[0 -> 5] Good day, ladies and gentlemen. Thank you for staying by. Welcome to Kuaishou Technology
[5 -> 9] first quarter 2023 financial results conference call. Please note that English simultaneous
[9 -> 15] interpretation will be provided for the management prepared remarks. The English line will be
[15 -> 25] in listen only mode. And now I will turn the call over to Mr. Matthew Tao, VP of capital
[25 -> 32] market and investor relations at Kuaishou Technology. Thank you, Operator. Good evening
[32 -> 36] and good morning to everyone. Welcome to our first quarter 2023 financial results conference
[36 -> 44] call. Joining us today are Mr. Cheng Yixiao, co-founder, executive director and CEO. Also,
[44 -> 49] we have Mr. Jing Bing, chief financial officer. Before we start, we would like to remind you
[49 -> 54] that today's discussion may contain forward-looking statements which involve a number of risks and
[54 -> 58] uncertainties. Actual results and outcomes may differ materially from those mentioned
[58 -> 62] in today's announcement and this discussion. The company does not undertake any obligation
[62 -> 71] to update any forward-looking information except as required by law. And also, during
[71 -> 78] today's call, we are going to also discuss the search and non-IFRS financial measures
[79 -> 87] for comparison purposes only. For a definition of non-IFRS financial measures and a reconciliation
[87 -> 94] of IFRS and to non-IFRS financial results, please refer to our results announcement for the first
[94 -> 105] quarter ended March the 31st of 2023, issued earlier today. For today's call, management will
[105 -> 109] use Chinese as the main language. A third-party interpreter will provide simultaneous English
[109 -> 115] interpretation in a prepared remark session and conceptual interpretation during the Q&A section.
[117 -> 122] Please note that English interpretation is for convenience purposes only. In the case of any
[122 -> 128] discrepancy, management statements in their original language will prevail. And as otherwise
[128 -> 134] stated, for all the currency mentioned, we are talking about renminbi. Now, I'll hand the call
[134 -> 139] over to Yisha. Hello, everyone. Welcome to Quieshow's first quarter 2023 earnings conference
[139 -> 144] call. In the first quarter of 2023, we recorded group level adjusted net profit for the first
[144 -> 150] time since our listing, a significant breakthrough in our profitability. This milestone was achieved
[150 -> 154] on the back of a strong first quarter performance driven by new records and user metrics, revenue
[154 -> 163] growth, and operating efficiency improvements. In addition to healthy growth in the DAUs and MUs,
[163 -> 167] we continue to grow a number of content creators, advertisers, and merchants on our platform while
[167 -> 174] promoting a more integrated commercialization and traffic ecosystem. We also made substantial progress
[174 -> 178] with our store-wide RRI strategy in driving end-to-end sales funnel conversion for both
[178 -> 187] our advertising and e-commerce businesses. As a result of these accomplishments combined with
[187 -> 191] macroeconomic tailwinds, our revenue growth accelerated across all three business segments
[191 -> 198] in the first quarter of 2023 and outperformed their respective industries. Our effective
[198 -> 204] initiatives to enhance monetization and operation efficiency while maintaining our pace of business
[204 -> 211] growth played a pivotal role in our profitability turnaround, leading to adjusted net profit at the
[211 -> 216] group level in the first quarter of 2023. Next, I'll discuss our key business developments in the
[216 -> 225] first quarter. First, user growth and ecosystem construction. In the first quarter of 2023,
[225 -> 229] we set a new record for the scale of our user community by capitalizing on growth opportunities
[229 -> 234] from some seasonal festivals, including Chinese New Year. Average DAUs and MUs on the Kuaishou app
[234 -> 243] reached 374.3 million and 654.4 million, representing an increase of 8.3% and 9.4%
[243 -> 250] respectively. Average daily time span per DAU on Kuaishou's app was 126.8 minutes, while total views
[250 -> 255] on a short video and live streaming content increased by over 10% year-over-year, representing
[255 -> 263] a higher growth rate and a total user spent. With a focus on both the efficiency and quality of user
[263 -> 268] growth, we lowered our user acquisition and retention costs in the first quarter of 2023
[268 -> 275] on both a quarter-over-quarter and year-over-year basis. This was the result of our refined
[275 -> 279] management and technological tools, as well as the automated placement on original,
[279 -> 285] high-quality short play and short video and live streaming content. Meanwhile, we further
[285 -> 290] advanced our eye on user acquisition by growing the proportion of users within line and lifetime
[290 -> 295] value. We reinforced the virtuous cycle on content supply and consumption by optimizing
[295 -> 298] the content supplied through our enhanced algorithm-based learning system targeting
[298 -> 302] different user groups. We also continued to strengthen the social attributes and community
[302 -> 307] vitality of our platform, key factors setting us apart from our competitors. By the end of the first
[307 -> 312] quarter of 2023, pairs of mutual followers on Kuaishou's app reached a community of 29.6%,
[312 -> 317] representing a 56.6% year-over-year. The Chinese New Year period has always been
[317 -> 320] an important window for user growth and brand promotion. During this year's Chinese New Year,
[320 -> 324] combined with the content and interaction, we provide users with dual venues to celebrate
[325 -> 328] the New Year on Kuaishou. On the interaction side, we offer a variety of interesting interactive
[328 -> 332] features and social games. In terms of content, we provide a diverse range of spring festival
[332 -> 337] related activities, including CCTV Spring Festival Gala, Kuaishou One-on-One and Night
[337 -> 341] Fans Gala, online festival fairs, Want to See a Spring Hiroki Party and more. Among them, Kuaishou
[341 -> 347] One-on-One Night Fans Gala and our self-produced program attracted more than 270 million viewers
[347 -> 355] and received over 520 million likes in the first round. We launched a total of 55 short plays
[355 -> 360] produced by Project Astro during the 2023 winter break period. Among them, Don't Lunch So,
[360 -> 365] accumulated 100 million viewers with a record-breaking 40 hours of its launch.
[365 -> 369] Our high-quality short play content and growing brand awareness in this area have also been
[369 -> 374] recognized by advertisers. In the first quarter of 2023, revenue from advertising sponsored by
[374 -> 379] Project Astro short plays increased by more than 300% year-over-year. In terms of pan-knowledge
[379 -> 383] content, we continue to reach our inclusive educated program, Neology Open Class. Under
[383 -> 388] our pan-knowledge IP, Kuaishou's new knowledge, we have collaborated with top-notch institutions
[388 -> 392] such as Tsinghua University and Peking University to offer courses covering a wide variety of fields,
[392 -> 397] including history, science and technology, economics and finance, attracting close to
[397 -> 404] 10 million viewers. We have also further refined the search function at our platform, which has
[404 -> 408] led to stronger user habits on searching. In the first quarter of 2023, Kuaishou's search average
[408 -> 413] monthly user exceeded 420 million, and the number of daily searches on our platform peaked at more
[413 -> 419] than 650 million. Meanwhile, we'd like to see continuous progress in the commercialization
[419 -> 424] of our search function, as evidenced by doubling of search-generated e-commerce GMV year-over-year,
[424 -> 428] as well as over 50% year-over-year growth in the search advertising revenue in the first quarter
[428 -> 433] of 2023. Second, online marketing services. In the first quarter, a considerable number of
[433 -> 437] advertisers remained cautiously optimistic towards the recovery of macroeconomy and consumption plans
[437 -> 443] in 2023, but through efforts to further strengthen our commercialization data infrastructure,
[443 -> 447] optimize our product capabilities and refine our industry-specific management strategies,
[447 -> 452] our advertising revenue growth gradually recovered. Our revenue from online marketing service for the
[452 -> 460] first quarter of 2023 grew by 15.1% year-over-year to reach 13.1 billion renminbi, accounting for 51.8%
[460 -> 464] of our total revenue. The number of advertisers on our platform also continued to grow rapidly
[464 -> 472] year-over-year and quarter-over-quarter in the first quarter of 2023. Advertising services
[472 -> 476] provided our native e-commerce merchants maintained robust growth momentum propelled
[476 -> 480] by the growth in e-commerce GMV on our platform. In the first quarter, we pioneered an industry-leading
[480 -> 484] operating philosophy for a strong wide RRI and completed pilot runs on certain brand advertisers
[484 -> 489] during the Valentine's Day and Women's Day shopping festival. These trials proved the capabilities of
[489 -> 493] our store-wide RRI-based bidding system and validated its effectiveness in end-to-end sales
[493 -> 497] funnel conversion from brand promotion and promoted ads and ultimately to transactions.
[497 -> 501] For our closed-loop advertising algorithms, we completed end-to-end RRI production and
[501 -> 506] productization plan, ensuring the alignment of the advertising e-commerce from traffic distribution
[506 -> 512] and factory advertising into our omni-domain e-commerce traffic aggregation algorithm.
