GigaCloud Technology Inc

Previous wording

We monitor the following key financial and operating metrics to evaluate the growth of our GigaCloud Marketplace, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. The financial impact from the acquisitions of Noble House and Wondersign was reflected in our unaudited condensed consolidated financial results. The operating impact from these acquisitions has not been reflected in the operating metrics in our GigaCloud Marketplace in this quarterly report.

Current wording

We monitor the following key financial and operating metrics to evaluate the growth of our GigaCloud Marketplace, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. The financial impact from the acquisitions of Noble House and Wondersign was reflected in our unaudited condensed consolidated financial results since the completion of the acquisitions in the fourth quarter of 2023. In the second quarter of 2024, we introduced Noble House-related SKUs to our GigaCloud Marketplace, which contributed to a one-time uplift in our operating metrics. The operating impact from these acquisitions has been reflected in the operating metrics in our GigaCloud Marketplace since April 1, 2024.

Previous wording

GigaCloud Marketplace GMV increased from $553.5 million in the 12 months ended March 31, 2023 to $907.7 million in the 12 months ended March 31, 2024, representing a growth of 64.0% period-over-period, primarily due to the continued increase in the numbers of sellers and buyers transacting in our marketplace and an increase in spend per active buyer as our marketplace continued to gain scale and market position.

Current wording

GigaCloud Marketplace GMV increased from $607.5 million in the 12 months ended June 30, 2023 to $1,097.8 million in the 12 months ended June 30, 2024, representing a growth of 80.7% period-over-period, primarily due to the continued increase in the numbers of sellers and buyers transacting in our marketplace and an increase in spend per active buyer as our marketplace continued to gain scale and market position. In the second quarter of 2024, we introduced Noble House-related SKUs to our GigaCloud Marketplace, which contributed to approximately $56.6 million of GMV in the three months ended June 30, 2024.

Previous wording

The number of active 3P sellers in the GigaCloud Marketplace increased from 602 in the 12 months ended March 31, 2023 to 865 in the 12 months ended March 31, 2024, representing an increase of 43.7% period-over-period. We view active 3P sellers as a key driver of the product catalog in our marketplace, which helps attract and retain buyers. The GigaCloud Marketplace offers SKUs across furniture, home appliances, fitness equipment and other large parcel categories from our active 3P sellers. The number of SKUs increased from 22,101 as of December 31, 2023 to 25,290 as of March 31, 2024. We expect continued growth in the number of active 3P sellers through expansion into new markets, reaching out to suppliers of brick-and-mortar channels, internal sales initiatives, referrals by existing users and word-of-mouth. We leverage our 1P inventory to help establish and validate markets for new sellers, helping them onboard to our marketplace.

Current wording

The number of active 3P sellers in the GigaCloud Marketplace increased from 665 in the 12 months ended June 30, 2023 to 930 in the 12 months ended June 30, 2024, representing an increase of 39.8% period-over-period. We view active 3P sellers as a key driver of the product catalog in our marketplace, which helps attract and retain buyers. The GigaCloud Marketplace offers SKUs across furniture, home appliances, fitness equipment and other large parcel categories from our active 3P sellers. The number of SKUs from active 3P sellers increased from 22,101 as of December 31, 2023 to 27,286 as of June 30, 2024. We expect to grow the number of active 3P sellers through geographic expansion, suppliers outreach, marketing initiatives, referrals and word-of-mouth. We also leverage our 1P inventory sales to establish new markets, reducing the risk in geographic expansion for new sellers, and increasing the appeal for new sellers to join our marketplace.

Previous wording

3P Seller GigaCloud Marketplace GMV represents the GMV our 3P Sellers transact in the GigaCloud Marketplace. 3P Seller GigaCloud Marketplace GMV was $285.2 million in the 12 months ended March 31, 2023 and $489.9 million in 12 months ended March 31, 2024, representing an increase of 71.8% period-over-period. 3P Seller GigaCloud Marketplace GMV represented 51.5% and 54.0% of total GigaCloud Marketplace GMV in the 12 months ended March 31, 2023 and March 31, 2024, respectively.

Current wording

3P Seller GigaCloud Marketplace GMV represents the GMV our 3P Sellers transact in the GigaCloud Marketplace. 3P Seller GigaCloud Marketplace GMV was $324.7 million in the 12 months ended June 30, 2023 and $571.9 million in 12 months ended June 30, 2024, representing an increase of 76.1% period-over-period. 3P Seller GigaCloud Marketplace GMV represented 53.4% and 52.1% of total GigaCloud Marketplace GMV in the 12 months ended June 30, 2023 and June 30, 2024, respectively.

