JD.com (JD) Q1 2023 Earnings Call Transcript

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JD.com (JD 2.08%)
Q1 2023 Earnings Call
May 11, 2023, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello, and thank you for standing by for JD.com's first quarter 2023 earnings conference call. At this time, all participants are in the listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang, director of investor relations. Please go ahead.

Sean Zhang -- Director, Investor Relations

Thank you. Good evening and good day, everyone. Welcome to JD.com first quarter 2023 earnings conference call. For today's call, CEO of JD.com, Mr.

Lei Xu, will kick off with opening remarks. Our CFO, Ms. Sandy Xu, 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. We'll include forward-looking statements, and please refer to our latest safe harbor statement in the earnings price 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 the comparable GAAP measure in the earnings price release. Also, please note, all figures mentioned in this call are in RMB, unless otherwise stated. Now, let me turn the call over to Mr. Xu, our CEO.

Lei Xu -- Chief Executive Officer, JD Retail

[Foreign language] Hello everyone, this is Xu Lei. Thank you for joining JD.com's first quarter 2023 earnings call. In the face of profound changes in the external environment of the industry, together with our own proactive adjustments for our business, JD achieved a high-quality performance in Q1. As many of you know, during the past three years of COVID, JD spared no efforts to maximize our business model and supply chain capabilities and allocated tremendous resources and energy to ensure daily supplies and provide reliable services to our customers and up and downstream business partners.

JD was able to play an important role in the economy and people's livelihoods throughout that challenging period. [Foreign language] In 2023, with COVID in the past, the macroeconomy and consumption have started to pick up, but the organic forces driving consumption demand are not yet sufficient. We've seen different phases of recovery for different categories, as well as changes in the demographic structure and people's lifestyles and spending patterns. JD has taken initiative to embrace the new external environment and industry dynamics in the post-COVID era.

2023 is a year of proactive adjustment for JD and a year that will set a solid foundation for JD's long-term development. Here, I will go through our major adjustments in three areas and some of the progress we've achieved so far. [Foreign language] First, we are refocusing on our core business. Since last year, we have carried out a set of adjustments on the supply side with the goal of long-term, healthy, and sustainable growth.

This includes optimizing our product mix and the sales channels in order to further improve our operating efficiency and quality. Also, I shared last time we have always encouraged innovative business initiatives while we need to regularly review these new initiatives within each business sector and focus our resources on those businesses that can create long-term value. Therefore, we scaled back on some of our new businesses. As we have been building a healthier business model, we've seen stronger profitability in both JD as a whole and in our core business.

With this reporting quarter setting a new record among all Quarter 1 in our history, this again demonstrates we have a lot of upside in terms of long-term profitable growth. While improving the overall health of our businesses, our core categories, such as home appliance and home goods, 3C and electronics, as well as categories, such as liquor, and baby and mom products that are seeing industrywide challenges, have all been maintaining and even expanding their leadership positions and market share. This trend has continued to strengthen so far in Q2 as we see consumption progressively recovering. [Foreign language] Second, we're improving efficiency of management and operations.

We recently rolled out an organizational readjustment for core segments, such as JD Retail and JD Logistics, with the purpose of further streamlining company hierarchy, building a more flat, nimble, and efficient management structure and further empowering front-line business teams. After the adjustment, JD Retail, which has tens of thousands of employees, will have just three levels in the reporting line from an entry-level procurement employee to CEO, which will be the flattest managerial structure among all similar-sized industry players. The reorganization will bring greater decision-making power to the execution teams closest to the market and users, incentivize each business unit, and give young talent more growth opportunities. This type of organizational structure is an essential driving force for us as we embrace the post-COVID era and pursue a new chapter of growth.

[Foreign language] Third, we are further enhancing our marketplace ecosystem and user experience. User focus has been built into JD's DNA. On top of our continuous efforts to optimize costs and efficiency, we're committed to providing users with best-in-class product offerings, prices, and shopping experiences, addressing user demand on all fronts, including superior selection, speed, quality, and value. Both 1P and 3P models are means to serve users.

