The second point I want to make is the enhancement in fulfillment rate also resulted from ongoing optimization of our shipper composition. In the past quarter, we continued to attract a substantial number of high-quality direct shippers to our platform. Among — there are approximately 2 million shipper MAUs, around 1.7 million of them are low and medium frequency 688 members and non-member shippers. The average fulfillment rate for both these shippers exceeded 50% in the second quarter. And most of them are direct shippers who have an inherent tendency towards high fulfillment rates, which contributed to the overall fulfillment rate improvement. Looking ahead, we anticipate a gradual increase in fulfillment rate, primarily driven by the growth of direct shippers.
While we might encounter some challenges from extreme weather, such as high temperatures and heavy rainfalls in the third quarter, we will continue to optimize our operational strategies, strengthen our transportation capacity management and provide incentives and support to high-quality truckers, so that we can maintain our efficient and high-quality supply. And furthermore, we will remain focus on enhancing user-oriented products and services to increase users’ satisfaction and engagement.
Eddy Wang: Thank you.
Operator: Thank you. And our next question today comes from Charlie Chen at China Renaissance. Please go ahead.
Charlie Chen: [Foreign Language] Can you please provide some update on the progress of shipper membership in the second quarter, which has a very robust growth? And what are the main reasons for this growth? And also, how do we envision the growth of member users and membership fee revenue in the future? Thank you.
Simon Cai: Thank you, Charlie. Since our new user registration only resumed last year, we have been consistently attracting more shipper users, particularly those direct shippers to join our platform. Through a combination of online branding efforts, multichannel promotions and offline campaigns, we have successfully converted a portion of these accumulated new users into new shipper members. Simultaneously, our existing shipper members showed high retention rates and stickiness, with 12-month retention rates surpassing 80% this year. For us, the primary advantage of the shipper membership mechanism lies in enhancing user stickiness and engagement, which in turn attracts more truckers and fuels healthy growth in both user members and order volumes.
Monetization through membership fees comes as a secondary benefit. The majority of our new shipper users are direct clients, characterized by their high engagement, low frequency and higher service expectation compared to professional shippers. As a result, our membership conversion strategy focused on optimizing user experience and providing value-added services that appeal to direct clients, such as priority matching, expedited shipping and discounts of freight insurance to incentivize new shipper users to become members. In the future, we will continue to refine our user acquisition and membership conversion strategies. We believe that China’s extensive community of small- and medium-sized enterprises will contribute to our potential user pool and thus further increasing the number of shipper members.
From a monetization standpoint, there’s still room for improvement in membership conversion rates. Taking into account the impact of new user subsidies, we anticipate a single-digit year-over-year increase in membership fee revenue for this year.
Operator: Thank you. Our next question today comes from Brian Gong at Citigroup. Please go ahead.
Brian Gong: [Foreign Language] I will translate it myself. I have a very good question on our margin. Our gross margin for the second quarter improved significantly, already into 53% from 45% a year ago and also from 50% in the first quarter this year. Could you please elaborate more on the main drivers behind the GP margin improvement? Thank you.
