Q4 2022 Yunji Inc Earnings Call
Speaker 1: The.
Speaker 1: And.
Speaker 2: Good morning and good evening ladies and gentlemen. Thank you for standing by.
Speaker 2: And welcome to UND sports quarter 2022 earnings conference call.
Speaker 2: With us today are Mr. Shangmue Zhao, Chairman and Chief Executive Officer, Mr. Peng Zong, Vice President of Finance, and Ms. KVU, Investor Relations Director of the company.
Speaker 2: As a reminder, this conference call is being recorded.
Speaker 2: Now I would like to hand the conference over to our first speaker today, Ms. Kay Liu, IRD of Yunji. Please go ahead, ma'am.
Speaker 3: Hello everyone. Welcome to our fourth quarter 2022 earnings call. Before we start, please note that this call will contain a forward-looking statement within the meaning of the Private Security Litigation Reform Act of 1995 that are based on our current expectations and current marking operating conditions and later events that involve known or unknown risks.
Speaker 3: uncertainties and other factors of the Indian industry.
Speaker 3: These forward-looking statements can be identified by terminologies such as will, expects, anticipates, continued or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to our related document file with the USACC. Any forward-looking statement that we make on this call are based on assumptions as of today and is presently qualified in the form of a
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Speaker 4: We hope you enjoyed this video. If you did, please like and subscribe to our channel. Please like and subscribe to our channel.
Speaker 3: During the fourth quarter, we successfully weathered the challenges posed by police related restrictions and the subsequent easing of these measures.
Speaker 5: In October and November , COVID controls exerted downward pressure on our order volume. Then, in December , our water fulfillment capabilities were negatively impacted as the country battled a surge in COVID cases. Although we have observed the signs of a broader micro-stabilization and recovery, we have also observed a lack of
Speaker 5: As in time, our enhanced capabilities and our business resilience.
Speaker 5: leave us well positioned to seize opportunities when a market recovers.
Speaker 5: fortified by these solid foundations, we remain cautious of gymnastics as we look to the future.
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Speaker 5: I'd like to summarize this year's often ups and downs. During 2022, we continue to iterate our initiatives, both the product and the marketing side. For our healthcare brand, we introduced a wide array of fresh offerings covering weight management.
Speaker 5: skincare and bodily revitalization, allowing us to better meet diverse consumer needs. The driving force behind our R&D and production processes was a focus on creating high quality, healthy and natural products. Our efforts were extremely well received.
Speaker 5: by our users with several of the new products, each generating over 10 million RMB in sales during a single sales event. DreamBide is unique and innovative offering. Use the mindset of a energy healthcare continues to gradually form.
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Speaker 5: turnuning here: our thinkincare brand sodium, refreshing and RE focusing our content marketing and credate label brand promotion initiatives. We further developed and disrenthened the plan istor- probably traffic, leveraging social media and our own user community.
Speaker 5: we boosted user interaction by generating attention grabbing helpful content thereby further enhancing user experience and our brand reach.
Speaker 4: Good afternoon to all of you. It is amazing what you've seen how smart scene is, and the students are getting invited to come. We also invite you to come into the fall office or the classroom. We also have a breakout room with full- quantified museums and different classrooms on campus. We would like to wave aarsen in fancy language for JavaScript tothannt on our campus, and we really appreciate yourPrize learning. We look forward to seeing you in fall school, to rest and they will give you lots of unique pieces of the homework that they have covered.
Speaker 5: For our highly curated product selection, we successfully launched our upgraded Mingji selected quality certification system, an integral component of our gourmet Mingji strategy with its main focus on gourmet food category.
Speaker 5: The stringent certification assures consumers that products are of the highest quality. One year after the launch, our platform has accumulated a wide range of well-loved products that are regularly repurchased by our users. Powered by Indeed, Flux
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Speaker 4: Thank you for your attention.
