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Edited Transcript of SECO.OQ earnings conference call or presentation 30-Apr-20 12:00pm GMT

Q4 2019 Secoo Holding Ltd Earnings Call

BEIJING May 5, 2020 (Thomson StreetEvents) -- Edited Transcript of Secoo Holding Ltd earnings conference call or presentation Thursday, April 30, 2020 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jingbo Ma

Secoo Holding Limited - IR Executive

* Rixue Li

Secoo Holding Limited - Founder, Chairman of the Board & CEO

* Shaojun Chen

Secoo Holding Limited - CFO

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Conference Call Participants

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* Hugo Shen

Macquarie Research - Analyst

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Presentation

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Operator [1]

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Hello, ladies and gentlemen, thank you for standing by for Secoo Holding Limited's Fourth Quarter and Full Year 2019 Earnings Conference Call. (Operator Instructions) Today's conference call is being recorded.

I will now turn the call over to your host, Ms. Jingbo Ma, Board Secretary of the company. Please go ahead, Jingbo.

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Jingbo Ma, Secoo Holding Limited - IR Executive [2]

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Hello, everyone, and welcome to the Fourth Quarter and Full Year 2019 Earnings Conference Call of Secoo Holding Limited. The company's results were issued by the Newswire services earlier today and have been posted online. You can download the earnings press release and sign up to the company's e-mail alerts by visiting the IR section of our website at ir.secoo.com.

Mr. Richard Li, our Founder, Chairman and Chief Executive Officer; and Mr. Shaojun Chen, our Chief Financial Officer, will start the call with their prepared remarks followed by a question-and-answer session.

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's registration statement on Form F-1 and Form 20-F as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

Please also note that Secoo's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Secoo's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.

I will now turn the call over to our Chairman and CEO, Mr. Richard Li. Please go ahead.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [3]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [4]

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[Interpreted] Hello, everyone, and thank you for joining us today.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [5]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [6]

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[Interpreted] We are very pleased to complete a robust 2019, presenting a solid start for Secoo's second decade of operations. In 2019, we delivered solid growth across all key metrics. Notably, our full year GMV increased by 71.3% to RMB 13.785 billion, and the number of active customers increased 67.5% to 1.223 million. In the fourth quarter, which is a traditionally strong season for online consumption, Secoo implemented a series of influential year-end consumer events during the shopping holidays. Such as Double-11, Black Friday and 1217 Luxury Festival, featuring innovative marketing campaigns centering on our membership programs. Supported by our AI-empowered operating platform and service system, these promotion activities boosted our rapidly-growing active customer base. To illustrate: in the fourth quarter, the number of active customers realized more than 50% year-over-year increase and the number of the active customers enrolled in our membership increased approximately 200% year-over-year. These meaningful results illustrate a strong growth momentum of China's luxury goods and services market. They also further validate the power of our leading position in the marketplace underpinned by a solid infrastructure built on supply chains, customer engagement strategy, AI technology advancement and the overall strength of our brand.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [7]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [8]

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[Interpreted] On the supply front, Secoo remains committed to a diversified growth strategy and optimizing our global supply chain network to enhance our competitive edge in well-established product categories. On the customer demand front, Secoo is dedicated to cultivating its membership ecosystem and increasing effective customer engagement. These efforts are being driven in combination with the variety of cutting-edge marketing events, featuring both online and offline activities, designed to ramp up customer traction and paid conversion rates. At the same time, Secoo's strategic focus remains on technology innovation and advancement across our platform in a continuous effort to optimize our platform and strengthen data analytics and insight capabilities. We are making rapid strides toward a completely AI-empowered platform that fortifies our core competitive strengths.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [9]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [10]

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[Interpreted] As Secoo's high-end brand image and influence continues to grow, we have been able to quickly expand our cooperations with more global luxury brands and high-quality suppliers. Since the beginning of the fourth quarter-to-date, we have secured direct cooperation partnerships with a total of 69 new brands, including Zegna, Maserati, Lanvin and Anna Sui. I'm also pleased to announce that Valentino's official online flagship store in China was launched on our platform in early March.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [11]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [12]

