Q2 2026 Yunji Inc Earnings Call

August 20, 2026

Speaker #1: Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Yunji's first half 2026 earnings conference call. With us today are Mr. Sheng Lu Shao, Chairman and Chief Executive Officer, and Ms. Nan Song, Senior Financial Director.

Operator: Good morning and good evening, ladies and gentlemen.

Operator: Thank you for standing by and welcome to Yunji's H1 2026 earnings conference call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer, and Ms. Nan Song, Senior Financial Director. As a reminder, this conference call is being recorded.

Speaker #1: As a reminder, this conference call is being recorded. Before we start, please note that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on the company's current expectations and current market operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors of Yunji and its industry.

Operator: Before we start, please note that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on the company's current expectations and current market operating conditions and relate to events that invoke known or unknown risks, uncertainties, and other factors of Yunji and its industry. These forward-looking statements can be identified by terminologies such as will, expect, anticipate, continue, or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to the company's related documents filed with the US SEC. Any forward-looking statements that the company makes on this call are based on assumptions as of today and are expressly qualified in the entirety by cautionary statements, risk factors, and details of its filing with the SEC. The company does not undertake any obligation to update these statements except as required under applicable law.

Speaker #1: These forward-looking statements can be identified by terminology such as "will," "expect," "anticipate," "continue," or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to the company's related documents filed with the US SEC.

Speaker #1: Any forward-looking statements that the company makes on this call are based on assumptions as of today and are expressly qualified in their entirety by cautionary statements, risk factors, and details of its filings with the SEC.

Speaker #1: The company does not undertake any obligation to update these statements, except as required under applicable law. With that, I will now turn the call over to Mr. Sheng Lu Shao, Chairman and CEO of Yunji.

Operator: With that, I will now turn the call over to Mr. Shanglue Xiao, Chairman and CEO of Yunji. Please go ahead, sir.

Speaker #1: Please go ahead, sir.

Speaker #2: 各位投资者、分析师朋友，大家好。感谢各位对云集的持续关注和支持。2026年上半年，市场环境仍然充满挑战，但我们坚守有机生活引领者的战略定位。通过产品和体验双轮驱动，在有机健康生活领域持续深耕。接下来我将向大家汇报公司的财务表现和战略执行情况。

Speaker #3: Hello, everyone. Welcome to.

Shanglue Xiao: Hello, everyone. Welcome to

Shanglue Xiao: Hello, everyone. Welcome to.

Operator: Thank you for your patience. You may restart the presentation.

Speaker #1: Thank you for your patience. You may now restart the presentation.

Speaker #3: Okay. Hello, everyone. Welcome to Yunji's earnings call. Thank you for your continued interest and support. The market environment remained challenging in the first half of 2026, but we stayed firmly committed to our strategic positioning as a leader in organic living, advancing our products and experience through our engine strategy as we continue to deepen our presence in the organic healthy living market.

Shanglue Xiao: Okay. Hello, everyone. Welcome to Yunji's earnings call. Thank you for your continued interest and support. The market environment remained challenging in H1 2026, but we stayed firmly committed to our strategic positioning as a leader in organic living, advancing our products and experience through entry strategy as we continue to deepen our presence in the organic health living market. I will now walk you through the company's financial performance and strategic execution. Let me begin by sharing some financial highlights which result our proactive approach to optimizing our structure and improving quality and efficiency.

Speaker #3: I will now walk you through the company's financial performance and strategic execution.

Speaker #2: 首先和大家分享一些财务的数据。这些数据反映了我们主动优化结构、提质增效的经营思路。

Speaker #3: Let me begin by sharing some financial highlights. These reflect our proactive approach to optimizing our structure and improving quality and efficiency.

Speaker #2: 上半年公司总收入为人民币9,630万元，同比有所下滑。这是我们主动优化产品组合、清退低消第三低效第三方商家带来的结构性调整。现阶段自营商品在整体销售额中的占比逐步提升到70%，其中自有品牌的销售额占到56%。高毛利自有品牌商品正逐渐成为公司收入的核心支支撑，同时通过溯源体验举措加强打磨客户心智，保持稳定的客户联系，有利于提高公司的盈利水平和长期发展。

Shanglue Xiao: 上半年公司总收入为人民币9630万元，同比有所下滑。这是我们主动优化产品组合，清退低效第三方商家带来的结构性调整。现阶段自营商品在整体销售额中的占比逐步提升到70%，其中自有品牌的销售额占到56%。高毛利自有品牌商品正逐渐成为公司收入的核心支撑。同时，通过溯源等体验举措加强打磨客户心智，保持稳定的客户粘性，有利于提高公司的盈利水平和长期发展。

Shanglue Xiao: [Foreign language]

Speaker #3: Total revenue for the first half was RMB 96.3 million, compared with RMB 158.3 million in the same period last year. This reflects the structural adjustment from our proactive efforts to optimize the merchandise mix, including discontinuing relationships with certain third-party merchants whose offerings did not meet our enhanced product standards.

