Good morning, and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Yunji's Fourth Quarter 2023 Earnings Conference Call. With us today are Mr. Shanglue Xiao, Chairman and Chief Executive Officer; Mr. Yeqing Cui, Senior Financial Director; 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 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 and relate to events that involve known and unknown risks, uncertainties and other factors of Yunji’s 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 latest document 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 filing with the SEC. Yunji do not undertake any obligation to update these statements expect 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 2023 earnings call. During 2023 and in particularly in the fourth quarter's peak e-commerce promotion season, the prevailing trend relatively to the market was intense price competition. Major e-commerce and live streaming platforms adopted low-price strategies alone fostering a bargain hunting mindset among consumers. However, Yunji is not really an e-commerce platform. We are also a brand building and a sales service provider. We understand the long-term repercussions of relying on low pricing strategies, which can lower the brand identity over time. The value we deliver to users was in our cost-effective products with low return rates as well as in minimizing decision-making and wait times for our users. Our commitment to a heavily curated product selection ensures that Yunji maintains a stable average order value even amidst in the market focus on low prices. The stability of our average order value is intrinsically linked to our highly developed product capabilities, centered around the saying of love for food, beauty and health. We have developed a range of cost-effective private label products. We have not only expanded the existing categories, but also successfully upgraded our lineup of [indiscernible] medicinal products. Over the span of many years of product development and sales, we have identified key ingredients that resonate strongly with our user base such as collagen and probiotics. Building on successful trials and increased active user feedback, we have introduced a variety of new products across multiple categories that innovatively incorporate these popular ingredients, while performed in different ways to harness these ingredients and enhance product functionality leveraging the existing popularity of these ingredients. Our new offerings have been warmly embraced by our users. We aim to cultivate loyal users of individual products who appreciate our carefully selected ingredients. In doing so, we will develop…

Okay. Thank you, Shanglue. Hello, everyone. Before I go through our financial results, please note that all numbers started in the following remarks are in RMB terms and all calculation and the percentage changes are on a year-over-year basis unless, otherwise, noted. During the fourth quarter of 2023, our operations remained relatively stable, and we continue to reinforce our core operational process. Our requirement to inventory management practice allowed us to generate a stable gross profit. We maintain a strategic focus on inventory management, actively and monitoring various product categories on a weekly or monthly basis to ensure optimal stock levels. This approach should not only optimize our asset's utilization, but also effectively manages our cash flow. Meanwhile, we are actively pursuing more efficient cash flow management. Now let's take a close look at our financials. Total revenues were RMB 149 million compared to RMB 289 million a year ago. Revenues from sales of merchandise were RMB 112 million, and the revenues from our marketplace business were RMB 34 million. These changes were primarily driven by ongoing refinement to our product range across all categories. This coupled with the optimization of our supplier and the merchant network resulted in a short-term impact on sales. Despite these changes, our gross margin remained relatively solid at 46.6%. This was due to sustained customer loyalty towards our private labels and our effective product creation strategy. Now let's take a look at our operating expense. Fulfillment expense were RMB 25 million compared to RMB 32 million a year ago. This was primarily driven by a decrease in warehousing and logistics expense, stemming from lower merchandise sales, reduced personal cost due to staffing structure optimization and a decrease of service fee charged by third-party payment settlement platform. Sales and marketing expense were RMB 29 million…

[Operator Instructions] Our first question comes from Ethan Yu with First Trust China.

I just heard you mention customer service. We have observed that in recent months, major e-commerce platforms have launched a series of policies such as 7-day no user returns, free shipping in remote areas, et cetera. What do you think of these new policies which are biased towards consumers? Will all this strategy have any impact on our performance?

This issue evolves the nature of our products and user consumption habits. First of all, we believe that to be a good platform, the selling point of your products cannot be for RMB 9.9 with free shipping. And user's consumption behavior cannot be based on imposed consumption. Yunji, especially -- Yunji's merchandise sales and private label products has always maintained a loose and a customer specific policy. However, our quality refund rate is very low compared to other platforms, which is inseparable from our sufficient user education. We believe that loose sales are important, but what ultimately attracts consumers to repurchase is unique product offering and cost effectiveness. Our average order value is enough to cover our customer management expenses. And we also have many loyal users in remote areas.

[Operator Instructions] As there are no further questions at this time, I would 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 look forward to talking with you next quarter. Bye.

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