ContextLogic Holdings Inc. (LOGC) Earnings Call Transcript & Summary

My name is Kunal. I'm the UBS analyst covering Wish. It's a pleasure to introduce Joe and Vivian, our CEO and CFO of Wish. Please why don't you start.

Thank you. Thanks Kunal for having us at the conference.

Thank you for doing this. This is great. So one question that comes I think to everybody's mind right now, especially given the holiday season and what have you, is what are you seeing in the market today or over the past few weeks.

Yes, definitely. I think for us, right, internally, we do see quite good sales trend within Wish, right? So I think during this holiday season, as we can see from the internal research report, right, definitely, there's something a slight growth year-over-year. And zooming the category, right, so we did see a lot of kind of a very promising category sales like electronics and also some of the cell phone categories, right? But within Wish, we also have a very strong sales momentum throughout the entire November. But compared to the local domestic retailer, even e-commerce platform, right? So we are pretty much cross-border focus. So that's why the sales trend is a little bit different from the domestic players, right? So our sales team come a little bit earlier than the Black Friday and Cyber Friday, right? So -- but throughout the whole of November, we have a very good holiday campaigns, right? So that's why we see quite good results -- initial results from the holiday.

And it continues. We've been obviously watching December and December remain a very strong in terms of self-momentum. So that's a really good sign. And we are pretty -- we feel cautiously optimistic about Q4, is how I'd put it.

But 1 thing I want to mention here is this time, right so the November, we have the Everyday is Black Friday campaign throughout the whole November. It is the first-ever merchant founded promotion we have within Wish, right? Something company already [indiscernible] very important initiative for us also kept us very strong confidence in actually by the tightened relationship and better engagement with the merchant, definitely, 1 thing is actually we can empower and enable the sales, right? On the other hand, can really inspire our consumers by the great deals offered by the merchants.

Great. And one question we've been getting for the past, I would say, 1.5 year, and you inherited a turnaround. When you look -- when you took on the job and can you give us a sense of how you're thinking about your strategy to revive Wish? Where we are in that plan? And then from a Wall Street perspective or from an investor perspective, is like what are the timelines or goals that we can use to kind of track how far you've progressed and what is left?

Yes. So I step in Wish as interim CEO back in September this year, just almost 3 months ago. So I feel very thankful when I joined the company, right? So I have seen so many changes. So from the efforts that you have done by the entire team within Wish around improving the consumer experience, the engaging with the merchants, and also driving the operational efficiencies, right? So that's why we have seen a lot of positive signs. So that's what we call out during the earnings call -- the Q3 earnings call. So the NPS for both merchant and the consumer have significantly improved, right? And also the time to door delivery time in the top country, right? So on average, reduced 5 days. And also on time delivery rate has also reached about 92% and -- versus last year, the number is 80%, very significant improvement, right? And the order volume and the MAU also have the first sequential quarter-over-quarter growth, right, since the Q1 2021 last year, right? So a lot of good things happen within Wish, right? And when I first joined Wish this time, right so actually -- by the way, I joined Wish back in 2020. So this is the second time, I rejoined the company, right? And one thing -- one of the reasons why I chose to rejoin is about the vision of the company, right? So that's why when I first joined this time, so I reiterate the vision of this company, right, to the entire company, the entire team, which is to unlock the e-commerce for underserved, right? What does it mean here, right? So we need to understand actually what typical the persona, the customer profile of which, right? This is a very, very important thing. That's why starting September, actually, the team has keeping together, right, to really discuss, right? So what will be our key strategy moving forward? And we sharpen our focus in some of the areas, let's say, the customer segments, right? We clearly understand actually our main customer segment came from the Millennial and the Gen X underserved households and also in terms of category, right? So we do see -- we are a marketplace, right? So we're kind of doing the horizontal approach before. But if we zoom into the categories and the key merchandise that we are selling now, right? So you will see a very strong narrative around home and life, right? So that's why we also kind of keep focusing on 4 major categories like fashion, electronics, home and hobbies, right? So this is the thing we make sure actually by focusing the key customer segment we have, right? So we have the target customer category to try to serve those customer settlements, right? And also, we have the global access to over 60 countries, right? But looking at some of the top countries, definitely, there's room for us to do more localized efforts there, right? No necessary thing actually will enable the domestic local to local transaction. But from many point of view, so actually we can do a much better job in the language localization, local payment master implementation and also [indiscernible] stuff, right? So this is the thing actually give the team actually a clear view. So there's 3 main focus is around customer segments, categories and the key countries, that allow us actually to really understand better about our demands, about our customers and how much you can enable the supply to really bridge the gap between demand and supply. And on top of that, right, so actually we also target to build some of the key core capabilities as well, right? So how to drive the product innovation, right, how to kind of drive the merchant empowerment, user growth, logistic reliability as well as the data platform capability, right? So this is the thing, right? So we believe if we continue doing the right things, actually, we can really drive the sustainable growth for Wish.

