Dingdong (Cayman) Limited - Earnings Call - Q1 2025

Transcript

Operator (participant)

Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Dingdong (Cayman) Ltd First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please note that the event is being recorded. I will now turn the conference over to the first speaker today, Nicky Zheng, Director of Investor Relations. Please go ahead, sir.

Nicky Zheng (Director of Investor Relations)

Thank you. Hello, everyone. Welcome to Dingdong's First Quarter 2025 Earnings Call. With me today are Mr. Changlin Liang, our Founder and CEO, and Mr. Song Wang, our CFO. You can refer to our First Quarter 2025 financial results on our website at ia.m100.me. You can also access a replay of this call on our website when it becomes available a few hours after its conclusion. For today's call, management will go through their prepared remarks, which will be followed by a question-and-answer session. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call. As we will be making forward-looking statements, please note that all numbers stated in the following management prepared remarks are in RMB terms.

We will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in our earnings release and the filings with the SEC. I will now turn the call to our first guest speaker today, the Founder and the CEO of Dingdong, Mr. Liang.

Changlin Liang (Founder and CEO)

[Foreign language]

Hello everyone, thank you for joining the Dingdong Earnings Call for Q1 2025. As of the first quarter of 2025, we have achieved non-GAAP profitability for 10 consecutive quarters and GAAP profitability for five quarters. Additionally, we've seen positive year-on-year revenue growth for five straight quarters. This consistent growth in both scale and profitability has undoubtedly laid a strong foundation for our future development. In today's call, I'll outline our operating performance in Q1, offer a thorough analysis of our product status, and discuss recent strategic insights.

[Foreign language]

In the first quarter of 2025, Dingdong reported a GMV of RMB 5.96 billion, a 7.9% increase compared to the previous year. Revenue for the same period reached RMB 5.48 billion, a rise of 9.1% year-on-year. Non-GAAP net profit stood at RMB 30 million, with a non-GAAP net profit margin of 0.6%. GAAP net profit was RMB 8 million, with a GAAP net profit margin of 0.1%. Building on the profits from 2024, we successfully achieved both profitability and growth in scale in the first quarter.

[Foreign language]

The first quarter of 2025 marked the commencement of Dingdong's implementation of the 4G strategy, which emphasizes good users, good products, good services, and good mindshare. Significant adjustments have been made to the company's objectives, organizational structure, and evaluation methods, and we continue to experience transitional challenges. Nevertheless, even amidst these difficulties, we have achieved year-on-year performance growth.

[Foreign language]

The growth in performance was primarily fueled by higher user engagement in existing markets and our continued improvement in product development capabilities and optimization efforts. This quarter, the order volume rose by 12.1% year-on-year with the average Daily Active User count surpassing 2 million, a 4.5% increase year-on-year. This reflects strong market demand, enhanced appeal of Dingdong's products, and our upgraded product development capabilities. Regarding user conversion, the average daily transaction users exceeded 830,000, an 11.1% year-on-year increase, owing to our effective strategies in user acquisition and traffic conversion. The conversion rate for ordering users improved by 2.4 percentage points year-on-year, thanks to the continued enhancement in product development, operational efficiency at base recommendations, as well as the appeal of our offerings. This has created a more seamless transition from browsing to purchasing.

User stickiness continued to increase, with average monthly order frequency rising to 4.1% times, an increase of 2.4% times year-on-year, driven by our superior shopping experience that includes both products and services, which helps users cultivate a habit of frequent repurchases. The growth in these metrics marks a promising start of our 4G strategy, which emphasizes good users, good products, good services, and good mindshare. People often say that a good start is half the battle. We firmly believe that we are undertaking the difficult yet right course of action, which will undoubtedly activate a positive development flywheel and deliver better performance.

