Good day, ladies and gentlemen. Thank you for standing by. Welcome to Alibaba Group's March quarter 2022 and full fiscal year 2022 results conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. I would now like to turn the call over to Rob Lin, Head of Investor Relations of Alibaba Group. Please go ahead.
Good day, everyone, and welcome to Alibaba Group's March quarter 2022 and full year, full fiscal year 2022 results conference call. With us today are Daniel Zhang, Chairman and CEO, Joe Tsai, Executive Vice Chairman, Toby Xu, Chief Financial Officer. This call is also being webcast from the IR section of our corporate website. A replay of the call will be available on our website later today. Now let me quickly cover the safe harbor. Today's discussion may contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussion of the risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the U.S. SEC or announced on the website of the Hong Kong Stock Exchange.
Any forward-looking statement that we make on this call are based on assumption as of today, and we do not undertake any obligation to update these statements except as required under applicable law. Please note that certain financial measures that we are using on this call, such as adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP diluted earnings per share, ADS, and free cash flow, are expressed on a non-GAAP basis. Our GAAP results and reconciliation of GAAP to non-GAAP measures can be found in our earnings press release. Unless otherwise stated, growth rates of all stated metrics mentioned during this call refer to year-over-year growth versus the same quarter last year. In addition, during today's call, management will give their prepared remarks in English. A third-party translator will provide simultaneous Chinese translation on another conference line.
Please refer to our press release for details. The Q&A session, we will take questions in both English and Chinese, and the third party translator will provide consecutive translation. All translations are for convenience purpose only. In the case of any discrepancy, management statement in the original language will prevail. With that, I will now turn to Daniel.
Thank you, Rob. Hello, everyone. Thank you for joining our earnings call today. We completed a solid fiscal year amidst the macroeconomic challenges in China due to the resurgence of COVID and tremendous uncertainties in the global geopolitical landscape. During the fiscal year, we achieved the target of 1 billion AACs in China with annual net increase of 113 million. Globally, we reached 1.31 billion AACs with annual net increase of 177 million. We achieved a total GMV of CNY 3.3 trillion, with close to CNY 8 trillion in China and CNY 341 billion outside of China. Our cloud computing business completed its first profitable fiscal year while maintaining market leadership in China.
Now, I would like to share a bit more about the latest situation in China with the recent resurgence of COVID. As you all know, Omicron started to spread in China in March and has impacted several major consumption and manufacturing centers such as Pearl River Delta, including Shenzhen, the Yangtze River Delta, including Shanghai and Beijing. During the second half of April, over 80 cities in China reported confirmed COVID cases, and most are national economic centers. Such widespread impact has brought significant uncertainties to the China economy. We saw the national retail sales reporting negative year-over-year growth in March and April, and online sales of physical goods also reported a historical decline year-over-year. The resurgence of COVID has also impacted our business to varying degrees. Overall speaking, we saw a low single-digit decline in revenue growth in April compared to the same period last year.
Online physical goods GMV of our China retail marketplaces, excluding unpaid orders, saw a year-over-year decline in the low teens % in April. To give you a sense of the scope of impact, based on our consumer address, cities with new COVID cases in April represented more than half of our China retail marketplaces GMV. These cities also included major merchant hubs such as Shanghai, Shenzhen, and their nearby cities, where supply chain and logistics disruptions have resulted in widespread impacts. During the same period, while our user traffic and engagement have remained resilient, patterns of consumption across categories on our platforms have shifted. Fashion and electronics consumption decreased. Demand for essential supplies such as food and FMCG products increased significantly with more consumers stockpiling at home. Emerging categories such as healthcare, active wear, and outdoor products also grow rapidly.
We have seen a major recovery in local logistics capacity compared to April. We believe operating stability and the sustainability during this period is the primary concern of all businesses. Ensuring stability of supply chain and logistics amid the uncertainties is the best way to improve consumption sentiment and foster a more positive environment for business operations. We are also facing uncertainties in the macro environment outside of China. During the quarter, the order growth slowed down to 32% year-over-year as offline consumption gradually recovered post-pandemic in Southeast Asia, with Malaysia, Vietnam, and Thailand achieved higher than regional average order growth rates. Trendyol continues market leadership in Turkey with quarterly order volume growing by 48% year-over-year.
The order volume of AliExpress decreased year-over-year this quarter, mainly due to the impact of the European Union's policy change in VAT exemption, recovery of local supply chain and offline consumption post-pandemic, as well as international logistic disruptions due to the regional conflict. Despite geopolitical conflicts and uncertainties, we will continue efforts to develop our globalization strategy in consumption. We will serve international consumers through a combination of cross-border and the local commerce models, and proactively invest in our local-global logistic networks as part of our overseas digital commerce infrastructure buildup. Facing the challenges of geopolitical and macroeconomic uncertainties, many companies started to focus on high-quality growth with cost control and loss cutting. For Alibaba, high quality growth has been a principle for years, especially during the pandemic. We see the benefits of a solid foundation that we have built over time carrying out this principle.
Number one, the high quality consumer that we serve. Number two, the high quality infrastructure we are building for digital commerce. Number three, the high quality technology innovations that drive the vast potential of our cloud computing business. I will elaborate more in the following sections. First of all, the high quality consumer base. We serve the largest and highest quality consumer base in China by Taobao and Tmall. Among our 1 billion AACs in China, 124 million consumers spend more than RMB 10,000 annually on Taobao and Tmall, and 98% of those consumers continue to stay active in the following years. Looking ahead, we will continue to strengthen our comprehensive consumer application portfolio with clearly differentiated user value propositions, and address the diversifying needs of different consumer segments in accordance with their consumption power and mindset, especially those of our core customers.
What does it mean? In pre-purchase stage, it means establish a clear consumer mindset, stimulating consumer interest through increasing user engagement and time spent on consumption-related contents, and influencing consumer decision. In post-purchase stage, it means an enhanced fulfillment and customer service experience. I believe this is a winning formula for earning consumer mind share and wallet share in a highly competitive landscape. Secondly, the high quality infrastructure for digital commerce. Over the years, Alibaba has established a comprehensive infrastructure for digital commerce based on a hybrid model, combining intercity and intracity fulfillment. Through digital user outreach, effective organization of product and services supply, as well as fulfillment service capabilities covering cities and communities. Our infrastructure has become an important way for consumers to obtain daily necessities during the pandemic.
