京東 (JD) 2023 Q3 法說會逐字稿

Hello, and thank you for standing by for JD.com's Third Quarter 2023 Earnings Conference Call. (Operator Instructions) Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang, Director of Investor Relations. Please go ahead.

您好，感謝您出席京東 2023 年第三季財報電話會議。 （操作員指示）今天的會議正在錄音。如果您有任何異議，您可以此時斷開連接。現在我想將會議交給今天會議的東道主，投資者關係總監張肖恩。請繼續。

Thank you, operator. Good day, everyone. Welcome to JD.com Third Quarter 2023 Earnings Conference Call. For today's call, CEO of JD.com; Ms. Sandy Xu will start with her opening remarks, and our CFO, Ms. Ian Shan, will discuss the financial results. After that, we'll open the call to questions from analysts. Let me quickly cover the safe harbor. Please be reminded that during this call, our comments and responses to your questions reflect management's view as of today only and will include forward-looking statements. Please refer to our latest safe harbor statement in the earnings press release on our IR website, which applies to this call. We'll discuss certain non-GAAP financial measures. Please also refer to the reconciliation of non-GAAP measures to comparable GAAP measures in the earnings press release. Also, please note, all figures mentioned in this call are in RMB, unless otherwise stated. Now let me turn the call over to our CEO, Sandy.

謝謝你，接線生。今天是個好日子。歡迎參加京東 2023 年第三季財報電話會議。在今天的電話會議上，京東執行長； Sandy Xu 女士將首先致開幕詞，我們的財務長 Ian Shan 女士將討論財務表現。之後，我們將開始接受分析師提問。讓我快速覆蓋安全港。請注意，在本次電話會議中，我們的評論和對您問題的答案僅反映管理層截至今天的觀點，並將包括前瞻性陳述。請參閱我們的投資者關係網站上的收益新聞稿中的最新安全港聲明，該聲明適用於本次電話會議。我們將討論某些非公認會計準則財務指標。另請參閱收益新聞稿中非公認會計準則衡量標準與可比較公認會計準則衡量標準的調節表。另請注意，除非另有說明，本次電話會議中提到的所有數字均以人民幣為單位。現在讓我將電話轉給我們的執行長桑迪。

Thanks, Shan. Hello, everyone, and thanks for joining us today to discuss our Q3 results. We continue to see business development across many of our operating and financial metrics, and we saw a robust performance for our Singles' Day Grand Promotion with double-digit order growth and many innovations. The successful promotion further amplified our efforts to bring lower cost, higher efficiency and superior customer experience to our customers and business partners. This is JD's operating philosophy, which we have been committed to since day 1. User experience is at the center of our operating philosophy and we have gone extra mile to further improve our user experience.

謝謝，珊。大家好，感謝您今天加入我們討論我們的第三季業績。我們繼續看到許多營運和財務指標的業務發展，我們的雙十一大促銷表現強勁，訂單增長兩位數，並有許多創新。這次成功的推廣進一步增強了我們為客戶和業務合作夥伴帶來更低的成本、更高的效率和卓越的客戶體驗的努力。這是京東的營運理念，我們從第一天起就一直致力於這個理念。使用者體驗是我們營運理念的核心，我們付出了更多的努力來進一步改善我們的使用者體驗。

Let me share some recent highlights. In Q3, we expanded free shipping coverage for our users by leveraging our improved logistics capabilities. We lowered the minimum order value for free shipping services from RMB 99 to RMB 59 for all users and offered JD Plus numbers unlimited free shipping for 1P products. As always, JD.com customers will continue to enjoy our premium so-called (inaudible) same and next-day delivery services. JD's live streaming sessions hosted by our own category managers proved very popular with users and brands during our Singles' Day promotion.

讓我分享一些最近的亮點。第三季度，我們利用改進的物流能力擴大了用戶的免費送貨覆蓋範圍。我們將所有用戶的包郵服務最低訂單金額從 99 元降低到 59 元，並為 JD Plus 號碼提供 1P 產品無限量包郵。像往常一樣，京東客戶將繼續享受我們優質的所謂（聽不清楚）當日達和隔天達服務。事實證明，在雙十一促銷期間，由我們自己的品類經理主持的京東直播會議非常受用戶和品牌的歡迎。

What's unique about JD's live streaming is that not only are the category managers, the experts for the products they bring to the show. They are also empowered by JD's supply chain capabilities, and they don't charge any additional commission fees. This means that we can bring a great selection of products to our users at excellent prices.

京東直播的獨特之處在於，不僅是品類經理，他們帶來的產品也是專家。他們還擁有京東的供應鏈能力，並且不收取任何額外的佣金費用。這意味著我們可以以優惠的價格為用戶提供多種產品選擇。

Customers and brands have embraced this new live streaming format as they benefit from the streamlined cost structure and superior value. As a result, our live streaming sessions hosted by category managers attracted over 380 million viewers in total during the promotion period. We also stepped up our after sale customer service by increasing the coverage of our industry-leading instant refund and one click for best price guaranteed services. (foreign language) both of which are increasingly resonating with our users. All these efforts to improve our customer service quality and user experience have been reflected in higher user engagement as we saw an accelerated growth of user order frequency in Q3 compared to the past 6 quarters.

客戶和品牌已經接受了這種新的直播格式，因為他們受益於簡化的成本結構和卓越的價值。因此，在促銷期間，由品類經理主持的直播活動總共吸引了超過 3.8 億觀眾。我們還透過擴大業界領先的即時退款和一鍵獲得最優惠價格保證服務的覆蓋範圍來加強售後服務。 （外語）這兩者都越來越引起我們用戶的共鳴。所有這些提高客戶服務品質和用戶體驗的努力都體現在更高的用戶參與度上，與過去 6 個季度相比，第三季度用戶訂單頻率加速成長。

Beyond the recent efforts to improve user experience, we are very focused this year on investing in long-term key capabilities to drive sustainable growth, namely our strategy is to build a differentiated platform ecosystem and improve everyday low price or EDLP mindshare. I would like to spend some time to share with you our thinking on why this is the right direction for JD and on the progress we have made.

除了最近改善用戶體驗的努力之外，我們今年非常注重投資於長期關鍵能力以推動永續成長，即我們的策略是建立差異化的平台生態系統並提高日常低價或 EDLP 思維份額。我想花一些時間與大家分享我們對為什麼這對京東來說是正確的方向以及我們所取得的進展的想法。

Let me start with our platform ecosystem strategy. Providing the best-in-class user experience is at the heart of everything we do. Our platform ecosystem allows us -- allows us 1P and third-party business to grow in a complementary and sustainable manner and together serve our customers better by ensuring both 1P and 3P sellers, follow the same operating philosophy and can compete and thrive in a comprehensive platform ecosystem. JD is best able to provide consumers with a superior user experience. As such, we never drive one business model at the cost of the other.

讓我從我們的平台生態系統策略開始。提供一流的使用者體驗是我們所做一切的核心。我們的平台生態系統使我們能夠讓1P 和第三方業務以互補和可持續的方式發展，並透過確保1P 和3P 賣家遵循相同的營運理念，能夠在全面的競爭和發展中共同更好地服務我們的客戶。平台生態系統。京東最有能力為消費者提供卓越的使用者體驗。因此，我們絕不會以犧牲另一種商業模式為代價來推動一種商業模式。

On the 1P side, JD's leading supply chain capabilities and scale advantages provide users high-quality products at competitive prices and greater customer experience. This will always be a key offering and differentiator for JD and our 3P marketplace gives us the flexibility to expand into new product categories where it is difficult to achieve the same level of efficiency we have under our 1P model.

