Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Yunji's First Quarter 2023 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, Investor Relations Director of Yunji. Please go ahead, ma'am.

Hello, everyone, welcome to our first quarter 2023 earnings call. Before we start, please note that this call will contain forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995 that are based on our current expectations and current market operating conditions related to events that involves known and unknown risks, uncertainties and other factors to Yunji and its industry. These forward-looking statements can be identified by terminologies such as will, expect, anticipate and continue or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to our latest document filed with U.S. SEC. Any forward-looking statement that we'll 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 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.

Hello, everyone. Welcome to Yunji's first quarter 2023 earnings call. I'm delighted to announce that we celebrated our 8th corporate anniversary on May 16, 2023. It has now been three years since the outbreak of COVID. And during the first half of this year, consumption has been gradually and steadily recovering. And the same time, consumers have been yearning for more fulfilling and enriching lives. During our anniversary celebration with employees, partners and service managers in attendance, we took the opportunity to announce an exciting new initiative. Leveraging our brand and ready-for-community-service competitive advantages, we will embark on a comprehensive exploration of gourmet food, beauty and healthcare. We will delve into inter-connectiveness of these categories and the role enhancing quality of life. In many years, local community services have emerged as a new growth trend in the consumption at the end. In line with these trends, during March, we integrated our existing food and neighborhood groups into our community e-commerce service super supply chain. This service offers exclusive products to use it with a particular focus on the gourmet food category. Super supply chain leverages super community leaders to bring a wide selection of affordable gourmet food from all over the country and around well to door steps. Under this model, every super community leader is closely connected to users residing within of 500-meter radius, facilitating high-frequency interactions on a daily or even hourly basis. To encourage repeat purchases, the most popular and product featuring super supply chain will subsequently become available for regular purchase. Furthermore, we have set up an innovation department dedicated to expanding the rate of our community e-commerce service beyond our current community. This department will address for community e-commerce in untapped commercial networks and actually connect with new group leaders. Beyond expanding the scope 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 all comparisons and persisting changes are on a year-over-year basis, unless otherwise noted. After navigating the challenges of last year, we spent the first quarter of 2023 implementing a number of strategic upgrades to adapt to the post-COVID environment. Responding to shifting consumer trends, we have refocused our private label product development to capture growing interest in immunity enhancement, allocating more resources for the cultivation of healthcare and the nutritional therapy product. This initiative, combined with other efforts such as online repurchase reminders, contributed to 80.2% repurchase rate during the quarter. Meanwhile, our gross margin improved to 47.7% as our attempts to enhance user loyalty more food. Despite pressure on our top line from our ongoing product mix requirements and optimization efforts, our net loss narrowed by 37.8% from the same period last year, and we recorded operating profit for the quarter. We are confident that our emphasis on efficiency and our ability to respond to emerging consumer trends leave us well-positioned for the future. Now let's take a closer look at our financials. Total revenues were RMB 179 million compared to RMB 343 million a year ago. Revenues from sales of merchandise were RMB 143 million, and revenues from our marketplace business were RMB 33 million. This change was primarily due to our continued strategy to refine our product selection across all categories and optimize our selection of suppliers and merchants, which has a near-term impact on sales. Meanwhile, consumer confidence and spending power still have yet to fully recover. Despite these challenges, we improved our gross margin to 47.7% compared to 44.2% a year ago. This was a result of sustained…

[Operator Instructions] Our first question will come from Ethan Yu of First Trust China. Please go ahead.

We have observed a rapid recovery in off-line economic service and interstate mobility. But overall, the consumer confidence remains unstable. How does it impact your business? And what specific measures has the company taken? Additionally, what specific initiatives have your company implemented or plan to implement to enhance our brand awareness of Yunji and our private label products? Thank you.

Thank you for your question. Yunji's within their connection between people both online and off-line has its own advantages. Before the pandemic, Yunji operated with a marketing model, their combined online communities and offline alone. The off-line alone help bridge the gap between the company service managers and customers, fostering trust and providing a better experience with our products. This became even more important as we developed more private labels as cultivating customer trust and education becomes paramount. Our private labels adhere to the principle of providing consumers with peace of mind and high-quality products. We insist on sourcing directly from the place of origin and have deep partnerships with leading companies and factories. This allows us to invest and trace the production and processing of our goods. As the cities resume their flow, we have invited some public service managers to join us in exploring and lending, witnessing the birth of mainly Yunji manufacturing and sharing authentic experience with virtual community. Furthermore, we are establishing a new brand center in Hangzhou, setting as a hub to display our private label capabilities. We hope to attract more partner brands and incubate more private label products. And therefore, it's a quite a mature joint to label products. We are going to make more education to our customers by the middle-level influencers from the top platforms. And we are going to take advantages of those offline media through the advertising and publicity of the products, based on our existing customers and intensity of our customers. From city to city, we're going to do the task them to the promotion of the joint label products. And so for our publicity, we mainly will use four channels, the existing online channels and the self-made content and the mid-level influencers online and also the off-line media. Thank you for your questions.

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. Bye.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.