VIPS - Earnings call transcript Q1 2021 | Vipshop Holdings Limited

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Operator

Ladies and gentlemen, thank you for standing by. Good day, everyone, and welcome to the Vipshop Holdings Limited First Quarter 2021 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, ma'am.

Jessie Fan

operator. you, Thank thank Earnings and joining First Vipshop's Hello, Call. you XXXX Conference Quarter everyone, for

Before will begin, we I harbor statement. read the safe

this be this may projections Securities statements of will only are meaning we forward-looking During In such on or industry. may, our potential call XXXX can we All intend, of statements have these assumptions, and based hereof make Holdings statements. call, 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 fact 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, conference and obligation change likely are statements believe, forward-looking

call to on Shen-zong? 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

of strong momentum Good and customers. joining Welcome, earnings of the morning, it's of in active operational and XXXX and good results evening, our for driven first financial quarter our continued believe first quarter everyone. XXXX, the another quarter thank robust you number conference We in by call. growth

year. million the XX.X active our by quarter, year-over-year grew same from to million the number XX.X of in customers During total period last XX%

and period the focus quarter billion strategy. the CNYXX.X from our billion XX% are XX% execution to bread for on which butter, a year-over-year same merchandising our result GMV by grew even As of by increased year-over-year. successes the year. category, faster of our GMV These apparel-related the are in result, for last CNYXX.X our

in we our contribution We of particularly as acquire believe those our our to suppliers, to existing partnerships value while increase stickiness VIP the our we aim for with customers. through market-based our relationships collaborative will deepen platforms. from from relationships, more Leveraging products offer made core to long-term have differentiated new We categories. increase them continue our offering customers, to we customers with

we forward, leadership generate strengthen to to retail China's sustainable aiming customers committed Going value and our for remain continuing our to market, suppliers. in discount

As David strategy and operational this financial hand detail discuss our CFO, that me over our Cui, go point, he results. the in let call over may our to more so and

David Cui

hello, and everyone. Eric, Thanks,

top another pleased are to strong line have We of quarter with profitability. delivered solid growth, coupled

XX% net from During prior year the increasing to see CNYXX.X strong period. by billion growth, quarter, our billion total in year-over-year to continued the revenue CNYXX.X

In addition, our on profitability basis. a year-over-year improved

increased from year. to for non-GAAP margin year-over-year billion the by CNYX.X million quarter Our to year X.X% attributable shareholders in non-GAAP the shareholders same CNYXXX Vipshop's income net to in X.X% the attributable from quarter and our net for to increased prior the period last Vipshop's XX% period,

our our procured margins on top we through diversified fast basis. as carefully stable grow products aim line while keeping Looking ahead, strong as daily offering our by to desirable possible, a merchandisers

existing We time. growing new over while and will ARPU customers customers their attract retain

shareholders. are of delivering value to all We sustainable committed to long-term our

to highlights. on moving Now our quarterly financial

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

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

period. first of CNYXXX.X of were decreased the billion prior million percentage a for expenses from the XXXX net the CNYX.X revenue, to fulfillment XXXX as Marketing year total quarter the in quarter year As for of first expenses with in prior period. X.X% X.X% compared

for of quarter was million to from customer to of percentage the acquisition decreased marketing expenses XXXX in CNYXXX.X to first XXXX the compared for a prior quarter year period, investment X.X% the primarily CNYXXX.X relating with advertising total net retention. X.X% prior attributable of period. expenses revenue, year first and million activities increased content the in in Technology as As and

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

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

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

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

of restricted CNYXX.X cash had XX, our cash equivalents As and billion company of investments short-term and cash XXXX, billion. March of CNYX.X and

operating were cash the For XXXX, CNYXXX.X activities first in quarter of million. used net

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

Operator

Thank you, sir.

the [Operator the now Wang. the question-and-answer question Please session. line go of from Instructions] begin We have first will ahead. We Eddy

Eddy Wang

for quarter So well second the the of just as year. as for my is this second the question outlook half about

promotion that we noticed of event host April. So had quite successful in we a

So or second very event how for in -- more be revenue to check color this April? already strong promotion for the second can And will if quarter on I XX% the factoring in the growth revenue the XX% event, not guidance the very the to give for whether just outlook outlook helpful. half, want Shen-zong, growth it

Eric Shen

There it Eddy, the last quarter are a in we is guidance, promotional the factors didn't did conservative. year. run run of couple it consideration. that we event, but this we April rather year, as 'XX One second see

their May the year, last strong started to quite when out particularly to the clothes But extremely and So new on holidays starting after was during May, also that it's growth China. really quarantines positive. because come basis, buy of in we everyone lockdown in saw that travel and then

this facing tougher of we beginning May. So the year, comps are in much

see going to period We goes quarter. to are how second the a get the of full picture event to and June have summertime promotional the

quite However, we are achieving steadily, growth strong by we driven user and are growing sustainable growth.