Speaker 5: Let's take a closer look at our marketing assets. We continue to innovate on and refine our virtual community services. At the same time, we have launched additional value-added services. For example, we enhanced the members perks by increasing the number of users.
Speaker 5: providing them with professional health information and nutritional advice within their loyalty and satisfaction. Later on, we upgraded our consumer marketing tool from graphical marketing content to a short video format, generating exponential growth in high quality content.
Speaker 5: By integrating these two with our innovative features that make sharing more convenient, we create a heightened brand exposure and allow our service managers to promote products efficiently and accurately.
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Speaker 5: Moving further into 2023, we have already engaged in extensive strategic planning on both the product and the marketing side. On the product side, we are really making an evolving consumption trend where increasing numbers of e-commerce companies are competing in a subsidy war, cultivating...
Speaker 5: We are confident that our private labour strategy delivers a unique consumption experience that goes beyond all prices.
Following the easing of COVID-related restrictions in the fourth quarter, consumers became more health conscious and increased their spending in the health category accordingly. In line with these trends, this year we are focusing on exploring the healthcare and the nutritional therapy categories to further enhance the statements of our private label helium.
Our efforts to date have yield positive results with the proportion of our total sales accounted for by healthcare products increasing. Importantly, both our legacy and the newest launch products proved popular with users, helping us maintain a healthy growth margin.
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We will continue to work on the recovery of the consumption. We will continue to work on the recovery of the consumption. As previously mentioned, the recovery of consumption is a silica process and we have seen the travel sector rebound most rapidly.
On the marketing channel side, our goal for DCN is to expand channel penetration and build more people-to-people connections. Over the past several years, as signal constraints prevented us from regularly holding offline promotional events, it has coupled with the limited number of sales managers able to...
when offline kickoff meeting in Changsha. During the meeting, we teased and launched items from our new range of products. I also took this opportunity to have a number of fruitful one-to-one discussions with some of the service managers and mothers in attendance. and present.
We are further energizing our offline marketing by running a third TCD in 100 days offline promotion campaign. At the same time, we will attract public traffic and boost awareness of our pre-reliable brands by rolling out more offline experience stores.
where consumers can explore and enjoy our products. We are very grateful to our founders for their support. We are very grateful to our founders for their support.
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We will be with our customers every step of the way to help them smoothly navigate the post-pandemic era. At the same time, we will support and help our service managers to receive fresh opportunities in a specialty retail industry. With that, I will turn the call to Oritu Midsum. I will invite President of Finance to go through the financial results.
Thank you, Xiong-Yue. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in RMB terms, and all comparisons and percentage change are on a year-over-year basis unless otherwise noted. We face a volatile micro environment during the fourth quarter.
with pandemic-related restrictions in October and November , and COVID spread following their re-execution in December . Navigating through the pandemic, we gained valuable experience as we continue to refine our product selection, develop our private labels, optimize our product mix, and explore new business opportunities. Importantly, our repeat has been considered to be a critical truth. We continue to workflow closely into our business to ensure our brand Blackstone shortly to ensure our brand Blackstone shortly meets the safety of our customersCheyenne typical level is the business constantly Bravo brighter level very quickly
purchase rate increased to 81.8% and our gross margin increased to 40.9% during the quarter. At the same time, we adapted to the micro environment by further optimizing our cost structures and adhering to our prudent cost control strategy.
increased to 81.8% and our growth margin increased to 40.9% during the quarter. At the same time, we adapted to the micro environment by further optimizing our cost structures and appearing to our prudent cost control strategy. Thanks to these efforts.
We delivered significant efficiency improvements with our operating expenses decreasing by 22% year over year. Our strong cash positioning and healthy financial conditions provide the foundations for the further development of our business.
Now let's take a closer look at our financials. Total revenues were 289 million compared to 471 million a year ago. Revenues from sales of merchandise were 241 million.
and revenues from our marketplace business were for extremely. This decrease was primarily due to our continuous strategy of refining our product selections across all categories and optimizing our selection of suppliers and merchants, causing near-term decrease in sales. Changes in consumers' consumption, confidence and habits during the COVID-19 pandemic also contributed to the decrease.