Previous wording

The number of active buyers in the GigaCloud Marketplace increased from 4,255 in the 12 months ended March 31, 2023 to 5,493 in the 12 months ended March 31, 2024, representing an increase of 29.1% period-over-period. We view the number of active buyers as a key driver of our GigaCloud Marketplace GMV and revenue growth, and a key indicator of our ability to attract and engage buyers in our marketplace. We expect to grow the number of active buyers by on-boarding the brick-and-mortar retailers that are subscribed to the Wondersign’s Catalog Kiosk to our GigaCloud Marketplace and referrals by existing users.

Current wording

The number of active buyers in the GigaCloud Marketplace increased from 4,351 in the 12 months ended June 30, 2023 to 7,257 in the 12 months ended June 30, 2024, representing an increase of 66.8% period-over-period. We view the number of active buyers as a key driver of GMV and revenue for our GigaCloud Marketplace. We plan to expand our active buyers by on-boarding the brick-and-mortar retailers that are subscribed to the Wondersign’s Catalog Kiosk, enhancing our marketplace product categories, and leveraging referrals from existing users.

Previous wording

The spend per active buyer in our GigaCloud Marketplace increased from $130,083 in the 12 months ended March 31, 2023 to $165,239 in 12 months ended March 31, 2024, representing an increase of 27.0% period-over-period. We view spend per active buyer as a key driver of our GigaCloud Marketplace GMV and revenue growth. Spend per active buyer is driven by expanding the product categories, increasing the frequency of buyer purchases and growing the average price per purchase. The increase in spend per active buyer was primarily due to our expanded product catalog, increase in the mix of higher priced products, introduction of new value-added services to improve the shopping experience and our enhanced supply chain capabilities for better fulfillment.

Current wording

The spend per active buyer in our GigaCloud Marketplace increased from $139,629 in the 12 months ended June 30, 2023 to $151,276 in the 12 months ended June 30, 2024, representing an increase of 8.3% period-over-period. Spend per active buyer is a key driver of GMV and revenue for our GigaCloud Marketplace. We are growing spend per active buyer by expanding our product categories, increasing buyer's purchase frequency and raising the average price per purchase. The increase in spend per active buyer for the 12 months ended June 30, 2024 was primarily due to expanded product catalog, increase in the mix of higher priced products, improved shopping experience in our marketplace and our enhanced supply chain capabilities for better fulfillment.

Previous wording

Sellers in our marketplace are typically manufacturers operating in Asia who are able to use our supply chain capabilities to establish overseas sales channels without having to invest in their own logistics or fulfillment centers overseas. We are focused on growing and retaining the number of sellers who choose to list their large parcel merchandise in our marketplace and utilize our fulfillment and logistics network for the shipping and handling of their products.

Current wording

Sellers in our marketplace are typically manufacturers operating in Asia who utilize our supply chain capabilities to establish overseas sales channels without having to invest in their own logistics or fulfillment centers overseas. We are focused on growing and retaining the number of sellers who choose to list their large parcel merchandise in our marketplace and utilize our fulfillment and logistics network for the shipping and handling of their products.

Previous wording

Our number of active 3P sellers was 865 in the 12 months ended March 31, 2024, compared to 602 in the 12 months ended March 31, 2023, representing an increase of 43.7% from 12 months ended March 31, 2023. We believe this increasing trend will continue because of the growing recognition of our marketplace, our seller-friendly comprehensive fulfillment and logistics network which enables hassle-free delivery of large parcel merchandise and our expansion into new markets.

Current wording

Our number of active 3P sellers was 930 in the 12 months ended June 30, 2024, compared to 665 in the 12 months ended June 30, 2023, representing an increase of 39.8% from 12 months ended June 30, 2023. We believe this increasing trend will continue because of the growing recognition of our marketplace, our seller-friendly comprehensive fulfillment and logistics network which enables hassle-free delivery of large parcel merchandise and our expansion into new markets.

