京東 (JD) 2022 Q4 法說會逐字稿

Hello, and thank you for standing by for JD.com's Fourth Quarter and Full Year 2022 Earnings Conference Call. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. (Operator Instructions) I would now like to turn the meeting over to your host for today's conference, Sean Zhang, Director of Investor Relations. Please go ahead.

您好，感謝您支持京東 2022 年第四季度和全年收益電話會議。在管理層準備好的發言之後，將進行問答環節。今天的會議正在錄製中。 （操作員說明）我現在想將會議轉交給今天會議的主持人，投資者關係總監 Sean Zhang。請繼續。

Thank you, Kate. Hello, everyone. Welcome to JD.com Q4 and Full Year 2022 Results Conference Call. For today's call, CEO of JD.com, Mr. Xu Lei, will start with his opening remarks; and our CFO, Ms. Sandy Xu, will discuss the financial highlights. After that, we'll open the call to questions from analysts.

謝謝你，凱特。大家好。歡迎來到京東第四季度和 2022 年全年業績電話會議。對於今天的電話會議，京東 CEO 徐磊先生將首先致開幕詞；和我們的首席財務官 Sandy Xu 女士將討論財務亮點。之後，我們將打開分析師提問的電話。

Let me quickly cover the safe harbor. Please be reminded during this call, our comments and responses to your questions reflect management's view as of today only and will include forward-looking statements. Please refer to our latest safe harbor statement in the earnings press release, which applies to this call. We'll discuss certain non-GAAP measures. Please also refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in the earnings press release. Also, please note all figures mentioned in this call are in RMB, unless otherwise stated.

讓我快速覆蓋避風港。請注意，在本次電話會議期間，我們對您問題的評論和答复僅反映了管理層截至今天的觀點，並將包括前瞻性陳述。請參閱適用於此次電話會議的收益新聞稿中的最新安全港聲明。我們將討論某些非 GAAP 指標。另請參閱收益新聞稿中非 GAAP 措施與可比 GAAP 措施的調節。另外請注意，除非另有說明，否則本次電話會議中提到的所有數字均以人民幣為單位。

Now let me turn the call over to our CEO, Mr. Xu.

現在讓我把電話轉給我們的首席執行官徐先生。

[Interpreted] Hello, everyone. This is Xu Lei. Thank you for joining JD.com's Fourth Quarter and Full Year 2022 Earnings Call.

【解讀】大家好。這是徐磊。感謝您加入京東 2022 年第四季度和全年財報電話會議。

In the year 2022, JD's [stage] focus on our goals and resolute throughout in a challenging macro environment. We have been able to play an important role in the industry and China's economic development as we continue to fully leverage our unique business model and supply chain capabilities to provide consumers best-in-class services and help our up and downstream partners to enhance their operations.

2022年，京東[階段]在充滿挑戰的宏觀環境中，聚焦目標，堅定不移。我們能夠在行業和中國經濟發展中發揮重要作用，因為我們繼續充分利用我們獨特的商業模式和供應鏈能力，為消費者提供一流的服務，並幫助我們的上下游合作夥伴提升他們的運營.

At the same time, we have achieved high quality growth of our own with our full year revenues in 2022 achieving the RMB 1 trillion milestone for the first time. This reflects the strategic decision we made in the beginning of the year to focus our energies and resources on JD's core business in line with our analysis and understanding of the predominant industry and the macro trends.

同時，我們實現了自身的高質量增長，2022年全年收入首次突破萬億元大關。這反映了我們在年初做出的戰略決策，即根據我們對主導行業和宏觀趨勢的分析和理解，將我們的精力和資源集中在京東的核心業務上。

This has enabled JD to continue to deliver high-quality operations with highest ever profitability of the year despite the external challenges. This once again demonstrates that our business model has a strong potential for profitable growth. Today, the industry and the overall external environment are experiencing profound changes. The coverage over the past 3 years, the recovering macro economy and demographic structure changes have all impacted the retail industry.

這使京東能夠在面臨外部挑戰的情況下繼續提供高質量的運營和年度最高盈利能力。這再次證明我們的商業模式具有強大的盈利增長潛力。如今，行業和整體外部環境正在發生深刻變化。過去3年的報導、宏觀經濟的複蘇和人口結構的變化都對零售業產生了影響。

In a post COVID era, customers' lifestyles and preferences have notably changed. We have seen the polarized trends of consumption patterns and spending power. On one hand, the number of middle class and household users who attach great importance to the quality and function of goods is expanding. On the other hand, consumers have become more meticulous in their spending.

在後 COVID 時代，客戶的生活方式和偏好發生了顯著變化。我們已經看到了消費模式和消費能力的兩極分化趨勢。一方面，重視商品品質和功能的中產階級和家庭用戶數量不斷擴大。另一方面，消費者在消費上變得更加謹慎。

The fourth, we see increasing diversification of consumer demand and consumption scenarios. On top of that, Internet companies across the world that previously prioritized growth in traffic, users and business scale over profitability and cash flow have performed their approach. Not only that, there have been also changes in how to evaluate business health. We see a mix of opportunities and challenges amid these dynamic evolution.

第四，我們看到消費需求和消費場景越來越多樣化。更重要的是，以前將流量、用戶和業務規模的增長置於盈利能力和現金流之上的全球互聯網公司已經執行了他們的方法。不僅如此，如何評估企業健康狀況也發生了變化。在這些動態演變中，我們看到機遇與挑戰並存。

JD has been able to be the first to adopt the time changes with agility and determination. Here, I would like to give a brief overview of the major adjustments we've been proactively made. First, we initiated a series of strategic realignment in 2022 with the aim of achieving healthy and sustainable growth.

京東能夠率先敏捷而果斷地適應時代的變化。在此，我想簡要介紹一下我們主動做出的重大調整。首先，我們在 2022 年啟動了一系列戰略調整，旨在實現健康和可持續增長。

In the past, we did more on presume and tolerance to new trials in both our core and new businesses, which diluted management's forecast to a certain extent. Based on our analysis of the external environment, we have conducted a comprehensive review of our businesses and decided to pull back those new businesses that either could not develop more efficient business models, had limited synergies with our core businesses who could not achieve sufficient economies of scale. That said, we will continue to invest in the new businesses with healthy momentum and exciting future opportunities.

過去，我們對核心業務和新業務的新嘗試更多的是假設和容忍，這在一定程度上削弱了管理層的預測。根據我們對外部環境的分析，我們對我們的業務進行了全面審查，並決定撤回那些無法開發更有效的商業模式、與我們的核心業務協同效應有限、無法實現足夠經濟效益的新業務。規模。也就是說，我們將繼續投資於具有健康發展勢頭和令人興奮的未來機遇的新業務。

I've shared some of the examples shortly. Second, we have been expanding our supply chain capabilities for our core business. We continue to build up our operating capabilities across different categories and lower costs.

我很快就分享了一些例子。其次，我們一直在擴展核心業務的供應鏈能力。我們繼續建立跨不同類別的運營能力並降低成本。

Third, we have reallocated our resources and energies back to the very essence of retail. Putting consumers need first, we have further built upon our commitment to better products, prices and services. In terms of price, our goal is to be known by customers for providing the most consistent everyday low price. As such, we have gone through numerous bottom up optimization, including further streamlining of our promotional programs and improving our traffic allocation mechanism.

第三，我們將資源和精力重新分配到零售的本質上。我們將消費者的需求放在首位，進一步致力於提供更好的產品、價格和服務。在價格方面，我們的目標是以提供最一致的日常低價而被客戶所熟知。因此，我們進行了多次自下而上的優化，包括進一步簡化我們的促銷計劃和改進我們的流量分配機制。

Through these efforts in our supply chain and the marketplace ecosystem, we have seen a massive increase of product selection on our platform offered by both our 1P and 3P merchants. And user recognition of JD's price competitiveness is gradually being restored.