In particular, over the last few years, we have created our location-based commerce business by building core capabilities in supply chain and fulfillment and online/offline integrated distribution networks on top of a pre-existing marketplace model. Based on our data in March and April, an average order value of customers in our location-based commerce business has increased significantly as consumers in COVID-affected areas rushed to stock up. As a result, while our order volumes were negatively impacted by the fulfillment capacity constraint during the pandemic, GMV of these location-based commerce business have shown robust year-on-year growth. Taking Shanghai as an example, while Ele.me's food delivery business has been significantly impacted, deliveries of retail categories have grown rapidly. In particular, demands for groceries and pharmaceuticals are extremely strong with year-on-year growth above 100%.
As Ele.me continued to enhance its operations and reduce unit logistics cost, its unit economics also improved significantly to almost break even during the quarter. Our infrastructure is playing an important role during the pandemic. For example, our different businesses, including Freshippo, Taoxianda, Tmall Supermarket, Ele.me, et cetera, are providing essential supplies in cities impacted by COVID in China. Through these efforts, we hope to integrate business capabilities with social responsibility, leveraging the power of digital commerce and technology in the fight against COVID, and providing essential supply support for local communities. Let me name a few examples. Sun Art, Freshippo and other business units supported the supply and delivery of essentials to the residents by dispatching thousands of couriers and frontline workers from various regions in China to Shanghai.
Ele.me delivered more than 2.5 million pharmaceutical medicine orders to homes in Shanghai in April 2022. It also launched emergency delivery services for vulnerable groups in the city, and addresses nearly 70,000 emergency requests during the month. Cainiao built an emergency logistics system that encompassed disaster preparedness management, emergency transportation, transit, and distribution to deal with contingencies. Amap, our map navigation tool, launched the map of PCR tested sites, which cover more than 350 cities in China by mid-May. User can easily search for a locations and opening hours of nearby test sites.
Taobao and Tmall have launched a series of targeted relief measures that would help merchants in Shanghai and those participating in our June 18 shopping festival to ease their cash flow pressure, reduce operating costs, and speed up the resumption of work and production to the largest extent possible. Thirdly, the high-quality technology innovations that drive the vast potential of our cloud computing business. Alibaba Cloud's competitive advantage is its world-class proprietary technology and products that support the highly demanding and complex business across Alibaba Group, while serving customers across a wide range, a wide variety of verticals globally. In fiscal year 2022, Alibaba Cloud continues to be the leader in terms of market share in China and achieve the full-year profitability for the first time.
Its GAAP revenue reached CNY 74.6 billion during the year, with 23% year-on-year growth. Before inter-segment elimination, cloud revenue for the fiscal year has exceeded CNY 100 billion. During the past quarter, Alibaba Cloud's revenue increased by 12% year-on-year. The growth deceleration was a result of several factors, including the decline in corporate activities and a delay in project delivery due to the impact of COVID restrictions, slowdown in the growth of internet industry customers, and the gradual termination of contracts by a top customer for our public cloud services outside of China. We believe these impacts are temporary. While China's internet industry customers show a deceleration in cloud service demand as the entire sector face a challenge of growth ceiling in user traffic and time spent. Digitalization of other industries is just starting, and we see plenty of opportunities.
Cloud computing and data intelligence services are fundamental to every business in every sector undergoing digital transformation. According to the industry estimates, China's cloud market size will reach CNY 1 trillion by 2025. Alibaba Cloud will continue to elevate its core technology and products to maintain its leadership in this highly potential market. The cumulative results of Alibaba's strong management and operations over the years has produced a high quality customer base, a sophisticated digital commerce infrastructure, and world-class technology innovation. We also have a multi-engine growth strategy, robust financial conditions, and a profitable business and a strong cash flow. These provide important assurance in the face of a macro uncertainty, and more importantly, a source of confidence as we continue to pursue healthy and sustainable development for the future.
In the new fiscal year, we will focus even more on cost control and continue to improve our operating efficiency. This includes streamlining unprofitable businesses, improving cash cycles, and enhancing investment efficiency in personnel, fixed assets, and other areas to maintain financial flexibility amidst uncertainties. Recently, the Chinese government has released important policy signals on its commitment to stabilize the economy and the job market in response to COVID impacts. They have also issued clear statements on promoting the development of internet platform economy through a healthy regulatory environment. Yesterday, the State Council held a national meeting to mobilize the implementation of several economic policies. As one of the representative companies of China internet platform economy, Alibaba is committed to supporting China's development through the combination of technology innovation and commercial innovation.
We aim to serve Chinese consumers' pursuit for a better life, as well as the digital transformation needs of different industries. We also will be on the front lines in the fight against COVID and ensuring the availability of food and other essential supplies to community in need. We look forward to the introduction and implementation of policies that will enable the internet platform companies to contribute more towards stabilizing the market, creating jobs, and furthering high quality development of China economy. The history of economic development has always been filled with twists and turns. In the long run, we strongly believe in the resilience and the potential of the China economy. We will strengthen our fundamentals during this unique period, focus on innovation and customer value creation, and continue investing and planning for Alibaba's long-term growth. Thank you everyone for your time.
I will now turn the mic over to Toby, who will walk you through the details of our financial results.
Thank you, Daniel. Hello, everyone. Let me walk you through the details of our financial results. For the quarter ended March 31, 2022, total revenue was RMB 204 billion, an increase of 9% that was primarily driven by the revenue growth of China Commerce segment by 8% to RMB 140 billion. Local Consumer Services segment by 29% to RMB 10 billion, and Cloud segment by 12% to RMB 19 billion. Income from operations for the quarter was RMB 16.7 billion, compared to a loss from operations of RMB 7.7 billion in the same quarter of last year.
The year-over-year change of RMB 24.4 billion was primarily due to RMB 18 billion anti-monopoly fine levied in the March 2021 quarter in a mark-to-market adjustment of SBC expenses of RMB 13 billion in the March 2022 quarter. Excluding these impacts, income from operations would have decreased by RMB 7 billion, primarily due to changes in adjusted EBITDA. Adjusted EBITDA decreased by RMB 6.8 billion to RMB 15.8 billion year-over-year in the quarter. The decrease was primarily due to RMB 7.4 billion decrease in China Commerce segment EBITDA that mainly reflected investments in Taocaicai and Taobao Deals, impacts from COVID, as well as losses incurred by Sun Art. However, it's important to note that the combined losses of Taobao Deals and Taocaicai declined quarter-over-quarter as we focused on driving high quality growth for our China Commerce segment.
