Rui Chen: [Foreign Language]
Juliet Yang: As for the content supplier, which is the host. If we look at the fourth quarter, near 1 million hosts were active on Bilibili. Only a small portion of them were from professional guilds. Most of them are actually native content creator from our PUGV ecosystem. And this also sets us apart from other traditional live broadcasting platform is because that we’re cultivating our own supply and demand within our PUGV ecosystem.
Rui Chen: [Foreign Language]
Juliet Yang: Similarly, in terms of content categories, the content category in our PUGV can also be our live broadcasting categories, especially the categories where Bilibili has our own unique advantage, such as the virtual content creators. We are considered to be, if not the most leading platform in China. And also on knowledge-based content such as legal-related live broadcasting. It’s hard to imagine this category to be a top vertical on other platform, but it is very popular on Bilibili.
Rui Chen: [Foreign Language]
Juliet Yang: As for our priorities for live broadcasting business in 2024, we’ll be putting a lot of priorities in terms of the quality of our revenues as the gross profit and gross profit margin of this business. We hope to achieve sustainable and high-quality revenue growth in live broadcasting in 2024.
Operator: Our next question comes from Felix Liu from UBS.
Felix Liu: [Foreign Language] Let me translate myself. My question is on the advertisement business. I noticed that your fourth quarter advertisement delivered a strong growth momentum. So I check the reason behind this good performance. And what is your outlook for the advertisement business for 2024? What will be the key growth drivers from here?
Carly Lee: [Foreign Language]
Juliet Yang: Our advertising revenue in 2023 totaled about over RMB 6.4 billion, marking a 27% year-on-year growth. And in fourth quarter, advertising revenue grew by 28% year-over-year, contributing 30% of our total revenue, up from 25% in the same period last year. The increase in ad’s revenue and its proportion is directly a result of improving our gross margin and gross profit.
Carly Lee: [Foreign Language]
Juliet Yang: Please allow me to recap what we have done in 2023 and in the fourth quarter and the growth driver. Actually, in the beginning of 2023, we have put forward [indiscernible] strategy while paying close attention to the opportunity brought by the active commerce activities within our community. E-Home refers to the middle platform capabilities for commercialization, including our traffic strategy, algorithm capabilities and our data power development. And the e-zone refers to our vertical industry strategies. Our ultimate goal is to provide customers with a better ad placement experience and higher ROI, and then we have formed 10 vertical strategies for different industry verticals. We also believe in the revenue potential that bought from active commerce-related activities within our community. As we’re sticking to the open-loop strategy, we plan to connect Bilibili into a more broader ecosystem with our e-commerce partners.
Carly Lee: [Foreign Language]
Juliet Yang: As we have already shared a lot of information and cases about Bilibili’s strategy in previous calls, I will not dive into more detail here. However, because of that strategy, our advertising revenue has also exceeded expectations for the first three quarters of 2024. And now I will share some additional highlights in fourth quarter.
Carly Lee: [Foreign Language]
Juliet Yang: First, we are able to leverage our advantage in the big events in specific verticals and to catch the momentum of the new product launch stage. I’ll make two examples here. First of all, in the gaming industry, we have made record high growth during two new games’ open beta testing stage, such as the Dream Star as well as the Girls Frontline 2.
Carly Lee: [Foreign Language]
Juliet Yang: Another example is what we’ve seen in the e-commerce sector. So we actually hosted several e-commerce promotion events during 11/11, 12/12 and our New Year Shopping Festival, leveraging our video and live e-commerce capabilities. Here are some interesting numbers to share. During 11/11, the total GMV generated from our live and video e-commerce increased over 250% year-over-year. The number of live e-commerce sessions that happened on Bilibili also increased over 100%. And additionally, here are some interesting verticals, baby and maternity, it might sounds a little bit too mature for our users. However, we’re still able to bring over 90% of new users to the baby and maternity clients through our video and live e-commerce campaigns.
Carly Lee: [Foreign Language]
Juliet Yang: Secondly is that we have strengthened our advertisement placement capabilities. In the fourth quarter, our deep conversion capabilities, including provide ROI and order information within 24 hours, has gradually improved and matured. As a result, we’re able to achieve the budget target for our customers more accurately and therefore, gain more budget from them. Advertising with deep conversion pocket contributed over 30% of our total performance ad revenue in the fourth quarter.
Carly Lee: [Foreign Language]
Juliet Yang: And thirdly is that we have integrated our multiple product lines in terms of organizational structure as well as the product offerings. And for example, by integrating our Sparkle ads platform with our other ad products, we have further expanded the quantity and the quality of our native content, therefore, enhanced and expanded our customer’s lifespan and investment cycles on our platform. Those three reasons, combined with what we have said about the [indiscernible] strategy, is the key drivers for our fourth quarter advertising revenue growth.
Carly Lee: [Foreign Language]
Juliet Yang: As for the video and live e-commerce business that many investors were very interested about, I will share more detail on that. In 2023, we further integrated the commercial scenarios into our content ecosystem, influencing our users from product seeding to transaction conversion. In 2023, on daily average, over 26 million users has viewed our video e-commerce related content, and the number of users who live on the commerce-related videos and redirect to external platforms increased over 200%.
Carly Lee: [Foreign Language]
