SecProbe.io

February 15, 2019
Shanglue Xiao
Chairman of the Board of Directors and Chief Executive Officer
Yunji Inc.
15/F, South Building, Hipark Phase 2, Xiaoshan District
Hangzhou 310000
Zhejiang Province
Peoples Republic of China
Re:Yunji Inc.
Draft Registration Statement on Form F-1
Submitted January 11, 2019
CIK No. 0001759614
Dear Mr. Xiao:
            We have reviewed your draft registration statement and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.
            Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
            After reviewing the information you provide in response to these comments and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement on Form F-1, submitted January 11, 2019
Prospectus Summary
Overview, page 1
1.In the third paragraph under this heading you state that as of September 30, 2018, you had
accumulated 5.3 million members.  To provide your investors with better context for this
metric, please disclose in close proximity the number of transacting members or state that
79% of your cumulative members made or facilitated a purchase from you in the last 12
months.  Please also apply this comment to your disclosure on page 112.

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2.Here and throughout your filing you refer to your business model and platform as
membership-based.  However, we note that members are a relatively small percentage of
your buyers.  We further note your disclosure on page 115 that you have started to open
your platform to new members without requiring an invitation to join from an existing
member, and we note your disclosure on page 119 regarding the Yunji VIP app for non-
members and your plans to integrate this app with the Yunji app for members.  Please
revise your disclosures in your prospectus summary and the similar disclosures beginning
on page 112 to better explain the role of non-members in your business model and
revenue generation.  To the extent your business model is changing to be less reliant on
existing members' promotion of your memberships and products, please revise your
disclosures to clarify this matter and, if material, quantify revenue generated from new
memberships and product sales that did not result from referrals or promotions by existing
members.
3.If applicable, please revise this section to disclose that your officers and directors and
certain affiliated shareholders will own a substantial majority of your ordinary shares
following the offering.
Conventions that Apply to this Prospectus, page 6
4.Please refer to your definition of GMV.  The second sentence in this bullet point indicates
that your revenues recognized on a gross basis exclude certain items which are included in
the GMV measure.  Similarly, the third sentence in this bullet point indicates that your
revenues recognized on a net basis exclude certain items which are included in the GMV
measure.  Please revise your disclosure to clarify the meaning of the word "exclude."  If
your intent is to convey that revenue is presented net of such items, please clearly state
this.
Managements Discussion and Analysis of Financial Condition and Results of Operations
Nine months ended September 30, 2018 compared to nine months ended September 30, 2017
Revenues, page 89
5.We note your disclosure that revenues from sales of merchandise increased primarily due
to an increase in the number of buyers and increase in the number of orders fulfilled.
Since it appears these metrics will likely double from fiscal 2017 to fiscal 2018, we
believe you should provide additional context around such significant increases in order to
provide investors with a better view of the company's operations and results through the
eyes of management, including additional insight from management into the underlying
trends and causes behind the increase in number of buyers, change in prices and number
of orders fulfilled.  Please also disclose the amount of revenue generated by the sales of
your private label products, to the extent material.  In this regard, we note your disclosure
on page 114 that your private label products generally are higher margin.  Please refer to
Item 5 of Form 20-F.  Please also apply this comment to your analysis of the increase in
revenue from fiscal 2016 to fiscal 2017.