[Foreign language]

Regionally, the Jiangsu, Zhejiang, and Shanghai regions remain our primary growth drivers. In this quarter, Shanghai's GMV rose by 5% year-on-year, while Zhejiang and Jiangsu saw increases of 17.8% and 13.9% respectively. All cities within these regions reported positive year-on-year growth. Notable mentions include Wenzhou, Huzhou, Nantong, and Jinhua, each surpassing 50% growth. Additionally, Huizhou and Foshan in the Guangdong-Shenzhen area experienced over 40% year-on-year growth. This year, we are further accelerating the deployment of our frontline fulfillment stations in Jiangsu, Zhejiang, and Shanghai. By the end of Q1, we had established 14 new frontline stations. By strategically optimizing the layout and density of our frontline fulfillment network in key areas, we aim to create a more efficient fulfillment system and enhance our cost structure, thereby continually improving overall operational efficiency.

[Foreign language]

In the last quarter of 2024, the entire company aligned around a shared understanding, which is we work together to improve product quality and develop differentiated products. After determining the 4G strategy of good users, good products, good services, and Good Mindshare, we established performance goals and organizational structures that support these strategic objectives. As a result, in the first quarter, more and more differentiated and good products appeared on our app and gained user popularity, driven by methods such as restructuring the product business unit, establishing an incentive scheme that rewards the development of differentiated and good products, creating a product lifecycle accountability system, having core executives visit product sources, and requiring product developers to respond to consumers' negative reviews personally.

[Foreign language]

For instance, our meat products showcase the strength of our six self-operated meat factories, which drive our product innovation. After establishing the trusted Daily Fresh brand, we introduced the Hehua Tian brand, emphasizing health and taste, along with the premium black pig pork label, Black Diamond Family. Furthermore, we began expanding our focus on the deep processing sector within the leisure goods segment, emphasizing health trends, selecting premium raw materials, and crafting healthy, tasty daily preparations and snacks. For example, our Hehua Tian Australian Wagyu beef crisps recently won the Golden Carrot Award during our good product competition, thanks to its top-quality Australian Wagyu beef and distinctive cheese flavor. Since its early March launch, it has rapidly gained popularity among consumers, achieving sales of around RMB 3.4 million.

Orders that include this item recorded an average order value of RMB 139, outperforming the company average by nearly 100%, demonstrating how good products attract good users. Our product development team prioritizes quality and meticulously examines every stage to ensure that each product meets Dingdong's high standards.

[Foreign language]

Moreover, our product developers have won over users with their dedication and professionalism. For instance, our users fondly refer to our product creators as Guava Sister and Saury Fish Brother on social media because they developed the acclaimed Tree-Ripe Cream Guava and Liangxin Jiangren Spring Fresh Wonton and Saury Fish and Shepherd's Purse, both of which won awards in our product competition.

[Foreign language]

It is widely acknowledged that in the present consumer environment, encounters substantial challenges. The instant retail sector has become markedly saturated with competitors, resulting in heightened competition. There is a common concern about Dingdong maintaining profitability amidst fierce rivalry, and there are apprehensions regarding the sustainability of Dingdong as a viable entity. Faced with this competition, what advantages and opportunities do we possess?

[Foreign language]

Firstly, we're fortunate that in previous rounds of competition, we did not simply follow trends. Rather, we stayed true to the fundamental of business, meticulously developing a comprehensive model, enhancing our supply chain, and focusing on key regions. Throughout each stage of competition, we made consistent advancements, delving deeply into our strategies and ensuring adequate resources. Today, we not only possess a robust technological accumulation and a solid foundation within our supply chain, but also our cash reserves are healthy, enabling us to sustain profitability. All of these factors have established a strong foundation for us to keep succeeding in this new phase of competition.

[Foreign language]

In conclusion, in the context of today's intense competition, we have identified the following core advantages: robust supply-chain capabilities. The company was founded to provide consumers with healthy and high-quality food ingredients. From the inception of our operations, we recognized that our role could not be limited to merely serving as an intermediary or sales channel. Rather, we had to delve deeply into each aspect of the supply chain to enhance quality and improve efficiency. We engaged comprehensively in every stage of the process, including cultivating and producing food ingredients, sourcing, logistics and warehousing, grading and packaging, food research and development, distribution operations, and delivery to consumers. We refer to the strategic approach as narrow and deep, as narrow as an inch, yet as deep as a mile.

