Ladies and gentlemen, thank you for standing by, and welcome to the MOGU Third Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Sean Zhang. IR Director of MOGU Inc. Thank you. Please go ahead sir.

Thank you, Chris. Hello, everyone, and thank you for joining us today. MOGU’s earnings release was distributed earlier today and is available on the IR website at ir.mogu-inc.com as well as on Business Wire services. Before we begin, I’d like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management’s current expectation and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties or other factors, all of which are difficult to predict and many of which are beyond the company’s control, which may cause the company’s actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company’s filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise except as required under applicable law. On the call today from MOGU are Mr. Shark Chen Qi, Chairman and CEO; and Ms. Helen Wu, CFO. Mr. Chen will review business operations and company highlights, followed by Ms. Wu, who will discuss financials. Both will be available to take your questions during the Q&A session. Now it is my pleasure to introduce our Chairman and CEO, Mr. Chen, please go ahead.

[Foreign Language] Hello, everyone, and thank you for joining us our December quarter earnings call today. We continue to execute on our live video broadcasting, or LVB, e-commerce strategy and made significant progress during the quarter, which is traditionally China’s peak shopping season. Our LVB business has increasingly become a key business driver and maintained strong growth momentum, with GMV increasing 99.5% year-over-year during the quarter. Its contribution to our overall GMV also jumped to 53% during the quarter, up 14% sequentially and more than double from the same period last year. The rapid growth of the LVB business has been driven primarily by the enhanced content being created and further bolstered by the consolidated supply chain capacity we are actively expanding. LVB broadcast hours per day increased to 3,800 hours in December 2019 from 3,400 hours per day in September. Average LVB MAUs also increased 133% from a year ago, which I believe reflect the direction we are headed as our strategy further take hold and bear more fruit. [Foreign Language] Cultivating and empowering our KOLs and LVB hosts, is a key component of our engaging and comprehensive fashion and lifestyle destination we are building for our users and will create a solid platform to drive long-term sustainable growth. During the quarter, we continued to strengthen our ability to empower KOLs and host. First, we expanded talent pool of LVB host by recruiting nearly 5,000 new hosts during the quarter to increase the diversity of fashion and lifestyle-related content and amplify engagement with a wider demographic of a user. Second, our new-KOL incubation and empowering program i.e., Double Hundred and Migrating Bird plans that were rolled out in July 2019 are already beginning to generate solid results and drive growth momentum. We are seeing performance and growth of our…

Thank you, Shark. Thank you again, everyone, for joining the call tonight. I will walk you through our third quarter fiscal year 2020 financials. We believe year-over-year comparison is the best way to review our performance. So unless otherwise stated, all the percentage changes that I’m going to give you are on that basis. So let’s review the financials. Our overall [Technical Difficulty] continue to generate pretty steady GMV growth over the past quarter, with the GMV increasing 8% when we compare it to the same period last year. Our LVB business, in particular, continued to grow significantly with the associated GMV for the third quarter of fiscal year 2020, increasing by 99.5% year-over-year to RMB 3.4 billion. LVB business continues to grow as a proportion of total GMV, accounting for 53% through the quarter, up 14% sequentially, and is growing strongly as our associated commission revenues, which has increased significantly and accounting for a larger portion of our overall commission revenue. Going forward, it will continue generating strong growth momentum, driven primarily by our strategy and the continued upgrading of our merchant structure on our platform. The average APP MAU, who clicked the live video broadcast in the quarter increased by 132.7% year-over-year. Active buyers of the LVB business in the past 12-month period ending December 31, 2019, grew by 32.4%. Now let’s turn to revenues. Total revenue came in at RMB 269.5 million, a decrease of 26.6% year-over-year. This was primarily due to a 19.6% year-over-year decrease in the commission revenue and 44% – roughly 45% year-over-year decrease in the marketing revenue. The commission revenue decreased to RMB 141.2 million, mainly driven by the decrease in the GMV and also the commission revenue related to our marketplace business. While our revenue in the Live Video Broadcasting business has…

Thank you. [Operator Instructions] Your first question comes from Charlie Chen of China Renaissance. Your line is open.

[Foreign Language] Maybe let me first translate the question for listeners’ sake. Okay. The first question is regarding the impact from the COVID-19, which – in which area you see the most impact? Is it on the supply side or the live video broadcast host available hours or the logistics? The second question is, when do you expect your business will recover to normal state? The third question is, do you see a decrease in your pool of live video broadcast host or increase due to people stay for an extended period of time at home?

