Earnings Call Transcript - JD Q4 2023

Sean Zhang, Director of Investor Relations

Hello, and thank you for standing by for JD.com's Fourth Quarter and Full Year 2023 Earnings Conference Call. 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.

Ran Xu, CEO

Thanks, Sean. Hello, everyone, and thanks for joining us today to discuss our Q4 and full year 2023 results. In Q4, we delivered healthy top line and bottom line growth and made solid progress on operations, finishing off a productive 2023. In the past year, we stayed focused on constantly improving user experience, lowering costs and increasing efficiency amidst evolving opportunities and challenges. Guided by our business philosophy, we carried out a set of proactive moves to drive more sustainable growth for the long term, mainly in the areas of user experience improvement, cost leadership, and platform ecosystem strategy. Despite some short-term impact in 2023, our strategic focus has successfully steered key operating metrics in a positive direction. 2024 will be a year of execution. Our team will take firm and steady steps to execute our existing strategies and push forward our two priorities for the new year, namely user experience improvement and market share expansion. We are encouraged by what we've seen and are confident that we are on the right path. Let me share some details. First, user engagement. In Q4, we saw the number of active customers accelerate significantly. Looking at new users alone, the growth was at an even faster pace in Q4, particularly in new users. We are excited to see our user momentum pick up in Q1. User behavior also trended better. For example, user shopping frequency on JD continues to rise both in Q4 and the full year. This increase was particularly driven by the growth of our loyal existing users and Plus members. This means if users stay longer with us, they tend to shop more frequently with us, a validation of our focus on user experience and strengthening market share. In addition, this growth also translated to robust order volume growth, hitting double-digit year-on-year in Q4 and accelerating for three consecutive quarters. In terms of JD Plus, we saw another quarter of robust growth of its member base and GMV contributed by Plus members grew faster than our total GMV in Q4. The promising progress in user engagement is a result of our stepped-up efforts in improving user experience, low-price offerings and implementing our platform ecosystem strategy. Looking at our efforts in improving user experience, in addition to our previously launched initiatives, such as free shipping, instant refunds and price guarantee, we also recently launched new customer services, such as free doorstep pickup for returns and cash back for delayed shipping. As a result, our Net Promoter Score for both our 1P and 3P businesses have improved substantially in Q4. As we generate great momentum with our users, it's important to continue to build on these initiatives, which we believe will help to propel growth in 2024. Also, as an important part of our holistic approach to improving user experience, we will continue to step up efforts including our price competitiveness and platform ecosystem. For low-price offerings, from day one, we've been pushing forward our price competitiveness for branded products and a broader selection of value products. During the past year, we have further enhanced our ability to offer great value in branded products and expanded our selection for private label products. Our price competitiveness has notably improved according to our customer survey and in-house price comparison. We are encouraged to see our increase both sequentially and year-on-year in Q4, a proof that user interest in JD's low-price offerings is picking up. We also note other key metrics are trending well. The number of our users from low-market share segments grew faster in Q4 compared to previous quarters and the growth of order volume generated by lower-priced products reached double digits year-on-year, outpacing that of our total users. I want to highlight again that our price competitiveness is not supported by subsidies. The backbone of JD's business model is always our supply chain capabilities, which enable us to generate scale efficiency and lower product costs so that we can provide better value to users while maintaining healthy financial performance. Shifting to our platform ecosystem strategy. The number of active 3P merchants on our platform delivered another stellar growth both in Q4 and on a full-year basis as the team did a great job onboarding and supporting them. Meanwhile, 3P users and 3P order volumes both saw accelerated growth year-on-year in Q4 and in the full year of 2023. That said, we are still at an early stage of building our platform ecosystem and we are now prioritizing monetization of our young and rapidly growing ecosystem. Therefore, we are not taken by surprise when we see revenue benefiting from our 3P marketplace lagging the growth of our 3P merchant base and orders in Q4, which was also partially driven by one-off factors. Ian will elaborate on this later. We believe this is only temporary. In fact, quarter-to-date, we've seen marketplace and marketing revenues bounce back to stronger momentum. As shared before, our platform ecosystem encourages our businesses to develop in a complementary way. Our 1P business continues to make solid progress, thanks to our core capabilities in supply chain. In particular, users responded well to our nonstop services during the Chinese New Year holiday, something we've been committed to for 12 consecutive years. Also, enabled by our supply chain strength, our home appliance and electronics category continued to gain market share throughout 2023 despite industry headwinds. Going forward, we will further leverage our supply chain capabilities to build up better service, penetrate lower-tier and offline markets, and strengthen our cooperation with suppliers, which we believe will lead to a continuous expansion in market share in 2024. Moreover, we saw our supermarket category trending in the right direction as we dedicated ourselves to optimizing the supply chain and giving a better product mix and fulfillment network. We believe there will be more upside for supermarkets in 2024. Finally, I want to highlight our commitment to shareholder returns. As announced in our earnings press release, our Board has approved our 2024 annual cash dividend payment, the aggregate amount of USD 1.2 billion, a meaningful increase compared to 2023. The Board has also approved a new share repurchase program of USD 3 billion over the next 36 months. We are committed to creating more value for our shareholders. To conclude, 2023 was a year of strategically focused and organizational upgrades, which have set the foundation for JD. 2024 will be a year of execution along the strategic roadmap that is in place. We will continue to build upon the good foundation in user experience, more price offerings and platform ecosystem strategy and will further build up our total capabilities in supply chain. With the market share and user experience at top of mind, we are confident in making steady progress this year. With that, I will turn it over to Ian for our financial highlights. Thank you.