Shanglue Xiao: Total revenue for H1 was RMB 96.3 million compared with RMB 158.3 million in the first period last year. This reflects the structural adjustment from our proactive efforts to optimize the merchandise mix, including discontinuing relationships with certain third-party merchants whose offerings did not meet our enhanced product standards. While this affected our near-term revenue, we believe it has strengthened our merchandise mix in support of our long-term strategy. Self-operating merchandise now accounts for approximately 70% of the total sales, of which private label products accounted for 56%. Private label products with higher margins are increasingly becoming the core support for our revenue. While our experiential initiatives such as supply chain traceability, continue to strengthen customer engagement and maintain stable customer retention, supporting improved profitability and long-term development.

Speaker #3: While this affected our near-term revenue, we believe it strengthened our merchandise mix in support of our long-term strategy. Self-operated merchandise now accounts for approximately 70% of total sales, of which private label products account for 56%.

Speaker #3: Private label products with higher margins are increasingly becoming the core support for our revenue, while our experimental initiatives, such as supply chain traceability, continue to strengthen customer engagement and maintain stable customer retention.

Speaker #3: Supporting improved profitability and long-term development.

Speaker #2: 同时，毛利率水平保持稳健，亏损收窄成效显著。本期综合毛利率维持在41%左右，上半年净亏损率净亏损降低至7,240万元，净亏损对比去年同期实现大幅的改善，这源于我们对于成本管控和运营绩效的坚持，把资金集中投向高复购、高毛利的自有产品与用户体验建设。我们对未来盈利改善十分有信心。

Shanglue Xiao: 同时，毛利率水平保持稳健，亏损收窄成效显著，本期综合毛利率维持在41%左右。上半年净亏损降低至7240万元，净亏损对比去年同期实现大幅的改善。这源于我们对于成本管控和运营高效的坚持，把资金集中投向高复购、高毛利的自营产品与用户体验建设。我们对未来盈利改善十分有信心。

Speaker #3: In addition, our gross margin remained resilient, and our losses narrowed significantly over time. Gross margin for the period held steady at approximately 41%, and net loss for the first half narrowed to RMB 72.4 million.

Shanglue Xiao: At the same time, our gross margin remained resilient and our losses narrowed significantly. Gross margin for the period held steady at approximately 41% and a net loss for the H1 narrowed to RMB72.4 million, a substantial improvement compared with the same period last year. This reflects our continued discipline in cost management and operational efficiency as we directed resources toward high retention, high margin private label products and toward enhancing the user experience. We remain confident in our path to improved profitability.

Speaker #3: This represents a substantial improvement compared with the same period last year. This reflects our continued discipline in cost management and operational efficiency as we direct resources toward high-retention, high-margin private label products, and toward enhancing the user experience.

Speaker #3: We remain confident in our path to improved profitability.

Speaker #2: 接下来让我来向大家介绍上半年的业务开展情况。

Shanglue Xiao: 接下来让我来向大家介绍上半年的业务开展情况。

Speaker #3: Next, let me walk you through our business progress in the first half.

Shanglue Xiao: Next, let me walk you through our business progress in the H1.

Speaker #2: 我们的战略核心是打造有机健康、有机食品和美妆护肤产品矩阵，并向药食同源产品衍生，配合产品与体验双引擎，赋能云集有机健康生态。

Shanglue Xiao: 我们的战略核心是打造有机健康、有机食品和美妆护肤产品矩阵，并向药食同源产品延伸，配合产品与体验双引擎，赋能云集有机健康生态。

Speaker #3: Our strategy rests on two engines: product and experience. On the product side, we continue to build out our organic health, organic food, and beauty and skincare metrics.