在1P方面，京東領先的供應鏈能力和規模優勢為使用者提供高品質的產品、有競爭力的價格和更好的客戶體驗。這始終是京東的關鍵產品和差異化因素，我們的 3P 市場使我們能夠靈活地擴展到新產品類別，而在這些產品類別中，我們很難達到 1P 模式下的相同效率水平。

So in the face of consumers' rapidly evolving demand and increased price sensitivity, our 3P marketplace allows us to efficiently serve customers with a diverse selection. What is our approach? The essence of what we are doing to build our platform ecosystem can be summarized in the following key steps. In addition to our 1P suppliers, it's equally important to encourage our 3P merchants to embrace and adhere to the same operating philosophy that we have been committed to over the last 20 years.

因此，面對消費者快速變化的需求和日益增長的價格敏感度，我們的 3P 市場使我們能夠透過多樣化的選擇有效地為客戶服務。我們的方法是什麼？我們建構平台生態系統的本質可以概括為以下關鍵步驟。除了我們的 1P 供應商之外，鼓勵我們的 3P 商家接受並堅持我們過去 20 年來一直致力於的相同經營理念也同樣重要。

To do this, we are investing tremendous efforts to improve our platform ecosystem, including traffic allocation, algorithm, operating tools and infrastructure to encourage and empower the 3P merchants. We're setting clear rules and stepping up our platform governance efforts to enhance risk management. On top of this, we are working to ensure that positive behaviors of 3P merchants are rewarded.

為此，我們投入巨大的努力來完善我們的平台生態系統，包括流量分配、演算法、營運工具和基礎設施，以鼓勵和賦能3P商家。我們正在製定明確的規則並​​加強平台治理工作，以加強風險管理。除此之外，我們正在努力確保 3P 商家的正向行為得到獎勵。

The main goal is to incentivize 3P merchants to follow our operating philosophy and align their performance with our commitment to improving user experience. For example, we have established a scoring system based on the key elements underpinning our operating philosophy, including price competitiveness, product and service quality as well as store rating.

主要目標是激勵3P商家遵循我們的經營理念，並使他們的績效與我們改善使用者體驗的承諾保持一致。例如，我們根據支撐我們經營理念的關鍵要素建立了評分系統，包括價格競爭力、產品和服務品質以及商店評級。

The score system applies to both our 1P and 3P merchants in a fair and transparent way, and merchants are able to review and track their scores across different aspects. We then embed these scores in our traffic distribution algorithm to create a virtuous cycle. We continue to strengthen our 1P business model in the areas where it generates higher efficiency and deliver better user experience.

評分系統公平透明地適用於我們的1P和3P商戶，商家可以從不同方面審查和追蹤他們的評分。然後，我們將這些分數嵌入到我們的流量分配演算法中，以建立良性循環。我們持續加強我們的 1P 業務模式，以提高效率並提供更好的使用者體驗。

At the end of the day, it is the choice of our users to pick either 1P or 3P. I want to reiterate that we will not drive 3P development at the cost of our 1P business. What we do is to create a platform ecosystem that enables both 1P and 3P to compete on (inaudible) ground and better serve our customers.

歸根結底，選擇 1P 或 3P 取決於我們的用戶。我想重申，我們不會以犧牲1P業務為代價來推動3P發展。我們所做的是創建一個平台生態系統，使 1P 和 3P 能夠在（聽不清楚）地面上競爭並更好地為我們的客戶服務。

Looking to how we track and measure our progress. To evaluate the long-term success of our platform ecosystem, we look at a set of key operating metrics. We were encouraged by the continued rapid growth of active 3P merchants and growth of 3P orders and active users who purchased from our 3P merchants in Q3, even though 3P monetization is not our priority in the near-term, we have been delighted to see continued double-digit growth in 3P advertising revenue, especially driven by the improving engagement of new merchants on JD's platform.

了解我們如何追蹤和衡量我們的進展。為了評估我們平台生態系統的長期成功，我們查看了一組關鍵營運指標。我們對第三季活躍 3P 商家的持續快速成長以及 3P 訂單和從 3P 商家購買的活躍用戶的成長感到鼓舞，儘管 3P 貨幣化不是我們近期的首要任務，但我們很高興看到持續成長3P 廣告收入實現兩位數成長，尤其是在京東平台上新商家參與度提高的推動下。

On 1P side, we were happy to see improved user experience as evidenced by increased users' NPS. Building this unique platform ecosystem is a long-term commitment and we are still at the early stage of realizing its potential. We believe the set of operating metrics are moving in the right direction. We are determined to continue our efforts to strengthen our capabilities and build our unique platform ecosystem. Now let me continue to elaborate on the thinking behind our efforts this year to improve our EDLP mindshare.

在 1P 方面，我們很高興看到用戶體驗得到改善，用戶 NPS 的增加證明了這一點。建立這個獨特的平台生態系統是一項長期承諾，我們仍處於實現其潛力的早期階段。我們相信這組營運指標正在朝著正確的方向發展。我們決心繼續努力增強我們的能力，打造我們獨特的平台生態系統。現在讓我繼續詳細闡述我們今年為提高 EDLP 關注度所做的努力背後的想法。

First, what does low price mean in JD's case? At JD, low price means improving our price competitiveness across different product categories particularly the branded product and expanding selection for white label products to cover a wider range -- wider price range in order to show up what we lacked in the past. I want to clarify some of the market misunderstanding here.

首先，對京東而言，低價意味著什麼？在京東，低價意味著提高我們在不同產品類別（特別是品牌產品）上的價格競爭力，並擴大白標產品的選擇以覆蓋更廣泛的範圍——更廣泛的價格範圍，以顯示我們過去所缺乏的東西。我想在這裡澄清一些市場的誤解。

JD is not shifting our focus away from our core competency in branded products or serving the top tier market. On the contrary, we are further enhancing this strength by improving our price competitiveness. Also, will never allow any bad quality or counterfeit products on JD's platform while we provide low price. Our low-price commitment does not mean to pursue absolute low prices at the expense of other aspects of user experience, such as product quality and service. While we need to improve our price competitiveness. Price competitiveness is the most important value proposition for retail business and one of the most important pillars of JD's customer-centric philosophy. Our focus on price competitiveness drives us to continually strengthen our 1P supply chain capabilities, improve the efficiency and sharpen our abilities to foster prosperous platform ecosystem, where healthy competition among merchants and suppliers are encouraged.

京東並沒有將我們的注意力從我們在品牌產品或服務頂級市場的核心競爭力上轉移。相反，我們正在透過提高價格競爭力來進一步增強這一實力。另外，在我們提供低價的同時，也絕不允許任何劣質或仿冒品出現在京東的平台上。我們的低價承諾並不意味著為了追求絕對的低價而犧牲其他方面的使用者體驗，例如產品品質和服務。同時我們需要提高我們的價格競爭力。價格競爭力是零售業務最重要的價值主張，也是京東以顧客為中心理念的最重要支柱之一。我們對價格競爭力的關注促使我們持續增強1P供應鏈能力，提高效率，並增強我們的能力，以培育繁榮的平台生態系統，鼓勵商家和供應商之間的良性競爭。

All these drive better user experience which is key to our long-term success. Both our 1P and 3P marketplace play a critical role in this. In our 1P retail business, we are relentlessly driving down costs improving operating efficiency along our supply chain through technology and scale and passing on the efficiency gains to our customers. This is a sustainable way to ensure price competitiveness and enable us to fulfill our commitment of offering EDLP for our great products and service. A key part of our low price strategy is focused on 1P retail business, especially on branded products. To supplement this, -- on the 3P side, we aim to onboard merchants that offer diverse product selections covering a wider price range. Merchants are rewarded for offering low prices, great selection and good services to our customers based on the positive traffic feedback mechanism that we are building.

