the education industry, we found that the core advantage of the service platform is the need for professional education and interest courses. We saw the possibility of higher growth than before. In the media information industry, we realized the short-term industry's self-development chain and closed-off management at the end of last year. It has also led to a significant growth in paid short-term marketing consumption. This year, we hope to replicate the industry of small games and novels. Not only can we bring better user experience and market growth, but we can also accumulate more back-to-back data, and thus make more accurate recommendations. In short, we will continue to work hard in the field of industry optimization operation, smart marketing solution solutions, and algorithmic optimization. In addition, we have discovered opportunities in some prospective industries. In the automobile industry,
spk02: Many auto brands have seen the huge potential of the lower-tier market, and our integrated marketing solutions that combine brand awareness, sales conversion, and operation marketing for the automotive industry have brought us more budget allocations from auto manufacturers and aftermarket clients. In the education industry, there is potential for higher year-over-year growth. by addressing our core demographic user needs for professional education and interest-based courses. In the media and information industry, marketing spending of paid short plays increased month over month based on the closed-loop operation of our self-developed conversion path for short plays, which we established at the end of last year. This year, we will work to replicate this model in mini-program games and online literature industries, not only elevating user experience and amplifying user time span, but also accumulating more post-link conversion data to enhance recommendation accuracy. In general, we will continue to refine industry-specific operations, iterate smart marketing products, and optimize algorithms to bring better marketing placement and conversion to clients. We are very confident we can grow our online marketing services revenue at a faster pace than the industry.
spk04: Thank you all for your time.
spk17: Next question, please. 下一道问题来自于UBS的Felix Liu. Your next question comes from Felix Liu of UBS.
spk10: Thank you, management, for taking my questions and congratulations on the very strong Q1 results. Could management share more color on the latest developments and your strategy and tactics for local services in 2024? Thank you.
spk03: Thank you for your question. After a year and a half of development, we have a deeper understanding of users' needs and desires for local life. We have also successfully verified the business model of fast-tracking local life in some core cities. We are also more clear about the strategic approach to month-to-month business. We hope that fast-tracking local life can be a greater opportunity for business owners in 2024 under the large background of the potential for new market users to be released in consumption as the driving force for economic growth.
spk02: Thanks for the question. After a year and a half, we have deeper understanding on users' needs and preferences for local service content. We also validated the business model for our local services in some core cities and have a clear picture of our strategy and tactics for the business. Now, consumer spending is a driving economic force with great potential for unleashing user consumption in lower tier market. With this backdrop, we think Our local services can bring more new customers and greater incremental opportunities for merchants in 2024.
spk03: We continue to promote multi-level health development. In the first quarter, we used the winter and spring holidays to cooperate with travel agencies and OTAs to enrich the supply of nine-level products. Using the fast-growing population and content advantages, we created a standard case such as Tangshan South Lake Tourist Area. In terms of content, we continue to expand our cooperation with UZI to help UZI to shorten the growth cycle through a variety of platform policies. As for our recent developments, first on the supply side, we have been continuously optimizing industry-specific merchandise and conducting targeted programs in core categories.
spk02: making breakthroughs in certain product categories. As a result, in Q1 of 2024, the number of average daily active merchants and the number of merchandises rose by 29% and 38% quarter-over-quarter, respectively. We continue to develop multiple categories. In Q1, capitalizing on the key winter vacation and the Chinese New Year promotion period, We cooperated with traditional and online travel agencies to enrich the variety of offerings within the hotel and travel categories. By leveraging our user base and content advantages, we created benchmark cases such as the Townshend South Lake Scenic Area. Content-wise, we continue to work with top-notch KOLs. Through various policies, we helped shorten KOL's growth cycles and empowered creators to increase income at our platform. jointly building a high-quality content ecosystem. In Q1, the number of KOLs distributing products grew by 32%, and the number of daily average active streamers hosting live sessions increased by 62%, both on a quarter-over-quarter basis.
spk03: In the meantime, we insist on establishing the ultimate cost-effectiveness. In addition, we continue to optimize the self-management system and improve the efficiency of platform self-management to improve user experience. In the first quarter, the number of paid users in Japan has increased by nearly nine times.
spk02: On the demand side, we made continuous efforts to strengthen users' mentality in accessing our local services by improving basic functionalities and enriching marketing features. This allows us to consistently reinforce the idea of value for money to users while enhancing subsidy efficiency. In addition, we continue to fortify KOL and merchant fulfillment capabilities, optimize our platform's governance system, and boost governance efficiency. all aimed at elevating user experience. In Q1, average daily paying users of local services skyrocketed by nearly nine-thirds year-over-year. 快手本地生活的直播和短视频的GPM环比持续增长,拉动一级度GNV的高速增长。 Regarding our platform's matching capability, we adjusted our traffic mix by synergizing public and private domains. This optimized our local content distribution efficiency in recommended traffic, elevating both user experience and transactional value. As a result, our local services GPM for both short video and live streaming continues to increase quarter over quarter in Q1 and drove rapid GMV growth.
spk03: to implement a differentiated product growth strategy. Second, on the product strategy, through cooperation with the service provider and strengthening their own operating capabilities, on the basis of improving the efficiency of the supply chain, strengthen the price mentality, and suggest low-cost friendly goods for users to provide high-quality products. Third, on the local service content, it is necessary to take care of the quality, especially the quality, The content is the biggest difference between us and the goods, and it is also the key for us to do this job well. Only if we do the content well can we get more content related to local consumption of users, so that we can attract merchants and people to provide good products and services for users, and thus realize the user and commercial value of the platform.
spk02: As for our strategic priorities in 2024, first, we will tailor our operations to the characteristics of different industries to achieve industry-specific refined operations. We will steadily expand the scale of our in-store dining services while implementing differentiated category growth strategies for general in-store business and the hotel and travel business. Second, On the product strategy front, by working with service providers and strengthening our own operational capabilities, we will strengthen the user's price mentality with higher subsidy efficiency. We will advocate affordable prices for superior quality goods to provide users with products that offer the best value for their money. Third, we will boost both the quality and quantity of our local services content with a focus on quality. Content is our biggest differentiator compared with the shelf-based platforms and is central to our ability to run this business. By providing excellent content, we can attract more users and help merchants and KOLs provide good products and services to users, increasing the user and commercial value of our platform.
