Yiou Home Furnishings reported on the evening of November 20 that Yunmi released its financial report for the third quarter of 2019.
According to the financial report data, Yunmi’s revenue in the third quarter was 1.07 billion yuan, a year-on-year increase of 89.2%; net profit was 73 million yuan, and the adjusted net profit was 84 million yuan, a year-on-year increase of 116.4%. This quarter’s net profit turned losses into profits.
Yunmi was listed on Nasdaq in September last year. The first quarterly financial report after listing showed that its net loss reached 59 million yuan. The outside world generally has doubts about the hype of Internet home appliances and the lack of core technical capabilities. However, since the fourth quarter of 2018, Yunmi has basically achieved profitability, but its performance growth is still not stable enough.
In the financial report, Yunmi also announced changes in the number of users: as of the third quarter of this year, the company had more than 2.6 million home users, a year-on-year increase of 85.71%. Moreover, as of the third quarter of this year, the proportion of users with at least two Yunmi IoT products increased from 16.1% at the end of the second quarter to 17.1%, and about 13.2% at the end of the third quarter of 2018.
It is worth noting that the number of offline experience stores of Yunmi in the third quarter of this year was more than 1,600, compared with about 1,900 by the end of the second quarter of 2019 and about 1,200 by the end of the third quarter of 2018.
Regarding the decrease in offline stores, Yunmi CFO Jiang Shun explained that this was mainly due to the company starting to close stores with poor performance in the second half of 2019 in order to optimize and improve store performance and productivity. He also said that despite the reduction in the number of stores, the revenue generated by the offline channel is still growing.
At the end of 2019, Chen Xiaoping, founder and CEO of Yunmi, also revealed his plan for the next year: continue to diversify sales channels and launch more product lines and SKUs. Among them, the expansion of channels includes opening more offline experience stores for Yunmi, and expanding investment in other mainstream channels to further increase brand awareness.
In terms of products, Yunmi has successively launched products including range hoods, cleaning robots and refrigerators this year, and launched a new high-end AI home appliance brand “cokiing”, the first product is refrigerators.
In terms of channels, Yunmi’s current online channels include Yunmi Mall, Mijia Youpin, Jingdong flagship store, Tmall flagship store and Suning Tesco flagship store, and offline channels are mainly Yunmi offline experience stores.
Yunmi, which was established just over four years ago, officially landed on Nasdaq and became the second listed company in the Xiaomi ecological chain, attracting much attention. The reason why Yunmi can be launched in a fast-paced manner is that Yunmi relies on the driving force of popular products.
According to Yibang Power, Yunmi’s popular small home appliance Xiaomi water purifier, in this year’s Double 11 promotion, the sales on the whole platform exceeded 100 million yuan in 1 hour and 30 minutes. In addition, according to the data of Suning Wukong list, during the 818 promotion this year, the Xiaomi kitchen water purifier ranked first in the cumulative sales list of water purifiers. With the concept of “whole house Internet home appliances” and the advantages of Xiaomi’s ecological chain, Yunmi has been able to steadily advance in the home appliance market that competes in the Red Sea.
However, a large part of Yunmi Technology’s business still comes from Xiaomi’s OEM orders. Yunmi’s financial report data shows that in 2016, 2017 and the first half of 2018, the company’s revenue from selling products to Xiaomi accounted for 95.9%, 84.7% and 62.6%, respectively.
Although relying on Xiaomi’s advantages, Yunmi can achieve a win-win situation in a relatively short period of time, but in the long run, it is not conducive to the expansion of the company’s business space. In addition, Xiaomi mainly focuses on cost-effectiveness, and the gross profit of OEM orders undertaken by Yunmi is naturally very low, which is the main reason for Yunmi to launch a new high-end brand.
In addition, in the context of the development of Internet home appliances, Yunmi is also facing many challenges. The first thing to face is the competition from established manufacturers such as Gree and Midea. Secondly, the concept of Internet home appliances is not deeply rooted in the hearts of the people, consumers do not fully understand the products, and the brand influence of Yunmi in the field of major home appliances is relatively weak.
In an interview, Chen Xiaoping once said when answering the question “How does Xiaomi help the company in terms of specific measures?”: “Xiaomi can promote our team to rethink how to use Internet logic to make products, which is a very big change. Secondly, Xiaomi has also brought us a good channel, which has promoted the company’s cash flow. In addition, we and Xiaomi have also cooperated with each other in research and development.”
Channels, research and development, and Internet thinking are the main help Xiaomi has given to ecological chain companies. But an obvious trend is that companies including Yunmi, Zhimi, and Huami are starting their own businesses and starting to push their own brands to seek their own value.
For Yunmi and these companies that want to expand their influence, if they leave the Xiaomi ecological chain, it means leaving Xiaomi’s dominant circle and entering a larger market “outside the circle”.
In this “outside the circle” market, many are senior home appliance companies than Yunmi, and they have a deeper understanding of the industry and products. To break through the competition, Yunmi also needs to rebuild its upstream supply chain and downstream channels to build its own core competitiveness.