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Income tax (expense)/benefit, page 91
6.We note your disclosure that your income tax expense was RMB 22.3 million in the nine
months ended September 30, 2017, which was mainly because you incurred sales and
marketing expenses without VAT invoices in the amount of RMB 92.6 million and such
amount was not deductible from your taxable income during the nine months ended
September 30, 2017.  Please tell us and revise your disclosure to better explain why you
incurred sales and marketing expenses without VAT invoices in 2017 and why you did
not incur sales and marketing expenses without VAT invoices in 2018.
The new social e-commerce industry in China, page 108
7.We note your disclosure of challenges faced by "traditional search-based e-commerce." In
light of your line of business, please revise this section to provide more balanced
disclosure and discuss the challenges of social e-commerce.
Business, page 112
8.We note your disclosure that "as of September 30, 2018, 68.3% of [y]our transacting
members had promoted and initiated transactions of [y]our products through their social
networks."  To provide context for this statement, please disclose, if possible, the
percentage of such promotions that resulted in purchases of your products.  Please also tell
us whether you utilize any metrics to measure the extent of your members' engagement.
In this regard, we note disclosure throughout your prospectus that members are the key
participants on your platform.
Yunji Platform, page 116
9.We note that you have sharing interfaces that can be posed via different social network
platforms.  Please tell us whether you track the extent to which revenue is derived from
the platforms referenced in this section.
Our Product Offerings, page 121
10.Please revise to provide additional disclosure about the products you offer, including the
amount of revenues derived from the product categories referenced in this section, to the
extent material.  Refer to Item 4.B.1 of Form 20-F.
Fulfillment and Customer Service
Payment, page 123
11.Please provide additional disclosure about your reliance on third-party online payment
service providers, including whether you are dependent upon any particular provider or
providers for such services.  In this regard, we note your risk factor on page 29 that
"[y]our business depends on the billing, payment and escrow systems" of third-party
service payment providers.  Refer to Item 4.B.6 of Form 20-F. To the extent material,

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provide additional disclosure about the terms of any agreements with such providers.
Regulation
Regulations Relating to Pyramid Selling in the PRC, page 137
12.Please provide some additional disclosure about the ways in which you modified your
business practices since February 2016 to comply with applicable regulations.  Please also
provide additional disclosure about what constitutes an "illegal benefit" under these
regulations.  Refer to Item 4.B.8 of Form 20-F.
Description of American Depositary Shares
Governing Law, page 179
13.We note disclosure that any action based on the deposit agreement may be instituted by
the depositary and holders through arbitration in either New York or Hong Kong.  Please
tell us whether these arbitration provisions apply to claims made under the federal
securities laws of the United States.
Consolidated Financial Statements
Note 1. Principal Activities and Organization
(b) History of the Group and Basis of Presentation for the Reorganization, page F-13
14.We note your disclosures here and in Notes 18 and 19 regarding the Reorganization and
its impact on your financial statement presentation.  We have the following comments:

•We understand from your disclosures in Note 1 that the substance of these transactions
was to have the shareholding interests in Yunji Inc. immediately following the
Reorganization mirror the shareholding interests in Yunji Sharing immediately prior to
the Reorganization.  We further understand from your disclosures in Note 19 that since
Yunji Sharing had no shares outstanding, the paid in capital contributed by each of the
Initial Ordinary Shareholders, Former Series Seed Beneficiary Owners and Former
Series A Beneficiary Owners immediately prior to the Reorganization determined their
equity interests percentage as reflected in Yunji Inc. immediately following the
Reorganization.  Please confirm our understanding, or if our understanding is not
correct, please explain this matter to us in more detail.

•It appears from your disclosures on page F-48 that the relative equity interests of each
group of equity holders in Yunji Sharing as of December 31, 2017 were approximately
67.7% held by the Initial Ordinary Shareholders, 18.7% held by the Former Series
Seed Beneficiary Owners and 13.6% held by the Former Series A Beneficiary
Owners.  Please tell us how these relative equity interests are reflected in the
December 31, 2017 financial statements of Yunji Inc.  Also tell us whether the
modification/extinguishment of certain Initial Ordinary Shareholders' equity interests
and issuance of Series A Preferred Shares as described in Note 19 impacts the relative

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equity interests reflected in the December 31, 2017 financial statements of Yunji Inc.