Previous wording

We attract new sellers predominantly through organic channels such as referrals by existing users, word-of-mouth, or direct visits to our website. In 2023, we completed the acquisitions of Noble House and Wondersign, which supplemented our supply chain, fulfillment and logistics capabilities and we expect to attract more sellers and buyers into our GigaCloud Marketplace after these strategic acquisitions. We also plan to augment organic customer acquisition by adding additional sales and marketing employees to enhance seller and buyer growth.

Current wording

We attract new sellers predominantly through organic channels such as geographic expansion, suppliers outreach, marketing initiatives, referrals and word-of-mouth. In 2023, we completed the acquisitions of Noble House and Wondersign, which supplemented our supply chain, fulfillment and logistics capabilities and we expect to attract more sellers and buyers into our GigaCloud Marketplace after these strategic acquisitions. We also plan to augment organic customer acquisition by adding additional sales and marketing employees to enhance seller and buyer growth.

Previous wording

In the 12 months ended March 31, 2024, we had 5,493 active buyers in our marketplace with an average $165,239 spend per active buyer, representing a 29.1% increase in active buyers and 27.0% increase in spend per active buyer compared to the 4,255 active buyers in our marketplace with an average $130,083 spend per active buyer in the 12 months ended March 31, 2023, primarily attributable to increased scale and recognition of our marketplace and an increase in the number of global sales channels for buyers to resell products to end customers.

Current wording

In the 12 months ended June 30, 2024, we had 7,257 active buyers in our marketplace with an average $151,276 spend per active buyer, representing a 66.8% increase in active buyers and 8.3% increase in spend per active buyer compared to the 4,351 active buyers in our marketplace with an average $139,629 spend per active buyer in the 12 months ended June 30, 2023, primarily attributable to increased scale and recognition of our marketplace and an increase in the number of global sales channels for buyers to resell products to end customers.

Previous wording

Our results of operations are also affected by our ability to introduce new service offerings. We have a history of expanding our service offering to enhance our customer experience and to increase revenues. We started our business by primarily selling our own self-procured large parcel merchandise directly to end customers. We expanded our service offerings and launched our GigaCloud Marketplace in 2019, and the revenues generated by GigaCloud Marketplace grew quickly, representing 75.5% and 62.8% of our total revenues in the three months ended March 31, 2023 and 2024, respectively. We continue to evaluate opportunities to launch additional services.

Current wording

Our results of operations are also affected by our ability to introduce new service offerings. We have a history of expanding our service offering to enhance our customer experience and to increase revenues. We started our business by primarily selling our own self-procured large parcel merchandise directly to end customers. We expanded our service offerings and launched our GigaCloud Marketplace in 2019, and the revenues generated by GigaCloud Marketplace grew quickly, representing 74.6% and 61.5% of our total revenues in the six months ended June 30, 2023 and 2024, respectively. We continue to evaluate opportunities to launch additional services.

Previous wording

Our results of operations depend in part on our ability to invest in our infrastructure and technology platform to cost-effectively meet the demands of our anticipated growth. Our global fulfillment and logistics network is a key part of our infrastructure, which consists of fulfillment centers and other facilities that are strategically located, designed and equipped to efficiently manage inventory and to fulfill customers orders and other needs. As of March 31, 2024, we leased 37 fulfillment centers with an aggregate gross floor area of approximately 9.7 million square feet in five countries, and two other facilities with storage and showroom functions with an aggregate gross floor area of approximately 18,348 square feet in the U.S. Additionally, we maintain partnerships with several major shipping, trucking and freight service providers to supplement our transportation network and shipping requirements.

Current wording

Our results of operations depend in part on our ability to invest in our infrastructure and technology platform to cost-effectively meet the demands of our anticipated growth. Our global fulfillment and logistics network is a key part of our infrastructure, which consists of fulfillment centers and other facilities that are strategically located, designed and equipped to efficiently manage inventory and to fulfill customers orders and other needs. As of June 30, 2024, we leased 40 fulfillment centers with an aggregate gross floor area of approximately 10.5 million square feet in five countries, and two other facilities with storage and showroom functions with an aggregate gross floor area of approximately 18,348 square feet in the U.S. Additionally, we maintain partnerships with several major shipping, trucking and freight service providers to supplement our transportation network and shipping requirements.

