Lei Xu: And let me answer the first question. And firstly, I want to make a bit of correction. There are certainties and uncertainties. By the certainties I mean that we do see there are some new signals, and we are getting ready for the good things to come. I believe that the worst time has been passed, and we do receive some signals and some good information and factors for a brighter future. However, for the rebound, the question is when and how strong? So these are the uncertainties. We are not quite sure how strong and what’s the time the recovery will come. So for JD.com, we are such a large company that covering the whole country from the first- to fifth-tier cities. And we believe the recovery will come in different formats and different times on different groups of people in different regions.
And since our — based on our communications with our brand partners, they all expressed to — their strategy to focus on profit this year, and this also coupled with their concerns on the supply chain impact made by the Ukraine war. So whether or not next year, they will focus more on profitability or on the growth, it’s really hard to tell at this moment. So we will also make our dynamic evaluations and to make the investment decisions at the right time next year. Hope this answers your question. And on the profit, I want to make a further explanation here. For JD’s growth throughout the years, there are two main drivers. One is for the product structure changes. With a higher percentage of certain products, their gross margins will improve steadily and also the increase in revenue from the services we provide.
So throughout the years, you can hear that all the companies are talking about lower the cost and improve efficiency. And for JD.com, this year, we focus more on lower the cost and to improve stability for the internal management. And I believe in next year and the year — in the next 2 years, we will focus more on the improvement of the efficiency. I can see there’s many areas we can continue to improve efficiency. That’s what I want to add.
Sandy Xu: And this is Sandy. I want to advertise that our long-term margin target hasn’t changed, which is based on the industry-level margin and the operating efficiency we can generate through technology and the scale of our business operation. If the consumer confidence is largely recovered, we will add more investments to drive growth in users and the market share. However, at the same time, we will also gain additional operating efficiency, as Xu Lei just mentioned, due to spillover benefit, due to technology and due to the increased contribution of our service income. So this is the beauty of retail business. Although we achieved a very important milestone for net income this quarter at the group level, but on an annual basis, our margin is still below the industry level for almost all business segments.
So we always — so there’s still room for us to continue to improve our bottom line performance. JD always pursue sustainable growth. And we will try to deliver stable margin with steady improvement year-over-year until our long-term margin target is met. Of course, during that journey, we will make dynamic adjustments based on the market situation.
Operator: And our next question today comes from Lingyi Zhao with SWS Research.
