Good day, welcome to the Tuniu 2023 Q2 Conference Call. All participants will be in listen-only mode. If you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Mary Chen, Investor Relations Director. Please go ahead.
Thank you, and welcome to our 2023 Q2 Earnings Conference Call. Joining me on the call today is Dunde Yu , Tuniu Founder, Chairman, and Chief Executive Officer, and Anqiang Ye , Tuniu's Financial Controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the Q2 of 2023. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call as we will make forward-looking statements. This call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Please note that unless otherwise stated, all figures mentioned during this call are in RMB. I would now like to turn the call over to our Founder, Chairman, and Chief Executive Officer, Dunde Yu .
Thank you, Mary. Good day, everyone. Welcome to our Q2 2023 earnings conference call. In the Q2 , Tuniu's business experienced a rapid recovery and delivered a robust result, building on the strong momentum we saw in the Q1 . Our net revenues beat our previous guidance, growing by 170% year-over-year for the quarter, with revenues from package tours growing even faster at 632% year-over-year. In this year-- In this quarter, we achieved our first operating profit since 2016, and the first net income since the pandemic outbreak, both on GAAP and non-GAAP basis. By leveraging Tuniu's advantages in products, supply chain, and sales channels, we have been able to continuously increase our profitability. We also focused on improving internal operation, operational efficiency through the implementation of technology tools.
During the quarter, our gross margin improved to 65%, up from 45% during the same period last year. Additionally, we have maintained positive operating cash flow for 2 consecutive quarters. The encouraging results from this quarter demonstrate that Tuniu is overcoming the negative impact of the pandemic, and we are now one step closer to realize our goal of sustained growth and long-term profitability. In the Q2 , people's interest has grown for traveling search with the warm weather and upcoming holidays. In response to the increasing mass market demand for travel products in terms of both quantity and quality, our strategy has been to focus our in-house offerings on the most popular travel products and to meet diverse customer demands through collaborations with suppliers.
To be more specific regarding our in-house products, we follow strict quality standards for product development and provide industry-leading services for a selection of popular travel destinations and routes. During the quarter, our Niu Tour series launched a large number of routes, routes, and shopping activities, resulting in an impressive 98% customer satisfaction rate. Notably, several classic Niu Tour itineraries in Europe, which were launched in Q2, were nearly full, fully booked, with tours scheduled through September. Regarding profitability, Tuniu leverage is our scale advantages to effectively reduce the resource procurement costs for our in-house products. Our focus on product differentiation helps minimize the risk of price competition, leading to higher take rates from- for our in-house products. We also continue to expand our collaborations with a diverse range of suppliers to offer our customers an extended range of long-tail products.
Customized tours are increasingly popular due to the public's growing demand for higher quality travel experiences. In the Q2 , Tuniu's revenue for customized tours increased by more than 100%... compared to the previous quarter. The primary customer base for fully customized tours is the middle to upper class, as well as our repeat customers, who often travel with their families and friends. The tour destinations have expanded from domestic to international markets. Corporate travel experiences is the peak season during springtime, with a notable increasing of team building trips and incentive trips organized for companies in first and the second tier cities. Customized tours can constantly achieve a higher degree compared to standard products, mainly due to value-added services. In addition, our self-operated local tour operators also provide services for customized tours, helping to ensure high quality service and additional profitability.
In terms of sales channels, our diverse sales network allow us to reach more customers. One of Tuniu's key competitive advantages lie in, lies in our professional team of tour advisors. In the Q2, we continued to improve the efficiency of our tour advisors through developing new tech tools, and the sales per employee experienced a significant increase year-over-year, surpassing the previous quarter. We remain committed to strengthening our team building efforts through destination-based training, both online and offline, to our staff to enhance their business capabilities. We are seeing that new staff are able to become more productive with the help of our training and technology tools. Our repeat customers have constantly show great trust and support for Tuniu, largely due to our membership-based loyalty program. This year, the contribution of our regular customers to the overall GMV remained at over 70%.
During the first half of this year, the total GMV and GMV of package tours sold on our Membership Day every month maintained steady growth. During the Q2 , our sales on live streaming channels experienced constant monthly growth. Several of our key live streaming accounts ranked among the top three nationwide in terms of sales volumes within the trips, hotel, and travel service category. We also continued to collaborate with leading influencers and MCN agencies to promote our products. On the supply side, in Q3, we ranked third place nationwide among Tuniu travel suppliers. Thanks to the team's dedicated efforts, our live streaming channel achieved a significant milestone by recording its first quarterly profit since its establishment. Our distribution channels, including our B2B platform, offline partner stores, and social marketing tools, also delivered positive results.
During this quarter, sales from our B2B platform and offline partner stores achieved triple-digit growth compared to the previous quarter. The distribution strategy helps the company accumulate scale advantages for the procurement side and reduce our inventory pressure. Travel is considered a relatively low-frequency consumption demand compared to daily necessary necessity. Through our B2B distribution approach, we are able to transform it into high-frequency consumption. Offline partner stores help our products to reach a broader customer base and in lower tier cities at a relatively low cost, while it helps to build brand influence. Regarding technology, we have further deployed automation across our operations. For example, we implemented automated tools for product reviewing and supply chain management.
Through automation technology, we further enhanced the company's operational efficiency, helping to lower Tuniu's operating expenses for four consecutive quarters on a year-over-year basis. We will continue to promote automation and digitalization across various work scenarios, and processes to increase employee productivity. In the Q2 , we made a positive progress on both our top and bottom line. reflecting the effectiveness of Tuniu's integrated business model and the product and the service strategy we have always adhered to. With the summer peak season approaching, we are well prepared to face any challenges and continue to create greater value for our customers and shareholders. I'll now turn the call over to Anqiang, our Financial Controller, for the financial highlights.