Previous wording

Revenues reported are attributed to geographic areas based on locations of our fulfillment centers, except for platform commission revenues which are attributed to Hong Kong, where the server of GigaCloud Marketplace is located. Revenues by geography for the three months ended March 31, 2023 and 2024 were as follows:

Current wording

Revenues reported are attributed to geographic areas based on locations of our fulfillment centers, except for platform commission revenues which are attributed to Hong Kong, where the server of the GigaCloud Marketplace is located. The following table sets forth the breakdown of our revenues by geographic regions for the periods presented:

Previous wording

(1) No other individual region’s revenues exceeded 10% of our total revenues for the three months ended March 31, 2023 and 2024.

Current wording

(1) No other individual region’s revenues exceeded 10% of our total revenues for the three and six months ended June 30, 2023 and 2024.

Previous wording

From time to time in the three months ended March 31, 2024, when we had excess fulfillment capacity, we utilized such excess fulfillment capacity and our extensive logistics network to offer third-party logistics services to customers to help fulfill their large parcel transportation needs. As we continue to grow our GigaCloud Marketplace, we expect to dedicate our logistics capacity to customers using our marketplace and to products sold on our own marketplace, and will opportunistically provide third-party logistics services when there is excess capacity within our network.

Current wording

From time to time in the three and six months ended June 30, 2024, when we had excess fulfillment capacity, we utilized such excess fulfillment capacity and our extensive logistics network to offer third-party logistics services to customers to help fulfill their large parcel transportation needs. As we continue to grow our GigaCloud Marketplace, we expect to dedicate our logistics capacity to customers using our marketplace and to products sold on our own marketplace, and will opportunistically provide third-party logistics services when there is excess capacity within our network.

Previous wording

Our interest expense primarily consists of our financial lease interest expense for fulfillment centers and other facilities in the U.S.

Current wording

Our interest expense primarily consists of our financial lease interest expense for leased equipment used in our fulfillment centers and other facilities in the U.S.

Previous wording

Our revenues, which primarily consist of service revenues generated from GigaCloud 3P and product revenues generated from GigaCloud 1P and off-platform ecommerce sales, increased by 96.5% from $127.8 million in the three months ended March 31, 2023 to $251.1 million in the three months ended March 31, 2024. This increase was primarily due to the increased market recognition and scale of our GigaCloud Marketplace, leading to increases in our GigaCloud Marketplace GMV, sales volume and number of sellers and buyers.

Current wording

Our revenues, which primarily consist of service revenues generated from GigaCloud 3P and product revenues generated from GigaCloud 1P and off-platform ecommerce sales, increased by 103.1% from $153.1 million in the three months ended June 30, 2023 to $310.9 million in the three months ended June 30, 2024. This increase was primarily due to the increased market recognition and scale of our GigaCloud Marketplace, leading to increases in our GigaCloud Marketplace GMV, sales volume and number of sellers and buyers.

Previous wording

•Service Revenues from GigaCloud 3P. Our service revenues increased by 92.0% from $35.1 million in the three months ended March 31, 2023 to $67.4 million in the three months ended March 31, 2024. The increase was attributable to:

Current wording

•Service Revenues from GigaCloud 3P. Our service revenues increased by 97.2% from $43.3 million in the three months ended June 30, 2023 to $85.4 million in the three months ended June 30, 2024. The increase was attributable to:

Previous wording

◦an increase in revenues from last mile delivery services by 65.6% from $18.6 million in the three months ended March 31, 2023 to $30.8 million in the three months ended March 31, 2024 as our GigaCloud Marketplace GMV and delivery volume continued to increase;

Current wording

◦an increase in revenues from last mile delivery services by 81.7% from $22.9 million in the three months ended June 30, 2023 to $41.6 million in the three months ended June 30, 2024 as our GigaCloud Marketplace GMV and delivery volume continued to increase;

Previous wording

◦an increase in revenues from ocean transportation services by 250.0% from $2.8 million in the three months ended March 31, 2023 to $9.8 million in the three months ended March 31, 2024 as our GigaCloud Marketplace GMV and delivery volume continued to increase;

Current wording

◦an increase in revenues from ocean transportation services by 297.4% from $3.9 million in the three months ended June 30, 2023 to $15.5 million in the three months ended June 30, 2024 as our GigaCloud Marketplace GMV and delivery volume continued to increase, as well as an increase in the pricing of ocean transportation services during the period;

Previous wording

◦an increase in revenues from warehousing services by 63.2% from $5.7 million in the three months ended March 31, 2023 to $9.3 million in the three months ended March 31, 2024 as we handled more products as our GigaCloud Marketplace GMV continued to increase;