Ian Shan, CFO

Thank you, Sandy, and hello, everyone. We recorded a set of healthy top and bottom line results in Q4, ahead of our expectations as we focus on experience improvements, price competitiveness, and platform ecosystem in 2023. We are also committed to sharing our success with our shareholders. The Board has approved our annual cash dividend of USD 1.2 billion for the fiscal year of 2023, representing USD 0.38 per ordinary share or USD 0.76 per ADS. Our dividend per ADS increased by 23% compared to the annual dividend paid in 2023. In addition, we bought back 15 million ordinary shares for a total of approximately USD 203 million. As the existing program will expand soon, the Board has approved a new share repurchase program of USD 3 billion over the next 36 months. This demonstrates our dedication to returning value to our shareholders. Now let me turn to our Q4 and full year 2023 financial performance. Our net revenues grew by 4% year-on-year to RMB 306 billion in Q4 and RMB 1.1 trillion for the full year 2023, as we navigated a mix of macro recovery, seasonality factors and our strategic refocus. Breaking down the revenue mix, product revenues were up 4% year-on-year in Q4 and 1% on a full year basis. By category, electronics and home appliances revenues were up 6% and 4% year-on-year in Q4 and for the full year, respectively, once again outpacing industry growth. We have seen solid market share expansion in these categories across every quarter of 2023 and continue to feel confident in this momentum going into 2024. General merchandise revenue saw a turnaround to positive year-on-year growth in Q4 despite the impact of scaling back of our International business, the high base in Q4 2022 due to stockpiling and the seasonality impact of the Chinese New Year shopping festival. On a full year basis, such factors led to a 5% decline in general merchandise revenues. Taking a closer look, categories such as home goods, decoration, sports, and apparel recorded double-digit year-on-year growth in Q4. As we further enriched our product and service offerings, these categories also drove higher user traffic, conversion rates, and user engagement in the quarter. As for our supermarket category, we believe it has bottomed out and its growth trend will continue to strengthen in 2024, driven by its increasing order volume and user shopping frequency. Service revenues grew by 3% year-on-year in Q4 and 18% on a full year basis, primarily driven by the growth of logistics and other service revenues, which were up 8% and 30% year-on-year for the quarter and full year, respectively. Marketplace and marketing revenues were down 4% year-on-year in Q4 and up 3% on a full year basis. The soft performance in the quarter was primarily due to the decline in commission revenues as a result of our enhanced support for fast-growing new merchants. While advertising revenues also experienced one-off headwinds in Q4, mainly due to the seasonality impact of the Chinese New Year Shopping Festival, we believe those were short-term fluctuations and our platform is progressing well on our current strategy with a fast-expanding base of active 3P merchants and accelerated growth in both 3P users and 3P order volumes. In the Q1 quarter-to-date, we saw that marketplace and marketing revenues have resumed growth. Now let's turn to our segment performance. JD Retail revenues increased by 3% year-on-year in Q4 and 2% on a full year basis. Our Retail segment's gross margin continued to increase, both in Q4 and the full year of 2023. This was driven by our improved supply chain capabilities, which enable us to offer more value to our users while recording healthy margin expansion due to increased operating efficiency. Our strategic refocus also brought tailwinds to gross margin throughout 2023. On a full year basis, Retail fulfilled gross margin was up 39 basis points. Though in Q4, Retail fulfilled gross margin was down slightly by 7 basis points year-on-year due to extended free shipping offerings since late Q3. Retail segment's non-GAAP operating margin came in at 2.6% in Q4, softer than a year ago, but in line with our expectations as we invest in user experience and expanding our user base. On a full year basis, Retail's non-GAAP operating margin continued to improve to a record level of 3.8%. Beyond our expectations, we are confident that our continued focus on user experience will lead to a better market position and expanded market share in 2024 and ultimately present more headroom for profit expansion. JD Logistics recorded a 10% revenue growth year-on-year in Q4 and 21% on a full year basis. External revenues accounted for 70% of total revenues in both Q4 and the full year. In terms of profitability, JD Logistics' non-GAAP operating margin picked up meaningfully with a 73-basis point expansion year-on-year to 2.8% in Q4 and a 22 basis points expansion to 0.6% on a full year basis. Before moving on to the next section, please note that we are reporting the aggregated results of Dada and new business on the other segment this time. We've adjusted the results of this segment in Q4 to reflect Dada's impact. Revenues of the segment were down 9% and 11% year-on-year in Q4 and full year, respectively, primarily due to Dada's impact and the scaling back of our international business. Excluding the disposal gain and the impairment loss of long-lived assets of JD property, the non-GAAP operating loss of the segment was RMB 474 million in Q4 and RMB 1.5 billion in full year, both representing substantial narrowing on a year-on-year basis as a result of the scaling back of JD's international business. Moving to the consolidated bottom line. In Q4, we recorded RMB 8.4 billion non-GAAP net income, attributable to ordinary shareholders with non-GAAP net margin expanding 16 basis points to 2.7%. On a full-year basis, our non-GAAP net income attributable to ordinary shareholders was RMB 35.2 billion, and non-GAAP net margin was up 55 basis points year-on-year to an all-time record of 3.2%. We continue to generate healthy cash flow. Our last 12-month free cash flow as of the end of Q4 was RMB 41 billion, an increase of 14% from a year ago. This was driven by our improved profitability and further optimized cash conversion cycle. By the end of Q4, our cash and cash equivalents, restricted cash and short-term investments added up to a total of RMB 198 billion. To conclude, we have taken proactive actions and delivered a set of solid financial and operating results in Q4 and full year of 2023 amid an evolving external environment and our business refocus. Going into 2024, we are well set to continue to execute the strategies we have in place. We feel confident in making further progress towards our operating priorities of user experience improvement and market share expansion, and we're committed to sharing our success with our shareholders.

