Transcripts
Dingdong (Cayman) Limited's management answers for the business every quarter. These are the exchanges that explain it best — verbatim, from the call transcripts preserved in Sources. Each link opens the full transcript at that page in a new tab.
Q3 FY2025 Earnings Call — Q3 FY2025
The most recent call: how Dingdong plans to grow through an intensifying price war — the "One Big, One Small, One World" framework and the top-selling-product model, in management's own words. · Open the full transcript →
How the "Good Products" system compounds retention, order frequency and GMV.
Changlin Liang (Founder & CEO): This year, the company has made notable progress with its "Good Products" system. A series of good products has effectively enhanced user retention and repurchase rates, while also significantly supporting overall GMV growth. For instance, in September, SKUs classified as "Good Products" comprised 37.2%, generating 44.7% of total GMV—a rapid jump from January, when the 4G strategy was launched, and the share of Good Products SKUs was 14.1% and their GMV contribution was 16.4%. The growing number of these "Good Products" has attracted more users to place orders on Dingdong. In Q3, the monthly order conversion rate increased by 1.6 percentage points year-over-year, and the number of monthly ordering users grew by 4.1%. Additionally, "Good Products" have further strengthened user mindshare. The average monthly order frequency reached a record 4.6 times in Q3—up 4.9% year-over-year with member placing an average of 7.7 orders per month, a 1.3% year-on-year increase.
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Where the money comes from: flat GMV, B2B up 67%, and margin managed by design.
Song Wang (CFO): Revenue for Q3 reached RMB 6.66 billion, marking a 1.9% year-on-year increase. GMV was RMB 7.27 billion, up 0.1% compared to the previous year. The scale growth mainly stemmed from a general rise in order volume, which increased by 2.2% year-on-year in Q3. This quarter, our B2B business continued to grow steadily, with revenue expanding by 67.4% year-on-year, and its revenue share rose by 1.9 percentage points year-on-year. […] Gross profit margin was 28.9%, down 0.9 percentage points year-on-year. The decline in gross profit narrowed on a quarter-on-quarter basis. During the quarter, the company maintained its focus on its "good products" strategy by refining its product lineup, emphasizing flagship items, and increasing the supply of high-quality goods. It continued to enhance its supply chain system by prioritizing high-quality products that meet market demand, while systematically phasing out slow-moving items with low user preference. This "high-quality in, low-quality out" approach enabled the company to focus on core categories, thereby enhancing overall product competitiveness.
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Q2 FY2025 Earnings Call — Q2 FY2025
The fullest account of the 4G strategy reset — the org redesign, the full-chain AI build-out, and a six-point contrast with the platform rivals. · Open the full transcript →
The operating model in one frame: 85% direct sourcing, omnichannel demand, widening geography.
Changlin Liang (Founder & CEO): First, we strengthened our presence in the supply chain by sourcing over 85% of our fresh produce directly from the origin, including Dingdong Agriculture, Guyu Factory, ten product development divisions, Dingdong Xiaoman origin procurement, and direct sourcing from Australia. This ensured ample product availability – in other words, always stock on hand. Second, on the demand side, we expanded omnichannel sales. Besides our popular Dingdong app, we also served domestic and international KA channels and B2B clients, such as merchants, hotels, travel agencies, restaurants, canteens, and factories. Omnichannel sales boosted sales efficiency and fully showcased the value of our supply chain, leading to "sales success." Lastly, we continuously expanded our operational regions, starting from East China to nationwide coverage, and then gradually entering Southeast Asia, the Middle East, and Central Asia. Looking ahead, we plan to expand into Europe, America, and Africa. These simultaneous efforts across supply chains, channels, and regions formed an interconnected system—"point, line, plane, and solid"—which broke growth barriers and enhanced our core system capabilities and competitiveness.
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The full-chain AI strategy — from LLM procurement agents to automated sugar-content testing.
