JD.com, Inc. (NASDAQ:JD) Q3 2019 Earnings Conference Call - Final Transcript
Nov 15, 2019 • 07:00 am ET
Hello, and thank you for standing by for JD.com's Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a 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 like to turn the meeting over to your host for today's conference, Jia Dong.
Thank you, and welcome to our third quarter 2019 earnings conference call.
Joining me on the call today are Mr. Richard Liu, JD.com Group CEO; Mr. Lei Xu, CEO of JD Retail; Mr. Zhenhui Wang, CEO of JD Logistics; Sidney Huang, CFO; and Jon Liao, our Chief Strategy Officer.
For today's agenda, our CFO, Sidney Huang, will discuss highlights for the third quarter 2019 followed by Richard Liu, our CEO. Other managements will join the Q&A session.
Before we continue, I refer you to our Safe Harbor statement in the earnings press release which applies to this call as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB.
I would now like to turn the call over to our CFO, Sidney Huang.
Thank you, Jia. Hello, everyone. Thank you for joining us today.
We are very pleased to report another strong set of results for the third quarter 2019. Our net revenue growth continued to reaccelerate, reaching 28.7%, the highest growth rate in the past five quarters, driven by our lower tier city penetration strategies. In particular, the growth rate for electronics and home appliance categories in lower-tier cities was more than double that of tier 1 and tier 2 cities. And most other top 25 categories saw higher and accelerated growth rates in lower-tier cities as well. Overall, over 70% of new customers in Q3 came from lower-tier cities, which is a new record, and the growth rates for both purchase orders and GMV in lower-tier cities reached the highest levels in the past six quarters.
In terms of traffic, due to innovative marketing activities and better user engagement through our upgraded mobile interface, the JD mobile MAU grew 36% in September, the highest growth rate in the past eight months, while our mobile DAU grew [Phonetic] 35% in Q3, the fastest in five quarters. This may surprise some people who are not familiar with China's lower tier city consumers and think they are only interested in low priced, low quality products which have seemingly flourished on other platforms.
The reality is that consumption upgrade has been quietly occurring in these regions where average consumers may have relatively lower absolute income but have somewhat similar or even higher disposable income than tier 1 city residents due to significantly lower housing costs. As these consumers learned to shop online, they gradually