•Your statements of changes in shareholders' deficit reflect that 20 ordinary shares were
issued in 2017 and 1.15 billion ordinary shares were issued in 2018.  Your statements
of changes in shareholders' deficit and Note 18 indicate that the issuance of 1.15
billion ordinary shares in 2018 relates to the Reorganization.  Please tell us and revise
your footnotes in an appropriate location to better explain how the 2018 issuance of
ordinary shares relates to the Reorganization, including how this issuance relates to the
equity accounts at Yunji Sharing immediately prior to the Reorganization.

•We note that disclosures throughout your filing concerning your net loss per share
indicate the weighted average number of ordinary shares outstanding in each of 2016
and 2017 was more than 1 billion shares.  For example, see your disclosure at the
bottom of page F-8 and on page F-59.  However, your balance sheets and statements
of changes in shareholders' deficit reflect that no shares were outstanding during 2016
and only 20 shares were outstanding by the end of 2017.  Please tell us how you
calculated the weighted average number of ordinary shares outstanding used in
calculating your net loss per share for each period of historical financial statements
included in your filing and why this number differs so significantly from the number
of shares outstanding disclosed on the face of your financial statements.
Note 2. Principal Accounting Policies
2.10 Short-term investment, page F-23
15.We note your disclosure that short-term investments include wealth management products
issued by PRC banks or other financial institutions, which contains fixed or variable
interest with original maturities of one year.  Please describe in greater detail the nature
and terms of your wealth management products for each period presented.  In addition, we
also note your disclosure on page 90 that your financial income, net for the nine months
ended September 30, 2018 compared to the nine months ended September 30, 2017
increased primarily due to an increased return on investments in wealth management
products.  To allow your investors to better understand this statement, please disclose the
percentage return on investment for the each of the periods presented.
Note 10. Deferred Revenue, page F-40
16.Please revise your disclosure to include the amount of revenue recognized in each year
presented that was included in deferred revenue as of the beginning of each respective
period. Refer to ASC 606-10-50-8.
Note 21. Fair Value Measurements, page F-58
17.We note you have classified your wealth management products using valuation techniques
that use Level 2 inputs using model-derived valuations in which significant inputs are

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observable or can be derived principally from, or corroborated by, observable market
data.  Please revise your disclosure to provide more detail about the model-derived
valuations, including the identification of the valuation model used, key assumptions and
inputs used in the valuations.  Please refer to 820-10-50-2(bbb)(1).
Note 25. Subsequent Events, page F-62
18.We note your disclosure on page 167 that on November 19, 2018 you issued 15,829,046
Series B+ preferred shares to Shanghai Fengxian, for an aggregate consideration of US$15
million.  If your next amendment continues to include these interim financial statements,
please revise your subsequent event footnote to also include this disclosure.
Note 26. Pro Forma Loss Per Share, page F-62
19.We note you have presented pro forma earnings per share on page F-62.  Since the
conversion of outstanding securities will occur subsequent to September 30, 2018, the
latest balance sheet date, please consider presenting pro forma earnings per share for the
latest annual period and subsequent interim period wherever historical earnings per share
has been disclosed in the fore part of your prospectus, such as Selected Consolidated
Financial and Operating Data on page 77.  We believe this provides useful information to
your investors about the capital structure into which they will be investing.
20.We note the inclusion of 846,786,626 preferred shares to be converted to ordinary shares
in the denominator of your pro forma net loss per share calculation as of September 30,
2018.  Please tell us why this amount differs from the disclosure on page 158, which states
“Immediately prior to the completion of this offering, 895,216,752 preferred shares that
are issued and outstanding will be converted into ordinary shares by way of re-designation
on a one-for-one basis…”  If the difference relates to equity issued after the September 30,
2018 balance sheet date, please tell us where such subsequent equity issuances are
disclosed.
General
21.We note disclosure throughout your registration statement that members are rewarded if
users purchase the products promoted on members' social media platforms. Please
describe these membership rewards in greater detail.  In this regard, we note your
disclosure that members may receive Yun-Coin for new member referrals, but it is not
clear whether members may also receive Yun-Coin as a reward for successfully
promoting products.

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Shanglue Xiao
Yunji Inc.
Febr