通過我們在供應鍊和市場生態系統中的這些努力，我們看到 1P 和 3P 商家在我們的平台上提供的產品選擇大幅增加。而用戶對京東價格競爭力的認可正在逐步恢復。

At the same time, we remain highly committed to service quality and user satisfaction. For example, we recently launched a version of our app that caters to the needs of the elderly people. I'd like to reiterate that all of our adjustments are made out of our deliberate consideration of consumer needs and are executed with careful planning.

同時，我們始終高度重視服務質量和用戶滿意度。例如，我們最近推出了一個滿足老年人需求的應用程序版本。我想重申，我們所有的調整都是出於對消費者需求的深思熟慮，並經過周密的計劃來執行的。

Our ultimate goal is to satisfy our diversifying customer demand and provide a best-in-class experience across the board.

我們的最終目標是滿足我們多樣化的客戶需求，並提供全面的一流體驗。

Now let me review the major progress we made in Q4. As discussed in the past, we have been focusing on user quality and efficiency and sustainability of user acquisition given the softer consumption environment.

現在讓我回顧一下我們在第四季度取得的主要進展。正如過去所討論的，鑑於消費環境較軟，我們一直關注用戶質量和效率以及用戶獲取的可持續性。

In the quarter, on top of our largely stable user base, we also recorded double-digit DAU growth year-on-year. More encouragingly, we are seeing an upward trend for both user structure and quality. In particular, in our core business JD Retail, repeat purchases and payment members both grew robustly in Q4 and accounted for higher proportions of our total users, which helped to drive up shopping frequency and ARPU.

在本季度，除了我們基本穩定的用戶群之外，我們還錄得了兩位數的 DAU 同比增長。更令人鼓舞的是，我們看到用戶結構和質量都呈上升趨勢。特別是，在我們的核心業務京東零售中，重複購買和支付會員在第四季度都強勁增長，占我們總用戶的比例更高，這有助於提高購物頻率和 ARPU。

JD Plus reached 34 million members in Q4, while flat members continue to spend 8x the average annual amount of non-plus members, reflecting their high shopping frequency and spending power.

京東Plus在Q4達到3400萬會員，而持平會員的年均消費額繼續是非Plus會員的8倍，反映出其較高的購物頻率和消費能力。

Moreover, our Yihaodian Membership Store, which is positioned to serve the middle to high-end market, has also crossed the 1 million paying members milestone. We are continuously improving our user service and operating capabilities so as to better serve our users in first and second-tier cities as well as lower tier markets.

此外，我們定位於服務中高端市場的1號店會員店也突破了100萬付費會員的里程碑。我們正在不斷提升我們的用戶服務和運營能力，以更好地服務我們在一二線城市和低線市場的用戶。

As we improve our operating quality, we also continue to invest in new growth opportunities and new businesses such as marketplace ecosystem, omnichannel business and supply chain logistics services. We see great potential in building up an open ecosystem that enables the sustainable growth for our merchants.

隨著我們提高運營質量，我們還繼續投資於新的增長機會和新業務，例如市場生態系統、全渠道業務和供應鏈物流服務。我們看到了建立開放生態系統的巨大潛力，可以為我們的商家實現可持續增長。

With such efforts, we can further lower merchants operating costs and optimize our traffic distribution. We can also help merchants to grow with better efficiency and certainty supported by our strength in supply chain, logistics, technologies and services.

通過這些努力，我們可以進一步降低商戶運營成本並優化我們的流量分配。憑藉我們在供應鏈、物流、技術和服務方面的實力，我們還可以幫助商家以更高的效率和確定性發展。

As a result, in Q4, JD Retail increased its merchant base by over 20% year-on-year for the eighth quarter in a row. Growth in categories like health, sports and outdoors and home goods all outperformed the industry in this quarter.

因此，在第四季度，京東零售連續第八個季度同比增長超過 20%。本季度，健康、運動和戶外用品以及家居用品等品類的增長均優於行業。

JD's intra-city and demand retail services, which is part of our omnichannel business, maintained strong growth trajectory in this quarter. As we further stepped up efforts on collaboration with brands and offline stores, GMV in our O2O business increased by 29% year-on-year.

作為我們全渠道業務的一部分，京東的同城和需求零售服務在本季度保持了強勁的增長軌跡。隨著我們進一步加強與品牌和線下門店的合作，我們O2O業務的GMV同比增長29%。

In particular, Shop Now, our one-hour delivery service, grew 80% in this quarter. This not only generates incremental growth for brick-and-mortar stores, but also provides users with an on-demand shopping experience that combines online ordering, offline shipping and delivering as fast as within an hour.

特別是，我們的一小時送貨服務 Shop Now 在本季度增長了 80%。這不僅為實體店帶來了增量增長，而且還為用戶提供了一種按需購物體驗，將在線訂購、線下運輸和最快在一小時內交付相結合。

Despite the impact of COVID, JD Logistics maintained a resilient revenue growth in Q4. More notably, with the continuous improvement of this business, JDL has been profitable for 3 consecutive quarters and achieved a target of breakeven on a full year basis.

儘管受到 COVID 的影響，京東物流在第四季度仍保持了強勁的收入增長。更值得一提的是，隨著該業務的不斷提升，JDL已連續3個季度實現盈利，實現了全年盈虧平衡的目標。

Despite the macro challenges and dynamic competitive landscape, JDL has been able to further strengthen its position in the industry. JDL also continued to draw on the complementary strengths of and create synergies with Kuayue-Express and Deppon, particularly in the areas of integrated supply chain services, Air Express network, bulky item delivery and express network.

儘管面臨宏觀挑戰和動態競爭格局，JDL 仍能夠進一步鞏固其在行業中的地位。 JDL還繼續與快躍速遞、德邦優勢互補，發揮協同效應，特別是在綜合供應鏈服務、航空快遞網絡、大件派送和快遞網絡等方面。

This has enabled JDL to provide comprehensive supply chain solutions for both up and downstream customers to help them reduce cost to increase efficiency and withstand risks while at the same time build a more advanced logistics system. JDL has also won wide recognition from customers for its distinguished service quality.

這使得JDL能夠為上下游客戶提供全面的供應鏈解決方案，幫助他們降本增效、抵御風險，同時構建更先進的物流體系。 JDL也以卓越的服務品質贏得了客戶的廣泛認可。

In Q4, JDL continued to expand its logistics infrastructure, notably JD Airlines made steady progress in increasing cargo routes in Q4 since its official commenced operation last August with 3 all cargo aircraft in operation by the end of 2022. This allows JD Airlines to better serve customers in many industries, including consumption and manufacturing and more.

第四季度，京東持續擴充物流基礎設施，特別是京東航空自去年8月正式運營以來，第四季度貨運航線穩步推進，截至2022年底，全貨機已投入運營3架，這讓京東航空能夠更好地服務許多行業的客戶，包括消費和製造等等。

Last but not least, we continue to foster the growth of new businesses that resonate with our core businesses and capabilities. JD Industrial is one of the examples of a successful business that we have been incubated internally and has gone on to deliver hyper growth.

最後但同樣重要的是，我們繼續促進與我們的核心業務和能力產生共鳴的新業務的增長。 JD Industrial 是我們在內部孵化並繼續實現高速增長的成功企業的例子之一。

With its focus on industrial manufacturing, an important composition of the real economy, JD Industrial successfully integrate resources across the industrial chains such as procurement, production, warehouse logistics and inventory management to achieve superior synergies and economies of scale. Another example is our private label brand, Jing Zao, which translates as made by JD. It delivered over 60% year-on-year growth in 2022.

