Q3 2024 Yunji Inc Earnings Call
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Speaker Change: And good evening, ladies and gentlemen. Thank you for standing by and welcome to UNG's third quarter 2024 earnings conference call.
Speaker Change: With us today are Ms. Shanglue Xiao, Chairman and Chief Executive Officer, Mr. Yeqing Cui, Senior Financial Director, and Ms. Kay Liu, Investor Relations Director of the company.
Speaker Change: As a reminder, this call is being recorded. 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 Change: Hello everyone, welcome to our third quarter 2024 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 is based on our current expectations and current market operating conditions and relates to events that involve unknown risks, uncertainties, and other factors of currency and its industry.
Speaker Change: Any forward-looking statements that we make on this call are based on assumptions as of today and are explicitly qualified entirely by cautionary statements, risk factors, and details of the company's piling with SEC.
Speaker Change: Yunqi did not undertake any application to apply the statement expressed as quite unapplicable. With that, I will now turn over to Shanglue Xiao, Chairman and CEO of Yunqi.
Shanglue Xiao: Hello everyone and welcome to Yunji's third quarter 2024 earnings call.
Shanglue Xiao: First of all, I would like to share a piece of good news with you. On November 8th, the Yunji Sharing Industry Center project and the Yunji Headquarters project will be held in Shenzhen.
Shanglue Xiao: In the future, we will build the headquarters of Yunji Digital Marketing Center, which is integrated in education, training, product development and operation.
Shanglue Xiao: Focusing on the restoration of consumer brands such as Group Health and Beauty The new headquarters will be an important carrier of corporate culture and brand image
Shanglue Xiao: It will also be a new starting point for companies to reach higher goals. The headquarters project is the asset purchased in the second quarter of this year. In an economically variable environment, the company continues to diversify cash and assets to enhance the company's ability to resist pressure and increase returns.
Shanglue Xiao: So, let me start with a significant milestone in our company's growth. On November the 8th, we broke ground on our new headquarters, the Yunji Innovation Center. This 15-room campus is strategically located in the heart of the economic and technology development zone.
Shanglue Xiao: represents more than just a new office space. It is designed to be an integrated facility that brings together our marketing, training, R&D and operational teams under one roof.
Shanglue Xiao: The center will serve as an incubator for expanding health and beauty brands while embodying our corporate culture and visions for the future.
Shanglue Xiao: We secured this property at an attractive valuation in the second quarter this year, which aligns with our strategy of strategic asset diversification to strengthen our market position and optimize returns in today's dynamic environment.
Thank you.
大健康是云集未来十年重要的方向之一 我们坚定普及健康知识 选择有机食品 致力于让有机健康走进亿万家庭
Shanglue Xiao: At present, organic food is expensive due to high production costs, and the price is usually higher than that of conventional food. At a time when consumers are increasingly sensitive to price, Yunji has played an exceptional role, allowing the people to afford to evaluate organic food.
Shanglue Xiao: Our team has visited and explored the excellent health industry supply chain across the country. We have become the eyes of our users, and we have made real experiences and real sharings.
Shanglue Xiao: and the first cloud-based health certification system. After the product is certified, it will still receive regular reviews. These efforts have received positive feedback from users.
Shanglue Xiao: For example, we have our own authentic Qiyue pear production area in Shuyuan In October every year, we promote the Qiyue pear in the core production area Many mothers will come to Yunji to buy it every year
Shanglue Xiao: In line with the global wellness trend, we are reinforcing our decision to health and wellness as a key pillar of our 10-year strategy.
Our mission is to democratize.
Shanglue Xiao: Democratic side, access to healthy living, particularly in the organic food space.
Shanglue Xiao: While organic products traditionally come with premium price tags, we've leveraged our procurement expertise to make these products more affordable without compromising quality.
Shanglue Xiao: Our team has traveled nationwide to discover and connect with top-notch health products and supply chains, acting as the eyes for our consumers by ensuring true traceability, authentic experiences, and genuine sharing.
Shanglue Xiao: Additionally, we've established a robust quality control process through our proprietary e-health certification system, which includes random inspections of certified products even after they receive certification.
Shanglue Xiao: These initiatives have garnered positive feedback from our users. For example, our autumn moon pairs have become an annual favorite for many parents who eagerly return each October to make their family purchases.
Shanglue Xiao: In July this year, Yunji's first Chinese medicine online store is officially open.
Shanglue Xiao: We will further expand the client group to 41 to 55-year-old people.