Our operational product categories and revenue scale may not highlight a competitive advantage, but we have a substantial lead in enhancing and strengthening the supply chain. Importantly, throughout the transformation and upgrading of our supply chain, we have established a robust IT system that enables us to continuously optimize costs, enhance efficiency, and replicate our supply chain capabilities across various regions and sectors.

[Foreign language]

Recently, we have formed a strategic partnership with the DFI Group based in Hong Kong. DFI is a recognized leading global trading and retail company. While they have previously explored cooperation with numerous Chinese companies, they ultimately chose to partner with Dingdong. Their decision is driven by Dingdong's robust fresh grocery supply-chain capabilities and advanced IT system capabilities. This, in turn, is a testament to our supply-chain effectiveness.

[Foreign language]

Due to our robust supply-chain capabilities, we have evolved beyond a conventional retail company, thus positioning ourselves to withstand the intense competition within the instant retail market. As time progresses, the advantages of our supply chain will become increasingly apparent, generating profit margins that substantially surpass those of instant retail enterprises.

[Foreign language]

Distinct positioning. Our competitors are mostly positioned as online supermarkets, while Dingdong focuses on quality ingredients and products. They mostly follow a strategy that is wide as a mile, yet as shallow as an inch. In contrast with our approach of being narrow as an inch, yet deep as a mile. Competitors rely on price wars for customer traffic, whereas we prioritize quality and service to attract users. Operational data shows that we outperform competitors in key metrics of user trust and quality, such as AOV, repurchase rate, gross profit margin, and satisfaction. While some see us as a basic retail service, we are a full-chain fresh grocery supply-chain company driven by digital technology.

[Foreign language]

Third, a Robust Ecosystem. As mentioned, we have established a strategic partnership with DFI in Hong Kong. Concurrently, in the international markets, we are fostering in-depth cooperation with HKTV Mall in Hong Kong, Fair Price in Singapore, and retail groups in Central Asia and the Middle East. On one hand, we provide advanced IT capabilities to these excellent retail partners to enhance their fresh grocery supply-chain efficiencies. Simultaneously, we also introduce China's high-quality ingredients and culinary offers to overseas markets.

[Foreign language]

In the domestic market, we have formed strategic partnerships with numerous agricultural and food research and development institutions and agricultural and food companies. We use our retail and supply-chain capabilities to empower these organizations to foster and foster collective growth.

[Foreign language]

Internally, we have incubated Guyu Food Group, a leader in China for the R&D and production of pre-prepared meals, meats, grains, and soy products. Guyu's products are distributed through various channels beyond Dingdong, showing consistent rapid revenue growth and profit margins. Lee Kum Kee, a world-renowned food seasoning company, has traditionally sold its products to retailers. Now, we are the sole provider of pre-prepared meals to Lee Kum Kee, facilitating broader overseas distribution of our products. This collaboration highlights our product capabilities and future development potential.

[Foreign language]

Organizational Ability and Implementation. Since its inception, Dingdong has faced fierce competition from both startups and large companies. Eight years later, most rivals have vanished, while giants with similar businesses continue to incur losses. Dingdong not only survived but also achieved profit for ten consecutive quarters, demonstrating our competitiveness and vitality.

[Foreign language]

It's been eight years since we started our business, and the colleagues who joined us on the journey are still actively working alongside us today. Over time, we've faced various challenges that have required us to make some strategic changes. As part of evolving our strategy, we have also restructured our organization to help our management team adapt quickly to the changing needs of the business. This year, to strengthen our supply chain and create competitive advantages, we have introduced the 4G strategy, focusing on good users, good products, good services, and good mindshare. This shift has led to a significant overhaul of our structure, where our core executives have taken on new roles in product development and improving our supply chain capabilities. Everyone on the team is focusing on the big picture, embracing the new responsibilities with enthusiasm.

