After the epidemic, the global economic growth rate has further slowed down, and user consumption willingness and preferences have changed. Real time retail will eventually return to commercial essence. "During the performance conference call in the third quarter, Liang Changlin, founder and CEO of Dingdong Maicai, discussed Dingdong Maicai's thoughts on the current retail industry and consumption environment. He also stated that China's fresh food market is a very large market, and any model that is valuable to users may survive. Fresh food is not a monopolistic market.
Previously, Dingdong Maicai's financial report showed that the company's revenue in the third quarter was 5.14 billion yuan, a year-on-year decrease of 13.5% and a month on month increase of 6.2%. The net profit was 2.1 million yuan, with a net loss of 345 million yuan in the same period last year. Under non US GAAP, the net profit was 15.5 million yuan, compared to a net loss of 285.2 million yuan in the same period last year.
In the third quarter, GMV decreased by 13% year-on-year and increased by 6.4% month on month
The GMV of Dingdong Buycai in the third quarter was 5.665 billion yuan, a year-on-year decrease of 13%. Liang Changlin explained that this is mainly due to the suspension of operations in some cities and sites since the fourth quarter of last year, which has affected GMV by about 9.8% year-on-year. At the same time, after returning to normal this year, consumers have returned to offline consumption demand more this summer, and users have concentrated on traveling during the summer vacation. The GMV of Dingdong Maicai in the third quarter increased by 6.4% month on month, mainly due to orders and AOV (average order value) increasing by 6.0% and 0.5% month on month, respectively.
During the conference call, Liang Changlin mentioned that Dingdong Maicai continues to upgrade and renovate its front-end warehouses. As of the end of October, it has upgraded and optimized nearly a hundred front-end warehouses. Among them, the GMV of the upgraded front-end warehouses completed at the end of June increased by 15.2% in the third quarter compared to the second quarter. Meanwhile, the monthly average frequency of users in this quarter has further increased year-on-year and month on month, reaching an average of 4.2 times, with the monthly average frequency of green card members reaching 6.9 times. In the third quarter, the average monthly transaction users with ARPU values (average user income) above 560 yuan reached nearly one million, and the proportion of GMV transactions among these users was higher than 48.8%.
Regionally, due to the impact of last year's epidemic, Shanghai's GMV has decreased slightly year-on-year, but has converged to within 10% year-on-year. At the same time, in the third quarter, it resumed positive growth month on month, reaching 7.8%. On the basis of the growth in the second quarter, Jiangsu and Zhejiang benefited from the continuous expansion of the number of users who placed orders, while the frequency of old users placing orders also increased. In the third quarter, they still achieved double-digit year-on-year growth. Both Jiangsu and Zhejiang regions have achieved overall profitability after covering headquarters expenses for four consecutive quarters. In the third quarter, we have stabilized our scale in North China and South China, and we will further optimize our operations and improve in the aforementioned areas in the future
Retail enterprises need to adapt to a challenging new environment
Liang Changlin stated that in the third quarter, Dingdong Buycai continued to adhere to the strategy of 'prioritizing efficiency and balancing scale'. For the second time since the fourth quarter of 2022, it achieved quarterly profit calculated according to GAAP (General Accounting Standards in the United States). Continuous profitability calculated on a non GAAP basis for the past four consecutive quarters. Among the top companies in the industry, we are the first to achieve profitability. This is a long and difficult journey
During the conference call, Liang Changlin also discussed Ding Dong's thoughts on the current retail industry and consumer environment. He mentioned, "After the epidemic, global economic growth has further slowed down, and consumer willingness and preferences have changed. Retail enterprises need to adapt to a challenging new environment. At this stage, consumers' shopping mentality tends to be deterministic, and real-time retail will eventually return to commercial essence: better providing consumers with the service capabilities determined during the shopping process, stable quality assurance, and price competitiveness
When discussing the current industry situation, he said that China's fresh food market is a very large market, and any model that is valuable to users can survive. Fresh food is not a monopolistic market. Nowadays, people are paying more attention to efficiency and low prices. When it comes to eating, low prices are an increase in efficiency, not a decrease in quality