The company revealed in its 2021 financial report a fivefold increase in loss compared with the previous year; downsizing is on the way
Youzan (08083: HK) (Chinese: 有赞), a Chinese top e-commerce solution provider and SaaS platform, reported on March 29 a revenue of CNY 1.57 billion (USD 247.6 million) in 2021, down 13.74% year on year.
The revenue includes CNY 973 million from subscription solutions and CNY 584 million from merchant solutions. Another CNY 11.4 million came from other sources. Its gross profit rate rose to 60.7%.
The company also announced operating losses of around CNY 3.29 billion, surging by 503.5% year on year, with a goodwill and asset impairment of more than CNY 2 billion.
Youzan attributed its losses to the global pandemic outbreaks and the Internet environment, along with a 23% increase in sales expenditure and a 30% rise in research and development expenses.
New retail businesses have become the “second growth curve” for the merchant services provider. In 2021, the number of paying merchants of SaaS products catering to physical stores doubled year on year to 29, 645, and the number of new paying merchants reached over 47,000.
GMV generated by Kuaishou (01024: HK) dropped to 2% as Kuaishou banned third-party product links in its short video clips. GMV of other channels registered a year-on-year growth of around 30%, and 28% of the overall GMV came from store-oriented SaaS products.,
The company also announced a plan to shed 20% of its workforce on Tuesday, in response to media reports that the firm was prepared to slash up to 70% of its headcounts. Youzan will focus on the digitalization of new retail services and improve productivity this year, Youzan CEO Bai Ya said in an internal letter to its employees.
Another Chinese e-commerce service platform Weimob (2013: HK) (Chinese: 微盟) posted on March 28 a revenue of CNY 2.69 billion in 2021, up 36.4% year on year, hitting its record high. Its adjusted gross profit reached CNY 1.52 billion, up 51.3% over the previous year.