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[Interpreted] We continued our endeavors to expand Secoo livestream channel, featuring trendy and the upscale livestream shopping programs, not only to cater to the most popular online shopping trend, but also to empower luxury fashion brands with new retail opportunities to reach larger base of customers in China. Secoo livestream features a wide range of unique, engaging experiences, such as the live broadcast programs in direct collaboration with brands, livestreaming in-store shopping, fashion show live stream and the fashion wearing style live stream, which effectively helps increase user traffic and free-to-paid conversion rate.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [13]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [14]

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[Interpreted] I'd like to provide more color on our livestream strategy by giving some examples. To illustrate: Secoo rollout the brand authorized live streaming rooms in direct collaboration with Prada and Versace, and hosted livestreaming shopping program that features real time interactions with broadcaster in the Giuseppe Zanotti brand store. These livestream programs are pretty attractive to and engaging fans of those brands. Further, in late February, Secoo worked with a number of global fashion luxury brands, such Tod's, Versace and Lanvin to bring livestream of their runway shows during the Milan and Paris Fashion Weeks to our platform. Those front-row, real time shows from these prestigious fashion houses on Secoo platform attracted a massive number of new users. Also in March, Secoo creatively launched a fascinating online campaign that spurs fashionists to show off their stylish wearing by using the Secoo livestream platform and those receiving most good comments were awarded as our fashionable partners. These campaigns were well received by many celebrities, fashion KOLs and various groups of fashionists. We believe Secoo livestream platform will become a destination for more fashionable consumers towards sustainable fashion trends and fashion purchasing. Notably, the pre-owned luxury transactions through Secoo livestream have covered dozens of first-class luxury brands, such as Hermes, LV, Gucci, Armani and Chanel. Secoo livestream are also devoted to present more in-depth upscale content centered on luxury watches, jewelry and beauty categories, including luxury goods authentication and maintenance, makeup live show and so on. Recently, Secoo livestreamer also hosted live stream shopping events in several well-known off-line duty-free shops, which enrich consumers' high-end shopping selections during this time period of curtailed public movement.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [15]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [16]

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[Interpreted] To harness powerful live streaming sales potential, we have been fortifying our live streaming effort by increasing the number and duration of live broadcasts. These initiatives help characterize Secoo's live stream platform as having high average transaction value and high repeated purchase rates. So far, average daily number of broadcast events on Secoo livestream channel has surpassed 100 with average spending per customer more than RMB 5,000 and the one-week repeated purchase rate reached 52%.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [17]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [18]

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[Interpreted] Through our unique value proposition and bolstered by our integrated online and off-line platforms, we have been enriching our product offerings in collaborations with more premium original designer brands that help us better cater to the ever-widening spectrum of style preferences of high-end consumers. For example, renowned Chinese indie designer brand, Exception, has openned online store on Secoo platform. In addition, the well-known Chinese Fashion trade show Ontimeshow launched its inaugural online trade show exclusively on Secoo's platform when its offline 2020 autumn-winter Season Show was canceled due to the coronavirus epidemic. We have a long-term partnership with Ontimeshow and ongoing collaboration in helping indie designer brands to explore more commercialization opportunities. We enhanced the cooperation for the inaugural online tradeshow, enabling all indie designers brands and the brand shops signed up for the Ontimeshow, to sign up for an online shop on Secoo and featuring Secoo live stream function to promote their sales.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [19]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [20]

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[Interpreted] In addition to advancing our supply chain capabilities, we continually strive to identify and create deeper and more meaningful engagement with high-end customers. Throughout 2019, we have been strategically upgrading our membership mechanism and cultivating our paying member ecosystem. With our big data analytics on the luxury purchasing behaviors, preferences, and needs, we are integrating our proprietary know-how with the external premium resources to continually identify, create and expand high-end lifestyle shopping recommendations for the prime users. Furthermore, we are able to anticipate and address their high-profile shopping demand while optimizing their shopping experience. Moreover, during the Valentine's Day shopping festival this year, we upgraded our tiered membership program. This initiative coupled with our promotional of campaigns on shopping festivals and holidays has contributed to a robust increase in the number of paying users on our platforms. Additionally, with our dedication to ensuring our customers enjoy first-class shopping experience, despite the coronavirus epidemic. Since February, we officially launched an express delivery service in Beijing, Shanghai, Xiamen and Qingdao. Customers who order products applicable to this express delivery service on Secoo app in these 4 cities, will receive their merchandise in as quickly as 2 hours from the time of placing their order.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [21]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [22]

