HANGZHOU, China, March 24, 2020 (GLOBE NEWSWIRE) — 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, 2019¹.
Fourth Quarter 2019 HighlightsGMV² in the fourth quarter of 2019 increased by 36.1% year over year to RMB11.0 billion (US$1.6 billion) from RMB8.1 billion in the same period of 2018 as a result of the Company’s effective merchandising, which helped to further increase its competitive differentiation. GMV related to marketplace revenues was RMB5.0 billion (US$ 0.7 billion) in the fourth quarter of 2019, compared with nil in the same period of 2018.
 Total revenues in the fourth quarter of 2019 were RMB2,449.4 million (US$351.8 million), compared with RMB4,465.9 million in the same period of 2018, primarily due to an increase in the proportion of the Company’s business contributed from its marketplace business, which recognizes revenue on a net basis. Revenues generated from the marketplace business grew significantly, along with the continued strong growth in GMV related to marketplace business. The marketplace business also continued to generate higher commission rates.
 Transacting members³ in the twelve months ended December 31, 2019, increased by 57.4% year over year to 9.6 million from 6.1 million in the twelve months ended December 31, 2018.
 Cumulative members⁴ as of December 31, 2019 increased by 12.3% to 13.8 million from 12.3 million as of September 30, 2019.Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, “During 2019, we improved our business management capabilities while upgrading our merchandising strategies. Notably, our distinctive focus on empowering emerging brands with our platform resources helped to further differentiate our merchandising mix, bolster our core value proposition for members, and accelerate the growth in number of transactions on our platform. Beyond these improvements, we are quite pleased to see that our financial and operational situations have begun to stabilize. Although our business is experiencing some short-term impacts from COVID-19 outbreak, we are working with a number of leading manufacturers and emerging brands to ensure the daily supply of essential products and groceries to our members.”“In the fourth quarter of 2019, in addition to our improved margins, we narrowed our net loss by 42.6%, and increased our adjusted net income by 174.1% year over year in the period. We achieved an adjusted net income for the full year of 2019, compared with an adjusted net loss in 2018. Notably, our gross margin improved to 24.3% in the fourth quarter of 2019, compared to 18.1% in the same period of 2018, which was primarily due to our ongoing optimization of brand curation and merchandise offerings, and our continuous efforts to improve our operating efficiency, as well as our ability to facilitate more cost-effective transactions on our platform. Importantly, such achievements further illustrate the good progress we are making along the path towards healthy profitability.” said Mr. Chen Chen, Chief Financial Officer of Yunji.Fourth Quarter 2019 Unaudited Financial ResultsTotal revenues were RMB2,449.4 million (US$351.8 million), compared with RMB4,465.9 million in the same period of 2018, which was primarily due to a decrease in revenues from sales of merchandise as a result of an increase in the proportion of the Company’s business contributed from its marketplace business. Revenues generated on the marketplace business are recognized on a net basis and contributed to marketplace revenues, while revenues generated from merchandise sales are recognized on a gross basis and contributed to sales of merchandise, net.Revenues from sales of merchandise, net decreased by 39.6% to RMB2,124.6 million (US$305.2 million) from RMB3,517.2 million in the same period of 2018. The decrease was due to an increase in the proportion of the Company’s business contributed from its marketplace business as the Company continued to refine its resource allocation plan to further improve the operational efficiencies of its merchandise sales, marketplace business, and merchants on the platform, partially offset by positive revenue impact of the decrease of estimated refunds payable to members⁷.
 Revenues from the membership program decreased by 84.3% to RMB145.9 million (US$21.0 million) from RMB930.2 million in the same period of 2018, as the Company refined its membership enrollment system by providing users with alternative paths to achieve membership status in order to facilitate further business expansion. Alternative paths to achieve membership status include purchasing gift packages or meeting certain other requirements.
 Revenues from the marketplace business were RMB169.2 million (US$24.3 million), compared with nil in the same period of 2018, as the Company continued to increase its investments in attracting more popular brands and merchants onto its platform after launching the marketplace business in the first quarter of 2019 and its marketplace business continued to generate higher commission rates.
 Other revenues decreased by 47.8% to RMB9.7 million (US$1.4 million) from RMB18.5 million in the same period of 2018.        Total costs of revenues decreased by 49.3% to RMB1,854.9 million (US$266.4 million), or 75.7% of total revenues, from RMB3,659.0 million, or 81.9% of total revenues, in the same period of 2018. This decrease was mainly attributable to the decline in merchandise sales, which recognize revenues on a gross basis.Total operating expenses were RMB662.4 million (US$95.1 million), compared with RMB804.4 million in the same period of 2018.Fulfillment expenses decreased by 48.0% to RMB194.5 million (US$27.9 million), or 7.9% of total revenues, from RMB373.9 million, or 8.4% of total revenues, in the same period of 2018. The decrease was mainly due to reduced warehousing and logistics expenses, resulting from lower merchandise sales, improved logistics efficiency, and decreased third-party payment transaction fees due to lower commission rates, which was partially offset by increased personnel costs.
 Sales and marketing expenses decreased by 10.9% to RMB306.5 million (US$44.0 million), or 12.5% of total revenues, from RMB343.8 million, or 7.7% of total revenues, in the same period of 2018. The decrease was mainly due to the reduction in member management fees, resulting from improvements in member management efficiency, which was partially offset by an increase in business promotion expenses, resulting from the rise in business development activities for the Company to attract more popular brands and merchants to its marketplace business.
