Social e-commerce platform Yunji received a delisting warning from Nasdaq!

Yunji is a social- driven membership- based e-commerce platform that launched its app in May 2015. The company went public on the Nasdaq on May 3, 2019, becoming the second domestic social e-commerce company to be listed in the United States after Pinduoduo .

The platform had previously received a delisting warning from Nasdaq on September 27 and had a 180-day grace period to restore compliance qualifications . Yunji said the company will resolve the issue within the stipulated grace period.

The delisting warning letter stated that because the closing price of Yunji's depositary shares was lower than US$1 per share for the past 30 consecutive business days, it no longer met the minimum acquisition requirements stipulated in the Nasdaq listing rules.

This means that before March 28, 2022, the closing price of Yunji’s stock must reach US$1 or above per share for at least 10 consecutive trading days to avoid the risk of delisting .

Since receiving the delisting warning letter, Yunji 's stock price has rebounded from the bottom, but it did not close at $1.08 per share until October 20. Shen Meng, executive director of Xiangsong Capital, analyzed that stocks below one dollar can still return to above the minimum standard through market value management or multi-share mergers . But the question is whether this short-term approach can really work, and if the company itself cannot optimize its growth, problems may continue to arise in the future .

In fact, from 2018 to 2020, Yunji 's revenue has been declining, and the company's net losses have increased year by year. Although the company's net profit improved in the first and second quarters of this year, its revenue continued to decline . Relevant data show that from 2018 to 2020, Yunji 's net losses gradually increased, reaching 59.688 million yuan , 126 million yuan, and 146 million yuan, respectively. Total operating income is also declining, from 13.015 billion yuan in 2018 to 11.672 billion yuan in 2019 and 5.53 billion yuan in 2020 .

The decline in the company's stock price also seems to reflect the problems faced by the development of membership-based social e-commerce . From the perspective of consumer economics, members and enterprises have achieved a win-win situation in social e-commerce based on membership fees.

However, the fundamental development of membership- based companies lies in providing higher- quality products and services. If the so-called membership-based e-commerce only uses membership to attract more users, the development of this model will be unsustainable.

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