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[Interpreted] With a keen focus on enhancing user experience, we accelerated our intelligent operating strategy by advancing and leveraging our capabilities in AI, big data and cloud computing. Specially in the fourth quarter, we officially launched our unified merchandise management system. This system enable automated pricing and the smart product recommendation by leveraging the AI-empowered identification, big-data, analytics and cloud computing technologies. As a leader in the luxury e-commerce sector, Secoo leveraged its strong team of luxury goods, authentication experts and a powerful product authentication database that incorporates block chain technology to launch a unique online luxury authentication service, which brings a sophisticated luxury authentication institution to serve users online.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [23]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [24]

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[Interpreted] During the COVID-19 epidemic, we canceled various offline events and maintained only basic operations in our physical stores in response to central and local governments' quarantine and containment measures. In addition, due to the macroeconomic slowdown and overall conservative consumption sentiment, we expect some short-term impact to our business. We have taken prompt action in adjusting our operations and mobilizing our advantages as one of the leading high-end e-commerce platforms in China to fulfill consumers' high-end shopping demand during this time period of curtailed public movement. As the coronavirus moves toward a state of containment, we remain confident in the long-term prospects of our development and continue to implement upgrades to our platform operations to further enrich user experience.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [25]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [26]

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[Interpreted] In 2019, we accomplished a great deal. We constantly optimized our global supply chain system, implemented the smart recommendation initiatives, enhanced customer engagement along with upgraded paid membership program and ramped up our data-driven targeted marketing platform. All these efforts are well aligned with our goal to build out a solid infrastructure to support sustainable growth for our suppliers, partners and high-end customers. In 2020, in addition to continuing the activities I just mentioned, we will also invest in strengthening our fashion clothing category and livestream channel, enlarge the scale of pre-owned luxury transactions, further expand our cooperation with more offline, high-end strategic partners, deepen our collaboration with luxury brands and bring Secoo's influence in upscale fashion space to a next level.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [27]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [28]

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[Interpreted] With that, I will now turn the call over to our CFO, Mr. Shaojun Chen, who will discuss our key operating metrics and financial results.

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Shaojun Chen, Secoo Holding Limited - CFO [29]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [30]

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[Interpreted] Thank you, Richard, and hello, everyone.

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Shaojun Chen, Secoo Holding Limited - CFO [31]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [32]

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[Interpreted] We are pleased that, our financial performance in 2019 continued to demonstrate our solid execution of our strategies. We delivered total revenue of RMB 6.9 billion in 2019, up 27.5%. We will continue to pursue solid organic growth pathways and explore valuable partnerships that enhance our suite of offerings and strengthen our brand leadership in the market. Our core capabilities, which we believe will support us to achieve our long-term corporate goal and maximize shareholder value.

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Shaojun Chen, Secoo Holding Limited - CFO [33]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [34]

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[Interpreted] Now I'd like to walk you through our detailed financial results in the fourth quarter of 2019.

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Shaojun Chen, Secoo Holding Limited - CFO [35]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [36]

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[Interpreted] GMV increased by 51.9% to RMB 4.68 billion for the fourth quarter of 2019, from RMB 3.08 billion for the fourth quarter of 2018.

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Shaojun Chen, Secoo Holding Limited - CFO [37]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [38]

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[Interpreted] Total number of orders increased by 48.4% to RMB 1.403 million for the fourth quarter of 2019 from RMB 945,000 for the fourth quarter of 2018.

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Shaojun Chen, Secoo Holding Limited - CFO [39]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [40]

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[Interpreted] Total revenues for the fourth quarter of 2019 increased by 13.8% to RMB 2.04 billion from RMB 1.79 billion for the fourth quarter of 2018, primarily attributable to the continuous expansion of our operation. Our lush offerings of merchandise and service SKU combined with our creative and effective marketing activities driving the rapid growth in our total active customers and the total number of orders served during the period.