Despite these challenges, we maintained a stable gross margin at 40.9% compared to 39.6% a year ago. This was a result of sustained customer loyalty to our private labels and effective product curation strategy. Now let's take a look at our operating expenses.
Fulfillment expenses were 32 million compared to 47 million a year ago. This was primarily due to reduced warehousing and logistics expenses due to lower merchandise sales. Sales and marketing expenses were 59 million compared to 78 million a year ago. This was mainly due to the reduction in personnel costs as a result of staffing structure refinements, and decreasing member sales and marketing expenses were 59 million.
management fees and a decrease in marketplace business platform promotion expenses.
Technology and content expenses were 17 million compared to 26 million years ago. The decrease was mainly due to the reduction in personnel costs as a result of staffing structure assignments and reduced cloud service costs.
General and administrative expenses were 45 million compared to 44 million a year ago.
Total operating expenses in the fourth quarter decreased to 153 million from 196 million in the same period of 2021. We recorded a loss from operations of 33 million compared to an income from operations of 4 million a year ago.
Net loss was 38 million compared with net income of 58 million a year ago, while adjusted net loss was 31 million compared with adjusted net income of 71 million a year ago. Basic and diluted net loss per share attributable to ordinary shareholders were both 2 cents.
Compared with basic and diluted net earnings per share, the net earnings is not attributable to ordinary shareholders of 3 cents in the same period of 2021.
Moving on to liquidity, as of December 31, 2022, we had a total of 669 million in cash and cash equivalents, restricted cash and short-term investments on our balance sheet compared to 571 million as of September 30, 2022. During the fourth quarter, we refined our operations and optimized our working capital cash flow.
Our liquid assets were sufficient to cover our payable obligations and we did not hold any long-term bank loads or debts on our balance sheet. Looking ahead, we will continue to cultivate our range of private label products and introduce more novel offerings with strong repurchase potential and customer peers. As we navigate through the current macro challenges, we will further refine our cost structure.
while exploring new opportunities driven by consumption recovery in 2023. We are confident that our resilient business model and innovative strategies will deliver long-term value to our shareholders.
This concludes our prepared remarks for today. Operator, we are now ready to take questions.
Thank you. We will now begin the question and answer session.
To ask a question, you may press star 1 on your touch tone phone.
If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call.
And our first question today comes from Ethan Yee at First Trust China. Please go ahead.
Thanks for taking my question. We see that there are several competitors in the market starting to engage in subsidy work. I'm just curious about what's the impact of the
Would you consider entering a billion dollar specific campaign like Jintong and Pingdao in the future? Thank you.
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Firstly, the consumer purchasing power is still growing and recovering, and the 10-dollar subsidy program can indeed bring tangible benefits to consumers. We acknowledge the value of the subsidies to consumer markets.
especially in some standard product categories, such as mobile phones and electronics, and some impulsive consumption analysis.
The price is of course a very important element in consumption decisions.
But the demand for product quality, customized service and production features is still quite important and it's wrong.
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We don't believe in blindly somebody sizing prices. Our goal is to establish a mindset among our consumers that our products are not only affordable but also unique with high quality rather than offering price subsidies.
we focus on providing value-added services and maintaining the quality of our products so that our customers feel that their purchases are worth it.
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And actually we believe the initiative of the government is more important, that is to have differentiation from high-speed development to high-quality development.
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We have a variety of private labels in healthy food, beauty and gourmet food categories, complemented by professional vertical communities for one-stop shopping and marketing. This gives us a strong post control and operational capabilities over productive quality.
Thank you.
Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to management for any closing remarks. Thank you for joining us today. Please do not hesitate to contact us if you have any further questions, and we're looking forward to talking with you next quarter. Bye. Thank you. This concludes today's conference call.