Importantly, during the March 2022 quarter, we are also making progress in improving operating efficiency and instill cost discipline throughout the company. This has resulted in narrowing losses year-over-year of RMB 1.2 billion for local consumer services. Narrowing losses of RMB 732 million for DME segment, and improving profitability of RMB 618 million for cloud segment. Cost of revenue ratio, excluding SBC, increased to 68% in the quarter, ending March 31, 2022. The increase was primarily due to, firstly, higher proportion of direct sales businesses such as Freshippo and Tmall Supermarket, that increased the cost of inventory as a percentage of revenue. Secondly, growth of Taocaicai and Taoxianda businesses that led to an increase in logistic costs as a percentage of revenue.
Excluding SBC, product development expenses as a percentage of revenue slightly increased to 6% in the quarter ending March 31, 2022, reflecting our continued investments in talents to drive technology and product innovation. Sales and marketing expenses, excluding SBC, as a percentage of revenue remained stable at 13% in the March quarter compared to the same quarter of last year. Excluding SBC and the impact from anti-monopoly fine, general and administrative expenses as a percentage of revenue will be flattish in the quarter. Non-GAAP net income attributable to ordinary shareholders in the quarter was CNY 21.5 billion, a decline of CNY 6.9 billion, primarily due to decrease in adjusted EBITDA. GAAP net losses attributable to ordinary shares was CNY 16.2 billion.
The difference between GAAP net losses and non-GAAP net income was primarily due to a decrease in the market prices of our equity investments in publicly traded companies. As of March 31, 2022, we continue to maintain a strong net cash position of CNY 343 billion, or $54 billion. Our strong net cash position is supported by robust cash flow generation. In fiscal year 2022, net cash flow from operation and free cash flow were CNY 142.8 billion and CNY 98.9 billion, respectively. Majority of the difference is operating CapEx spending at CNY 42 billion, reflecting our investment in cloud business and logistic fulfillment infrastructure.
Free cash flow in March quarter 2022 was an outflow of CNY 15 billion, mainly due to the payment of final installment in the amount of CNY 9.1 billion of the CNY 18.2 billion, the anti-monopoly fine, and a decrease in profit. Importantly, we have continued to enhance returns to shareholders through share repurchases, given our strong balance sheet and free cash flow generation capability. In fiscal year 2022, we repurchased approximately 60 million of our ADSs for approximately $9.6 billion under our share repurchase program. On March 22, our company's board has authorized an increase of our share repurchase program for $15 billion-$25 billion. Since April 1 to May 25, we have repurchased another $3.4 billion in ADSs.
As of May 25, we still have an unused amount of $12 billion under the share repurchase program. Before I start with our segment results, I like to highlight something in the December 2021 quarter financial results. In the December quarter, the net income attributable to ordinary shareholders was understated by RMB 7.3 billion. This was caused by a goodwill impairment charge that should have been partially attributed to non-controlling interest, but was fully recorded in net income attributable to ordinary shareholders. This does not impact our non-GAAP measures and does not impact revenue, income from operations or total net income for the December quarter. The attribution has been rectified and properly re-reflected in the full year consolidated financial information for the fiscal year 2022. This attribution has no impact on the consolidated financial information for the March 2022 quarter.
Now, let's look at our segment results. Revenue from our China commerce segment in March quarter was RMB 140 billion, an increase of 8% year-over-year. Customer management revenue remained stable year-over-year at RMB 63 billion, despite a low single-digit decline in Taobao and Tmall online physical goods GMV, excluding unpaid orders. For the March quarter, the combined GMV growth of January and February was flat, but was offset by a decline in GMV in March, driven by COVID-19 impacts. If we further break down customer management revenue growth into advertising and commission revenue, total advertising revenue delivered a positive growth during the quarter. Commission revenue recorded a high single-digit decline due to GMV decline and higher order cancellation and delays as a result of logistics bottleneck from COVID-19 resurgence in March.
Direct sales and others revenue in March quarter was CNY 73 billion, an increase of 14% year-over-year, primarily driven by robust revenue growth of Freshippo and Tmall Supermarket. China Commerce segment adjusted EBITDA decreased by CNY 7.4 billion year-over-year to CNY 32.1 billion in the March quarter. The decline reflected investments in Taocaicai, Taobao Deals, as well as over CNY 1 billion losses incurred by Sun Art, primarily due to one-off asset impairments and special provisions. We are making progress in our commitment to improve efficiency and narrow losses for Taobao Deals and Taocaicai that have been successful in acquiring new consumers in less developed areas. During the quarter, Taobao Deals had over 300 million annual active consumers.
More than 20% of these AAC of Taobao Deals were consumers that did not shop on Taobao or Tmall in fiscal year 2022. Taocaicai had over 90 million AAC, of which more than 60% were first-time fresh produce buyers on our various platforms. At the same time, the combined losses of Taobao Deals and Taocaicai declined quarter-over-quarter. We expect the combined Taobao Deals and Taocaicai losses to continue to narrow as we focus on driving high-quality growth for our China Commerce segment. On to our major direct sales businesses. Except for Sun Art, as mentioned, losses narrowed year-over-year for Freshippo, Tmall Global, and Tmall Supermarket.
We have continued to expand our direct sales business to enrich product supply for our marketplaces, strengthen supply chain capabilities for various verticals, and offer comprehensive high frequency fulfillment services that seamlessly integrate with physical stores and pickup stations. These businesses delivered solid top line growth during the quarter, and we expect them to contribute more to the overall segment revenue mix, which will continue to affect the China Commerce EBITDA margin. Our International Commerce segment revenue in March quarter was CNY 14.3 billion, an increase of 7% year-over-year. The increase was primarily driven by Lazada and Alibaba.com, our international wholesale business. Lazada delivered solid order growth of 32%, while Alibaba.com grew transaction value completed on platform by 22%.
