VIPS - Earnings call transcript Q4 2020 | Vipshop Holdings Limited

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Operator

Ladies and gentlemen, good day, everyone, and welcome to Vipshop Holdings Limited's Fourth Quarter and Full Year 2020 Earnings Conference Call. At this point, I would like to turn the call to Ms. Jessie Fan, Vipshop's Director of Investor Relations. Please proceed.

Jessie Fan

Thank you, Operator. you Earnings Vipshop's Conference thank Full Quarter and XXXX Year Call. everyone, for Fourth joining and Hello,

Before we begin, Statement. I will read the Safe Harbor

this be this may projections Securities statements of will only are meaning we forward-looking we In such on or industry. may our potential call XXXX can conference All intend, of statements have these assumptions, and based hereof make Holdings statements. During the estimates as And historical some plan, Limited continue, expectations, within to its statements is and identified anticipate, that expect, make update speak are aim, will, other statements forward-looking of Vipshop statements. the at no by date Reform similar words facts other these Litigation phrases estimate, forward-looking Private any subject during than current we Act to, to time. about should, are as expressions. or or of forward-looking the These cases, call, and obligation change likely are statements believe, forward-looking

call to on At would are this to I Shen, call Chairman and our today's Shen. CEO; our and time, us Joining like the turn CFO. Mr. Co-Founder, Eric David over Cui, Eric

Eric Shen

XXXX fourth and strong good and the XXXX of evening, finished financial you morning, in full-year Good our and results quarter. everyone. thank with quarter We joining year the and Welcome, operational fourth for earnings call. conference

Driven quarter. of our our robust last customers, related XX.X accelerated Continuing GMV the increased of total core in in the year-over-year by our quarter, in XX% for active period XX% growth numbers XX% faster to fourth by categories specifically, billion the the which by year. GMV apparel growth, increased year-over-year. even billion During by year-over-year XX.X the same increased from trend

shop shopping the grew customers offering are with our Our not professional the attractive who fast convenience becoming more due we as the to able showing by is acquisition customers robust during the discount procured strong retail momentum financial and trends believe and We active superior team customers than this expertise metrics differentiated our driven and we on quarter, reason did operational continued to focus customers The customer growth marketplace key see total by us to experience in our before. our are industry. offer our in new to that value the compared merchandising are platform.

for same We We have inventory this and in brands of business decade over a grow related in their segments. particularly while deals, at categories, customer the new China and looking reach value apparel inventory experience deep offer filings field. in achieve expertise the in super consumers turnover, faster industry to helping have time,

to business Looking top will the enable increasing us acquire and devoted customers. to and while into offer to aiming new execute beyond, existing deeply partners brand XXXX continue strategy, more merchandising diversified, our to customers of to our attract we desirable our product in share our brand on are more which

enabling our we the in with customers to our operational and and to the and income broader over levels CFO, from that data order a results. hand our and point, David addition, At to enjoy offering. detail to may he base, over our know-how Cui, age technology let our go continue product and service call this discuss so enhance in me financial strategy customer more will In demographic different group big us capabilities shop

David Cui

Thanks, Eric, and hello, everyone.

delivered quarter by another number have financial growth glad quarter XXXX, of the We XX% strong growth in driven In active top-line we are accelerated of year-over-year results. to with our strong the delivered fourth customers.

by in in XX% quarter, X.X X.X the year also demonstrated increasing shareholders Vipshop the growth to billion period. attributable prior billion income net non-GAAP to our year-over-year Importantly, robust from

of inflow XXXX, XX, the free billion cash for increased from in XX-months the significantly ended December year which Additionally, prior trailing generated period. X.X we billion, robust X.X a

daily on dedicated time We customers at basis. merchandise offering to desirable this with our are a

logistics While providing and customer superior to marketplace them platforms. with post-sales compared services service as

result, of year. prior from in the increased XX% quarter the XXXX As a same period conversion fourth by in our rate the

product we balance will to forward, our and Going continue profitability. enhance growth assortment our and top-line

