Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to Yunji's Third Quarter 2022 Earnings Conference Call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; Mr. Peng Zhang, Vice President of Finance; and Ms. Kaye Liu, Investor Relations Director of the company. As a reminder, this conference call is being recorded. Now, I would like to hand the conference over to our first speaker today, Ms. Kaye Liu, IRD of Yunji. Please, go ahead, ma'am.

Hello, everyone. Welcome to our third quarter 2022 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 relate to events that involve known or unknown risks, uncertainties and other factors of Yunji and its industry. These forward-looking statements can be identified by the terminologies such as will, expect, anticipate, continue or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to our related documents filed with US SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and are expressly qualified in the entirety by cautionary statements, risk factors and details of the company's filing with the SEC. Yunji does 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] Hello, everyone. Welcome to Yunji's third quarter 2022 earnings this morning. We, once again, faced a volatile and uncertain macro environment during the third quarter. Against this backdrop, we dedicated ourselves to improving our capabilities while reinforcing our business sustainability. We launched a variety of initiatives, including enhancing our service provision, augmenting our private label product development process and optimizing our inventory structure. This timely and agile response has elevated our resilience and product on the path to sustainable high-quality growth. In addition, we took advantage of the e-commerce sector's usual third quarter off season to further evolve our innovative technology and upgrade our services. As in time, we deepen our exploration of e-commerce potential by focusing on our [indiscernible] products and driving the use of short videos as our main consumer marketing tool. Let's take a look at our product selection strategy. Consumers are switching away from well-known global labels and are purchasing a more diverse range of trends. We responded to these emerging trends by realigning our product selection strategy to focus on high-quality domestic brands at a competitive prices and marketed products in video streaming channels. Through continued analysis of our core user’s consumption habits and pricing preferences, we have maintained a relatively high repurchase rate despite the current macro headwinds. Furthermore, by refining the details and accuracy of our product descriptions, we fostered the mindset of a carefully considered purchase decisions, allowing us to successfully maintain a low product return rate. On the marketing side, entrepreneur oriented has always been one of our core values, especially when it comes to empowering women to launch businesses and enhance their lives through self improvement. In the current environment where employment prospects are uncertain, we are further investing in our service managers by developing innovative features that…

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 all comparisons and percentage changes are on a year-over-year basis, unless otherwise noted. During the third quarter, we faced a volatile macro environment and ongoing pandemic controls, both of which presented challenges to our business. In response, we further refined our product selection and optimized our relationships with suppliers, sacrificing near-term sales, while building a solid foundation for our company's long-term success. Our repeat purchase rate remained stable at 79%, and we once again improved our gross margin. Beyond this, operating expenses and total cost of revenues, both declined, as we continue to optimize the cost structure of our business. We finished the quarter in a healthy cash position. And this combined with our persistent focus on efficient operations will allow us to continue to weather an unpredictable market. Going forward, we will continue to reward our shareholders through share buybacks. Now, let's take a closer look at our financials. Total revenue were RMB 239 million, compared to RMB 438 million a year ago. Revenues from sales of merchandise were RMB 197 million, as revenues from our marketplace business were RMB 38 million. This decrease was primarily due to the company's continued strategy to refine product selection across all categories and optimize this selection of suppliers and merchants, causing near-term decrease in sales. Consumers' willingness to spend on discretionary products in 2022 has also declined, compared with that in the same period of 2021. Despite these challenges, we improved our gross margin to 49.4% compared to 43.2% a year ago as a result of sustained customer loyalty to our private labels and the effective product curation strategy. Now, let's take a look at…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from Ethan Yu at First Trust China. Please go ahead.

[Foreign Language] Let me make a quick translation. Thanks for taking my questions. Recently there has been a lot of good news about China easing the COVID policies. Could you comment on this trend and tell us more about a lot what measures will the company do to grab this opportunity of a possible recovery in consumer -- in private consumption? Thank you.

[Foreign Language] Thank you for your question. The recovery of the epidemic has an uncertainty, and a certainty. First of all, in terms of certainty, we believe that the most difficult time of the epidemic is about to pop. In terms of the uncertainty, as a comprehensive e-commerce platform Yunji has a wide customer base from the first tier cities, such as Beijing, Shanghai and Guangzhou to remote areas such as Xinjiang and Inner Mongolia. We believe that, the recovery of consumption will not be explosive, but an oddly slow uneven recovery based on regions and product categories.

[Foreign Language]

From the supply chain side, the supply chain of our private label is relatively easy to grasp. And we will flexibly adjust the production and marketing strategies of various categories, according to the recovery situation. For the third-party supply chain, as a highly curated platform our fully bestseller pool can quickly adapt to the market changes.

[Foreign Language]

From the perspective of the market habits, I think that, after three years of the epidemic consumers plans will not fade away so quickly and restocking demand for the necessities may still exceed demand for the discretionary products in the short term. In addition global economic depression this year are not only affected by the epidemic, but also factors such as climate change and international relations. In the long run, we still believe in users yearning for a better life, we will enhance our business and management capabilities, and maintain a healthy financial position to cope with the challenges and opportunities ruled by the microenvironment.

Thank you.

Thank you, Shanglue. Thank you. I have no more questions. Thank you.

Thank you. And ladies and gentlemen, as there are no further questions at this time, I'd like to hand the conference back to the management for closing remarks.

Thank you for joining us today. Please do not hesitate to contact us, if you have any further questions and we're looking forward to talking with you next quarter. Thanks. Bye.

This conference has now concluded. Thank you for attending. You may now disconnect.