After five months of hard work, we've begun to see some great results. Dingdong is rolling out more unique and high-quality products. Our users are happier than before, and our supply chain efficiency is steadily improving. As we continue moving forward, these benefits are becoming even more obvious. This really highlights our strong organizational ability to adapt and bounce back in the face of adversity.

[Foreign language]

Due to Dingdong's distinct positioning and unique advantages, we're confident that we can remain competitive in various competitive landscapes. Over time, our advantages will become increasingly evident. Particularly as this strategic adjustment is progressively implemented, we anticipate a swift recovery from the short-term challenges induced by the transition, leading to a substantial enhancement in sales volume, increased innovation within our business practices, and further optimization of our profit margins.

[Foreign language]

Finally, I'll provide an update on the outlook for Q2 2025. We anticipate maintaining year-on-year growth in scale and achieving non-GAAP profitability for the second quarter of 2025. We're still in the transitional phase of transformation, but this period will pass quickly. By the end of the year, Dingdong's advantages will be distinctly evident. We expect significant growth in both performance scale and profit margin by then. This wraps up my speech. Thank you. Now, I would like to invite our CFO Wang Song to discuss the company's financial performance.

Song Wang (CFO)

[Foreign language]

Thank you, Mr. Liang, and hello everyone. Before I review our financial performance for the first quarter, please note that all of our figures are in RMB.

[Foreign language]

In the first quarter of 2025, Dingdong reported a revenue of RMB 5.48 billion, reflecting a 9.1% year-over-year increase and marking five consecutive quarters of positive growth. Non-GAAP net profit was RMB 30 million, and GAAP net profit was RMB 8 million, and operating net cash inflow reached RMB 85 million. The company continued to demonstrate positive profitability alongside positive operating net cash inflow. By the end of Q1, after accounting for short-term loans, our actual funds amounted to RMB 2.89 billion, indicating a continued net increase. This year, we're committed to executing our narrow yet deep value proposition, intensifying our efforts to satisfy consumers through quality products and services while establishing a unique path focused on quality, stability, and consistent supply capabilities.

[Foreign language]

Next, we'll analyze the first quarter's financial performance. Revenue reached RMB 5.48 billion, a 9.1% year-on-year growth. GMV stood at RMB 5.96 billion, a 7.9% increase from the previous year. While the average daily GMV rose by 9.1%, we leverage our products to attract more consumers and boost user engagement. The conversion rate of transacting users in Q1 reached a record high in recent years, averaging 64%, an increase of 4.8 percentage points year-on-year. The number of monthly transacting users rose by 10.3% year-on-year, and monthly transacting members grew by 12.6% year-on-year. Additionally, cities such as Wenzhou, Huzhou, Nantong, and Jinhua demonstrated a strong growth momentum, achieving over 50% year-on-year growth. Furthermore, our 2B business has shown solid growth, boasting a revenue increase of 64.6% year-on-year and a rise in revenue share of 1.4 percentage points year-on-year.

[Foreign language]

Gross profit margin was 29.9%, down 0.7 percentage points from last year. This decline in gross profit largely stems from our increased investment in high-quality products, the introduction of more quality items, and our commitment to removing less favorite products. Additionally, consumers benefited from our dedicated efforts in optimizing the supply chain. Moving forward, we'll persist in nurturing quality products, focus on in-depth research with the Craftsman dedication, and strengthen our core competitive edge. Moreover, by utilizing our intelligent forecasting and operational scheduling capabilities, we aim to better meet user needs and improve the efficiency of our inventory turnover and defect management. The average turnover days improved to 11.7 days, a 2.8% increase in efficiency year-on-year. While the loss rate remained stable, the out-of-stock rate for leading products decreased by 1.8 percentage points compared to last year.