value are will unparalleled healthy future. customer our shareholders. that inventory suppliers, our of acquisition to continuously growth solutions offering management for We value in and By confident we to ultimately and our sustainable the will our providing to generate drive trends retention continue the long-term all customers

on moving quarterly to Now highlights. our financial

was started, to the X.X margin like for in in the active Gross period. of customers. the XXXX all renminbi clarify X.X fourth XX.X% year billion billion to XXXX changes net all are billion year Gross changes from in X.X profit numbers by today number total quarter as the year billion for quarter period. XX.X% the otherwise get prior in Total as would for growth of I to I unless the prior were XX.X% Total billion Before the driven with expenses refer compared year-over-year percentage primarily increased operating fourth XX.X% XX.X with presented fourth of increased by prior for in XXXX quarter compared in billion year-over-year of quarter period. and fourth XX.X the X.X prior XXXX amounts that the from the of revenue noted. the to the period, financial by year year-over-year

the As year operating XXXX net period. Fulfillment the a as total for for XX.X% the compared quarter fourth in revenue, with of XX.X% quarter expenses to X.X total billion decreased expenses the fourth prior were of billion X.X the year from prior XXXX period. of percentage in

expenses the fulfillment revenue, X.X% period, primarily net X.X% in year period. XXXX in prior to prior Marketing total the year fourth fourth the change attributable XXXX X.X with quarter to fulfillment XXX.X the logistics for the of of compared arrangement. percentage expenses billion in from of decreased million as for quarter a As were

acquisition. to year the period. and X.X% content year net with fourth quarter percentage a expenses XXX.X of the total X.X% for of prior XXXX from the revenue, for million primarily marketing customer fourth in As million XXX.X prior attributable quarter the of as expenses in decreased to investment were XXXX in Technology period, compared the increased

revenue, technology As were of year fourth and prior year fourth XXXX from of decreased prior billion as General for the percentage billion XXXX of total to a quarter for X.X% and expenses with the quarter the the period. in administrative X.X% content in X.X net expenses compared X.X period.

prior general to percentage a revenue, decreased total As period. in net of year of XXXX the fourth from for administrative quarter and the X.X% X.X% expenses

XX.X% from from increased year X.X% to the in of which the period. of compensation XXXX and from to year-over-year margin the by fourth quarter the year-over-year X.X year X.X% income Operating of quarter X.X share-based a excluded from from operations to year amortization billion fourth X.X% year the Non-GAAP to expenses prior assets prior X.X Our X.X income the application in from prior billion for increased increased for quarter period. Non-GAAP XXXX margin of prior billion fourth increased XXXX period. resulting by XX.X% billion operations, X.X% in period. from operating for intangible income in the

Vipshop Vipshop X.X% amortization in prior RMBX.XX XXXX income investments, period. activation, ads communication RMBX.XX from per gain Our billion investment dividends, fourth business for accounted increased assets X.X% period. in the tax income from excluding attributable the to for equity fourth fourth RMBX.XX X.X% XXXX net X.X net Net impairment period. for share ADS the from net attributable loss Vipshop billion and effect margin attributable of prior loss revaluation the amortization XXXX prior the resulting investment by in from of for of quarter Non-GAAP by limited prior and assets tax year to by to of resulting the that income of to the billion shareholders the shareholders year for and XXXX net X.X from increased Vipshop's effective, X.X fourth expenses, in the to shareholders XXXX period. of service quarter year XX.X% to period. of in diluted increased of from to prior X.X% to compensation quarter the income expenses, the of excluding prior Net year billion, for diluted increased to quarter quarter investment margin X.X to of per attributable which revaluation shareholders in partnership the increased of investees Non-GAAP period. effect as year-over-year dividends in for to from year tax attributable of fourth from XX.X% Vipshop's of XXXX year excluded business fourth RMBX.XX of Vipshop shareholders measured to attributable intangible gain shareholders increased year-over-year share-based of Non-GAAP are acquisitions, intangible quarter investments the investments

the for of from was cash December XX, fourth equivalence and Net XXXX, short-term XXXX. investment company cash of billion. restricted of X.X and operating had of billion As cash XX.X billion quarter activities X.X cash our and

reflects at current the to be I XXXX, business open billion of change. year-over-year first which Operator. revenue to quarter we between our for rate a like call With net outlook This to billion, approximately that, now RMBXX.X our the subject XX%. growth Q&A. is and representing Looking our RMBXX.X XX% and the operational preliminary view and forecast on market of to conditions, would to total expect

