Yunji Inc ((YJ)) has held its Q4 earnings call. Read on for the main highlights of the call.
Yunji Inc’s recent earnings call painted a mixed picture for the company. While there were significant improvements in gross margin and user engagement through innovative product offerings and wellness programs, these positive developments were overshadowed by a notable decline in total revenue and increased operating expenses, leading to a widened net loss. This dual sentiment reflects the challenges and opportunities facing Yunji as it navigates its strategic path forward.
Improved Gross Margin
Yunji’s overall gross margin improved to 49.4% in 2024, a testament to the company’s effective cost management strategies and strong customer loyalty. This improvement indicates Yunji’s ability to maintain profitability in its core operations despite broader financial challenges.
Strong User Repurchase Rate
The user repurchase rate remained robust at 71.9%, underscoring customer trust and satisfaction with Yunji’s offerings. This high rate of repurchase is a positive indicator of the company’s market position and the perceived value of its products.
Growth in Private Label Product Sales
Yunji saw substantial growth in its private label product sales, particularly in its organic health products. Sales of probiotics reached nearly RMB 5 million in Q4 2024 and over RMB 6 million in Q1 2025, while the new life coffee quickly generated over RMB 5 million in sales. This growth highlights the successful reception of Yunji’s new product lines.
Success of SUYE Pro Firming Series
The SUYE Pro firming skincare series proved to be a hit, generating over RMB 20 million in total sales. This success demonstrates the strong demand for high-value skincare solutions and Yunji’s ability to capitalize on this market trend.
Introduction of Innovative Wellness Programs
Yunji’s introduction of the tea therapy program, which combines tea tasting, meditation, and traditional Chinese studies, achieved a 91% retention rate among participants. This innovative approach has fostered strong user engagement and is a promising avenue for future growth.
Decline in Total Revenue
Total revenue decreased to RMB 97.1 million from RMB 149.2 million a year ago. This decline was driven by refinements to the product range and optimization of the supplier network, indicating a strategic shift that has yet to yield financial benefits.
Increased Operating Expenses
Operating expenses rose to RMB 126.2 million from RMB 109.8 million, primarily due to severance payments and impairment charges on long-lived assets. These increased expenses have contributed to the company’s financial challenges.
Widened Net Loss
Yunji’s net loss widened to RMB 85 million from RMB 65.9 million a year ago, with an adjusted net loss of RMB 84.5 million. This increase in net loss highlights the financial pressures the company is facing as it implements its strategic initiatives.
Forward-Looking Guidance
Yunji’s forward-looking guidance emphasizes continued focus on improving gross margins and maintaining a strong user repurchase rate. The company plans to expand its successful SUYE Pro series and tea therapy program, aiming to recruit more participants and enhance product offerings. Despite a decrease in total revenue, Yunji is committed to cost optimization efforts and strategic investments to foster sustainable growth, with a focus on financial prudence.
In conclusion, Yunji Inc’s earnings call reflects a company in transition, balancing successful product innovations and customer engagement with financial challenges. The overall sentiment is one of cautious optimism, as Yunji strives to leverage its strengths while addressing areas of concern to achieve long-term growth.