Changlin Liang (Founder & CEO): Dingdong was an early AI adopter and among the first in the industry to extensively embed AI into its business. It now implements a comprehensive full-chain AI strategy across all core business segments. […] Supply Chain Intelligence: We use multimodal technology for smart management and optimization throughout the supply chain, enhancing the accuracy and consistency of mapping between physical and digital environments and ensuring "truth-seeking and traceability" across the entire supply chain. Additionally, a large language model (LLM) agent automates decisions on purchasing, allocation, and promotions, further improving inventory accuracy and system stability. For instance, we developed an automated system for testing fruit sugar content, overhauling the testing process to automate everything from "image recognition to data analysis to system integration," replacing manual data entry. The results are notable: data entry time dropped from 20 seconds to under 3 seconds; accuracy rose significantly to 98.3%, greatly reducing quality disputes caused by human errors; and all test data is automatically synchronized to the system, supporting data analysis and traceability, standardizing data, and boosting management efficiency. This system represents a successful application of intelligent supply chain management in the quality control process.
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What the 4G reset actually changed: 10 product divisions, GMV/margin dropped as KPIs, good-user repurchase.
Thomas Chong (Jefferies); Changlin Liang (Founder & CEO): Could you summarize the progress and outcome of the 4G strategy during this period?
Liang Changlin: (Speaking Foreign Language). Thank you for your question. The 4G strategy has been in place for more than six months. During this period, we have refined our production relationships and enhanced productivity, emphasizing "good users, good products, good services, and good mindshare.”
First, we comprehensively restructured our production relationships by dismantling traditional product development centers. We integrated personnel from product development, operations, and quality control to form 10 independent product development divisions, each led by a key executive. This shift enabled the Company to prioritize high-quality products and increase organizational efficiency. Simultaneously, we overhauled resource distribution and performance evaluation methods. During this period, we removed GMV and profit margin as performance metrics, instead emphasizing quality indicators such as the proportion of good products, good users, purchase repeat rate, and negative reviews. […] Our good users show an exceptionally high repurchase rate with at least eight orders monthly per user, compared to the average of 4.4.
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Six point-by-point contrasts with the price-war rivals — the clearest statement of the moat.
Yang Bai (CICC); Changlin Liang (Founder & CEO): Since our IPO in 2021, we have been attentive to competition in areas such as community group buying, platform delivery, and frontline fulfillment stations. We have addressed these issues individually in previous quarters. We focus less on competition and more on creating value. Reflecting on this journey, we have stayed consistent and accurate in our understanding and positioning.
First, recent competition within instant retail has garnered widespread attention. The battle for users and traffic is fierce, with many adopting quick, short-term price wars. However, this focus often neglects aspects like supply chains and product development. As we outlined with our strategic approach of "narrower and deep," we differ significantly from typical instant retail companies. […] First, our goal is to develop the supply chain and create an ecosystem, whereas theirs is to compete for more users and traffic.
Second, strategically we emphasize commodity and ecological approaches, unlike their focus on traffic, platform dominance, and market monopolization.
Third, in our relationships with channels we seek win-win cooperation and steady growth, whereas they engage in zero-sum market competition.
Fourth, our interactions with suppliers are collaborative and mutually beneficial, while theirs follow a traditional client-provider model.
Fifth, our business models grow in proportion to our upstream and downstream partners. In contrast, theirs are characterized by a power-law distribution, with a few entities controlling most resources and influence, and becoming oligopolies.
Sixth, we value long-term relationships and patience, unlike their focus on short-term KPIs.
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Q2 FY2024 Earnings Call — Q2 FY2024
Return to growth laid bare: the anti-Walmart operating principle, the 0-to-1 / 1-to-10 revenue vision, and hard numbers on new-station unit economics. · Open the full transcript →
Why the Walmart playbook fails in fresh grocery — the first principle Dingdong runs on.
Thomas Chong (Jefferies); Changlin Liang (Founder & CEO): Many in the industry adhere to the traditional retail approach, which is achieving scale by offering low prices and then leveraging that scale to drive down procurement costs and operating expenses. However, we've realized that the first principle of traditional retailing, which has been successful since the Walmart era, is not applicable to the fresh grocery industry.
Instead, the first principle of success is to continuously enhance end-to-end efficiency, to achieve growth at scale, seek profitability and bolster competitiveness. It is crucial that we focus on consistently improving our supply chain capabilities. With these capabilities, we'll be able to serve a larger customer base and meet their evolving needs.
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The long-range guidance frame: from 0-to-1 (RMB20bn) to 1-to-10 (RMB100bn) over the next seven years.
