Yunji(YJ) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q3 2021 was CNY 438 million, a decrease from CNY 1,067 million in the same period last year [14] - Operating income improved to CNY 18 million compared to an operating loss of CNY 24 million a year ago [13] - Net income for the quarter was CNY 61 million, a significant turnaround from a net loss of CNY 44 million in the previous year [13][17] - Gross margin increased to 43% from 30% year-over-year, indicating improved operational efficiency [14][15] Business Line Data and Key Metrics Changes - Revenue from merchandise sales was CNY 366 million, while revenue from the marketplace business was CNY 65 million [14] - The repeat repurchase rate for branded products reached 80.6% over the past 12 months, reflecting strong customer loyalty [12] Market Data and Key Metrics Changes - The company has optimized its supplier and merchant selection, which led to a near-term revenue decrease but improved gross margin and operational efficiency [14][15] - The company is focusing on the food category as a primary growth area, leveraging consumer demand and market research [5][7] Company Strategy and Development Direction - The company is committed to enhancing its supply chain and refining its membership management system, focusing on private label products [12][18] - A "1 plus 2" strategy is being implemented, prioritizing food for private label development, followed by cosmetics and supplements [22][23] - The company aims to establish itself as the first choice for customers seeking food delicacies, emphasizing word-of-mouth marketing over brand recognition [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic direction and operational solutions to deliver sustainable growth for shareholders [18] - The company plans to continue executing its megahit product curation strategy and expand its range of private label products [18] Other Important Information - As of September 30, 2021, the company had CNY 1 billion in cash and cash equivalents, with no long-term bank loans or debt [18] - The company is focusing on training service managers to improve customer engagement and promote healthy eating habits [10][11] Q&A Session Summary Question: Details on private label product incubations and investment strategy - Management highlighted the importance of communication with service suppliers and the need to establish Yunji as the first choice for food delicacies [20][21] - The company is looking to invest in emerging brands and develop a long-term strategy for private labels in food, cosmetics, and supplements [22][23]