所有這些都帶來了更好的使用者體驗，這是我們長期成功的關鍵。我們的 1P 和 3P 市場在這方面都發揮著關鍵作用。在我們的 1P 零售業務中，我們不斷降低成本，透過技術和規模提高供應鏈的營運效率，並將效率收益傳遞給我們的客戶。這是一種可持續的方式，可確保價格競爭力，並使我們能夠履行為我們的優質產品和服務提供 EDLP 的承諾。我們低價策略的關鍵部分是專注於1P零售業務，尤其是品牌產品。為了補充這一點，在 3P 方面，我們的目標是讓商家能夠提供涵蓋更廣泛價格範圍的多樣化產品選擇。基於我們正在建立的流量正回饋機制，商家因向客戶提供低廉的價格、豐富的選擇和良好的服務而獲得獎勵。

Since the beginning of this year, we have launched a series of new initiatives to enhance our value creation for customers. Our category manager like live streaming during the Singles' Day promotion was a good example. Another example is that we continue to enrich the value for many selection of 3P products within our $10 billion discount program, and we saw 3P GMV contribution to the total of this program increased to over 50% in Q3. And lastly, how to track and measure our progress on low price or EDLP mindshare building. We check the trend of key customer metrics, including customer NPS and engagement while the structural change in NPS may take longer time to shape. We are seeing strong early progress in user engagement as evidenced by the double-digit growth of order volume and ARPU of users from lower-tier markets. We also note that growth of low ticket size orders accelerated and outpaced the total order growth in Q3.

今年以來，我們推出了一系列新舉措，增強為客戶創造價值。我們的品類經理喜歡雙十一促銷期間的直播就是一個很好的例子。另一個例子是，我們在100億美元折扣計劃中繼續豐富了許多3P產品選擇的價值，我們看到3P對整個計劃的GMV貢獻在第三季度增加到了50%以上。最後，如何追蹤和衡量我們在低價或 EDLP 意識份額建設方面的進展。我們檢視關鍵客戶指標的趨勢，包括客戶 NPS 和參與度，而 NPS 的結構性變化可能需要更長的時間才能形成。我們看到用戶參與度方面取得了強勁的早期進展，來自低線市場的用戶訂單量和 ARPU 呈兩位數增長就證明了這一點。我們還注意到，第三季小批量訂單的成長加速並超過了總訂單的成長。

All these are strong testaments to our early progress in EDLP mindshare building. We look forward to sharing more with you on the progress of our key initiatives in coming quarters, and we look ahead to the future. We will continue to adhere to our operating philosophy and execute our strategy to provide the best customer experience. We believe it will guide us to achieve a high-quality sustainable growth and win-win value creation for our users, business partners, shareholders and the society at large. With that, I will turn it over to Ian for our financial highlights. Thank you.

所有這些都有力地證明了我們在 EDLP 意識份額建設方面取得的早期進展。我們期待與您分享更多關於未來幾季我們關鍵舉措的進展情況，並展望未來。我們將繼續堅持我們的經營理念並執行我們的策略，以提供最佳的客戶體驗。我們相信，它將引領我們實現高品質永續成長，為用戶、合作夥伴、股東和社會創造共贏的價值。至此，我將把它交給伊恩來了解我們的財務要點。謝謝。

Thank you, Sandy, and hello, everyone. In the third quarter, we delivered a stable top line performance, facing a mix of gradual macro recovery, seasonality and a high base while we continued our proactive strategic refocus. Our bottom line maintained healthy momentum with non-GAAP net margin hitting all-time high which enabled us to invest in user experience in a sustainable way.

謝謝你，桑迪，大家好。第三季度，我們在繼續主動調整策略重點的同時，面臨著宏觀逐步復甦、季節性和高基數等因素的影響，實現了穩定的營收業績。我們的利潤保持了健康的勢頭，非公認會計準則淨利潤率創下歷史新高，這使我們能夠以可持續的方式投資於用戶體驗。

As Sandy mentioned, we saw improvement across many of our operating metrics, and we are on the right path to strengthen our core capabilities, enhance price competitiveness and build a platform that allows both 1P and 3P to better serve our users even though these efforts may not be fully reflected in the short-term financial results.

正如Sandy 所提到的，我們看到了許多營運指標的改善，並且我們正走在增強核心能力、增強價格競爭力並建立一個允許1P 和3P 更好地服務我們用戶的平台的正確道路上，儘管這些努力可能會影響我們的業務。未能充分反映在短期財務表現。

With that, let me turn to our Q3 financial performance. Our net revenues grew by 2% year-on-year to RMB 248 billion in Q3. Breaking down the revenue mix, product revenues were down by 0.9% year-on-year. By category, electronics and home appliances revenue was flat year-on-year, primarily due to seasonality and a high base from last year. That said, this category continues to outpace the industry in Q3 and in the first 9 months this year. Once again, it shows our strong user mindshare and robust supply chain with industry-leading service capabilities.

接下來，讓我談談我們第三季的財務表現。第三季我們的淨收入年增 2% 至人民幣 2,480 億元。從收入結構來看，產品收入較去年同期下降0.9%。按類別劃分，電子和家用電器收入較去年同期持平，主要是由於季節性因素和去年基數較高。儘管如此，該類別在第三季和今年前 9 個月繼續領先該行業。它再次展示了我們強大的用戶認知度和強大的供應鏈以及業界領先的服務能力。

General merchandise revenues were down 2% year-on-year in Q3 as the supermarket category is still recovering. The decline continued to narrow compared to the first 2 quarters this year and we started to see positive signs from supermarkets and fashion-related categories, such as increased order volume, higher user shopping frequency and higher product mix.

由於超市類別仍在復甦，第三季百貨收入年減 2%。與今年前兩個季度相比，降幅持續收窄，我們開始看到超市和時尚相關品類的正面跡象，例如訂單量增加、用戶購物頻率更高和產品組合更豐富。

Service revenue grew by 13% year-on-year in Q3 accounted for 21% of JD's total revenues. Within service revenue, marketplace and marketing revenues were up 3%. In particular, 3P advertising revenues once again recorded double-digit growth for the quarter, which was partially offset by the decline of 3P commission revenues. This is an expected short-term outcome and is in line with our platform strategy, under which we have rolled out a number of cost reduction measures and operating tools to support 3P merchants onboarding and operation.

第三季服務營收年增13%，佔京東總營收的21%。在服務收入中，市場和行銷收入成長了 3%。特別是，本季 3P 廣告收入再次錄得兩位數成長，但部分成長被 3P 佣金收入下降所抵銷。這是預期的短期結果，也符合我們的平台策略，根據該策略，我們推出了一系列降低成本的措施和營運工具來支援3P商家的入駐和營運。

This strategy has produced early results as we have saw substantial expansion of active 3P merchant base in the quarter. At the same time, we are also deploying a more effective traffic allocation mechanism for both 1P and 3P to ensure better user experience and the healthy development of our platform.