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Shaojun Chen, Secoo Holding Limited - CFO [41]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [42]

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[Interpreted] Cost of revenues increased by 19.6% to RMB 1.74 billion for the fourth quarter of 2019 from RMB 1.46 billion for the fourth quarter of 2018, primarily due to the increase of total revenues.

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Shaojun Chen, Secoo Holding Limited - CFO [43]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [44]

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[Interpreted] Operating expenses decreased by 7.5% to RMB 246 million for the fourth quarter of 2019 from RMB 265 million for the fourth quarter of 2018. Now I'd like to walk you through the company's expense items in detail.

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Shaojun Chen, Secoo Holding Limited - CFO [45]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [46]

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[Interpreted] Our fulfillment expenses increased by 24.7% to RMB 50.1 million for the fourth quarter of 2019 from RMB 40.1 million for the fourth quarter of 2018. The increase was primarily attributable to the increase of shipping expenses and third-party payment commissions as well as the increased staff cost during the period.

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Shaojun Chen, Secoo Holding Limited - CFO [47]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [48]

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[Interpreted] Our marketing expenses decreased by 30.9% to RMB 106 million for the fourth quarter of 2019, from RMB 154 million for the fourth quarter of 2018, primarily due to reduced online and offline advertising expenses.

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Shaojun Chen, Secoo Holding Limited - CFO [49]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [50]

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[Interpreted] Technology and content development expenses increased by 27.3% to RMB 27.1 million for the fourth quarter of 2019 from RMB 21.3 million for the fourth quarter of 2018. The increase was primarily due to the continuous investment in the technology department in order to strengthen the driving force of technology for operation.

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Shaojun Chen, Secoo Holding Limited - CFO [51]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [52]

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[Interpreted] Our general and administrative expenses increased by 23.7% to RMB 62.2 million for the fourth quarter of 2019 from RMB 50.3 million for the fourth quarter of 2018. The increase was primarily attributable to rising rents associated with relocation of office, and provision for doubtful debts.

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Shaojun Chen, Secoo Holding Limited - CFO [53]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [54]

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[Interpreted] Our income from operations was RMB 50.0 million for the fourth quarter of 2019, compared with RMB 69.1 million for the fourth quarter of 2018.

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Shaojun Chen, Secoo Holding Limited - CFO [55]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [56]

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[Interpreted] We recorded a net income of RMB 43.7 million for the fourth quarter of 2019, compared with RMB 48.3 million for the fourth quarter of 2018.

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Shaojun Chen, Secoo Holding Limited - CFO [57]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [58]

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[Interpreted] Non-GAAP net income, which excludes sharebased compensation expenses, for the fourth quarter of 2019 was RMB 43.5 million, compared with RMB 54.8 million for the fourth quarter of 2018.

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Shaojun Chen, Secoo Holding Limited - CFO [59]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [60]

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[Interpreted] As of December 31, 2019, the company had cash and restricted cash of RMB 954 million.

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Shaojun Chen, Secoo Holding Limited - CFO [61]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [62]

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[Interpreted] To be mindful of the length of our earnings call, for the fiscal year of 2019 financial results, I will encourage listeners to refer to our earnings press release for further details.

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Shaojun Chen, Secoo Holding Limited - CFO [63]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [64]

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[Interpreted] Now for our outlook.

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Shaojun Chen, Secoo Holding Limited - CFO [65]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [66]

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[Interpreted] COVID-19 has brought the unprecedented levels of macro-economic disruption and uncertainty across the globe. At present, many aspects of daily life in China are starting to return to more normal routines. However, the situation in Europe and certain countries is still evolving and the operations of our European and overseas suppliers and merchants have been either interrupted or operating in reduced capacities. As a result, the company expects a soft performance in the first quarter of 2020. Secoo has been adjusting its business strategies to minimize COVID-19's impact on its operations. However, due to uncertainty of the pandemic's impact, particularly in Europe, the full extent to which COVID-19 will impact on our financial results and business operations will depend on future developments, which cannot be predicted.