京東產業聚焦實體經濟重要組成部分工業製造，成功整合採購、生產、倉儲物流、庫存管理等全產業鏈資源，實現卓越的協同效應和規模效應。另一個例子是我們的自有品牌京造，翻譯為京東製造。它在 2022 年實現了 60% 以上的同比增長。

The initial purpose of this business is to complement the product categories offered on our platform and to create new value for our suppliers and customers. It also helps JD to further expand throughout the up and downstream of the supply chain. We are pleased to see that 25% of Plus members have become loyal users of Jing Zao products, and the percentage continues to increase. Both JD Industrials and Jing Zao offer solid proof that we are on the right track as we adjust and focus on our core business and promising new businesses.

該業務的最初目的是補充我們平台上提供的產品類別，並為我們的供應商和客戶創造新的價值。這也有助於京東在整個供應鏈的上下游進一步擴張。我們欣喜地看到，25%的Plus會員已經成為精造產品的忠實用戶，並且這一比例還在持續增加。 JD Industrials 和 Jing Zao 都提供了確鑿的證據，證明我們在調整和專注於我們的核心業務和有前途的新業務時走在了正確的軌道上。

I hope that today's presentation helps you get a better understanding of the significance of the strategic shift underway at JD. At its core, our intention is to seize the opportunity presented by the profound changes in external environment and return to our focus on lower cost, higher efficiency and a superior user experience.

我希望今天的演講能幫助您更好地理解京東正在進行的戰略轉變的重要性。其核心是抓住外部環境深刻變化帶來的機遇，回歸到低成本、高效率、卓越用戶體驗上來。

Admittedly, we may experience short-term impact on our performance as we further educate users, reinvigorate JD's reputation for providing the best prices, optimize our product mix and streamline internal mechanism and procedures. All of these aspects require time and effort, especially as both the macro economy and the consumption are still in recovery stage.

誠然，隨著我們進一步教育用戶、重振京東提供最優惠價格的聲譽、優化我們的產品組合併簡化內部機制和程序，我們的業績可能會受到短期影響。這些都需要時間和精力，尤其是在宏觀經濟和消費都還處於恢復期的情況下。

That said, I want to stress that our long-term strategy has not changed. We believe that adjustments we're making will solidify our strength as we have faith in our own business model and the strategic direction as well as the resilience and the long-term growth trajectory on China's economy and consumption trends.

儘管如此，我想強調的是，我們的長期戰略沒有改變。我們相信，我們正在進行的調整將鞏固我們的實力，因為我們對自己的商業模式和戰略方向以及中國經濟和消費趨勢的彈性和長期增長軌跡充滿信心。

In the long term, JD is committed to play an important role in people's daily lives and to the country's economic development. We will work to ensure healthy and sustainable business development along the way to create long-term value for our users, business partners and shareholders.

從長遠來看，京東致力於在人們的日常生活和國家的經濟發展中發揮重要作用。我們將努力確保健康和可持續的業務發展，為我們的用戶、業務合作夥伴和股東創造長期價值。

With that, I'd like to pass the floor to our CFO, Sandy.

有了這個，我想把發言權交給我們的首席財務官桑迪。

Thank you, Xu, and hello, everyone. Moving back to 2022, we successfully executed on our strategy to achieve high-quality growth with stronger margins in line with our long-term goals despite the many terminal complexities and challenging. We delivered again and even exceeded our target which was especially demonstrated by our strong profitability and cash flow at the year-end.

謝謝徐老師，大家好。回到 2022 年，我們成功地執行了我們的戰略，儘管面臨許多終端複雜性和挑戰，但符合我們的長期目標，實現了高質量的增長和更高的利潤率。我們再次交付，甚至超過了我們的目標，這尤其體現在我們年底強勁的盈利能力和現金流上。

Our USD 1 billion cash dividend program further demonstrates our confidence for the long term. With our resilient business model, we are confident to embrace the new opportunities and challenges in 2023, as Xu just laid out. Now let me walk you through our financial results in Q4 and the full year of 2022.

我們的 10 億美元現金分紅計劃進一步表明了我們對長期發展的信心。憑藉我們富有彈性的商業模式，我們有信心迎接 2023 年的新機遇和挑戰，正如徐剛所說。現在讓我向您介紹我們在第四季度和 2022 年全年的財務業績。

Our net revenues grew by 7% year-on-year to RMB 295 billion in Q4. On a full year basis, net revenues grew by 2% and surpassed the RMB 1 trillion milestone for the first time in our history.

我們第四季度的淨收入同比增長 7% 至人民幣 2950 億元。按全年計算，淨收入增長 2%，歷史上首次突破 1 萬億元大關。

As we continue to focus on user quality and building deeper user engagement, we are encouraged to see that in Q4, JD Retail LTM average GMV per user and shopping frequency continued to increase year-on-year for 5 consecutive quarters, mainly driven by the expansion of our core user base.

隨著我們繼續關注用戶質量並建立更深層次的用戶參與度，我們感到鼓舞的是，第四季度，京東零售 LTM 平均每用戶 GMV 和購物頻率連續 5 個季度同比增長，主要受擴大我們的核心用戶群。

Breaking down the revenue mix. Product revenues were up 1% year-on-year in Q4 and 6% in the full year of 2022. Service revenues grew by 40% year-on-year in Q4 and accounted for a new high of 20% of our total revenue, up from 15% a year ago, showcasing the further diversification of our revenue streams.

打破收入結構。產品收入Q4同比增長1%，2022年全年增長6%。服務收入Q4同比增長40%，佔總收入20%的新高，高於一年前的 15%，表明我們的收入來源進一步多元化。

On a full year basis, service revenues were up 33% in 2022. Logistics and other services revenues grew by 75% year-on-year in Q4 and 55% in the full year of 2022. I will elaborate more on the underlying drivers in the segment analysis section later on.

從全年來看，2022 年服務收入增長 33%。物流和其他服務收入在第四季度同比增長 75%，2022 年全年增長 55%。我將詳細說明潛在驅動因素稍後的細分分析部分。

Marketplace and marketing revenues grew by 11% year-on-year in Q4 and 14% year-on-year in the full year of 2022, a notable outperformance compared to the industry. Thanks to our commitment to supporting merchants, particularly the SMEs, we saw a healthy expansion of our merchant base, and they have been investing additional advertising budget on our platform. This bodes well for our continued progress in strengthening our marketplace ecosystem.

市場和營銷收入在第四季度同比增長 11%，在 2022 年全年同比增長 14%，與行業相比表現顯著。由於我們致力於支持商家，尤其是中小企業，我們的商家群健康擴張，他們一直在我們的平台上投入額外的廣告預算。這預示著我們在加強市場生態系統方面繼續取得進展。

Now let's turn to our segment performance. JD Retail continued to see resilient revenue growth with encouraging expansion of both fulfilled gross margin and operating margin. especially during a quarter that was heavily disrupted by COVID dynamics.

現在讓我們來看看我們的細分市場表現。京東零售繼續實現強勁的收入增長，實現的毛利率和營業利潤率均出現了令人鼓舞的增長。特別是在一個被 COVID 動態嚴重破壞的季度。

In terms of revenues, JD Retail recorded 3.6% year-on-year growth in Q4 and 7.3% in the full year of 2022. By category, electronics and home appliance revenues were largely stable year-on-year in Q4 and up 5% for the full year. Thanks to our strong supply chain capabilities, user mind share and expanding intra-city on-demand retail services during a very challenging quarter for durable group. General merchandise revenues were up 2% year-on-year in Q4 and 8% for the full year.

