VIPS - Earnings call transcript Q2 2021 | Vipshop Holdings Limited

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Operator

Ladies and gentlemen, good day everyone and welcome to Vipshop Holdings Limited Second Quarter 2021 Earnings Conference Call. At this time, I would like to turn the call to Ms. Jessie Fan, Vipshop's Head of Investor Relations. Please proceed, ma'am.

Jessie Fan

Thank you, operator. you Vipshop's thank earnings quarter and call. conference everyone, for second joining XXXX Hello, are our Eric CEO; today us With Shen, Cui, CFO. and Co-Founder, our David and Chairman

remind remarks, Before their made of Private under provisions will I Securities you Harbor statements that Safe the will contain management forward-looking the prepared XXXX. like of begins the Litigation today discussion Act to U.S. Reform

risks to our release earnings to our With Safe to Harbor actual release note our measures forward-looking our now measures subject statements filings statements, are outlined Exchange that for risks relating our net any also presented extent uncertainties non-GAAP Potential Please in with U.S. call call results Shen. and to operating the to applies currently differ Commission, may the statements that which those cause earnings Securities be and of public such Mr. and Please are like to per Forward-looking call measures. may GAAP. non-GAAP this I this would over Eric in ADS as on and non-GAAP to that, but net are turn from not income to the non-GAAP made. with materially expectation. to not and include, income uncertainties the certain limited include, GAAP reconciliation to used accordance details in financial refer

Eric Shen

to joining thank with In for momentum up and Good metrics solid the kept Welcome we our quarter operating morning, quarter our XXXX core healthily. and evening, good conference continued second you second earnings call. everyone. trend business

its GMV. strong maintained continued driven user total increase Our in base

increased million total of grew XX% During by the to year-over-year GMV to year-on-year users and XX.X active XX% billion. RMBXX.X our number quarter, our by total

to with most of the a user our execute efforts strong quarter, total year-on-year focus nearly by showed of increase our developments XX% valuable robust result momentum and the third super in encouraging strategy. the second was calibrate XXXX. contributing operational on our synergies. growth quarter about merchandising group membership of cumulative VIP the relentless to These second continued In increased especially Our strategic GMV we

teams increasing with suppliers collaborated buyer number and brand partners. Our successfully of

to not result, branded be a but we have been have at on amount discount able able so unique price. only our ever sold merchandise of increasing attract been Vipshop to to do favorable As platform,

to inventory covering customized addition extensive of deeper In for of a carry proportion partners. branded Vipshop products. especially our are Vipshop traditional discount now we by brands, considerable range products These our also made for

the offer we initiatives clear We platform. breadth this we are is creating differentiated and our incentive and of users most our more to attract one several shoppers this, implemented end, to to leveraged portfolio for of dynamic of the have better priority. refinements we overall In our experience increase operational improving management instituted advantage selection successfully younger second including level. valued of merchandising To quality quarter of On sales. top marketing target users. effective User also depth at our to while selection our to merchandising for committed high price discount users merchandise a

Looking to strategy. merchandising XXXX, second of execution we our forward remain committed half to the of

over will markets. leading the position believe this create retail and customers, We let solidify partners. our Cui, go China's point, value our in to existing while add the over to operational At our discount increasing dedicated are CFO, for who for me results. We branded hand this new also our financial we and David core will call value our

David Cui

Thanks Eric, everyone. and hello

of set XXXX. We are for pleased the to quarter report a results of strong second

revenue top line of representing total XX.X%. with quarter reaching growth billion, net the increase During RMBXX.X a solid delivered we year-over-year

total accordance million year-over-year n growing by our of we in US$XXX with RMBX.X by in the increased to XX.X% earlier shareholders. the we quarter our in which growth business of long-term customers approximately program our attributable also We to respectively. number both shareholders and income this sustainable business our development adopted confidence evidenced to million and model and ADS is the XXXX, share repurchase XX% repurchased by March US$XXX Vipshop's our to are witnessed of year, orders delivering of In net Non-GAAP showing billion. robustness XX% dedication year-over-year our momentum second also active in value the