spk04: Thank you, operator. Next question, please.
spk17: Your next question comes from Alex Poon of Morgan Stanley. 请提问。
spk05: Thank you, management, for taking my question and congrats on very strong results. The company has just announced a new buyback program of up to 16 billion Hong Kong dollars over the next three years. What are the main considerations in formulating this amount and what is the expected pace of execution? Thank you very much.
spk07: of 4 billion Hong Kong dollars. It has also been recognized by the market. In addition, we have also combined the new rules of the Lianjiaosuo. Since December 18th last year, we have started implementing the automatic return of shares. This plan is part of the 4 billion Hong Kong dollars return plan, so that the company can perform the return action during the restricted period stipulated by the Lianjiaosuo. As of May 22nd, the company has accumulated a return amount of about 3.3 billion Hong Kong dollars, and the return share is about 60710,000. Thank you for your question. We are committed to creating more value for our shareholders, especially in terms of capital return.
spk02: After our group-level adjusted net profit turned positive in Q1 last year, we immediately announced a HK$4 billion repurchase program, which was well recognized by the market. On December 18th last year, we also implemented an automatic share repurchase plan in accordance with the new rules of the Hong Kong Stock Exchange. This plan is part of the HK$4 billion repurchase the exchange's designated restricted period. As of the closing of trading on May 21st, we had repurchased around 61.74 billion shares, accounting for about 1.4% of our total share outstanding, and for a total of approximately HK$3.09 billion in aggregate. And this figure has amounted to 1.7 percent of our total shares outstanding as of may 22nd there are some changes out there these repurchases demonstrate our genuine commitment to returning value to our shareholders and our confidence in the company's value
spk07: We have applied to the board of directors for a new return plan of more than 1.6 billion Hong Kong dollars in the next three years. In the current market environment, this new return plan also shows our confidence in the value of the company and the determination of the shareholders. When making this plan, we considered the current financial situation of the company, the future three-year profit market expectations, cash reserves, etc. for comprehensive judgment.
spk02: As the original HK$4 billion repurchase program will expire upon the shareholder meeting in June this year, we have put forth a new repurchase program with the Board of Directors for up to HK$16 billion over the next three years. In the current market environment, this new repurchase program is also a testament to our confidence in the company's value and commitment to returning value to shareholders. This program is based on a thorough analysis that includes our cash flow position, market expectations for profitability over the next three years, and cash reserves, among others.
spk07: As for the actual implementation of the new program, we will combine the capital market environment and consider it comprehensively. The company will reasonably arrange the rhythm and intensity of return on shares, and continuously improve shareholder returns.
spk02: The actual implementation of the new program will depend on comprehensive considerations based on the capital market environment. We will prudently arrange the pace and intensity of share repurchases to continuously enhance shareholder returns.
spk04: Thank you, operator. Next question, please.
spk17: 对于CICC的张雪晴, your next question comes from 雪晴张 of CICC,请提问。 谢谢管理层接受我的提问,也恭喜长进的叶子。
spk16: 我的问题是关于AI的详情管理层分享一下公司在AI大模型 方面的进展。 谢谢。 谢谢你的问题啊。
spk03: In the first quarter of 2024, we will steadily promote the replacement improvement of the performance of the self-propelled large model and accelerate the application of large models in various business scenarios. In terms of the improvement of the performance of the model, based on the optimization of the data and model structure at the training stage, we will break through the technical breakthrough in the field of counter-structuralization and learning system, We have also launched the first multi-magnet model in recent years.
spk02: Thanks for your question. In Q1, we steadily improved the functions of our self-developed LLMs and speed up their application in various business scenarios. For improving model performance based on pre-training data and model architecture optimization, we made technological breakthroughs in RLHF. This made the overall performance of our updated 175 filling scale LLM to approach that of GPT-4.0. Moreover, we recently unveiled our first multi-model LLM.
spk03: I'd also like to elaborate on our LLM's application and business scenarios. In Q1, we specified our LLM application strategy of upgrading understanding, facilitating integration, and exploring generations.
spk02: We made notable progress in Omni-Domain LLM, Content Understanding, AI Interactions, Digital Humans in Business Scenarios, and AIGC, among others.
spk03: First of all, in terms of the understanding of large-scale model content, our multi-mode large-scale model can help us deepen our understanding of short-film and live content, comment area understanding, and user behavior exploration. to better promote natural content, marketing content, and e-commerce content. While increasing the user market, it also brought about an increase in marketing investment and e-commerce low price. Secondly, in terms of AI interaction, we focused on the usefulness of AI small pieces, and greatly improved the recovery accuracy, and presented multi-level conversations and picture functions. In the first quarter, the user penetration rate of AI small pieces gained a significant growth. With more than 1.5 million users using the AI block in three days, we have further enhanced the interactive attributes of the community.
spk02: Regarding Omni Domain LLM content understanding, our multi-model LLM helped us gain a deeper understanding of short video and live streaming content and user comments, as well as explore users' behaviors and interests. In doing so, we aim to better recommend organic, marketing and e-commerce content, improving marketing spending and e-commerce GMV while amplifying user time spent. On the AI interaction side, we focus on the usefulness of AIQI, where we significantly enhanced its reply accuracy rate and launched multi-round dialogues in image and text functions. In Q1, the user penetration of AIQI grew tremendously, with the number of daily users exceeding 1.5 million at its peak, making our community more interactive.
spk03: Finally, in terms of digital people and AICC in commercial scenarios, our large model ability covers many scenarios such as short-screen live broadcasts and smart customer service. AI short-screen products can provide customers with short-screen script production, material digging, and automatic flow. AI digital people live broadcasts can provide customers with virtual people live broadcasts for another 20 hours. And smart customer service can help customers identify problems automatically and solve all kinds of information problems more smoothly and naturally through multiple rounds of dialogue. The application of the large model in the above scene greatly reduced the cost of the customer, and also brought us customer sales and investment increases. In the first quarter, the AI-based live broadcast and short video material, but the consumption quality broke 10 million. The deep integration of large model and short video and live business scene also made us more firm in the development and investment in large model. We will continue to bring you more advanced sharing in the future.
spk02: Lastly, for digital humans in business scenarios in AIGC, our LLM capabilities cover a range of scenarios, including short video, live streaming, and smart customer services. Specifically, our AI products for short video scenarios can provide clients with short video script creation, material discovery, and automatic marketing placement capabilities. Our AI digital human live streaming offers clients the ability of virtual person live streaming 24-7. And our smart customer services can help clients automatically identify questions and solve various queries more smoothly and naturally through multiple rounds of dialogues. LLM's application in these scenarios considerably lowered our clients' customer acquisition costs and brought us incremental marketing placement opportunities from clients. In Q1, daily spending of AIGC live streaming and short video materials surpassed $10 million at its peak. The deep integration of LLMs with short video and live streaming business scenarios also boosted our commitment to R&D investments in LLMs. We will continue to share more of our progress in LLMs as they unfold going forward.
spk04: Let's come to the end of the Q&A session. Back to you, Bob, please.
spk17: Thank you. Thank you once again for joining us today.
spk04: If you have any further questions, please contact our Capital Market and Investor Relations team at any time. Thank you. Thank you. you Thank you. Bye. Thank you. you you
spk13: Bye. music music
spk02: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Kuaishou Technology first quarter 2024 financial results conference call. Please know that English simultaneous interpretation will be provided for management's prepared remarks. This English line will be in listen-only mode. I will now turn the call over to Mr. Matthew Zhao, VP of Capital Market and Investor Relations at Kuaishou Technology. Thank you, operator. Good evening and good morning to everyone. Welcome to our first quarter 2024 financial results conference call. Joining us today are Mr. Cheng Yi Xiao, co-founder, chairman, and CEO. Mr. Jin Beng, chief financial officer. Before we start, please note that today's discussion may contain forward-looking statements which involve a number of risks and uncertainties. Actual results and outcomes may differ from those discussed. The company does not undertake any obligation to update any forward-looking information except as required by law. For all important information about this call, including forward-looking statements, please refer to the company's public information or the first quarter 2024 results announcement for the three months ended March 31, 2024 issued earlier today. During today's call, management will also discuss certain non-FRS financial measures These are provided for additional information and should not replace IFRS-based financial results. For a definition of non-IFRS financial measures, a reconciliation of IFRS to non-IFRS financial results, and related risk factors, please refer to our first quarter 2024 results announcement. For today's call, management will use Chinese as the main language. A third-party interpreter will provide simultaneous English interpretation in the prepared remarks session and consecutive interpretation during the Q&A session. Please note that English interpretation is for convenience purposes only. In the case of any discrepancy, management statements in their original language will prevail. Lastly, unless otherwise stated, all currency units mentioned are in RMB. Now, I'll hand the call over to Yixiao. Hello everyone and welcome to QYSHA's first quarter 2024 earnings conference call. In Q1, our total revenue grew by 16.6% year-over-year to 29.4 billion RMB, with a gross margin close to 55%, adjusted net profit of 4.4 billion RMB, and adjusted net margin of 14.9%. These results greatly outperformed the market. Despite being the typical slow season, we delivered robust operating and financial performance, highlighting strong business resilience and economic mode created by our users and commercial ecosystems. We're off to a great start in 2024. In Q1, we rolled out traffic recommendation mechanism to all users, boosting user experience and monetization efficiency. Our smart marketing solution helped marketing clients improve performances attracting more budgets. We're committed to creating an excellent shopping experience for users and have steadily grown our e-commerce business with a do-drive approach of live streaming e-commerce and shelf-based e-commerce. In Q1, we continue to foster a healthier live streaming ecosystem, laying a solid foundation for the platform's sustainable development. We also steadily advance the R&D and training of our self-developed large language models to empower various business scenarios with AI technology, enabling growth through increased efficiency. Next, I'll discuss our key business developments in Q1. First, user growth and ecosystem construction. In Q1, average DAUs and MAUs on the Kuaishou app reached 394 million and 697 million, growing by 5.2% and 6.6% year-over-year, respectively. The average daily time spent per DAU on the question app was 129.5 minutes. Our total user time spent in Q1 grew by 8.6% year over year. These increases reflect our commitment to advancing our high-quality user growth strategy. By catering user needs with great content and continuously improving user experience, we provide more value to our users. For user growth, We optimized our user acquisition channel mix, combining algorithm-based forecast on new user retention rates to increase the ROI of our user growth. We also launched initiatives like exploring diversity of user interest, refining shorter video elements, and enhancing shorter video common ranking strategies. These efforts improved the user experience and increased the user time spent on our platform. For content supply, we backed quality creators with a distinct Kuaishou characteristics and generated differentiated, high-quality, unique Kuaishou IP content for special occasions, giving users more reasons to open the Kuaishou app. For instance, to celebrate the Year of the Dragon with our vast user base of nearly 400 million, we continued our A Taste of Chinese New Year on Kuaishou activities in 2024, offering a variety of Chinese New Year-themed content. A highlight was Dragon Night, a fan celebration on Kuaishou hosted by Jackie Chen, who welcomed numerous celebrity friends and Kuaishou chaos. This event attracted over 260 million views with over 690 million cumulative likes and over 6.63 million peak concurrent users. Additionally, themed programs like Kuaishou 1001 Nights, Fans Gala, Online Festival Fairs, and the Village Basketball Association not only provide a stage for creators to showcase their talent, but also increase the user's thickness on Kuaishou. During the Chinese New Year season, 20 titles of Kuaishou Astro short plays received more than 100 million views, with seven exceeding 300 million views. More various diverse short play series like Super Powered Team and Grandpa and I generated huge social buzz. From celebrity-led to KOL-led, Kuaishou's short play is making great advancement. Regarding our search business, we optimized the search function by leveraging large language model technology and refining the landing page for search after watching feature to enhance the user experience. These efforts