The slower year-over-year growth rate as compared to previous quarters was mainly due to, firstly, revenue decline of Trendyol that was negatively impacted by the ongoing depreciation of Turkish Lira against RMB. Secondly, orders decline for AliExpress, which was mainly driven by the ongoing impacts from VAT rules as well as supply chain and logistics disruptions for parcels entering the Eurozone due to the Russia-Ukraine conflict, and then slowing China export growth and supply chain disruptions from COVID-19 impacts. International Commerce segment adjusted EBITDA losses was a loss of RMB 2.6 billion in March quarter.
Losses slightly increased year-over-year, mainly driven by Trendyol's investments in new businesses such as international businesses and local consumer services in Turkey, partly offset by continued profit growth of Alibaba.com, narrowed losses of AliExpress, and narrowed losses of Lazada through optimization of OpEx and logistics cost. Revenue from local consumer services was CNY 10.4 billion in March quarter, an increase of 29% year-over-year, driven by more efficient use of subsidies and higher average order value driven resilient GMV growth for Ele.me.
Local Consumer Services adjusted EBITDA losses reduced by CNY 1.2 billion year-over-year to CNY 5.5 billion, primarily due to the narrowed losses of our Ele.me business, driven by optimized user acquisition and reduced delivery costs. Revenue from Cainiao after inter-segment elimination was CNY 11.6 billion in March quarter, an increase of 16% year-over-year, primarily contributed by the increase in revenue from consumer logistics services as a result of service upgrades for enhancing consumer experience, partly offset by the decrease in international orders that was mainly impacted by the supply chain and logistics disruptions for parcels entering the Eurozone due to Russia and Ukraine conflict. During the fiscal year 2022, 69% of Cainiao's total revenue was generated from external customers. Cainiao adjusted EBITDA loss was CNY 912 million.
Loss widened by CNY 327 million year-over-year, primarily due to increase in operating costs from expansion of our global smart logistics infrastructure, as well as impacts from COVID-19 resurgence in China and Russia and Ukraine conflict. Going forward, we will continue our efforts in building comprehensive logistics and fulfillment infrastructure in China and internationally, laying the foundation for sustainable long-term growth for our digital commerce businesses. Revenue from our cloud segment after inter-segment elimination was CNY 19 billion in March quarter, an increase of 12% year-over-year. Revenue growth was slower in March quarter compared to prior quarters, reflecting slowing economic activities, softening demand from customers in China internet industry, and delays in completing hybrid cloud projects due to COVID-19 impacts.
Excluding revenue generated from a top customer in the internet industry that gradually phased out using our cloud services for its international business, our cloud segment revenue after inter-segment elimination would have grown 15% year-over-year during March quarter and 29% for fiscal year 2022. Excluding this customer, our customer base and industry coverage continues to diversify. The next top ten non-affiliated customers contribute to less than 10% of Alibaba Cloud's revenue in fiscal year 2022. Importantly, revenue contribution from non-internet industries continues to increase as well. During the March quarter, revenue growth was strong in telecommunication, financial services, and retail industries, but declined in selected internet verticals, including online education and entertainment.
Adjusted EBITDA of cloud segment, which comprises of Alibaba Cloud and DingTalk, was a profit of CNY 278 million in March quarter, which improved by CNY 618 million year-over-year. This is primarily attributable to ongoing improvement in cloud profitability, partly offset by increasing losses from DingTalk. In the new fiscal year, our cloud segment will focus on high-quality revenue growth, invest in talents and R&D, and improve operating efficiency and expand internationally. Revenue from our digital media and entertainment segment in March quarter was CNY 8 billion, a decrease of 1% year-over-year. Adjusted EBITDA was a loss of CNY 2 billion, narrowed by CNY 0.7 billion year-over-year. Let me close with a short recap of last fiscal year and then our outlook. In fiscal year 2022, we have faced with increasing challenges from many fronts.
These have been brought about by slowing macro activities, increased competition, and COVID resurgence domestically, as well as changes in geopolitical conditions internationally. They also bring into focus the fact that there's much we can do to create value for our customers and key stakeholders. During this past year, we have made a number of achievements that position us well for the future. First, we have reached a historical milestone of over 1 billion annual active consumers for all our consumer-facing businesses in China. This was made possible through the strong execution and growth of businesses such as Taobao Deals and Taocaicai. Our unique value proposition of having both e-commerce and location-based commerce businesses at scale position us well to serve these 1 billion consumers in China.
Second, we're seeing increasing benefit from our development of an integrated intercity and intracity logistics network that allow us to offer multiple delivery and fulfillment options to our consumers. This network also allow us to further increase penetration in categories such as grocery, FMCG, and consumer electronics in the future. Lastly, in fiscal year 2022, we have spent over CNY 120 billion in technology-related costs and expenses that continue to strengthen our leading position in China's cloud market, support to the sophisticated technological demands of our consumer-facing businesses and advance our research and development in the next-generation technologies. Now in terms of guidance, since mid-March 2022, we have seen significant impacts to our domestic businesses from COVID-19 resurgence in China, particularly in Shanghai.
Considering the risks and uncertainties arising from COVID-19, which we are not able to control and are difficult for us to predict, we believe it's prudent at this time not to give financial guidance that is typically provided at the start of the fiscal year. Looking forward in fiscal year 2023, emphasizing what Daniel has mentioned, we will focus and execute several key operational principles and financial objectives, including first, generate sustainable and high-quality revenue that reflects our ongoing commitments to developing high-quality consumers, high-quality digital commerce infrastructure and high-quality technology innovations. We believe these efforts will continue to build a strong and durable relationship with our consumers and customers. Second, we will focus on optimizing our overall cost structure. We will control costs and improve returns for our major businesses that are already at significant scale compared to peers.
For growth businesses, we will also optimizing spending and at the same time identifying increasing monetization opportunities that yield sustainable, high quality revenue. The incremental revenue generated will be invested back to the respective businesses and create value for their customers, thereby creating a virtuous growth loop to achieve long term profitability. At a high level, we will seek to improve gross margin of our direct sales businesses, optimize logistics and fulfillment costs for consumer facing businesses, and control our overall sales and marketing spend. Third, continue to build an energy efficient cloud infrastructure and a global warehouse and the logistic network that enhance our competitiveness in China and international markets. At the same time, we expect ongoing improvement in efficiency and utilization of these infrastructures can benefit both our customers and our own self-operated businesses. Lastly, we seek to maintain strong operating cash flow generation.