JD's goal this year is to build a robust ecosystem that attracts more third-party merchants, particularly the tremendous number of high-quality SMEs that account for a relatively small proportion of sellers on our platform. In terms of progress, on the merchant side, since the launch of our spring down program that includes a number of supporting measures for SMEs, we have accelerated the expansion of our merchant base. In particular, the number of third-party merchants with recorded transaction sold 20% sequential growth in Q1 among which merchants in the fashion, home goods, and the supermarket categories increased rapidly. Merchants remain motivated to allocate resources to our platform, thanks to our advantages in providing them with lower cost and better efficiency of operation.

On the user side, our main JD app maintained healthy traffic growth in this quarter with DAU growing double digits year on year and in March. Moreover, as we continue to focus on user quality in Q1, the number of repurchasing users and the paid users of JD Retail experienced a rapid year-on-year growth of nearly 20% and 30%, respectively. And the proportion of our total users continued to rise, leading to a higher shopping frequency and up in the quota. In particular, the number of JD PLUS members reached 35 million by the end of Q1.

And PLUS members spent 8.4 times of the average annual amount of non-PLUS members, sustaining their high shopping frequency and spending power. What's also worth highlighting is that lower tier market users who have stayed with JD for over a year saw healthy growth momentum in both user scale and up in Q1 and April as well. In addition, as we continue to push forward our everyday low price strategy, we're happy to see that NPS score of our main JD app increase on a sequential basis. This makes us more confident that as we continue to build up the supply side and enhance our user surveys and user operation, we are able to ensure best-in-class experience for our current users, while, at the same time, addressing diverse demands of new users.

We still have a lot of upside in user acquisition. [Foreign language] I hope my sharing today has made it clear that 2023 is the best timing for JD's proactive adjustment as we integral a fluid external environment and embrace new opportunities in the post-COVID era, while such adjustments will impact us for now but will provide a necessary foundation for us to seize the long-term strategic opportunities. The progress we have achieved so far is strong evidence that our adjustment is moving forward steadily and in the right direction. From a long-term perspective, we believe JD is still on a healthy and sustainable track of high-quality growth as our long-term strategies remain unchanged and our core competitiveness and driving forces are constantly improving.

We will remain committed to creating lasting value for our users, business partners, and shareholders. [Foreign language] Finally, I have submitted my retirement request to the board to spend more time with my family, and the board has approved it. Over the years, it's been a great honor working at and growing together with JD, creating value for our users, business partners, and the society, and working side by side with Richard and our passionate, hardworking, and dedicated management team. I am very grateful to the trust and support from Richard and the board of directors.

It's also been important to have worked closely with Sandy for the past years with her profound insight and vision for our businesses, outstanding professional achievements, and strong dedication. Sandy is the perfect candidate of the next CEO. I will also work together with her and do my best to ensure a seamless transition in the coming months. With that, I will hand over to Sandy.

Sandy Xu -- Chief Financial Officer

Thank you, Xu, and hello everyone. It's a great honor to become the third CEO of JD.com, and I truly appreciate the trust from Richard, Xu, and the board. Richard and Xu have set a strong foundation for our future endeavors, and they will continue to guide our long-term strategic developments. I look forward to further driving the high-quality and sustainable growth of the company and bringing more value to our customers, business partners, and the society.

Now, let's turn to our financial performance. In the first quarter of 2023, we continued to build on our progress in business and organizational adjustments and began to see encouraging trends, including improved user engagement, as Xu just shared, rejuvenated marketplace performance, improving NPS score, and resilient profitability, among others. Also, as elaborated by Xu, our ongoing business adjustment, as well as the reorganization announced in April, could result in moderated growth, especially as measured by revenues in the short term. And yet, with the encouraging trends we've seen and our focus on building a team that can thrive in a very evolving business environment with adaptability, strategic agility, and results, we are more confident than ever in our ability to deliver healthy, sustainable growth for the long run.

Now, let me walk you through our financial results in Q1. Our net revenue grew by 1.4% year-on-year to RMB 243 billion in Q1 as we continued to focus on user quality and building deeper user engagement, we are encouraged to see that. During the quarter, JD Retail LTM average GM per user and shopping frequency continued to increase year on year for six quarters, mainly driven by the expansion of our core user base. Breaking down the revenue mix, product revenues were down 4% year on year in Q1.