這項策略已初見成效，我們看到本季活躍 3P 商家群體大幅擴張。同時，我們也在1P和3P方面部署更有效的流量分配機制，確保更好的使用者體驗和平台的健康發展。

Turning back to our service revenues. Logistics and other service revenues grew by 19% year-on-year in Q3.

回到我們的服務收入。第三季物流及其他服務收入年增19%。

Now let me turn to our segment performance. JD Retail revenues increased by 0.1% year-on-year in the quarter as we continue to see headwinds on our short-term financial results from our strategic refocus. We know that our core business group has maintained a healthy momentum as evidenced by the continued expansion of JD Retail's profitability. Both gross margin and fulfilled gross margin increased to record highs in Q3 despite our investment in low prices and user experience, such as expanded free shipping service. This shows that our low price offerings are enabled by our supply chain capabilities and healthy development of our platform instead of only by subsidies.

現在讓我談談我們的細分市場表現。京東零售本季營收年增 0.1%，因為我們持續看到策略重心調整對短期財務表現的不利影響。我們知道，我們的核心業務集團保持了健康的發展勢頭，京東零售獲利能力的持續擴張就證明了這一點。儘管我們在低價和用戶體驗方面進行了投資，例如擴大免費送貨服務，但第三季的毛利率和實際毛利率均創下歷史新高。這表明我們的低價產品是由我們的供應鏈能力和平台的健康發展來實現的，而不僅僅是補貼。

JD Retail's non-GAAP operating margin came in at 5.2%, largely flat year-on-year as we continue to invest in improving user experience to encourage stronger user engagement, and this will help our long-term sustainable growth. We also saw encouraging trends in user shopping behavior in the quarter.

京東零售的非公認會計準則營業利潤率為 5.2%，年比基本持平，因為我們繼續投資改善用戶體驗以鼓勵更強的用戶參與度，這將有助於我們的長期可持續增長。我們也看到本季用戶購物行為的令人鼓舞的趨勢。

JD Plus members maintained a double-digit growth, and the group continued to show high loyalty and strong spending power. The annual ARPU was 8x of that of non-Plus members in Q3. JD Logistics saw a 16% revenue growth year-on-year in Q3, driven by the acceleration of both internal and external revenues. External revenues accounted for 72% of revenues in Q3. In terms of profitability, JDL's non-GAAP operating margin was 0.7% in the quarter, same as last year.

京東Plus會員維持兩位數成長，族群持續展現高忠誠度和強勁消費能力。第三季的年度 ARPU 是非 Plus 會員的 8 倍。受內部和外部營收加速推動，京東物流第三季營收年增16%。外部收入佔第三季營收的 72%。在獲利能力方面，JDL 本季非 GAAP 營運利潤率為 0.7%，與去年持平。

Dada reported revenues of RMB 2.9 billion, up 20% year-on-year, and non-GAAP operating loss of RMB 52 million for the quarter, a substantial narrow down of 83% compared to last year. This was driven by better operating efficiency and economies of scale. The on-demand retail is still an important pillar for JD. In the quarter, the number of offline stores that cooperate with Daojia and Shop Now expanded from around 300,000 to over 400,000, providing more than 2,000 cities and countries with on-demand retail services, covering a wide range of categories.

達達報告本季營收為人民幣 29 億元，年增 20%，非 GAAP 營運虧損為 5,200 萬元，較去年大幅收窄 83%。這是由更好的營運效率和規模經濟所推動的。按需零售仍然是京東的重要支柱。本季度，與到家、Shop Now合作的線下門市數量從約30萬家擴大至超過40萬家，為超過2000個城市和國家提供按需零售服務，品類覆蓋廣泛。

Lastly, revenues from new business were RMB 3.8 billion in Q3, down 24% year-on-year due to the scale back of our international business. New business operating loss was RMB 139 million in the quarter, a notable narrow down of 85% from an operating loss of RMB 953 million a year ago excluding the gain on disposals of JD properties assets in Q3 last year.

最後，由於國際業務規模萎縮，第三季新業務收入為38億元人民幣，較去年同期下降24%。本季新業務營運虧損為人民幣 1.39 億元，較去年同期的 9.53 億元營運虧損大幅收窄 85%，不包括去年第三季出售京東地產資產的收益。

Moving to the consolidated bottom line, we recorded RMB 10.6 billion non-GAAP net income attributable to ordinary shareholders in Q3, up 6% even off a high base in the same quarter last year. Non-GAAP net margin increased by 17 bps year-on-year to a new record of 4.3%. Finally, our LTM free cash flow as of end of September was RMB 39 billion, an increase of 18% from RMB 33 billion at the end of June and 52% from RMB 26 billion at the end of September last year.

談到合併利潤，我們第三季的非公認會計原則歸屬於普通股股東的淨利潤為 106 億元人民幣，即使比去年同期的高基數也增加了 6%。非 GAAP 淨利潤率年增 17 個基點，達到 4.3% 的新紀錄。最後，截至9月底，我們的長期自由現金流為390億元人民幣，較6月底的330億元成長18%，比去年9月底的260億元人民幣成長52%。

This was driven by our improved profitability and further optimize cash conversion cycle. By the end of Q3, our total cash balance including cash and cash equivalents, restricted cash and short-term investments added up to a total of RMB 250 billion. Excluding interest-bearing debt and accounts payables, our net cash balance was RMB 50 billion by the quarter end.

這是由於我們提高了獲利能力並進一步優化了現金週轉週期。截至三季末，包括現金及現金等價物、限制性現金及短期投資在內的現金餘額總計2,500億元。剔除帶息債務和應付帳款，截至季末，我們的淨現金餘額為 500 億元。

To conclude, we have seen a set of encouraging trends during the quarter, and we will continue to firmly execute our strategies on low prices and platform ecosystem to provide better user experience. This will position us for long-term sustainable growth. With that, I will turn it over to Sean. Thank you.

總而言之，我們在本季看到了一系列令人鼓舞的趨勢，我們將繼續堅定執行低價和平台生態系統的策略，以提供更好的用戶體驗。這將使我們能夠實現長期可持續成長。這樣，我就把它交給肖恩。謝謝。

Thank you, Ian. For the Q&A session, you are welcome to ask questions in Chinese or English. And our management will answer your questions in the language you asked. We will provide English translation with necessary for convenient purpose only. In the case of any discrepancy, please refer to our management statement in our original language. Operator, we can open the call for Q&A session.

謝謝你，伊恩。問答環節，歡迎您用中文或英文提問。我們的管理層將用您提出的語言回答您的問題。我們將僅出於方便目的提供必要的英文翻譯。如有任何差異，請參閱我們的原始語言管理聲明。接線生，我們可以發起問答環節了。

(Operator Instructions) The first question today comes from Thomas Chong with Jefferies.

（操作員說明）今天的第一個問題來自 Jefferies 的 Thomas Chong。

(foreign language)

（外語）

(foreign language)

（外語）

[Interpreted]

[解讀]

I will address most of the questions. As I mentioned earlier, the platform ecosystem has always been one of JD's key strategic focus, both from the corporate level and also JD Retail level and we are continuously refining to this distinct platform ecosystem. This aims to realize JD's value proposition and establish a unified business philosophy followed by both our 1P and 3P merchants, and we consistently enhancing platform infrastructure and tools to ensure that both 1P and 3P merchants on JD have ample resources and have better competition in the shared growth opportunity, ultimately delivering an enhanced user experience for all our customers.