[Foreign language]

The fulfillment cost rate rose to 22.9%, up 0.1 percentage points from the previous year. This increase primarily stems from the company's overseas investment, representing about 0.4% of revenue. Meanwhile, the domestic frontline fulfillment stations further enhanced their efficiency, with a 2.6% year-on-year rise in average daily order volume per station for Q1. If we exclude the effect of newly added stations since 2024, the average daily order volume at established stations saw a year-on-year increase of 5.3%. During the Lunar New Year in 2025, we also provided users with our non-closing services, leveraging algorithms and operational capabilities to deliver quality services. In Q1, the fulfillment time for ASAP orders was reduced by 5 minutes year-on-year, bringing it down to 34 minutes.

[Foreign language]

The sales and marketing expense rate was 2%, a decrease of 0.2 percentage points year-on-year. Moving forward, we aim to boost our investment in customer mind share by utilizing high-quality products to drive traffic and improve delivery conversion efficiency.

[Foreign language]

Management and R&D expenses represented 5.7% of revenue, a 0.2 percentage points decrease year-over-year, primarily due to economies of scale. We're committed to continuing our investment in food R&D, agricultural technology, and data algorithms, which will enhance our product development and full chain digital capabilities, thereby boosting supply chain efficiency.

[Foreign language]

Non-GAAP net profit margin was 0.6%, resulting in net profit of RMB 30 million. We also achieved a GAAP net profit margin of 0.1%.

[Foreign language]

As of the end of Q1, our cash and cash equivalents, along with our short-term restricted funds and investment, totaled RMB 4.29 billion. We remained focused on optimizing capital use and our financing structure. After accounting for short-term loans, our net balance of funds stands at RMB 2.89 billion.

[Foreign language]

This concludes my prepared remarks, Operator. We can now start the Q&A session.

Operator (participant)

We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. When asking a question, please state it in Chinese first and then repeat it in English for the convenience of everyone on the call. At this time, we will pause momentarily to assemble our roster. The first question comes from Thomas Chong with Jefferies. Please go ahead.

Thomas Chong (Regional Head of Internet and Media)

[Foreign language] Thanks, Management, for taking my questions and congratulations on a solid set of results. In the speech, Mr. Liang emphasized Dingdong's 4G strategy multiple times. Can you elaborate about the 4G strategy? What changes has Dingdong made to execute the strategy? Over the long-term, what advantages will the 4G strategy provide to us? Thank you.

Changlin Liang (Founder and CEO)

[Foreign language]

Thank you for your question. As you are aware, we deliver a strong performance in 2024. Nevertheless, our team remains cautious. At our strategic meeting at the end of 2024, we closely examined consumer trends, competition, and Dingdong's unique strengths. We understand that to create genuine competitive barriers and secure long-term growth opportunities, we must differentiate our approach compared to our current competitors. Simultaneously, we need to maximize our supply chain advantages.

[Foreign language]

Let's examine the current competitive landscape. We tell customers typically want more, faster, better, and cheaper. However, in today's market, where supply is ample, more no longer holds an advantage. An industry standard of 30-minute delivery has erased the competitive edge of speed. Many competitors are still fixating on cheaper. Dingdong takes a different approach. We do not excessively pursue cheaper anymore. Instead, we have introduced what we believe is a better strategy. This encompasses good users, good products, good services, and good mind share, which we refer to internally as the 4G strategy.

[Foreign language]

This strategy aligns with our original intention when we started the business. Right from the beginning, our goal has been to provide children with healthy and safe foods. Although circumstances have changed over time, our commitment to this principle remains steadfast. Furthermore, good quality is central to the food industry. The saying, "You are what you eat," underscores the importance of healthy eating for children's growth, balanced development for adults, and overall health and longevity for the elderly. It can even be said that quality food is essential for a nation's strong development. However, "You get what you pay for" reminds us that an excessive focus on low prices can compromise product quality and hinder healthy industry growth. However, when we consider our strengths, our deep engagement and long-term investment in the supply chain stand out.

