Page 1

Yunji InvestorRoom Yunji Announces Second Quarter 2021 Unaudited Financial Results HANGZHOU , China , Aug. 26 , 2021 / 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 second quarter ended June 30 , 2021 [ 1 ] . Second Quarter 2021 Highlights • Total revenues in the second quarter of 2021 were RMB570.7 million ( US $ 88.4 million ) , compared with RMB1,486.9 million in the same period of 2020 , primarily due to the Company's focus on refining its product selection across all categories by upgrading its strategy to carefully curate products through the implementation of its megahit product pool initiative . In line with the Company's long - term growth strategy to focus on profitability , the Company optimized its selection of suppliers and merchants during the refinement process , which caused sales decreases in both its marketplace business and merchandise sales . • Repeat purchase rate [ 2 ] in the twelve months ended June 30 , 2021 was 81.2 % . Mr. Shanglue Xiao , Chairman and Chief Executive Officer of Yunji , said , " In the second quarter of 2021 , we remained focused on increasing membership value and optimizing product selection and refinement . As a result of these continued efforts , our repeat purchase rate has now stabilized . Average spending per buyer [ 3 ] in the second quarter of 2021 reached RMB853 . We are delighted to see these improvements and will continue to execute our supply chain differentiation and product curation strategies to generate lasting shareholder value . " " After several quarters of optimization , our refined operations have resulted in significant improvements in our profitability . During the second quarter of 2021 , we recorded an operating income of RMB 16.0 million and a net income of RMB17.0 million , compared with an operating loss of RMB45.2 million and a net loss of RMB17.5 million in the same period last year . As of June 30 , 2021 , we had RMB1,092.1 million in Cash and cash equivalents , restricted cash , and short - term investment , compared with RMB1,323.9 million as of December 31 , 2020. We are confident that our innovative strategies and refined operational capabilities will continue to drive our sustainable development in the future . " said Mr. Chengqi Zhang , Yunji's Vice President of Finance . Second Quarter 2021 Unaudited Financial Results Total revenues were RMB570.7 million ( US $ 88.4 million ) , compared with RMB1,486.9 million in the same period of 2020. This decrease was primarily due to the Company's decision to upgrade its strategy to carefully curate products starting from the first quarter of 2021. As part of these upgrades , the Company launched its megahit product pool initiative , which focused on introducing more products with strong repurchase potential and customer appeal to refine product selections across all product categories on its platform . In line with the Company's long - term growth strategy to focus on profitability , the Company optimized its selection of suppliers and merchants across its platform , which caused sales decreases in both its marketplace business and merchandise sales . • Revenues from sales of merchandise , net decreased by 63.7 % to RMB472.1 million ( US $ 73.1 million ) from RMB1,299.3 million in the same period of 2020 . • Revenues from the membership program were RMB1.9 million , compared with RMB12.3 million in the same period of 2020. From January 2020 until the end of March 2021 , the Company allowed all its users to enjoy membership benefits free of charge for one year simply by registering for an account on the Yunji app . The Company has discontinued free membership as of April 1 , 2021. As a result , revenues from the membership program in the second quarter of 2021 were from paying members who joined the new membership program launched in the second quarter of 2021 , while membership revenues in the same period of 2020 were all from the deferred revenue of prior paying members . • Revenues from the marketplace business were RMB88.2 million ( US $ 13.7 million ) , compared with RMB159.6 million in the same period of 2020 . • Other revenues decreased by 45.1 % to RMB8.6 million ( US $ 1.3 million ) from RMB15.6 million in the same period of 2020 . Total cost of revenues decreased by 64.8 % to RMB370.5 million ( US $ 57.4 million ) , or 64.9 % of total revenues , from RMB1,053.7 million , or 70.9 % of total revenues , in the same period of 2020. The decrease was mainly attributable to the decline in merchandise sales , for which revenues are recognized on a gross basis . Total cost of revenues was mainly comprised of the costs related to the sales of merchandise revenue in the second quarter of 2021 . Total operating expenses decreased by 61.6 % to RMB186.9 million ( US $ 28.9 million ) from RMB486.6 million in the same period of 2020 . • Fulfillment expenses decreased by 61.2 % to RMB50.1 million ( US $ 7.8 million ) , or 8.8 % of total revenues , from RMB129.0 million , or 8.7 % of total revenues , in the same period of 2020. The decrease was primarily due to : ( i ) reduced warehousing and logistics expenses due to lower merchandise sales , and ( ii ) reduced personnel costs due to staffing structure refinements . • Sales and marketing expenses decreased by 73.1 % to RMB61.5 million ( US $ 9.5 million ) , or 10.8 % of total revenues , from RMB228.4 million , or 15.4 % of total revenues , in the same period of 2020. The decrease was mainly due to the decreases in member management fees and business promotion expenses . • Technology and content expenses decreased by 44.7 % to RMB32,4 million ( US $ 5.0 million ) , or 5.7 % of total revenues , from RMB58.6 million , or 3.9 % of total revenues , in the same period of 2020. The decrease was mainly due to the reduction in personnel costs as a result of staffing structure refinements , and reduced server costs . • General and administrative expenses decreased by 39.3 % to RMB42.9 million ( US $ 6.6 million ) , or 7.5 % of total revenues , from RMB70.7 million , or 4.8 % of total revenues , in the same period of 2020 , primarily due to a decrease in share - based compensation expenses . Income from operations was RMB16.0 million ( US $ 2.5 million ) , compared with loss from operations of RMB 45.2 million in the same period of 2020 . Financial income , net was RMB7.8 million ( US $ 1.2 million ) , compared with RMB28.2 million in the same period of 2020 , primarily due to decreased fair value of equity securities with readily determinable fair value . Net Income was RMB17.0 million ( US $ 2.6 million ) , compared with net loss of RMB17.5 million in the same period of 2020 . Adjusted net income ( non - GAAP ) [ 4 ] was RMB23.9 million ( US $ 3.7 million ) , compared with RMB20.1 million in the same period of 2020 . Basic and diluted net Income per share attributable to ordinary shareholders were both RMB0.01 , compared with basic and diluted net loss per share attributable to ordinary shareholders of RMB0.01 in the same period of 2020 . 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