Gross for quarter to XX.X% period in active quarter year-over-year I year-over-year with to financial presented to with like started compared that highlights, changes was get margin second XX.X% net XXXX. second XXXX the quarterly billion, year, are to the of of Before below percentage the last billion operating clarify in XXXX the primarily RMBX.X numbers expenses all I by RMBX.X and total second revenue exchanges from in noted. all would the the XX.X% from for driven unless the detailed RMBX.X are referred second for billion customers. period of financial XXXX Gross billion RMBXX.X Total increased number Total profit for year-over-year quarter RMBXX.X the large a year. the same the compared same by second in for period by of of quarter otherwise XX.X% quarter to in RMBX.X last XXXX increased were same of billion RMB XXXX. billion

XXXX. for As period second the last total for operating total of of year. as Fulfillment of quarter RMBX.X with XXXX the the net in XX.X% a second expenses second quarter billion the billion percentage RMBX.X revenue, expenses XXXX compared compared with of were same XX.X% in quarter was in

revenue, the RMBX.X Marketing of compared in a the for expenses XXXX. of from of X.X% decreased quarter second the to quarter XXXX second same As for period net X.X% total billion RMBX.X the quarter XXXX fulfillment billion second as of in of XXXX. were percentage expenses with

increase of primarily of total expenses XXXX second content to revenue, The of quarter the second Technology RMBXXX.X relating was in XXXX and activities for million quarter expenses to As advertising in to the the the were for quarter million to in RMBXXX.X investment XXXX. XXXX. of higher compared were customer percentage compared marketing in and second a net X.X% due X.X% quarter retention. acquisition same

As total the and X.X% RMBX.X and quarter to revenue, net of the X.X% General expenses compared in decreased expenses last the quarter second billion the second of a from XXXX XXXX. for of technology of to were administrative second the percentage in content second quarter million for RMBXXX.X XXXX year. quarter of

from quarter Net to increased period. to to X.X% in attributable of in attributable in note release. from income found bi the that resulting total margin of to with XXXX. for from period in of income which quarter share-based was XXXX. XXXX of quarter in Vipshop’s Non-GAAP to Vipshop’s second the non-GAAP the from last second the of compared by increased RMBX.X the in was as number the intangible percentage year a period shareholders XX.X% diluted and for quarter amortization income XXXX the the in XXXX the year-over-year RMBX.X quarter previous RMBX.XX the expenses billion the operations quarter X.X% second and in of the same income of second the details Vipshop’s the of business our of of the RMBX.X Net Non-GAAP of Please margin RMBX.X Operating quarter assets XXXX. same As from X.X% income from shareholders net RMBX.X compared compared net in from XXXX, the second for excluded XX.X% XXXX as of to the the in quarter to Vipshop’s quarter the before expenses by operating the year-over-year quarter for same was for earnings second X.X% as shareholders the administrative year. X.X% ADS second margin per shareholders to quarter of XXXX second billion attributable prior Non-GAAP for as XXXX. the second with with for RMBX.XX year. shareholders of of second second be was same of shareholders RMBX.X Vipshop’s last income increased XXXX Income operations compared second the quarter second compensation quarter with to billion quarter for RMBX.XX second to year. the a Non-GAAP quarter acquisitions year. was billion billion ADS of as period XXXX. from Net for attributable of excludes X.X% in X.X% year-over-year attributable second margin for of to compared Vipshop’s RMBX.XX RMBX.X quarter Non-GAAP XXXX billion XXXX. shareholders X.X% which general increased were X.X% second XXXX net to per last XXXX period diluted in attributable the with byXX.X% quarter revenue, net second to of the of attributable XXXX can RMBX.X increased X.X% Vipshop’s net items, compared of

and of and equivalents June XX, of restricted billion. short-term and company As XXXX, had cash cash RMBXX.X cash of investments RMBX.X billion the