It is strong net cash position that gives us the financial flexibility to invest in businesses and capabilities that expand the pie and benefit all of our key stakeholders. We have a lot of work ahead of us, but by being steadfast and executing the key strategic and financial objectives that we have set out, we believe Alibaba will emerge stronger in the future. Thank you. Now let's turn to Q&A. Hi, everyone. For today's call, you are welcome to ask questions in Chinese or English. A third-party translator will provide consecutive interpretation of the Q&A session, and our management will address your question in the language you ask. Please note that the translation is for convenience only. In the case of any discrepancy, our management statement in the original language will prevail.
If you are unable to hear the Chinese translation, bilingual transcript of this call will be available on our website within one week after the meeting. Operator, please connect speaker and SI conference lines now, and start the Q&A session. Thank you.
Thank you. Ladies and gentlemen, if you have a question at this time, please press * then one on your telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. To give more people the opportunity to ask questions, please keep yourself to no more than one question at a time. As a reminder, to ask a question, please press * then one. Our first question comes from the line of Ronald Keung with Goldman Sachs.
Thank you Daniel, Toby, and Rob, and congratulations on the resilience that we see in the results that you've just released. We did see that CMR revenues were flat, but there was nonetheless low single digit growth in GMV. Daniel also spoke about how advertising was performing well. Certainly, from April onwards, with the impact of COVID, there's been an impact there, including on CMR revenue. I'm wondering what we're seeing in May in terms of the performance of the parcel network, and if things are picking up and what we're seeing currently in terms of GMV and orders in May. Thank you. Well, thanks for your question. In Daniel's speech earlier, he did give you a presentation on the situation in April.
Overall, as Daniel said, GMV was down by around 10%. Typically CMR does tend to move in line with GMV, but there can be a lag. It's the case that many merchants may need to invest in order to grow their revenues. Thank you. Well, talking about the situation in May over the past couple of weeks. You know, with the resumption of express deliveries and with the beginning of the normalization of the situation in Shanghai, certainly we see things improving, but it will take time for all of the outstanding parcels to be delivered and also for merchants to make their preparations for the upcoming 618. In fact, preparations will be beginning tonight.
We certainly are seeing signs of improvement going into the month of May. Okay, next question.
Our next question comes from the line of Eddie Leung with Bank of America.
Good evening guys. Thank you for taking my question. I think you guys started to mention about some of the longer term initiatives because of the COVID lockdowns. Just looking ahead, assuming a reopening, do you see any long-term structural change in your operation, customer demand and product mix, after these lockdowns? And what type of investment you need to make, to handle the potential changes? Thank you.
Thank you for the question. I think during this, I mean, widespread COVID, I mean, in March and April, we do see a shifts of the consumption pattern. I think after this, I mean, this wave, I think what we see that actually consumers in China, they would tend to have some stocks at their home to prepare for the uncertain, I mean, uncertain situation. How to grow, for example, the supply by bulk
How to give them an on-demand, but not necessarily speedy delivery, but it's on-demand and on-time delivery I think is very important.
For us, I think actually we believe we are in a good position, that we have both our nationwide, I mean platform as well as the leverage by the delivery networks with major delivery partners. At the same time, we have our intra-city and instant delivery, I mean, forces on the ground in all of these major cities. How to leverage these infrastructure and enhance these capabilities and capacities is our priority in the future to support the various needs of the product. Product wise, I think it's more diversified to the bulk sales, for preparation for the future and for maybe the small package, just for the instant delivery and for the instant needs. It's all about you need a diversified retail formats as well as the delivery and the fulfillment network to support both of these. Thank you.
Thank you.
Thank you. Our next question comes from the line of Thomas Chong with Jefferies.
Hold on a sec. The translator still needs to translate. Operator, next question.
Our next question comes from the line of Thomas Chong with Jefferies.
Thank you and good evening, management. My question has to do with consumer spending. I'm wondering what changes you've seen in consumer spending within different segments of consumers, high income, middle income and low income consumers. Are low income consumers perhaps tending to be more cautious during this recent period? Also, I'd like to know what KPIs you set for this year's 618, and how you see recovery in the second half of the year. Do you think that once logistics capabilities have recovered, that will set the stage for recovery? Or will we have to wait a bit longer perhaps to see consumer sentiment also recover? Thank you.
好，谢谢。我来回答一下。第一个，从人群分层我们看，因为整个我们阿里巴巴这个零售平台上，有这个我们的十亿的消费者，其实覆盖了这多元化的这样的一个分层，其实我们可以看到不同的消费者的一个表现。这个整体上我想在这个特殊的阶段，我们看到的情况，实际上最重要的还是必需品的生活消费还是非必需品的生活消费，其实发生了比较明显的变化。其实从消费者来讲，无论是哪个分层，他对必需的生活消费品，他的需求更强烈，并且其实在特定的情况下，价格更不敏感，因为他为了这个基本生活需要。而相反，对非必需品的消费，会表现得相对价格更敏感一些。
Thank you. Well, on Alibaba's retail platforms, we have a consumer base of 1 billion consumers, who are highly diverse, spanning all those different tiers of spending. Yes, we certainly do see different patterns there. What I can tell you is during this special period of time, you really see a divergence between spending on essentials versus non-essentials. In all those different tiers of consumers, demand for essentials has gone up and there's been less price sensitivity, whereas with respect to non-essential purchases, there has been more price sensitivity.
这个其实也跟你问的这个下半年的趋势很有关系啊。我的观点是这样，我觉得整个的这个消费的恢复啊，和增长其实是要靠两方面的力量。一方面当然是，就像我这个script里边讲的，商家需要这个持续的这个经营的前提条件，就是这个可持续经营稳定的物流和供应链，啊商品供应链和物流。但是另外一方面还是需要消费需求的恢复。你先翻译吧，我再讲下半段。
This is also very relevant to the other part of your question about the trend for the coming half of the year. Because in my view, for recovery and growth of consumption to occur, two things need to happen. First, as I mentioned in my script, merchants, in order to be able to operate, need to have sustainable and robust supply chain and logistics in place. At the same time, consumption demand needs to return.