Shanglue Xiao: Our strategy rests on two engines: product and experience. On the product side, we continue to build out our organic health, organic food and beauty and skincare matrix with drug-food homology products as a growing focus within organic health. Together, our products and experience dual engine approach powers Yunji's organic health ecosystem.

Speaker #3: With food and medicine homology products as a growing focus within organic health, together, our products and experience-driven approach power Yunji's organic health ecosystem.

Speaker #2: 在有机健康板块，我们持续在大健康领域深耕，重点布局药食同源赛道，贴合现代家庭健康需求。我们在药食同源赛道的首个明星产品是黄金茶，该产品2025年四季度正式上线，依托得天独厚的原产地实打实的品质和精细化的加工工艺，上线后市场反馈远超预期，迅速成为药食同源产品线支柱。黄金茶上半年销售额曾快速增长态势，单品跑通完整增长模型，充分验证我们切入中式养生赛道的产品策略，具备广阔的市场空间。

Shanglue Xiao: 在有机健康板块，我们持续在大健康领域深耕，重点布局药食同源赛道，贴合现代家庭健康需求。我们在药食同源赛道的首个明星产品是黄精茶，该产品2025年四季度正式上线，依托得天独厚的原产地、实打实的品质和精细化的加工工艺，上线后市场反馈远超预期，迅速成为药食同源产品线支柱。黄精茶上半年销售额呈快速增长态势，单品跑通完整增长模型，充分验证我们切入中式养生赛道的产品策略，具备广阔的市场空间。

Speaker #3: In our organic health segment, we continue to deepen our presence in the broader health and wellness market, with a particular focus on food-medicine homology products that address the health needs of the modern family in China.

Shanglue Xiao: In our organic health segment, we continue to deepen our presence in the broader health and wellness market, with a particular focus on drug-food homology products that address the health needs of the modern families in China. Our first flagship product in this category is a Polygonatum tea, which launched in Q4 2025. Supported by premium origin sourcing, genuine quality and refined processing techniques, the product received market feedback that exceeded our expectations. It quickly became a key growth driver of our drug-food homology product line. In the H1 2026, Polygonatum tea delivered rapid sales growth and has successfully validated our complete growth model. This demonstrates that our product strategy for entering the Chinese wellness and health market has a long-term market potential.

Speaker #3: Our first flagship product in this category is a polygenic tea, which launched in the fourth quarter of 2025. It is supported by premium origin sourcing, guaranteeing quality and refined processing techniques.

Speaker #3: The product received market feedback that exceeded our expectations. It quickly became a key growth driver of our food-medicine homology product line.

Speaker #3: In the first half of 2026, Polygenation Tea delivered rapid sales growth and successfully validated a complete growth model. This demonstrates that our product strategy for entering the Chinese wellness and health market has long-term market potential.

Speaker #2: 在有机食品板块，我们把有机理念融入用户一日三餐场景，尤其是每日最重要的早餐，打通日常高频消费场景。作为引流切入，作为流量引入切点，呃，切点与有机健康产品共同形成高低频搭配，长短周期互补的产品矩阵。

Shanglue Xiao: 在有机食品板块，我们把有机理念融入用户一日三餐场景，尤其是每日最重要的早餐，打通日常高频消费场景，作为流量引入切点，与有机健康产品共同形成高低频搭配、长短周期互补的产品矩阵。

Speaker #3: In our organic food segment, we have integrated our organic philosophy into consumers' daily meal occasions—particularly breakfast, the most important meal of the day. By capturing this high-frequency daily consumption occasion, we have established an effective customer acquisition channel.

Shanglue Xiao: In our organic food segment, we have integrated our organic philosophy into consumers' daily meal occasions, particularly breakfast, the most important meal of the day. By capturing a high-frequency daily consumption occasion, we have established an effective customer acquisition channel. Together with our organic health product, this forms a complementary product portfolio that balances high and low frequency consumption patterns and short and long-term consumption cycles.

Speaker #3: Together with our organic health product, this forms a complementary product portfolio that balances high- and low-frequency consumption patterns, as well as short- and long-term consumption cycles.