收入方面，京東零售Q4同比增長3.6%，2022年全年增長7.3%。分品類看，電子和家電收入Q4同比基本穩定，增長5%全年。得益於我們強大的供應鏈能力，在耐用品集團面臨非常具有挑戰性的季度期間，用戶心智共享和擴展城市內按需零售服務。第四季度日用商品收入同比增長 2%，全年增長 8%。

Consumers remained relatively conservative on spending on discretionary products, such as apparel and cosmetics. Meanwhile, as we shared last time, our supermarket category is going through a transition towards a healthier product mix. As a result, the supermarket category saw its largest margin improvement over the last 2 years, checking well on a more sustainable growth trajectory for the long run.

消費者在服裝和化妝品等可自由支配的產品上的支出仍然相對保守。與此同時，正如我們上次分享的那樣，我們的超市類別正在經歷向更健康的產品組合的過渡。因此，超市類別在過去 2 年中實現了最大的利潤率提高，從長遠來看，這很好地驗證了更可持續的增長軌跡。

Emerging categories, such as health care and sports and outdoors, continued to deliver double-digit top line growth in the quarter, demonstrating our broad-based user mind share across categories. I want to highlight that JD Retail's profitability improvement is a strong testament to our continued commitment and ability to deliver against our goal of sustained long-term margin improvement.

醫療保健、運動和戶外等新興類別在本季度繼續實現兩位數的收入增長，表明我們在各個類別中擁有廣泛的用戶心智份額。我想強調的是，京東零售盈利能力的改善有力地證明了我們持續致力於實現持續長期利潤率改善目標的能力。

JD Retail's fulfilled gross margin was up 53 basis points year-on-year to 8.2% in Q4, the highest level achieved in all our promotion seasons since inception, mainly driven by our efforts to optimize cost and efficiency and the improving economy of sale. This also boosted JD Retail's operating margin to 3.0%, up 90 basis points from 1 year ago.

京東零售第四季度實現的毛利率同比增長 53 個基點至 8.2%，是我們自成立以來所有促銷季的最高水平，這主要是由於我們努力優化成本和效率以及改善銷售經濟。這也將京東零售的營業利潤率推高至 3.0%，較 1 年前上升 90 個基點。

For the full year of 2022, JD Retail's fulfilled gross margin was up 42 basis points to 8.2%, and operating margin was up 68 basis points to 3.7%, both at record high levels on an annual basis. Our long-term margin trajectory remains well on track. JD Logistics made solid progress in both top line growth and profitability in Q4 and the full year of 2022.

2022 年全年，京東零售的已實現毛利率上升 42 個基點至 8.2%，營業利潤率上升 68 個基點至 3.7%，均創歷史新高。我們的長期利潤率軌跡仍在軌道上。京東物流在第四季度和 2022 年全年的收入增長和盈利能力均取得了穩步進展。

Its revenue grew by 31% year-on-year in Q4 and 31% for the full year of 2022. Excluding the impact of consolidation of Deppon, the growth rate was 13% and 17%, respectively. This is mainly contributable to the resilient growth in revenues from external customers the proportion of which continued to increase to about 70% in Q4.

其Q4營收同比增長31%，2022年全年營收同比增長31%。剔除合併德邦的影響，增速分別為13%和17%。這主要得益於外部客戶收入的彈性增長，其占比在第四季度繼續增加至70%左右。

Notably, JDL has been profitable on a non-GAAP operating income basis for 3 quarters in a row and its operating margin rising to 2.1% in Q4.

值得注意的是，JDL 已連續三個季度在非 GAAP 營業收入基礎上實現盈利，其營業利潤率在第四季度上升至 2.1%。

On a full year basis, JDL's operating margin reached 0.4% in 2022, achieving its breakeven target for this year despite the unfavorable impact from the external environment, including additional COVID related costs and operating deleverage.

從全年來看，JDL 的營業利潤率在 2022 年達到 0.4%，儘管受到外部環境的不利影響，包括額外的 COVID 相關成本和運營去槓桿化，但實現了今年的盈虧平衡目標。

Dada reported revenue of RMB 2.7 billion in Q4, and its non-GAAP operating loss narrowed sequentially to RMB 207 million for the quarter, JD Retail and Shop Now has been expanded to cooperate with over 200,000 business partners in the quarter and provided more than 2,000 cities and counties with on-demand retail services that cover a wide range of categories.

達達Q4營收27億元，本季度非美國通用會計準則營業虧損環比收窄至2.07億元人民幣，京東零售和Shop Now本季度已拓展至超過200,000家商業夥伴，提供超過2,000按需零售服務覆蓋品類廣泛的市縣。

As a result, our inter-city on-demand retail business maintained its robust momentum particularly Shop Now that recorded a year-on-year GMV growth of over 80% in Q4. Finally, our new business revenue scaled back to RMB 4.8 billion in Q4 and RMB 21.8 billion in the full year of 2022.

因此，我們的城際按需零售業務保持強勁勢頭，尤其是 Shop Now，其第四季度的 GMV 同比增長超過 80%。最後，我們的新業務收入在第四季度縮減至人民幣 48 億元，到 2022 年全年縮減至人民幣 218 億元。

As we continue to adjust strategies in both Jingxi and International businesses, while JD Property maintained a strong growth momentum. For international businesses, we've decided to [cease] operations of e-commerce business in Southeast Asia market for now as we believe that it would continue to require heavy investment over a prolonged period to build an efficient and scalable B2C e-commerce business based on the current economic and infrastructure development in the local markets. Instead, we continue to invest in building global logistics infrastructure that better leverage our core capabilities and explore online retail business opportunities in other markets.

隨著我們不斷調整京西和國際業務的策略，京東地產保持了強勁的增長勢頭。對於國際業務，我們決定暫時 [停止] 東南亞市場的電子商務業務運營，因為我們認為在很長一段時間內仍需要大量投資才能建立高效且可擴展的 B2C 電子商務業務基於當地市場當前的經濟和基礎設施發展。相反，我們繼續投資建設全球物流基礎設施，以更好地利用我們的核心能力，並探索其他市場的在線零售業務機會。

In terms of profitability, new business operating loss narrowed substantially year-on-year in Q4 and in the full year of 2022. Looking ahead, we continue to explore new initiatives and encourage innovations that create better synergies with our core businesses and capabilities. We believe this strategy will validate itself in the coming quarters as we pursue high-quality development.

在盈利方面，新業務經營虧損在第四季度和 2022 年全年同比大幅收窄。展望未來，我們將繼續探索新舉措並鼓勵創新，以與我們的核心業務和能力產生更好的協同效應。我們相信，在我們追求高質量發展的過程中，這一戰略將在未來幾個季度得到驗證。

Moving on to our consolidated bottom line, as we firmly executed our strategy to improve operating efficiency and focus on high-quality growth that we set at the beginning of last year. We ended the year on a strong footing with RMB 7.7 billion in non-GAAP net income attributable to ordinary shareholders in Q4.

繼續鞏固我們的底線，因為我們堅定地執行我們在去年初制定的提高運營效率和專注於高質量增長的戰略。我們以強勁的勢頭結束了這一年，第四季度非美國通用會計準則歸屬於普通股股東的淨收入為人民幣 77 億元。

Our non-GAAP net margin was 2.6% in Q4, which represented an impressive expansion of 130 basis points compared to 1 year ago. On a full year basis, non-GAAP net income attributable to ordinary shareholders was RMB 28.2 billion, which grew at a 3-year CAGR of 38%.