Sean Zhang, Director of Investor Relations

Thank you, Sandy and Ian. For the Q&A session, you're welcome to ask questions in Chinese and English, and our management will answer your questions in the language you asked. We'll provide English translation when necessary for convenience purposes only. In the case of any discrepancy, please refer to our management statement in the original language. Okay. Operator, we can open the call for the Q&A session.

Ronald Keung, Analyst

Thank you, Sandy, Ian, and Sean. I have two questions. One is that JD and other e-commerce companies have focused on defending market share, reigniting growth as key focuses in this increasingly zero-sum e-commerce market. So how will management drive the balance between growth and absolute profit or growing profits in the year ahead? And with that, with the profits and cash flow generation, then we've seen regular dividends in 2023. We've seen the free cash flow for the business was nearly close to USD 6 billion in 2023. So do we see room to further increase total shareholder return, given the strong free cash flow of the business in the years ahead? Thank you.

Ran Xu, CEO

Thank you, Ronald. I will answer your first question and Ian will address the second question. The question about the balance between growth and profits is always a good one. In 2023, while focusing on the health of our business, we made many efforts and took actions to further enhance our user experience, low-price mindshare, and platform ecosystem. Last year, we stepped up our efforts to improve user shopping experience and services by introducing or expanding a series of differentiated shopping and customer services, such as our price guarantee service and free doorstep pickup for returns and exchanges on both our 1P and 3P businesses. We've seen accelerated growth in quarterly shopping users in Q4, especially in the number of new users, and we expect this growth trend to continue in Q1. At the same time, we are seeing a significant drop in profits, which reflects our efforts to maintain a balance between growth and revenue. We continue to optimize procurement costs and expand our range of low-cost products. Additionally, we have introduced a series of measures, including a CNY 10 billion discount program, free shipping channels, and a lower order value threshold for free shipping. Our goal is to provide high-quality products at affordable prices to increase user purchase frequency. We believe that continuous improvement of user experience will promote healthy user growth and purchase frequency, which in turn will help us to increase business scale and market share. From a platform ecosystem perspective, we have seen more and more new merchants join JD's marketplace, and the number of active merchants whose business is growing on our platform is increasing at an accelerated rate. Their participation has greatly improved the diversity of product offerings on the platform, leading to accelerated growth in both the number of users and orders. In 2024, we will prioritize improving user experience, price competitiveness and the platform ecosystem. We will make persistent efforts to execute in these key areas and are confident that we will continue to gain market share. I want to reemphasize that our business model dictates that business efficiency comes from enhancing scale and technology development. With these enhancements, we expect increased revenue that we can invest in enhancing user experience. This, in turn, will lead to increased user engagement, shopping frequency and growth, resulting in business scale growth. This creates a sustainable and virtuous cycle, although it may not have a significant immediate impact on profits. This is the logic of our business model. Profits are a natural result of our expanding market position and value creation for our users. Throughout these quarters, our management team will strive to maintain a balance and a good pace between investments and growth while creating good returns for our shareholders. Thank you.

Ian Shan, CFO

This is Ian. Thank you, Ronald, for asking about our shareholder returns. JD's focus is on the long-term healthy development of our business, aiming for healthy scale expansion and stable growth in profits and cash flow. On top of this, we're committed to long-term shareholder return and will continue to give back to our shareholders in various ways. Our balance sheet is strong and we believe that maintaining a good return to shareholders and continuous investment in our business are not contradictory. We have just announced an annual cash dividend of USD 1.2 billion. This is thanks to last year's rapid earnings growth, which yielded solid returns for our shareholders. Over the past three years, we have returned a total of USD 4.2 billion in dividends, and we plan to continue to pay annual dividends going forward, sharing the company's value creation with our shareholders. Also, our Board of Directors has approved a new repurchase program to buy back USD 3 billion worth of company shares over the next three years. We will firmly execute the buyback and communicate with investors regularly. We believe that investors will recognize the company's tangible efforts to share its value with shareholders. Thank you.

Kenneth Fong, Analyst

My first question is on the platform ecosystem. We have been investing to build our 3P ecosystem. Judging from the total and active merchants, we have received very solid results. Can management share with us under what circumstances we will start to accelerate the monetization of the 3P merchants? And also for 2024, any change and update for our 3P strategy? And my second question is for overseas. We see a lot of e-commerce platforms investing overseas. Can management share with us your thoughts on our overseas expansion?

