Yunji(US:YJ)2019-12-02 17:10Financial Data and Key Metrics Changes - In Q3 2019, the company's GMV increased by 69.8% year-over-year to RMB 9.2 billion, while total revenue was RMB 2.77 billion, down from RMB 3.08 billion in the same period of 2018 [5][19] - The adjusted net loss decreased by 37.7% to RMB 24.9 million from RMB 39.9 million in the prior year period [5][23] - Gross profit margin expanded to 17.8% from 16.8% in the prior year period, attributed to improvements in subsidy allocation and product offerings [21] Business Line Data and Key Metrics Changes - Revenues from net sales of merchandise were RMB 2.47 billion, accounting for 89.1% of total revenue, while revenues from the marketplace business were RMB 86.3 million, compared to nil in the same period of 2018 [20] - Revenues from the membership program increased by 16.3% to RMB 206.7 million [21] Market Data and Key Metrics Changes - The cumulative membership increased by 14.2% to 12.3 million from 10.8 million as of June 30, 2019 [5] - The total number of transacting members increased by 122.7% year-over-year [5] Company Strategy and Development Direction - The company is focusing on three competitive strategies: sustainable growth with stable profitability, building competitive differentiation through effective merchandising, and providing value propositions through personalization [5][6] - The company aims to collaborate with high-end manufacturers to cater to the rising middle-income consumer segment in China [6][7] - The shift towards a marketplace business model is intended to improve operational efficiency and reduce costs [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving profitability during the Double Eleven campaign and anticipates a decline in operating expenses in Q4 2019 [9][23] - The company plans to leverage its cash position to convert more users into members and enhance brand equity [24] Other Important Information - The company has a total of RMB 2.3 billion in cash and cash equivalents as of September 30, 2019 [24] - The company is focused on balancing sales between the marketplace and merchandise sales platforms to drive long-term profitability [24] Q&A Session Summary Question: Will 3P GMV continue to expand in terms of the contribution ratio? - Management does not set specific expectations for GMV allocation between 1P and 3P models but aims for a balanced approach in 2020 [28][29] Question: What are the strategies for member growth? - The company will continue using current online and offline strategies for member acquisition, emphasizing offline promotions to enhance member engagement [30] Question: Why was the gross margin in Q3 lower than Q2? - The lower gross margin in Q3 is typical and expected to improve in Q4 as the company introduces more emerging brands and educates the market [32][33]