GigaCloud Technology Inc

Previous wording

•GigaCloud 3P: generates service revenues, including revenues from platform commission, ocean transportation service, warehousing service, last-mile delivery service, packaging service and others, by facilitating transactions between sellers and buyers in our GigaCloud Marketplace.

Current wording

•GigaCloud 3P: generates service revenues, including revenues from platform commission, ocean transportation service, warehousing service, last-mile delivery service, packaging service, drayage service and others, by facilitating transactions between sellers and buyers in our GigaCloud Marketplace.

Previous 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.

Current wording

GigaCloud Marketplace GMV increased from $684.7 million in the 12 months ended September 30, 2023 to $1,233.6 million in the 12 months ended September 30, 2024, representing a growth of 80.2% period-over-period, primarily due to the continued increase in the numbers of sellers and buyers transacting in our marketplace as our marketplace continues to gain scale and market position. In the second quarter of 2024, we introduced Noble House-related SKUs to our GigaCloud Marketplace, which have been reflected in our GigaCloud Marketplace GMV starting April 1, 2024.

Previous 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.

Current wording

The number of active 3P sellers in the GigaCloud Marketplace increased from 741 in the 12 months ended September 30, 2023 to 1,051 in the 12 months ended September 30, 2024, representing an increase of 41.8% 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 33,086 as of September 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 $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.

Current wording

3P Seller GigaCloud Marketplace GMV represents the GMV our 3P Sellers transact in the GigaCloud Marketplace. 3P Seller GigaCloud Marketplace GMV was $369.5 million in the 12 months ended September 30, 2023 and $635.5 million in 12 months ended September 30, 2024, representing an increase of 72.0% period-over-period. 3P Seller GigaCloud Marketplace GMV represented 54.0% and 51.5% of total GigaCloud Marketplace GMV in the 12 months ended September 30, 2023 and September 30, 2024, respectively.

Previous 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.

Current wording

The number of active buyers in the GigaCloud Marketplace increased from 4,602 in the 12 months ended September 30, 2023 to 8,535 in the 12 months ended September 30, 2024, representing an increase of 85.5% 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 enhancing our marketplace product categories, and leveraging referrals from existing users.

Previous 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.

Current wording

The spend per active buyer in our GigaCloud Marketplace was $148,793 in the 12 months ended September 30, 2023, compared to $144,534 in the 12 months ended September 30, 2024, representing a slight decrease of 2.9% period-over-period. Spend per active buyer is a key driver of GMV and revenue for our GigaCloud Marketplace. We grow spend per active buyer by expanding our product categories, increasing buyers’ purchase frequency and raising the average price per purchase. The slight decrease in spend per active buyer for the 12 months ended September 30, 2024 was primarily due to a higher number of new buyers onboarded during the period, who generally require time to increase their spending in our GigaCloud Marketplace.

Previous 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.

Current wording

Our number of active 3P sellers was 1,051 in the 12 months ended September 30, 2024, compared to 741 in the 12 months ended September 30, 2023, representing an increase of 41.8% from 12 months ended September 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

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.

Current wording

In the 12 months ended September 30, 2024, we had 8,535 active buyers in our marketplace with an average $144,534 spend per active buyer, representing a 85.5% increase in active buyers and a 2.9% decrease in spend per active buyer compared to the 4,602 active buyers in our marketplace with an average $148,793 spend per active buyer in the 12 months ended September 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

Recent global economic uncertainties, inflation, higher interest rates, lower consumer confidence and demand for discretionary goods, and geopolitical events such as recent international trade disputes and the ongoing wars in Ukraine and in Israel and Gaza, including the related disruptions to international shipping in the Red Sea could impact the demand of products and shipping and freight rates. Other macroeconomic factors that can affect customer spending patterns include employment rates, availability of customer credit, interest rates, tax rates and energy costs.

Current wording

Recent global economic uncertainties, inflation, higher interest rates, surge in fuel and transportation costs, lower consumer confidence and demand for discretionary goods, and geopolitical events such as recent international trade disputes and the ongoing wars in Ukraine and in Israel and Gaza, including the related disruptions to international shipping in the Red Sea could impact the demand of products and shipping and freight rates. We expect an increase in our transportation costs in the fourth quarter of 2024 due to seasonal demand surge which may negatively affect our profitability. Other macroeconomic factors that can affect customer spending patterns include employment rates, availability of customer credit, tariffs, interest rates, tax rates and energy costs.

