HANGZHOU, China, March 21, 2024 /PRNewswire/ -- Yunji Inc. ("Yunji" or the "Company") (NASDAQ: YJ), a leading membership-based social e-commerce platform, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023^[1].

Fourth Quarter 2023 Highlights

• Total revenues in the fourth quarter of 2023 were RMB149.1 million (US$21.0 million), compared with RMB288.7 million in the same period of 2022. The change was primarily due to soft consumer confidence and the Company's continued strategy to refine its product selection across all categories and optimize its selection of suppliers and merchants, which had a near-term impact on sales.
• Repeat purchase rate^[2] in the twelve months ended December 31, 2023 was 75.4%.

Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, "Throughout 2023, we proactively explored and engaged in various trials and innovations to navigate the dynamic market landscape. We have successfully developed a number of new products that will be gradually launched in 2024, as we to strive to better serve consumer needs."

"We will continue to prioritize the efficient use of our working capital and judiciously optimize asset allocation to enhance support for our operations." said Mr. Yeqing Cui, Senior Financial Director of Yunji.

Fourth Quarter 2023 Unaudited Financial Results

Total revenues were RMB149.1 million (US$21.0 million), compared with RMB288.7 million in the same period of 2022. This change was primarily due to soft consumer confidence and the Company's continued strategy to refine its product selection across all categories and optimize its selection of suppliers and merchants, which had a near-term impact on sales.

• Revenues from sales of merchandise were RMB112.3 million (US$15.8 million), compared with RMB241.3 million in the same period of 2022.
• Revenues from the marketplace business were RMB34.3 million (US$4.8 million), compared with RMB42.9 million in the same period of 2022.
• Other revenues were RMB2.5million (US$0.4 million), compared with RMB4.5 million in the same period of 2022.

Total cost of revenues decreased by 53.3% to RMB79.6 million (US$11.2 million), or 53.4% of total revenues, from RMB170.6 million, or 59.1% of total revenues, in the same period of 2022. The decrease was primarily attributable to the change in merchandise sales, for which revenues and cost of revenues are recognized on a gross basis. Total cost of revenues, which primarily comprises the costs related to the sales of merchandise, decreased accordingly in the fourth quarter of 2023.

Total operating expenses decreased by 28.1% to RMB109.8 million (US$15.5 million) from RMB152.7 million in the same period of 2022.

• Fulfillment expenses decreased by 21.9% to RMB24.8 million (US$3.5 million), or 16.7% of total revenues, from RMB31.8 million, or 11.0% of total revenues, in the same period of 2022. The decrease was primarily due to (i) reduced warehousing and logistics expenses due to lower merchandise sales, (ii) reduced personnel costs as a result of staffing structure refinements, and (iii) decreased service fees charged by third-party payment settlement platforms.
• Sales and marketing expenses decreased by 51.7% to RMB28.5 million (US$4.0 million), or 19.1% of total revenues, from RMB59.0 million, or 20.4% of total revenues, in the same period of 2022. The decrease was primarily due to (i) a decrease in member management fees, and (ii) reduced business promotion expenses.
• Technology and content expenses decreased by 29.2% to RMB12.0 million (US$1.7 million), or 8.1% of total revenues, from RMB17.0 million, or 5.9% of total revenues, in the same period of 2022. The decrease was primarily due to (i) the reduction in personnel costs as a result of staffing structure refinements, and (ii) reduced server costs.
• General and administrative expenses decreased by 1.0% to RMB44.5 million (US$6.3 million), or 29.8% of total revenues, from RMB44.9 million, or 15.6% of total revenues, in the same period of 2022. The decrease was primarily due to the reduction in personnel costs as a result of staffing structure refinements and share-based compensation expenses, partially offset by an increase in the allowance for credit losses.

Loss from operations was RMB39.5 million (US$5.6 million), compared with RMB33.1 million in the same period of 2022.

Financial loss, net was RMB23.4 million (US$3.3 million), compared with financial income, net of RMB8.4 million in the same period of 2022, primarily due to a decrease in the fair value changes of equity securities investments.

Net loss was RMB65.9 million (US$9.3 million), compared with RMB38.2 million in the same period of 2022.

Adjusted net loss (non-GAAP)^[3] was RMB65.0 million (US$9.2 million), compared with RMB31.0 million in the same period of 2022.

Basic and diluted net loss per share attributable to ordinary shareholders were both RMB0.03, compared with RMB0.02 in the same period of 2022.

Fiscal Year 2023 Unaudited Financial Results

Total revenues were RMB640.2 million (US$90.2 million), compared with RMB1,154.1 million in the full year of 2022. The decrease was primarily due to the same factors that led to the quarterly decrease.