So one of the things that -- sorry, go ahead.

No, I was just going to say, I've been here a little longer than Joe. I've been here just about a year. So if you just -- maybe just at the risk of repeating some -- what he just mentioned, I think the last year, it's really about fixing the fundamentals of Wish as a marketplace platform and building a platform that is both buyers and merchants can trust and be proud of being part of. So from a user experience standpoint, something doesn't change, Wish is still where a lot of people go find amazing bargains at like a great quality product at a very competitive price, right? And that doesn't change. And they do that through very engaging fun, entertaining shopping experience through the discovery-based shopping experience, that doesn't change. We remain very committed to serving underserved, as Joe mentioned. The things that really changed last year is that your broadening experience, the listing quality has drastically improved. And the product quality is drastically improved, the delivery time has been shortened by, as Joe mentioned, 5 days. It used to be 3 -- close to 3 weeks now, it's about 2 weeks. And I think that makes a huge difference in terms of the NPS score that we have seen since last year, NPS score doubled. And the cancellation rate and the rebound a trusted reduced since the beginning of the year. That all tells us to customers just really having a lot more favorable and very enjoy the shopping experience at Wish and is a product and value proposition we offer. Going forward, it's about focus, right? And we have globally 1 billion downloads already. We are a 12-year-old company, and we have a massive user base globally, and we have a massive selection of really good products at really competitive price. And the big question is how we focus on making sure that we improve our unit economics, right, and improve the life value of our existing customers. And that will be the difference, if you will, going into 2023 versus what we've done in 2022.

It's interesting. There is definitely a question there in terms of '23 versus '22. But before we go there, when you think of like devising a turnaround plan, especially in a time when macro is uncertain and while the consumer hasn't broken down yet, consumer could break down tomorrow. And your products are essentially discretionary. How has that kind of informed your strategy and your marketing spend as you look into maybe now and 6 months from now?

Do you want to take that?

You want me to -- so we -- so there are multiple elements of that question, right? So maybe I'll start with the marketing spend. So performance marketing has been a very important driver for our growth in the past, and it will continue to be important. We will continue to invest in performance marketing. But we will be very mindful of the efficiency of marketing and going forward. So the difference is that we will, number one, focus on the ROAS, of the marketing spend and making sure that whatever spend -- ad spend we invest, it will generate a very high return and high life value repeated purchases. So that's the first part, which is about ad efficiency. The second part is diversity of the marketing values, right? And it used to be very concentrated in certain social platforms where we used to spend the marketing dollars. And going forward, it will be much more diversified e-mail notifications, affiliates, influencers and Google, Facebook, you name it, right? And the goal is to make sure that we acquire or reengage with the customers who offers higher repeated purchases and a higher value, increasing time value over a period of time. So that's on the marketing side. The other piece -- sorry, I kind of forget about your first piece.

The first piece was about like the strategy that you have, and especially given the macro -- the unique macro that we are in, how does your strategy mesh-in with the unique macro?