Operator

from comes Please ask the question Stanley. Eddie first question. Your Instructions] of your of Morgan [Operator line Wang

Eddy Wang

good Hi the Shen, results. congratulations evening, Jessie and very great and on David

question on is the user my growth. So

in quarter. accelerate growth the seen actually We sustain have third very to strong user fourth from quarter

made that, in the question Can made well side. of my the except examples, you So as the quarter. terms fourth the Any the that third the give on is side have in customer initiatives I us efforts some technology quarter. especially, as the in you mentioned - think, on new partner brand is you have acquisition for you

the that user So on question you. is Thank growth. my

Jessie Fan

[Foreign Language]

Eric Shen

[Foreign Language]

Jessie Fan

started retain on year's quarter, acquire well marketing customers. new your acquisition. Since our existing to third on customers increase as last as customer we to expenses question Eddy,

and So we on. digital so installation mobile endorsement, customer reality and including use channels, Show show TV various advertising, pre acquisition

third of in the is retail. which marketing believe market, focus customers we that particularly have So at fronts, done in discount quarters. opportunities previous pace we XQ on acquire as We new there and very in in the to expenses, those this is to on similar readjusted we have in to what of went quarter lots terms

model customer where the and lifetime So effectiveness we to evaluate will but continue marketing efficiency our the how to we invest dollars. spending into acquisition, value we are of use and

technology our change can spending. on of platform. much are the products on and On but which the And at and are improve find side, continue a will focused are customers to customers our efficiency top suitable and spend, and disciplined to deep marketing, daily we their offering good more products also also we on that the improve really side operational So merchandising, basis. from that the to investing we conversion like they rate discounts

we to that business, everything So doing. long and that around, in parts to are all continue believe flywheel there we of is a acquire these they we our the customers will each will all And contribute improve we on growth. intact, to long-term continue as effect as element, will

Operator

Your line next of Citigroup. the ask question of Alicia question. comes your Yap from Please

Alicia Yap

the Thanks on actually quarter evening bit first guidance. XQ question to for good my also Shen, month-over-month and strong Hi Congratulations quarter. taking the the My little questions. David, Jessie. a is trend related

the are did the in and did after year spending relative go people strong the would much actually you not have New impact on before. on the December So So Chinese that the describe period? how as Year did situation that actually willingness, clothing you as more we And traveling base first stay many as that in needing single into spending promotion. see or city slowdown quarter, some not negative this budget given stimulate very given actually

think first Chinese encouragement changes previous giving how in any color of And wondering of carry Year quarter could these that this guidance the year. New this city to stay just strong in the that you versus direction rest you the the So see demand, Thank terms at the any terms of you. year through differences year. is this

Jessie Fan

Alicia. you, [Foreign Language] Thank

Eric Shen

[Foreign Language]

Jessie Fan

event we for Alicia, both as predominantly which saw quarter of well robust have always of on for season anniversary growth as results And in that Xth, year solid apparel a on event is trend we last us December single your question as regarding e-commerce, into state trend have promotional sales our and are a Fourth particularly key we seen. the we retailer. January. the

step a due but December, January as decelerate to compared bit, to we the winter. little change As mostly weather out of did

people much very of we the better you shopping. their at than as as New year's where look are people be when Particularly previous anticipating. January are lot families back year, mentioned, not February, seeing originally and into compared results and we were seeing trend. to hometowns years you than solid So their industry their going results, are time a during respective in staying this business Year, that believe spending wide rather pretty were as cities we their we should to with This Chinese

therefore, Looking from the shopping more that beyond. structural believe into changes of to resulted more that will and customers with ahead, us that of peers people continue believe lot gain online was beyond. And we continue as to we a and to e-commerce shop XXXX continue of learning the is and COVID-XX XXXX the into grow for people opportunities and the online there to pandemic rest