消费需求恢复是非常重要的，其实还是这个用户对未来的预期，对未来收入的预期，对未来生活的预期，会决定他们的消费开支。当然还有重要的一点是他的可支配收入的稳定的增加。我想这些方面都会决定了这个消费的力量能不能更好地增长。同时，特别是在除了基本生活必需品，这些食品，这些日用家庭日用品以外，在非生活必需品上，能不能够恢复到原来的消费的态势。我想这个是消费能够不仅恢复并且带来增长，对中国GDP的发展做出贡献的非常重要的一个前提条件。
In order for consumer demand to recover, it's very important that there be strong expectations for the future. Because only when people have strong expectations for the future, and in particular in their ongoing ability to grow their disposable income, will they be able to grow their consumption. Going beyond the essentials, but getting back also to increased spending on the non-essentials, which would be very important for also growing the economy in terms of stimulating GDP growth.
那个好像他也有问到618我们的这个expectation。
618刚刚开始，这个作为年中的一个重要节点，其实所有的商家应该在经历了前一段时间的挑战以后，我们看到的情况是商家还是抱有巨大的热情，大家都想在618的时候能够补回一些前期的损失，能够卖更多的商品，能够有更好的生意表现。从我们的角度来讲，我们也是在积极准备，同时我们也看到目前的情况是从商家的报名踊跃程度，从核心商品的数量，这些方面其实都有比较好的、跟去年同期相比有明显好的趋势。同时我们也看到随着时间的临近，因为现在618已经变成了一个season，变成一个holiday season，所以消费者的热情也开始慢慢表现出来。从平台来讲，我们也会全力地来支持好这个活动，来增加投入，包括特别是在618我们也已经发布了很多支持商家的政策，帮助他们加速流动资金的回转，加快物流，包括能够帮助他们更好地利用这段时间能够获得一个好的销售成绩。这是我们一个共同努力的目标。当然我想在这个过程当中我们也希望看到在未来的一段时间里边，整个疫情的控制得到一个很好的延续。如果是这样的话，我们都能够创造一个更好的条件。
Yes. The other part of the question was about this year's 618, which is just getting started. This is an important midyear event. Coming out of this recent challenging period, merchants are indeed excited. They're looking at it as a good opportunity to recover those losses and achieve good sales. For us, we're making active preparations to do that, and we're seeing a lot of enthusiasm and a strong trend this year compared against last year in terms of merchant enrollment, in terms of the product offerings. This is coming up into the holiday season. There's a lot of consumer enthusiasm and as a platform, we intend to be strongly supportive.
As was mentioned, for 618, we've already put in place many policies to support and help our merchants, as well as to ensure that logistics are functioning effectively to help those merchants be able to achieve good sales. These really are joint objectives for our merchants and for us as a platform. Of course, we do very much hope to see pandemic control measures continue to be effective, which will put in place the necessary conditions to make this a success.
Thank you. Next question.
Our next question comes from the line of Jerry Liu with UBS.
Thank you, Management. My question has to do with cost optimization. Cost control, which you mentioned will be implemented across a lot of businesses. Should we understand that as part of this cost optimization strategy that in the coming fiscal year, the objective is to achieve faster profit growth than revenue growth? We've certainly seen a significant improvement in UE and Ele.me and elsewhere, but what will be the major focuses and priorities for cost optimization in the coming fiscal year?
好的，我来回答这个问题。首先的话，我想从整个集团的层面，我觉得这一点还是很明确的，也就是说，其实我们过去几个季度，那未来的一年我们会继续去做，就是在整个的降本增效的角度，我们会十分地关注。而在这个降本增效的角度，我就分两个层次来讲。第一个层次我觉得是对于很多的业务，那我们会存在一定的，这个大家通常所说的一些关停并转。那么在这种情况下，对于有一些业务，如果是这个长期的价值不明显，那我们会存在这样一个关停并转的情况，是第一层。
Thank you. This is Toby. I'll take that question. I think for the group as a whole, it's very clear that our strategy in the next few quarters or year as a whole is going to focus on cost optimization and cost control, and that will involve a couple of things. First of all, for the parts of the business that aren't generating long term value, we'll find ways to make them more efficient or scale them down with consolidation.
对，第二层我觉得是到我们的很多的业务端，那么在这些所有的业务端，根据业务的不同的它的性质，我们都会有一定的降本增效的这样的一个目标跟要求。那这里面举几个例子，比如说在我们整体的一个业务里面，大家会看得到，我们有比较，现在已经有比较大的这个我们叫做direct sales的这样一个业务，那这个像这类的业务，我们现在已经比较明确地可以看得到，对，对业务的要求是在整个的这个毛利端，我们会提出一个比较高的一些要求，就是整个去提升这个效率的要求，然后同时在这个物流端，那我们也会提出这个对于这个效率提升的这样的一个要求，整体合起来可以给到像这样一个直营业务的话，一个整体的一个效率提升。
Secondly, we do have a lot of different businesses that are different in nature and therefore we'll be taking different approaches and putting in place different requirements to achieving better cost efficiency. To give you an example around our direct sales businesses and here it's very clear on the one hand, in terms of gross margin, we're looking to drive higher efficiency and at the same time, we'll also be looking to achieve more cost control, better efficiency in logistics, and it will be the combination of those two things that will drive cost optimization.
对，那有一些，比如说是整体在集团层面的。举个例子，比如说有一些像这个市场费啊等等这一类的成本，那我们也会用一个相对来说比较严格的手段跟一个measures去控制，那会在现在这个阶段，某一些的业务可能会降低它的整个spending等等方面，这些都是我们的一些控制手段。
More broadly at the group-wide level, another example would be marketing costs. Here we will be taking a more disciplined approach with specific measures. In many cases spending will be cut back.
对，所以呢，就是我想我刚才举了几个例子回答您的问题。整体的角度来讲，您刚才的问题是我们有没有对利润、收入啊等等，这个我们没有这样的一个标准。但是我想刚才我script里面讲的，未来一年很重要的对我们来讲呢，特别是从一个CFO的角度，很重要的一个任务就是在提升我们的运营的效率，怎么样去降低成本，提升效率，同时保证我们有很好的现金流入，然后控制好我们的现金的整个的这个余额。这个我觉得是未来一年很重要的一个任务。好，谢谢您的问题。
We don't have a specific figure to share with you on the other part of your question about the ratio. As I mentioned in my script, as CFO for the group, a big priority for us is driving higher operational efficiency, lowering costs, achieving higher efficiency, in order to ensure that we have a strong balance sheet and a strong cash flow generation capability. Thank you.
谢谢。
Operator next question.
Our next question comes from the line of Alex Yao with JPMorgan.