I'll discuss category performance shortly. Service revenues grew by 34% year on year in Q1, among which, marketplace and marketing revenues grew by 8% year on year. We are encouraged to see that 3P revenues delivered robust momentum in the quarter, reaching the highest growth rate in the last four quarters. Notably, growth of 3P advertising revenues meaningfully outpaced that of 1P in the quarter, which is primarily driven by our continuous efforts to support merchants, particularly SMEs, leading to a substantial merchant base expansion in the quarter.

We believe this is an important step forward in our business adjustment to build a vibrant marketplace ecosystem and further enrich product supplies and user experience on our platform. Logistics and other services revenues grew by 61% year on year in Q1. Now, let's turn to our segment performance. JD Retail experienced a soft revenue performance in Q1 will continue to expand on both fulfilled gross margin and operating margin.

As communicated before, the continuous improvement of our profitability and bottom-line growth indicates that we are moving in the right direction toward building a healthy, sustainable business model. In terms of revenues, JD Retail reported a 2% year-on-year decline in Q1. By category, electronics and home appliance revenues were down slightly by 1% year on year during the quarter, mainly due to the lagging recovery of durable goods consumption compared to other discretionary categories. That said, we continue to notably outperform the industry in Q1, thus effectively defending our market share in this category.

More importantly, our outperformance in electronics and home appliance industries becomes more pronounced heading into Q2, and we are confident to not only defend but also to further increase our market share in this category. Thanks to our strong supply chain capabilities, user mind share, and solid progress in both online and offline channels. General merchandise revenues were down 9% year on year in Q1, a mixed result of our business adjustments and the high comp for supermarket category last year due to the stockpiling during COVID. Since we are on the topic of supermarket category, I'd like to share that it once again achieved an impressive margin improvement as our business adjustment aimed to build a healthier product mix is yielding results.

Our emerging categories, such as healthcare products and services, apparels, and accessories, delivered double-digit top-line growth in the quarter demonstrating our broad-based user mind share across categories. I want to highlight JD Retail's profitability improvement. JD Retail's fulfilled gross margin was up an exceptional 95 basis points year on year to 8.9% in Q1, mainly driven by our efforts to optimize cost and efficiency and the improving economies of scale. This also boosted JD Retail's operating margin to 4.6%, up 101 basis points from a year ago, another impressive margin expansion in four consecutive quarters in a row.

Our core retail business remains well on track of our long-term margin trajectory as we are making proactive adjustments to set JD in stronger position for achieving sustainable growth. JD Logistics saw a 34% revenue growth year on year in Q1, excluding the impact of consolidation of the Deppon, JD Logistics growth rate was 7%. This is mainly contributable to the resilient growth in revenues from external customers, the proportion of which reached 69% in Q1. In terms of profitability, JDL non-GAAP operating loss margin was 3.1% in the quarter, primarily due to the extra resources allocated in response to COVID in January and February.

Data reported revenues of RMB 2.6 billion in Q1 and non-GAAP operating loss of RMB 217 million in the quarter. Intracity, on-demand retail business remains as an important pillar for us. And we are glad to see that JD DJ and Shop Now have expanded to cooperate with over 300,000 offline stores and provided more than 2,000 cities and counties with on-demand retail services that cover a wide range of categories. As a result, our intracity on-demand retail business, Shop Now, maintained its robust momentum with year-on-year GMV growth rate of 60% in Q1.

Finally, revenues from new businesses built back to RMB 3.5 billion in Q1 as we continue to adjust the investment pace in both Jingxi and international businesses, while JD Property maintained its robust growth momentum. In terms of profitability, operating loss of new businesses continued to narrow down substantially on both year-on-year and sequential basis. As shared previously, we will continue to explore new initiatives and encourage innovations that generate better synergies with our core businesses and capabilities. We are pulling off those that we don't see a clear path for meaningful returns in the foreseeable future.

Moving to the consolidated bottom line. As we continue to focus on our core businesses to drive high-quality growth and further optimize operating efficiency, we recorded RMB 7.6 billion non-GAAP net income attributable to ordinary shareholders in Q1, and non-GAAP net margin rise at 3.1%, up 144 basis points compared to a year ago. Finally, our LTM free cash flow as of Q1 was RMB 19 billion. This was mainly driven by the deferrable payment of accounts payables.