Yes. So yes, Wish is more about discretionary -- not necessarily like the essential type. We don't sell grocery, we don't sell food, right? And which is where people go, have a lot of fun and with retail gratification at a very, very affordable price. So we wanted to be online destination for home and life, which means the -- what you think about household, whether you have family or don't have a family, everything about home and life, you can find very affordable -- very good quality products at a very affordable price on Wish. And again, goes back to the vast selection we have hundreds of units of SKU available on Wish, what do you need for your household you can always find at Wish at a very competitive price. So when the economy, as you pointed out, is when the economy turns rough and the discretional spend level potentially go lower, there's also an argument that people start to trade down on the price point. What you used to maybe buy at a different Amazon at a more premium price and now you wanted to look for cheaper alternatives, that's when people come to Wish. I think there's certainly a tailwind that we have observed during this economic downturn, and we are hoping to more effectively capitalize on the tailwind.

Yes. But in general, I think as Vivian mentioned, right, definitely, we are providing value for cost products, to the consumer, right? So putting in this macro on tax environment, right, so definitely, there is a tailwind for us. But again, so for discretionary spending, it's still hard to say, right? How they're going to kind of impact this kind of discretionary spending? But overall, I think one thing I think, bear in mind, I want to mention here is about our shopping experience, right? So compared to the other many -- any other platforms, right, we are discovery and inspiration driven platform, right? So I think in traditional marketplace, right? So I think mainly shopping behavior coming from search, right? So then time to [indiscernible] more, right? But our discovery and inspiration experience definitely give us a role kind of -- consumer more entertaining of fun shopping experiences. Yes.

And then when you were talking about 3 [indiscernible] the thing that we're looking for is in terms of like a timeline and goal and a road towards the -- How do we think in terms of one, how can we track from the outside? How do we track the recovery? And what are the goals that you would -- you may -- I don't know if you can talk about it to set goals for yourselves? And so, hey, you need to this point by -- and this is the KPI that we're tracking. If we can talk about that. And then going into '23, how we should kind of think of the KPIs?

Yes. So 2023, as I mentioned, the unit economics will be a very high focus for us. And we don't report publicly unit economics. I think a lot of e-commerce companies don't actually report that metric, but internally, that's a super important metric for us. We definitely track that. And the cash flow optimization is another very, very important goal for 2023. And as some of you might know, we have a very strong balance sheet, right? We have no debt, a lot of cash and -- but our goal is to make sure we use that cash very wisely and for the -- driving the growth and -- continue to drive the turnaround and make sure that we breakeven arrive a little later, right, and start to be cash flow positive. So unit economics and cash flow optimization will be very, very important OKR source in 2023 but we also wanted to drive top line growth, right? And e-commerce is about scale end of the day. And we haven't really put out necessary OKR public out there, say, this is our GMV or revenue target for 2023. One thing I wanted to just call out as a context that we changed our pricing strategy as a part of the turnaround in 2022. The pricing strategy, not going into tons of detail, is really to improve the transparency of our pricing with our users and the merchants alike. And if that was something we heard of feedback from both communities allowed and clearly in the past, and we made an important decision to change that -- change of practice in first half of 2022. So that had a short-term impact -- negative impact on the GMV and the revenue. But we firmly believe, by the way, we will start to see the proof of that what we believe in the second half, we believe that will increase the engagement level with our buyers and merchants like under the new pricing strategy despite the short-term pain that we -- or the impact on the revenue and EBITDA. Long way of saying when you think about year-over-year comparison, it's a little bit apples-to-oranges in 2023, right? So that's the point that we called out multiple times in the earnings call, just want to make sure everyone understand the changes we made. And we'll continue to call it out. And when you look at it year-over-year, you might be wondering why you haven't seen more robust growth, given all the fundamental changes we have made, all the improvements we've seen in other OKRs, the volume growth, the reduction in the refund rate and the delivery time, all that why your GMV or revenue hadn't shown a drastic improvement year-over-year because the pricing strategy that we implemented is an important factor. But again, we have seen retention start to improve as well, and that's a very important evidence of the turnaround strategy is working, right, and the pricing strategy we implemented is the right step.