well in in the we on by expansion with confident term. second this growth, focused more our We as half personalization. More saw our shopped the us. especially categories So we customers is the long for number better believe male about as example, strong growth specifically, and that in quite are sportswear, user that of driven into

In sizable to the the addition, are quite we customers also most growth overall that in which our loyal number of chunk of contribute VIPs, Super strong saw paid revenues. the

healthy the business. long-term quite long-term are about growth and business we the of confident development of So the the

Operator

question from [Operator Joyce line America. Bank ahead. next Instructions] Please of We of have the the Ju from go

Joyce Ju

seems first actually this was and like also number the meaningfully. solid quarter. question quarter. It to gross quite margin the on related profit sequentially this My down Congrats

we on get have discounting I our rate because brands? gain of the margin color it because terms with I like future, Is gross just to or it's we colors want take trend. strategy So to like just get want changed it. probably the more in new

Eric Shen

gross the the outlook. on gross and margin profit question your Joyce,

the gross to the focus bottom on quite In line. about fact, we're internally optimistic trend. We long-term margin managing more

As we stable topline grow we've past, possible remains relatively the and effect provided to as bottom aim our line communicated that healthy. in

customers, the well So benefits in on up paying getting their reactivating shopping quarter, as spent money old to SVIPs. our frequency first as we've more more

cost. some brands more by the basis. share solid, we're on during company. are members basis, trend continues paid own very we in be our mostly off, year-over-year is But mostly actual the test So members, to margin selectively which for a the increasing in quarter VIP an cost -- participate to will offering the net happy future, on to the the a see period X% our to is Super beared And margin first net

of our as outlook still profit the long we're margins. quite optimistic as net quite over well about gross long-term run, and So confident the our

Operator

have Please the line question Thomas next the from of Chong from We Jefferies. question. your ask

Unidentified Analyst

I question acquisition. have about a So customer

So year? for share do can you we us that channels customer have Thanks. initiatives any new with acquisition this or

Eric Shen

actually customer shows targeted the -- at that We marketing in various more invest are have this more dollars. What's terms on. year very cellphone same as going short acquisition more on our even optimized we're exploring acquisitions, advertising, personalized we including be live we try TV to our And including how endorsements streaming as uniformed, start operations videos, different improved, shows to more is so customer in time, to also well to of be and into preinstallation. reality diversified and channels,

give worth don't what overall that terms be past. mentioning the and We believe to meaningful acquisition. targeted than have to to compared the as streaming into more that we we we results thing invest in live more that more portion marketing think customer be better before. that do looking going one in So do to much are think a of is a is budget, little will it's is but us that we increasing of The going done be

Operator

We your Please have from the from the International. question of next question. Haitong Natalie Wu ask line

Natalie Wu

dynamic Just also sense margin Just thoughts considering regarding some change expect? wondering, growth most get of the and competition, be some profile relate the you view, to and to rate moves let's your time stable want on wondering that? that shopping anti-monopoly recent the entries, just what's considering including what the if also we take COVID-XX, And could do new kind platforms. on conclusion on the management also of say, of comfortable the thought after a longer-term at state

Eric Shen

acquisition steady Natalie, more customer of confident testing Natalie, is customer XX% aiming we're in the acquisition growth, and of are in exploring and videos short single all long-term terms mini term, about programs a long customer the that XX% partners But growth the channels, long-term and there overall the as achieve we channel on acquisition. of actively the as potential a to we're our sustainable with contribution. well quite at to business. isn't

will enhance continue explore So our in we of and to dollars. the future, the marketing performance

Operator

have of Ronald We next from the Goldman question Sachs. Keung ask your the Please line from question.

Unidentified Analyst

Ronald. will on of behalf asking I be

of with shared In VIP few the development us terms of products, in has collaborated a quarter, brands. hundred management last Vipshop as with

have how the we related can past quarter expanded would with and great. there's if metrics many brands Just in wondering operating be collaboration shared be any

example, product LV, et of on have sales the cetera? users For scale how Vipshop many our the and app, purchased

Eric Shen

On products. we with working are collaboration, the Vipshop on Made for around for Vipshop already Made the brands currently XXX

news platform rate our good seen working the that quite track. a However, us we've metrics sophistication products that every brand's brand's our platform. is the than level that is and different. they're of bit with these proves contribution how that other The for and for on much sell-through the sales solid is product conversion are this on products higher Meaning improved on strategy and rates and

enough, brands from platforms brands works this on However, to time long-term best we hasn't the with be to will our as these our we been time. very it that other more collaboration for to how Vipshop kind Made figure need important deepen and But differentiation for over what believe with out do products. growth create more of and products long

Operator

your Capital. line We Hou the next Tian Please from the ask from have question of TH question.