Speaker #2: 在美妆板块，我们仍然坚持以消费者提供高质价比的美妆护肤产品。在当前市场环境下，理智的消费者更加偏好质价比高的产品，素颜一直以来的品牌定位与这一趋势高度契合。因此得到了消费者的认可，稳定地占据着市场份额。板块销售额与同期相比保持总体稳定，同时有部分产品突出重围，如2025年下半年推出的新品素颜全能油，获得消费者的持续好评。今年上半年该产品获得了29%的快速增长。

Shanglue Xiao: 在美妆板块，我们仍然坚持为消费者提供高性价比的美妆护肤产品。在当前市场环境下，理智的消费者更加偏好性价比高的产品，素野一直以来的品牌定位与这一趋势高度契合，因此得到了消费者的认可，稳定地占据着市场份额。板块销售额与同期相比保持总体稳定，同时有部分产品突出重围，如2025年下半年推出的新品素野全能油，获得消费者的持续好评。今年上半年，该产品获得了29%的快速增长。

Speaker #3: In our beauty segment, we remain focused on offering customers high-quality, high-value skincare and beauty products. In the current market environment, increasingly rational consumers seek products that deliver high value at an affordable price, and so this long-standing brand positioning aligns closely with this trend.

Shanglue Xiao: In our beauty segment, we remain focused on offering customers high quality, high value skincare and beauty products. In the current market environment, increasingly rational consumers favor products that deliver high value with affordable price. SUYE's long standing brand positioning aligns closely with this trend. As a result, this brand has continued to earn consumer recognition and maintain a stable market position, with segment sales broadly stable compared with the same period last year. At the same time, certain products have stood out. SUYE Skincare condensing essence oil, launched in the H2 2025, has continued to receive positive feedback from consumers and achieved 29% sequential sales growth in the H1 of this year.

Speaker #3: As a result, this brand has continued to earn consumer recognition and maintain a stable market position, with segment sales broadly stable compared with the same period last year.

Speaker #3: At the same time, certain products have stood out. Skincare condensing essence oil, launched in the second half of 2025, has continued to receive positive feedback from consumers and achieved 29% sequential sales growth in the first half of this year.

Speaker #2: 全年的素颜体验是云集区别于传统货架式电商的核心竞争力，也是云集构筑用户粘性护身盒的重要抓手。素颜让品质不再是抽象的概念，而是用户可感知、可验证的真实体验。上半年我们持续加大供应链素颜相关投入，所有的动作围绕着强化用户信任，提升复购转化展开。我们共开展素颜活动约30次，每一次素颜都为我们带来了良好的销售转化，如4月13日开展的白华智素颜，使得该单品的销售额同比与和环比分别增长了128%和146%。再如6月17日开展的白月山枸杞原浆素颜，使得单品销售额同比增长13%，环比增长366%。这验证了我们打造素颜体验强化用户触达这一策略是高效可行的，值得我们长期坚持。

Shanglue Xiao: 全链路溯源体验是云集区别于传统货架式电商的核心竞争力，也是云集构筑用户粘性护城河的重要抓手。溯源让品质不再是抽象的概念，而是用户可感知、可验证的真实体验。上半年我们持续加大供应链溯源相关投入，所有的动作围绕着强化用户信任，提升复购转化展开。我们共开展溯源活动约30次，每一次溯源都为我们带来了良好的销售转化。如4月13日开展的白桦汁溯源，使得该单品的销售额同比与环比分别增长了128%和146%。再如6月17日开展的白岳山枸杞原浆溯源，使得单品销售额同比增长13%，环比增长366%，这验证了我们打造溯源体验、强化用户触达这一策略是高效可行的，值得我们长期坚持。

Speaker #3: End-to-end supply chain traceability experience is a core competitive advantage that sets Yunji apart from traditional e-commerce platforms. This is also a key method in building our customer loyalty.

Shanglue Xiao: End-to-end supply chain traceability experience is a core competitive advantage that sets Yunji apart from traditional e-commerce platforms. This is also our key method in building our customer loyalty. Our traceability experience turns product quality from an abstract concept into something users can see and verify for themselves. In the H1 2026, we continued to increase our investment in supply chain traceability experience, with all of our initiatives focused on strengthening user trust, improving repurchase conversion. In total, we conducted approximately 30 traceability events during the period, and these events collectively delivered strong sales conversion. For example, a traceability event for our Baiyueshan birch sap product held on 13 April drove the product's H1 sales up 128% year over year and 146% compared with the H2 2025.

Speaker #3: Our traceability experience turns product quality from an abstract concept into something users can see and verify for themselves. In the first half of 2026, we continued to increase our investment in supply chain traceability experience, with all of our initiatives focused on strengthening user trust and improving repurchase conversion.