Only companies like ours, with deep roots and dedication in this area, can deliver on the promise of good quality.

[Foreign language]

Achieving cheaper is straightforward. If you maintain low-prices, you can draw in consumers and boost sales. However, striving for better is far more challenging. It involves doing 10,000 small things right and demands a systematic long-term approach. To facilitate this, we have repeatedly held internal brainstorming sessions to develop a unified understanding. We have adjusted our performance metrics, and for a period of time, we're focusing solely on the ratio of quality products and satisfied users, monitoring user repurchase rates and paying attention to negative reviews. Instead of GMV and profit margin metrics, we also reshape our fundamental challenges to internal structure. We dismantle the original product development center and integrate product-development, product operation, and quality control teams into independent business units, each led by a core executive. This setup empowers the product development team to abandon conventional thinking and focus on creating distinctive quality products.

Additionally, this organizational adjustment fosters a genuine commitment across the company to fully understand and enhance products, leveraging the supply chain in product development and create unique quality offerings. Furthermore, this restructuring enables each functional department to effectively support quality products, continuously boost efficiency, and create value throughout the product-development process.

[Foreign language]

Such a transition will entail a challenging period that compels us all to leave our comfort zones, impacting our rapid scaling and profit margins in the near-term. However, to truly succeed, we must embrace disruption and persevere through the tough times. Even though just five months have passed, we have noted an uptick in the proportion of quality products, an increase in the number of good users, a rise in the user repurchase rate, and more positive feedback on the Dingdong App and social media.

Thomas Chong (Regional Head of Internet and Media)

[Foreign language]

Unlike typical retail transformation that are often initiated externally, our approach is an inside-out transformation. While this method may not be widely noticed externally and results may take time, it promises ongoing fundamental improvements. Over time, substantial and transformative changes will occur, significantly enhancing our scale, optimizing profit margins, and fostering genuine core competitiveness that withstand competition. Thank you.

[Foreign language]

Operator (participant)

The next question comes from Yang Bai with CICC. Please go ahead.

Yang Bai (Asset Management Intern)

[Foreign language] Mr. Liang also talked about the internally incubated Guyu Food Group in his speech. Can you give an overview of the current business situation? Thank you.

Changlin Liang (Founder and CEO)

[Foreign language]

Thank you for your question. Our CFO is better equipped to address this matter.

Song Wang (CFO)

[Foreign language]

Thank you, Mr. Liang. I can introduce Gu Yu through four key aspects: strategic positioning, scale growth, product development, and export progress. First, Guyu is the strategic business unit that the company began to incubate in early 2020, marking our transformation into a food supply-chain company with a comprehensive industry layout. We achieved vertical integration of the supply chain through self-built factories, encompassing a closed loop from product research and development, joint farming and planting of raw materials and ingredients, production and processing to terminal sales, thereby strengthening our control over product quality, cost, and timeliness. Currently, we have established three major business units: meat, pre-prepared meals, and grains, and have built 12 self-operated factories, spanning more than 54,000 square meters across six cities, equipped with automated production lines that strictly control food safety while enhancing the flavor and quality of products.

In the future, we plan to position Guyu as a benchmark for Dingdong and even the industry, providing consumers with even more exceptional products.

[Foreign language]

Second, over the past five years, Guyu's production and processing capacity has grown rapidly, with an average annual growth rate of over 40%. In 2024, the GMV of Guyu products on Dingdong was approximately RMB 5 billion, with a CAGR of nearly 200%, accounting for about 20% of sales on Dingdong. We officially began exporting in 2023. In just two years, export revenues in 2024 reached about RMB 300 million, a year-on-year growth rate of about 150%. The revenue in Q1 of 2025 surpassed RMB 100 million, a year-on-year growth rate of nearly 120%. We anticipate that export revenues this year will reach RMB 600 million and expect that by 2027, exports will account for more than 50% of Guyu's revenues.