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Shaojun Chen, Secoo Holding Limited - CFO [67]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [68]

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[Interpreted] This concludes our prepared remarks. We will now open the call to questions. Operator, please go ahead.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We have our first question from the line of Hugo Shen of Macquarie.

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Hugo Shen, Macquarie Research - Analyst [2]

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(foreign language) I have 2 questions. My first question is, what is the impact of COVID-19 on consumer behavior? And my second question is, how will the company tackle the competition from peers like Tmall and JD.com, especially on competing for the cooperation with luxury brands?

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [3]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [4]

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[Interpreted] Since the beginning of this year, the COVID-19 has spread throughout China and continuing to spread in other parts of the world. Chinese government took a number of measures to contain the outbreak. But inevitably cost the macroeconomic slowdown and overall conservative consumption sentiment and expected to have some short-term impact to our business as well as our global partners and suppliers. Because of the travel ban, global travel is less now and consumer retail industry sector will be more affected. With that, the challenge brought by the COVID-19 outbreak, we believe that it also brings some opportunities for Secoo, with our unique online and offline integrated model and supply chain system across the globe. Given the current situation, offline high-end shops become more difficult and thus, online shopping platform, which provides fast, convenient and reliable services is now the first choice for many consumers. More demands are fulfilled through online channels. And we expect a much higher proportion of superior luxury shopping to happen online going forward even after the epidemic. In addition, due to the decline in the offline sales, more luxury brands will choose to cooperate with online platform, and Secoo is a strong and reliable partner for them.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [5]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [6]

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[Interpreted] However, due to the uncertainty of the pandemic impact, particularly in Europe, the full extent to which COVID-19 will impact the whole industry will depend on future development, which cannot be predicted.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [7]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [8]

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[Interpreted] Since this February, facing the evolving market environment, Secoo launched the livestreaming and self-delivery service. They have hold the lead broadcast events in direct collaboration with brands and a bigger brand base to connect the brands with consumers and patients. At the same time, we also accelerated the process to approve applications of new livestream accounts on Secoo platform from the offline merchants who are unable to operate as usual due to the COVID-19 epidemic. In this way, that enable to extend our collaboration with more offline brands and shopping centers.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [9]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [10]

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[Interpreted] During this period of curtailed public movement, consumers are less likely to go outdoor and shop as usual. And our express delivery service has greatly improved the satisfaction levels of consumers who shop on our platform. More than 90% of customers are pleased with our 2-hour express delivery service in Beijing.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [11]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [12]

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[Interpreted] For your second question, Secoo has an advantage in expanding cooperations with global luxury brands and high-quality suppliers. Since the beginning of the fourth quarter to date, we have secured direct cooperation partnerships with a total of 69 brands, including the Ermenegildo Zegna, Lanvin and Anna Sui, and Valentino official online flagship store in China also was launched on Secoo platform in early March.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [13]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [14]

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[Interpreted] In order to expand cooperations with luxury brands, Secoo continued its endeavors in helping them to promote their influence and sales through planning customized marketing events, utilizing big data and AI to identify target consumers, integrating online and offline activities as well as hosting live broadcast events in direct collaboration with brands and fashion show live stream.

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Rixue Li, Secoo Holding Limited - Founder, Chairman of the Board & CEO [15]

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(foreign language)

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Jingbo Ma, Secoo Holding Limited - IR Executive [16]

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[Interpreted] Thank you.

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Operator [17]

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Ladies and gentlemen, that concludes our question-and-answer session for today. And I'd like to turn the call back over to the management, to Ms. Jingbo for closing remarks. Please go ahead.

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Jingbo Ma, Secoo Holding Limited - IR Executive [18]

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Thank you, once again, for joining us today. If you have further questions, please feel free to contact Secoo's Investor Relations through the contact information provided on our website or The Piacente Group Investor Relations whose information is also on our website.

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Operator [19]

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Thank you. Ladies and gentlemen, that concludes our conference for today, and thank you for participating. You may now all disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]