Operator

comes of Keung question. Ronald Sachs. of question the Please line next ask Your from Goldman your

Ronald Keung

David thank and Jessie. you. Shen, you Thank

growth the seems market. increased particular, supply Basically, of two-years for from It be very faster on increased of question we discounted my growth see of over like the lot apparel a XX%. you the one-year inventory. And and GMV buildup past, we kind market. are apparel in of this say, the therefore, brands than benefiting apparel, shed and think clearing I it of inventory, of following the overall your growth strong kind or kind demand the is is in the apparel

kind you. how in And later see or share, and do lapse the year, into apparel we or in we tap this say, to labels do Thank business, of maybe how we discount drivers? market private seen so maybe inventory how the that this growth cycle say ongoing other as have of

Jessie Fan

Thank you, Ronald. Language] [Foreign

Eric Shen

Language] [Foreign

Jessie Fan

not has shortage a off-price of a the in spent in inventory decade, there the we retail market. for and been business over Ronald, discount

apparel of the pandemic products. a is bit and apparel are they course, I'm products of in new brands, the standardized Of business non making very tailwind. result category. And surprised a did are and seasons launching by constantly of a there new our thousands

excess to to market inventory So or impossible it the is for predict apparel as how the exactly inventory there each will always almost much make in FTE.

existing that, suppliers, also into especially on on the Vipshop the looking And making inventory top market. investing of more so On These products. top designing, for and Vipshop are for that is actively platform. we the and are made are suppliers especially products

already future, suppliers continue products. supply base. the to will we the double ensure cost supply will in always digits. with so reached And far, attractive that to the contribution for increase Vipshop These And we collaborate have that and contribution and the will made has consumer from more products is other

Going best capability well market on to to the grow help look suppliers as merchandising bring in made order more for will and to from well the our forward, into continue business. we Vipshop both enhancing their the our customers as as product as price existing of serve to

Operator

from ask Your Jefferies. of Thomas next question of comes Please question. line Chong the your

Thomas Chong

as question. taking the Can year? in you comment the as for outlook margin well Thanks my about expenses marketing this management trend for

Jessie Fan

Thank you, Language] Thomas. [Foreign

Eric Shen

[Foreign Language]

Jessie Fan

as and how on Thomas, in user as on to outlook well margin the expenses XXXX question the your it growth beyond. and marketing leads

gain half and we XXXX. spending and in more on are should of and marketing second a that little we more into to accelerating grow trend continue similar believe XXXX be customers beyond. the we customers growth, And As customer

customers is However, million retail in that and XXX discount could approximately there is become that Vipshop's be will given customers. that potential interested

market. very from perspective, of we that potential in opportunity still a still in believe So there this to we that And compared opportunity as the the is market. small are lot

will growth So be priority. our top

between we as our profile. our been top-line on growth have always very the margin well However, focused balance as

Our will solid. to line very continue bottom be

we single-digit of are to grow a as As previously, on top-line mid- our possible margin mentioned as try we non-GAAP maintaining range, net that. and have top will fast we at

grow that sustainability. healthy growth balance to users contribute we long-term will strive to the forward, our users, continue going could So grow two, but to

Operator

America. of Your from next Joyce line Ju your of Bank question comes the of ask Please question.