resulted in improved user penetration and overall search experience. In Q1, the monthly average users for Kuaishou's search increased by more than 15% a year over year. With the daily searches reaching a peak of nearly 800 million, we actively promoted search commercialization revenue from such. Search marketing services grew by over 50% a year over year in Q1. Second, online marketing services. In Q1, with the macroeconomy and consumer markets showing signs of stabilization and gradual recovery, our revenue from online marketing services rose by 27.4% a year over year to 16.7 billion RMB, accounting for 56.6% of our total revenue. We vigorously promoted the use of our smart marketing solution across various scenarios, boosting active marketing clients by nearly 90% a year over year in Q1, Furthermore, we guided traditional external marketing clients to shift their operations natively onto Kuaisha through our self-developed sales funnel conversion path. Business transition helped them convert targeted users and complete closed-loop transactions on our platform, enriching our insights to users. By using algorithms to model the conversion of active users into transactions through our marketing activities, we further unlocked the monetization potential of our online marketing services. In Q1, leveraging our AI and LLM capabilities, our smart marketing solution provided clients with end-to-end solutions to improve efficiency, covering smart creation, smart replacement, smart connection. With our AIGC capabilities for smart creation, we could quickly generate higher quality creative content, diversifying our creative deployments. In Q1, the peak daily spending from the clients with AIGC marketing materials exceeded 10 million RMB. Regarding smart placement, our UAX product and Omni platform marketing solution offer clients a range of automated placement functions, like beating real-time tracking and adjustments. In terms of a smart connection, our AI-driven customer service helps clients communicate with targeted users, significantly improving marketing conversion efficiency. In specific industries, the conversion rate from content exposures to lead generation has increased by over 40%. In Q1, Revenue from our enclosed loop marketing services grew rapidly year-over-year, outpacing the overall e-commerce GMV growth. We further iterated our Omni platform marketing solution strategy and capabilities. Especially, our Omni platform merchandise marketing solution introduced new core features like marketing material data disclosure, content creation, and editing optimization. We provided all clients with access to these new features in March to help them explore high-quality traffic and expand their GMV. Regarding smart hosting products, we tested and unveiled live streaming hosting functions for major promotion scenarios, improving clients' marketing performance and a willingness to place ads with us. Merchants' total marketing spending through our Omni platform marketing solution or smart hosting products accounted for 30% of overall enclosed closed-loop marketing spending Q1. In Q1, our year-over-year revenue growth in external marketing services continued to outperform the market, especially in new media information, gaming, education sectors. Within the media information sector, average daily spending in marketing for paid short videos, short plays, rose over fourfold year-over-year. This was fueled by our ongoing optimization of the self-developed sales funnel conversion path and increased supply and demand resulting from incentives policies. On the gaming front, in Q1, we validated the effectiveness of the IAA marketing model for Kuaishou's mini-program games, boosting the marketing spending of our gaming clients. Marketing spending in the education sector nearly doubled year-over-year in Q1, driven by our ability to meet growing user demand, resulting in increased budget from marketing clients. Our smart placement product under external marketing services, UEX, provides tailored full lifecycle automated marketing solutions to clients in diverse industries, enhancing their marketing conversion efficiency, total marketing spending through UAX, increased by over four times, quarter over quarter in Q1. In brand marketing services, we've established a rich brand marketing metrics and customized solutions for our clients. By leveraging our superior content, precise demographics, targeting, and efficient conversion, we help clients achieve their marketing goals of improving brand awareness and sales conversion. As a result, we have successfully attracted over budgets from a wider range of brand clients, and the number of brand marketing clients during the 2024 Chinese New Year soared by more than 120% year-over-year. The blockbusters from Kuaishou Astro Short Plays delivered highly effective exposure and targeted demographics reach for brands like Tmall.com and Honor Smartphones, among others. We upgraded our marketing solutions, integrating brand awareness, operational marketing, and sales conversion for clients, in the automotive industry, aiming to a more efficient brand marketing and lead operation. Recently, we collaborated with Dongfeng Nissan to attract traffic using celebrity IPs and KOL recommendations. Our auto dealer network on the platform then engaged with this traffic, converting it into sales. This resulted in nearly 800 million views for the brand-related content, achieving omni-domain operations for the launch of new vehicle models. Third, our e-commerce business. In Q1, we enhanced buyer conversion efficiency by our refining operations, further enriching merchandise offerings, and expanding e-commerce scenarios. As a result, our e-commerce GMB grew by 28.8% year-over-year to R288.1 billion. On the user front, our e-commerce monthly active paying users grew by 22.4% to R126 million in Q1, mainly due to the expanding shopping scenarios like shelf-based and short-video e-commerce and the ongoing upgrade of marketing tools and features. We also reinforced policy guidance to enhance the end-to-end experience for consumers during and after sales. These policies, including speedy refund and proactive service takeover by platform, greatly improved the overall customer experience. During the Chinese New Year promotion, the number of paying users surged by over 60% compared with the last few years. On the supply side, the number of monthly active merchants grew by nearly 70% year-over-year in Q1, mainly due to the sustained activity level of newly onboarded merchants. We greatly optimized our policies to attract merchants and augmented marketing capabilities to cover a diverse range of supplier types, from brands and large merchants to small and medium-sized merchants. Consequently, the number of newly Onboarded monthly active merchants continue to grow with a high speed year-over-year in Q1. For small and medium-sized merchants, we rolled out generous incentives for new merchants under the gold-bound policy, supporting their co-start with initiatives for deposits, traffic generation, distribution, and training. The improved incubation and educational resources have equipped merchants to scale up their business on our platform. We maintained strong growth among branded merchants in Q1. During the Chinese New Year promotion, brand GMV surged by over 70% compared with last year. Brand merchants significantly