我將回答大部分問題。正如我之前提到的，平台生態系統一直是京東的戰略重點之一，無論是從企業層面還是京東零售層面，我們都在不斷改進這個獨特的平台生態系統。此舉旨在實現京東的價值主張，建立統一的1P和3P商家遵循的經營理念，並不斷增強平台基礎設施和工具，以確保京東的1P和3P商家擁有充足的資源，並在共享市場中具有更好的競爭力。成長機會，最終為我們所有的客戶提供增強的使用者體驗。

(foreign language)

（外語）

[Interpreted] And throughout this year, we have streamlined the merchants onboarding processes, increase the support for our new merchants, especially small and medium-sized sellers and established clear (inaudible) provided more operational tools and witnessed a historic high in both total (inaudible). We are pleased to see that the number of total merchants maintaining a triple-digit growth rate notable (inaudible) significant in our 3P merchants in the categories of supermarkets, fashion and home goods. Additionally, the number of active merchants is accelerating with an increasing number of new merchants gradually finding effective operating strategies to operate on JD and empower their sales growth.

[解讀]今年以來，我們簡化了商家入駐流程，加大了對新商家特別是中小賣家的支援力度，並明確（聽不清）提供了更多的營運工具，並見證了總金額的歷史新高（聽不見）。我們很高興地看到，超市、時尚和家居品類的 3P 商家總數保持了三位數的成長率，這一點非常顯著（聽不清楚）。此外，活躍商家數量正在加速成長，越來越多的新商家逐漸找到有效的營運策略來營運京東並賦能其銷售成長。

(foreign language)

（外語）

[Interpreted] As I just mentioned in my script, while our ongoing investment in making support does not prioritize short-term 3P monetization. We have also observed a continued a double-digit growth in our 3P advertising revenues, thanks to our increasing engagement of new merchants.

[解讀] 正如我剛才在腳本中提到的，雖然我們在支援方面的持續投資並不優先考慮短期 3P 貨幣化。由於新商家的參與度不斷增加，我們的 3P 廣告收入也持續實現兩位數成長。

(foreign language)

（外語）

[Interpreted] And from the user base performance, we've received the positive feedback and the penetration rate of users shopping from 3P merchants continue to increase year-on-year and 3P order volume also achieved healthy year-on-year growth.

【解讀】而從用戶基數表現來看，我們得到了正面的回饋，3P商家購物的用戶滲透率同比持續提升，3P訂單量也實現同比良性增長。

(foreign language)

（外語）

[Interpreted] The platform ecosystem has, in the past 2 to 3 years, been our long-term investment direction. And building a unique -- we are aspired to building a unique digital ecosystem. This is an ongoing project. And still, we are in the early stage of this goal, and there's plenty of room for us to continue to improve our governance and the tools, our platform ecosystem. And we are also making our commitment to create a clearer growth path and a fair business environment for merchants promoting the mutual prosperity and the development of both 1P and 3P business.

【解讀】平台生態是我們過去2-3年的長期投資方向。並建立一個獨特的——我們渴望建立一個獨特的數位生態系統。這是一個正在進行的項目。儘管如此，我們仍處於這一目標的早期階段，我們還有足夠的空間繼續改進我們的治理和工具以及我們的平台生態系統。我們也致力於為商家創造更清晰的成長路徑和公平的商業環境，促進1P和3P業務的共同繁榮和發展。

(foreign language)

（外語）

[Interpreted] And regarding people want to shop for 1P over 3P, this will be a natural outcome of choices from our users. And as we see the gradual mature of our platform ecosystem, I think in the long run, the share of 3P orders and GMV will eventually surpass that of 1P, but of course, this will be an ongoing process.

【解讀】而對於人們想要購買1P而不是3P，這將是我們用戶選擇的自然結果。隨著我們看到我們的平台生態系統逐漸成熟，我認為從長遠來看，3P訂單和GMV的份額最終會超過1P，但當然，這將是一個持續的過程。

(foreign language)

（外語）

[Interpreted] So our core objective is to meet the diverse needs of different users through rich product supply, continuously enhancing our user experience. This will be one of our essential drivers for the sustained growth of our long-term revenue and profit.

【解讀】所以我們的核心目標就是透過豐富的產品供給來滿足不同使用者多樣化的需求，並不斷提升我們的使用者體驗。這將是我們長期收入和利潤持續成長的重要驅動力之一。

(foreign language)

（外語）

[Interpreted] Yes. And then to answer the second part of your question, we've announced today that Mr. Lijun Xin will leave the role of CEO of JD Retail for another appointment by the company. Mr. Xin assumed the role of CEO of JD Retail in September 2021, in (inaudible) involvement of external environment and industry he has led the team to successfully expand collaboration with business partners and strengthen user mindshare, making significant contribution to the business. We truly appreciate Mr. Xin's dedication, and I believe he will continue to play a vital role at other positions at JD.com.

[解釋] 是的。然後回答你問題的第二部分，我們今天宣布，辛立軍先生將辭去京東零售執行長一職，由公司重新任命。辛先生於2021年9月出任京東零售首席執行官，在（聽不清）外部環境和行業的參與下，他帶領團隊成功擴大了與商業夥伴的合作，增強了用戶的認知度，為業務做出了重大貢獻。我們衷心感謝辛先生的奉獻精神，相信他將繼續在京東的其他職位上發揮重要作用。

(foreign language)

（外語）

[Interpreted] And JD Retail is obviously, the very core business of JD and contributes to the highest proportion of our total revenue. It is also the cornerstone for us while exploring our diverse businesses. At this role, I will continue to drive the execution of retail strategies and strengthen synergies across business units.

【解讀】而京東零售顯然是京東最核心的業務，在我們總收入中佔比最高。這也是我們探索多元化業務的基石。在此職位上，我將繼續推動零售策略的執行並加強跨業務部門的協同效應。

(foreign language)

（外語）

[Interpreted] JD Retail strategies are set up by our Strategy Execution Committee, the CES -- SEC and are personally involved in the discussions and implementation of these strategies. So there will be no change to the JD Retail strategies.

【解讀】京東零售策略是由我們的策略執行委員會CES－SEC制定的，並親自參與這些策略的討論和實施。因此，京東零售策略不會改變。

Operator, can we have the next question?

接線員，我們可以問下一個問題嗎？

The next question comes from Ronald Keung with Goldman Sachs.

下一個問題來自高盛的薑羅納德 (Ronald Keung)。

(foreign language)

（外語）

[Interpreted] Okay. Let me briefly translate the question. Ronald wants to ask in terms of the strategy adjustment, KPI adjustment and team restructuring. After this adjustment, what you have seen in terms of core GMV growth trend? And how is your 3P business been trending? And the second question was, what's your basic assumption for macro and consumption for next year? And based on that, what is your strategy to maintain your core business or categories market share? And how do you balance between growth and profitability?