[512 -> 515] In addition, we launched a project growing our small and medium-sized e-commerce merchant client
[515 -> 519] base. In particular, within our client acquisition and marketing capabilities,
[519 -> 523] we upgraded our Magnetic Taurus, a platform for e-commerce marketing solutions on mobile devices
[523 -> 527] to capitalize advertising needs, enhance penetration, and optimize our merchant ecosystem.
[528 -> 532] In terms of our external advertising services, as most of our external clients are online businesses,
[532 -> 536] their recoveries have lagged relatively to offline businesses. However, an encouraging
[536 -> 539] gradual recovery plan began to take shape during the first quarter in the industry,
[539 -> 543] such as information services, medical care, finance, and education to explore advertisers'
[543 -> 548] long-term goals, to empower our clients to achieve in-depth promotion of our target users.
[548 -> 551] We are leveraging products and algorithms that are well-integrated with industry attributes to
[551 -> 557] promote discovery, accumulation, and user-brand matching of high-quality user cohorts and also
[557 -> 562] post-click models. At the same time, we actively monitor the healthiness of external advertisements
[562 -> 567] on our platform, ensuring the penetration on the high-value users through our optimized traffic
[567 -> 571] allocation mechanism. In addition, we have established review standards and systems for
[571 -> 576] native advertisement materials to improve the quality of greater materials and reduce the
[576 -> 579] negative impact on user experience and our ecosystem. These efforts, together with our
[579 -> 583] organic and commercial traffic allocation mechanism to enhance conversion efficiency
[583 -> 587] and ROI for advertisers, have propelled the growth for external advertising services.
[587 -> 591] With respect to brand advertising, we focus on strengthening our product capabilities.
[591 -> 595] We established a rich advertising product portfolio, which includes splash ads and
[595 -> 599] sponsorships for our self-produced IP setups such as KOLs, homepages, and searches.
[600 -> 603] further expanding our brand advertising scenarios and sources.
[603 -> 607] Furthermore, we design and customize solutions for brand advertisers at various stages across
[607 -> 610] different industries.
[610 -> 614] We systematically establish user assets for brand advertisers and create an end-to-end
[614 -> 619] conversion path, include integrating brand promotion, performance ads, and transaction,
[619 -> 626] leading to increased recognition of our platform value from a growing number of brand advertisers.
[626 -> 630] Driven by these initiatives and benefiting from key promotion events such as the Chinese
[630 -> 636] New Year and Women's Day in the first quarter, our revenue from brand advertising increased
[636 -> 637] over 20% year-over-year.
[637 -> 638] Third, our e-commerce business.
[638 -> 648] In the first quarter of 2023, we'll continue to strengthen our trust-based e-commerce ecosystem
[648 -> 650] and execute our Omni-Domain Operating Strategy.
[650 -> 655] We further stratify or satisfy our users' needs by enriching our mechanism, improving
[655 -> 660] matching accuracy between buyers and sellers, and harness the high-quality streaming resources
[660 -> 664] and e-commerce content, which in turn drove a year-over-year increase in GMV of 28.4%
[664 -> 668] to 224.8 billion RMB.
[668 -> 673] On the merchandise side, we continue to reinforce our merchandising capabilities, amplifying
[673 -> 676] the exposure of more high-quality products for recommendation through product evaluation
[676 -> 679] and rating based on a broader array of metrics.
[679 -> 683] And at the same time, we guide merchants to continue enhancing the product information
[683 -> 687] quality and quantity as well as elevating their service capabilities.
[687 -> 691] On the merchant side, we further upgraded the cooperative mechanism between merchants
[691 -> 692] and KOLs.
[692 -> 696] We facilitated more accurate product matching for KOLs engaged in product distribution
[696 -> 702] through a more refined tiered and tiered operation strategy, leading to an over 50% year-over-year
[702 -> 706] increase in GMV through the KOL distribution channel in this quarter.
[706 -> 709] We expanded our commercial revenue generated from KOL distribution to continue contributing
[709 -> 713] to incremental e-commerce revenue growth going forward.
[713 -> 717] Moreover, by leveraging our stream initiative to build a bridge between merchants and KOLs,
[717 -> 722] we have created a flywheel of merchandise and traffic driving increased both sides of
[722 -> 723] our platform.
[723 -> 726] With respect to onboarding and development of merchants, with that cooperation with
[726 -> 730] more brand merchants across a growing range of industries, first quarter catering to our
[730 -> 734] users' increasing needs and consumption of branded merchandise, leveraging our deep
[734 -> 738] insights into users' consumption behavior, we carried out top-tier promotions, leading
[738 -> 742] to approximately 30% year-over-year increase in average number of brands onboarded their
[742 -> 747] promote in the first quarter, invite promotion events such as Super Brand Day.
[747 -> 753] The growth rate of GMV from brands, including quiet brands, was much higher than the over
[753 -> 759] platform, accounting about 30% of our total e-commerce GMV in the first quarter.
[759 -> 763] We also facilitated brand self-operated live streaming through creative content formats
[763 -> 767] such as press conferences, product launches, and live streaming by buses to better cater
[767 -> 771] to users' purchasing needs for brand merchandise.
[771 -> 776] In the first quarter, GMV offered brand self-operated live streaming group by approximately 70%
[776 -> 777] year-over-year.
[777 -> 782] Going forward, we aim to more brands expand their user base while achieving GMV ramp-up
[782 -> 784] and sustainable operations.
[784 -> 788] Additionally, we work with service providers to attract merchants in industrial zones and
[788 -> 791] improve our merchant empowerment system.
[791 -> 796] In the first quarter, we launched a Gold Rush initiative with exclusive policy and traffic
[796 -> 799] support to house more medium-sized merchants to grow.
[799 -> 804] In March, the number of both monthly-operated on-boarded business merchants and monthly-active
[804 -> 807] business merchants increased by over 50% year-over-year.
[807 -> 811] And for merchants with steady operations on Kuaishou, we launched promotion activities
[811 -> 816] such as Spring Festival, Goose Festival, and Women's Day promotions to refine our subsidy
[816 -> 822] strategies, optimize traffic allocation, and enhance conversion efficiency, thus fostering
[822 -> 825] GMV scale-up for small and medium-sized merchants.
[825 -> 831] On our user front, we continue to refine our tiered operations for e-commerce business payers
[831 -> 832] – payer users.
[832 -> 836] We cultivate the user mindset through recommendations and reinforce our conversion of new paying
[836 -> 840] users and potential customers via smart subsidies, promotions, and traffic allocation adjustments.
[840 -> 845] In the first quarter of 2023, new e-commerce paying users, monthly purchase frequency increased
[845 -> 850] continuously year-over-year and quarter-over-quarter, with retention rates improving every month.
[850 -> 855] With respect in relatively less active paying users, we strengthened the identification and
[855 -> 858] reactivation of users with support experience.
[858 -> 861] And for active paying users, we launched our early warning and targeted anti-churn strategies
[861 -> 865] in the first quarter to provide better services to high-value users.
[865 -> 868] In the first quarter, the number of monthly active e-commerce paying users averaged order
[868 -> 872] price and monthly order frequency all increased year-over-year.
[872 -> 877] Algorithm-wise, we mitigated the impact of e-commerce content on user time span by modeling
[877 -> 882] the relationship between the e-commerce-related user interaction and consumption time span.
[882 -> 887] We optimized users' e-commerce consumption experience, leading to more effective recommendations
[887 -> 888] and conversion.
[888 -> 893] Shop-based e-commerce is another major realming question of the domain e-commerce business
[893 -> 894] strategy.
[894 -> 898] In the first quarter, we started to test the new Shopping More entry button we placed on
[898 -> 903] the landing page of QuietShop to better meet the intended driven shopping needs of high
[903 -> 904] active paying users.
[904 -> 908] We aim to validate our Shopping More business model and cultivate user mindshare through
[908 -> 912] this exit point, laying a solid foundation for full-scale launch of our Shopping More
[912 -> 913] service in the future.
[913 -> 917] Meanwhile, as we optimized our search function to better identify user intention, we improved
[917 -> 920] the product relevance of search results, leading to a doubling of GMP generated from the searches
[920 -> 922] year-over-year in the first quarter.
[922 -> 925] Next, regarding our live streaming business, in the first quarter of 2023, live streaming
[925 -> 930] revenue grew by 18.8% year-over-year to 9.3 billion RMB, driven by year-over-year increases
[930 -> 933] in both average MPUs and monthly ARPU.
[933 -> 938] Specifically, average MPUs increased by 6.4% year-over-year to 60.1 million, while monthly
[938 -> 942] ARPU rose by double digits year-over-year.
[942 -> 947] These achievements are as a result of the consistent improvement of live streaming content
[947 -> 954] quality and optimization of user content matching efficiency through algorithm interactions.
[954 -> 959] On a supply side, we focus on promoting development of live streaming as a professional and also
[959 -> 964] the continuous advanced or diverse cooperation with top talent agencies and streamers.