Tian Hou

part our of of for XP expectation percentage what to business? By business, XP this strategy develop management is be what our business? year, end so so the the to the of is For business total

Eric Shen

X.X%, to experience provided are marketplace user total GMV only rates quarter, but complaint under from of the around and contribution the marketplace control. the X.X% on Tian, plan development, grow the this do less is comes through the marketplace. X%, sales than our if business, the We

be to, of in the And year, quarter it in X%. fourth on we quarter, the first-party hope business want as terms want in still get meaningful to we the business, to than wouldn't a slightly of So X%, the contribution our offer said, but total want we marketplace much we of first in is say, over this the how very same the experience to But that it grow focus the as level to business. contribution, less as business. increase XP in we

Operator

Please from question Ashley next Xu from your the line ask have Suisse. question. We of Credit the

Ashley Xu

their I needs half few just and some the needs international XQ impact against bar ask whether do to brands about how previous how code want and see And this we we in months. destocking past second in the see from would overall brands year do XQ? needs the in

Eric Shen

lot Vipshop grow and excess of Ashley, are choice for them, not in formats excess Made a for example sold. clearance, brand that e-commerce we've to stock we also our products, allocate which for in already in-season, inventory contributed other partners. choose partner And the brands as also in inventory clear we And slow-moving only call. to for but we SKUs will different also to brands different do channels past many be we in earlier in them the of inventory some the discussed via with extra

of brands customers our So a meaningful which And partner brand partners, in especially e-commerce with we of sales. time, but question very and as we're with event, channel At brand apparel seeing in both the a growing we for lot On -- top is up on partners momentum. the international we are the quite the new on impact actually sales, grow is picking your brands minimal. our terms there online for shoppers well brand their brand in same partners. our grow our gaining domestic a their as second terms for of their [indiscernible],

brands. share for So we're from domestic for take domestic seeing growing domestic to results international search quite Over demand we fast. and brands brands likely the brands are time, the believe

Operator

the of from have ask question. your Please We Feitong question the next line Zhang CICC. from

Feitong Zhang

we example, category would I the [Yang] on you on Congrats accelerate question. is category about the especially acquire CICC. for of This more expansion, expansion. more we to mentioned Feitong if have on to XC, those subsidize having category we're Are so, had solid margin? Will behalf -- users, destocking It's categories? impact male XC just male going what we like now be from in -- one What results. the brands the for customers? or those

Eric Shen

So contribution to the why pool of saw still of year-over-year. be customers the will we butter customers as we are of continue them contribution male efforts up customers might that's acquire might a And our apparel, around might terms overall women's our we female X% frequently, customers, able in male by Male be grow, from and growing more with which and menswear sportswear via shopping in we be the customers, us bread customers on total lot was for exponentially. customers Male sales but focusing acquiring still, categories. a to apparel-related primarily and mainly. number but are

are they driving So be to down buying and not going of margins. come ton cellphones the a

our decisions that much from apparel that and this customers they The one the quite positive see all And much it's serve rates really category. male category. we perspective, shop in higher more we we're wearable have confident well customers conversion is So male how quickly. can about thing that make and in

when experiences our we our to be So platform. and come female for will customers improving male personalized they shopping

Operator

your Charlie China next ask line question. We have Renaissance. from the of Shen question from Please the

Charlie Chen

average a going forward. revenue as have well trend per question the the I regarding Actually, as user

first strategy already. year-on-year calculation. use did if average I for actually U.S. is past if It quarter, the user seems dollar revenue this And for decline narrow very the the very, even a few use growth, quick you quarters. RMB, that's per actually the time that So actually basis, we

see you the how the can everyone customers trend revenue momentum more on the board, going revenue is is are color more? that. forward? that driving Is trend And or us core average the in Or, particular, give on also, So contributing users more across of are average old new more? you the or what buying contributing

Eric Shen

Charlie, XXXX. XXXX, order decline anymore. now the customers get shipping in size in year, not to saw the see in to free a need of normalizing. that the mostly ARPU, RMBXX in throughout we ARPU do shipping impacted free And basket because get year-over-year you therefore, certain to year But the trend

this and our customers we prior, And this very we've the platform. still to because are is to just expect, change this communicated shopping is in as is due change policy last habits of the is this So what in -- sticky the year. a some

our VIP going to We and a nine Super average paid VIP average, is spending. Super we eight focus more customer. One an their ARPU grow that than customer spends on thing will forward. On the to mention continue like our times members to

if we their perspective, So that will can we get also on join confident over VIP customers more increase the time. program, from are that ARPU to platform Super the

to of focus to experience and the customers personalization they on Additionally, each improving when we come platform. our continue

ARPU time, are do the of long-term the that and customers, prospects believe us good. over grow shop the quite stickiness customers also we believe of If that ARPU to do our we will Operator? and we growth that, of number So increase continue the customers. the with

Operator

our Ladies for the remarks. call we any would today's the hand to gentlemen, to I come and closing speakers end as conference, back like to of

David Cui

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

Eric Shen

Thank you.

Jessie Fan

Thank you.

Operator

you, gentlemen, our conference and for this call Thank participating. Thank for you today. sir. concludes Ladies

You all disconnect. may

Vipshop Holdings Limited (VIPS) 19 May 212021 Q1 Earnings call transcript