Donghao Yang: All right. So, we have been pretty aggressive in closing the number of store due to mostly the challenges in our macroeconomic situation, especially caused by COVID-19. So, at the beginning of this year, we have more than or close to 300 stores. But according to our current plan, by the end of this year, we’re going to have a little over 100 — about 100 stores, including self-operated stores and the franchise stores. Well, in terms of the expenses that we’ve incurred in the — during the process, well, it has been quite substantial. We can provide with a breakdown if you want after this call. But going into next year, I don’t think we’re going to incur a substantial loss or substantial expenses due to store closure-related provision expenses because now, I think we have reduced the total number of stores to a very manageable level.
Dustin Wei: Got it. Thanks a lot for answering my questions.
Donghao Yang: Sure, thank you.
Operator: Thank you. And the next question comes from with CICC.
Unidentified Analyst: Hi, and thanks for taking my questions. I’ve got two questions. The first one regarding Color Cosmetics. It seems that sales of Color Cosmetics keeps decreasing each quarter. However, we still believe in the company’s competitive edge in color cosmetics as well as the brand asset of PD. So, at what time or what sales size do management expect the Color Cosmetics will return to growth? So, this is the first question. And my second question is related to guidance for the fourth quarter. So, the total net revenue is expected to decrease by 30% to 40% in the fourth quarter. Could you elaborate more about the trend of color cosmetics and the skincare, like just to put it down by category? Thanks.
Irene Lyu: Yes, sure. So, for Perfect Diary, actually you can see for the past three quarter the — or the — in Color Cosmetics, in total, the year-over-year decline is in a similar scale. So, we’re not actually changing, it’s more a stable trend by now. And then, in terms of what we’re doing for Perfect Diary, right now the key goal is to achieve profitability. So, how we’re going to do that, we think there are two major plans that we are undergoing right now. One is in terms of channel optimization, and the second one is on the product category optimization. And on the channel one, we have alluded earlier is that offline, right now because of the challenging macro environment, so we’re closing down a number of stores that will contribute to the sales decline, but we think that will likely to stabilize by the end of this year.
And then secondly, in terms of channel mix, you can see all the online channels, Color Cosmetics are also dropping for Douyin. So, we’re also doing heavily — investing heavily on Douyin to promote the growth and attract new customers. So, for this quarter, our Douyin has experienced a year-over-year increase of 97%, so that’s how we’re pretty comfortable and continues to hope to do well on the Douyin part. So, that’s about the channel optimization. And on the product category optimization, Perfect Diary used to be very — have very high market share on the lip and also eye category. But in terms of complexion and facial makeup, that’s actually a larger market that we think we need to tap in and also increase our market share. So, as mentioned in our conference call, right, we are introducing a number of complexion products which are endorsed by our SmartLOCK technology, we are seeing quarter-over-quarter increase of market share in the facial makeup.
So, that’s another driver I think will help Perfect Diary’s brand turnaround and likely turn into a more healthy trend next year.
