Good morning, and good evening, ladies and gentlemen. Thank you for standing by and welcome to Yunji's Second Quarter 2024 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 turn the conference over to our first speaker, Ms. Kaye Liu, IRD of Yunji. Please go ahead, ma'am.

Hello, everyone. Welcome to our Second Quarter 2024 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 and unknown risks, uncertainties and other factors of the 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 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 entirely by cautionary statements, risk factors and details of the Company's filings with 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.

[Foreign Language] Hello, everyone. Welcome to Yunji's Second Quarter 2024 Earnings Call. [Foreign Language] Yunji has been operating for nine years. During this time, we have seen our users grown from new parents to those welcoming second child or entering new life stages. Our goal is to be a long-term partner for our users, supporting the health of their families. In light of China's aging population and the zero economy, we are looking to expand our user base further. [Foreign Language] Now let's discuss some of our ongoing initiatives. As part of our initiatives to provide our users with a holistic health solution, we plan to extend our presence into offline communities and establish wellness spaces, bringing our health care products directly to consumers. [Foreign Language] In July, we opened our first offline store, focusing on traditional Chinese medicine and wellness. This marks a new chapter for us in the health sector. The offline store will strengthen the connection between our online and offline services and lay the ground work for expanding our customer base. We aim to create a word-of-mouth network based on local committees offering retail services and expand our target customers' groups to those aged 41 to 55. This demographic values personal connections and can help us attract quality customers through referrals. [Foreign Language] In addition to our offline expansion, we plan to increase more organic grain and health products. We remain committed to our product selection criteria. We do not offer mediocre product or attempt to be or encompassing platform. Instead, we carefully choose quality products, set reasonable prices and ensure value for our users. This approach allows our service managers to earn a fair profit margin. [Foreign Language] Since our funding, we have focused on quality and followed an expensive but curated product selection strategy.…

Okay. 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 second quarter of 2024, we encountered some market dynamics that influenced our operations. However, our current financial positions allow us to support our strategic initiatives as we regularly assess the profitability of both new and existing business lines, making thoughtful adjustments in response to market changes. This approach help us maintain a stable financial position in a shifting business landscape. While we continue to refine our inventory management protocols, which contribute to a gross margin of 46.6%. We are also focused on optimizing our product range and supplier network to better align with customer preferences. As we move forward, we will continue to pursuing growth opportunities prudently while ensuring our financial stability. Now let's take a close look at our financials. Total revenues were RMB106 million compared to RMB167.1 million a year ago. Revenues from sales of merchandise were RMB83 million and the revenues from our marketplace business were RMB21.1 million. The changes were primarily driven by softer consumer confidence and ongoing adjustments to our product range across all categories. Additionally, the optimization of our supplier and merger network contribute to a short-term impact on sales. Despite these changes, our gross margin remained relatively strong at 46.6%. This strength is attributed to continued customer loyalty towards our product labels and our effective product creation strategy. Now let's take a look at our operating expense. Fulfillment expense were RMB20.7 million compared to RMB29.9 million a year ago, this was mainly due to low warehousing and logistics costs resulting from decreased merchandise sales as well as reduced personal cost…

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Ethan Yu with First Trust China. Please go ahead.

Hi. Good evening. Thanks for taking my question. I have a question about our business operation. Mr. Xiao just mentioned that you have participated in numerous product traceability efforts. Could you share more color from this experience? And how will these insights be applied to our product selection and operation at Yunji. [Foreign Language]

[Foreign Language] Thank you for your question. [Foreign Language] I've been traveling across the country almost every week for product traceability. In fact, there are many good merchants and the supply chains in China, especially for high demand and high repurchase rate products like meat, eggs and diary. [Foreign Language] However, we cannot simply rely on inspection reports, historical sales data and various promotional materials to confidently introduce those merchants to our platform. Only more authentic cost effective and healthy products which are better suited to the physique of the Chinese people can bring real value to our users. This requires our team to explore and experience personally. This generates sharing material from Yunji's traceability activities can gain more consumer trust. [Foreign Language] Additionally, along with offline traceability, we can host more offline loans and taking events, leveraging the advantages of a face-to-face communication to acquire loyal customers. [Foreign Language] Within such offline loan and offline traceability activities, we are going to create the products that are going to go to the deep part of the consumers. [Foreign Language] And those products and the related materials are going to encourage the consumer to buy on our platform. [Foreign Language] Thank you for your question.

[Foreign Language] Great, thanks. I have no more questions. Thanks.

As there are no further questions at this time. I'd like to hand the call back over to the 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 look forward to talking with you next quarter. Bye.

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