The impact of which is exaggerated when sales growth rate moderates. A capital phenomenon for retailers as we are working to drive healthy sustainable growth, we believe our free cash flow will go back to normal levels going forward. By the end of Q1, cash and cash equivalents, restricted cash, and short-term investments added up to a total of RMB 203 billion. During the quarter, we also did share buyback of RMB 1.1 billion.

The share buyback, coupled with our previously announced cash dividend demonstrated our confidence in JD's future prospects and commitment to returning shareholders despite the short-term volatility in the stock market as we go through our proactive adjustments. To conclude my remarks, we ended Q1 with strong footing in improved operating efficiency and expanding profitability, boding well for our proactive business reorganization. We are working to build an adaptive and efficient business model, a more ownership-oriented team. and ultimately, to achieve profitable expansion and market share gain in the long run, the same narrative of JD's development over the past 20 years.

JD has gone through many cycles and always emerged stronger, thanks to our regional moves and steadfast execution. We will continue to commit ourselves to the 3P sense of retail, user experience, cost, and efficiency and to the right way to create long-term value for our customers, business partners, and shareholders. With that, let's open the call to the Q&A. Thank you.

Sean Zhang -- Director, Investor Relations

Thank you, Sandy, For the Q&A session any is 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 when necessary and for convenient purpose only. In the case of any discrepancy, please refer to our management statement in the original language. Operator, we can open the call for Q&A.

Questions & Answers:

Operator

[Operator instructions] The first question comes from Thomas Chong with Jefferies. Please go ahead.

Thomas Chong -- Jefferies -- Analyst

[Foreign language]

Sean Zhang -- Director, Investor Relations

Thomas, go ahead. Thank you.

Thomas Chong -- Jefferies -- Analyst

Thanks, management, for taking my questions. My first question is about our recent organizational adjustment. Can management share about the rationale behind as well as the impact to JD? And my second question is about the subsidies program. It has been launched for about two months.

Can management share about -- from the perspective of user growth, merchant participation and GMV growth? Thank you.

Sandy Xu -- Chief Financial Officer

[Foreign language] Thank you for your question. This is Sandy. Let me answer the question about the organization of restructuring. As you might notice in the news, we have undergone such changes for JD Retail and JD Logistics business.

And I would take JD Retail's restructuring, as an example, to give you more explanations on it. So, the previous level of JD Retail's business group has been removed and replaced with business departments. Former leaders of business groups will now act as leaders of business departments. And the business departments that used to oversee various product categories will be further split into numerous operational units that focus on specific product categories.

And each of these units will have greater decision-making and management responsibilities, and their KPIs will be tied closer to their operating results, which will help to incentivize entrepreneurship at every level and better align team interest with those of investors.

Lei Xu -- Chief Executive Officer, JD Retail

[Foreign language] This is Xu Lei. I would add a few words regarding my role change. So, Sandy, she will be the third CEO of JD.com. She is no stranger to our investors and analysts.

In the past nearly five years, Sandy and I have been working closely from JD Retail's business to the group level. And some of you might recall in 2018, it's only because my close teamwork with Sandy that made it possible for us to write through this so-called darkest moment. So, Sandy has played a very important role. And without her, I don't think I can make it.

And plus, Sandy is a very young leader and still have a lot of energies, and she has been widely recognized with her professionalism and dedication inside and outside the company. So, everyone, including myself, members of the board and CEO committee all believe that she is the capable leader to lead JD into the new phase of healthy and high-quality growth. And for myself, my JD story can be tracked back to 16 years ago, when I first became the company's external advisor in 2007 and in the future, while we will also continue to be to become the first chairman of JD's advisory council. And my support to JD will be a lifetime commitment.

I just change the perspectives and position, but I will always support JD whenever the company needs. And this is also a very meaningful and privilege thing for me. And thank you.

Sandy Xu -- Chief Financial Officer

[Foreign language] So, thank you, Mr. Xu Lei. He has made a great achievement and contributions to the development of the company. And I would also take this opportunity to emphasize on our strategies which will remain unchanged in the long term, and we will continue to focus on our business philosophies to focus on our cost efficiency and user experience and to continue to create value for the customers, industries, and the society.

