Yunji(YJ) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q1 2024 were RMB 128 million, down from RMB 179 million in the same period last year, primarily due to ongoing refinements in product range and supplier optimization [13] - Revenue from merchandise sales was RMB 102 million, while marketplace business revenue was RMB 24 million [13] - Gross margin remained solid at 49.4%, supported by customer loyalty and effective product creation strategies [13] - Net income was RMB 4 million compared to a net loss of RMB 23 million a year ago, while adjusted net income improved to RMB 3 million from an adjusted net loss of RMB 27 million [15] Business Line Data and Key Metrics Changes - Fulfillment expenses decreased to RMB 22 million from RMB 27 million, driven by lower warehousing and logistics costs [14] - Sales and marketing expenses fell to RMB 26 million from RMB 30 million, mainly due to a decline in member management fees [14] - Total operating expenses decreased to RMB 76 million from RMB 85 million in the same period of 2023 [14] Market Data and Key Metrics Changes - The first quarter is traditionally an off-peak season for e-commerce, but the company focused on refining operations to maintain growth margins [5] - The company is expanding its presence in offline communities and establishing wellness spaces to enhance its healthcare offerings [6] Company Strategy and Development Direction - The company aims to transition consumers from a reactive to a proactive approach to healthcare, emphasizing daily dietary enhancements [8] - Plans to enhance the vertical community service experience and deploy advanced AI applications to support health services [8] - The integration of short videos and live streaming is a key strategy to boost engagement and sales across various product categories [9] Management's Comments on Operating Environment and Future Outlook - Management believes that challenges in the industry also present opportunities, and they are leveraging their experience in social e-commerce to adapt to new trends [9] - The focus will be on enhancing efficiency and strengthening resilience to address future challenges and seize emerging opportunities [16] Other Important Information - The company is dedicated to improving cash flow management and optimizing inventory management protocols [12][15] - As of March 31, 2024, total liquidity assets were RMB 505 million, down from RMB 552 million at the end of 2023 [15] Q&A Session Summary Question: How does the company differentiate itself in short video and live streaming? - The company ensures that all products are cost-effective and does not rely on low-priced clearance items to attract traffic. It engages in product development from inception, providing a deeper understanding of the commodity chain [18] - The strategy is rooted in an ordinary people-centric approach, facilitating individual entrepreneurship and making content more accessible, which differentiates it from competitors [18]