Good morning, and good evening, ladies and gentlemen. Thank you, and welcome to Yunji's Fourth Quarter and Full-Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will be hosting a question-and-answer session after the management's prepared remarks. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; Mr. Chen Chen, Chief Financial Officer; Mr. Hui Ma, Chief Strategy Officer and Chief People Officer; and Ms. Kaye Liu, Investor Relations Director of the Company. I would now like to hand the conference over to our first speaker for today, Ms. Kaye Liu, IRD of Yunji. Please go ahead, ma'am.

Hello, everyone. Welcome to our fourth quarter and full-year 2019 earnings call. Before we start, please note that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and current market operating conditions and related events that involve known or unknown-risks, uncertainties and other factors [often] industry. These forward-looking statements can be identified by terminology such as will, expects, anticipates, continue or other similar expressions. For detailed discussion of these risks and uncertainties please refer to our related document filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today and are expressly qualified in their entirety by cautionary statements, risk factors and details of the company filing with the SEC. Yunji do not undertake any obligation to update these statements, except as required under applicable law. With that, I will now turn over to Shanglue Xiao, Chairman and CEO of Yunji.

[Foreign Language] Good morning, and good evening, everyone. Welcome to our fourth quarter 2019 earnings conference call. During this time, [indiscernible] and uncertainties, it is worthwhile for us to survey the changing landscape and that what strategy has surpassed well in the past, and what strategy we should implement in the future. Since the beginning of 2019 we are explaining our paradigm of merchandise optimization strategy of being inclusive, focused, and differentiated when it comes to brand, selection and product innovation. We apply a set of thinking evaluation criteria by screening brands and curating products to be sold on our platform. Consequently, we're able to control the number of SPUs and make available our platform and manage them very effectively. In addition, we select those brands that stands above the quality in terms of use innovation, product quality, and logistical advancements and form a much more extensive and deeper collaborative relationship with them. We provide them with marketing support and with operation assistance so that we can streamline their entire operation and capitalize their brand recognition and product appeals into mega hit [indiscernible]. In turn, the ultimate success feedback into our work engine enables us to supercharge our own e-commerce business. For the tailored individual product assessment, we seek to satisfy each individual members unique demand through in-depth collaboration with innovative brands and product categories with high profit margins and high repeat purchase, such as Inner Beauty and cosmetics, health supplements, apparel, foods, tea and daily household products. We had kind of leading to better of innovative brands in China through our combination of private labeling to internal development, joint venture with leading brands in their respective product categories and strategic partnerships with product manufacturer. Developing those innovative brands has allowed us to provide our members with premium products of…

Thank you, Shanglue. Hello, everyone. Before I go through our financial results, please note that all numbers stated in the following remarks are in RMB terms, and our percentage changes are on a year-over-year basis unless otherwise noted. In the fourth quarter, our continuous efforts to unleash the profitability of both our merchandise sales and market-based business models have been shown in our better than expected moments in our financial results. GMV in the fourth quarter of 2019 grew by 36.1% to RMB11 billion from RMB8.0 billion in the same period of 2018. Revenues in the fourth quarter of 2019 was RMB2.4 billion compared to RMB4.5 billion in the same period of 2018. In addition, we achieved indefinite profit for the full year of 2019 and we increased our indefinite profit in the quarter by 174.1% year-over-year since establishing our marketplace vintage platform in the first quarter of 2019. And increasing number of merchants have shown just in addressing our policy as a result of our merchandise platform transitioning to our marketplace finished platform undertaking responsibility for the above mentioned management a portion of our revenues previously generated on our merchandise sales platform and recognized our cost basis was recorded on our marketplace business platform, which recognized sales on our net base. Revenues from net sales of merchandise for the fourth quarter of 2019 were [RMB2.7 billion] accounting for 86.7% of our total revenues in the period. Revenues from our marketplace business in the fourth quarter of 2019 increased to RMB169.2 million as we continue to attract more quality brands and the merchants through our platform as well as increased our take rate by strengthening our partnerships with existing brands. Notably in the second quarter of 2019, the takeaway rate of our marketplace been keep growing over the past three…

[Operator Instructions] Your first question comes from the line of Andre Chang of JPMorgan. Please ask your question.

So let me repeat my question. The company has rolled out free membership starting about January 1st to January this year. So I like to ask whether this will mean the membership program revenue will drop to zero this year in exchange for faster sale of merchandise revenue growth and also membership growth. And also whether that will mean some impact on the gross margin as the membership revenue generally usually have a higher margin? Thank you.

Thank you, Andre. So, I will take this question. So I can give you some background information first, because as a first membership based social e-commerce company history in U.S. so we need to take the responsibility together with local government to continue to refine the standards of this industry and make the new ecosystem better. This new measure we've just published has been widely pushed by local government and are followed by our competitors. So, for this new member recruitment method either for our existing members to invite and build the offline communities based on location. We still believe this kind of connection based on location will be more solid and active since the connection through Internet, but the nature of our finished model has not changed. So our business growth are still based on the supply chain upgrades as our CEO just stated in his remarks. And second, the social interaction between members. So for your questions, so, first of all the revenue of membership revenue yes because we changed the recruitment method. So the membership of revenue will decrease of course. And a second for the margin, because although the membership revenue decreased, but as we mentioned in both CEO and CFO, scripts remarks, because we will - our supply chain, core value of our supply chain to develop to cooperate with the best emerging brands and factories in China and to find their best SKUs. So our margin will come from the emerging brands and our own brands. So we believe the gross margin and operating margin in 2020 will not be negatively impacted by the cancellation of the member fee.

Your next question comes from the line of Ivy Liu of Credit Suisse. Please ask your question.

I'll quickly translate myself so thanks management for taking my question. My question is on membership as well so can management elaborate a bit more on the existing and strategies or tactics to acquire new members and the channels that Yunji invest and how that will impact the sales and marketing line in 2020. And also there are specific growth targets for the membership in 2020? Thank you.

Thank you, Ivy. So for this question, the first is from 2020 we will not only around the Internet-based membership member recruitment, we will also use the offline measures to promote our members. So based on the location and based on the different living communities all around China, we will encourage our members to get to do the offline promotions. So and for the cost of each new members, we do not change the incentive program. So for the each new members invited by the existing members, we’ll provide the new members for five RMB coupons. So that's our cost to have one new members so this policy not change. And so, we believe the sales and marketing expense will not increase significantly. And but we will continue to monitor the quality of the members from the new member of equipment approach. So we can - we’ll monitor that and we can discuss this with you after one quarter, we will see that better. And for the total member forecasts, because we did not provide the guidance, so we cannot disclose the detail numbers, but we can foresee the total new members joining Yunji through the new policies will increase compared to the previously qualities. But as we said, our focus is - always on how to get the quality transacting members, but not only the members. So, we will through the - so for our members how we can increase the transaction members will encourage through the supply chain either - which will keep creating the public skills of the new brands with the competitive prices. And we are also developing better skills from the emerging brands to compete with this mainstream brands with lower price and higher margins. So, through this deeply cooperating with the emerging brands and factories we’ll provide our members more values to make the new members to become quality transaction members. So, our focus is still is not only on the number of members, but on the number of the quality transaction members. So we will - spend more efforts to transfer the member to the transaction member quarter-by-quarter.

There are no more questions at this time. I would now like to hand the conference back to the management team for the closing remarks. Please go ahead.

Thank you everyone for joining us today. I’ll see you next quarter. Thanks.

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect.