David Cui: Eric, partially answered your questions regarding the profit margin and the marketing expense ratio. I would like to add two more points. One is that our improvement in our profit margin is not just coming from our savings of marketing expenses, but also coming from our improvements in our gross margin, as a result of our operational efficiencies and better selections of our inventories that we carry and we pay particular attention to our products margin and the rebates and the like. So, that’s one point. The other point is that, we do focus our efforts more on our Super VIP grow and that results in much better customer portfolio for us. So, number of our Super VIP grew significantly in this quarter year-over-year.
Operator: This is from the line of from Alicia Yap from Citi.
Vicky Wei: Good evening, management. Thanks for taking my questions. This is Vicky Wei on behalf of Alicia Yap. My first question is, would management provide some details on impact from logistic disruption and the latest return rate trend? And how should we think of the fourth quarter ARPU trend? My second question is, would management provide some color on the latest competition and brands’ attitude as well as level inventory level?
Eric Shen:
Jessie Zheng: So, first on the logistic side, currently we have roughly 4 million orders pending delivery. Some of the orders are actually staying in our warehouses or the orders waiting for to be delivered. And especially of the 4 million, actually 1.4 million are going to Xinjiang, which actually has been locked down over three months. So, it’s really a tough time. Recently the delay has extended to places like Wuhan and Sichuan, Guangdong. So, with the delay we expect to see some pick up in the cancellation or return rates. But 4 million is just — is still a manageable portion of our total orders. So, we hope that with the pandemic challenges going away over time, we expect delivery and fulfillment efficiencies returning to normal pace, and we can manage to meet customer needs.
And on the competition side, I think — we think our brand partners have quite some channels to choose from. And — but, one thing is certain that with — the offline stores are still struggling, especially with the COVID resurgence in the latest third and fourth quarters. And they have a lot of inventory to clear and it’s very hard for them to make money. I think — we think these brand partners, which should go to the online channels, including us and other channels including live streaming, to clear their inventory. And we are one of the — of their partners — and we know, we have a strong value proposition in discount retail and we manage to secure a lot of supply with deep discounts. And some of the — and some of the suppliers are actually not selling well on other channels and then transfer to our platform, and many of them actually customized offerings for Vipshop.
So, as long as we maintain our strong value proposition in branded quality products with deep discounts, we think we can and we will — we have the competence to meet the growing needs from customers who care value for money product offerings. And there are a lot of inventory out there. And we have very-strong merchandising capabilities and we are confident that we can secure more supplies from all kinds of brand partners and secure growing share of their inventories to our platform.
Operator: Thank you. We’ll now take the next question. Please stand by. This is from the line of Andre Chang from JP Morgan. Please go ahead.