I think definitely, we are closely monitoring both operating and the financial metrics internally, right? We set the milestone to track the progress, right, including the AAU conversion, AOV, CAC, ROAS et cetera, et cetera. So this is the thing definitely the team closely are monitoring, right? Speaking of the union, right, if you remember, one of our key focus I mentioned just now is about country. So looking to the different countries, right, you're looking to the unit economy by different countries, you will see a nuance across the different markets. I think this is one of the very interesting things when you operate a global marketplaces, right? You can see the different scenario, different economy in the different countries. But it also came to another challenge from the complexity of the operation, right? So that's why I think this year and also next year, so I think one of our key focus is really to understand, how we operate a different market, different country in a more efficient way to drive the unique economy. This is something definitely super helpful for us from the operation efficiency point of view.

Yes. Got it. In fact, talking about complexity and global footprint, the question that comes to mind, of course, is logistics. And that has been -- of course, you've navigated through the challenge very well, you've reduced the delivery times. What is the -- how should we kind of think of the unit economics on the delivery side? How has that kind of changed? And where are we in that process now?

You want me to -- sure. Logistics is a very, very important differentiator from the merchant engagement standpoint and even in terms of improving user experiences, right? So logistics is strategic to us. And our logistic services has the adoption rate by merchant is super high. It's close to 90%. And your question is more about the unit economics. End of the day, logistics is part of the kind of offering as a core marketplace. And we don't really monetize logistics like logistic company. It's part of the solution and offering we provide to our merchants and the user communities. And we have been able to achieve the efficiency without losing money, let me say, we don't report the margin of logistic by itself, but we don't lose money on logistics. And it's probably breakeven to kind of a low single-digit margin as we manage it today. And we'll continue to leverage that as a way of boosting our [indiscernible] to practice and improve the user experiences. And as mentioned, we have been able to improve the delivery time by 5 days, which is a big deal, if you think about what we have done better within a year. Next year, we will -- we have other initiatives on the roadmap to further improve the delivery time, on-time delivery rate as well. And we are looking to expand the 15-day delivery to all the top corridors globally. And we will be looking to get inventory forward deployment strategy, which will be different from what Amazon does, for instance, right? They manage or invest a lot of warehouse build up, invest and build a lot of warehouses and manage it by Amazon, that's not what we do because that's a very, very capital-intensive, but we have other partnership strategy to provide the forward deployment opportunities to certain inventory so that we can fulfill them a lot faster because they are closer to the end users. So anyhow, so continue to improve the efficiency, on-time delivery rate of logistics because at the end of the day, users wanted really good products at the competitive price and they delivered to them reasonably fast and reasonably on time, that's all they care about. If they can get that, we're a go.

Yes. It's very clear that, right? So we positioned logistic as the infra, the foundation and also the enabler, right, so for our business, right? So I think back to your question, Kunal, so how actually logistic can really impact our unit economic, right? So one thing I want to highlight here is if we do the logistics which can help to build the basket size. So that definitely would be helpful for our top line for AOV, for instance, right? And for the longer run, if a better, let's say, a short and more reliable delivery service can you have a better repurchase, better retention, can help us to kind of have a longer, let's say, lifetime for our customer, let's say, generate a higher lifetime value, LTV for the customer, right? So I would believe actually logistics as a thing can really help us to enable the top line, right? So this is something, I think, very clear internally within Wish, right? And one thing I also want to highlight here is compared to the other cross-border focused marketplace, right? We are very proud to say, actually, I think during the past few years, we have built a very strong, very solid logistic -- global logistic network, right? So we have the consolidation warehouse in Asia, right, and can really help a lot of cross-border focused merchant to easily deliver the parcels from Asia to North America to Europe, right? So this is something definitely I think I would say one of the biggest advantage of strengths we have built in the past few years, right? And this is the thing we keep reiterating, right? So we're trying to see, especially in some of the top of the country, right, can we continue shortening the delivery time and in a reasonable cost right? And the start of the expanding market, so how actually we can leverage the experience we learn from this top destination market, to really improve this delivery end-to-end experience. So this is the thing, I think the team have a very strong belief, right? So logistics could be a very, very important factor, can really kind of impact the customer experience and impact the whole unit economic things.