Ian Shan, CFO

Thank you, Kenny. Regarding your first question about platform ecosystem. As mentioned previously, JD's platform ecosystem includes both our self-operated and third-party models. These tools are complementary and jointly contribute to creating a good user experience. Our Net Promoter Score has improved substantially in Q4 for both our 1P and 3P businesses as we have invested in the ecosystem as a long-term strategic direction, so there is still a lot of room for improvement in our 3P business development. Our first step is to increase the number of merchants and their product offerings. We need to attract more merchants and help them succeed on the platform in order to enrich the platform's product offerings for our shoppers and foster positive business competition across the platform. Over the past year, we have increased our efforts to recruit merchants, simplified their onboarding processes, and provided more support and fee reductions for small and medium-sized merchants. To date, the number of effective merchants on our platform is close to 1 million, achieving the goals we set for ourselves at the beginning of last year. The number of active merchants has accelerated, and more new merchants are finding effective ways to do business on our platform and continue to grow. At the same time, we've received positive feedback from users. The number of shopping users and order volume on the 3P platform continues to grow, with our NPS for 3P rising. Both our 3P and overall GMV have gradually entered a trajectory of healthy growth. Building JD's unique platform ecosystem is a long-term project; we're still in the early stages. Our focus is not on a fast monetization of 3P in the short term. Instead, our priority in 2024 will be to attract more merchants, especially small and medium-sized merchants, to enrich product offerings, while also fostering merchant growth and optimizing the traffic distribution mechanism to create a clear growth path and better business environment for merchants. Moreover, we believe that by providing a wide range of high-quality goods and improving user product matching accuracy, we can attract more users and meet diverse needs. This will create a virtuous cycle that helps merchants succeed, naturally leading to increased monetization. This virtuous cycle will form a key driver of our long-term revenue and profit growth. We're in a good shape now and are not in a rush to increase monetization in the short term, but the trend of our steady improvement remains unchanged in the long run. Additionally, our marketplace and marketing revenues experienced short-term fluctuations in Q4 primarily due to our efforts to develop the platform ecosystem. We launched a set of supporting initiatives, including commission waivers for new merchants and proactive commission reductions in certain categories and programs. These initiatives led to a decline in commission revenues. Additionally, advertising revenue growth slowed slightly in Q4 due to the late start of the Chinese New Year promotion compared to the previous year, as well as the prior year's stockpiling behavior in December. With the easing of seasonal factors in Q1, we expect advertising revenues will return to healthy growth. In light of 2024, as user traffic improves, we expect growth of our ad revenues to gradually accelerate. Thank you. Regarding our overseas business strategy, we are always looking for opportunities to establish our presence. Given that our business model and advantages are distinct from other platforms, our approach to global expansion will likewise be different. We aim to leverage our competitive strengths to establish our international presence. For JD Retail, our outbound e-commerce platform is actively improving the shopping experience by offering high-quality products and services to global users. At the same time, it also assists Chinese companies in expanding their business and brands to overseas markets. While we are still in the early stages for