Robin Leung (Daiwa); Changlin Liang (Founder & CEO): So would you share what does the future revenue growth rate look like for Dingdong in the future?
Changlin Liang: (Speaking foreign language).
(Translated). In our previous discussion, we highlighted four key drivers for growth. These factors are linked to the organic expansion of our fresh food supply chain capabilities. We’re confident that in the future, these four growth drivers will be able to expand to the same scale as our current business lines or even greater.
Additionally, we have divided Dingdong’s initial development into two stages. The first stage covers the 7-year period from our business's establishment in 2017 to the present, representing the transition from zero to one. During this time, we have achieved profitability and have reached an annual revenue scale of more than 20 billion RMB. Looking ahead, the second stage will encompass the next 7 years, representing the transition from 1 to 10, and we aim to achieve an annual revenue scale of 100 billion RMB. Thank you.
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Station unit economics: ~RMB40m capex for 80 stations, breakeven at 500 orders/day, 3–6 month ramp.
Yang Bai (CICC); Song Wang (CFO): Will that increase pressure on the company’s cash flow? […] We estimate that the total CapEx investment for these 80 new stations will be around RMB40 million. Therefore, we have enough self-owned funds to complete their opening without impacting our daily operating funds at all. […] We estimate that the new frontline fulfillment stations in Jiangsu, Zhejiang, and Shanghai can achieve operational breakeven with only 500 orders daily per station. The ramp-up period is about 3 to 6 months. […] Our new frontline fulfillment stations processed an average of 800 orders daily in the first half of this year, and most of them are now breaking even at the operational level.
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Q4 FY2023 Earnings Call — Q4 FY2023
The first full year of non-GAAP profit, how private label drives category margins, and the reasoning behind the first buyback. · Open the full transcript →
The full-year milestone: first-ever annual non-GAAP profit on ~RMB20bn revenue, RMB22bn GMV.
Changlin Liang (Founder & CEO): As we consistently implemented our development strategy of efficiency first, with due consideration of scale, we not only achieved non-GAAP profitability for the fifth consecutive quarter, but also marked our first full year of non-GAAP profitability. […] For the full year, our revenue was 19.97 billion RMB, with a GMV of 21.97 billion RMB. Our gross profit margin was 30.7%, and our non-GAAP net profit margin was 0.2%.
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How private label drives margin: three brands past 50% of category GMV, with names and repurchase rates.
Changlin Liang (Founder & CEO): Over the past 3 years, we have successfully launched private-label products across three major categories: prepared meals, pork, and soy products, and these three categories of our private labels penetrated over 50% of GMV in 2023. Let me share some examples. First is Cai Chang Qing, a private-label product specializing in prepared home-cooked meals. In 2023, GMV totaled approximately [840] million RMB, a significant increase of 43% from 2022.
In the fourth quarter of 2023, the average number of monthly repurchasing users reached 37%, showcasing the brand's popularity among its customers.
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Capital allocation: the US$20m buyback rationale — undervalued stock, ample cash.
Jiajing Chen (CICC); Song Wang (CFO): Dingdong recently announced that the company plans to repurchase up to $20 million of its shares by January 2025. Could you give us more color on this?
Song Wang: (Speaking foreign language).
(Translated). Thank you for your question. As you mentioned, we recently announced a stock repurchase plan that will last 1 year, with a total limit of US$20 million. We expect to begin buying back shares once the blackout period ends following earnings. Our stock is significantly undervalued at the current price, especially in view of our long-term growth prospects. Given our ample cash reserves, buying back stock is an effective way to allocate capital, especially when the stock is undervalued. This program will be beneficial for both the company and its shareholders. […] The key to enhancing the company's overall value lies in our ability to continuously improve our operational capabilities, ensuring sustainable and long-term development.
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Q3 FY2023 Earnings Call — Q3 FY2023
The landmark profitability call: the first leading player to turn sustainably profitable, why it calls itself a food company rather than a retailer, and the efficiency math behind it. · Open the full transcript →
The milestone that defined the thesis: first of the leading players to reach sustained profitability.