Speaker #3: In total, we conducted approximately 30 traceability events during the period, and these events collectively delivered strong sales conversion. For example, a traceability event for our Baiyue Shan Birch Sap product held on April 13 drove the product's first-half sales up 128% year over year, and 146% compared with the second half of 2025.

Speaker #3: Similarly, a traceability event for Baiyue Shan Wolfberry Peru held on June 17th drove the product's first-half sales up 13% year over year, and up 366% compared with the second half of 2025.

Shanglue Xiao: Similarly, a traceability event for Baiyueshan wolfberry puree held on 17 June drove the product's H1 sales up 13% year over year and 366% compared with the H2 2025. These results confirm that our traceability experience strategy is effective in strengthening user engagement, reinforcing our confidence in pursuing this approach over the long term.

Speaker #3: These results confirm that our traceability experience strategy is effective in strengthening user engagement, reinforcing our confidence in pursuing this approach over the long term.

Speaker #2: 未来我们将持续优化产品矩阵，深化大健康布局，加码药师同源大健康赛道，将资源向高毛利高复购单品倾斜，从根源优化引力结构。同时我们将强化平台差异化体验壁垒，构建用户信任和品牌护身盒。此外，我们会持续保持成本管控，审慎评估各项资产和费用结构，确保资源配置服务于长期战略优先级。最终为中国家庭提供更优质的有机健康生活解决方案，创造更大的社会价值。

Shanglue Xiao: 未来我们将持续优化产品矩阵，深化大健康布局，加码药食同源大健康赛道，将资源向高毛利、高复购单品倾斜，从根源优化盈利结构。同时我们将强化平台差异化体验壁垒，构建用户信任和品牌护城河。此外，我们会持续保持成本管控，审慎评估各项资产和费用结构，确保资源配置服务于长期战略优先级，最终为中国家庭提供更优质的有机健康生活解决方案，创造更大的社会价值。

Speaker #3: Looking ahead, we will continue to refine our product metrics, expand our food management chronology offerings, and channel more resources into high-margin, high-repurchase items to support continued margin improvement.

Shanglue Xiao: Looking ahead, we will continue to refine our product matrix, expand our drug-food homology offerings, and channel more resources into high margin, high repurchase items to support continued margin improvement. At the same time, we will continue to strengthen our differentiated experiential offerings to build user trust and a durable brand moat. We will also maintain our discipline in cost management, carefully evaluating our asset and expense structure to ensure resources are allocated in support of our long term strategic priorities. Ultimately, our goal is to provide better organic health living solutions for families across China and to create greater social value.

Speaker #3: At the same time, we will continue to strengthen our differentiated experimental offerings to build user trust and a durable brand moat. We will also maintain our discipline in cost management, carefully evaluating our asset and expense structure to ensure resources are allocated in support of our long-term strategic priorities.

Speaker #3: Ultimately, our goal is to provide better organic health living solutions for families across China, and to create greater social value.

Speaker #2: 感谢各位的持续关注和支持。面对复杂的市场环境，我们对既定战略方向充满信心，将继续与用户价值为核心，平衡增长与盈利，推动公司实现长期可持续发展。

Shanglue Xiao: 感谢各位的持续关注和支持。面对复杂的市场环境，我们对既定战略方向充满信心，将继续以用户价值为核心，平衡增长与盈利，推动公司实现长期可持续发展。

Speaker #3: Thank you for your continued interest and support. Despite a complex market environment, we remain confident in our strategic direction, and we will continue to put user value at the center of our approach as we balance growth and profitability to drive the company's long-term, sustainable development.

Shanglue Xiao: Thank you for your continued interest and support. Despite a complex market environment, we remain confident in our strategic direction and we will continue to put user value at the center of our approach as we balance growth and profitability to drive the company's long term sustainable development.

Speaker #2: 我的分享到此结束。接下来欢迎我们公司财务高级总监宋南为大家详细分享财务情况。

Shanglue Xiao: 我的分享到此结束。接下来欢迎我们公司财务高级总监宋楠为大家详细分享财务情况。

Speaker #3: This concludes my prepared remarks for today. I will now hand it over to Ms. Nan Song, our Senior Financial Director, to walk you through the financial details.

Shanglue Xiao: This concludes my prepared remarks for today. I will now hand over to Mr. Nan Song, our Senior Financial Director, to walk you through the financial details.