我們在第四季度的非美國通用會計準則淨利潤率為 2.6%，與一年前相比增長了 130 個基點，令人印象深刻。按全年計算，非美國通用會計準則歸屬於普通股股東的淨利潤為人民幣 282 億元，三年復合增長率為 38%。

Non-GAAP net margin for the full year of 2022 increased by 90 basis points year-on-year to 2.7%, hitting a historic high on an annual basis. Finally, our LTM free cash flow as of Q4 reached a historical high of RMB 35.6 billion. By the end of Q4, cash and cash equivalents, restricted cash and short-term investments added up to a total of RMB 226 billion, up from RMB 218 billion (sic) [RMB 191.3 billion] last quarter. This gives us a stronger than ever positioned to support business development and again, return value to shareholders in the form of a cash dividend. This was mainly driven by both our improved profitability and a strong balance sheet.

2022年全年非美國通用會計準則淨利潤率同比增長90個基點至2.7%，創歷史新高。最後，截至第四季度，我們的 LTM 自由現金流達到 356 億元人民幣的歷史新高。截至第四季度末，現金及現金等價物、受限制現金和短期投資總計人民幣 2,260 億元，高於上一季度的人民幣 2,180 億元（原文如此）[人民幣 1,913 億元]。這使我們比以往任何時候都更有能力支持業務發展，並再次以現金股息的形式向股東回報價值。這主要是由我們提高的盈利能力和強勁的資產負債表推動的。

Furthermore, we plan to adopt an annual dividend policy going forward as a way to sustainably return value to shareholders at an amount to be determined by the Board based on our financial performance in the previous fiscal year and other factors.

此外，我們計劃在未來採用年度股息政策，作為一種可持續地向股東回報價值的方式，金額由董事會根據上一財政年度的財務業績和其他因素確定。

In March 2023, JD Industrial, our consolidated subsidiary and the leading industrial supply chain technology and only providing in China entered into the definitive agreements for its non-redeemable series B financing. JD remains the majority shareholder of JD Industrials after this transaction.

2023 年 3 月，我們的合併子公司 JD Industrial 和領先的工業供應鏈技術公司就其不可贖回的 B 輪融資簽訂了最終協議。本次交易完成後，京東仍為京東實業的大股東。

To conclude my remarks, the year of 2022 tested all of us on many fronts. What (inaudible) common part is our unique resilience to navigate the complex environment and to continue to make headway against our goals and long-term strategies, both financially and operationally.

最後，2022 年在許多方面考驗著我們所有人。什麼（聽不清）共同點是我們獨特的適應力，可以駕馭複雜的環境，並繼續在財務和運營方面朝著我們的目標和長期戰略取得進展。

Looking at 2023, we have emerged stronger and more prepared and we'll continue to relentlessly pursue the very essence of retail cost, efficiency and experience. We believe this business philosophy has been proven successful across many cycles over the 20 years since our founding and will remain the right way to enable us to create value for our customers, business partners and shareholders.

展望2023年，我們變得更強大，準備更充分，我們將繼續不懈地追求零售成本、效率和體驗的本質。我們相信，自我們成立以來的 20 年裡，這一經營理念已在許多周期中被證明是成功的，並將繼續是使我們能夠為我們的客戶、業務合作夥伴和股東創造價值的正確方法。

With that, let's open the call to the Q&A. Thank you.

有了這個，讓我們打開問答環節。謝謝。

The question-and-answer session of this conference call will start in a moment. (Operator Instructions) The first question is from Eddy Wang of Morgan Stanley.

本次電話會議的問答環節馬上開始。 （操作員說明）第一個問題來自摩根士丹利的Eddy Wang。

[Interpreted] My question is about the RMB 10 billion subsidy program we just launched. We understand that JD is trying to rebuild the low cost to make sure our customers throw this RMB 10 billion subsidy program. So just want to check if there's any matrix that we can follow to test whether or not this program is successful, and if our competitor is trying to follow and add the investment in these subsidy programs as well. So how should we expect the RMB 10 billion subsidy programs, the financial impact in the short term and the long term on JD.

【解讀】我的問題是關於我們剛剛推出的100億元補貼計劃。我們了解到，京東正在努力重建低成本，以確保我們的客戶能夠投入這項 100 億元人民幣的補貼計劃。所以只想檢查是否有任何我們可以遵循的矩陣來測試該計劃是否成功，以及我們的競爭對手是否也在嘗試遵循並增加對這些補貼計劃的投資。那麼我們應該如何看待100億元人民幣的補貼計劃，以及短期和長期對京東的財務影響。

[Interpreted] Thank you for the question. JD's discount program has recently draw a lot attention, and I believe a lot of our analysts do want to know more, so I would take on this question.

[翻譯]謝謝你的提問。京東的打折活動最近很受關注，相信我們很多分析師都想了解更多，所以我來回答一下這個問題。

First I want to stress that JD's business philosophy in our 20 years of development centered on cost efficiency and user experience by continuously optimizing cost and efficiency, we are able to create superior product, price and services. This principle remains unchanged.

首先我要強調的是，京東20年發展的經營理念是以成本效率和用戶體驗為中心，通過不斷優化成本和效率，我們能夠創造出優質的產品、價格和服務。這個原則保持不變。

Price is a very important element in user experience. In the past, all e-commerce players, including JD.com, focused our resources on grand promotion, which created a phenomenon of no promotion, no mining or no promotions, no sales. This is by no means an ideal situation for anyone, also and is able and stable for the better coordination and efficiency of the product supply chain.

價格是用戶體驗中非常重要的元素。過去，包括京東在內的所有電商都把資源集中在大促上，造成了不促銷、不挖掘或不促銷、不銷售的現象。這對任何人來說都不是一個理想的情況，對於產品供應鏈更好的協調和效率來說也是能夠且穩定的。

What we hope to do is to transform our marketing strategy from focusing on big sales to creating an environment of everyday low price, gradually shifting people shopping behaviors and driving up consumption activities on a daily basis. To return to the fundamentals of retail, we want to contribute to more stable development of the supply chain of the industry and more orderly growth of brands and merchants.

我們希望做的是將營銷策略從主打大賣轉變為營造天天低價的環境，逐步改變人們的購物行為，帶動日常消費活動。回歸零售本源，為行業供應鏈的更穩定發展，品牌和商家的成長更有序做出貢獻。

So you've noticed that several channels and services have already been launched on JD's online, including the compensation for higher prices and free shipping above 9.9 grand and price guarantee program as well as the highly notable RMB 1 billion subsidies program.

大家有沒有註意到，京東線上已經上線了好幾個渠道和服務，包括9.9以上的漲價補償、包郵和保價，還有備受矚目的10億補貼。

And for this program, it's one of the many programs in our aim to better our pricing strategies. And all these discount programs are not merely slogan, we would like to provide genuine and tangible benefits to our customers. Now we've planned RMB 1 billion worth benefit for the first 2 months, which is a collective marketing investment put together with our brand partners and merchants on our platform.

對於這個項目，它是我們旨在改善定價策略的眾多項目之一。所有這些折扣計劃不僅僅是口號，我們希望為我們的客戶提供真正和切實的利益。現在我們計劃前兩個月價值10億元人民幣的收益，這是與我們平台上的品牌合作夥伴和商家一起進行的集體營銷投資。

We understand that only by providing users with true benefits can we make them stay and attract more brands and merchants and in the same way, only by better serving the users can we better serve the merchants. And these programs will have a limited impact on our margins, and we will keep it in a controllable level, and Sandy can share with you more on that.