谢谢管理层给我这个机会。
谢谢管理层给我这个机会。Daniel，我听你在script里面说，有可能接下来政府会出台一些这种刺激性的政策，来帮助互联网企业更好地在这个经济比较低迷的时候去帮助到消费者，然后鼓励投资，稳定就业，这样的一些潜在的政策方向。您觉得在哪些方面有可能，或者在哪些业务线、业务环节上面有可能出现这样一些激励性的政策？然后在这样的一个环境下面，对咱们阿里巴巴来说，我们需要付出一些什么东西，然后我们可能能够得到一些什么样的东西？谢谢。
Thank you management. Daniel, in your script I believe you talked about incentives or stimuli that may be forthcoming from the government to help support the business of Internet platforms and drive consumer spending. I'm wondering if you could tell us what kinds of businesses do you think will benefit from these kinds of incentives and what kind of stimulus we can expect to see and how Alibaba can position itself to capture the benefit of this policy.
好，这个其实我刚才讲的是说，我们也看到近期国家已经通过各种方式释放了对稳经济、稳就业、保民生这样的一种强烈的信号。同时，就是在昨天，大家可能也知道，肯定也都知道，刚刚国务院开了这个非常重要的会，全国的会议来落实这个六个方面和三项的措施。那么我们也看到这六个方面也包括了非常重要的消费领域，包括了基本的民生领域，这些跟包括供应链的稳定这样的领域，这些都跟阿里巴巴的我们的业务也非常有关系。所以作为这样重要的中国的这样的一个平台企业的代表，我们也希望作为实体经济的一部分，我们在这个中间能够起到，在这三个方面，无论是稳经济、促进就业、保民生这些方面能够做出自己的贡献，能够帮助我们平台上的企业，特别是广大中小企业。我想他们在疫情当中，其实因为本身的能力问题跟规模问题，其实是首当其冲，受到很多的挑战。我们也希望帮助他们能够更快地去恢复，并且只有他们恢复了，才能够真正创造更多的市场化的就业机会，能够来带动整个社会的就业的发展，就业的进展，包括整个社会的发展。
Thank you. Well, we've seen that the government has been coming out with various policies lately aimed at stabilizing the economy, stabilizing employment, ensuring the provision of essentials to people including yesterday a very important national meeting convened by the State Council to implement measures in six different areas, several of which are highly relevant to the business of Alibaba, including stimulating consumption, ensuring the provision of essentials, and achieving supply chain recovery. That's all highly relevant to us. As a responsible representative of the platform economy and also as a constituent of China's real economy, Alibaba is of course keen to make our due contribution to driving progress in all of these areas. A very important part of this of course is SMEs.
These small businesses, because of their scale, have been the most vulnerable to the impacts of the pandemic, and we very much want to help them recover. Only when SMEs have recovered, can more market-based jobs and employment be generated. For Alibaba, this is where we can have a very unique role to play leveraging on our resources as a responsible company in society and as the operator of a digital economy. We see this as a basic responsibility. We've been doing everything in our power to provide support and assistance to merchants. As mentioned with the upcoming 618 Festival, we have 20 initiatives in five major categories.
Recently during the very difficult period in Shanghai, we had 20 special measures to support merchants during that period. We hope very much to be able to support merchants in these ways to facilitate their recovery and success. Okay, next question, please.
Our next question comes from the line of Jiong Shao with Barclays.
Thank you very much for taking my questions. You mentioned you just paid the fine for the anti-monopoly sort of new regulation last year. Last year was a year there were a lot of government regulations that were introduced to the internet industry. Lately, as you know, some of the senior leaders from the government have made some comments about any further regulation. I was just wondering, could you share with us your latest thoughts about government regulation for the industry for this year? Thank you. Thank you. Sorry, Rob. Sorry, Rob. I was not very clear. My bad.
My point was that, for example, one of the Vice Premier Liu He said about actually some of the regulations last year, many investors were very discouraged by it. Probably government went a bit overboard. I think Liu He mentioned that, perhaps, Chinese government should wrap up their regulation or any new regulation and move on and let the industry grow as it should. Sorry if I wasn't clear before.
Well, I think we all know that recently, Chinese government and Chinese leaders, they shared a very clear message to the market that they want the platform economy play an important role in economic development and encourage the healthy development of platform economy. I think this is the message is clear. As part of this platform economy in China, Alibaba is committed to fulfill our responsibilities in terms of helping the development achieve a better life for the consumers, to help the merchants as well, especially in the technology innovation, I think in the core areas.
I think this is what we committed, and we will work hard to make substantial progress in all these aspects. At the same time, we are closely watching the policy development and to make sure we are fully compliant with all the regulatory requirements. Thank you.
Thank you.
我们知道，中国的这些领导人发出了非常明确的信号，就是说平台经济在推动国家的经济发展方面发挥着重要的作用，也希望能够发挥重要的、健康的作用，他们也是鼓励平台经济得到健康规范的发展。那么作为一个平台经济，阿里的话呢，也是致力于履行我们的这样一些责任，尤其在核心领域，就是让消费者过上更好的生活，帮助商家，推动技术创新等。那么这些都是我们的承诺，我们也会继续不遗余力地努力来推动这些方面的进展。与此同时，阿里巴巴一直密切关注政策的最新发展，保证了公司一定是合规地遵守所有的这些规则规范。
Let's invite the last question.
Your next question comes from the line of Alicia Yap with Citigroup.
管理层晚上好，谢谢接受我的提问。我的问题是跟阿里云整个行业短期跟长期前景有关。就是短期来说，除了一些疫情封控和这个互联网行业增长放缓之外呢，还有什么其他原因会影响我们云业务的增长？然后从一个比较长远来看，就是说当我们把疫情过去之后，然后整个中国的经济恢复比较正常的时候，我们如何看待中国整个云产业的增长？然后对于阿里巴巴云这边，我们的增长会有什么看法？然后最近就是也听说云业务这边有一些重组跟一些人员的变动，不知道这个会对我们短期跟长期有什么影响吗？谢谢。
Thank you management. My question has to do with the cloud segment and the short-term and long-term prospects for the cloud business. Starting with the short term, I'd like to know, apart from the recent impact of the pandemic and the slowdown of the internet sector as a whole, what other factors are there that may be impacting the cloud business? Then in the longer term, when the Chinese economy has returned to normalcy, what's your view about how the cloud business will develop? What kind of growth do you expect Alibaba Cloud to achieve? Then finally recently we've heard some news about some restructuring and some personnel changes in the cloud space. Could you tell us please about the impact that those are likely to have in the short- and longer term? Thank you.