And our key growth drivers will continue to focus on our lower-tier markets to build an open ecosystem and on-demand omnichannel retail and by leveraging the economies of scale and of our operating efficiencies, we will continue to diversify our revenue structures to achieve healthy and sustainable growth in the long run. [Foreign language] So, let me answer the questions about our discount program. As we mentioned in our last quarter call, we had a series of programs offering competitive prices and services that consumers truly appreciate and enjoy, including the 10 billion subsidy program, low cost and free shipping, flat sale and more formats. This is based on our continuous investment and accumulation in the supply chain which results in higher efficiency and lower costs.

On the supply side, we are constantly improving our open ecosystem to offer users a wider selection of price ranges, products categories, including brand and other white label products. We also leverage our supply chain advantages to realize economies of scale and pass on the benefits to consumers. Therefore, JD's ability to offer everyday low price is based on our focus on everyday low cost. [Foreign language] We will drive several user experience changes this year by making adjustments on marketing strategies, guiding users to embrace our everyday low-price concept instead of stocking up goods only at promotion.

Thus, we will see the share of everyday sales increase this year, which is in line with our goal of everyday low price and returning to the assets of retail. This will also help stabilize the whole industry's supply chain operation thus enhancing the efficiency and value creation for our partners' brand and third-party merchants. [Foreign language] So, the performance of this discount program since it was launched two months ago, has met our expectation. With our joint investment in marketing resources with brands and merchants, we strive to provide consumers with tangible benefits only by truly passing on benefits to users can we attract them, which in turn attracts brands and sellers.

By serving use as well, we can also serve the brands and merchants well. We have noticed improvements in user traffic, engagement and repeat purchases as well as a significant increase in the number of active third-party merchants. So, we are confident in our ability to control the overall cost -- overall impact of this program. And this program has a limited impact on our margins.

Thank you.

Sean Zhang -- Director, Investor Relations

Yup. Thank you. Next question please, operator.

Operator

Thank you. The next question comes from Ronald Keung with Goldman Sachs. Please go ahead.

Ronald Keung -- Goldman Sachs -- Analyst

[Foreign language]

Sandy Xu -- Chief Financial Officer

[Foreign language] JD's GMV growth rate in Q2 has been faster than Q1 and the growth rate of GMV is also faster than that of revenues. We have seen the number of third-party merchants with active sales continued to rise and their GMV growth is faster than 1P businesses. And also, there is the factor that last year, this quarter, the 3P comp is relatively lower. In terms of organization structure change, we are gradually implementing the detailed plans, so the impact will be released over a certain period of time in the following quarters.

[Foreign language] So, for JD's core regional business, we have always been centered on our customers. So, any model that better satisfies consumers diversified demand should be offered to them and it will also attract users to make purchases. And JD platform offers both 1P and 3P models to serve consumers, and we should always keep the decision-making right to the consumers. And one of our unique advantage is that these two models are actually complementary to each other.

[Foreign language] So, for several categories, JD's self-operated model is highly competitive. For example, high-ticket size products, products that require higher level of quality and service assurance for consumers and products that can generate lower cost and higher efficiency through economies of scale. At the same time, as JD's consumers and the purchasing demand become increasingly varied and differentiated, we need to enrich our supply side through the marketplace business model. [Foreign language] So, our current adjustments, including the holistic management of 1P and 2P and the considerations on the KPIs tied to the performances to give better choices and more options to the users.

So, for the short-term business adjustments can indeed affect revenue growth, especially for certain categories. However, we believe that through these adjustments, categories such as like our supermarket categories will remain JD's most important growth driver and return to a healthier growth trajectory in the long term.

Sean Zhang -- Director, Investor Relations

Thank you. Operator, next question.

Operator

Thank you. The next question comes from Eddy Wang with Morgan Stanley. Please go ahead.

Eddy Wang -- Morgan Stanley -- Analyst

[Foreign language]

Lei Xu -- Chief Executive Officer, JD Retail

[Foreign language] Yes. I would like to share some insights on the categories of home appliances and home goods. So, in Q1, the performance still affected by softer consumption demand and the real estate industry. So, the recovery of durable goods consumption, such as household appliances and home furnishing, lags behind that of catering, entertainment, and other consumer goods.