[解釋]好的。我簡單翻譯一下這個問題。 Ronald想問的是策略調整、KPI調整、團隊重組等面向。這次調整後，您在核心GMV成長趨勢上看到了什麼？您的 3P 業務趨勢如何？第二個問題是，您對明年宏觀和消費的基本假設是什麼？基於此，您維持核心業務或品類市場佔有率的策略是什麼？您如何平衡成長和獲利能力？

(foreign language)

（外語）

[Interpreted] Over the past 4 quarters, the growth rate of our core GMV has been significantly higher than the total retail sales of consumer goods. And in this quarter, our core GMV achieved a single-digit -- high single-digit growth, which was higher than total retail sales and the online retail sales of physical goods.

【解讀】過去4個季度，我們的核心GMV成長率明顯高於社會消費品零售總額成長速度。本季度，我們的核心GMV實現了個位數－高個位數成長，高於零售總額和實體商品網上零售額。

(foreign language)

（外語）

[Interpreted] So in the last quarter, we shared the rapid growth of the onboarded merchants. And we also witnessed accelerated expansion of active merchants in Q2 and Q3. At the same time, user shopping from 3P merchants grew faster than total users in the past 2 quarters.

【解讀】所以上個季度我們分享了進駐商家的快速成長。我們也見證了第二季和第三季活躍商戶的加速擴張。同時，過去兩季3P商家的用戶購物成長速度快於總用戶成長速度。

(foreign language)

（外語）

[Interpreted] We believe the current progress of the platform ecosystem is in line with our expectations. We're seeing more active user -- active merchants and more users. It takes time to convert them to 3P orders and the GMV growth.

【解讀】我們認為目前平台生態的進展符合我們的預期。我們看到更多的活躍用戶—活躍的商家和更多的用戶。將其轉換為3P訂單和GMV成長需要時間。

(foreign language)

（外語）

[Interpreted] So I still want to stress that we're committed to providing our users with more choices and cheaper prices through 3P. We are pursuing a sustainable and healthy ecosystem, allowing our 1P and 3P together to provide users with a better shopping experience.

【解讀】所以我還是要強調，我們致力於透過3P為我們的用戶提供更多的選擇和更便宜的價格。我們追求永續健康的生態系統，讓我們的1P和3P共同為使用者提供更好的購物體驗。

(foreign language)

（外語）

[Interpreted] And for the second part of the question, with the recovery of China, it's not the growth, though the speed is slower than we anticipate at the beginning of the year. And also at the same time, driven by those series of effective policies supporting consumption, employment, project enterprises and the property sector. We anticipate that consumer spending will continue to steadily recover next year and consumption will continue to become a major driver of economic growth.

[解讀]對於問題的第二部分，中國的復甦不是成長，儘管速度比我們年初預期的要慢。同時，在支持消費、就業、專案企業、房地產等一系列有效政策的推動下。我們預計明年居民消費將繼續穩定復甦，消費將繼續成為經濟成長的主要動力。

(foreign language)

（外語）

[Interpreted] So from the perspective of categories, for some categories that JD has advantage will have a bigger market share, such as home appliances and electronics categories. Our supply chain strength and enhanced user mindshare have enabled us to maintain growth rates surpassing the inventory level in the first 3 quarters of the year. And we continuously gain -- on these current categories, we continue to gain market share. At the same time, our focused investment in our core capabilities this year give us the confidence in continuing to acquire market share next year.

【解讀】所以從品類來看，對於一些京東有優勢的品類，會擁有更大的市場份額，例如家電、電子品類。我們的供應鏈實力和增強的用戶認知度使我們能夠在今年前三個季度保持超過庫存水準的成長率。我們不斷獲得——在當前的這些類別上，我們不斷獲得市場份額。同時，我們今年對核心能力的集中投資讓我們有信心明年繼續獲得市場份額。

(foreign language)

（外語）

[Interpreted] In the mobile phone and the 3C and electronics categories, we leveraged our supply chain advantages to continuously optimize cost efficiency and providing users with a diverse range of products and competitive prices and better services. So we also lead the trend of these categories -- industries by strengthening our offerings of new and trendy products.

【解讀】在手機、3C及電子品類，我們發揮供應鏈優勢，不斷優化成本效率，為用戶提供多元化的產品、有競爭力的價格和更優質的服務。因此，我們也透過加強新時尚產品的供應來引領這些類別（產業）的趨勢。

(foreign language)

（外語）

[Interpreted] And in the home appliances category, which is the category heavily relied on services, so we will further enhance our retail and service capabilities, both online and offline. So while we are promoting higher end and emerging products, we are also enhancing users' mindshare of high cost effectiveness of this category. Additionally, we are also making breakthroughs in our service capabilities in the home appliances category, such as trading in and one-stop assembly, delivery and installation services, all aiming to further elevate the users experience and stimulate consumer demand.

【解讀】而家電品類，是一個高度依賴服務的品類，所以我們會進一步提升線上線下的零售和服務能力。因此，我們在推廣高階和新興產品的同時，也增強使用者對此品類高性價比的認知度。此外，我們也在家電品類的服務能力上取得突破，如以舊換新、一站式組裝、送貨、安裝服務等，旨在進一步提升使用者體驗，刺激消費需求。

(foreign language)

（外語）

[Interpreted] So for our supermarket category, after our proactive efforts this year and the initiatives -- we have a series of initiatives, including the category of planning, warehouse network transformation and refined operations, et cetera. And all these initiatives has been making steady progress. And this category has -- we have seen a better momentum compared to the first half of the year. And we believe for the supermarket category and will return to a healthier growth trajectory next year. So this will also reaffirm our belief that the supermarket category will remain to be JD's most important growth driver in the long-term. And on this category, I would also want to remind you that it has benefited from last year's pandemic period, which gives it a very high base a year ahead.

【解讀】那麼我們超市品類，經過今年的積極努力和舉措——我們有一系列的舉措，包括品類規劃、倉網改造、精細化運營等等。所有這些舉措都在穩步取得進展。與今年上半年相比，這一類別的勢頭更好。我們相信超市類別明年將恢復到更健康的成長軌跡。因此，這也將再次堅定我們的信念，即超市品類仍將是京東長期最重要的成長動力。在這個類別上，我還想提醒大家，它受益於去年的大流行時期，這使其在未來一年擁有非常高的基數。

(foreign language)

（外語）

[Interpreted] So for 2024, we expect the impact of our proactive business optimization and adjustments will become less. So with the gradual recovery of the economy and the consumption and also the release of all these effects of JD's algorithms and all the other measures based on our supply chain, we continue to play out as the low-priced mindshare and also our platform ecosystem strategy will also gradually take root, we anticipate achieving a higher -- high-quality business growth next year.

【解讀】所以對於2024年，我們預期我們主動的業務優化和調整帶來的影響會變小。因此，隨著經濟和消費的逐步復甦，以及京東演算法和基於我們供應鏈的所有其他措施的所有這些效果的釋放，我們將繼續發揮低價思維和我們的平台生態系統策略也將逐步生根發芽，我們預計明年將實現更高、更高品質的業務成長。

(foreign language)

（外語）

[Interpreted] Throughout the strategic implementation process, we will strike a balance between growth and profitability. In the long-term, our profit improvement will come from the enhancement of our supply chain efficiency and the gradual improvement of the platform ecosystem. So our long-term goal of steadily increasing profit margins remain unchanged.

【解讀】在整個策略執行過程中，我們會在成長和獲利之間取得平衡。長期來看，我們的利潤提升將來自於供應鏈效率的提升與平台生態的逐步改善。因此，我們穩步提高利潤率的長期目標保持不變。

We are ready for the next analyst.