[964 -> 968] In the first quarter, the number of active streamers from the talent agencies increased
[968 -> 970] by over 140% year-over-year.
[970 -> 975] We also provide accepted support to high-quality mid-level streamers to optimize the constituents
[975 -> 977] of live streaming supply.
[977 -> 982] At the same time, we continue to explore different live streaming categories, including knowledge-based
[982 -> 986] and virtual-person live streaming, to bring our users to analyze for a few types of live
[986 -> 988] streaming content.
[988 -> 991] Our initiative, Live Streaming Plus, services made steady progress in the first quarter.
[991 -> 996] We averaged daily resume submissions on quite high, growing by over 300% year-over-year,
[996 -> 1000] and peak daily resume submission exceeded 500,000.
[1000 -> 1006] At the end of the first quarter, ideal housing covered more than 70 cities nationwide, with
[1006 -> 1010] a cumulative growth transaction value surpassing 8 billion RMB in the first quarter.
[1010 -> 1015] In addition, quite date, matchmaking service facilitated over 100,000 voice chats in the
[1015 -> 1018] live streaming rooms and averaged every day in the first quarter.
[1018 -> 1022] Finally, in terms of overseas business progress, in the first quarter of 2023, we further deepened
[1022 -> 1026] our key country-focused strategy to optimize resource allocation while establishing a more
[1026 -> 1031] agile collaboration to elevate the operation efficiency in a core market region such as
[1031 -> 1032] Brazil and Indonesia.
[1032 -> 1037] Their use and yearly time span continue to grow year-over-year and quarter-over-quarter.
[1037 -> 1041] And revenue from overseas businesses grew at an accelerated pace to reach 138 million
[1041 -> 1045] RMB in the first quarter of 2023, increased by over six times year-over-year.
[1045 -> 1050] Meanwhile, we continue to narrow our overall operating loss in overall markets by 45.1%,
[1050 -> 1054] quarter-over-quarter in the first quarter, as we further enhance operating efficiency
[1055 -> 1059] and continue to reduce costs through an RI-based investment approach in our overseas business.
[1061 -> 1065] Our overseas live streaming business optimized its content supply by adding a vast area of
[1065 -> 1070] talent agencies into a partner roster and energizing its existing talent agency partners
[1070 -> 1072] to produce more and better streaming content.
[1072 -> 1076] Meanwhile, a ramp-up exploration in live streaming revenue products and rollout of its newest
[1077 -> 1081] iterations of the operating process lead to a steady improvement in live streaming
[1081 -> 1082] pay-and-use ratio in our pool.
[1082 -> 1086] In addition, success being passed a growth profit margin of live streaming business through
[1086 -> 1089] a series of measures improving the top talent agency efficiency.
[1089 -> 1093] And advertising front, our overseas business achieved better than expected revenue growth
[1093 -> 1096] thanks to its effort to strengthen local operation capabilities.
[1096 -> 1099] Expanding advertiser coverage and more industry-access optimized product
[1099 -> 1100] portfolio and service capabilities.
[1100 -> 1104] In addition, e-commerce services were launched in Brazil in the first quarter and test quarter
[1104 -> 1107] and primarily verify their processes.
[1107 -> 1111] Looking ahead to the rest of 2023, YSL will continue to leverage technology
[1111 -> 1115] to deliver high-quality experiences and services to our users and empower content creators,
[1115 -> 1118] advertisers, and merchants, while at the same time unlocking monetization potential
[1118 -> 1122] throughout vast and vibrant ecosystems to ultimately create long-term value
[1122 -> 1124] for our shareholders and stakeholders.
[1125 -> 1126] This concludes my prepared remarks.
[1126 -> 1126] Thank you.
[1126 -> 1130] And our CFO, Mr. Gene Bing, will discuss company's financial performance
[1130 -> 1131] for the first quarter of 2023.
[1133 -> 1134] Thank you, Michel.
[1135 -> 1139] We started the year of 2023 with remarkable performance and delivered a positive adjusted
[1139 -> 1142] net profit at the group level in the first time of our listing.
[1142 -> 1147] This milestone was a result of our persistent efforts in advancing integration of user content
[1147 -> 1151] and commercialization ecosystem and our continued commitment to refining operation efficiency.
[1151 -> 1155] Specifically, we achieved a healthy expansion of our user base,
[1155 -> 1158] taking our average DAUs and MEUs to a new record highs.
[1159 -> 1164] At the same time, we continue to optimize our monetization models and enhance monetization
[1164 -> 1168] efficiency to unlock the vast potential of our ecosystem,
[1168 -> 1172] propelling solid revenue growth across our business segments.
[1172 -> 1176] This, coupled with our effective growth cost control and efficiency enhancement measures,
[1176 -> 1180] leading to an operating profit in our domestic business for fourth consecutive quarters
[1180 -> 1185] at 55.4% reduction operating loss in overseas business year-over-year.
[1185 -> 1189] Next, let me walk you through our performance for the first quarter of 2023 in detail.
[1189 -> 1194] In the first quarter of 2023, our group's revenue increased 19.7% year-over-year to
[1194 -> 1199] 25.2 billion renminbi, accelerating from 15.8% in fourth quarter of 2022.
[1200 -> 1205] This increase was driven by broad-based strengths in all our main businesses, including online
[1205 -> 1213] marketing services, live streaming, and other services, particularly the e-commerce business.
[1213 -> 1218] Revenue from our online marketing services increased 15.1% year-over-year to $13.1 billion
[1218 -> 1223] RMB in the first quarter, with strong performance in our closed-loop advertising and brand advertising
[1223 -> 1224] services.
[1224 -> 1228] This growth was driven by our efforts to further strengthen our data infrastructure to support
[1228 -> 1233] commercialization, optimize our product capabilities, and refine our industry-specific management
[1233 -> 1234] strategies.
[1234 -> 1239] In the first quarter, revenue from our live streaming business grew by 18.8% year-over-year
[1239 -> 1241] to $9.3 billion RMB.
[1241 -> 1245] We continued to reach content supply by deepening cooperation with the top talent agencies and
[1245 -> 1251] expanding high-quality stream of aid and constantly expand our live streaming usage scenarios
[1251 -> 1255] and content categories to strengthen user engagement.
[1255 -> 1262] Our average NPUs reached $15.1 million in the first quarter, while our monthly output
[1262 -> 1267] also achieved double-digit year-over-year growth.
[1267 -> 1272] On the other services, revenue surged 51.3% year-over-year in the first quarter, reaching
[1272 -> 1278] $2.8 billion RMB, primarily propelled by our strong e-commerce revenue growth.
[1278 -> 1283] We continued to onboard and cultivate new merchants, reinforce our merchandising capabilities,
[1283 -> 1288] and optimize our cooperation strategy, which all helped convert more of our users into
[1288 -> 1292] active e-commerce paying users and increase their average order value and monthly order
[1292 -> 1297] frequency, fostering a virtuous cycle of merchant growth, paywall growth, and e-commerce user
[1297 -> 1298] growth.
[1298 -> 1304] As a result, our e-commerce GMV increased 28.4% year-over-year, reaching $224.8 billion
[1304 -> 1305] RMB.
[1305 -> 1309] And the year-over-year growth rate of e-commerce revenue outpaced the overall revenue growth
[1309 -> 1310] of other services.
[1311 -> 1315] For the first quarter of 2023, our cost of revenues increased 9.9% year-over-year to
[1315 -> 1321] $13.5 billion RMB, accounting for 53.6% of total revenues.
[1321 -> 1326] This increase was attributable to the increasing revenue-sharing costs and related taxes in
[1326 -> 1330] line with our revenue growth.
[1330 -> 1337] Growth profit for the first quarter of 2023 rose 33.4% year-over-year to $11.7 billion
[1337 -> 1338] RMB.
[1338 -> 1344] Of course, profit margin also increased significantly year-over-year, expanding 4.7% points from
[1344 -> 1353] 41.7% in first quarter of 2022 to 46.4% this quarter as a result of our improved cost management.
[1353 -> 1358] Moving to expenses, selling and marketing expenses for the first quarter of 2023 decreased
[1358 -> 1364] by 8.1% year-over-year to $8.7 billion RMB, primarily due to our efficient and disciplined
[1364 -> 1368] spending on user acquisition and retention.
[1368 -> 1377] Selling and marketing expenses as a percentage of total revenues also decreased from 45%
[1377 -> 1382] in the first quarter of 2022 to 34.6% in this quarter.
[1382 -> 1386] Research and development expenses for the first quarter decreased by 17.1% year-over-year
[1386 -> 1391] to $2.9 billion RMB, primarily due to the decrease in employee benefit expenses, including
[1391 -> 1394] related share-based compensation expenses.
[1394 -> 1400] R&D expenses represented 11.6% of our total revenues in the first quarter, also down
[1400 -> 1406] materially from 16.7% in the first quarter of 2022.