Current wording

◦an increase in revenues from warehousing services by 81.1% from $5.3 million in the three months ended June 30, 2023 to $9.6 million in the three months ended June 30, 2024 as we handled more products as our GigaCloud Marketplace GMV continued to increase;

Previous wording

◦an increase in revenues from packaging services by 117.2% from $2.9 million in the three months ended March 31, 2023 to $6.3 million in the three months ended March 31, 2024 as we handled more products as our GigaCloud Marketplace GMV continued to increase; and

Current wording

◦an increase in revenues from packaging services by 97.4% from $3.9 million in the three months ended June 30, 2023 to $7.7 million in the three months ended June 30, 2024 as we handled more products as our GigaCloud Marketplace GMV continued to increase; and

Previous wording

◦an increase in revenues from other services by 165.5% from $2.9 million in the three months ended March 31, 2023 to $7.7 million in the three months ended March 31, 2024, primarily due to an increase in other supplemental fulfillment services provided by our Marketplace compared to the previous period and inclusion of subscription revenues from Wondersign in the three months ended March 31, 2024.

Current wording

◦an increase in revenues from other services by 43.5% from $4.6 million in the three months ended June 30, 2023 to $6.6 million in the three months ended June 30, 2024, primarily due to an increase in other supplemental fulfillment services provided by our Marketplace compared to the previous period and inclusion of subscription revenues from Wondersign in the three months ended June 30, 2024.

Previous wording

•Product Revenues from GigaCloud 1P. Our product revenues from GigaCloud 1P increased by 46.9% from $61.4 million in the three months ended March 31, 2023 to $90.2 million in the three months ended March 31, 2024. The increase was primarily due to increases in GigaCloud Marketplace GMV, the number of buyers and spend per active buyer as our marketplace continued to grow in scale.

Current wording

•Product Revenues from GigaCloud 1P. Our product revenues from GigaCloud 1P increased by 46.7% from $69.8 million in the three months ended June 30, 2023 to $102.4 million in the three months ended June 30, 2024. The increase was primarily due to increases in GigaCloud Marketplace GMV, the number of buyers and spend per active buyer as our marketplace continued to grow in scale.

Previous wording

•Product Revenues from Off-platform Ecommerce. Our product revenues from off-platform ecommerce increased by 198.1% from $31.3 million in the three months ended March 31, 2023 to $93.3 million in the three months ended March 31, 2024. The increase was primarily due to increases in sales channels and sales volume in certain third-party off-platform ecommerce.

Current wording

•Product Revenues from Off-platform Ecommerce. Our product revenues from off-platform ecommerce increased by 206.2% from $40.1 million in the three months ended June 30, 2023 to $122.8 million in the three months ended June 30, 2024. The increase was primarily due to increases in sales channels and sales volume in certain third-party off-platform ecommerce.

Previous wording

•Our cost of services increased by 88.9% from $28.8 million in the three months ended March 31, 2023 to $54.4 million in the three months ended March 31, 2024, primarily due to:

Current wording

•Our cost of services increased by 112.6% from $34.8 million in the three months ended June 30, 2023 to $74.0 million in the three months ended June 30, 2024, primarily due to:

Previous wording

◦an increase in rental cost by 128.9% from $4.5 million in the three months ended March 31, 2023 to $10.3 million in the three months ended March 31, 2024 as we increased the number of fulfillment centers to 37 globally in the three months ended March 31, 2024, compared to 21 fulfillment centers in the three months ended March 31, 2023;

Current wording

◦an increase in rental cost by 146.7% from $4.5 million in the three months ended June 30, 2023 to $11.1 million in the three months ended June 30, 2024 as we increased the number of fulfillment centers to 40 globally in the three months ended June 30, 2024, compared to 21 fulfillment centers in the three months ended June 30, 2023;

Previous wording

◦an increase in other cost of services by 108.3% from $1.2 million in the three months ended March 31, 2023 to $2.5 million in the three months ended March 31, 2024.

Current wording

◦an increase in other cost of services by 94.7% from $1.9 million in the three months ended June 30, 2023 to $3.7 million in the three months ended June 30, 2024.