Shanglue Xiao: The offline store has quickly opened a website based on geographic location and provides new services to attract high-quality users through word-of-mouth and cloud-based offline standardization system. At present, the successful experience of offline stores is being quickly replicated and the second store will be officially opened at the end of October.
Shanglue Xiao: We've also made significant progress in our offline expansion. In July, we launched our first wellness store featuring traditional Chinese medicine practices.
Shanglue Xiao: This initiative has helped us tap into the growing demographic for customers aged 41 to 55 through word-of-mouth referrals in our standardized offline systems.
Shanglue Xiao: We've successfully replicated this business model with our second location opening in October
Speaker Change: On the Meili track, Su Yue has walked for 14 years. As of this month, this year, Su Yue's accumulated sales in the station has exceeded 100 million yuan.
Speaker Change: You guys are much better than me but I never expect such a big success from you guys We look forward to knowing about all aspects We continue to work hard to the anti-pressuregy plus
guys, see this y'all
Speaker Change: Yanzhou護理產品 This signifies Yunji's technical prowess in every track has once again made a breakthrough Looking forward to the high-end track in Yanzhou to achieve new results
Speaker Change: Our private label brand, Suye, has celebrated the 14th successful year in the beauty arena. In November, our accumulated sales on the platform have exceeded the R&D 100 million for the year.
Speaker Change: We are particularly excited about our expansion in the premier anti-aging segment, where we align ourselves with top global brands and consistently launch outstanding products within our age recovery series.
Speaker Change: The upcoming release of specialized eye care products marks another significant advancement in a high-end eye care lineup.
Speaker Change: Digitalization is a major engine for the modernization of the fast food industry.
Speaker Change: The construction of a modernized marketing system is inseparable from the development and application of big data. Cloud-based authentication accelerates the formation of digital platforms that lead and support innovation, and support AI as the main tool, and realize the integration and sharing of public resources and trading platforms.
Speaker Change: Cloud-based AI digital applications are mainly reflected in customer service, content production, material robots, support sharing, and education and training. AI applications greatly save costs, improve operating efficiency, service timing rate, and accuracy rate.
Speaker Change: On the technology front, digitalization is vital for advancing the fast-moving consumer goods industry. Building a modern marketing infrastructure requires effective big data strategies.
Speaker Change: We are pushing forward with the development of an innovative digital platform powered by AI tools that support the integration and sharing of public resources on trading platforms.
Speaker Change: Our AI applications focus on improving customer service, generating content, sharing materials and delivering educational training, which helps lower costs while enhancing operational efficiency and service reliability.
Speaker Change: In the future, Yunji will continue to stimulate innovative firepower, constantly improve core competitiveness, and strive to create greater social value for the Chinese family. That's all for my sharing. Next, let's welcome our Financial Senior Director, Cui Yeqing, to share the financial situation with you.
Speaker Change: So, looking ahead, we will continue to drive innovation, enhance our core competence, and strive to create greater social value for Chinese families.
Speaker Change: With that, I will hand it over to Mr. Cui, our Senior Financial Director, to go through the financial reports.
Thank you, Shangrui. Hello, everyone.
before I go through our financial results.
Speaker Change: Please note that all numbers in the following remarks are in RME terms.
Speaker Change: All comparisons and percentages change on a year-over-year basis, unless otherwise noted. During the third quarter of 2024, we faced a market dynamic that impacted our operations. Nevertheless, our financial positions
enables us to support our strategic initiatives.
Speaker Change: We continuously evaluate the profitability of both new and exciting business lines.
making informed adjustment in response to evolving market conditions.
Speaker Change: This strategy enabled us to uphold a solid financial foundation amidst a changing business environment. During the quarter, we observed notable improvements in our comparables, underscoring our dedication to effective cash management.
Additional, we successfully...
narrowed our operating and net losses, reflecting our commitment.
Speaker Change: to foster sustainable growth. At the same time, we refine our product offering and optimize our supply network to better meet customer demand.
Speaker Change: Looking ahead, we will continue to carefully seek growth opportunities while
prioritizing our financial stability.
Thanks for watching!
Now let's take a close look at our financials.
Speaker Change: Total revenue was $86.6 million compared to $145.1 million a year ago. Revenue from sales of merchandise was $17 million. And revenues from our marketplace business were $14.8 million. Changes were mainly due to software.
Speaker Change: consumer confidence and ongoing refinement to our product range across all catalogs. Furthermore, the optimization of our supplier and merchant network also has a short-term effect on sales.