Thank you, Dunde. Hello, everyone. Now I'll walk you through our Q2 of 2023 financial results in greater detail. Please note that all the monetary amounts are in RMB, unless otherwise stated. You can find the US dollar equivalents of the numbers in our earnings release. For Q2 of 2023, net revenue were RMB 100 million, representing a year-over-year increase of 170% from the corresponding period in 2022. The increase was primarily due to the growth of packaged tours and the travel market recovery. Revenue from packaged tours were up 632% year-over-year to RMB 59.8 million, and accounted for 70% of our total net revenue for the quarter. The increase was primarily due to the growth of organized tours.
Other revenues were up 10% year-over-year to RMB 30.2 million and accounted for 30% of our total net revenues. The increase was primarily due to the increase in service fees received from insurance companies. Gross profit for the Q2 of 2023 was RMB 65.4 million, up 296% year-over-year. Operating expenses for the Q2 of 2023 were RMB 48.6 million, down 43% year-over-year. The decrease was primarily due to the fact that the company did not incur gain on disposals of subsidiaries and the impairment of goodwill in the Q2 of 2023.
Gain on disposals of subsidiaries, which was recorded in other operating income in the amount of RMB 32.6 million and impairment of goodwill in the amount of RMB 112.1 million, were incurred as operating expenses in the Q2 of 2022. Research and product development expenses for the Q2 of 2023 were RMB 13.8 million, down 1% year-over-year. The decrease was primarily due to the decrease in amortization of acquired intangible assets. Sales and marketing expenses for the Q2 of 2023 were RMB 24.9 million, up 2% year-over-year. The increase was primarily due to the increase in promotion expenses. General and administrative expenses for the Q2 of 2023 were RMB 21.7 million, down 9% year-over-year. The decrease was primarily due to the decrease in general and administrative personnel-related expenses.
Net income attributable to ordinary shareholders of Tuniu Corporation was RMB 0.7 million in the Q2 of 2023. Non-GAAP net income attributable to ordinary shareholders of Tuniu Corporation, which excluded share-based compensation expenses, amortization of acquired intangible assets, gain on disposals of subsidiaries, and the impairment of goodwill, was RMB 6 million in the Q2 of 2023. As of June 30th, 2023, the company had cash and cash equivalents, restricted cash, and certain investments of RMB 1.1 billion. Cash flow generated from operations for the Q2 of 2023 was RMB 136.9 million. Capital expenditures for the Q2 of 2023 were RMB 6.2 million.
For the Q3 of 2023, the company expects to generate RMB 163.5 million-RMB 171.3 million of net revenue, which represents a 110%-120% increase year-over-year. Please note that the forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change. Thank you for listening. We are now ready for your questions. Operator?
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Again, if you have a question, press star then one. Our first question comes from Rachel Lee, Private Investor. Please go ahead.
Thank you, operator. First of all, congratulations on the excellent performance this quarter. For the Q2 , your revenues have exceeded last quarter's guidance. Which part of your company's business recovers better than expected, domestic or outbound tourism business? What are their proportions in revenues, respectively? Another question is regarding profitability outlook. From your perspective, do you think the profitability will expand in the Q3 ? Thank you.
Thank you for the questions. We had a strong Q2 with package tour revenue growing over six times year-over-year. Our total GMV maintained a steady growth month-by-month through April to June. This year, the summer peak season come a bit earlier than before, probably due to the lift of pent-up demand in previous years. We saw the travel surge start since the second half of June, which used to happen in early July. It's also contributing to the good results of the Q2 In terms of domestic and outbound tours, both have experienced faster recovery. During the Q2 , domestic travel tours accounted for less than 90% of our total GMV, and outbound tours accounted for over 10%, increasing from a single-digit proportion in the previous quarter.
For domestic tours, inter-province tours contribute the most to our revenues. New tour products, family tours, private and corporate customized tours were among our main revenue drivers. All of our direct and distribution channels grew fast, and many of the channels, such as online platform, B2B distribution, and live streaming, achieved profitability in the Q2 . For outbound tours, with the reopening of more countries announced in March, we launched new SKUs and saw increased bookings in the Q2 . For example, as several European countries were included in the March list, Europe become our second-largest overseas destination in terms of GMV in the Q2 . Jumping from bottom of the list, with its GMV increased over 100 times compared to the Q1 . We are excited about the new list of opening countries released last week.
The third list contains much more destinations. Some of them were among popular destinations for Chinese travelers before the pandemic. Soon after the release of the news, outbound destination searches on Tuniu platform increased significantly, especially for some countries in the new list. We are positive for the outlook of the industry and trying our best to resume supply chain as soon as possible. So far, we already have SKUs launched for the newly added destinations. For your second question, regarding the profitability, we've achieved our goal for a quarterly profit in the Q2 . The Q3 is the peak season. We are targeting for a top line growth of 110%-120% year-over-year, while we continue to take strict cost control measures.
We will maintain the increase of our total head count within 10% year-over-year during the peak season, and leverage technology tools to assist our staff to handle the increasing business. Thus, we still have room for margin improvement in the Q3 , both on a GAAP and non-GAAP basis. Thank you.
If you have a question, please press star and then one. There are no more questions in the queue. This concludes our question and answer session. I would like to turn the conference back over to Mary Chen for any closing remarks.
Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months.
The conference has been concluded. Thank you for attending today's presentation. You may now disconnect.