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Yunji(YJ) - 2021 Q1 - Earnings Call Transcript
YunjiYunji(US:YJ)2021-05-27 17:37

Financial Data and Key Metrics Changes - In Q1 2021, total revenue was RMB 675 million, a decrease from RMB 1.649 billion in the same period last year, primarily due to a shift in product curation strategy [14][18] - Revenue from merchandise sales was RMB 572 million, while marketplace business revenue was RMB 95 million [14] - Gross margin improved to 35% from 30% year-over-year, attributed to the supply chain differentiation strategy [14] - Total operating expenses decreased to RMB 273 million, with a loss from operations of RMB 20 million, and a net loss of RMB 4 million compared to RMB 13 million a year ago [16][17] Business Line Data and Key Metrics Changes - The company is focusing on a new strategy involving megahit products, which are expected to have stronger repurchase potential and greater customer appeal [14][18] - Fulfillment expenses decreased to RMB 65 million from RMB 178 million, due to improved logistics efficiency [15] - Sales and marketing expenses were RMB 96 million, down from RMB 251 million, reflecting a decrease in membership management fees and promotion expenses [15][16] Market Data and Key Metrics Changes - The company aims to enhance its presence in primary vertical markets such as health, cosmetics, and food products, which align with user demand [7][8] - The competitive landscape in the e-commerce industry is described as fierce, with top players leveraging economies of scale [5] Company Strategy and Development Direction - The company is committed to enhancing its supply chain differentiation strategy and developing a portfolio of megahit products by the end of 2021 [6][18] - There is a focus on cultivating a community-driven approach, leveraging service managers to provide professional recommendations and enhance customer experience [21][22] - The membership fee was adjusted from RMB 398 to RMB 199 to attract more users, with a focus on enhancing the value of membership through refined product recommendations [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the intense competition in the industry but believes that their current strategies will support sustainable growth and expansion [18] - The company plans to explore further investment opportunities in high-potential emerging brands while maintaining disciplined cost control [17][18] Other Important Information - As of March 31, 2021, the company had RMB 1.2 billion in cash and short-term investments, indicating a strong liquidity position [17] - The company is focusing on product quality and safety, particularly for products aimed at families [10] Q&A Session Summary Question: What is the market strategy for private label products and how do they differentiate from competitors? - The CEO emphasized a focus on health and cosmetics categories, leveraging service managers for product recommendations, which differs from competitors who primarily sell daily necessities [21][22] Question: What innovations are being made in the membership system? - The CEO explained the decision to lower membership fees to attract more users and emphasized enhancing the value of membership through targeted product recommendations [23][24]