increased their focus on both short videos and shelf-based e-commerce. In Q1, brand GMV leaped by more than 110% in short video segment and over 80% in shelf-based segment year-over-year. Across verticals like consumer electronics and home appliances, men's apparel and sports and gems and jewelry contributed relatively high growth rates. We encourage new small and medium-sized businesses KOLs to collaborate with brands in live streaming through the Supermona initiative. We also provided additional marketing tools for large-scale live streaming to assist leading KOLs in making breakthroughs. For KOL distribution, we recommended high-quality merchandise to KOLs and helped small and medium-sized KOLs to select merchandise via external coordinators. This strategy strengthens our platform's matching capabilities greatly in our streamers' willingness to host live streaming sessions and amplify their commercial contributions. in short video and other e-commerce scenarios. Our shelf-based e-commerce continued its strong growth in Q1. Shelf-based e-commerce GMV outpaced the overall platform growth, accounting for a promising 25% of total GMV. We achieved remarkable strides on both supply and demand fronts, with more than 50% and 60% of year-over-year increases in average daily active merchants and average daily paying users, respectively, in Q1. We also further enhanced the merchandise infrastructure, enriched merchandise offerings and improved the price management system. These efforts enable us to fulfill core user groups' needs in key categories such as fresh produce, food, personal care, and daily necessities. Meanwhile, our short video e-commerce GMV maintained its rapid growth in Q1, nearly doubling year-over-year. Within short video e-commerce, monthly and daily active paying users continue to rise, supported by consistently enriched content offerings. For example, the order volume of our shopping mall during the Chinese New Year promotion soared by 98% compared with the last year, with impressive performances across short video, search-induced, and shelf-based e-commerce. GMV from short video embedded shopping link search-induced e-commerce and shelf-based e-commerce surged by 345%, 164%, and 383% respectively compared with the last year. These stellar results highlighted how our new engine of live streaming and shelf-based e-commerce have been unlocking has been unlocked, you know, more new business opportunity for merchants. Next, regarding our live streaming businesses, in Q1, we continued to build a healthy live stream ecosystem, laying a solid foundation for long-term and sustainable growth. We strongly supported a mid-tier streamers improving their activity and quality through online training, offline lectures, and streamer tasks. This approach accelerated a new streamer's growth and incentivized talent agencies to drive their evidence. We also continue to promote emerging categories such as multi-host live streaming and grand stage, iterating product features and reaching our live streaming ecosystem. By the end of Q1, we had partnered with 50% of more talent agencies and grown the number of talent agency managed streamers on Kuaishou by 50% year-over-year. In addition, as examples of our live streaming plus services empowering traditional industries, Kuaishou launched the New Year job fair in Q1 to address job-seeking and recruitment needs following the Chinese New Year. The event featured various online activities hosted by KOLs and well-known enterprises. In Q1, daily average number of resume submissions sorted by over 180% and the daily average number of users submitting resumes increased by over 120% both on a year-over-year basis. Additionally, by the end of Q1, IDU Housing expanded its reach to over 100 cities nationwide and established partnerships with over 50,000 streamers. Finally, regarding our overseas business progress, We've established differentiated advantages in key overseas markets by effectively expanding our user base and implementing a robust localization strategy with a focus on localized original content generation. We rapidly grow our content supply by optimizing our platform's traffic mechanism and diversifying creators' income sources. We capitalize on events like Brazilian Carnival and Brazil's largest reality show, BBB24, among others, to consistently increase user activities. These initiatives helped to fortify Kuwait's bearing awareness and recognition, laying the groundwork for enhancing monetization. As one of the BBB sponsors, Kuwait created related topics on social media specifically for BBB. By the time the show ended on April 16th, it had attracted 14 billion cumulative views. In Q1, DAUs in our key markets grew rapidly, with average daily time spent per DAU improving both year-on-year and quarter-of-quarter. Notably, DAUs in Brazil rose by 13% a year over year, and the average daily time spent per DAU exceeded 75 minutes. As a result, revenue from overseas business reached R191 million, up 193.2% a year over year. As we continue to boost operating efficiency, we successfully narrowed our overseas operating loss by 67.4% year-over-year with operating loss, also reduced a quarter of a quarter. In terms of overseas online marketing services, we continuously refine our localized marketing capabilities and enhance our product ecosystem. These efforts have further improved advertisers' marketing efficiency and placement stability. Additionally, we focus on developing platform capabilities, service quality, and creativity. By leveraging marketing opportunities from events such as the Brazilian Carnival, we've also boosted both brand awareness and sales conversion for international and Chinese brands operating overseas. In Q1, marketing revenue from overseas business surged by nearly threefold year-over-year. During the Brazilian Carnival, CAI helped Chinese smartphone brand Realme create a blockbuster marketing campaign through diversified creative solutions, leading to a total of 95.6 million exposures. This successful event shaped Realme's brand awareness and product reputation in the Brazilian market. CAI also developed a detailed user profile analysis for Realme, providing valuable data points for the brand's ongoing expansion efforts in Brazil. and targeted promotional strategies and long-term operations. To sum up the business model and the future potential of short video combined with the live streaming continues to be where we see one of the greatest opportunities for our business. We are also committed to building healthier and more sustainable community content and commercial ecosystem, investing in AI technology and empowering more business scenarios Dedicating our resources to those areas will help us elevate users' content consumption experience and deliver augmented value to our users, providing more possibilities for quality and efficiency improvements for merchants and marketing clients in the ecosystem. This concludes my prepared remarks. Next, you will hear from our CEO, Mr. Xinbin, who will discuss the company's financial performance for Q1. Thank you, Yixiao, and hello, everyone. In the first quarter, we actively navigated the market challenges adhering to the strategy of high-quality, efficient business growth By integrating technology and boosting efficiency, we reinforced our core strengths. Our sustainable strategies across all of our