Yes. Great. In fact, I had a question on competition, but we got one in from the audience, so I'll read you the audience question. On the last earnings call, you mentioned PE takeouts are a distraction Can you elaborate on what is happening to the competitive environment? How long it might take to settle? And what might -- what you might continue to expect from PE going forward?

Sorry, what was the first question?

Yes. So you mentioned PE takeouts are a distraction on the last earnings call. So can you elaborate on what is happening with the competitive environment right now?

The PE takeout?

Private equity…

Private equity takeout.

Yes.

But I think [indiscernible] competitive environment in the -- is above the PE takeout.

No, I think it's more about the competitive environment and what have you so.

No, I think the competitive environment…

Yes, sure, sure. I think first of all, e-commerce in general is a competitive space always, right? So we do actually think actually there is the market actually massive enough for us, right? So if we look at the global market landscape, so it's really hard to find 1 or 2 e-commerce players dominating the market, right? So this is thing, we do see a lot of new competitors coming to the space, right, cross-border focus, a very similar play with us. I know many customers also kind of really interested in those kind of new competitors and players, right? But I have been thinking through this for quite a while, right? So I think one of the key things here is if you look at some of the market, right? So it's very, very different from Asia, even from China, right? So in U.S., in western country, I think the overall retail or e-commerce market tend to be more fragmented, right? So I think a customer actually they have a different intents of demands when they wish it and go to the different website or the retailer to shop for something, right? Things here is actually how we can really make Wish unique right, and really can make actually -- we have the perception -- the unique perception from our customers. That's what I mentioned, right? So one thing we want to strengthen and really want to highlight here is the shopping experience, right, the discovery and the inspiration based the experience, right? So this thing really can help us to keep the unique position and varied proposition for us, right? So this is the thing, I think, definitely putting the competitive environment, right? So we still feel like actually we have the first mover advantage here, right? So as Vivian mentioned, so previously, we already had over 1 billion downloads, right? So this is one of the biggest assets Wish has, right? And this is the thing -- and even I think now, I think putting in this macroenvironment, right? So how actually you can leverage this, right, can really help you to drive the operational efficiency. I think this is the key to many, many countries -- many, many companies, right? And also, I think it's also very critical to us, right? So again, the [indiscernible] is I think that the competition is always there. But if we can focus on our customer can really provide the unique value to our customers, we believe, actually, there's definitely this room for us to grow, right? Yes.

Just kind of add a little bit. It's similar to what Joe mentioned. If you think about e-commerce, this is a mega industry, obviously, at a high growth rate. And you could play in cross-border, you could have play in local to local, you could play in teenage fashion, you could play in home in life, you could play in many, many different ways. End of the day, it's about your niche. What is your strength? What is your niche where you focus on? I think that's really, really important. Because if you look at whatever -- everything that is happening in the space, you could be very -- you could be a little bit confused in terms of should we play, right? But that will be the wrong strategy. For us, it's very clear. We are cross-border first. We're not leading with local-to-local, right? Cross-border is our strength, that's how Wish was started. We are serving underserved 80% population, not the top 20%. That doesn't change. We are discovery-based shopping experience and not search-led shopping experience that's very, very clear to us. And our core audience is Millennial and Gen X, which is 27 to 47. That's kind of a very big age range, but they are not necessarily teenager, it's not fast fashion, right? And our categories are the major 5 category fashion in the more broader sense, not fast fashion or teenager, Gen X focus about a broader sense, fashion, electronics, home and garden, hobby and the beauty and health. So it's a home and life narrative to everything you need for your household, maybe besides the food and grocery, that's what we serve. So with the $1 billion of massive user base we already have and the right focus on the right categories, across border, really focused on improving the user experience and merchant engagement, we definitely have a bigger room to play, right? I mean the cross-border e-commerce, no one is dominant. No one has a majority like more than 30%, 40% or 50% market share, right? And we are, as Joe mentioned, we have been operating in this space for 12 years, we have a lot of -- we already used like tons of experiences and user information and the data to help us just continue to refine the machinery and get better and better in what we do. And I wanted to highlight one thing. When we talk about value-conscious customer, we're not necessarily talking about just cheap, right? It is anyone who cares about good value, good price for the quality that you expect, right? So I want to use the example. So this paint that I'm wearing. This is $3, including shipping. It has tons of beautiful details. And I'm actually worry multiple pieces I'm going to just use this as $3 including shipping. This is something if it were available in Macy, I would have been willing to pay $15, $20 minimum. And this is available on Wish. There are many, many products like this, just go broad and search, it's yours.

