Andre Chang: Thank you, management, for taking my question. My question is about the future upside of our gross margin. We noticed the efficiency — product strategy has helped company to improve the gross margin over the past two years, but there is still a significant gap against the gross margin that company achieved probably back five years ago. So, I wonder whether the management still sees a good room to improved gross margin toward the historical level through the current strategy or other things, or that we see the near term benefits being released and the margin should be relatively stable here?
Eric Shen:
Jessie Zheng: Okay. On GP margin, one thing you should bear in mind that we always focus on achieving solid and sustainable net profit margin. Turning to GP margin, one of the biggest factors is actually the cost savings from the customer rebates or coupons. We are not — we are currently quite prudent on this side. For example, this month, we probably achieved 21% of our GP margin, and if we — investing a lot of rebate or coupons, that could go down to 19%. So, that’s one of the biggest savings. Second, on take rate, we have said for many times that we’re not going to increase the take rate from brand partners because they are struggling with their business. So, that line should remain stable. This means that the gross margin will not go back to the level of five years ago, say 25%.
It should largely remain stable at the current level, at the level we have seen for Q3 and Q4, 2021 something. That’s for gross margin. But on the net profit margin, we still have a lot of potential to grow through further optimization of our operations. We can still achieve certain operating leverage on the procurement, customer acquisition and other G&A expenses. So, for the net profit margin, we still have room to grow.
Operator: This is from the line of Eddy Wang from Morgan Stanley. Please go ahead.
Eddy Wang: Thank you for taking my question. My question is about the user behavior change. We noticed that the net sales per customer and net sales per order actually declined year-over-year in this quarter, but on the other hand, if we look at GMV per customer, GMV per order actually quite stable. So not sure this is because of the COVID impact, or it is because that we have the — GMV generally actually increased, which has resulted in this decline? And what’s your thought about the further trend of this metric? Thank you.
Eric Shen:
Jessie Zheng: Actually the difference between GMV per order and revenue per order is primarily attributable to higher contribution from apparel categories. Actually we did quite well in Q3 for apparel categories, which booked positive year-over-year growth at 3.5% growth. And normally apparel categories carry relatively higher return — rejection rates. So that’s why you would see — ARPU had declined a bit during the quarter. But if you look at the GMV per order, that’s quite stable. And the other thing is that returns and exchanges are totally manageable. It has been consistently reflected in our income statement. It has very little impact on the profit, on the profit level. David?