business are well-educated, showing a healthy and robust financial position that marks a strong start to the year. Our focus on the user growth and efficiency and equality, coupled with significant enhancements in technology and premium content quality, has laid a solid foundation for the sustainable monetization and profitability. Our adjusted net profit reached 4.39 billion RMB in Q1, with and adjusted net profit margin close to 15%, showing a substantial increase in profitability. Now let's have a closer look at our financial performance for Q1. Our group's revenue grew by 16.6% year-over-year to 29.4 billion RMB, mainly driven by growth in our online marketing services and e-commerce business. Online marketing services revenue increased by 27.4% to 16.7 billion RMB from 13.1 billion in Q1 last year, and accounted for 56.6% of total revenues. This growth was mainly driven by more online marketing clients, higher spending, particularly from e-commerce merchants. Adoption of our smart marketing solutions and enhanced capabilities, our Omni platform marketing products further fueled this growth. Gradual recovery in the macro economy and consumer market also promoted advertisers' budget allocation. Leveraging our AI and LLM, Model capabilities, we have been able to deeply tap into users' needs, boosting marketing budget allocation and conversion efficiency. Other services revenue grew by 47.6% to 4.2 billion RMB from 2.8 billion RMB in Q1 last year, mainly driven by the continuous increase in e-commerce GMV, which boosted e-commerce commission income. We enriched our diverse shopping scenarios, expanded high-quality content offerings, upgraded marketing tools, and optimized platform policies. These efforts greatly improved the consumer experience and buyer conversion efficiency, leading to a rapid growth in monthly active merchants and monthly active paying users, driving 28.2% year-over-year increase in e-commerce GMV. Our live streaming revenue was 8.6 billion RMB, a decrease of 8% from last 9.3 billion RMB in Q1 last year. Despite industry challenges, we continue to innovate live streaming scenarios, promote emerging categories, deepen our focus on high-quality content to foster a sustainable and healthy live streaming ecosystem. In Q1, our cost of revenues decreased by 1.6% to 13.3 billion RMB and accounted for 45.2% of total revenues, mainly due to technology upgrades such as optimizing the structure of bandwidth resources, which cut down on both bandwidth expenses and the server custody costs year-over-year. Gross profit grew by 37.6% year-over-year to 16.1 billion RMB, and our gross profit margin improved to 54.8%, expending by 8.4 and 1.7 percentage points year-over-year and quarter-over-quarter, respectively. Moving to expenses, selling and marketing expenses increased by 7.6% year-over-year to $9.4 billion, accounting for 31.9% of total revenues, down from 34.6% in Q1 last year. The year-over-year growth was mainly due to increased spending on business promotions, including e-commerce business, etc. R&D expenses were $2.8 billion RMB, decreasing by 2.6% year-over-year. R&D accounted for 9.7% of total revenues, dropping from 11.6% in Q1 last year Administrative expenses decreased by 49.7% year-over-year to 462 million RMB, accounting for 1.6% of total revenues, down from 3.6% in the same period last year. The decrease in R&D and administrative expenses was mainly due to lower employee benefit expenses, including related share-based compensation expenses. Group-level net profit for Q1 rose to 4.1 billion RMB. a significant improvement from a net loss of 876 million RMB in Q1 last year. Group-level adjusted net profit rose to 4.4 billion RMB, a considerable leap from 42 million RMB in Q1 last year. Our balance sheet remains robust with cash and cash equivalents, time deposits, restricted cash, and wealth management products of Q1. 63.7 billion RMB as of March 31st. Through our enhanced monetization capabilities and efficient working capital management, we generated a positive operating net cash flow of 5.8 billion in Q1. Looking ahead, we are committed to optimizing the balance between our traffic ecosystem and monetization strategies to cultivate a healthy and sustainable ecosystem for users and merchants. We'll continue improving efficiency and maximizing ROI as our revenues expand. Leveraging our advantages in technology and innovation, we aim to unlock more monetization potential and create long-term value for our shareholders and partners. This concludes our prepared remarks. Operator, please now open the call for questions.
spk17: 你需要撤回您的问题,请按新二键。 请先用中文提出您的问题,再将您的问题翻译成英文。 We will now begin the question and answer session. To ask a question, please press star 1 on your telephone keypad. To answer a question, please press star 2. Please ask your question in Chinese first and repeat your question again in English. We will now move on to the Q&A session. The first question is from Lincoln Kong from Goldman Sachs. Your first question comes from Lincoln Kong of Goldman Sachs.
spk06: Thank you for your question. Thank you for accepting my question, Mr. Guan. Congratulations to Mr. Guan for achieving a very strong performance in the first quarter. My question is about e-commerce. Could you please share with us the latest progress in e-commerce and commercial business? So thank you, management, for taking my question, and congrats on a very strong first quarter result. So my question is around the e-commerce business. Can management share the progress of our e-commerce shopping mall business? And any more thoughts around the launching of a quite short select, the sales hosting model here? Thank you. 今天的问题啊,
spk03: The fast-growing e-commerce industry is still in a state of rapid development, and the retail industry is one of the e-commerce growth models. In the first quarter of 2024, it achieved a growth of more than 50% from the bottom, which is due to our joint drive of supply and demand on both ends.
spk02: Thanks for your question. Our e-commerce business is experiencing rapid growth. As one of the growth engines of our e-commerce business, shelf-based e-commerce achieved high-speed growth of more than 50% year-over-year in Q1 of 2024, driven by increases in both supply and demand.
spk03: From a user's point of view, the value of the turnover value is better to meet the needs of the users. Taiwan Taiwan Taiwan Our users are gradually developing their shopping habits in the fast-tracking industry. This also means that the business industry has a long-term potential for development. From a business perspective, more and more merchants are finding their way to business in the goods market, helping different business capabilities, different types of merchants and products to better get business opportunities on the platform. Brand merchants and white-collar merchants' demand for business continues to grow. In the first quarter, the number of Japanese-made wholesale merchants reached more than 70% of the total growth. At the same time, we are constantly improving the construction of supply chain. In the first quarter, we opened the Northwest Emergency Transport Service, which allows merchants to transport goods to and from the Northwest through the Central Transfer Emergency Transport Warehouse. At the same time, we greatly reduced transportation costs to help merchants open up the remote market.
