Interview Synopsis

Yunji IPO analysis

  • Multi Asset
  • Consumer
  • Greater China

Third Bridge Forum interviewed a former department head at Yunji Weidian, who spoke about the China-based social e-commerce platform, Yunji, and its recent US IPO on 3 May 2019, which raised the company over USD 121m.

IPO Analysis of the Chinese E-commerce Service

The Interview began with the former department head outlining the growth of Yunji Weidian, as well as whether similar players could compete with the company, noting the bottlenecks and barriers to Yunji’s future growth, including its approach to free versus paid subscriptions. The specialist suggested that the company offering free membership promotions to merchants in H2 2018 has impacted consumer expectations, which could reduce the likelihood of merchants switching to the paid model.

The former department head discussed the potential reasons behind why Yunji Weidian hasn’t been able to make a profit. He reasoned that this was likely caused by the fact that the company was predominantly selling fast-moving consumer goods. The specialist continued by outlining the way the company was attempting to resolve this issue.

The former department head continued by discussing the legal risks associated with the platform, especially with regard to the Chinese government fining the company for allegedly engaging in pyramid selling. The specialist suggested that Yunji has been adjusting its commission rates and rebates in line with the new regulations. However, he noted that if another platform were to offer better rebates, the platform could lose senior members.

To access all the human insights from Third Bridge’s Yunji IPO Analysis Interview, click below to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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