[Foreign language]

Third, we prioritize quality as our core value and meticulously refine our product development capabilities. Currently, we have established a product mix with distinctive features in meat, grains, and pre-prepared meals.

[Foreign language]

We currently operate six meat factories with a daily cutting capacity of 500,000 boxes, making us the highest comprehensive production capacity in the country. As mentioned earlier, the products range from pork, beef, raw-cut beef, raw-cut mutton to various meat products. Among them, our Black Diamond Family brand focuses on high-end black pig pork. We have established a black pig farming base in partnership with Gaojin Food, engaging ourselves in source breeding, selecting high-quality varieties, and employing coarse grains for 300 days low-raising periods. In 2024, the GMV of Black Diamond Family reached about RMB 200 million, with an annual growth rate of 30%. Meanwhile, the offline store of Black Diamond Family will also ramp up expansion. By 2025, we plan to increase the existing five Black Diamond Family stores to between 15 and 20.

[Foreign language]

We have three grain factories producing rice, flour, and bean products. We have incubated brands such as Liangxin Jiangren and Youdouzhi. For instance, Liangxin Jiangren has introduced intangible cultural heritage craft and collaborated with five-star catering chefs, universities, and multinational companies, all while remaining the essence of traditional craftsmanship to make product innovation more dynamic. As a result, this label has skillfully created products that highlight regional traits, incorporate traditional craft, and promote children's health, among other features. Two of the factories have obtained FSSC 22000 certification and U.S. FDA registration, which indicates that the production system has reached the highest level of international safety control and paves the way for entering the global high-end market. In 2024, the GMV of Liangxin Jiangren was about RMB 600 million, with an annual growth rate of 22% and an average monthly repurchase rate of 40%.

[Foreign language]

For pre-prepared meals, we currently operate three factories that cover categories such as meat products, aquatic products, and salads and fruit cuts. With the Cai Changqing brand as our foundation, we develop healthy pre-prepared meals with regional flavors based on our insight into consumer trends and front-end market data, advanced production capability, and technology, and over 3,000 flavor codes. Consumers greatly love many products such as whole chicken crayfish, which has had an annual sales exceeding RMB 100 million for three consecutive years, and Cai Changqing mouthwatering chicken, with an annual sales surpassing RMB 30 million. In 2024, the GMV of Cai Changqing was approximately RMB 1.1 billion, with a year-on-year growth rate of 27% and an average monthly repurchase rate of 40%.

[Foreign language]

Fourth, besides serving Dingdong, Guyu's products are competitive directly in a broader market due to their high quality. Currently, our products are sold not only in domestic chain channels such as Lianhua Supermarkets, Jingdong Seven Fresh, and Huazhu Hotels, but also in international markets where we have distributed our products to over 30 countries and regions through partners like Lee Kum Kee, Hong Kong DFI, and T&T Supermarkets from Canada. Furthermore, we are establishing in-depth cooperative relationships with HKTV Mall in Hong Kong, Fair Price in Singapore, and retail groups in Central Asia and the Middle East. In the future, we will leverage our data production and R&D capabilities to develop products that cater to various channels.

Thomas Chong (Regional Head of Internet and Media)

[Foreign language]

The evolution of Guyu serves as a testament to Dingdong's full industry-chain capabilities and the genuine potential of our narrow-and-deep strategy. It not only enhances Dingdong's product competitiveness, but also effectively establishes a robust, modern, and internationally-oriented, rapidly-developing, expanding, and high-quality food enterprise. Thank you.

Operator (participant)

As there are no further questions, I'd like to return the call to our management for closing remarks.

Yang Bai (Asset Management Intern)

Thank you again for joining our call today. If you have any further questions, please feel free to contact us or request through our website. We look forward to speaking with everyone on your next earnings call. Have a good day and have a good night.

Operator (participant)

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.