我們明白，只有為用戶提供真正的實惠，才能讓用戶留下來，吸引更多的品牌和商家；同樣，只有更好地服務用戶，才能更好地服務商家。這些計劃對我們的利潤率影響有限，我們會將其保持在可控水平，Sandy 可以與您分享更多信息。

And to create our low-priced image, we have been doing several things. First, from the supply side, we continue to improve our open ecosystem to provide more choices, more diversities of prices and categories also including the products from the industrial belts and the white label product for our customers. And at the same time, we continue to enhance our supply chain efficiency to generate the scale effect and to produce more money savings for our customers.

為了打造我們的低價形象，我們一直在做幾件事。首先，從供給端，我們不斷完善我們開放的生態系統，為我們的客戶提供更多的選擇，更多的價格和品類，包括工業帶產品和白標產品。同時，我們繼續提高供應鏈效率以產生規模效應並為我們的客戶節省更多資金。

And also through our different kinds of marketing activities, we want to let our customers have a very tangible and true feeling about the highly cost-effective product offering on our platform, both from our first party and the third party.

並且通過我們不同類型的營銷活動，我們希望讓我們的客戶對我們平台上提供的高性價比產品有一個非常具體和真實的感受，無論是來自我們的第一方還是第三方。

So these programs are still in their very early stage and have already generated some fruitful results. And in certain aspects, have already exceeded our expectations in terms of driving -- activating more users, existing users and new users and bring more traffic, et cetera. And for all these, we are still making internal adjustments, and we'll also see how our partners and our consumers receive on it. So overall, we believe this is a meaningful thing for JD and also for this industry.

因此，這些計劃仍處於非常早期的階段，並且已經產生了一些豐碩的成果。並且在某些方面，已經超出了我們在驅動方面的預期——激活更多的用戶、現有用戶和新用戶並帶來更多的流量等等。而這些，我們還在內部進行調整，還要看我們的合作夥伴和我們的消費者是如何接受的。所以總的來說，我們認為這對京東和這個行業來說都是一件有意義的事情。

And in terms of the indicators for the success of the program, we will continue to focus on the users and the users' performance through these programs such as the activities of the existing users and just they're returning and the new user acquisitions and users ARPU and their healthy shopping behaviors on our platform, there are many arranged users.

就計劃成功的指標而言，我們將繼續通過這些計劃關注用戶和用戶的表現，例如現有用戶的活動和他們的回歸以及新用戶的獲取和用戶ARPU和他們在我們平台上的健康購物行為，有很多被安排的用戶。

And last, I want to stress that of China's largest supply chain-based technology and service provider, JD's capabilities and the competitiveness exist in our years accumulation of our supply chain capabilities, our joint efforts used together and a winning situation with our business and brand partners and our long-term user forecast business philosophies instead of just providing, giving some benefit on the superficial level.

最後，我想強調的是，作為中國最大的供應鏈技術和服務提供商，京東的能力和競爭力是我們多年供應鏈能力的積累，我們的共同努力，我們的業務和品牌的共贏。合作夥伴和我們的長期用戶預測商業理念，而不是僅僅提供，在表面上給予一些好處。

So we remain very confident to continue to enhance our users experience and their value.

因此，我們仍然非常有信心繼續提升我們的用戶體驗和他們的價值。

Yes. This is Sandy. Let me add on some additional points on the P&L impact. So in terms of the package for this program, first of all, the discount to consumers will be real discounts. But as [Lei] said, we will work together with our suppliers and the merchants and leverage our supply chain capabilities. So not all the discounts will directly hit our gross margin or marketing expenses.

是的。這是桑迪。讓我補充一些關於損益影響的額外觀點。所以在這個節目的套餐上，首先，給消費者的優惠是實實在在的優惠。但正如[雷]所說，我們將與我們的供應商和商家合作，並利用我們的供應鏈能力。所以並不是所有的折扣都會直接影響我們的毛利率或營銷費用。

Second, our target is to smooth out the operation pressure from the 2 major promotion seasons to improve operating efficiency for the entire supply chain and also to attract new users or recap our existing users. So we expect to receive some efficiency gains and we may reallocate our marketing budget for big promotions or user acquisition cost, depending on the ROI of each initiative.

其次，我們的目標是緩解兩個主要促銷季的運營壓力，以提高整個供應鏈的運營效率，並吸引新用戶或重新獲得我們的現有用戶。因此，我們希望獲得一些效率提升，並且我們可能會根據每個計劃的投資回報率重新分配我們的營銷預算用於大型促銷或用戶獲取成本。

So overall, we do not intend to significantly change our overall marketing budget for the year. Bearing in mind, all the marketing spending is discretionary. It's all flexible cart. So we could always manage through dynamic adjustments. Thank you.

所以總的來說，我們不打算顯著改變我們今年的整體營銷預算。請記住，所有營銷支出都是可自由支配的。這都是靈活的推車。所以我們總是可以通過動態調整來管理。謝謝。

Next question is from Ronald Keung of Goldman Sachs.

下一個問題來自高盛的 Ronald Keung。

(foreign language) Can management first hear how you think about the China consumption or how retail sales may trend this year after this reopening? And in our kind of RMB 10 billion subsidy program and this background, how will we balance 1P, which is our self-operated business, versus marketplace growth and the implications to margins given the different margin profile for these 2 segments of the business?

（外語）管理層能否先聽聽您對中國消費的看法，或者今年重新開放後零售額的趨勢如何？在我們這種 100 億元人民幣的補貼計劃和這種背景下，我們將如何平衡 1P（我們的自營業務）與市場增長以及考慮到這兩個業務的不同利潤率狀況對利潤率的影響？

[Interpreted] So with the corporate control measures out of sight, we've seen the macro economy is on the recovering momentum from the consumption side. We see in the short term, the social contact related to consumption is recovering quicker, including like restaurants and tourism. We've seen some pent-up shopping demand.

[解讀]因此，在企業調控措施遙遙無期的情況下，我們看到宏觀經濟正在從消費端恢復勢頭。我們看到在短期內，與消費相關的社交活動恢復得更快，包括餐飲和旅遊。我們看到了一些被壓抑的購物需求。

But overall, for our essential or like a recovery in full, it will come from the recovery of people's confidence, it's very important now to review consumers' confidence and their confidence will -- recovery means the recovery of their income which requires the resumption of production of many enterprises, especially the massive demand of SME.

但總的來說，對於我們基本的或類似的全面復甦，它將來自人們信心的恢復，現在非常重要的是重新審視消費者的信心和他們的信心意願——恢復意味著他們收入的恢復，這需要恢復許多企業的生產，特別是中小企業的大量需求。

And currently, we have seen the government is rolling out a lot of economic stimulus measures and policies and many enterprises has reduced the production and all these factors will take some time to pass on to the resident income and for the recovery of consuming -- consumption confidence and spending power.

而目前，我們看到政府出台了很多經濟刺激措施和政策，很多企業都在減產，這些因素都需要一段時間才能轉嫁到居民收入和消費的恢復上。信心和消費能力。

So for now, we see the recovery of consumption is underway. And there are imbalanced pace here and there. So it feel me some time for a recovery in full. And at the same time, I want to add that we're talking with different brands, and we have a more consistent view on that. We continue to keep our cautious optimism on the recovery. And we believe that in the second half of the year, the recovery speed will be better.

因此，就目前而言，我們看到消費正在復蘇。到處都有不平衡的步伐。所以我覺得我有時間完全恢復。同時，我想補充一點，我們正在與不同的品牌商談，我們對此有更一致的看法。我們繼續對經濟復甦保持謹慎樂觀。而且我們相信下半年，復甦的速度會更好。

And sharing a little bit on the relationship between 1P and 3P, I see it as competition relations and it will be triggered by the needs of the users and which mode will eventually prevail depends on the prices and the products and services will better meet the needs of our customers. So this is a very open competition.