[Foreign Language] Okay. For the first question, yes, there is an impact to our business. The news came out in late January, and we see the most impact in February. Initially, early February, our live streaming hosts couldn’t come back to their studio. They are required – they were required to quarantine themselves at home. Later on, when our hosts start to come back, we find there is a bottleneck at supply side, mainly due to the extended holiday has basically postponed the resumption of work of factory and large-scale offline market. As of now, in early March, most of our hosts has come back to work. And most of the factory has resumed working now, but the delivery services has become a challenge due to, first of all, some of our customers are afraid of the safety issue as package being delivered from other cities. Also, there’s a limitation on the delivery services, as most of the neighborhood are asking the delivery guy to leave their parcel outside the gate after the main gate. So – but the same situation has also impacted brand and suppliers, and many of the brands and offline supplier have basically realized the spring collection – the sales of spring collection will be heavily impacted. So they move on from producing the spring collection to produce summer and autumn collection now, so we do see a shortage of supply of spring collection at this moment. [Foreign Language] Okay. Regarding recovery, on our platform, we are seeing – the data we’re seeing shows that DAU and also active user engagement has covered pretty well, and actually, we are seeing very good data coming regarding the user engagement. So that’s on the demand side. But the challenge remains on the supply side. Basically, we are still experiencing some bottleneck on the offline suppliers and also brand partners I think in China, the situation is largely – has been largely contained, although there is – and the outbreak abroad is an evolving situation. But in China, the situation has been largely contained, and we expect business will go back to normal pretty quickly. [Foreign Language] Okay. Basically, we’re seeing pretty encouraging development on the demand and also the supply of our live video broadcast host. We are seeing pretty stable number of hosts coming back to work. So basically, our pool of live streaming host has not reduced, but we are not seeing a rapid growth in the pool of live streaming hosts, mainly due to, again, as I said, on the supply side, we are seeing limited extra supply from brands and suppliers.

Okay. Thank you.

Our next question?

[Operator Instructions] Your next question comes from Charlie Chen with China Renaissance. Your line is open.

[Foreign Language] The first question is we’re seeing live video broadcast MAU growth pretty stable. And at the same time, the overall user decreased. So I wonder where the live video broadcast user came from. Secondly, how many you see your – the user from your traditional marketplace has converted to live video broadcast users?

[Foreign Language] Okay. Basically, we have four major user acquisition channels. The first one is, obviously, the major social platforms. The second one is the main app stores. The third one, which now has been impacted, is the OTV, online entertainment, such as OTV as well as the offline marketing channels. And third is – basically is the – our user word-of-mouth referral. Those are the four main channels we will acquire our users for our LVB business. [Foreign Language] Okay. Now the LVB users’ penetration rate to our total users is about only 30%. But the – their metrics are much better than our legacy marketplace users. For example, ARPU is multiple times four, five times of our non-LVB users and also the repeat rate is much higher.

[Foreign Language] Basically, my question is, when you see a challenge or constraint on the supply side, but at the same time, your LVB hosts coming back and they are engaging with their fans, are you – do you expect to see a decrease in kind of user engagement, in longer term, if you continue to have supply side constraint?

[Foreign Language] Okay. When we are saying there’s a constraint on the supply side, we’re not saying there’s no supply, just not abundant supply, so we still have quite a lot of supply to offer to our KOL. We mainly implemented two strategy in the past 1.5 months. Number one, expand our product category, especially cosmetics, because cosmetic product has not been impacted as heavily as apparel, so we are seeing contribution from our cosmetic sale has expanded. Second, we are – we have very successfully expanded our brand portfolio. As you guys know, we are – brands were not our basic core supply in the past. Right now, the epidemic really impacted the traditional apparel brand in China when they have very limited offline sales. So they have a lot of inventory. So actually, it’s opportunity for us to kind of penetrate into the brand live streaming e-commerce sale. So our key strategy this year is, expand our brand portfolio, expand our price ranges and expand our product categories. In the past 1.5 months, we have worked with more than 500 new brand partners. So in the past LVB host, they were reluctant to work with brand due to the higher price range, but now this is the opportunity because of the limited supply from the traditional, basically, factory supplier side. They have to rely on us more in order to work with brand partner to get a sufficient supply for the shows.

[Foreign Language] Thank you.

[Operator Instructions] There are no further questions. I will now return the call to Mr. Sean Zhang for final comments.

Sure. Thank you, Chris, and thank you, everyone, for joining the call today. If you have any further questions or comments, please don’t hesitate to reach out to any one of us here at MOGU. This concludes the call today.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.