Yunji, Inc. Q3 FY2023 earnings call

• The third quarter is an off-peak season for e-commerce, and Yunji used the opportunity to develop and strengthen business foundation, including fine-tuning market positioning, advancing new product development, adjusting product offering structure, and optimizing supply chain capabilities.
• Ramped up marketing and hosted events to lay groundwork for fourth quarter promotions. Private label team relocated to a new office building with enhanced display areas. Both Yunji and private label brands have high repeat purchase rates.
• Chose a different marketing approach during major e-commerce festivals, using straightforward promotions like product base, direct discounts, and multi-item offers to attract and engage users.
• Supply chain efforts yielded results, especially in food category. Craft vouchers and gift boxes were popular for Mid-Autumn and National Day. Sold over 400,000 carts of dairy in one month generating RMB13 million revenue.
• Private label brands: beauty is core, healthcare is secondary. Dual focus on beauty and health allows category collaboration. For example, beauty brand launched a product that sold out quickly, and health brand used popular ingredients with cross-category potential.
• Focus on service managers, offering opportunity to balance work and family, and launched new education/training program to refine sales skills and promote personal development.

In the third quarter of 2023, total revenues were RMB145 million. Revenues from sales of merchandise were RMB140 million, which contributed a significant portion, and revenue from the marketplace business was RMB29 million. The gross margin remained relatively solid at 45.7%. Operating expenses in the third quarter decreased to RMB98 million from RMB139 million in the same period of 2022. Loss from operations was RMB30 million compared to RMB18 million a year ago. Net loss was RMB35 million compared to RMB38 million a year ago, while adjusted net loss was RMB34 million compared with RMB30 million a year ago. As of September 30, 2023, cash and cash equivalents, restricted cash and short-term investments totaled RMB555 million, down from RMB669 million as of December 31, 2022.

• Will continue to proactively explore investment opportunities to enhance supply chain capabilities.

The call mentions that forward-looking statements are based on current expectations and market conditions, and involve known and unknown risks, uncertainties, and other factors as detailed in Yunji's latest SEC filings. Yunji does not undertake to update forward-looking statements except as required by law.

Q: Could you shed more color on the specific plans and the next positioning for our Health business segment?

A: Yunji Health is a forward-looking strategy for the next 10 to 20 years. With a large population of over 50-year-olds in China, Yunji Health is likened to a Sam's Club for the health domain, gathering diverse health products for different family members' personalized needs, and advocating a healthy lifestyle encompassing various aspects like sun protection, skincare, etc.

Q: [No more question as per transcript] A: [No further answer as Ethan Yu stated no more questions]