these efforts, we're also increasing our focus on inbound cross-border business. JD Worldwide has established three direct procurement centers worldwide so far to improve cross-border supply chain efficiency, offering consumers in China a wider range of imported products at lower costs while ensuring product safety. For JD Logistics, we have established a strong overseas supply chain, starting from warehouses and expanding to overall supply chain services. Currently, we operate numerous overseas direct warehouses, managing a floor area of almost 900,000 square meters. This enables JD Logistics to serve a large number of overseas customers as well as Chinese brands expanding abroad. JD Property is expanding its business in Southeast Asia and Europe, focusing on markets such as Vietnam, Indonesia, Singapore, the U.K. and the Netherlands. Its customers include international logistics and FMCG giants as well as emerging Chinese companies going overseas. Lastly, we've introduced an omnichannel retail platform in Europe called Ochama. This business leverages JD's advanced automated logistics technologies and global supply chain capabilities to provide high-quality shopping experiences for customers across 24 European countries. Ochama serves European local brands and merchants, and also provides a dependable path for Chinese brands and merchants to expand their business abroad. However, Ochama is still in the incubation stage. We will continue to focus on these areas and leverage our strengths to expand our global capabilities.

Alicia Yap, Analyst

In light of the shift of consumer preference and spending behavior amid the macro sentiment, will JD need to or plan to adjust any specific strategy to fulfill the demand shift? If so, what could be the changes and growth initiatives? What is management's expectation for China overall retail sales growth this year? How much higher can JD outperform the overall retail sales growth? Will JD reinvest to aggressively grow new users in tier cities? Will that mostly come from additional subsidy or through the improvement of product offerings? Do you have a target KPI set for the number of new customers that you plan to acquire this year?

Ran Xu, CEO

Thank you, Alicia. As you mentioned, we have seen consumers becoming more rational in their spending. They are placing an emphasis on both quality and cost-effectiveness of products; they highly value good products at reasonable prices. At the same time, shopping experience is also a crucial factor. Last year, we proactively responded to these consumer trends. While striving to provide better shopping experience and differentiated services, we expanded our platform ecosystem and low-cost product share. We also started tracking the latest consumption trends and worked closely with brands and merchants to jointly develop new products that better meet user demand. Overall, our performance has met our expectations so far. In 2024, we will stick to our current strategies and firmly focus on execution and optimization without making major adjustments. Yes, we will continuously improve user experience and services, strengthen our core competitiveness, and further enhance users' mindshare towards our fast delivery and high-quality reputation. At the same time, we will optimize our procurement costs and enrich our low-priced product offerings so that our users can better appreciate our price competitiveness. On the product diversity side, we will continue to expand our merchant base and improve the richness of low-priced products on our platform. We believe numerous economic stimulus plans and consumption promotion policies will be put in place, including the encouragement of trading consumptions, etc. We foresee a healthy upward trend of overall economy, which will also uplift some of our categories. Overall, we are optimistic about this year's overall retail sales and are confident that we will maintain a faster growth rate than that and continue to gain market share. Thank you.

