The Zhitong Finance App learned that China Youzan (08083) announced its 2023 annual results on March 21. In 2023, the company maintained a “cautious and positive” attitude and meticulous operations, helped merchants do business well through products and services, and continued to improve their own business results. The company's net operating cash inflow in 2023 was approximately RMB 77 million, and adjusted profit before interest, taxes, depreciation and amortization was approximately RMB 35.52 million, achieving annual operating profit for the first time.

In 2023, the GMV generated by merchants through favorable solutions was approximately RMB 102.5 billion, an increase of about 1% over the previous year. The GMV for the store SaaS business was approximately RMB 50.7 billion, an increase of about 19% over the previous year. In 2023, the number of new paid merchants was 21,851; the number of paid merchants in stock was 63,512, of which e-commerce SaaS merchants accounted for about 66%, and store SaaS merchants accounted for about 34%.

In 2023, China Youzan's revenue was approximately RMB 1.45 billion, of which subscription solution revenue was approximately RMB 840 million and merchant solution revenue was approximately RMB 610 million. The merchant ARPU increased to 22,805 yuan, an increase of about 27% over the previous year. The gross profit amount was approximately RMB 1.0 billion, up about 4% year on year; gross margin increased to 69.2%, up about 5 percentage points year on year. The gross profit of the subscription solution was approximately RMB 680 million, an increase of about 2% year over year; the gross margin of the subscription solution increased to 80.5%, an increase of about 6 percentage points over the previous year. The gross profit of the merchant solution was approximately RMB 330 million, up about 9% year on year; the gross margin of the merchant solution increased to 53.8%, up about 4 percentage points year over year. The company's sales expenses decreased by about 21% year on year, administrative expenses decreased by about 47% year on year, and other operating expenses decreased by about 39% year on year. The effect of reducing costs and increasing efficiency was obvious. The adjusted profit before interest, taxes, depreciation and amortization is approximately RMB 35.52 million.

In 2024, the popular brand and value proposition underwent the most significant upgrade in ten years. Youzan's new value position is: starting with helping merchants do a good job in public domain content marketing to get new customers, then providing private domain operation and distribution group buying systems to improve the merchant's customer repurchase rate and profit margin. At the same time, it also provides more intelligent solutions such as self-owned independent shopping malls, store digitalization, chain management, and multi-channel data for final sales transformation.

Youzan's core value is no longer just a “private e-commerce and store digitalization” service. It also uses product portfolios such as Youzan CRM, Youzan Smart Shopping Guide, and Youzan Enterprise WeChat Assistant to provide a more complete “intelligent consumer operation” system, changing from single-core to dual-core.

Starting in 2024, Youzan will truly grow from providing “digital software” for small and medium-sized businesses to provide an “intelligent consumer operation system” for brand retailers, covering the entire business process from the public domain to the private domain to the final sales transformation.

In the future, thanks to the accumulation of best practice data in the service process over the past few years, Youzan will use AI assistants (Copilot) to help merchants more easily use products to do online and offline operations, use automation (Agent) to complete work more efficiently, use business consultants (Insight) to generate more targeted and effective business strategy suggestions, and use AIGC to generate better marketing ideas, and help brand retailers with tens of millions of old customer fans increase customer repurchases and profit growth.