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 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.

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 74.4% and 63.7% of our total revenues in the nine months ended September 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 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.

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 September 30, 2024, we leased 37 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

We believe that sales of home furniture and other large parcel items are subject to modest seasonality. We expect the last quarter of the year to be the most active because of the November and December holiday sales period. Our GigaCloud Marketplace GMV is usually the largest in the fourth quarter of a year. It is uncertain whether this is an indicator of industry trends going forward.

Current wording

Our business is subject to seasonality. We expect the last quarter of the year to be the most active because of the November and December holiday sales period. Our GigaCloud Marketplace GMV is usually the largest in the fourth quarter of a year. It is uncertain whether this is an indicator of industry trends going forward.

Previous wording

We generate service revenues from our GigaCloud 3P business, and product revenues from our GigaCloud 1P, off-platform ecommerce businesses and others. Service revenues from GigaCloud 3P, including revenues from platform commission, ocean transportation service, warehousing service, last-mile delivery service, packaging service and others are generated by facilitating transactions between sellers and buyers in our GigaCloud Marketplace. Product revenues from GigaCloud 1P are generated through the product sales of our inventory through our GigaCloud Marketplace, and product revenues from off-platform ecommerce are generated from product sales of our inventory to and through third-party ecommerce websites.

Current wording

We generate service revenues from our GigaCloud 3P business, and product revenues from our GigaCloud 1P, off-platform ecommerce businesses and others. Service revenues from GigaCloud 3P, including revenues from platform commission, ocean transportation service, warehousing service, last-mile delivery service, packaging service, drayage service and others are generated by facilitating transactions between sellers and buyers in our GigaCloud Marketplace. Product revenues from GigaCloud 1P are generated through the product sales of our inventory through our GigaCloud Marketplace, and product revenues from off-platform ecommerce are generated from product sales of our inventory to and through third-party ecommerce websites.

Previous 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.

Current wording

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

Previous wording

We derive service revenues primarily through the various 3P activities of sellers and buyers in the GigaCloud Marketplace, including revenues from platform commission, ocean transportation service, warehousing service, last-mile delivery service, packaging service and others. When a seller and buyer enter into a transaction in GigaCloud Marketplace, we generate revenues from platform services by earning a percentage commission depending on the transaction value. The standard commission ranges between 1% and 5%. Additionally, we charge a fulfillment fee for other freight services such as delivery of products via ocean transportation. We charge the sellers storage fees based on the number of days and the size of the products that are stored in our fulfillment centers, and we charge buyers a flat fee for last-mile delivery services for delivery of products to end customers directly from our fulfillment centers, which varies by the weight of the products. We also charge packaging fees in connection with merchandise that we pack and ship.

Current wording

We derive service revenues primarily through the various 3P activities of sellers and buyers in the GigaCloud Marketplace, including revenues from platform commission, ocean transportation service, warehousing service, last-mile delivery service, packaging service, drayage service and others. When a seller and buyer enter into a transaction in GigaCloud Marketplace, we generate revenues from platform services by earning a percentage commission depending on the transaction value. The standard commission ranges between 1% and 5%. Additionally, we charge a fulfillment fee for other freight services such as delivery of products via ocean transportation. We charge the sellers storage fees based on the number of days and the size of the products that are stored in our fulfillment centers, and we charge buyers a flat fee for last-mile delivery services for delivery of products to end customers directly from our fulfillment centers, which varies by the weight of the products. We charge drayage service fees in connection with transportation of products from ports to warehouses at a flat fee. We also charge packaging fees in connection with merchandise that we pack and ship.

Previous 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.

Current wording

From time to time in the three and nine months ended September 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

We derive product revenues from the sales of products through selling our own inventory in our marketplace. This 1P business creates more products for buyers, gives us insights into seller needs, provides us with proprietary data and increases the velocity of sales in our marketplace.

Current wording

We derive product revenues from the sales of products through selling our own inventory in our marketplace. Our 1P business creates more products for buyers, gives us insights into seller needs, provides us with proprietary data and increases the velocity of sales in our marketplace.

Previous wording

Cost of services primarily consists of domestic delivery costs, an allocated portion of fulfillment center rental expenses, and costs associated with the operation of the GigaCloud Marketplace.