Looking views net With to of total billion Please and note XX%. would this a current operational to Q&A. representing year-over-year expect approximately preliminary I between to the to that that our X% forward condition our rate forecast third the XXXX, reflects of is now growth open RMBXX.X like change. revenues quarter to subject to which call we to the RMBXX.X market billion be of and

Operator

of question. question-and-answer have session from Zhang Feitong gentlemen, first CICC. coming go and We line begin Ladies now This ahead. the we will the is [Operator from Instructions] Please the

Feitong Zhang

platforms [indiscernible] is color fourth in stock July e-commerce are the short our if going contained? well these some should questions. the guidance? quarter forward quarter we is How business gets we video we third to question question this we taking competitive Hi in pandemic How third Feitong guidance. observe about have we year question. quarter very expect think This helpful? from observed is the about landscape channels. and a pandemic I two think third The in My exploring the acceleration competitive at as any we second of quarter Thanks stocking August, the the really any landscape, would for should first Did impact factored from the industry my well regarding the some in doing are the regarding guidance, CICC. and brands should be

Eric Shen

or Okay terms in moving, models. are it moving, that is a There let streaming first in whether old of the me streaming, branded live slow of question lot first inventories. are slow through season, selling live translate the to platforms answer

capturing I it but thing lot pricing is whether think these platforms the is of that's customers. advantages, brand most or the thing most what, for are advantages no important attention, customers a merchandising, primarily matter important

For but focus live and what most for we to creating merchandise both less customers pricing of differentiated in streaming, we advantages. value brand Vipshop terms do the actually is and

have will video on just some that a impact time terms has platform fact from short but the of some in attracting lot business. despite it impacts spent own limited So, our customers, of

guidance, year related macro made factors In which as a where traditionally the did industries. peak and events certain a are of is We've had apparel report are season typically phase recovery is else to sentiment see will the a we terms there seen end sizes live strong season to And COVID-XX environment tough run QX and that was from larger not also the strong the partially last well COVID-XX these be same weaker of there there. the some consumer as as tend few in and within entering QX, and the the is natural province But turning everyone and quarter QX some promotion of a apparel we here disaster in a resurgence we to as QX. of industry. live for ticket also QX and

COVID-XX should the as relatively So as at hold well pandemic time. long QX that up

Feitong Zhang

Thanks, very helpful.

David Cui

something COVID-XX. Eric on QX is one Number mentioned. business would I had add what to last we post that just booming remember like a

guidance larger year, so this we this that is active that's that Number we so that's XX%. base softer we customer two for So number had have -- our year-over-year notice X. a for larger base actually should base why QX year, grows

should that future and foundation indicator that business that business also with our healthy growth. our to for grow provide us a future So a strong help is that's that our and does

Feitong Zhang

Thanks. [Foreign Language]

Operator

Thank you.

coming the question ahead. from have the of line which from We is Stanley. Please Wang Morgan next go Eddy

Eddy Wang

bit first of questions; earnings we been your by have breakdown yes guidance -- during the the the regarding in little the for you because I two -- the May that second second quarter, when quarter you mentioned first, can that actually month in remember quarter call a has give us conservative.

So, sales a expected. growth, we like will in relatively actually, it seems have but expecting, you June situation that are strong quite weaker is your than

color and demand, about and in I'm is Thank question sales the more for not also so because guidance NBS, at And our which you us or give second if So, apparel of sure apparel the third July also can you apparel, not actually the how us on for give in can that? August, color the far some retail -- weakness impact, whether the show this look us quarter? you. demand so