Ian Shan, CFO

For the second question on user growth, we will actively drive up user growth and their purchase frequency. Throughout the past year and this year, we have prioritized improving user experience to achieve high-quality growth. We will continue to improve diversity of product offerings while promoting our low-cost strategy and expanding the product pool for users from lower-tier markets to better meet their shopping preferences. This will help us enhance user engagement, product matching efficiency, and retention rates. We believe that subsidizing and other marketing activities are all tools for user operations. These measures can serve specific purposes in certain periods but should only be utilized in a targeted and disciplined manner. We saw healthy growth in the number of users in Q4; new users experienced strong growth while existing users maintained steady growth. Users from lower-tier markets also achieved accelerated growth and user purchase frequency showed healthy growth, particularly among existing users. In addition, user satisfaction rates improved, with NPS for both self-operated and marketplace businesses achieving year-on-year increases. With this positive momentum, we are confident in our ability to drive user growth this year. JD was selected to be the exclusive interactive partner for the China Media Group's Spring Festival Gala. During the show, we offered a variety of gifts to viewers aimed at reaching a broad set of new users. Looking ahead to the whole year, we are confident in our user growth.

Sean Zhang, Director of Investor Relations

Thank you, Alicia. Let's have the last question.

Thomas Chong, Analyst

My first question is about the consumer sentiment in 2024. How should we think about the trend for different categories? And my second question is related to our thoughts on the competitive landscape.

Ran Xu, CEO

Thank you, Thomas, for your question. By 2023, we observed that society and the economy have returned to normal. Although the consumption market shows a recovery trend, people's spending ability and confidence still needs a boost. Entering 2024, in these first two months, we can observe that the national economy is on track for recovery. With the expected effects of the micro stimulus plans and consumption promotion policies, we believe the momentum of consumption recovery and expansion will be further solidified. From JD's perspective in 2024, we anticipate outperforming the overall market. In the long term, we believe the desire for a better life remains unchanged among consumers. Our business model aims to offer better services and quality products with greater value for money, giving us unique advantages to meet diverse user needs in various shopping scenarios. From an industry perspective, we see the proportion of online retail sales continuing to grow. Some industries have enjoyed a high penetration rate, while others, such as supermarkets and automotive, still have plenty of room for online sales improvement. Specifically, in 2023, we maintained our market leadership in electronics categories and delivered faster growth rates than the overall market in this area, despite industry challenges last year. Overall, we are confident to maintain a faster growth than the industry growth rate in these categories, especially considering that the government is promoting the consumption of electronics and consumer goods. We expect intensified competition in the supermarket category this year with various players adopting different strategies. JD's Supermarket business has undergone some adjustments in the past year, like focusing on core businesses, improving supply chain capabilities, and enhanced fulfillment efficiency through warehouse network reforms. These strategies are gradually showing their positive effects with a growth recovery trend for the Supermarket category. In the Fashion & Home segment, it is more dependent on our third-party merchants' development. Due to our unique business model, we will foster these two categories with a different approach. So far, we have seen our open ecosystem strategy yielding initial results, and users becoming more aware of JD Fashion and JD Home. We are confident that we will continue to see healthy growth for these categories in 2024. Regarding competitive landscape, we believe that China's retail consumer market is vast, and various platforms and business models will coexist. From JD's perspective, we see ourselves primarily as a retailer, and this market presents significant opportunities. The key for long-term success lies in enhancing user experience and collaborating with our partners. We will stick to our strategy and continue to gain market share. We are optimistic that all the changes we made last year will gradually yield results. Additionally, we have implemented innovative tactics and techniques to improve conversion rates and reduce operating losses, positioning us well to deliver results this year. As a supply chain-based company, we have strengths and capabilities to navigate through different economic cycles, ensuring good outcomes this year. Thank you.

Sean Zhang, Director of Investor Relations

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

Operator, Operator

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