[1406 -> 1412] Understated expenses increased by 5.5% year-over-year to reach $900 million RMB for the first quarter,
[1412 -> 1416] primarily due to the increase in employee benefit expenses, including related share-based
[1416 -> 1417] compensation expenses.
[1417 -> 1423] As a percentage of total revenues, it decreased from 4.1% in the first quarter of 2022 to
[1423 -> 1427] 3.6% in this quarter.
[1427 -> 1431] In the first quarter of 2023, our group achieved adjusted net profit for the first time, which
[1431 -> 1439] amounted to $42 million RMB, a turnaround of adjusted net loss of $45.3 million RMB
[1439 -> 1448] in the fourth quarter of 2022 and $3.7 billion RMB in the same period of last year.
[1448 -> 1454] Our balance sheet maintained a very healthy trend, with cash and cash equivalent time deposits
[1454 -> 1463] restricted cash and wealth management products of $44.8 billion RMB of March 31st of 2023.
[1463 -> 1468] Our enhanced monetization capabilities and efficient working capital management empowered
[1468 -> 1474] us to generate a positive operation net cash flow of $1.8 billion RMB for the first quarter
[1474 -> 1475] of 2023.
[1476 -> 1482] In summary, additionally, as you may have seen, we announced a share repurchase plan
[1482 -> 1489] of $4 billion Hong Kong dollar, which demonstrates the competence of our board and the management
[1489 -> 1493] of our company's long-term and sustainable growth potential.
[1493 -> 1497] So overall, in summary, we continue to propel the high-quality development of our ecosystem
[1497 -> 1502] and strove to maximize value for our content advertising and e-commerce merchant partners.
[1502 -> 1508] Looking ahead, we will remain focused on monetization efficiency gain across our business
[1508 -> 1513] lines, which are built on the foundation of ever-improving user experience and user trust.
[1513 -> 1518] This coupled with our ongoing focus on enhancing our cost efficiency positions as well to further
[1518 -> 1522] improve our operating profitability while creating values for all the shareholders.
[1522 -> 1524] This concludes prepared remarks.
[1524 -> 1525] Now open for questions.
[1525 -> 1526] Operator, please go ahead.
[1526 -> 1548] As a reminder, to ask a question, you need to press star 1 on your telephone.
[1548 -> 1551] To remove your request, please press the pound or hash key.
[1551 -> 1555] Please stand by while we compile the Q&A roster.
[1559 -> 1566] The first question comes from Kenneth Fung from Credit Suisse.
[1566 -> 1567] Please go ahead.
[1569 -> 1572] Hi, Matthew.
[1572 -> 1574] Thank you for accepting my question.
[1574 -> 1577] I'd like to congratulate you on a very strong performance.
[1577 -> 1579] My question is about e-commerce.
[1579 -> 1585] Under the current competitive situation, how should we think about how e-commerce will
[1585 -> 1590] contribute to future growth and what factors will drive it?
[1590 -> 1596] I'd also like to share with you the preparation and progress of our e-commerce business.
[1597 -> 1602] Thank you, management, for taking my question and congrats on a strong quarter.
[1602 -> 1607] Under the current competitive landscape, how should we think about the upside potential
[1607 -> 1609] for our e-commerce business?
[1609 -> 1612] Can management share some of the key drivers behind?
[1612 -> 1617] I also would appreciate some updates on the progress and status of the marketplace e-commerce
[1617 -> 1618] business.
[1618 -> 1622] Thank you.
[1623 -> 1652] Thank you for the questions.
[1653 -> 1660] According to the recent MBS data, nationwide online retail sales grew by 8.6% year-over-year
[1660 -> 1664] in the first quarter of this year, and the scale of e-commerce industry continued to
[1664 -> 1665] expand.
[1665 -> 1671] As an up-and-comer with an advantageous position in live streaming e-commerce, we are still
[1671 -> 1672] growing rapidly.
[1672 -> 1676] We are fully confident that we will continue to gain market share going forward.
[1679 -> 1680] Thank you.
[1708 -> 1710] Thank you.
[1780 -> 1786] As to the specific drivers of our growth, first, on the supply side, the constant enrichment
[1786 -> 1790] of merchandise infrastructure, short video content, brand e-commerce, and different merchandise
[1790 -> 1794] categories drives demand growth for our e-commerce business.
[1794 -> 1799] We will improve our merchandising infrastructure to select competitively priced.
[1800 -> 1804] high-quality merchandise for precise user targeting and conversion.
[1804 -> 1808] We will also encourage merchants and KOLs to not only make effective recommendations
[1808 -> 1813] through show video content, but also to promote order placement and transactions.
[1813 -> 1817] At present, e-commerce GMV from show video recommendations accounts for a low single
[1817 -> 1825] digit of total GMV of e-commerce, with considerable future upside potential.
[1825 -> 1829] As for brand e-commerce, in the first quarter of our brand GMV grew at a significantly faster
[1829 -> 1834] pace on a year-over-year basis than our overall e-commerce GMV.
[1834 -> 1839] Going forward, we will improve sales conversion through more precise marketing, subsidy, and
[1839 -> 1843] support policies to encourage self-operated live streaming by merchants, while leveraging
[1843 -> 1847] our high-quality KOL resources to expand brand's share of voice.
[1847 -> 1851] At the same time, our merchandise categories have been growing.
[1851 -> 1856] The apparel category, which we are in a vantageous position, maintained rapid growth, with a
[1856 -> 1860] major increase in the sports and outdoor subcategory.
[1860 -> 1867] GMV from FMCG, home furnishings, and 3C continue to increase as a percentage of total GMV,
[1867 -> 1872] with products carrying a higher average order value, such as home appliances, growing at
[1872 -> 1874] a notably faster rate.
[1874 -> 1881] GMV from fresh-produced, plant, and pest products has also displayed a strong growth momentum.
[1881 -> 1888] While it still accounts for a relatively small proportion overall, in fact, GMV of tea and
[1888 -> 1892] other subcategories nearly tripled year-over-year.
[1892 -> 1897] This is primarily due to our in-depth discovery and operation of high-quality merchants in
[1897 -> 1902] industrial zones, as well as the efficient conversion of potential paying users.
[1902 -> 1907] We are confident in our ability to help merchants from a wider range of industries achieve
[1907 -> 1910] a quantum leap in their online sales.
[1914 -> 1920] In terms of trends, the main driving factor is the increase in traffic volume, buyer penetration
[1920 -> 1922] rate, and purchase frequency.
[1922 -> 1928] As a high-quality content platform, our traffic volume is still growing and rising.
[1928 -> 1934] Our effort is to constantly improve the quality of e-commerce content and the accuracy of
[1934 -> 1939] matching, making e-commerce an important component of high-quality content, and improving
[1939 -> 1941] the traffic ceiling.
[1941 -> 1946] Under these conditions, our e-commerce buyer penetration rate has stabilized at around
[1946 -> 1950] 15% in the first quarter, and there is still a lot of room for improvement.
[1950 -> 1955] With the increase in traffic volume, e-commerce business and content consumption are highly
[1955 -> 1956] coordinated.
[1956 -> 1960] The algorithmic matching is more accurate, and smart subsidies and large-scale operations
[1960 -> 1962] continue to release new capabilities.
[1962 -> 1967] We are confident in low-priced goods, high-quality content, and thoughtful services continue to
[1967 -> 1971] help e-commerce buyers transform, save efficiency, and strengthen more users.
[1971 -> 1975] In the fast-moving platform, e-commerce consumer confidence further improves the rating of
[1975 -> 1976] orders.
[1976 -> 1984] Secondly, on the demand side, overall user traffic, rising paying user penetration, and
[1984 -> 1988] higher purchase frequency are the main growth drivers.
[1988 -> 1994] As a platform with high-quality content, we continue to grow our user traffic to new highs.
[1994 -> 2000] The direction of our future efforts is to make e-commerce an integral part of our high-quality
[2000 -> 2004] content ecosystem, and raise the upside of our traffic growth through improvements in
[2004 -> 2007] e-commerce content quality and matching accuracy.
[2007 -> 2013] So far, the penetration rate of our monthly active e-commerce paying users has hovered
[2013 -> 2018] around 15%, indicating considerable upside given our massive user traffic.
[2018 -> 2023] We are further improving the path from product recommendation to transaction.
[2023 -> 2030] And aligning content consumption with e-commerce needs and enhanced matching algorithm accuracy.
[2030 -> 2035] Supported by these initiatives, as well as the momentum of our smart subsidy programs
[2035 -> 2040] and the main app operation activities, we are confident that we can constantly enhance
[2040 -> 2045] the conversion and retention efficiency of active e-commerce paying users with cost-effective
[2045 -> 2049] goods, high-quality content, and customer-focused services.
