Mogu, Inc. Q4 FY2020 earnings call

• The live video broadcasting business remained the focal point throughout the pandemic, maintaining strong growth momentum.
• COVID-19 impacted the fashion industry, but LVB helped merchants reach customers and collect small orders. Offline apparel suppliers embraced LVB.
• MOGU is positioned to capture opportunities with its KOL operation and supply chain control. ARPU is increasing, and LVB hosts are bonding with users via quality products.
• Deployed LVB brand strategy to enrich supply chain with brand apparel products, achieving significant GMV with Nike and Adidas in one night.

The live video broadcasting (LVB) business was a key growth driver. LVB-associated GMV during the fourth quarter increased by 54.1% year over year to RMB 1.6 billion, and for fiscal year 2020, it grew 91.6% to RMB 7.9 billion. The LVB business accounted for 65.4% of the Q4 GMV and 46.2% of the entire fiscal year 2020 GMV. Active buyers of the LVB business in the last 12 months grew 44.9% year over year to 3.6 million.

• The LVB business is identified as the main growth driver going forward.
• Confident in capturing the growth potential of LVB e-commerce in China.

• COVID-19 disrupted the fashion industry, with factory shutdowns, reduced sales, and wholesale market drops.
• Uncertainties related to market competition and execution of growth strategies for LVB business.

Q: Regarding the strategy of the LVB business in the near future, how to expand GMV?

A: Focus on supply chain empowerment (helping KOLs source brands, factories, etc.) and expanding proprietary traffic within the MOGU app to improve LVB efficiency.

Q: About liquidity and KOL base pay?

A: Liquidity not a concern as LVB grows, and base pay for KOLs is a long-term investment to incubate talent with revenue mainly from commissions.

Q: About cuts in sales and marketing expenses?

A: Shift to LVB model where live video broadcasting customers are sticky, and focus on targeted marketing for LVB hosts' fans.

Q: Breakdown of host numbers and 2Q guidance?

A: Host breakdown not specifically disclosed, but diversified influencers are valued; no revenue guidance but confident in LVB's future growth.

Q: Recovery process of apparel category?

A: Short-term impacted by COVID-19, medium to long-term driven by Chinese GDP and culture, with focus on value-for-money products and bridging KOLs with supply chain partners.