Joyce Ju

focus Yes. for the and was the question. last efficiency also on team been will Basically, strategic XXXX, strategy focus company the year. for translate asking the Language] the I my from merchandise recovery And Back I'm year, [Foreign the COVID. on focused management to the for improvement. the for this the has

initiatives Just expect? or you. year this should the want with new to Thank know any we driver new for

Eric Shen

[Foreign Language]

Jessie Fan

and there to to growth, acquire growth lot We XXXX current into we continue the looking we at grow. Joyce, that that high-quality meaning to a sustainable And time, believe who opportunity maintain of fast and will our growth and long-term our will size, will we compared to margin will a to is net healthy healthy healthy potential same continue profile. to contribute profitability. and by continue pursue customers beyond,

continue the - fast, we profitability we grow even well. as out operating increase As will leverage to our come more

beyond. to will into be continue So top our and priority XXXX that

Operator

Natalie comes Wu question Please line Haitong your Your ask from of question. of next the International.

Natalie Wu

I question contribution solid management congratulations XXXX and the contribution, there to My comes offline question on my and offline GMV fourth from revenue expectation how will just and wondering quarter much myself a not that? Language] translate the result. for longer-term regarding what for [Foreign maybe in also is very of is if and expectation

Eric Shen

[Foreign Language]

Jessie Fan

on question Natalie, strategies. off-line regarding your

have is On very is three this offline GMV is X% side, business different businesses. profitable. [indiscernible] and One we outlook. the a contribution, around

we and different of grow models. that we in called So quite is two continue a at are Vipmaxx, offline and stores, healthy terms pricing is our one they have to pace. will other key targets. And the Vipshop called One own

the offering stores these businesses over slightly slightly contribution. today, the small quite one One while still contribution And still two, of total X% other of these is loss-making, almost is GMV breakeven. key

online digitized. to to We stores will the stores stores these grow retail. of and to these and more But how all focus offline will discount explore how on strategy continue offline explore these to make

new third coming as digitized the well. within these and up as customers. are the we offline Vipshop more Vipmaxx for more Currently, revenues And more our customers businesses and to ecosystem. exploring suppliers healthily around will explore of customers we Group WeChat our game buying serving such are how our how channel grow also the the from are Currently, we profitability core bring the to Group, the WeChat actively core value to WeChat utilize the members for of traffic and and a stores exploring going as and create potentially So continue contribution through ways well to offline as our and more forward.

Operator

from next Please the of of comes your ask question Jerry question. UBS. Your Liu line

Yuan Liu

and streaming about [Foreign My the to earlier question Language] Thanks. related is live video. short comments

purpose the a here maybe Just to and main new for there Thanks. platforms, some operate or these channels recent we wondering look to customers a But streaming we opportunities some while. video seeing opportunities are maybe in to at as acquire have these way is we use especially some through on WeChat, been are WeChat operating when times. of

Eric Shen

Language] [Foreign

Jessie Fan

lot Thank live methods and streaming regarding short do spending customers live your our been short ask a in time. channels. believe are that of We newer video investing and actively video. And customer these are you, question apps a Jerry. of On app and exploring have lot we where and streaming acquisition

think to targeting XXX% newer our are are up these the room still own. results to are how how own customers we customers do in app, formats. expectations. Vipshop content we we therefore, On improve that our the not streaming our And the live we be more have would acquiring well However, as as

store. there half and [remain maybe stores, is afterwards, other about like with the the going are whereas to example, on shopping many retained app these and half forward remaining of customers in would us for come our However,

with to to short invest live the continue will to and customer various order and continue ways acquisition app. streaming best will to improve the video to efficiencies, into at these the work in channels we look So we

Operator

of line (Ph) . Please comes question the CICC next your Your [Haitong ask Zhang] from question. of

Unidentified Analyst

elaboration our very target that And or the to robust follow-up we David the more question. better the help mentioned, would be will It Shen. have on product. products Jessie, my as for impact taking do product? and any addition for the you is special results. business, Congratulations a can us helpful. question, on Vipshop profitability consumers have addition price Yes, the better thanks gain are Vipshop special any hi How Vipshop Shen or and the

Jessie Fan

Thank you, [Foreign Language]

Eric Shen

[Foreign Language]