我們已經為下一位分析師做好了準備。

The next question comes from Charlene Liu with HSBC.

下一個問題來自匯豐銀行的劉夏琳。

(foreign language) The first question is about competition. So competition intensified in 2023, can you please kindly shed light on how you expect the competitive landscape to change in 2024? And how this would shape JD's strategy going forward? Will GMV and market share be the continued focus over profitability. Second part to my question is, given most structural adjustments are expected to complete by end 2023, on (inaudible) next year, how much growth can we expect for the overall company, retail and most specifically for FMCG in 2024? And what could drive the results to potentially surprise on the up or down side and why?

（外語）第一個問題是關於競爭的。那麼2023年的競爭會更加激烈，您能透露您預計2024年的競爭格局將如何變化嗎？這將如何影響京東的未來策略？ GMV 和市場佔有率是否會成為獲利能力的持續關注點？我的問題的第二部分是，鑑於大多數結構性調整預計將在 2023 年底前完成，即明年（聽不清楚），我們預計 2024 年整個公司、零售業，尤其是快速消費品將有多少成長？是什麼可能導致結果出現意外的上升或下降，為什麼？

(foreign language)

（外語）

[Interpreted]

[解讀]

So thanks to answer your first question. So currently, China's e-commerce market features various platforms and business models and for each platform, it has distinct characteristics.

謝謝你回答你的第一個問題。所以目前中國的電子商務市場平台多元、商業模式多樣，而且各平台又具有鮮明的特性。

(foreign language)

（外語）

[Interpreted] Though I might repeat myself many times. So here, I still want to share that for JD.com. We are constantly adhere to be supply chain-based and consumer-centric business model, building core capabilities around supply chain and user experience. We collaborate with our partners to create a to create a supply of high-quality and affordable goods to precisely match suitable users and provide ultimate shopping experience and earn user trust. So this business model has created value and (inaudible) outcomes for consumers, business partners and the society at large. It is designed to be the most resilient and sustainable business model capable of navigating different economic cycles.

[解釋]雖然我可能會重複很多次。所以在這裡我還是想跟京東分享一下。我們始終堅持以供應鏈為基礎、以消費者為中心的商業模式，圍繞著供應鏈和使用者體驗打造核心能力。我們與合作夥伴共同打造物美價廉的商品供應，精準搭配合適的用戶，提供極致的購物體驗，贏得用戶的信任。因此，這種商業模式為消費者、商業夥伴和整個社會創造了價值和（聽不清楚）成果。它旨在成為能夠適應不同經濟週期的最具彈性和可持續的商業模式。

(foreign language)

（外語）

[Interpreted] So in terms of the competition of the retail markets, the competition in this industry has always been here. Actually, there's another saying about it's like, more fear or less fear is always the competition here. So for retailers, we've observed that for this industry, many players this year has been focused on enhancing users experience and also refining operational and sustainable development strategies. So yes, so -- always, there's competition. And this year, you might feel this is intensified.

【解讀】所以從零售市場的競爭來說，這個產業的競爭一直都在。事實上，還有另一種說法，那就是，更多的恐懼或更少的恐懼永遠是這裡的競爭。那麼對於零售商來說，我們觀察到，對於這個產業來說，今年許多參與者都專注於提升使用者體驗，同時也完善了營運和永續發展策略。所以是的，所以——競爭總是存在的。今年，你可能會覺得這種情況更加嚴重。

(foreign language)

（外語）

[Interpreted] So amid these competitions, you can see that these platforms, their profit margins have not been significantly impacted. We believe this is mainly attributed to the way for each platform to implement their business strategy and business models. So for JD.com, we don't stare at others. We continue to believe that our core strategy is to improve our supply chain efficiency through technology and the economy of scale. And we would like to use these capabilities to be able to share the actual profit brought by efficiency improvements to our partners and users, which includes improving user experience. So in another words, the user experience improvement is not built on sacrificing our reasonable profit margins and shareholder interests.

【解讀】所以在這些競爭中，大家可以看到這些平台，他們的利潤率並沒有受到太大的影響。我們認為這主要歸因於每個平台實施其業務策略和商業模式的方式。所以對京東來說，我們不會盯著別人看。我們仍然相信，我們的核心策略是透過技術和規模經濟來提高供應鏈效率。我們希望利用這些能力能夠將效率提升帶來的實際利潤分享給我們的合作夥伴和用戶，其中包括改善用戶體驗。所以換句話說，使用者體驗的改善並不是建立在犧牲我們合理的利潤率和股東利益的基礎上的。

(foreign language)

（外語）

[Interpreted] So we believe this should be a virtuous business cycle with a better user experience and drive more traffic. And with more traffic, there's more sales opportunities and generate more profit margins. And with the margins, we can further reinvest into improve our user experience.

【解讀】所以我們認為這應該是一個良性的商業循環，帶來更好的使用者體驗並帶來更多的流量。流量越大，銷售機會越多，利潤率越高。有了利潤，我們可以進一步進行再投資，以改善我們的用戶體驗。

(foreign language)

（外語）

[Interpreted] So we will continue to adhere to our long-term strategy, and we have confidence in our business model to sustainably maintain a virtuous cycle and gain market share.

【解讀】所以我們會繼續堅持我們的長期策略，我們對我們的商業模式能夠持續保持良性循環並獲得市場份額充滿信心。

(foreign language)

（外語）

[Interpreted] So in terms of our KPIs, so we have different business segments, exhibiting distinctive characteristics and being at different stages of development in terms of the GMVs and the profits and the cash flows. So for the weighting of these 3 indicators might vary. In the long-term, we believe in achieving a healthy balance across these indicators.

【解讀】所以從我們的KPI來看，所以我們有不同的業務板塊，各有特色，從GMV、利潤、現金流來看，處於不同的發展階段。所以這3個指標的權重可能會有所不同。從長遠來看，我們相信能夠在這些指標之間實現健康的平衡。

(foreign language)

（外語）

[Interpreted] For the second part of the question, our major structure adjustments have been made and implemented this year, including the business healthiness adjustments, enhancing user experience low price and platform ecosystem strategies. The key impact of business adjustments will be reflected in this year's numbers.

【解讀】對於問題的第二部分，我們今年已經做出並實施了重大的架構調整，包括業務健康度調整、提升用戶體驗低價以及平台生態策略。業務調整的關鍵影響將反映在今年的數據中。

(foreign language)

（外語）

[Interpreted] So our growth target for next year in the longer-term remain unchanged. We anticipate that JD's overall and retail business in 2024 will return to normal growth rates. We are confident in achieving our growth faster than the national total retail sales of consumer goods. And given JD's substantial scale, our growth is highly correlated with the country's macroeconomic conditions and the retail market. We aspire to outperform industry growth and continue to gain market share.

【解讀】所以我們明年的長期成長目標不變。我們預計2024年京東整體及零售業務將恢復正常成長。我們有信心實現高於全國社會消費品零售總額的成長。鑑於京東規模龐大，我們的成長與國家宏觀經濟狀況和零售市場高度相關。我們渴望超越行業成長並繼續獲得市場份額。

(foreign language)

（外語）

[Interpreted] So overall, despite for the supermarket categories despite the challenges faced by these categories due to our business adjustments and the post-pandemic recovery in the offline consumption and a high base from the previous year, we believe the effects of our adjustments will gradually materialize and the category is returning to a healthier growth trajectory. And in the long-term, we remain confident that it will continue to be JD's most important growth driver. And starting from next year, we expect the supermarket run rate to gradually recover those rates faster than the overall retail market.