spk02: On the user side, shelf-based e-commerce value proposition to users lies in better meeting users' predictable shopping needs, attracting new users to our platform, and heightening the consumption frequency of our active users. Targeting on users' growing predictable needs, we opened full access to the Shopping Mall tab. as well as sections like big brand, big subsidy, and special sale at low prices to significantly strengthen users' mindset of making purchases in our shopping mall. In Q1, the number of average daily buyers of our shopping mall soared by over 70% year over year. The rapid growth indicates a rising consumption demand in our shopping mall scenarios, where users are gradually developing browsing and searching habits, This clearly shows the long-term potential for our shopping mall business. On the merchant side, more and more merchants have found their path to operations in the shelf-based e-commerce realm, thanks to our efforts in helping merchants with different operational capacities and merchandise categories to acquire business opportunities on our platform. As the operational needs of both brand merchants and white-label merchants continually grow, The number of average daily active merchants surged rapidly by more than 70% year-over-year. Meanwhile, we continued to improve our supply chain capabilities and launched a consolidated shipping service for northwest China in Q1, which allows merchants to ship merchandise to consumers in northwest China through transit consolidation warehouses. This service considerably lowered shipping costs while ensuring logistics timeliness. which has helped merchants expand into remote markets.
spk03: We also saw some merchants in the rapid e-commerce growth this year, especially the elite stores of traditional merchants, including some of the core merchants of the industrial era. They have a deep accumulation in the supply chain, and they also hope to set up their own business on such a new platform in the rapid e-commerce. But due to the lack of marketing promotion and sales channels, Many times, we face a situation where good products can't be sold. Therefore, we have launched a quick hand selection. Provide official sales support services for business owners. Reduce the threshold of business owners. Business owners only need to report products, ship products, and customers. And the quick hand is responsible for running and promoting product sales. In this cooperative relationship, the platform and the business owners have found their appropriate positions to do their best business.
spk02: During the rapid development of our e-commerce business in recent years, we have seen some merchants' operational pain points firsthand, especially traditional merchants, including original manufacturers at the industry zones. These merchants already have deep-seated supply chain expertise and are looking to work with new platforms like Kuaishou to develop their business. They have good quality products but lack marketing and sales channels. To address this pain point, we launched Kuaishou's Choice, providing merchants with platform sales hosting services to give them a pathway to enter the market and lower their operational thresholds. Under this model, merchants only need to be responsible for carting, delivering, and providing customer services, while Kuaishou takes care of the FKU operations, marketing, and sales. This cooperative relationship allows both the platform and merchants to do what they do best.
spk03: At the same time, by relying on the comprehensive sales data on the fast phone, we can more clearly identify the products that are not sold on the platform, thereby increasing the efficiency of product selection and pricing, and by integrating traffic and scale operation, provide a certain sales channel and sales chain to the business owners, both reducing the cost of business in the fast phone and realizing the fast transaction of the product on the platform, and solving the problems of business for the business owners.
spk02: Leveraging the full sales data of our e-commerce platform, we could more clearly identify which product categories or single SKU have the potential to become blockbusters. This helps us elevate the efficiency of product selection and pricing. Moreover, through traffic integration and large-scale operations, we offer merchants predictable sales channels and sales funnel conversion paths. This service reduces merchants' operating costs on Kuaishou and facilitates rapid transactions on our platform, providing merchants with viable solutions for their operations.
spk03: Kuaishou is going to launch more marketing playlists in the 618 event in Jiangzhai to meet the needs of customer purchases and merchant orders. In the future, we hope that the commercial goods market and the domestic market will further combine in-depth
spk02: Our shopping mall will roll out more marketing features during the June 18th Shopping Festival to meet user shopping needs and help merchants achieve high sales. Going forward, we hope to integrate shelf-based and content-based e-commerce segments more deeply and complementarily. which will become the sustainable driving force of our e-commerce business. This will help more merchants achieve Omni domain operations more effectively and attract more business opportunities.
spk04: Thank you, operator. Next question, please.
spk17: Next question is from Jefferies' Thomas Chong. Your next question comes from Thomas Chong of Jefferies. Please go ahead.
spk00: Thanks, management, for taking my question. My question is regarding online marketing service. As companies achieve robust revenue growth in online marketing service in Q1, looking ahead, What will be the driving forces for further revenue growth? Thank you.
spk03: 另一个问题,第一季度我们的线上营销服务收入达到了166.5亿, 同比增长27.4%, 那我们的内外循环均取得了可喜的增长。 我们为客户提供了更好的营销解决方案, 带来了ECPM的提升。 Thanks for your question. In Q1, online marketing services revenue reached 16.65 billion RMB, up 27.4% year-over-year. Both closed-loop e-commerce marketing services
spk02: and external marketing services grew remarkably as we provided better marketing solutions to clients, driving eCPM improvement. Our growth was led by our success in bringing clients deeper sales funnel conversion passes for targeted demographics through measures such as joint modeling, as well as end-to-end efficiency enhancement from our LLM-driven smart marketing solutions.
spk03: In the future, we believe that the growth of online marketing revenue will mainly depend on the improvement of eCPM and AdLoad, especially in eCPM. We will have more space for improvement in the same industry. We will continue to work for customers in the area of deep networking and target transformation, which can bring better customer sales. The smart marketing solution based on large-scale capacity is already in smart manufacturing, smart marketing, and smart interaction have made a good profit. In the future, we are looking forward to the large model to help us make greater breakthroughs in user value understanding and marketing content distribution. In terms of the improvement of the load, we will do the original marketing content and the natural content in the flow through the original marketing material construction. Looking ahead, we believe our online marketing services revenue growth will mainly be led by advancements in eCPN and AdNote.
spk02: ECPM, in particular, is one of the key metrics where we still have significant room for improvement compared with our peers. We will continue to deepen the sales funnel conversion path for our clients' targeted demographics, which will lead to better bids from clients. Our LLM-based smart marketing solutions have already shown promising results in areas such as smart creative content production, smart marketing placements, and smart interaction and connection. Going forward, we also expect LLMs to help us achieve greater breakthroughs in understanding users' preferences and distributing marketing content. In terms of ad load enhancements, we will integrate native marketing content with organic content by refining native marketing materials, achieving a true marketing as content approach, which will increase the ad-low's upper limit. In Q1, the spending of external native marketing materials grew by 30% quarter-over-quarter, with a consistent increase in the share of external marketing spending from native marketing materials.
