Yunji Inc. (NASDAQ: YJ)

Yunji Inc. operates a social e commerce platform in China that uses a membership based model to connect consumers with a wide range of products. The company was established in 2015 and launched its flagship app in May of that year to provide a curated shopping experience driven by social interactions. Over time Yunji has built an ecosystem that includes its own inventory, a marketplace for third party sellers and a suite of private label brands. Members join by purchasing an annual fee package or by placing a refundable deposit that is returned after they reach a spending threshold. Once inside the platform members receive incentives for sharing product links, for inviting new users and for creating content such as short videos and live streams. The firm emphasizes categories such as beauty and personal care, food and fresh produce, apparel, household goods and health care products, continually updating its assortment based on user feedback and data analysis. Yunji also invests in emerging manufacturers through minority equity stakes to co develop exclusive items that meet the evolving tastes of its community.

The company generates revenue primarily from two sources: direct sales of products it purchases from suppliers and commissions earned on sales made by third party merchants on its marketplace. Direct sales are recorded on a gross basis meaning the full transaction value is recognized as revenue while marketplace commissions are recognized on a net basis reflecting only the fee received. In addition to product sales Yunji collects membership fees from the purchase of annual packages and from refundable deposits that become non refundable when users do not meet the required spending level. Membership fees provide a steady stream of income that is less volatile than transaction based revenues and help to lock in user engagement. According to the filing total revenues were RMB640.2 million in 2023, RMB417.7 million in 2024 and RMB317.0 million in 2025. The business model emphasizes high turnover and repeat purchases, which drive sustained revenue streams and support investment in technology and content. Yunji also earns incremental income from value added services such as advertising placements and promotional campaigns that brands run on the platform.

The company operates through the following segments.

• Merchandise Sales: This segment involves the direct purchase of goods from suppliers, including brand owners and manufacturers, and the subsequent sale of those products to members and non member users through the Yunji app and affiliated mini programs. The company manages inventory, pricing and promotion for these items and retains full control over the customer experience. It also develops private label brands such as Suye, Qing Zi Yang and Yuan Sheng Huang, which are produced under its specifications and sold both on its own platform and through external channels like Tmall and Douyin.

• Marketplace: This segment enables third party merchants to list and sell products on the platform, with Yunji earning a commission on each transaction while the merchants handle fulfillment, shipping and customer service. The company applies strict selection criteria to limit the number of brands in each category, aiming to maintain a curated offering of high quality items. It monitors merchant performance through user feedback and internal metrics and removes underperformers on a quarterly basis to preserve the reputation of the marketplace.

Yunji Inc. competes in China’s highly competitive social e commerce sector alongside platforms such as Pinduoduo, Xiaohongshu and various social commerce features embedded in super apps. Its competitive advantages stem from a membership driven community that fosters organic word of mouth promotion, a curated private label portfolio that captures higher margins, and a supply chain that links consumer insights directly to manufacturers. The company also benefits from a technology infrastructure that uses big data analytics and artificial intelligence to personalize recommendations, optimize inventory levels and reduce marketing costs. While larger rivals may have greater brand recognition and deeper financial resources, Yunji differentiates itself through its focus on emerging brands, its ability to adapt quickly to changing consumer preferences and its strong network of trained service managers who create content that drives engagement. This combination of community, data driven product development and a flexible operational model allows Yunji to carve out a niche in a market dominated by larger generalist e commerce players.

The core of Yunji’s user base consists of its members, who are predominantly middle class consumers with a significant share of female users. Members typically belong to households that make purchasing decisions for daily necessities and they are active on social networks where they share product experiences, post reviews and invite friends to join the platform. The platform’s incentive structure rewards users for successful referrals, for creating short videos that showcase products and for hosting live streams that demonstrate items in real time. Non member users also browse and buy on the platform, often arriving through recommendations from existing members or through exposure to content shared on social media. The company does not disclose specific individual customer names in its public filings but indicates that its audience spans urban and semi urban regions across China. Repeat purchase rates among transacting members have remained relatively stable, reflecting the effectiveness of the membership model in fostering loyalty and habitual buying behavior.