Financial Performance - Total revenues decreased by 12.1% from RMB 6,845.6 million in 2019 to RMB 6,019.7 million in 2020, and further decreased by 48.0% to RMB 3,131.6 million (US$491.4 million) in 2021 due to the impact of the COVID-19 pandemic[484]. - Total GMV decreased by 35.6% from RMB 15,768.5 million in 2020 to RMB 10,162.5 million (US$1,594.7 million) in 2021, primarily due to the impact of the COVID-19 pandemic[488]. - Offline GMV decreased by 73.1% from RMB 706.6 million in 2019 to RMB 190.1 million in 2020, and further decreased by 72.4% to RMB 52.5 million (US$8.2 million) in 2021[488]. - Revenue from mobile applications decreased from RMB 5,268.2 million in 2019 to RMB 4,571.3 million in 2020, and further decreased to RMB 2,405.7 million (US$377.5 million) in 2021[489]. - Total number of orders decreased from 4,040.7 thousand in 2019 to 2,910.7 thousand in 2021 due to the slowdown in demand and delayed logistics services caused by the COVID-19 pandemic[487]. - Merchandise sales for the year ended December 31, 2021, were RMB 2,986,044 thousand, a decrease of 48.5% from RMB 5,790,248 thousand in 2020[490]. - Marketplace and other services revenue for 2021 was RMB 145,580 thousand, down 36.6% from RMB 229,433 thousand in 2020[490]. - Total revenue for the year ended December 31, 2021, was RMB 3,131,624 thousand, representing a decline of 47.9% compared to RMB 6,019,681 thousand in 2020[490]. Business Strategy and Operations - Secoo generated 94.9%, 98.8%, and 99.5% of its total GMV through its online platform in 2019, 2020, and 2021, respectively[309]. - The company formed strategic partnerships with major brands such as Prada and Versace to expand its luxury product offerings and enhance its market presence[303]. - Secoo's strategic alliances with leading partners in the luxury goods sector are aimed at increasing brand awareness and diversifying product portfolios[307]. - The company has expanded its product offerings to include high-end lifestyle services since 2014, optimizing customer shopping experiences and diversifying revenue sources[307]. - The company has established direct product sourcing relationships with a wide range of global brands, enhancing its presence in the China market and providing consumers with convenient access to luxury products at attractive prices[343]. - The company has engaged in various marketing initiatives, including collaborations with popular entertainers and artists, to enhance brand awareness and customer insights in the high-end consumption market[351]. - The company has developed a sophisticated business intelligence system that enables effective collection and analysis of customer behavioral data, supporting targeted marketing and product recommendations[357]. - The company leverages big data technology to create customized product recommendations, enhancing customer segmentation and personalization efforts[359]. - The company has implemented a service-oriented architecture supported by cloud-based big data technology, improving operational efficiency and customer experience[356]. Customer Experience and Engagement - Secoo opened four offline experience centers in popular shopping destinations and central business districts in China and Malaysia to enhance brand presence and customer experience[303]. - Secoo's mobile application features personalized services, allowing customers to customize payment and delivery preferences, enhancing the shopping experience[314]. - The company launched live streaming shopping programs in collaboration with brands, improving user engagement and shopping experience[316]. - The omni-channel commerce solutions allow customers to receive orders from physical stores or pick them up at conveniently located stores, enhancing customer experience[321]. - The after-sales maintenance service is considered among the best in the e-commerce industry in China, covering watches, leather products, and jewelry[324]. - The membership program offers various exclusive benefits, including discounts, cleaning services, and priority access to new products, enhancing customer loyalty[327]. Logistics and Infrastructure - The company has established a comprehensive logistics network with centers in Beijing, Yichun, Hainan, Hong Kong, and Milan, ensuring nationwide coverage for deliveries[338]. - The company operates four offline experience centers with a total area of approximately 4,909 square meters and over 25 sales representatives as of December 31, 2021[320]. - The company plans to selectively launch new offline experience centers in high-demand luxury product markets, including third- and fourth-tier cities[320]. - The company utilizes a warehouse management system (WMS) and an enterprise resource planning (ERP) system to efficiently manage inventories and track sales data, minimizing excess inventory[360]. Regulatory and Compliance - The E-commerce Law, effective January 1, 2019, strengthens regulations on consumer protection, personal data protection, and intellectual property rights for e-commerce operators[390]. - The Data Security Law, effective September 1, 2021, mandates data processing to be conducted legitimately and introduces a classification system for data protection based on its importance[399]. - The Cybersecurity Review Measures, effective February 15, 2022, require network platform operators with over one million users' personal information to apply for a cybersecurity review before listing on foreign stock exchanges[403]. - The Anti-Terrorism Law mandates telecommunication and internet service providers to implement network security measures and report any discovered terrorism information[397]. - The Cyber Security Law, effective June 1, 2017, requires network operators to safeguard network security and maintain the integrity of network data[398]. - The Measures for the Supervision and Administration of Online Trading, effective May 1, 2021, impose stricter obligations on online trading operators regarding consumer rights and transaction safety[389]. - The Regulations on Protection of Critical Information Infrastructure require operators to establish a cybersecurity protection system and hold accountability for security breaches[404]. - The Interim Measures for Seven-day Unconditional Return of Online Purchased Goods entitle customers to return goods without cause, with certain exceptions[389]. - The Personal Information Protection Law took effect on November 1, 2021, integrating various rules on personal information rights and privacy protection[417]. - The law mandates that personal information processing must have a clear purpose and be limited to the minimum necessary scope to avoid excessive collection[417]. Intellectual Property - As of December 31, 2021, the company owned 31 patents, 622 registered trademarks, and copyrights to 38 software programs, indicating a strong intellectual property portfolio critical to its success[363]. - The company has registered 38 computer software copyrights in China as of December 31, 2021, reflecting its commitment to protecting intellectual property[430]. - The PRC Trademark Law allows for damages of up to RMB 5 million for trademark infringement, emphasizing the importance of protecting registered trademarks[427]. Employment and Labor - The company had a total of 509 full-time employees as of December 31, 2021, with 163 in business development, sales, and marketing, indicating a focus on maintaining a skilled workforce[366]. - The company participates in various employee social security plans mandated by PRC law, contributing specified percentages of salaries and bonuses[368]. - The PRC Labor Contract Law mandates that employers must enter into written contracts with employees within one year, or face penalties[431]. - The company must comply with regulations requiring participation in employee benefit plans, including social insurance and housing provident funds[434]. Investment and Financing - In June 2020, Secoo issued 10,204,082 Class A ordinary shares to Qudian for a total of up to US$100.0 million, reflecting a per share purchase price of US$9.80[295]. - In April 2022, Secoo issued a two-year guaranteed secured note to Great World with a principal amount of US$217.7 million (equivalent to RMB1,387.6 million) to refinance the Original Note[296]. - The company has completed the filing procedures for its employee stock incentive plan in 2017[459]. - The loan agreements with shareholders of Beijing Auction amount to an aggregate of RMB 1 million, intended exclusively for initial capitalization[471]. Market Trends and Future Outlook - The company anticipates that the retail market for upscale products will continue to evolve, necessitating ongoing innovation to remain competitive[364]. - The company has experienced significant growth since its inception in 2011, although this growth was adversely impacted by the COVID-19 pandemic[481]. - The company’s ability to attract and retain customers, manage supplier relationships, and control marketing expenses are key factors affecting its operating results[482].
Secoo(SECO) - 2021 Q4 - Annual Report