 Technology and content expenses increased by 39.8% to RMB74.9 million (US$10.8 million), or 3.1% of total revenues, from RMB53.6 million, or 1.2% of total revenues, in the same period of 2018, which was mainly due to increased personnel costs, resulting from an increased headcount in research and development.
 General and administrative expenses increased by 160.8% to RMB86.5 million (US$12.4 million), or 3.5% of total revenues, from RMB33.2 million, or 0.7% of total revenues, in the same period of 2018, which was mainly due to: (i) increased personnel costs, resulting from an increased number of general and administrative employees and an increased amount of bonuses paid；and (ii) increased share-based compensation expenses due to new grant share-based awards.Loss from operations was RMB54.4 million (US$7.8 million), compared with an income from operations of RMB2.5 million in the same period of 2018.Net loss was RMB4.9 million (US$0.7 million), compared with RMB8.6 million in the same period of 2018.Adjusted net income⁵ was RMB25.3 million (US$3.6 million), compared with RMB9.2 million in the same period of 2018.Basic and diluted net loss per share attributable to ordinary shareholders was RMB0.002 (US$0.0003), compared with RMB0.60 in the same period of 2018.Fiscal Year 2019 Unaudited Financial ResultsTotal revenues were RMB11,672.0 million (US$1,676.6 million), compared with RMB13,015.2 million in the full year of 2018, which was primarily due to the same factors that led to the quarterly decrease.Revenues from sales of merchandise, net decreased by 7.4% to RMB10,548.3 million (US$1,515.2 million) from RMB11,388.4 million in the full year of 2018. The decrease was due to the same factors that led to the quarterly decrease⁷.
 Revenues from the membership program decreased by 50.0% to RMB776.8 million (US$111.6 million) from RMB1,552.4 million in the full year of 2018, which was due to the same factors that led to the quarterly decrease.
 Revenues from the marketplace business were RMB311.9 million (US$44.8 million), compared with nil in the full year of 2018, which was due to the same factors that led to the quarterly increase.
 Other revenues decreased by 53.0% to RMB34.9 million (US$5.0 million) from RMB74.4 million in the full year of 2018.        Total costs of revenues decreased by 13.6% to RMB9,249.5 million (US$1,328.6 million), or 79.2% of total revenues, from RMB10,706.6 million, or 82.3% of total revenues, in the full year of 2018. This decrease was mainly attributable to the same factors that led to the quarterly decrease.Total operating expenses were RMB2,746.0 million (US$394.4 million), compared with RMB2,408.0 million in the full year of 2018.Fulfillment expenses decreased by 16.9% to RMB965.9 million (US$138.7 million), or 8.3% of total revenues, from RMB1,162.1 million, or 8.9% of total revenues, in the full year of 2018. The decrease was mainly due to reduced warehousing and logistics expenses, resulting from lower merchandise sales and improved logistics efficiency, which was partially offset by an increase in personnel costs.
 Sales and marketing expenses increased by 24.3% to RMB1,187.5 million (US$170.6 million), or 10.2% of total revenues, from RMB955.1 million, or 7.3% of total revenues, in the full year of 2018, mainly due to: (i) increased member management fees, resulting from an expanded membership base; (ii) increased business promotion expenses, resulting from increased business development activities for the Company to attract more popular brands and merchants to its marketplace business; (iii) increased share-based compensation expenses due to new grant share-based awards; and (iv) increased personnel costs, resulting from an increased headcount in sales and marketing.
 Technology and content expenses increased by 119.4% to RMB315.2 million (US$45.3 million), or 2.7% of total revenues, from RMB143.6 million, or 1.1% of total revenues, in the full year of 2018, which was mainly due to: (i) increased personnel costs, resulting from an increased headcount in research and development; and (ii) increased server costs, resulting from higher user traffic.
 General and administrative expenses increased by 88.5% to RMB277.5 million (US$39.9 million), or 2.4% of total revenues, from RMB147.2 million, or 1.1% of total revenues, in the full year of 2018, which was mainly due to the same factors that led to the quarterly increase.Loss from operations was RMB298.4 million (US$42.9 million), compared with RMB99.4 million in the full year of 2018.Net loss was RMB123.8 million (US$17.8 million), compared with RMB56.3 million in the full year of 2018.Adjusted net income⁵ was RMB4.4 million (US$0.6 million), compared with an adjusted net loss of RMB2.0 million in the full year of 2018.Basic and diluted net loss per share attributable to ordinary shareholders was RMB0.91 (US$0.13), compared with RMB1.98 in the full year of 2018.Recent DevelopmentsStarting in January 2020, the Company further refined its membership enrollment system by allowing any user to become a member and enjoy membership benefits free of charge for one year by simply registering for an account on the Yunji app. If the user meets a certain cumulative spending threshold or certain other requirements during the initial one-year period, the user may extend his or her membership for an extra year. The Company may further refine and develop its membership enrollment and benefits system to expand its membership base and encourage existing members to extend the length of their memberships by making purchases on the Company’s platform.Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses adjusted net income/(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 income/(loss) as net income/(loss) excluding share-based compensation.The Company presents adjusted net income/(loss) because it is used by management to evaluate operating performance and formulate business plans. Adjusted net income/(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 income/(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 income/(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 CallThe Company will host a conference call on Tuesday, March 24, 2020, at 7:30 AM Eastern Time or 7:30 PM Beijing/Hong Kong Time to discuss its earnings.Dial-in numbers for the live conference call are as follows: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 StatementsThis 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 ContactYunji Inc.
Investor Relations
Email: [email protected]
Phone: +1 (646) 224-6957ICR, Inc.
Xinran Rao
Email: [email protected]
Phone: +1 (646) 224-6957





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