Previous wording

◦an increase in product cost by 78.3% from $52.9 million in the three months ended March 31, 2023 to $94.3 million in the three months ended March 31, 2024;

Current wording

◦an increase in product cost by 98.3% from $60.4 million in the three months ended June 30, 2023 to $119.8 million in the three months ended June 30, 2024 as sales volume, as well as shipping costs to procure our inventories, including ocean freight costs, increased during the period;

Previous wording

◦an increase in delivery cost by 80.8% from $19.8 million in the three months ended March 31, 2023 to $35.8 million in the three months ended March 31, 2024, consistent with the increase in our sales;

Current wording

◦an increase in delivery cost by 67.0% from $10.6 million in the three months ended June 30, 2023 to $17.7 million in the three months ended June 30, 2024 consistent with the increase in our increased sales volume;

Previous wording

As a result of the foregoing, our gross profit increased by 124.7% from $29.6 million in the three months ended March 31, 2023 to $66.5 million in the three months ended March 31, 2024. Our gross margin increased from 23.1% in the three months ended March 31, 2023 to 26.5% in the three months ended March 31, 2024, primarily due to normalization of ocean freight rates in the first quarter of 2024 compared to that of 2023.

Current wording

As a result of the foregoing, our gross profit increased by 89.1% from $40.4 million in the three months ended June 30, 2023 to $76.4 million in the three months ended June 30, 2024. Our gross margin slightly decreased from 26.4% in the three months ended June 30, 2023 to 24.6% in the three months ended June 30, 2024, primarily due to increases in ocean freight costs and rental costs.

Previous wording

Our selling and marketing expenses increased by 111.6% from $6.9 million in the three months ended March 31, 2023 to $14.6 million in the three months ended March 31, 2024, which was primarily due to (i) an increase in platform service fee we incurred on certain third-party ecommerce websites by 144.4% from $2.7 million in the three months ended March 31, 2023 to $6.6 million in the three months ended March 31, 2024 as sales volume and sales channels both increased, (ii) an increase in staff cost related to selling and marketing personnel by 55.6% from $3.6 million in the three months ended March 31, 2023 to $5.6 million in the three months ended March 31, 2024 as we increased the number of sales and marketing personnel and the commission paid to them, and (iii) an increase in advertising expense by 375.0% from $0.4 million in the three months ended March 31, 2023 to $1.9 million in the three months ended March 31, 2024.

Current wording

Our selling and marketing expenses increased by 105.3% from $9.5 million in the three months ended June 30, 2023 to $19.5 million in the three months ended June 30, 2024, which was primarily due to (i) an increase in platform service fee we incurred on certain third-party ecommerce websites by 110.8% from $3.7 million in the three months ended June 30, 2023 to $7.8 million in the three months ended June 30, 2024 as sales volume and sales channels both increased, (ii) an increase in staff cost related to selling and marketing personnel by 93.9% from $4.9 million in the three months ended June 30, 2023 to $9.5 million in the three months ended June 30, 2024 primarily relating to share-based compensation expenses incurred for awards granted and vested within Q2 2024, and (iii) an increase in advertising expense by 133.3% from $0.6 million in the three months ended June 30, 2023 to $1.4 million in the three months ended June 30, 2024.

Previous wording

Our general and administrative expenses increased by 266.7% from $4.2 million in the three months ended March 31, 2023 to $15.4 million in the three months ended March 31, 2024, which was primarily due to (i) an increase in staff cost related to general and administrative personnel by 210.0% from $2.0 million in the three months ended March 31, 2023 to $6.2 million in the three months ended March 31, 2024 as we increased the number of staff, (ii) an increase in rental expense by 516.7% from $0.6 million in the three months ended March 31, 2023 to $3.7 million in the three months ended March 31, 2024, primarily because the expenses for certain newly acquired fulfillment centers that are currently under preparation for use were included in rental expense in the three months ended March 31, 2024, as compared to cost of revenues in the three months ended March 31, 2023, as well as an increase in the number of corporate offices in the three months ended March 31, 2024 compared to the previous period, (iii) an increase in professional service expense by 228.6% from $0.7 million in the three months ended March 31, 2023 to $2.3 million in the three months ended March 31, 2024 as we engaged professional services for our financial and legal advisors in the three months ended March 31, 2024 compared to the previous period, and (iv) an increase in property insurance expense by 250.0% from $0.2 million in the three months ended March 31, 2023 to $0.7 million in the three months ended March 31, 2024.

