MOGU Inc. Q3 FY2021 earnings call

• MOGU has been in operation for 10 years since 2011, continuously innovating in fashion shopping formats from curation to e-commerce, and now live e-commerce and short video e-commerce. - Third quarter achieved positive EBITDA on a non-GAAP basis, reflecting operating efficiency improvement and disciplined capital allocation. - MOGU Live GMV increased by 20.9% year-over-year to RMB4.1 billion, and its contribution to overall GMV was 80.3%. - The vibrant community of MOGU attracted more users, with active buyers of the live video broadcasting business achieving a year-over-year growth of 9.4%. - During 11.11 and 12.12 promotions, 2 KOLs on the platform each achieved over RMB 100 million sales. - Future will explore new business opportunities including cross-border e-commerce and offline business, leveraging strategic assets built over 10 years.

In the third quarter of fiscal year 2021, MOGU's total GMV was RMB5.046 billion, a decrease of 19.9% year-over-year. MOGU Live GMV increased by 20.9% year-over-year to RMB4.1 billion, and its contribution to the overall GMV jumped to 80.3% this quarter. Total revenue decreased by 45.6% to RMB146.5 million. Commission revenue decreased by 29.8% to RMB99.2 million, and marketing services revenue decreased by 75.9% to RMB17.4 million due to the company's business restructuring towards an LVB-focused model. Cost of revenue decreased by 48.3% to RMB51 million, sales and marketing expenses decreased by 63.4% to RMB76.5 million, R&D expense decreased by 14.5% to RMB27.2 million, general and administrative expenses decreased by 32.4% to RMB29.1 million, while amortization of intangible assets increased by 10.3% to RMB113.5 million.

• Will explore new business opportunities such as cross-border e-commerce and offline business. - Will leverage the strategic assets built over the last 10 years and take advantage of industry landscape changes. - Focus on user retention, as existing users' retention is extremely important, and will not use a cash-burning strategy to acquire customers but leverage innovation and know-how for customer acquisition and efficient resource allocation.

• The conference call contains forward-looking statements based on current expectations, which are subject to known or unknown risks, uncertainties or other factors beyond the company's control that may cause actual results to differ materially from forward-looking statements. - Further information regarding these risks and other risks, uncertainties or factors is included in the company's filings with the U.S. Securities and Exchange Commission.

Q: About the company's strategy going forward regarding EBITDA and user acquisition.

A: Continue to invest in the live e-commerce segment, maintain and enhance competitive advantage, continue innovation and optimization of user interface, balance different roles in live e-commerce while achieving monetization, and will explore cross-border and offline business, focusing on user retention and efficient resource allocation.

Q: About category expansion and KOL incubation.

A: Will expand into higher-margin categories like cosmetics, skin care and nutritions. Will dedicate resources to other KOLs for category expansion, having spent time and strategy on recruiting KOLs before and after Chinese New Year.

Q: About the competitive landscape of live e-commerce in China and cross-border e-commerce opportunity.

A: Differentiated by being an innovator of live e-commerce since 2016 with product innovation, and being a KOL-driven live e-commerce-dedicated platform. For cross-border e-commerce, will leverage the experience and know-how accumulated in China, team up with KOLs to explore opportunities overseas.