[2049 -> 2054] Taken together, these efforts will reinforce more users' e-commerce consumption habits
[2054 -> 2062] on Kuaishou's platform, leading to further increases in purchase frequency.
[2082 -> 2105] Prosperity on both the supply and demand sides of e-commerce can only be achieved through
[2105 -> 2107] strong platform operation and governance.
[2107 -> 2112] In the first quarter, we basically finished upgrading our merchants experience scoring
[2112 -> 2117] system and our KOL's reputation scoring system, which are based on a comprehensive
[2117 -> 2122] evaluation of merchandise and service quality, content, and user experience.
[2122 -> 2126] These systems will allow us to better identify and support high-quality merchants,
[2126 -> 2131] elevate users' overall shopping experience, and, together with our merchandise scores,
[2131 -> 2136] help us further strengthen our trust-based e-commerce ecosystem in the future.
[2136 -> 2144] Regarding your second question, as our merchandise infrastructure is gradually maturing,
[2144 -> 2148] our new shopping mall services are also continuously improving.
[2148 -> 2152] In the first quarter, we opened and tested the new shopping mall services
[2152 -> 2153] for the first-time buyers.
[2153 -> 2156] In the second quarter, we will gradually increase the number of these services,
[2156 -> 2159] using a larger GMAV volume and a rich supply of market capacity
[2159 -> 2163] to improve the accuracy and efficiency of shopping malls.
[2163 -> 2167] The new shopping malls will help the platform understand the shopping preferences
[2167 -> 2170] of users and enhance their shopping mindset.
[2170 -> 2173] With the latest results, we will gradually test the first-level entrance
[2173 -> 2175] of shopping mall services in the future.
[2175 -> 2178] In terms of the choice and introduction of merchandise,
[2178 -> 2181] we will make good use of the existing merchandise terms on the platform
[2181 -> 2184] to strengthen the infrastructure of long-term products,
[2184 -> 2186] merchandise cards, and detailed pages.
[2186 -> 2189] At the same time, we will also make full use of the social resources of the merchandise
[2189 -> 2192] to continue to introduce high-quality supply.
[2192 -> 2196] At present, Kuaishou's GMAV value has exceeded 10%.
[2196 -> 2200] Among them, the growth of Guess You Like and Search GMAV
[2200 -> 2203] in the first quarter has been doubled.
[2203 -> 2206] Among the more active buyers, the penetration rate of Search
[2206 -> 2209] has reached 69%.
[2209 -> 2212] This shows the growing shopping mindset of Kuaishou users
[2212 -> 2215] on the Kuaishou platform.
[2215 -> 2218] It is expected that this year's GMAV value will increase rapidly,
[2218 -> 2223] and the value will continue to improve.
[2223 -> 2226] And regarding your second question,
[2226 -> 2229] as our merchandise infrastructure matures,
[2229 -> 2232] we have been testing our new shopping mall service.
[2232 -> 2235] In the first quarter, we opened testing of the shopping mall feature
[2235 -> 2238] on buyers' homepages.
[2238 -> 2241] We will gradually roll out access to this service
[2241 -> 2244] in the second quarter on a larger scale
[2244 -> 2247] and use the resulting GMAV increase and growth momentum
[2247 -> 2250] to propel supply-side enrichments,
[2250 -> 2253] enhance merchandise listings, and enhance its operating efficiency.
[2253 -> 2256] The new shopping mall will also help us understand
[2256 -> 2259] the shopping preferences of our active users
[2259 -> 2262] and fortify users' shopping mindsets.
[2262 -> 2265] With this as a home base for our e-commerce operations,
[2265 -> 2268] we will progressively test Level 1 access points
[2268 -> 2271] for the shopping mall.
[2271 -> 2274] With respect to merchandise selection and shelving,
[2274 -> 2277] we will leverage our platform's existing merchandise pool
[2277 -> 2280] and improve infrastructure such as on-shelf goods
[2280 -> 2283] and detailed merchandise information pages.
[2283 -> 2286] Meanwhile, we will leverage all types of suppliers' resources
[2286 -> 2289] to constantly bring in high-quality supplies.
[2289 -> 2293] Currently, Kuaishou's pan-shelf GMAV
[2293 -> 2296] accounts for over 10% of our total GMAV of e-commerce,
[2296 -> 2299] of which GMAV resulting from the Guess What You Like feature
[2299 -> 2302] and searches both doubled in the first quarter.
[2302 -> 2305] The penetration rate of our search function
[2305 -> 2308] reached a high level of 69%
[2308 -> 2311] among monthly active e-commerce paying users,
[2311 -> 2314] reflecting our users' increasingly established
[2314 -> 2317] shopping mentality on our platform.
[2317 -> 2320] We expect our pan-shelf GMAV to grow
[2320 -> 2323] at an accelerated pace this year
[2323 -> 2326] and account for a rising share of total GMAV of e-commerce.
[2326 -> 2331] Thank you, Operator.
[2331 -> 2335] Next question, please.
[2335 -> 2338] This is Goldman Sachs' Lincoln Gong.
[2338 -> 2341] Next question comes from the line of Lincoln Gong from Goldman Sachs.
[2341 -> 2344] Please go ahead.
[2344 -> 2347] Thank you, Mr. Xiao.
[2347 -> 2350] My question is about commercialization.
[2350 -> 2353] I would like to ask Mr. Guan to predict
[2353 -> 2356] that our external circulation has reached a high level
[2356 -> 2359] and is able to restore a steady growth.
[2359 -> 2362] In the last quarter,
[2363 -> 2366] we have seen an increase in our commercial circulation
[2366 -> 2369] and an increase in our stock price,
[2369 -> 2372] including our full-year ROI.
[2372 -> 2375] Can you share some of the progress?
[2375 -> 2378] I will translate for you.
[2378 -> 2381] Thank you for taking my question.
[2381 -> 2384] My question is about commercialization business.
[2384 -> 2387] Can management give us any indication
[2387 -> 2390] for the external ads,
[2390 -> 2393] especially the performance ads,
[2393 -> 2396] when it can recover to positive growth?
[2396 -> 2399] In the last quarter,
[2399 -> 2402] I mentioned also talking about
[2402 -> 2405] an increase in our stock price.
[2405 -> 2408] Can you give us any indication
[2408 -> 2411] for the external ads?
[2411 -> 2414] I will translate for you.
[2414 -> 2417] Thank you for taking my question.
[2400 -> 2406] the traffic efficiency, the upgrade of our commercial service, as well as the store-wide ROI.
[2406 -> 2410] Could we elaborate a bit more in terms of the progress here? Thank you.
[2432 -> 2439] As you can see, the consumption of effects-related ads is showing a more obvious trend of gradual recovery.
[2439 -> 2447] In terms of the trend of the industry, games, media consultations, and e-commerce retail are still the main driving force for the increase and recovery.
[2447 -> 2454] In addition, the financial, education, and other industries, along with our product chain optimization and key customer public-private partnerships,
[2454 -> 2462] have become important pillars for the gradual recovery and growth of effects-related ads.
[2462 -> 2468] We expect that with the surge in traffic in the summer, media consultations will increase,
[2468 -> 2471] and the gaming industry will combine.
[2471 -> 2478] With more new products being released, and some customers' clear demands for traffic in the summer,
[2478 -> 2483] game ads will also enter the peak of consumption in the summer.
[2483 -> 2491] As a result, we have a stronger confidence in the growth of effects-related ads in the second half of the year.
[2491 -> 2495] Thanks for your questions.
[2495 -> 2501] In the second quarter, we have gradually completed the execution of four-year framework agreements
[2501 -> 2506] with external advertising customers from the rise on various industries.
[2506 -> 2511] Given this context, combined with the upcoming June 18th promotion
[2511 -> 2514] and the implementation of our refined channel policies for some industries,
[2514 -> 2522] we have noticed a clear month-by-month recovery trend in external performance ad expenditures compared with the same period last year.
[2522 -> 2531] Industry-wise, the main drivers of this recovery came from gaming, information services, e-commerce, and retail industries.
[2531 -> 2540] The finance and education industries, among others, also underpinned the year-over-year growth of our external performance ads,
[2540 -> 2547] thanks to our optimized sales funnel conversion, targeted efforts towards key clients, and associated supportive policies.
[2547 -> 2555] We expect advertising placements in this information services industry to increase gradually during this year's summer break period,
[2555 -> 2557] driven by uncool user traffic.
[2557 -> 2563] Advertising expenditures from gaming clients will also enter a peak period during summer break,
[2563 -> 2570] propelled by the large number of new releases by game developers and some clients' clear traffic needs in this period.
[2570 -> 2580] These factors have boosted our confidence that our external performance ads will resume growth starting from the second half of this year.
[2584 -> 2588] In the past three quarters, we have seen progress in commercialization of our internal performance.