spk03: In addition, we also discovered some potential industry opportunities. In the automotive industry, many automotive brand manufacturers have seen huge consumer potential in the new market. In our automotive industry, The sales solution has also brought more customer investment budget for the mobile market and the car market. In the education industry, we found that the core advantage of the service platform is the need for vocational education and interest courses. We saw the possibility of higher growth. In the media information industry, we realized the self-development chain of the short-term industry at the end of last year. It also led to a major growth in the short-term sales of paid marketing. This year, we hope to replicate the industry of small games and novels. Not only can we bring better user experience and market growth, but we can also collect more back-to-back data to make more precise recommendations. In short, we will continue to work hard in the field of business optimization operation, smart sales solution solutions, and algorithmic optimization. In addition, we have discovered opportunities in some prospective industries in the automobile industry.
spk02: Many auto brands have seen the huge potential of the lower-tier market, and our integrated marketing solutions that combine brand awareness, sales conversion, and auto operation marketing for the automotive industry have brought us more budget allocations from auto manufacturers and aftermarket clients. In the education industry, there is potential for higher year-over-year growth by addressing our core demographic user needs for professional education, and interest-based courses. In the media and information industry, marketing spending of paid short plays increased month over month based on the closed-loop operation of our self-developed conversion path for short plays, which we established at the end of last year. This year, we will work to replicate this model in mini-program games and online literature industries. not only elevating user experience and amplifying user time span, but also accumulating more post-link conversion data to enhance recommendation accuracy. In general, we will continue to refine industry-specific operations, iterate smart marketing products, and optimize algorithms to bring better marketing placement and conversion to clients. We are very confident we can grow our online marketing services revenue at a faster pace than the industry.
spk04: Thank you all for your time.
spk17: Next question, please. 下一道问题来自于UBS的Felix Liu. Your next question comes from Felix Liu of UBS.
spk10: Thank you, management, for taking my questions and congratulations on the very strong Q1 results. Could management share more color on the latest developments and your strategy and tactics for local services in 2024? Thank you.
spk03: Thank you for your question. After a year and a half of development, we have a deeper understanding of the needs and desires of users and local life. We have also successfully verified the business model of fast local life in some core cities. We are also more clear about the strategic approach to business. In terms of consumption as the main force of economic growth and the potential of user consumption in the new market, we hope that fast local life will be a greater opportunity for businesses in 2024.
spk02: Thanks for your question. After a year and a half, we have deeper understanding on users' needs and preferences for local service content. We also validated the business model for our local services in some core cities and have a clear picture of our strategy and tactics for the business. Now, consumer spending is a driving economic force with great potential for unleashing user consumption in lower tier market. With this backdrop, we think our local services can bring more new customers and greater incremental opportunities for merchants in 2024.
spk03: Regarding the recent progress, first of all, in the supply chain, we divide the industry and continuously optimize the supply of commercial products, and break through the core product range. In the first quarter of 2024, the number of日均动交商家数商品数环比分别增长29%和38% We continue to promote multilayer health development. In the first quarter, we used the spring and summer holidays to cooperate with travel agencies and OTAs, which greatly enriched the supply of nine categories of products. By using the fast-growing population and content advantages, we created a standard case such as Tangshan South Lake Tourist Area. In terms of content, we continue to expand our cooperation with UZI to help UZI shorten the growth cycle through a variety of platform policies. As for our recent development, first on the supply side, we have been continuously optimizing industry-specific merchandise and conducting targeted programs in core categories.
spk02: making breakthroughs in certain product categories. As a result, in Q1 of 2024, the number of average daily active merchants and the number of merchandises rose by 29% and 38% quarter-over-quarter, respectively. We continue to develop multiple categories. In Q1, capitalizing on the key winter vacation and the Chinese New Year promotion period, We cooperated with traditional and online travel agencies to enrich the variety of offerings within the hotel and travel categories. By leveraging our user base and content advantages, we created benchmark cases such as the Townshend South Lake Scenic Area. Content-wise, we continue to work with top-notch KOLs. Through various policies, we helped shorten KOL's growth cycles and empowered creators to increase income at our platform. jointly building a high-quality content ecosystem. In Q1, the number of KOLs distributing products grew by 32%, and the number of daily average active streamers hosting live sessions increased by 62%, both on a quarter-over-quarter basis.
spk03: In the meantime, we insist on establishing the ultimate cost-effectiveness. In addition, we continue to optimize the self-management system and improve the efficiency of platform self-management to improve user experience. In the first quarter, the number of paid users in Japan has increased by nearly nine times.
spk02: On the demand side, we made continuous efforts to strengthen users' mentality in accessing our local services by improving basic functionalities and enriching marketing features. This allows us to consistently reinforce the idea of value for money to users while enhancing subsidy efficiency. In addition, we continue to fortify KOL and merchants' fulfillment capabilities. optimize our platform's governance system, and boost governance efficiency, all aimed at elevating user experience. In Q1, average daily paying users of local services skyrocketed by nearly nine-thirds year-over-year.
spk03: In terms of platform matching, we recommend the distribution efficiency of traffic by adjusting traffic structure, user experience, and value of transactions using the company's interoperability methods.
spk02: 快手本地生活的直播和短视频的GPM环比持续增长,拉动一级度TNV的高速增长。 Regarding our platform's matching capability, we adjusted our traffic mix by synergizing public and private domains. This optimized our local content distribution efficiency in recommended traffic, elevating both user experience and transactional value. As a result, our local services GPM for both short video and live streaming continues to increase quarter over quarter in Q1 and drove rapid GMB growth.
spk03: 关于20年本地生活业务的策略重点, B是行业化,我们希望结合不同的行业特性去做经济化的运营, 把到餐品类积蓄稳步做大。 to achieve a differentiated product growth strategy in the middle of the road. Second, through cooperation with service providers and strengthening their own operating capabilities in the product strategy, to strengthen the price mentality on the basis of improving the performance of the service, and to suggest low-price friendly goods for users to provide high-quality products. Third, local service content should be in order, especially in order. The content is the biggest difference between us and the goods, and it is also the key for us to do this job well. Only if we do the content well can we get more content related to user consumption and local life, so that we can attract merchants and people to provide good products and services for users, and thus realize the user and commercial value of the platform.
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