Yunji(YJ) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q2 2024 were RMB106 million, down from RMB167.1 million in the same period last year, reflecting a decline driven by softer consumer confidence and adjustments in product range [13] - Revenues from merchandise sales were RMB83 million, while marketplace business revenues were RMB21.1 million, indicating a shift in sales dynamics [13] - Gross margin remained strong at 46.6%, attributed to customer loyalty and effective product creation strategies [14] - Net loss was RMB11.9 million compared to RMB41.5 million a year ago, with adjusted net loss at RMB9.7 million compared to RMB39.8 million in the previous year [16] Business Line Data and Key Metrics Changes - Fulfillment expenses decreased to RMB20.7 million from RMB29.9 million, primarily due to lower warehousing and logistics costs [14] - Sales and marketing expenses fell to RMB21.7 million from RMB33.4 million, reflecting a decline in member management fees [15] - Technology and content expenses were reduced to RMB12.2 million from RMB14.3 million, largely due to lower personnel costs [15] - General and administrative expenses decreased to RMB18.7 million from RMB33.2 million, mainly due to reduced allowance for credit loss [15] Market Data and Key Metrics Changes - The company noted ongoing market dynamics that influenced operations, indicating a challenging environment for consumer confidence [12] - The focus on optimizing the supplier and merger network had a short-term impact on sales, highlighting the need for strategic adjustments in response to market conditions [14] Company Strategy and Development Direction - The company aims to expand its user base by establishing offline wellness spaces and opening its first offline store focused on traditional Chinese medicine [6] - There is a commitment to quality product selection, emphasizing organic grain and health products while avoiding mediocre offerings [7] - The beauty business, particularly the SUYE brand, continues to focus on anti-aging solutions, indicating a strategic emphasis on high-end product development [9] - Marketing innovation is being pursued through technology and AI, particularly in short video content creation, to enhance engagement and drive traffic [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the evolving market landscape and emphasized ongoing improvements in inventory management and cost optimization [17] - The company is committed to enhancing operational efficiencies and adapting strategies to support future growth [17] Other Important Information - As of June 30, 2024, the company had RMB324.5 million in cash and cash equivalents, down from RMB561.9 million at the end of 2023, indicating a need for careful liquidity management [16] Q&A Session Summary Question: Insights on product traceability efforts - Management highlighted the importance of authentic, cost-effective, and healthy products, emphasizing personal exploration and experience in product traceability to build consumer trust [20] - Offline traceability activities are expected to enhance customer loyalty and drive sales on the platform [20]