【解讀】所以總體來說，對於商超品類來說，儘管由於我們的業務調整以及疫情後線下消費的復甦以及去年基數較高的原因，這些品類面臨著一些挑戰，但我們相信我們調整的效果會更好。逐步實現，該品類正在回歸健康的成長軌跡。從長遠來看，我們仍然有信心它將繼續成為京東最重要的成長動力。從明年開始，我們預計超市營運率將比整體零售市場更快地逐步恢復。

Operator, can we have the last question maybe?

接線員，我們可以問最後一個問題嗎？

The next question comes from Kenneth Fong with UBS.

下一個問題來自瑞銀集團的 Kenneth Fong。

(foreign language) My first question is about user and strategy. Under the current uncertain macro, can management share with us some of the behavioral change of a user? And how is the performance split among different categories? And any change in the operation strategy in light of the current macro challenges? Second is about how we balance margin and growth. On one hand, we continue to emphasize on the low-price strategy user subsidies our competition is also intensifying. That said, we have been very disciplined able to maintain a stable margin. Can management share with us the investment during Double 11 and beyond? How should we think about the balance between growth and investment? And any thoughts and update on the JD Retail long-term margin target?

（外語）我的第一個問題是關於使用者和策略的。在當前宏觀不確定的情況下，管理階層能否與我們分享一些使用者的行為變化？不同類別之間的表現如何劃分？針對當前宏觀挑戰，經營策略有何變化？其次是關於我們如何平衡利潤和成長。一方面，我們不斷強調低價策略的用戶補貼，我們的競爭也加劇。也就是說，我們非常自律，能夠維持穩定的利潤率。管理階層可以跟我們分享一下雙11及以後的投資狀況嗎？我們該如何思考成長與投資之間的平衡？對京東零售長期利潤率目標有什麼想法和更新嗎？

(foreign language)

（外語）

[Interpreted] It's a very good question. So for JD platform, we've seen the consumers are making more rational purchasing decisions with rising focus on price and quality. So we continuously enhance our supply chain efficiency to lower procurement and operational costs and enrich the platform ecosystem and the price competitiveness and the diversity of product offerings to meet consumers diversified demand and their shopping experience.

[解讀]這是一個非常好的問題。因此，對於京東平台，我們看到消費者正在做出更理性的購買決策，越來越關注價格和品質。因此，我們不斷提高供應鏈效率，以降低採購和營運成本，豐富平台生態系統以及價格競爭力和產品供應的多樣性，以滿足消費者多元化的需求和購物體驗。

(foreign language)

（外語）

[Interpreted] So as we shared certain statistics, the JD Retail users purchasing frequency continue to grow and with the growth rate surpassing that of ARPU.

【解讀】所以從我們分享的一些數據來看，京東零售用戶的購買頻率持續成長，且成長速度超過了ARPU。

(foreign language)

（外語）

[Interpreted] So notably, as we increase product diversity from 3P merchants and lowered the free shipping threshold, we witnessed accelerated growth in a number of orders and with a low average order value. So with the significant -- the orders of low average order value is significantly outpaced the overall order volume growth.

【解讀】值得注意的是，隨著我們增加3P商家的產品多樣性並降低包郵門檻，我們看到訂單數量加速成長，但平均訂單金額較低。因此，具有顯著意義的是，平均訂單價值較低的訂單明顯超過了整體訂單量的成長。

(foreign language)

（外語）

[Interpreted] So the spending part of our users from the first and second Tier cities remain robust and JD Plus continue to experience double-digit growth in the number of users, which has shown a very strong stickiness of these memberships.

【解讀】所以我們一二線城市的用戶消費部分依然強勁，京東Plus的用戶數量持續保持兩位數的成長，這顯示會員黏性非常強。

(foreign language)

（外語）

[Interpreted] So yes, I also want to share a viewpoint that we observed that users does not really want to compromise all the services while pursuing low prices. They are seeking low price doesn't means that they will sacrifice the qualities of products and services. So for ourselves this year, we have been continuously improving efficiency, optimizing our procurement costs and expanding product choices and do everything we can to better or even making the ultimate efforts to improve our services such as the installation services and after sales services to ensure we still offer our services at no compromise.

[解讀]所以是的，我也想分享一個觀點，我們觀察到用戶並不真的想在追求低價的同時犧牲所有服務。他們追求低價並不意味著他們會犧牲產品和服務的品質。所以對於我們自己來說，今年我們不斷地提高效率、優化採購成本、擴大產品選擇，盡一切努力甚至是盡最大努力去改善我們的安裝服務、售後服務等服務，以保證我們的服務品質。仍然毫不妥協地提供我們的服務。

(foreign language)

（外語）

[Interpreted] So for long-term, we'll continue to pursue the services as our core competitiveness on this market in the fierce competition.

【解讀】所以從長遠來看，我們將繼續把服務作為我們在這個激烈競爭的市場中的核心競爭力。

(foreign language)

（外語）

[Interpreted] And to address your second question on the (inaudible) the revenues and the margins and profitability. I think in the long run, it shouldn't be a problem or a question. It will eventually form a virtuous cycle with growing revenues, they will be growing profits. Whereas in the short-term, I think it's more a tactical issue that whether we should invest more on marketing on the user's acquisition, et cetera. So overall, in the long-term for JD.com we continue to pursue a steady and sustainable growth and development. So our steady pursuit of profitability increase remain unchanged.

[解釋]並回答您關於（聽不清楚）收入、利潤率和獲利能力的第二個問題。我認為從長遠來看，這不應該是一個問題或疑問。最終會形成良性循環，收入不斷增長，利潤也會不斷增長。而短期來看，我認為這比較像是戰術問題，我們是否應該在用戶獲取等行銷方面投入更多。總體而言，從長遠來看，京東將繼續追求穩定、可持續的成長和發展。所以我們對獲利能力成長的堅定追求沒有改變。

(foreign language)

（外語）

[Interpreted] So finally, I would like to stress that for JD.com, we don't pursue the short-term very high monetization and profitability. As a retailer, we've always pursued a reasonable profit for our industry. So this is (inaudible) as always. Thank you.

【解讀】最後我想強調的是，對京東來說，我們並不追求短期很高的變現和獲利能力。作為零售商，我們始終追求行業的合理利潤。所以這（聽不清楚）一如既往。謝謝。

Thank you very much. Thank you, Kenny, for the questions. I think operator, time is running up. I think that's all for today's Q&A session.

非常感謝。謝謝肯尼提出的問題。我想接線員，時間已經不多了。我想這就是今天問答環節的全部。

I will now turn the call over to JD.com, Sean Zhang for closing remarks.

我現在將電話轉給京東張肖恩 (Sean Zhang) 致閉幕詞。

Yes. Thank you for joining us today on the call and for your questions. If you have further questions, Yes. As always, please contact me and our team. We appreciate your interest in JD.com. We're looking forward to talking to you again next quarter. Thank you.

是的。感謝您今天參加我們的電話會議並提出問題。如果您還有其他問題，可以。一如既往，請聯繫我和我們的團隊。感謝您對京東的關注。我們期待下個季度再次與您交談。謝謝。

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

感謝您參加今天的會議。演示到此結束。您現在可以斷開連線。祝你有美好的一天。

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

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]