In February, the AHS store network expanded by including 39 new jointly-operated stores, 38 of which were partner stores. The number of city-level operation stations totaled 103 with 4 additions added in the month. We resume the expansion of our local service touchpoints after the Chinese New Year holiday.

In Q1 2022, the service integration model was launched in 22 pilot cities and was proven effective. It turns out that 12 of them achieved 100%+ growth rates for B2B GMV, including 3 provincial capitals, Shenyang, Nanchang and Hefei. We remain steadfast in the city-level service integration strategy and will leverage it to conduct refined management, analysis and roll out incentive programs based on our local operations.

ATRenew upgraded its intelligent mobile phone appearance inspection equipment named “Camera Box 3.0”, which is able to simultaneously handle multiple devices. By incorporating AI algorithms, “Camera Box 3.0” can accurately detect more than 30 kinds of defects within 20 seconds, with an accuracy rate of over 99%, saving 90% of the time compared to manual inspection. It is expected that “Camera Box 3.0” will be put into use in 1H2022 to further implement automation at ATRenew’s operation centers.

The Company relocates its Shenzhen operation center to Dongguan. Currently, the Dongguan facility is going through a couple of upgrades, including an automated shunting system, an intelligent storage system, and Matrix automated inspection system. A trial operation is expected in mid-June before it’s officially in use by the end of June. The automation rate of the inspection process will improve by 40%. In February, the Company closed its Shanghai operation center to reduce fulfillment costs in the region. The inspection orders will be directed to city-level operation stations in Shanghai and the operation center in Changzhou.

Premier Li Keqiang of the State Council proposed in the government work report (link) on March 5 to improve supportive policies for environmental protection industries such as energy conservation, water conservation, and recycling and reuse of pre-owned goods. During the two sessions, a number of NPC deputies made proposals on the development of a circular economy, further strengthening the recycling of electronics, formulating a medium and long-term development plan for the recycling and reuse of electronics, vigorously cultivating and regulating the industry.