Changlin Liang (Founder & CEO): Non-GAAP net income margin was 0.3%, marking our fourth consecutive quarter of non-GAAP profitability as we continue to prioritize our strategy of “efficiency first, with due consideration of scale”. In addition, we achieved quarterly profitability on a GAAP basis for the second time since Q4 of 2022.
Sustaining profitability over the past 4 consecutive quarters on a non-GAAP basis is critical for both Dingdong and the industry. First of all, it indicates that we have successfully navigated the difficult macroeconomic and competitive environment we found ourselves in, with many doubting the sustainability of the sector. Second, it reflects the corporate flexibility and adaptability we maintain. With the market continuing to change rapidly, these attributes will remain critical to our long-term sustainability.
Third, among the leading companies competing in the sector, we are the first to achieve profitability. It was a long and difficult journey to get here, but we stuck to our principles and vision, which kept us on the right path. Lastly, having reached the profitability milestone, we are confidently looking to the future, where we will maintain sustainable long-term growth.
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"We are a food company": private-label R&D and 12 self-operated factories, not just a retailer.
Changlin Liang (Founder & CEO): We are more than just a retail company; in fact, we are a food company with R&D and production capabilities. Our top priority has always been to provide our customers with unique, high-quality products. As we grow, our customers are not only buying products on Dingdong, they are increasingly buying Dingdong-branded products. We develop and produce private-label products in 12 self-operated factories in addition to cooperating with high-quality upstream suppliers.
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The efficiency engine in numbers: 30.4% gross margin, 10.7-day turnover, <1.5% loss, fulfillment -3.5pts.
Song Wang (Head of Finance): In Q3, gross profit margin increased by 0.4 percentage points year-over-year, reaching 30.4%. This was driven by the continuous improvement of our operational capabilities and efficiency as we expanded along the fresh food supply chain. Our “extensive SPUs, concentrated SKUs” strategy allowed us to leverage our supply chain and product development capabilities to create top-selling products while managing slow-moving ones. This approach also helped us improve supply chain efficiency, resulting in a companywide turnover time of only 10.7 days and 4.5 days for frontline fulfillment stations.
Our end-to-end loss rate was kept below 1.5%. This helped us utilize economies of scale, while improving our bargaining power and optimizing our product mix. As a result, our gross profit margin remains stable while maintaining our ability to provide significant value to our users. […] Our fulfillment expense ratio in Q3 was 23.3%, an improvement of 3.5 percentage points compared to the same period last year, reflecting the substantial impact of this year’s optimization measures.
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The competitive-landscape answer: a fractured market that can't be monopolized; low prices from efficiency.
Fiona Fan (Jefferies); Changlin Liang (Founder & CEO): The market for fresh groceries in China is vast and fractured; it cannot be monopolized. As a startup, Dingdong is committed to providing value to consumers. We believe that many different business models can thrive in this market.
As discussed earlier, we believe instant-delivery retail will bring the sector back to the basics of providing efficient service, better product development capabilities, and competitive pricing. In today's world, efficiency and low prices are critical factors that everyone considers when making purchasing decisions. Low prices result from an improvement in efficiency, not a compromise in quality. […] As for fresh grocery products, we continue to work directly with farmers on the ground, cutting out numerous intermediaries in the supply chain. For non-fresh products, we have increased the proportion of private-label products and in-house production to boost our gross profit, while attracting consumers with our exceptional products. In essence, our approach entails improving our product supply, maintaining quality control from the source, meeting a diverse range of user needs, and responding promptly to demand.
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Cohort retention as the LTV proof: 2017 users average ~6 orders/month, rising with tenure.
Sophia Chi (Daiwa); Changlin Liang (Founder & CEO): In addition, we have found that the longer customers use our service, the more orders they tend to place. On average, users who joined our platform in 2017 place around 6 orders per month, while the 2018 cohort place 5.4 orders per month. This suggests that our existing users are highly loyal and tend to increase their order frequency over time. We are confident that we will achieve sustained growth by meeting consumer needs and retaining users for longer term.
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More calls
Q4 FY2024 Earnings Call — Q4 FY2024 · 3 pages · The Q4 and full-year 2024 results and 2025 outlook — but the only available transcript is paywall-truncated to the cover and intro, so the PDF gives headline framing rather than management's full remarks or Q&A. · Open →