稍微分享一下1P和3P的關係，我把它看成是競爭關係，會被用戶的需求所觸發，最終哪種模式會佔上風，取決於價格，產品和服務更能滿足需求我們的客戶。所以這是一個非常開放的比賽。

And our 1P business have quite strong advantages in several categories based on our years of accumulation and understanding our supply chains. And we've been limited the selections of the product we try to pursue the best consumer experience.

而我們的1P業務，根據我們多年的積累和對供應鏈的了解，在幾個品類上都有相當強的優勢。我們一直在限制我們試圖追求最佳消費者體驗的產品選擇。

And as there are increasing number of users and they're diversifying demand shopping on JD platform, we need to expand and enrich our supply of products on our platform.

隨著用戶數量的增加以及他們在京東平台上的需求購物多樣化，我們需要擴大和豐富我們平台上的產品供應。

So you've also noticed that in the past couple of quarters, there's a strong increase of merchants' number on our platform. And also, we rolled out a so-called [spring down] project, which faced the individual merchants to welcome them on our platform. These are all the efforts we made a sort of a JD supply side reform to meet the diversifying needs of our customers.

所以你也注意到，在過去的幾個季度裡，我們平台上的商家數量大幅增加。此外，我們還推出了一個所謂的 [spring down] 項目，面向個體商戶歡迎他們進入我們的平台。這些都是我們為滿足客戶多樣化需求所做的京東供給側改革的努力。

And also including our efforts made on our traffic allocations and our algorithm upgrading as well as the 1 box program, maybe you've already heard about in the beta stage now, and all of this effort is made to improve users experience and to center on their need to make all our adjustments. So this is -- for this year, the biggest and determined actions will carry on. Of course, this also needs time to pan out.

也包括我們在流量分配和算法升級方面所做的努力，以及1盒子計劃，現在可能你已經聽說了，現在是內測階段，所有這些努力都是為了提高用戶體驗，圍繞他們需要對我們進行所有調整。所以這就是——今年，將繼續採取最大規模、最堅決的行動。當然，這也需要時間來磨合。

On the margin impact, actually -- so on the margin impact, if we look at by GMV, I would say it doesn't make a significant difference, either 1P or 3P as JD always try to maintain reasonable take rate, we never try to over-monetize our users or business partners in any particular category or models.

關於利潤率影響，實際上 - 所以關於利潤率影響，如果我們從 GMV 來看，我會說它沒有顯著差異，無論是 1P 還是 3P，因為 JD 總是試圖保持合理的採用率，我們從不嘗試在任何特定類別或模型中通過我們的用戶或業務合作夥伴過度獲利。

Of course, the change of 1P, 3P mix will affect our accounting margin if our strategy of improving the 3P can be proved to be successful, it will definitely be positive to our accounting margin improvement. Thank you.

當然，1P、3P組合的變化會影響我們的accounting margin，如果我們提高3P的策略被證明是成功的，那肯定對我們accounting margin的提升有積極影響。謝謝。

The next question is from Ellie Jiang of Macquarie.

下一個問題來自麥格理的Ellie Jiang。

(foreign language) Let me translate myself really quick. How do we really go around and allocate multiple pillars of a retail business, mostly importantly, kind of keeping a balance between the more higher quality, more premium services as opposed to the more price-cautious merchandises in general?

（外語）讓我自己快速翻譯一下。我們如何真正地圍繞和分配零售業務的多個支柱，最重要的是，在更高質量、更優質的服務與一般更謹慎的價格商品之間保持平衡？

[Interpreted] And let me don't go to too much detail with the algorithm. I want to share with you where are our traffic fields that our traffic field includes our main site of our JD's app and our Jingxi's app and our channels on WeChat and a lot of our offline sales networks and all these different fields are facing different kinds of our customers. The structures are different.

[解釋] 並且讓我不要對算法進行過多的詳細介紹。我想給大家分享一下我們的流量場在哪，我們的流量場包括我們京東的主站，我們京西的app，還有我們微信的渠道，還有我們很多的線下銷售網絡，這些不同的領域都面臨著不同的類型。我們的顧客。結構不同。

And secondly, I want to say that on our site, our main site, there are different channels and different programs and providing price treatment or category-driven or diversified offerings to different groups of consumers. So this program is also targeted to meet the demand of users who are more sensitive with prices and to definitely for our existing high volume users in the first tier and the second tier cities, they can also navigate their way to go to the other channels and pages.

其次，我想說的是，在我們的網站上，我們的主要網站上，有不同的渠道和不同的程序，並為不同的消費者群體提供價格處理或類別驅動或多樣化的產品。所以這個方案也是為了滿足對價格比較敏感的用戶的需求，當然對於我們現有的一二線城市的高流量用戶，他們也可以導航到其他渠道，頁。

So at the same time, I think the search suggestion function is playing a big role in these aspects. And for now, we are doing a lot to revamp our algorithm to make sure it's in a fair way and then to target different groups of customers with their different preferences to recommend them with the product. Some may prefer price, some may prefer other things.

所以同時，我覺得搜索建議功能在這些方面起到了很大的作用。目前，我們正在做很多工作來改進我們的算法以確保它以公平的方式進行，然後針對具有不同偏好的不同客戶群體向他們推薦產品。有些人可能更喜歡價格，有些人可能更喜歡其他東西。

So the algorithm will be more targeted. Of course, there are some challenging internally for us to do all this overhaul. But through the years of our cumulative, and technically and technologically we are ready for that. And what's more important for our shift on this move is to shift our concept to double down our ideas to serve the consumers, especially given the size of JD.com with nearly 600 million users on our platform, we would like to shift our attention more to better serve our consumers. Thank you.

所以算法會更有針對性。當然，對我們來說，要進行所有這些大修，內部存在一些挑戰。但是通過我們多年的積累，在技術上和技術上，我們已經為此做好了準備。更重要的是我們轉變觀念，將我們的想法加倍服務於消費者，特別是考慮到京東在我們平台上擁有近 6 億用戶的規模，我們希望更多地轉移我們的注意力更好地服務於我們的消費者。謝謝。

The next question is from Alicia Yap of Citigroup.

下一個問題來自花旗集團的 Alicia Yap。

(foreign language) My question is related to the on-demand retail business. If this business actually continued to grow very quickly, can management share a little bit in terms of the current GMV contribution because if it's growing faster, would that actually be diluted our 1P revenue growth to some extent?

（外語）我的問題與按需零售業務有關。如果這項業務實際上繼續快速增長，管理層能否就當前的 GMV 貢獻分享一點，因為如果增長更快，這實際上會在某種程度上稀釋我們的 1P 收入增長嗎？

Thanks, Alicia, for your question. I believe at this stage, the intra-city on-demand sales is still a very small percentage of our total GMV for JD Group. If we look at a longer time period, I wouldn't think this business will dilute the impact of our 1P business because really, they are providing our customers very different shopping experiences.

艾麗西亞，謝謝你的問題。我相信現階段，同城按需銷售在京東集團的總 GMV 中所佔的比例仍然很小。如果我們看更長的時間，我認為這項業務不會削弱我們 1P 業務的影響，因為它們確實為我們的客戶提供了截然不同的購物體驗。

So the reason for us to expand to this business model was because we realized that some of our customers, they do have the on-demand shopping requirements even though this business model may not be as efficient as our traditional B2C e-commerce business model in terms of financial model. That means once comparing the price, the value for many products, so the pricing may not be as great as our B2C business model.