Current wording

Cost of services primarily consists of delivery costs, an allocated portion of fulfillment center rental expenses, and costs associated with the operation of the GigaCloud Marketplace.

Previous wording

Cost of product sales primarily consists of the purchase price of merchandise, shipping and handling costs for self-owned merchandise, rental expenses for fulfillment centers excluding the portion allocated to cost of service revenue and abnormal capacity, packaging fees and personnel related costs. Shipping and handling costs primarily consist of those costs incurred during the process of delivery in North America and markets in other regions, including the expenses attributable to shipment and handling activities, when we deliver a good to a customer.

Current wording

Cost of product sales primarily consists of the purchase price of merchandise, shipping and handling costs for self-owned merchandise, rental expenses for fulfillment centers excluding the portion allocated to cost of service revenue and abnormal capacity, packaging fees and personnel related costs. Shipping and handling costs primarily consist of those costs incurred during the process of delivery in North America and markets in other regions such as Japan and Europe, including the expenses attributable to shipment and handling activities, when we deliver a good to a customer.

Previous 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.

Current wording

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

Previous wording

Our interest income primarily consists of interest income from bank deposits, wealth management products and investment.

Current wording

Our interest income primarily consists of interest income from bank deposits, wealth management products and investments.

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 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.

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 70.2% from $178.2 million in the three months ended September 30, 2023 to $303.3 million in the three months ended September 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 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:

Current wording

•Service Revenues from GigaCloud 3P. Our service revenues increased by 95.0% from $51.5 million in the three months ended September 30, 2023 to $100.4 million in the three months ended September 30, 2024. The increase was attributable to:

Previous 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;

Current wording

◦an increase in revenues from last mile delivery services by 33.8% from $27.8 million in the three months ended September 30, 2023 to $37.2 million in the three months ended September 30, 2024 as our GigaCloud Marketplace GMV and delivery volume continued to increase;

Previous 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;

Current wording

◦an increase in revenues from ocean transportation services by 385.2% from $5.4 million in the three months ended September 30, 2023 to $26.2 million in the three months ended September 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 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;

Current wording

◦an increase in revenues from warehousing services by 117.2% from $5.8 million in the three months ended September 30, 2023 to $12.6 million in the three months ended September 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 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

Current wording

◦an increase in revenues from packaging services by 66.7% from $4.5 million in the three months ended September 30, 2023 to $7.5 million in the three months ended September 30, 2024 as we handled more products as our GigaCloud Marketplace GMV continued to increase;

Previous 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.

Current wording

◦an increase in revenues from other services by 243.5% from $2.3 million in the three months ended September 30, 2023 to $7.9 million in the three months ended September 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 September 30, 2024.

Previous 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.

Current wording

•Product Revenues from GigaCloud 1P. Our product revenues from GigaCloud 1P increased by 31.6% from $80.4 million in the three months ended September 30, 2023 to $105.8 million in the three months ended September 30, 2024. The increase was primarily due to increases in GigaCloud Marketplace GMV and the number of buyers 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 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.

Current wording

•Product Revenues from Off-platform Ecommerce. Our product revenues from off-platform ecommerce increased by 109.5% from $46.3 million in the three months ended September 30, 2023 to $97.0 million in the three months ended September 30, 2024. The increase was primarily due to increases in sales channels and increases in sales volume on certain third-party off-platform ecommerce channels.

Previous 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:

Current wording

•Our cost of services increased by 93.8% from $40.4 million in the three months ended September 30, 2023 to $78.3 million in the three months ended September 30, 2024, primarily due to:

Previous wording

◦an increase in delivery cost by 115.1% from $23.9 million 1 in the three months ended June 30, 2023 to $51.4 million in the three months ended June 30, 2024 as ocean freight costs and our sales increased during the period;

Current wording

◦an increase in delivery cost by 87.8% from $29.6 million in the three months ended September 30, 2023 to $55.6 million in the three months ended September 30, 2024 as ocean freight costs and products handled increased during the period;

Previous wording

◦an increase in staff cost by 172.7% from $2.2 million in the three months ended June 30, 2023 to $6.0 million in the three months ended June 30, 2024; and

Current wording

◦an increase in staff cost by 122.2% from $2.7 million in the three months ended September 30, 2023 to $6.0 million in the three months ended September 30, 2024 as we increased the number of employees; and

Previous 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.

