Yunji's Q4 2024 Earnings Call: Contradictions in Tea Therapy, Community Focus, and Product Traceability

These are the key contradictions discussed in Yunji's latest 2024Q4 earnings call, specifically including: Tea Therapy Program and Offline Wellness Stores Integration, and the Focus on Customer Community Building:



Revenue Decline and Structural Changes:
- Yunji's total revenue was RMB 97.1 million in Q1 2024, compared to RMB 149.2 million a year ago, reflecting a 34.7% decrease.
- The decline was primarily driven by ongoing refinements to the product range, optimization of the supplier and merchant network, and strategic restructuring of operations.

Improved Gross Margin and Private Label Success:
- Despite revenue decline, Yunji's gross margin remained strong at 48.3%.
- This trend was sustained by continued customer loyalty to private label products and effective product creation strategies, with notable contributions from SUYE and organic health products.

Operational Restructuring and Cost Reduction:
- Yunji's fulfillment expenses decreased to RMB 16.4 million from RMB 28.8 million a year ago, reflecting a 42.7% reduction.
- The reduction was mainly due to structural requirements that led to reduced staff costs, warehousing and logistics expenses, and lower service fees from third-party platforms.

Proprietary Wellness Initiatives:
- Yunji introduced the tea therapy program, achieving 91% retention among the first 150 participants, with some attending for 100 consecutive days.
- The program's success was driven by a unique wellness experience offering a combination of tea tasting, meditation, and traditional Chinese studies, fostering customer loyalty and engagement.