所以我們擴展到這種商業模式的原因是因為我們意識到我們的一些客戶，他們確實有按需購物需求，儘管這種商業模式可能不如我們傳統的 B2C 電子商務商業模式高效財務模型方面。這意味著一旦比較價格，許多產品的價值，所以定價可能不如我們的 B2C 商業模式。

But when the users, they do have this immediate purchase request, then we can also satisfy their shopping demand. So really, it's to improve our customers' shopping experience. So in terms of competitiveness of our 1P business model, I still believe our 1P business model, because of the scale of the economy, we have very unique and very strong competitive advantage in terms of the lower cost, lower fulfillment cost. Thank you.

但是當用戶，他們確實有這種即時的購買需求，那麼我們也可以滿足他們的購物需求。所以真的，這是為了改善我們客戶的購物體驗。所以就我們1P商業模式的競爭力而言，我仍然相信我們的1P商業模式，因為經濟規模，我們在更低的成本，更低的履行成本方面具有非常獨特和非常強大的競爭優勢。謝謝。

[Interpreted] I want to ask that when we consider entering a market, it's not purely dependent on its growth rate. We will be phasing out the demand of our users. We do see there are on-demand shopping users and shopping demand on the platform. If we jump through that, this will be a lot like an insufficient service base from JD.

【解讀】我想問的是，我們在考慮進入一個市場的時候，並不是單純的看它的增長率。我們將逐步淘汰用戶的需求。我們確實看到平台上有按需購物用戶和購物需求。如果我們跳過那個，這很像京東的服務基礎不足。

And also, when we talk to our brand partners, we also received their demand to work with JD to help them to optimize their business based on on-demand business model and leveraging JD's platform, our user base and our big data, et cetera, to provide them better support on the marketing side and the efficiency of our product supply.

而且，當我們與我們的品牌合作夥伴交談時，我們也收到了他們與京東合作的需求，幫助他們基於按需業務模型並利用京東的平台、我們的用戶群和我們的大數據等來優化他們的業務，在營銷方面為他們提供更好的支持，並提高我們產品供應的效率。

And just thirdly, from our supply chain perspective, as we know, that JD has a very strong B2C 1P model for supply chain, and we do a good job on it. But with the time goes by, we are diversifying our supply chain models including our warehouse at the production zones and more.

第三，從我們的供應鏈角度來看，正如我們所知，京東擁有非常強大的 B2C 1P 供應鏈模型，我們在這方面做得很好。但隨著時間的推移，我們正在使我們的供應鏈模式多樣化，包括我們在生產區的倉庫等等。

And for the on-demand retail, it's new type of supply chain, and we believe this is the necessary thing we need to do. And this is our criteria when we decide whether we want to do this business model and whether we need to step up efforts on this model.

對於按需零售，這是一種新型的供應鏈，我們相信這是我們需要做的必要事情。這是我們決定是否要做這個商業模式，是否需要在這個模式上加大力度的標準。

And here, I just want to repeat again, even though the 3 (inaudible) I mentioned above and (inaudible), we still go back to the point I mentioned in my remarks at the beginning of the call, we will still consider if this business model has a good -- can improve cost and efficiency and good for user experience. In terms of user experience, whether we can provide differentiated service base in terms of price, products and services. So by meeting all these criteria, we will make our position to enter this market.

在這裡，我只想再次重複，即使我上面提到的 3（聽不清）和（聽不清），我們仍然回到我在電話會議開始時的發言中提到的那一點，我們仍然會考慮是否這商業模式有一個好處——可以提高成本和效率，有利於用戶體驗。在用戶體驗方面，能否在價格、產品、服務等方面提供差異化的服務基礎。因此，通過滿足所有這些標準，我們將進入這個市場。

Okay. Next question, please.

好的。請下一個問題。

The next question is from Thomas Chong of Jefferies.

下一個問題來自 Jefferies 的 Thomas Chong。

(foreign language) My question is more about the future competitive landscape. Given that we have been seeing our peers are also spending aggressively recently in a different sort of a marketing campaign, I just want to get a sense about from our strategic perspective, will we also step up our marketing spending if our competitors are spending aggressively? Or will we still stick to our balanced approach on top line and profitability? I just want to get a sense on how we should think about our growth strategies in light of the dynamic landscape?

（外語）我的問題更多是關於未來的競爭格局。鑑於我們最近看到我們的同行也在不同類型的營銷活動中大舉支出，我只想從我們的戰略角度了解一下，如果我們的競爭對手大舉支出，我們是否也會加大營銷支出？還是我們仍會堅持在收入和盈利能力方面保持平衡？我只是想了解一下我們應該如何根據動態景觀來考慮我們的增長戰略？

[Interpreted] I'll try to answer your question. Some part of your question is not very clear. So I just want to share that on the differentiator of JD's business model exists in our scalable supply chain and the certainties we can provide in the products supply chain.

[解釋] 我會盡量回答你的問題。你的問題的某些部分不是很清楚。所以我只想分享京東商業模式的差異化因素存在於我們可擴展的供應鏈中，以及我們可以在產品供應鏈中提供的確定性。

And we have been building -- develop our core capabilities on supply chain and users experience and provide more certain and a quality shopping experience. By quality I mean overall quality of shopping with JD.com. So we see a relatively lower ratio of users coming to our platform to do this kind of like impulsive shopping and most of our users comes here to do flash shopping or shop for their family.

我們一直在建設 - 發展我們在供應鍊和用戶體驗方面的核心能力，並提供更加確定和優質的購物體驗。我所說的質量是指在京東購物的整體質量。所以我們看到來我們平台進行這種衝動購物的用戶比例相對較低，我們的大多數用戶來這裡是為了閃購或為他們的家人購物。

And so with JD per se, we are now traffic-driven e-commerce company. And in essence, we are a company based on our whole categories, and we are transforming to a great (inaudible) that will be developed based on running our users on our platform and to enhance the overall -- their life cycle value on our platform.

因此，就京東本身而言，我們現在是流量驅動的電子商務公司。從本質上講，我們是一家基於我們整個類別的公司，我們正在轉型為一個偉大的（聽不清），它將基於在我們的平台上運行我們的用戶而發展，並提升整體——他們在我們平台上的生命週期價值.

So I believe at different times in economic and consumption cycles, different companies of different models will review their different values. For JD's business model besides our business will take a long-term view and then heavier in terms of our investment in logistics and users experience.

所以我相信在經濟周期和消費周期的不同時期，不同模式的不同公司會重新審視自己不同的價值觀。對於京東的商業模式，除了我們的業務會放眼長遠，然後在物流和用戶體驗方面的投入會更重。

And while we face external competition, we are confident that we have been growing and being better with internal funding and other operating efficiency continue to grow, the market competitions will always be there. The more important question is what is your long-term goal, and how you can do this business smartly in the short term.

在我們面臨外部競爭的同時，我們有信心隨著內部資金和其他運營效率的不斷提高，我們一直在成長並變得更好，市場競爭將永遠存在。更重要的問題是你的長期目標是什麼，以及如何在短期內聰明地做這個生意。

We are now approaching the end of the conference call. I will now turn the call over to JD.com's Sean Zhang for closing remarks.

我們現在接近電話會議的尾聲。我現在將把電話轉給京東的 Sean Zhang 作結束語。

Sure. Thank you for joining us on the call today and for your questions. If you have further questions, please contact me and our team. We appreciate your interest in JD.com and really looking forward to talking to you again next quarter. Thank you very much.

當然。感謝您今天加入我們的電話會議並提出您的問題。如果您還有其他問題，請聯繫我和我們的團隊。我們感謝您對京東的關注，並期待下個季度再次與您交談。非常感謝。

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.

感謝您參加今天的會議。介紹到此結束。您現在可以斷開連接。再會。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此記錄中標記為 [已翻譯] 的部分由現場通話中的口譯員說出。]