[2588 -> 2595] First, in terms of commercialization traffic, we have continued to strengthen our commercialization of data infrastructure,
[2595 -> 2600] through front-end business and product algorithmic synchronization,
[2600 -> 2604] targeted crowds, emotional exploration, and internal data integration,
[2604 -> 2609] as well as encouraging advertising clients to actively pass on and increase conversion data.
[2609 -> 2612] In the gaming, social, and financial industries,
[2612 -> 2614] the value of human rights to break the circle is obvious,
[2614 -> 2617] and it has indeed improved the advertising client's placement effect.
[2617 -> 2620] Second, in terms of product capability construction,
[2620 -> 2622] as mentioned in the brief just now,
[2622 -> 2626] we have also improved the mobility of magnetic bulls,
[2626 -> 2629] including in the placement chain and e-commerce.
[2629 -> 2636] In March 2023, the mobility of magnetic bulls increased by 72% compared to small and medium-sized businesses,
[2636 -> 2640] which has improved the penetration rate of small and medium-sized businesses and optimized the ecological structure of the internal loop.
[2640 -> 2642] In terms of search traffic,
[2642 -> 2647] with the improvement of search functions and the gradual formation of new searches,
[2647 -> 2650] the search traffic continues to grow rapidly,
[2650 -> 2653] combining with more conversion efficiency of search ads.
[2653 -> 2655] We see that in the first quarter,
[2655 -> 2659] the search ads increased by more than 50%,
[2659 -> 2662] providing more room for commercialization income.
[2662 -> 2665] In terms of brand advertising products,
[2665 -> 2668] in addition to the traditional opening form,
[2668 -> 2671] we have expanded the reach of brand resources,
[2671 -> 2673] such as personal pages and searches,
[2673 -> 2676] driving the increase in brand advertising to a higher level.
[2676 -> 2679] Third, in terms of commercialization service upgrade,
[2679 -> 2684] we are gradually improving the customer service system and response system at the customer level,
[2684 -> 2687] simultaneously solving customer service demands,
[2687 -> 2691] and promoting industrialization of the production system at the industry level.
[2691 -> 2694] In terms of industry supply issues and the deep conversion goal,
[2694 -> 2705] we are moving to our progress with respect to building our own strength in the online marketing services.
[2705 -> 2709] First, in terms of improving advertising traffic efficiency,
[2709 -> 2712] we continue to strengthen our commercialization data infrastructure.
[2712 -> 2716] We also substantially elevated our advertising performance
[2716 -> 2720] by reaching a broader audience among users in the gaming, social networking,
[2720 -> 2725] and financial industries through better coordination among our front-end business
[2725 -> 2730] and our product and algorithm teams, exploration of targeted users groups,
[2730 -> 2734] interest and internal data sharing, as well as by encouraging advertisers
[2734 -> 2738] to send back in-depth user conversion data.
[2738 -> 2742] Second, regarding strengthening our product capabilities,
[2742 -> 2747] in my prepared remarks, I mentioned the intelligent upgrade of our magnetic platform
[2747 -> 2751] for e-commerce and marketing solutions on mobile devices.
[2751 -> 2758] This upgrade included the connecting ad placements with e-commerce services.
[2758 -> 2762] As a result, we increased the penetration among small and medium-sized merchants,
[2762 -> 2768] as evidenced by the 72% year-over-year growth in the number of this type of merchants
[2768 -> 2771] on magnetic tours on mobile devices in March,
[2771 -> 2775] further optimizing our closed-loop advertising ecosystem.
[2775 -> 2779] Third, in terms of search traffic, with the improvement of our search function
[2779 -> 2783] and gradual establishment of users' search habits on our platform,
[2783 -> 2786] our search traffic maintained rapid growth.
[2786 -> 2790] As a result, and aided by its higher conversion efficiency,
[2790 -> 2796] search advertising generated 50% higher revenue year-over-year in the first quarter.
[2796 -> 2801] The rapid growth of search revenue will continue to provide upside potential
[2801 -> 2803] for advertising revenue.
[2803 -> 2807] As for brand advertising products, we expanded beyond traditional splash ads
[2807 -> 2811] to KOL's homepages and searches, among other areas,
[2811 -> 2817] driving higher growth for brand advertising versus an overall advertising services.
[2817 -> 2821] Third, with respect to advertising services upgrades,
[2821 -> 2824] we are on track to improve our customer service system
[2824 -> 2829] and response mechanism to address customer service needs in a timely manner.
[2829 -> 2833] At the industry level, we also promoted the development of product systems
[2833 -> 2838] and formulated customized industry solutions to address common industry problems
[2838 -> 2843] and achieve in-depth conversions.
[2843 -> 2845] As for the whole store's ROI,
[2845 -> 2849] at the end of March, the related products have been launched.
[2849 -> 2853] In the first quarter, we focused on running models and product optimization,
[2853 -> 2856] focusing on the enhancement of consumption capacity.
[2856 -> 2859] Through the R14 and R38 Queen's Day,
[2859 -> 2862] we completed some of the brand customers' tests.
[2862 -> 2866] We obtained stage-by-stage test experience and knowledge
[2866 -> 2870] to verify the fans' conversion space in the following year.
[2870 -> 2873] Many customers' feedbacks, the whole store's ROI,
[2873 -> 2877] and the way of promotion will be much lower in the case of direct investment.
[2877 -> 2881] Target ROI achievement and investment effect optimization
[2881 -> 2885] have been significantly improved compared to before.
[2885 -> 2891] We expect that the whole store's ROI products will enter the stage of mass promotion in the second quarter.
[2891 -> 2896] And turning to store-wide ROI,
[2896 -> 2901] we already launched the associated product at the end of March.
[2901 -> 2907] Our forecast in the first quarter was to validate our model and optimize products,
[2907 -> 2909] and this was our focus,
[2909 -> 2913] and improving our ability for incremental ad expenditures.
[2913 -> 2916] We completed pilot runs for same-brand advertisers
[2916 -> 2920] during the Valentine's Day and March the 8th Women's Day Shopping Festival,
[2920 -> 2924] which provided us with testing experiences as well as insights
[2924 -> 2929] while confirming the conversion potential of brand homepage followers.
[2929 -> 2933] Many advertisers reported the lower personnel and tracking costs
[2933 -> 2936] and significant improvements in ROI target achievement
[2936 -> 2940] and ad performance after the adoption of store-wide ROI.
[2940 -> 2945] We expect to commence the large-scale rollout of this product in the second quarter.
[2948 -> 2951] Thank you. Operator, next question, please.
[2956 -> 2960] The next question comes from the line of Thomas Chung from Jefferies.
[2960 -> 2961] Please go ahead.
[2972 -> 2978] Thanks, management, for taking my question.
[2978 -> 2980] My question is about the new initiatives.
[2980 -> 2985] Can management comment about local services and online recruitment?
[2985 -> 2988] How's the progress so far? Thank you.