Current wording

◦an increase in other cost by 216.7% from $0.6 million in the three months ended September 30, 2023 to $1.9 million in the three months ended September 30, 2024.

Previous 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;

Current wording

◦an increase in product cost by 66.0% from $67.9 million in the three months ended September 30, 2023 to $112.7 million in the three months ended September 30, 2024 as sales volume, as well as shipping costs to procure our inventories, including ocean freight costs, increased during the period;

Previous 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.

Current wording

As a result of the foregoing, our gross profit increased by 58.1% from $48.9 million in the three months ended September 30, 2023 to $77.3 million in the three months ended September 30, 2024. Our gross margin decreased from 27.4% in the three months ended September 30, 2023 to 25.5% in the three months ended September 30, 2024, primarily due to lower product gross margin resulting from product procured at increased fulfillment costs, partially offset by a higher service gross margin supported by our fixed rate ocean freight contracts that stabilized costs during the three months ended September 30, 2024.

Previous wording

Our selling and marketing expenses increased by 107.3% from $16.4 million in the six months ended June 30, 2023 to $34.0 million in the six 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 125.0% from $6.4 million in the six months ended June 30, 2023 to $14.4 million in the six 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 77.6% from $8.5 million in the six months ended June 30, 2023 to $15.1 million in the six months ended June 30, 2024 primarily relating to share-based compensation expenses incurred for awards granted and vested within Q2 2024, as well as the increased number of sales and marketing personnel and the commission paid to them, and (iii) an increase in advertising expense by 220.0% from $1.0 million in the six months ended June 30, 2023 to $3.2 million in the six months ended June 30, 2024.

Current wording

Our selling and marketing expenses increased by 69.1% from $11.0 million in the three months ended September 30, 2023 to $18.6 million in the three months ended September 30, 2024, which was primarily due to (i) an increase in staff cost related to selling and marketing personnel by 66.0% from $5.0 million in the three months ended September 30, 2023 to $8.3 million in the three months ended September 30, 2024 as we increased the number of sales and marketing personnel and the commission paid to them, (ii) an increase in platform service fee we incurred on certain third-party ecommerce websites by 60.4% from $4.8 million in the three months ended September 30, 2023 to $7.7 million in the three months ended September 30, 2024 as sales volume and sales channels both increased, and (iii) an increase in advertising expense by 128.6% from $0.7 million in the three months ended September 30, 2023 to $1.6 million in the three months ended September 30, 2024 as we increased our marketing efforts.

Previous 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.

Current wording

Our general and administrative expenses increased by 163.8% from $5.8 million in the three months ended September 30, 2023 to $15.3 million in the three months ended September 30, 2024, which was primarily due to (i) an increase in rental expense by 525.0% from $0.8 million in the three months ended September 30, 2023 to $5.0 million in the three months ended September 30, 2024, primarily relating to expenses for certain newly acquired fulfillment centers that are currently under preparation for use that were included in rental expense in the three months ended September 30, 2024, (ii) an increase in staff cost related to general and administrative personnel by 87.0% from $2.3 million in the three months ended September 30, 2023 to $4.3 million in the three months ended September 30, 2024 as we increased the number of staff, (iii) an increase in professional service expense by 80.0% from $1.5 million in the three months ended September 30, 2023 to $2.7 million in the three months ended September 30, 2024 as we engaged additional professional services from our financial and legal advisors in the three months ended September 30, 2024 compared to the previous period, and (iv) an increase in other general and administrative expenses by 240.0% from $0.5 million in the three months ended September 30, 2023 to $1.7 million in the three months ended September 30, 2024.

Previous wording

Research and development expenses increased by 308.3% from $1.2 million in the six months ended June 30, 2023 to $4.9 million in the six 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 six months ended June 30, 2024 compared to the previous period.

Current wording

Research and development expenses increased by 550.0% from $0.4 million in the three months ended September 30, 2023 to $2.6 million in the three months ended September 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 in the three months ended September 30, 2024 compared to the previous period.

Previous 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.

Current wording

We had losses on disposal of property and equipment of $45 thousand in the three months ended September 30, 2024, compared to nil in the three months ended September 30, 2023.