Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Yunji's Fourth Quarter 2022 Earnings Conference Call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; Mr. Chengqi 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 fourth 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 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 the U.S. SEC. Any forward-looking statements that we make on this call are based on assumptions as of today and are expressly qualified entirely by cautionary statements, risk factors and details of the company's filings 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.

Hello, everyone. Welcome to Yunji's Fourth Quarter 2022 Earnings Call. During the fourth quarter, we successfully weathered the challenges caused by COVID-related restrictions and the subsequent easing of these measures. In October and November COVID controls exerted a downward pressure on our order volume. Then in December, our water fulfillment capabilities were majorly impacted as the country battled a surge in COVID cases. Although we have observed the size of a broader micro stabilization and recovery, there remains some levering weaknesses in household income and private consumption. Nonetheless, we are confident that our optimized cost structure will enable us to navigate through the market downtime with agility and flexibility. As in time, our enhanced capabilities and business resilience lead us well positioned to seize opportunities when the market recovers. Fortified by these solid foundations, we remain cautious and optimistic as we look to the future. I would like to summarize this year's often ups and downs. During 2022, we continued to reiterate our initiatives on both the product and marketing insights. For our health care brand, we introduced a wide array of fresh offerings covering weight management, skin care and body revitalization only as to rather meet diverse consumer needs. The driving force behind our R&D and production processes with a focus on creating high-quality, healthy and natural products. Our efforts were eternally well received by our users. With several of the new products each generating over RMB 10 million in sales during a single sales event driven by this unique and innovative offerings. This mindset of Yunji Healthcare continues to gradually form. Turning to our skin care brand SUYE. By refreshing and refocusing our content marketing and private label brand promotion initiatives, we further developed and strengthened the brand for public traffic. Leveraging social media and our own user…

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 year-over-year basis, unless otherwise noted. We faced a volatile macro environment during the fourth quarter with pandemic-related restrictions in October and November and COVID spread following the relaxation in December. Navigating through the pandemic, we gained valuable experience as we continue to refine our product selections, develop our private labels, optimize our product mix and explore new business opportunities. Importantly, our repeat purchase rate increased to 81.8%, and our gross margin increased to 40.9% during the quarter. At the same time, we adapted to the macro environment by further optimizing our cost structures and adhering to our prudent cost control strategy. Thanks to these efforts, we delivered significant efficiency improvements with our operating expenses decreased by -- decreasing by 22% year-over-year. Our strong cash position and healthy financial condition provides the foundation for the further development of our business. Now let's take a closer look at our financials. Total revenues were RMB 289 million compared to RMB 471 million a year ago. Revenues from sales of merchandise was RMB 241 million, and revenues from our marketplace business were RMB 43 million. This decrease was primarily due to our continued strategy of refining our product selections across all categories and optimizing our selection of suppliers and merchants causing near-term decrease in sales, changes in consumers' consumption confidence that have during the COVID-19 pandemic also contributed to the decrease. Despite these challenges, we maintained a stable gross margin at 40.9% compared to 39.6% a year ago. This was a result of sustained customer loyalty to our private labels and the effective product curation strategy. Now let's take a…

[Operator Instructions] And our first question today comes from [Ethan Yee] at First Trust China.

We see that there are several competitors in the market starting to engage in subsidy work. I'm just curious about what rings view on this? And would you consider entering the RMB 1 billion specific campaign like Jingdong and [Indiscernible] in the future?

Sorry, let me quickly translate this question. [Foreign Language].

Firstly, the consumer purchasing power is still a slowing recovery and the tendering subsidy program can indeed bring tangible benefits to consumers. We acknowledge the value of the subsidies to consumer market, especially in some standard product categories such as mobile phones and electronics and some imposed consumptions in -- And the price is, of course, very important element in consumption decisions. But the demand for product quality, customer service and production features still is quite important and strong. We don't believe in blindly [Indiscernible] prices. Our goal is to establish a mindset among our consumers that our products are not only affordable, but also unique with high quality. Rather than offering client subsidies, we focus on providing value-added services and maintaining the quality of our products, so that our customers feel that their purchases are worth it. And actually, we believe the initiatives of the government is more important. That is to have the transition from high-speed development to high-quality development. We have a variety of private labels in healthy food, beauty and gourmet food categories complemented by professional vertical committees for one-stop shopping and marketing. This gives us a strong cost control and our operational capabilities over product quality, pricing and services. We provide users with a high value experience without relying on tendering subsidy. Thank you for your question.

Ladies and gentlemen, this concludes our question-and-answer session. I'd like to turn the conference back over to management for any 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. Bye.

This concludes today's conference call. You may now disconnect your lines, and have a wonderful day.