Current wording

Our general and administrative expenses increased by 281.2% from $6.9 million in the three months ended June 30, 2023 to $26.3 million in the three months ended June 30, 2024, which was primarily due to (i) an increase in staff cost related to general and administrative personnel by 314.7% from $3.4 million in the three months ended June 30, 2023 to $14.1 million in the three months ended June 30, 2024 primarily relating to share-based compensation expenses incurred for awards granted and vested within Q2 2024, (ii) an increase in rental expense by 785.7% from $0.7 million in the three months ended June 30, 2023 to $6.2 million in the three months ended June 30, 2024, primarily because the expenses for certain newly acquired fulfillment centers that are currently under preparation for use were included in rental expense in the three months ended June 30, 2024, as compared to cost of revenues in the three months ended June 30, 2023, as well as an increase in the number of corporate offices in the three months ended June 30, 2024 compared to the previous period, (iii) an increase in professional service expense by 68.8% from $1.6 million in the three months ended June 30, 2023 to $2.7 million in the three months ended June 30, 2024 as we engaged additional professional services from our financial and legal advisors in the three months ended June 30, 2024 compared to the previous period, and (iv) an increase in property insurance expense by 350.0% from $0.2 million in the three months ended June 30, 2023 to $0.9 million in the three months ended June 30, 2024.

Previous wording

Research and development expenses increased by 157.1% from $0.7 million in the three months ended March 31, 2023 to $1.8 million in the three months ended March 31, 2024. The increase was primarily due to our dedication in expanding our research and development efforts, including an increase in the number of research and development projects and the number of employees to perform research and development function in the three months ended March 31, 2024 compared to the previous period.

Current wording

Research and development expenses increased by 520.0% from $0.5 million in the three months ended June 30, 2023 to $3.1 million in the three months ended June 30, 2024. The increase was primarily due to our dedication in expanding our research and development efforts, including an increase in the number of research and development projects and the number of employees to perform research and development function, as well as share-based compensation expenses incurred for awards granted and vested to research and development personnel in the three months ended June 30, 2024 compared to the previous period.

Previous wording

We had losses on disposal of property and equipment of $6 thousand in the three months ended March 31, 2024, compared to nil in the three months ended March 31, 2024.

Current wording

We had losses on disposal of property and equipment of $162 thousand in the three months ended June 30, 2024, compared to nil in the three months ended June 30, 2023.

Previous wording

We had interest expenses of $113 thousand in the three months ended March 31, 2023 and $81.0 thousands in the three months ended March 31, 2024. The decrease was primarily attributable to a decrease in interest on finance lease liabilities.

Current wording

We had interest expenses of $804 thousand in the three months ended June 30, 2023 and $59.0 thousands in the three months ended June 30, 2024. The decrease was primarily attributable to a decrease in the balance of finance lease liabilities.

Previous wording

We had interest income of $0.6 million in the three months ended March 31, 2023 and $1.6 million in the three months ended March 31, 2024. The increase was primarily attributable to higher average bank deposits, wealth management products and investment and interest rates in the three months ended March 31, 2024 compared to the previous period.

Current wording

We had interest income of $0.5 million in the three months ended June 30, 2023 and $2.2 million in the three months ended June 30, 2024. The increase was primarily attributable to higher average bank deposits, wealth management products and investment and interest rates in the three months ended June 30, 2024 compared to the previous period.

Previous wording

We had foreign currency exchange gains, net of $1.4 million in the three months ended March 31, 2023, compared to foreign currency exchange losses, net of $2.7 million in the three months ended March 31, 2024, primarily attributable to U.S. dollars appreciated against Japanese Yen and Euro in the three months ended March 31, 2024.

Current wording

We had foreign currency exchange losses, net of $0.8 million in the three months ended June 30, 2023, compared to $1.1 million in the three months ended June 30, 2024, primarily attributable to the continue appreciation of U.S. dollars against Japanese Yen in the three months ended June 30, 2024.

Previous wording

Others losses, net was $21 thousand in the three months ended March 31, 2023 and $322 thousand in the three months ended March 31, 2024.

Current wording

Others losses, net was $1 thousand in the three months ended June 30, 2023 and others gains, net was $506 thousand in the three months ended June 30, 2024.

Previous wording

As a result of the foregoing, our net income was $15.9 million in the three months ended March 31, 2023 and $27.2 million in the three months ended March 31, 2024.

Current wording

As a result of the foregoing, our net income was $18.4 million and $27.0 million in the three months ended June 30, 2023 and 2024, respectively.