Speaker #4: Thank you, Song Li. Hello, everyone. Before I go through our financial results, please note that the numbers stated in the following remarks are for our midterms, and all comparisons and percentage changes are on a year-over-year basis unless otherwise noted.

Nan Song: Thank you, Song Li. 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 changes are on a year-over-year basis unless otherwise noted. In the H1 2026, the market environment remained a challenge. As Song Li outlined, we stay firmly committed to our strategic position as a global leader in organic living, advancing our products and experience supported by our relevant financial position. We remained disciplined in cost management and made timely adjustments to adapt to these conditions. Now, let's take a close look at our financials. Total revenues were RMB 196.3 million compared to RMB 158.3 million in the same period a year ago. Revenues from sales of merchandise were RMB 82.4 million, and the revenues from our marketplace business were RMB 13.7 million.

Speaker #4: In the first half, the environment remained challenging, as the summary outlined. We remain firmly committed to our strategic position as a global leader in organic living, advancing our products and experience through endurance. Supported by our relevant financial positioning, we remained disciplined in cost management and made timely adjustments to adapt to these conditions.

Speaker #4: Now let's take a close look at our financials. Total revenues were $196.3 million, compared to $158.3 million in the same period a year ago. Revenues from sales of merchandise were $82.4 million, and the revenues from our marketplace business were $13.7 million.

Speaker #4: The change in our total revenues for the period was primarily driven by software consumer spending, amid a broader macro-environmental context in China. Together with our choice to stay aligned with the organic health philosophy guiding our business, as part of the effort, we also proactively activated certain actions with our investors to extend future sharpening of our merchandise mix in support of our private label and organic health priorities. Given this strategic declaration, we had anticipated this effect on our revenue backdrop for the period.

Nan Song: The change in our total revenues for the period was primarily driven by softer consumer spending amid a broader macro environment in China, together with our choice to stay aligned with the organic health philosophy guiding our business. As part of the effort, we also proactively exited certain did not align with our standard futures, sharpening our merchandise mix in support of our private label and organic health priorities. Given this strategic, we had anticipated this impact on our revenues backdrop for the period, and we continue to believe it represents the right long-term path for the business. On the cost side, total cost of revenues decreased by 31.9% to RMB56.8 million, primarily due to the low merchandise sales, which are recognized on a gross basis.

Speaker #4: And we continue to believe it represents the right long-term path for the business. On the cost side, total cost of revenues decreased by 131.9% to RMB 56.8 million, primarily due to the long merchandise sales which are recognized on a gross basis, excluding the impact of declination of incentive payables to negative members, which carries no associated cost of revenue.

Nan Song: Excluding the impact of direct recognition of incentives payable to inactive members, which carries no associated cost of revenue, our gross margin remained resilient at 41% during the period. This is supported by our continued focus on selecting premium high-retention categories together with our private label products. Now let's take a look at our operating expenses. Fulfillment expense decreased to RMB10.3 million from RMB20.6 million in the same period a year ago. The decrease was primarily driven by lower warehousing and logistics expenses resulting from reduced merchandise sales, together with the low personal costs from staffing structure refinement. Sales and market expenses were RMB39.5 million compared to RMB50.1 million in the same period a year ago. The change is primarily due to the low member management fees and reduced business promotion expenses. Technology and content expenses were RMB12.4 million, compared to RMB15.3 million in the same period a year ago.

Speaker #4: Our gross margin remained relevant and was 31% during the period. This is supported by our continued focus on selecting premium, high-retention categories together with our private label products.

Speaker #4: Now let's take a look at our operating expenses. Fulfillment expense decreased to $10.3 million from $28.6 million in the same period a year ago. The decrease was primarily driven by lower warehousing and logistics expenses resulting from reduced merchandise sales.

Speaker #4: Together with the long personal cost from staffing structure, refinement sales, and market expenses were $39.5 million, compared to $50.1 million in the same period a year ago. The change is primarily due to a long member management phase and reduced business promotion expenses.

Speaker #4: Technology and content expenses were $12.4 million compared to $15.3 million in the same period a year ago. This was mainly due to the reduction in personnel costs as a result of continued staffing structure refinement.