That's free advertising for you right now.

Yes, well why not?

But yes, no, in fact, yes, so another question that we get is -- and this is coming straight from the time of the IPO. So at that time, the macro was good. But the way people are looking at it is, hey, you're targeting more value-conscious consumers and it is not that you're serving the need within a day or 2 days or 3 days. So it's not something which can be a necessity under any circumstance. This is definitely a luxury for the more value-conscious people. So as you think of like a weaker macro, is the fact that you're cross-border, the fact that you have a logistics time of like 2 weeks or 3 weeks from different countries, is that a significant disadvantage that you face versus other folks?

Again, we are about home in the life. Even in a tough economy, people still get married, you have kids, they want to buy toys for -- they still need to buy a kitchen appliance small appliances, they need this you need to have home decorations, and still buy fashion clothing accessories. And by the way, this ring is also from Wish. So there are a lot of things people still do irrespective of the macro situation, right? And they just wanted to do it at a lower cost. And as I mentioned, Wish is about the massive selection for people who wanted to have some fun with the shopping and retail gratification at a very, really affordable price level, right? And a lot of people go on Wish, find this stuff they never expect to find it at a price like surprisingly competitive. And that's really our core customer base to come back over and over. And that's the audience we will be hyperfocused in 2023 and just really focused on increase the repurchase rate and also the life value. And hopefully, more and more people see the value of Wish even you have never tried it before and come give a try and you will see the value proposition.

When we do the customer interview and research, right, definitely, we see the most of the scenario the use cases come from, as Vivian mentioned, but like event. People come to Wish to buy stuff for the events, right? But even now, I think the macro is weak, but actually people still hold events, right, for holiday stuff, right? So that's why -- and also something very interesting to share here is also we do see a big audience, right, from some of the sports activity group, like soccer mom right? So in the U.S., we do see a lot of our customers come from this soccer mom group, right? So people actually the mom come together during the weekend, right, so for kids soccer activity, right? And then they discuss what kind of stuff they need to buy for the kids, right? So this is actually a lot of user kind of research, give us those kind of a scenario, we think about actually how we can organize our supply and the merchandise, right? But definitely, it's not essential, but actually, those spending still happen, right? So yes.

Totally. One of the things that you mentioned was, again, in terms of the user experience and discovery and all those things. But Wish had always been doing that, and Wish had always be doing gamification and what have you, in terms of the user experience and to make that more entertaining. Have you changed that or how is that different now?