[3000 -> 3005] 團隊資源等,我們設定重點運營的核心城市打造MVP。
[3005 -> 3014] 利用本地達人的影響力,團隊深耕細作和第三方合作夥伴的海量資源,建立起達人加商家生態。
[3014 -> 3019] 同時推薦商品隱形,篩選優勢供給,深入了解用戶需求。
[3019 -> 3025] 例如,在已經初步跑通了MVP的城市中,青島表現尤為突出。
[3025 -> 3034] 開城後僅50天內,日均DMV提升14倍,訂單數提升12倍,下單用戶數提升9倍。
[3034 -> 3048] 合作商家方面,例如某知名連鎖快送品牌,上線僅一個月時間,快速冷氣爬坡,首月支付DMV超過了3500萬。
[3048 -> 3059] 其中,有搜索意圖的訂單交易額佔比近30%,我們相信快手用戶對本地生活內容的消費意願和偏好是非常值得期待的。
[3059 -> 3065] 謝謝您的提問。在第一半,我們也進一步進行了本地服務。
[3065 -> 3074] 我們為城市MVP的關鍵項目認證了城市優勢、使用者基礎和團隊資源的具體評估。
[3074 -> 3087] 接著,利用本地KOL的影響力,我們團隊的勤奮努力和第三方夥伴的富有資源,我們建立了本地生態系統,包含KOL和商品。
[3087 -> 3094] 同時,我們提升了商品引擎,以顯示高質量的供應和深化使用者的需求。
[3094 -> 3103] 其中,我們在城市MVP中完成了12輪試驗,清道的成績非常出色,成就了不可思議的增長。
[3103 -> 3111] 在剛好50天後,清道的平均每日GMV的本地服務增長了14倍。
[3111 -> 3117] 訂單的數量增長了12倍,使用者的訂單的數量增長了9倍。
[3117 -> 3131] 關於我們的商品夥伴,一家著名的快速食品交易餐廳在清道完成了快速售價升幅,只在服務推出後一月,產生了超過35億人民幣的GMV。
[3131 -> 3138] 此外,交易源自於搜索,計算了近30%的整體售價。
[3138 -> 3145] 這些鼓勵的結果明顯反映出清道的使用者對本地服務有強烈的渴望和要求。
[3146 -> 3157] 在策略方面,隨著線下經濟的加速恢復,用戶對本地生活內容的消費需求在快速增長。
[3157 -> 3170] 進入二季度,我們將繼續擴大核心運營程式數量,提升當地優勢商家商品供給,激勵達人創作優質內容,強化本地用戶的消費心智。
[3170 -> 3178] 以配對應的平台政策支持,打造高效精準的短時間加直播雙輪增發體系。
[3178 -> 3186] 目前形成以清道、哈爾濱等多個城市為重要據點的成熟商業模式,快速複製到更多的城市。
[3186 -> 3195] 商品方面,我們也將擴展品類,除到餐以外增加道鐘、酒旅、門票等本地商品。
[3195 -> 3209] 除本地商家外,進一步擴展SKA品牌,幫助更多全國聯設品牌擴大用戶基數,充分利用在快手下層市場的用戶優勢,幫助品牌豐富用戶結構。
[3209 -> 3223] 平台運營方面,一季度我們搭建了NTS用戶推薦系統,更好地理解用戶,也將不斷完善本地業務、消費場景,提升用戶體驗。
[3223 -> 3233] 在策略方面,在上游經濟恢復和加速的速度下,用戶的消費需求對本地服務內容有迅速的增長。
[3233 -> 3249] 第二季度,我們將繼續擴展本地經營城市的數量,提高本地商品和產品的優質性,鼓勵KOL創造高質量內容,並強化本地用戶的消費觀念。
[3249 -> 3259] 這些措施,加上我們平台的支持政策,將在短短的視頻和直播中建立有效的內容分配系統。
[3259 -> 3266] 我們將快速地複製我們建立的商業模式,從關鍵市場如青島和哈爾濱,到更多的城市。
[3266 -> 3275] 在產品層面,我們將分配產品類別,從雜貨店、餐飲店到總的雜貨店、商店、酒店、旅行、票房等。
[3275 -> 3287] 此外,除了本地商品,我們還將繼續擴展SKA品牌的覆蓋,以幫助更多的國際雜貨店增強他們的用戶基礎,並分配他們的用戶混合,
[3287 -> 3292] 並在低階市場提供優勝的用戶資源。
[3292 -> 3301] 在平台運作方面,我們在第一季提出了NPS的用戶推薦系統,以獲得更深入的用戶要求。
[3301 -> 3312] 我們將繼續精心整合本地服務的產品和消費技術,以提升整體的用戶體驗。
[3312 -> 3324] 第一季度,快聘業務也穩步推進,日均簡歷投放量同比增長超過300%,同時日月投地簡歷峰值也超過50萬。
[3324 -> 3337] 快聘業務的持續進展,得益於我們不斷增加的崗位供給,通過數據基建提升簡歷質量,並通過算法提升崗位供需匹配效率等。
[3337 -> 3348] 同時,我們也在積極探索通過AI技術自動生產招聘視頻,形成低成本批量化內容生產能力,助力商家經營。
[3348 -> 3365] 在變現這兒,我們CPQL及分子量的線索定價模式也在逐步跑通,並在重點行業客戶完成測試,預計商業變現收入在未來一到兩個季度逐步起降。
[3365 -> 3381] 在第一季度,我們也在逐步提升。我們觀察到每年增加超過300%的日常報告提供,每天最高提供超過500,000人。
[3381 -> 3395] 這次持續增長是由於我們在增加數據基建提升崗位供給,通過數據基建提升崗位供需匹配效率等。
[3395 -> 3409] 此外,我們也在積極探索AI技術自動生產招聘視頻,形成低成本批量化內容生產能力,助力商家經營。
[3409 -> 3429] 在金融項目上,我們正在核實CPQL或分子量的線索定價模式,並在重點行業客戶完成測試,預計商業變現收入在未來一到兩個季度逐步提升。
[3430 -> 3433] 謝謝。下一個問題,請問行政長官。
[3433 -> 3439] 謝謝。下一個問題來自摩根山地的Alex Poon。
[3439 -> 3445] 下一個問題來自摩根山地的Alex Poon。請請問。
[3446 -> 3462] 下一個問題是關於利潤率的趨勢的。請管理層能不能分享一下未來毛利率和降本增效的一些趨勢應該怎麼看?謝謝。
[3462 -> 3476] 下一個問題是關於利潤率的。請管理層能不能分享一下未來毛利率和降本增效的一些趨勢應該怎麼看?謝謝。
[3494 -> 3523] 下一個問題是關於利潤率的。請管理層能不能分享一下未來毛利率和降本增效的一些趨勢應該怎麼看?謝謝。
[3600 -> 3602] 持续锚定单敌AU成本的提效
[3602 -> 3605] 通过完善精细化的投放和补贴模型
[3605 -> 3608] 计划渠道进行差异化的处理
[3608 -> 3610] 不断降低单敌AU维系成本
[3610 -> 3613] 优化新回流用户投放结构
[3613 -> 3616] 使用征投入ROI明显提升
[3616 -> 3618] 第二,服务器带宽投入方面
[3618 -> 3620] 我们通过技术手段
[3620 -> 3623] 不断提升单位时长的服务器和带宽使用效率
[3623 -> 3625] 中期通过研发效率
[3625 -> 3627] 指标体系建设
[3627 -> 3629] 和自营运营数据中心等项目
[3629 -> 3633] 使服务器带宽成本战术比持续降低
[3633 -> 3635] 第三,人力相关投入方面
[3635 -> 3638] 我们通过建立人力成本管控基准线
[3638 -> 3641] 有效实现各项指标的持续优化
[3641 -> 3644] 同时更关注人效和元效的改善
[3644 -> 3646] 并在ROI更高的板块
[3646 -> 3649] 持续坚定投入
[3649 -> 3650] 具体的说
[3650 -> 3653] 我们在去年推出了几个主要的活动
[3653 -> 3656] 以减少成本和增强效率
[3656 -> 3659] 首先,使用者增长成本
[3659 -> 3662] 我们专注在增强人流成本
[3662 -> 3664] 并保持交通增长
[3664 -> 3667] 通过精心研发投资模式和财务模式
[3667 -> 3669] 并采取不同的方法
[3669 -> 3672] 与不同频道的使用者互动
[3672 -> 3674] 我们不断地和不断地
[3674 -> 3677] 降低了人流成本的保持费用
[3677 -> 3681] 并改善了使用者重新启动的费用架构
[3681 -> 3684] 这并大幅提升了使用者增长的ROI
[3684 -> 3688] 第二,关于伺服器和带宽费用
[3688 -> 3692] 我们继续增强伺服器和带宽费用的效率
[3692 -> 3694] 每1000分钟通过技术
[3694 -> 3695] 在中段期间
[3695 -> 3699] 我们不断地降低了伺服器和带宽费用
[3699 -> 3701] 作为收入的百分比
[3701 -> 3703] 通过创造一个数据系统
[3703 -> 3705] 来测量R&D效率
[3705 -> 3708] 并建立自己的运营资料中心
[3708 -> 3711] 第三,关于人员费用
[3711 -> 3714] 我们建立了一个人员费用控制基础
[3714 -> 3718] 并且不断地调整了相关的基础
[3718 -> 3719] 此外
[3719 -> 3721] 我们更加注重了
[3721 -> 3725] 增强工作和资源的生产力
[3725 -> 3728] 并继续进行快速的投资
[3728 -> 3730] 在更高的ROI阶段
[3730 -> 3736] 那么展望未来毛利率持续改善的驱动因素包括以下
[3736 -> 3738] 第一,收入结构变化
[3738 -> 3741] 高毛利的广告及电商业务占比持续提升
[3741 -> 3745] 第二,各业务的长期分层基矩的优化
[3745 -> 3747] 带来分层成本的有效控制
[3747 -> 3749] 第三,通过技术创新
[3749 -> 3752] 不断提升服务器和贷款的使用效率
[3752 -> 3754] 在毛利率改善的基础上
[3754 -> 3757] 我们仍然会重视运营杠杆的持续优化
[3757 -> 3759] 例如销售费用
[3759 -> 3761] 在保证完成用户增长目标
[3761 -> 3763] 及时长相对稳定的前提下
[3763 -> 3765] 通过对拉新渠道的治理
[3765 -> 3767] 效率优化技术迭代等等手段
[3767 -> 3770] 进一步优化单用户货的成本
[3770 -> 3772] 以及单DAU的维系成本
[3772 -> 3775] 人力费用通过组织迭代和提效等工作
[3775 -> 3778] 占收比不断向行业标杆水平靠拢