Nan Song: This was mainly due to the reduction in personal costs, a result of continued staffing structural refinements. General and administrative expenses decreased to RMB47.5 million from RMB93.4 million in the same period a year ago. The decrease was mainly driven by a reduction in allowance for credit loss on the third-party loan receivable and partially offset by an increase in impairment for property and equipment. Our expense discipline extended across nearly every category this period, with a year-over-year reduction reflecting both a small merchandise base and our ongoing staffing and cost-efficient measures. As a result, total operating expenses in H1 2026 decreased to RMB109.7 million from RMB139.4 million in the same period of 2025, a 38.8% reduction. Consequently, loss from operation narrowed significantly to RMB39.4 million from RMB100.4 million in the same period a year ago.

Speaker #4: General and administrative expenses decreased to $47.5 million from $193.4 million in the same period a year ago. The decrease was mainly driven by a reduction in allowance for credit loss on the third-party receivable and partially offset by an increase in empowerment for private and equipment.

Speaker #4: Our expenses displayed extended across nearly every category this period, with the year-over-year reduction reflecting both a smaller merchandise space and our ongoing staffing and cost efficiency measures.

Speaker #4: As a result, total operating expenses in the first half of 2026 decreased to $109.7 million from $139.4 million in the same period of 2025, a 38.8% reduction. Coincidentally, loss from operations narrowed significantly to $39.4 million from $100.4 million in the same period a year ago. This expense discipline supports our continued progress toward profitability, even as revenues face further pressure from the software environment discussed earlier.

Nan Song: This expense discipline supports our continued progress toward profitability, even as revenue faces pressure from the softer environment described earlier. Net loss was $72.4 million compared with $100.7 million a year ago, while adjusted net loss was $72.3 million compared with $100.5 million a year ago. The year-over-year narrowing of both net loss and adjusted net loss reflects our expense discipline together with our continued focus on addressing customer engagement and maintaining stable customer retention. Basic and diluted net loss per share attributable to ordinary shareholders were both narrowed to $0.04 from $0.05 in the same period of 2025. Turning to liquidity. As of 30 June 2026, we have a total of $242.1 million in cash and cash equivalents, restricted cash, and short-term investments on our balance sheet, compared to $216.1 million as of 31 December 2025.

Speaker #4: Net loss was $72.4 million compared with $100.7 million a year ago, while adjusted net loss was $72.3 million compared with $100.5 million a year ago. The year-over-year narrowing of both net loss and adjusted net loss reflects our expenses decreasing, together with our continued focus on strengthening customer engagement and maintaining a stable customer retention base. The net loss proportion attributable to ordinary shareholders was also narrowed to 0.04 from 0.05 in the same period of 2020.

Speaker #4: Turning to our cash position, as of June 30, 2026, we had a total of $242.1 million in cash and cash equivalents, restricted cash, and short-term investments on our balance sheet, compared to $216.1 million as of December 31, 2025.

Nan Song: We maintain sufficient liquidity to meet our payable obligations while continuing to optimize working capital and manage our assets efficiently in support of our operations. Looking at the H1 as a whole, given a challenging market environment, we made further progress on cost discipline and narrowed our loss on a year-over-year basis. This reflects our continued execution of the strategies for the objectives Songyi outlined. Our discipline in cost management and our focus on organic health and providing label products. Our solid financial position continued to support these priorities, and we will remain disciplined in how we manage costs and allocate in support of our strategic positioning as a leader in organic health living. Looking forward, we will remain focused on improving our operating margin as we balance growth and profitability in support of the company's long-term sustainable development. This concludes our prepared remarks for today. Thank you.

Speaker #4: We maintained sufficient records to meet our payable obligations while continuing to optimize working capital and manage our assets efficiently in support of our operations.

Speaker #4: Looking at the first half as a whole, we registered a strong market environment. We made further progress on cost discipline and narrowed our loss on a year-over-year basis. This reflects our continued execution of the strategy throughout, as outlined in our latest summary.

Speaker #4: Our discipline in cost management and our focus on ongoing health and private label products are solid. Our financial position continues to support these priorities and will remain a display in how we manage costs and allocate in support of our stronger position as a leader in organic healthy living. Looking forward, we will remain focused on improving our operating margin as we balance growth and profitability in support of the company's long-term sustainable development.

Speaker #4: This concludes our prepared remarks for today. Thank you.

Speaker #2: Operator, I'm listening.

Nan Song: Operator, are you listening?

Operator: That brings us to an end of today's call. Thank you for attending. You may now disconnect.