Whereas, the good news is that through JD's years of building our multi-channels, and we have always delivered higher than industry performance. So, with the economy recovery in the following quarters, we can see -- we expect the demand will come back on JD's platform. [Foreign language] Yes. And for the 3P and electronics category, it also belongs to the durable and the large ticket categories.

So, JD has a very strong mentality among our consumers, and we have also done innovative measures on the channels, on the services and continuing to lead the market share. And we are seeing that the Q4 market is getting better. And admittedly, for these two categories, it still takes some time waiting for more recovery of the market, and it also depends on the confidence restoration from the factories and the manufacturers. When the confidence is back, I believe the recovery will bounce back quickly.

[Foreign language] So, a few words on our 2618 brand promotion, it is very critical and important event for us. And on the one hand, we will use this opportunity to strengthen our collaborations with our brand partners. And for certain categories, they do face operating and inventory pressures. So, we will leverage the 618 brand promotions to make more adjustments on the marketing and operations to conduct more innovations to create a new high in terms of innovation and partnership.

Sandy Xu -- Chief Financial Officer

[Foreign language] So, just one more observation on the 3P and electronic categories, we are seeing the sales in Q4 is picking up. So, for those categories that JD has some strength on the market, we are confident to continue to lead the market and have the performance outperform the industry average in April. Thank you.

Operator

Thank you. The next question comes from Alicia Yap with Citigroup. Please go ahead.

Alicia Yap -- Citi -- Analyst

Hi. Thank you. I am going to ask in English, so good evening. Management, thanks for taking my question and also congratulations to Sandy on your new role as CEO, and also best wishes to Xu Lei.

I have questions surrounding the category core side and also competition. So, while -- I mean I remain quite cautious, especially for the big ticket items like 3C, but it's also things like the OEM and hardware, handful manufacturings are eager to destocking their existing models in preparation for the new models launched in the fall. So, how will JD work with them to leverage the upcoming 618 promotion to stimulate the consumer purchasing sentiment? And do you anticipate competition in 3C and appliance to heat up? Or is JD seeing more competition headwind in the FMCG categories? And lastly, can management elaborate on what is JD's next growth expansion story? Thank you.

Sandy Xu -- Chief Financial Officer

Thanks Alicia. Well, the overall consumption might remain cautious, especially for large ticket size products like 3Ps and home appliance. However, we heard from the brands that all the OEM manufacturers that they are quite willing to provide attractive rebate or discount to boost their sales and also to try to sell through their existing inventory in order to prepare for the new models releasing in the second half year. So, if this is true, and then JD will be -- you know, there will be a great opportunity for us, given our stronger relationships, our stronger supply chain capabilities with the brands.

And also, we heard that, in particular, for the brands of home appliances. They are all expecting positive sales growth for the year. In terms of the supermarket competition, I would say our competitive advantages are very different from the other competitors. Again, we are a supply chain-driven platform instead of a traffic-driven platform.

So, even though we are facing some short-term challenges because of our proactive business adjustment or a proactive channel or product mix adjustment, but I can see that our gross margin for many product categories are still improving. That means, you know, we have -- we will continue to gain operating efficiency will set a competitive pricing in front of the consumers. So, the healthy business is still growing. And I am pretty comfortable that after all the business adjustments are completed or absorbed this year, we will go back to our normal growth trend.

Sean Zhang -- Director, Investor Relations

Thank you.

Alicia Yap -- Citi -- Analyst

Thank you.

Operator

Thank you. As we are now approaching the end of the conference call, I will turn the call over to JD.com's Sean Zhang for closing remarks. Please go ahead, sir.

Sean Zhang -- Director, Investor Relations

Thank you. Thank you, everyone, for joining the call today and for your questions. If you have further questions, please contact me and our team. We appreciate your interest and support in JD.com, and look forward to talking to you again next quarter.

Thank you.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Sean Zhang -- Director, Investor Relations

Lei Xu -- Chief Executive Officer, JD Retail

Sandy Xu -- Chief Financial Officer

Thomas Chong -- Jefferies -- Analyst

Ronald Keung -- Goldman Sachs -- Analyst

Eddy Wang -- Morgan Stanley -- Analyst

Alicia Yap -- Citi -- Analyst

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