[3778 -> 3784] 接下来,继续增长利润增长的改善
[3784 -> 3787] 会受到关键因素的影响
[3787 -> 3790] 第一,我们的利润变化
[3790 -> 3793] 是在宣传和互联网商业
[3793 -> 3795] 与增长利润增长的企业
[3795 -> 3797] 提供更多的利润货币
[3797 -> 3801] 第二,我们在商业领域中
[3801 -> 3804] 提供了利润货币协议
[3804 -> 3807] 这将有效控制利润货币的费用
[3807 -> 3810] 第三,我们将利用技术进步
[3810 -> 3815] 来继续增强伺服器和货币的使用效率
[3815 -> 3817] 在增长利润增长的背后
[3817 -> 3819] 我们将集中在
[3819 -> 3822] 调整行业的利润
[3822 -> 3824] 例如,在确保
[3824 -> 3826] 使用户增长目标
[3826 -> 3828] 和相对稳定的使用时间
[3828 -> 3830] 我们将继续提高
[3830 -> 3832] 使用户增长和货币的使用费用
[3832 -> 3834] 通过新的使用户增长频道
[3834 -> 3836] 效率提升和技术升级
[3836 -> 3838] 来继续提高货币货币的费用
[3838 -> 3841] 此外,我们将继续
[3841 -> 3844] 提高伺服器和货币的费用
[3844 -> 3847] 以渐渐提高伺服器的货币
[3850 -> 3854] 那么总之
[3854 -> 3857] 降本增效的本质目的是为了提示增效
[3857 -> 3860] 这不仅是单纯的财务措施
[3860 -> 3862] 更是公司的长效战略机制
[3862 -> 3865] 是融入在公司基因里的运营思维的变化
[3865 -> 3869] 公司在未来每一个战略决策的制定和实施过程中
[3869 -> 3871] 都会包含相关的考量
[3871 -> 3873] 总的来说
[3873 -> 3875] 最终的目标
[3875 -> 3878] 价格减少和效率提升
[3878 -> 3880] 是增强质量和生产力
[3880 -> 3883] 这些并不是单纯的财务措施
[3883 -> 3886] 而是我们的持续的战略措施
[3886 -> 3889] 代表改变我们的经营思维
[3889 -> 3892] 在未来
[3892 -> 3894] 我们会考虑这些
[3894 -> 3898] 每当我们制定和实施公司的战略决策
[3898 -> 3902] 谢谢
[3902 -> 3903] 经理
[3903 -> 3904] 下一个问题
[3904 -> 3906] 当然
[3906 -> 3910] 下一道问题来自CICC的张雪芹
[3910 -> 3914] 下一个问题来自CICC的张雪芹
[3914 -> 3916] 请提问
[3917 -> 3918] 谢谢总理
[3918 -> 3919] 马克
[3919 -> 3921] 谢谢提问的机会
[3921 -> 3924] 恭喜EC2集团前面的盈利
[3924 -> 3926] 想请管理层分享一下
[3926 -> 3928] 公司在AI方面的进展
[3928 -> 3930] 然后在短视频领域
[3930 -> 3933] 可能出现怎么样的一个大模型相关产品
[3933 -> 3934] 谢谢
[3934 -> 3935] 晚安经理
[3935 -> 3937] 谢谢您的提问
[3937 -> 3938] 恭喜你们
[3938 -> 3940] 在团队层面的利润上
[3940 -> 3941] 经理
[3941 -> 3944] 分享公司在AI上的进步
[3944 -> 3947] 以及在短视频领域
[3947 -> 3951] 可能出现的大模型相关产品
[3951 -> 3954] 谢谢
[3954 -> 3955] 谢谢您的提问
[3955 -> 3959] 分手目前已经组建了大模型的研发团队
[3959 -> 3962] 并依托过去在AIGC算法和大模型
[3962 -> 3965] 模型方面的技术积累
[3965 -> 3968] 按计划推进大模型的开发和训练
[3968 -> 3971] 各项的话进展的比较顺利
[3971 -> 3974] 当前模型还处于训练阶段
[3974 -> 3977] 目前我们认为此次AI技术的变革
[3977 -> 3979] 是一次长期的机遇
[3979 -> 3982] 加拿大实施做好底层大模型
[3982 -> 3986] 对标国际最先进的模型效果更加重要
[3986 -> 3990] 因此我们暂时还没有明确的对外发布计划
[3990 -> 3994] 谢谢您的提问
[3994 -> 3998] 我们已经组建了一个LLM研究和发展团队
[3998 -> 4004] 利用之前的AIGC算法和LLM技术
[4004 -> 4008] 进行LLM训练和发展
[4008 -> 4012] 目前一切都进行顺利
[4012 -> 4014] 由于我们的模型仍处于训练阶段
[4014 -> 4016] AI技术的变革
[4016 -> 4018] 代表着一个长期的机会
[4018 -> 4020] 我们认为是重要的
[4020 -> 4023] 与LLM建立一个稳定的基础
[4023 -> 4026] 并努力评估世界上最先进的模型
[4026 -> 4032] 因此我们暂时还没有明确的对外发布计划
[4033 -> 4038] 另外和大家分享一下
[4038 -> 4041] 我们关于AI在短视频领域
[4041 -> 4044] 最可能率先落地的应用场面的思考
[4044 -> 4047] 也是目前快手正在努力推进的方向
[4047 -> 4049] 首先是搜索方面
[4049 -> 4053] LateChat的GDP模型可以拓展搜索边界
[4053 -> 4058] 从当前的站内短视频搜索拓展到全网搜索
[4058 -> 4063] 同时还可以通过内容生成的方式
[4063 -> 4065] 带来更好的搜索摘要和问答
[4065 -> 4067] 提升用户的搜索体验
[4067 -> 4071] 其次是AITC辅助生成图文视频
[4071 -> 4074] 赋能用户降低创作门槛
[4074 -> 4077] 提升作品的质量和多元化
[4077 -> 4078] 具体而言
[4078 -> 4083] AITC可以用于诸如辅助生产场景下
[4083 -> 4085] 做到的故事剧本
[4085 -> 4088] 电商场景下的商品文案及图片
[4088 -> 4090] 增长场景下的Post文案
[4090 -> 4092] 商业化场景的广告文案
[4092 -> 4094] 以及AI模表特效等等
[4094 -> 4096] 最后在推荐设法方面
[4096 -> 4098] AI也可以帮助我们提升
[4098 -> 4101] 对于短视频和直播内容的理解
[4101 -> 4103] 从而在推荐设法上
[4103 -> 4104] 做出更好的匹配
[4104 -> 4106] 提升内容推荐的ROI
[4106 -> 4110] 现在我想分享一下
[4110 -> 4112] 我们对AI的第一个可能性
[4112 -> 4114] 应用情况和短视频
[4114 -> 4118] 这些也是快秀目前的焦点和方向
[4118 -> 4121] 首先是搜索
[4121 -> 4123] ShareGPT类型模式
[4123 -> 4125] 可以延伸搜索条件
[4125 -> 4127] 远超于目前的短视频搜索
[4127 -> 4128] 在平台内
[4128 -> 4130] 并广播整个互联网
[4130 -> 4133] 它还可以提供更好的搜索总结
[4133 -> 4134] 和Q&A
[4134 -> 4135] 通过内容生产
[4135 -> 4138] 增强使用户的搜索经验
[4138 -> 4139] 第二
[4139 -> 4141] AIGC可以帮助
[4141 -> 4143] 生产图片、文字和视频
[4143 -> 4146] 减少内容生产的阻碍
[4146 -> 4148] 并鼓励使用户
[4148 -> 4151] 并提供高质量和更多的内容
[4151 -> 4152] 它可以使用
[4152 -> 4155] 其他各种不同的情况
[4155 -> 4156] 这些情况包括
[4156 -> 4159] 帮助制作故事剧本
[4159 -> 4162] 开发产品宣传复制
[4162 -> 4166] 和生产AI充满特殊效果的视频
[4166 -> 4167] 最后
[4167 -> 4169] 关于推荐的计划
[4169 -> 4171] AI可以增强我们的了解
[4171 -> 4173] 短视频和直播内容
[4173 -> 4175] 通过推荐计划
[4175 -> 4179] 并增强内容控制的能力
[4200 -> 4208] In summary, we believe the short video platforms can fully benefit from the advances in AI technology.
[4208 -> 4219] As such, Kuaishou will persistently drive the development and training of LLMs while ensuring rational and efficient allocation of manpower and other resources.
[4219 -> 4226] We will also actively seek out opportunities to integrate LLMs into diverse business scenarios.
[4226 -> 4230] Thank you. Back to operator.
[4232 -> 4238] 今天的問答環節到此結束。現在有請Matthew做總結性發言。
[4238 -> 4248] 感謝大家今天的參與。如果您還有更多問題,歡迎隨時與 Kuaishou 的資本市場及投資者關係團隊取得聯繫。謝謝大家。
[4248 -> 4258] Thank you once again for joining us today. If you have any further questions, please contact our capital market investor relations team at any time. Thank you.