好的，我来回答一下。对这个云业务来讲，确实近期的挑战，包括这个季度的收入增长的速度的放缓，这个原因刚才都解释了，我不重复了。那我想这里边，我认为从未来这个经济发展当中，这个云计算扮演的作用来讲，我想它还是每个行业，各行各业走向数字化经营，变成一个数字驱动的，这样的一个大数据公司的一个非常重要的一个基础设施。所以从这个角度来讲，其实存在着每个行业都存在着这个云，成为它的一个去服务的对象的这么一个机会。所以这是第一点。所以从行业的前景来讲，我们认为是一个非常广阔的前景。刚才我的script里边也讲到了，就是2025年，其实市场已经估计了中国的云计算规模会到达一万亿人民币，那这个意味着我们在未来的几年，有这个两倍以上的，乘三倍以上的这样的一个增速的这么一个可能性。所以我想这是一个巨大的一个产业机会，一个巨大的一个普适性的机会，这第一点。
Thank you. Well, talking about the performance of the cloud business in the short term. I've already spoken about the factors that led to the slowdown in revenue growth in Alibaba Cloud recently, so I won't repeat here what I already said earlier. I think when it comes to economic development and the important role that the cloud can play there, the key thing is that all industries are digitalizing and need to digitalize. The cloud and big data are an important kind of infrastructure driving that upgrading of industry, and therefore all industries present important opportunities for us at Alibaba to serve. That really represents a huge market opportunity. In fact, as I mentioned in my script earlier, the forecast is for the cloud market in China to reach CNY 1 trillion by 2025.
That potentially means that over the next few years, we have the potential to grow at a 2x or 3x kind of multiple. It's gonna be a very big and exciting opportunity.
第二点，从要抓住这样的机会，获得这个、实现这样的增长，非常关键的一点就是如何跟这个产业去结合。其实今天当我们谈cloud，其实每个人说的这个定义并不完全相同。但可能最相同的一点就是，作为云IT，要成为服务、代替原来的、代替传统的IT，成为这个服务的基础设施。但是我想这个只是一个起点，最重要的还是能够把云计算、大数据的平台和AI，包括整个企业全方位的数字化经营，都能够基于这个云来进行实现。我想这个需要跟每个行业，特别是主要的行业，深入地形成这样的一个解决方案，形成行业需要的产品，我觉得这个对云的业务的发展非常重要。从这个意义来说，阿里必须在这个方面跟所有的产业的SaaS的服务商和生态的伙伴一起来共同合作，来共同探索这样的一个行业机会。只有形成基于行业的云的产品和解决方案的突破，我想这个才能够实现抓住每个行业走向数字化的这样的一个历史机会。
Secondly, in order to be able to fully capitalize on that opportunity, you need to take an industry-specific approach. Because, you know, when we talk about cloud, there are many different definitions out there. The only part of that definition that everybody will agree on is the IaaS layer, which seeks to replace traditional IT infrastructure. But to me, the more important opportunity is beyond that. It's when you start bringing in the big data, AI, as well as the ability to digitalize the overall operations of different enterprises and enable all of that through the cloud. To do that, this requires an industry or vertical-specific approach with products that are custom-tailored for different applications in different vertical segments. I think this is very important for the cloud business.
It's imperative that Alibaba be working with these different industries, different verticals, especially the major ones, in-depth with SaaS and with our ecosystem partners in order to be able to deliver that value and capitalize on all of those opportunities going forward.
第三点，我想除了这个垂直行业的机会以外，非常重要的还是说利用我们今天在现在市场的领先地位，在整个的IaaS层，包括我们的PaaS核心PaaS产品上，能够继续通过技术的创新、技术的突破，能够带来更好的一个技术价值的实现、技术红利，使得我们获得更好的规模经济。因为大家都知道在IaaS层，其实云计算本身是一个规模经济的事业，所以如何在规模下通过技术的升级降低成本，这个是非常重要的，作为我们作为市场领先者来巩固领先地位、扩大领先份额的非常重要的一个手段。
Thirdly, apart from that vertical-oriented approach, it's also incumbent upon us, given our market leadership position, to continue to innovate also in the IaaS layer and also the core PaaS layer so that we can continue to reap the dividends of technological innovation through economies of scale. In particular, the IaaS layer is all about economies of scale. If we can continue to improve the technology and lower the costs, there's a huge advantage that can be reaped there.
最后我也说一下，最近这个您刚才问的，Alex问的这个团队的，我们的一个升级，这个我们也是加强了我们的云计算的这个我们的领导团队，这个……
在这个领导这个团队的这样的一个升级的背后，我们思考是，今天这个云，去年这个财年大家已经看到了，已经是算上阿里内部的服务，对阿里内部的服务已经是过千亿的这么一个业务了。在这样的一个规模化业务本身，也是一个复杂的系统，是一个复杂的工作系统。同时如何在这个基础上提升这个云的工作效率，提升我们的经营效率，包括实现刚才Toby说的我们的更好的，在这样的一个不仅是对初期业务的降本增效，也包括我们增长型业务的降本增效上能够取得更好的进展，达到更好的效率，并且形成新一代的对企业级服务的enterprise service这样的一种工作方式。我觉得这个是我们从云从今天的一千亿走向未来的三千亿、五千亿，我想我们必须要打好这个基础。
Finally, to address your question about the team upgrade that has been implemented. As you saw last year in the previous fiscal year, the revenues of Alibaba Cloud, if you include services provided within the group to Alibaba, has already exceeded CNY 100 billion. It's a very complex system. Looking for ways to make the operations of the cloud business more efficient and very much in line with what Toby was describing earlier, looking for ways to drive more cost efficiency and achieve more cost optimization, as well as to position ourselves to better provide the next generation of enterprise services to get us from the scale we're at today of CNY 100 billion to a future of CNY 300 billion or even CNY 500 billion.
That was the thinking underlying the way we've gone about reorganizing the team. Okay. Thank you everyone for participating today. If you have any questions, please reach out to the IR team and myself. Thank you, and we'll see you next quarter. Thanks.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.