Junling Liu: Regarding your second question of OEM. Yes, this – actually, this is really excited. Today, we have launched about 9 SKUs of our private label products. And all of these 9 SKUs have been well affected by our customers, especially those small and media trends or individual B2B stores. So actually, in China, in those big trend stores the private label products have contributed about 10% to 20% of the GMV and about 30% to 40% of their margin. Well, our B2B customers, those individual stores, those small chains, they are not able to have their own brand as their volume is there. There are also many, many opportunities for this market that when we launch our offers, our private label to help them compete with those big ones in the market.
And they are already about 100 private label SKUs in our pipeline, some are in production, et cetera. So we expect to see a fast increasing volume in this project in the coming quarters. Felix, I hope I answered your questions.
Unidentified Analyst: Thank you.
Operator: Thank you. Your next question comes from Tom Craig with Investment. Please go ahead.
Unidentified Analyst: Good afternoon. This is Tom Craig from And congratulations on your performance in the third quarter. I have three questions. The first one is, well services did the company provide to patients in COVID hit regions? And second one is, what are the reasons behind contracting non-GAAP net loss from operation as a percentage of net revenue. Can this be sustained? And third one is, what is the status of the company’s cash reserves? Thank you.
Harvey Wang: Hi, Tom, let me answer your first question. It’s hard. It’s very hard to provide services for the COVID impacted regions. We have made tremendous efforts in counting all those difficulties. As we speak now, 5 of our 7 fulfillment centers are under severe impact loss balance or other impact right now. So our offices, our headquarter office here lockdown for almost 80 days. So it was hard. And even every single day, we have 1,000 orders blocked somewhere on route to customers, everything single day. So what we did, since the first day of pandemic, we won an emergency response center and we have daily calls to result from the slide. And we launched a free consultation, online consultation for all the patients in those pandemic impact regions.
As Junling mentioned that we cover customers for more than 370 cities and more than 400 different types of diseases. And also, we work with the governments to get special licenses. For example, we get our – for some local government to give us dedicated for medical products or some provinces. And we also built a very robust and dedicated transition networks to deal with the daily disruptions caused by the COVID pandemic. The network consists of the house both partner with our type of vendors, our marketplace vendors. And everything we have multiple options to – so that if one link is broken due to some reasons and we can immediately transfer to the second. So through all those ways, we’re able to as we hope so – hope to, but we got a large volume – large percentage of our business through the pandemic.
Junling Liu: And Tom, regarding second question about the net loss. Yes, we are seeing the contracting of our net loss from operations as a percentage of our net revenue. And this is, of course, both parts, what is the improvement of our gross profit. As I just mentioned, about 27% improvement on our gross profit year-over-year, and this is one hand. On the other hand, and also, we will reduce our operating expenses, which is 8.4% from 10.2% of the same quarter last year. So the improvement came from the procurement source upgrade and our product assortment, the optimization of our product assortment and also we launched various tools, for example, our new PRS or smart pricing tools. So all of this has contributed to the reduction of expenditure.
So moving forward, of course, we will – we definitely will sustain the trend. We will continue our efforts on both sides. And also, we expect to see a further improvement in the near future quarters on our net loss and our profitability. Thank you.
Harvey Wang: Yeah. On the cash position, we have closed at our earnings release that as of September end, we have total cash, including restricted cash and short-term investments amounting to RMB 860 million. As we just shared with you that we have reported a positive operating and overall cash flow for the quarter, and we believe the trend will continue. So we have strong confidence that this position, cash position is sufficient to support our future operations as well as our growth. Tom, I hope we answered all your questions.
Unidentified Analyst: Thank you, management. Hope you have a great quarter. Thank you.
Harvey Wang: Thank you.
Operator: Thank you. There are no further questions at this time. In closing, on behalf of the entire 111 management team, we’d like to thank you for your interest and participation in today’s call. If you require any further information or have any interest in visiting 111 in Shanghai, China, please let the company know. Thank you for joining us today. The call has concluded.