Jessie Fan

for for other it rate platform. and different the impact as how actually for make Vipshop Vipshop or and brand. the products your products given Regarding question same margin how it are products as make on is will or Vipshop the The take a a gross

conversion products. However, similar go prices meaning Vipshop the for us are give other when products giving also going only on should could for help more the in and into as their to to customers that consignment platform. for on we invest us we products should products for traffic be additional make customers value, Vipshop these differentiated products. as the they best because the we these make found result a basis that Vipshop we own are And rates off-price with well And better acquire brands, products products, our work be offer make as support for to are and new looking wait ask they more natural forward,

Operator

question your next Renaissance. from line of ask comes of Veronika Please China Your question. Shen the

Veronika Shen

I [Foreign regarding new ARPU. is remember the that mentioned from ARPU Language] for Well, My management Well low. the relatively my users thanks management the question question. taking is

Thank more So half look second trend should we seen year. the color joined than their please about Since ARPU forward And of increase. since quarter have us mix? and you last some us going for ever platform considering new could users done have at new provide how our of user you from the who Vipshop year they on spending ARPU you. the the

Eric Shen

[Foreign Language]

Jessie Fan

historical And from usually customers Veronica, in year for the we doubles a ARPU acquired quarters, customers retention continue our growth quarterly have see numbers. solid and the few on to that ARPU past solid basis. in from two we the new

is for reason customers customer that usually more driving And is new So the XXXX the by we pool. all while. to year-over-year are us shopped ARPU the adding acquiring these And versus customers for have who newer is them in average long-term with a the old lower, healthy and not and customers mix, down ARPU the from total lot therefore, XXXX for we because quite ARPU contribution decline about are confident seen the customers. sustainability these a

our the free newer method often to the some customers we RMBXXX impacted VIPs used who still have adjustments of to made well from to Additionally, lowering has the they free shipping are super which as of as ARPU as shipping and are getting frequently, to are trends, more not the continue becomes historical From confident issues we And high-quality all ticket more shopping but the that of the more to side. buy cover as customers apples-to-apples. in future. enough in the decrease comp away these slight RMBXX, changes these these short-term will new will go

As customers existing and super well buying more these as VIPs old are frequently. already

on will better to see we beyond So ARPU trends into continue and XXXX the side.

Operator

question last from Joon line the comes of Han Your of Kim Macquarie.

Han Joon Kim

a Great. advertising faster Thank other revenue. that time your product I I revenues, have this for have growing noticed is your and the you been revenues presume than today. bit

clip to the helping relationship as them have assume put grow we we kind that cut that of should think user see product outlook? our to at is other we Thank continues, brands on is continue growth way a revenue, to the tighter the more that So advertising should of about with kind you. than faster that revenues platform and

David Cui

and Other offline revenues. revenues a very advertising our portion offline our revenues only total it revenue revenues. of represents small represents And

much. So it doesn't that change

Jessie Fan

Yes.

the advertising to contribution quarter reasons. This not The the focused slightly the of faster. business has being marketplace. year, as revenues to grew line, fourth the other is the Shan from around first-line for fourth XX% on quarter. commission in is last to will as down third-party is compared decreased around slightly primarily and contribution Outlets. few slightly to focused But us the actually little a primary came that in growing has I Shan GMV on decreased contribution due due X% from platform in increase the And So more rate is of third-party marketplace the bit. give a therefore, faster breakdown it

fourth only year's other revenues. Shan around contributed But of this the revenues. to of to XX% fourth Shan year, X% other of As quarter Outlets quarter, last in it around in contributed

Operator

I back for remarks. the further are call closing there will no to hand questions, management now the see I the

David Cui

with forward So. Thank taking and you time to Thanks. look to you join quarter. for the speaking us, next we

Jessie Fan

Thank you all.

Eric Shen

you. Thank

Operator

conference Ladies and participating. today's for Thank you concludes gentlemen, this call.

all disconnect. You may now

Vipshop Holdings Limited (VIPS) 25 Feb 212020 Q4 Earnings call transcript