Speaker Change: Despite these changes, our growth margin remained relatively strong at 54.1%.
Speaker Change: Sales and marketing expense decreased to $19.3 million from $29.6 million a year ago. This was primarily a result.
Speaker Change: of a decline in membership fees. Technology and contact expense were 11.6 million compared to 13.9 million years ago. This was largely due to lower personal cost from staffing optimizations.
Speaker Change: general and administrative expense was 25.8 million compared to 28.1 million ago.
Speaker Change: This was mainly due to a reduction in professional sales performance.
Thank you. Thank you. Thank you.
Speaker Change: Total operation expense in the third quarter decreased to $73.9 million from $93.9 million
7.2 million in the same period of 2010-2013
30.3 million in school
Net loss was 30.
Speaker Change: compared to 34.8 million at its goal, while adjusted net loss was 29.5 million compared to
Speaker Change: 34 million SGO, basic and diluted net loss per share, attributable to ordinary shareholders was about $0.02, compared to $0.02 in the same period of 2023.
Speaker Change: Short-term investments on our balance sheet, our liquid assets, are sufficient to cover our payable obligations.
Speaker Change: and we did not hold any long-term bank loans or debits on our balance sheet. In addition, we are dedicated to making the most of our working capital and smartly managing our assets to best support our operations.
Looking forward, we are dedicated to improving our operational
Speaker Change: efficiencies and adjusting our strategies to effectively navigate the changing marketer landscape.
Speaker Change: of Inventory Management and Cost Optimization leave us well-positioned for further growth.
Speaker Change: By continuously innovating and refining our product offering, we believe that we can boost our momentum and create long-term shareholder value.
Speaker Change: This concludes our prepared remarks for today. Operator, we are now ready to take questions. Thank you.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.
Speaker Change: 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.
Speaker Change: At this time, we will pause for a moment to assemble our roster.
Speaker Change: And our first question today will come from Ethan Yu of First Trust. Please go ahead.
Thank you. Thank you.
Speaker Change: Thank you. Thank you Guan Yichen for accepting my question. I would like to ask Mr. Xiao and Guan Yichen, at this time,
Speaker Change: What is the difference between the online store and the offline store? How will the two be combined in the future?
Thank you for watching!
Speaker Change: Let me translate for myself. Thank you for taking my question. My question is about expanding our offline activities at this point of time. What is the main difference of offline stores and online e-commerce business? And how would these 2 businesses be combined in the future? Could you share more color on this? Thank you.
Thanks for watching!
Thank you for your questions.
Speaker Change: from 40 to 55 years old. While we continue to pay attention to the needs of users, we also hope to cater to the development of the middle-aged economy, expand the scope of cloud-based users, and truly serve the whole family of users.
Thanks for watching!
Speaker Change: Thank you for your question. Firstly regarding market demand and target customers, offline wellness stores are an extension of UNIGY's existing customer base.
Speaker Change: Over the past nine years, and actually the ten years since ING's establishment, some of our earliest customers, such as young mothers, have now transitioned into the key demographic for offline wellness services, which is the 40 to 55 age group.
Speaker Change: By continuously addressing user needs, we aim to align with the development of the Asian economy, broaden Yunji's customer base, and truly provide services for the entire family.
Speaker Change: There are many differences between offline marketing and online marketing. We focus on moving 500 meters of offline community and marketing by combining local promotion and online promotion. In the process of service, we can get feedback from users more directly and in time.
Speaker Change: The offline wellness business differs significantly from online marketing. We focus on offline communities within the 500-meter radius, combining ground promotion with online campaigns.
Speaker Change: This approach allows us to receive user feedback more directly in prompt links during the service process.
Speaker Change: In the future, after we establish loyalty and trust among online users, we plan to combine online marketing and offline services, especially in the promotion of free brands and organic food. In the construction of the human network and the earth network, we will bring more surprises to the selection and health business.
Speaker Change: In the future, after establishing loyalty and trust among offline wellness users, we plan to integrate online sales and services. This is especially true for the promotion of our own brand and organic food products.
Speaker Change: The synergy between our people network and land network will deliver exciting opportunities for our curated and health-focused business lines.
Xièxiè nǐ de qǐ wèi Thank you for your question.
Speaker Change: There are no further questions at this time. This will conclude the question and answer session and I'd like to turn the conference back over to management for any closing remarks.
Speaker Change: 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.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
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