Well, so first of all, again, right, so we still exploration discovery and also providing the entertaining more entertaining finding experience, to our customers. You are right. I think gamification definitely -- this is one of the features that actually we'll provide right? And this is something we keep evolving reiterating those experience, right? So -- but since beginning of this year, you can see we have done many changes as well, right? We did the redesign for the home page, right? As Vivian mentioned earlier, we have more entry points, right? So on our homepage and providing more kind of merchandising features to our consumer as well, right? Now we have the deal hubs, right? So just launch our app, right? The customer can easily explore the great deals on our app and also for merchant -- we also can provide them another master way, help them to promote their product as well, right? And for the fashion redesign, so this is also the thing for us to really understand how we can build a more verticalized shopping experience for our customer, right? So this is the thing I think we're trying to see how actually can really build on the new stuff on our consumer app, right? And for more entertaining or fun experience we are building now is also about a video, right, which clicks. So we're launching this year. It's about actually how actually we can provide a shoppable video to our customer. Honestly speaking, right, so we still keep integrating this product, right, and see how actually you can leverage the video content, can better describe, better promote the product to our consumers. So this is all the consumer product features. So we're trying to build but next year, I think more is coming.

Vivian, 1 thing that we've been getting, and I don't know, I must have asked you so many times over GMV. When do we get that number?

Yes, it will be available. We will start reporting GMV and the potential you would guide on that. I know we haven't done that. And as I shared previously as well, 1 reason we just need a little more data to make sure we can forecast and report it very accurately, it's because of the pricing changes I mentioned earlier, right? And the pricing changes matter this year and first quarter, there is a new pricing practice you are implemented globally since 100% consistent in Q3. Now when we implement the pricing changes, it has a direct impact on the GMV performance and revenue and EBITDA all of that. So during the process, it's very hard to see where the true baseline would be going forward. So we've been waiting for maybe 2 quarters and when we see the baseline post the pricing changes anything we can start accurately forecasting and potentially even provide guidance on that particular metric. I think since I joined a year ago, people have been asking when we can -- we provide more metrics for report on or forecast more metrics beyond the EBITDA. And it would definitely be very mindful of that. I think 2023 is most likely when we do it. Yes.

And we are almost at time. But it would be -- you talked about it, you are sitting on a huge pile of cash, right? And of course, with 0 debt. How do you picture -- how do you visualize liquidity? How are you planning for that over the next couple of years? Because clearly, during the turnaround period, you may be using liquidity?

Well, so we have -- I would say, since I do cash flow optimization and liquidity management has been like top priority from a financial standpoint. And if you look at our cash flow reports, and we are consuming maybe 25% of what we used to consume like in 2020. That's when we spend very high amount of advertisement dollar acquiring users and reengaging all that. And we -- and that's before the turnaround. And now we are restarting the flywheel with the product features, value proposition, user experience, merchant engagement, quality of listing, everything we just talk about. So we are able to reduce -- we have been able to reduce ad spend drastically and reduce the cash burn, right? So our cash consumption is about 25% of what we used to need to run the operation. Next year, it will be another step -- further step up in terms of cash optimization. And our goal is that we minimum is -- to have a minimum 2-year nearly 3 years cash runway without any capital infusion, right? I mean that's our goal. And we have certainly more capital through debt or equity, but we decided not to do that, and we wanted to focus on operation and really improve our cash efficiency. Like I said, next year, our goal is to further reduce the cash burn and just even with the existing balance, we should be able to sustain for at least 2 to 3 years, and our goal certainly is to turn cash positive during that time.

Okay. Got it. So like from '22 onwards, that is how we should kind of model out the free cash flows.

2023 and -- 2022 is already done almost, right?

Okay. Yes. So '23 and '24, you are fully funded for '23, '24 maybe possibly into '25. But then yes again, it depends on the turnaround and how quickly that happens.

Yes. So we will -- like I said, our goal is to become cash positive during that period of time. Again, this is without any additional capital. Yes.

I think this is one of our financial focus in the coming year, right? So I think it's how to have the more disciplined cash management way, to help us to really have a better cash runway and allowed us that you can really focus on the turnaround plan to improve the operating metrics. So this is why it's a key focus.

By the way, we think it's doable. It's not something that we have a goal, but have no idea how to achieve the type of situation, we think it's doable. Yes.

Great. So we look forward to when you report 4Q results to start seeing numbers and to start seeing timelines associated with the plan. So great, with that, I think we are over time. Thank you so much for coming. Thank you for doing this.

Thank you.

Thank you.

Thank you all.