Unidentified Analyst: If you don’t mind, if you – may I ask a second question. How will your company achieve double-digit revenue and gross profit growth, especially in light of the COVID situation and possibly third quarter economic uncertainties?
Junling Liu: Yeah. Maybe let me try to answer that question. First of all, you mentioned about this overall environment. It is the COVID-19, the COVID zero policy does cause a lot of disruption to our business. Our fulfillment centers cannot operate as usual, and we couldn’t really replenish inventory. And some of the fulfillment centers were lock down, and we were not able to deliver orders out. And there are many orders get stuck in transit because we don’t know which city was lock down – some of the cities actually are the logistical hubs. And I think under such circumstances, it really proves the quality of our team, and it’s extraordinary. And first of all, we established emergency response committee, and this committee reports to the management of the logistic problems and all the necessary measures that need to be taken.
And if there are decisions that need to be made in the daily meeting with the management, for instance, some of the majority of the workers stay in dormitory near the warehouse and some of the dormitories get lock down. And then under such situation, we need to quickly figure out how we can do our best to keep the operation going. So in the end, we made a decision that all our office people went to the warehouse to help with the – sorting to help with packaging and really try to deliver the orders out. And also, our GR team is excellent. They managed to work with various governments to get a special delivery fleet permit. And we’ll have to work with different provincial governments to make sure that the goods can really cross provinces. Under the extraordinary circumstances, we still delivered 22% margin growth.
This is also related to our strategy, like what we did was we optimized our assortment. We optimized our pricing and we reduced the procurement cost, and we also used our technology to really provide a whole selection, a whole rich selection of products at a very competitive pricing. And the pandemic is still pretty serious right now. And we still anticipate a lot of the negative impact is going to be assumed. But we have every confidence that we will overcome all those challenges and will continue to deliver growth in the future. Thank you, Gerald.
Unidentified Analyst: Thank you for your answer and I really look forward to your report next quarter with great anticipation. So good luck going forward.
Junling Liu: Thank you.
Operator: Thank you. Your next question comes from Felix Yang who is a private investor. Please go ahead.
Unidentified Analyst: Thank you for the chance to raise questions. First of all, congratulations to you all for the 17th continuous growth quarterly. I have two questions regarding the technology R&D progress and also the private label products. First, I would like to know, is there any progress in technology R&D in the past season and what future advances will there be? And second, it’s about private label products, I know it’s a good way to raise the margin. And what will there be for the next quarter and the coming year?
Harvey Wang: Thanks, Felix. Let me take the first question regarding our technology. We are continuously making very decent resource investment in technology and in innovation. As you know that we set our mission as applying digital technology to seamlessly connect patients with medical services. So you can see that everything is through digital technology. And Junling also mentioned that we build various systems to – for example, build a smart sourcing system to manage our assortment. We build the system to improve the efficiency of our field teams and also build very effective supply chain management systems based on organization models and algorithms. All those help us to speed up our inventory turns, improve our supply chain efficiency and use our segment cost.
As you can see that results are – is through our margin improvement. And this has also been simplified by the various recognitions, some nationally, some locally. Junling mentioned that we are certified by the Chinese Ministry of Science and Technology as a national high-tech enterprise. Also, we were awarded the price of national e-commerce demonstration enterprise by China Ministry of Commerce. So these are national recognitions, which are very significant, also have some recognitions or distinctions by the local government, Shanghai government and Pudong government. We feel very proud of all the recognitions and the efforts we are putting in.