• Revenues from sales of merchandise were RMB500.7 million (US$70.5 million), compared with RMB965.8 million in the full year of 2022.
• Revenues from the marketplace business were RMB130.2 million (US$18.3 million), compared with RMB170.6 million in the full year of 2022.
• Other revenues were RMB9.3 million (US$1.4 million), compared with RMB17.7 million in the full year of 2022.

Total cost of revenues decreased by 48.9% to RMB332.8 million (US$46.9 million) from RMB651.6 million in the full year of 2022. This decrease was primarily attributable to the same factors that led to the quarterly decrease.

Total operating expenses were RMB403.0 million (US$56.8 million), compared with RMB602.7 million in the full year of 2022.

• Fulfillment expenses decreased by 33.1% to RMB107.5 million (US$15.1 million), or 16.8% of total revenues, from RMB160.7 million, or 13.9% of total revenues, in the full year of 2022. The decrease was primarily due to the same factors that led to the quarterly decrease.
• Sales and marketing expenses decreased by 43.6% to RMB121.0 million (US$17.1 million), or 18.9% of total revenues, from RMB214.8 million, or 18.6% of total revenues, in the full year of 2022.The decrease was primarily due to the same factors that led to the quarterly decrease.
• Technology and content expenses decreased by 34.3% to RMB53.5 million (US$7.5 million), or 8.4% of total revenues, from RMB81.4 million, or 7.1% of total revenues, in the full year of 2022.The decrease was primarily due to the same factors that led to the quarterly decrease.
• General and administrative expenses decreased by 17.1% to RMB121.0 million (US$17.1 million), or 18.9% of total revenues, from RMB145.9 million, or 12.6% of total revenues, in the full year of 2022. The decrease was primarily due to the same factors that led to the quarterly decrease.

Loss from operations was RMB80.6 million (US$11.4 million), compared with RMB78.6 million in the full year of 2022.

Financial loss, net was RMB60.2 million (US$8.5 million), compared with RMB14.4 million in the full year of 2022, primarily due to the same factors that led to the quarterly change.

Net loss was RMB165.1 million (US$23.3 million), compared with RMB138.4 million in the full year of 2022.

Adjusted net loss^[3] was RMB166.0 million (US$23.4 million), compared with RMB108.2 million in the full year of 2022.

Basic and diluted net loss per share attributable to ordinary shareholders were both RMB0.08 (US$0.01), compared with RMB0.07 in the full year of 2022.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses adjusted net loss as a supplemental measure to review and assess operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted net loss as net loss excluding share-based compensation.

The Company presents adjusted net loss because it is used by management to evaluate operating performance and formulate business plans. Adjusted net loss enables management to assess operating performance without considering the impact of share-based compensation recorded under ASC 718, "Compensation-Stock Compensation." The Company also believes that the use of this non-GAAP measure facilitates investors' assessment of operating performance.

This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net loss is that it does not reflect all items of income and expense that affect the Company's operations. Share-based compensation has been and may continue to be incurred in Yunji's business and is not reflected in the presentation of adjusted net loss. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited.

The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. Yunji encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

For more information on the non-GAAP financial measures, please see the table captioned "Reconciliation of Non-GAAP Measures to the Most Directly Comparable Financial Measures" set forth at the end of this press release.

Conference Call

The Company will host a conference call on Thursday, March 21, 2024, at 7:00 A.M. Eastern Time or 7:00 P.M. Beijing/Hong Kong Time to discuss its earnings. Listeners may access the call by dialing the following numbers:

A telephone replay of the call will be available after the conclusion of the conference call for one week.

Dial-in numbers for the replay are as follows:

Safe Harbor Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "confident," "potential," "continue" or other similar expressions. Among other things, the quotations from management in this announcement, as well as Yunji's strategic and operational plans, contain forward-looking statements. Yunji may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Yunji's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Yunji's growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China's e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of China's e-commerce market; PRC governmental policies and regulations relating to Yunji's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Yunji's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Yunji undertakes no obligation to update any forward-looking statement, except as required under applicable law.

About Yunji Inc.

Yunji Inc. is a leading social e-commerce platform in China that has pioneered a unique, membership-based model to leverage the power of social interactions. The Company's e-commerce platform offers high-quality products at attractive prices across a wide variety of categories catering to the day-to-day needs of Chinese consumers. In addition, the Company uses advanced technologies including big data and artificial intelligence to optimize user experience and incentivize members to promote the platform as well as share products with their social contacts. Through deliberate product curation, centralized merchandise sourcing, and efficient supply chain management, Yunji has established itself as a trustworthy e-commerce platform with high-quality products and exclusive membership benefits, including discounted prices.

For more information, please visit https://investor.yunjiglobal.com/

Investor Relations Contact

Yunji Inc.
Investor Relations
Email: Yunji.IR@icrinc.com
Phone: +1 (646) 224-6957

ICR, LLC
Robin Yang
Email: Yunji.IR@icrinc.com
Phone: +1 (646) 224-6957

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SOURCE Yunji Inc.