Eric Shen

trend spend, well. did mentioned, our longer customers. it it hold days you we turn to core terms that This long attractive less less June and of seen our some seeing month actually and to the a In promotional not their promotional XX%, June, XX% not slower event three to e-commerce but guidance events. June, tried deliver have very of due back to of our that the space become to past, the in we Okay, two, it's already tends as out -- has promotional or were the sales does to in coupons event e-commerce sales. encourage becoming we or customers to And one in in

offline the So see the control some a probably they are And weakness inventory, to strong at our We we in we for also merchandise third is COVID-XX. good due had half anticipated, category but we sales marketing actually months as apparel slower not seeing resurgence spend. the not we same due the did imagined. stores good COVID-XX place one quarter, as because it's not of brand we the the time very, into as -- than before. think and there, half a had bad as the primarily not had see and we the entering very and first also over -- some the the that to moving very actually trend and have media here are But first

have online they us. actually, for inventory So increased

months turns So to trend see out. a how this couple we a of to have few see

Eddy Wang

[Foreign Language]

Operator

Thank you.

go Ronald from from Goldman We have question Sachs. the Keung next Please ahead.

Ronald Keung

Thank you, you. David, Shen Thank and Jessie.

and translate Mandarin. to So I'll I have questions, two

ARPU also in quarter revenue first the of strong that whether would about see guidance about and know on into the is The quarter and kind quarter quite marketing we put we user remains And to in on how do the X% of second that see we be maintaining this is just Just quite to kind that would or as season? a how control still quarter, my in as decline on, question basis, XX%, of to June second during our our this, forecast? spending or an further growth the third this and growth remains what want is year-on-year then fourth XX% that imply within want in user trends spent that couponing, talk increase. you more the peak some spend mentioned will around in marketing but ARPU

has metrics marketing around how been expecting of more into is as and second think head And as half as second we a are revenues in which one quarter. of of the the sales which of revenue, so, spending we and the percentage we X.X%

Eric Shen

Language] [Foreign

David Cui

second on the marketing question Hi, Ronald. expenses. regarding take I'll the

expenses, respect discretion new this that marketing marketing we and acquisition existing more area and probably bit, with So the with is retention. expenses user user to between the little have

expenditure in will have we we stable. of maintain number in how that of And stable level, revenue, will continue we in can of marketing the to then we expected we grow not we the XX%, that objective our spending. our more would strategy, us discretion to the a in and base how -- to of strategies. grow customer second evaluating should as terms active terms So, percentage terms in the base quarter, execute carefully by be our the for terms expect you remain at customer marketing is we allocated And see to the of

dollar. We our in terms to that efficiencies will how of improve try we spend

Eric Shen

to back as you by for our may have the quarter that Okay, question second on your decreased noticed ARPU year-over-year. X% trends,

the decline -- expect the don't moderated. deceleration QX, would similar growth, be So and for we within much QX the

we last second in the customers in of You customers. have lot reactivating actually as new new attracting spending But of -- a recall money quarter in attracting as stopped customers. time spent our on well we year, reacting old know

year, and ARPU. number ramp customers of the entering trend actually this when up new some be so who due ARPU their head will So But we we spending time overall into going may is which an to increasing impacting need think general the saw for stabilized.

second VIP almost memberships because who grew than quarter the an We average we've loyal are spend confident VIP year-over-year XX% been members we spending Super that Super an customer, and growth found XX more customer. they in strong very and very actually have average in much about times seen

So that improve over our Super VIP the grow can time. ARPU confident as we are as members, long we will

Ronald Keung

thank management. you, thank you Understood,

Operator

you. Thank

We have from This Please Jefferies. the next coming line from go of Chong ahead. Thomas the question. is

Thomas Chong

will [Indiscernible] two Thomas questions have of on ask behalf management, I Chong. I questions.

The colors first then gross second and [Foreign attracting including year we And Language] the margin about revenues do half for some net and about young the share XXXX my users, of we management profit profit the on is, question is about and outlook about any user the initiations question have also can the acquisition? mentioned updates like second margin?

Eric Shen

had the a and going terms terms many continue sale. of is a a very of to With in in our we the have are optimistic lot like stable second and new born a the first in leveraging will of especially channels. acquisition So have customer after who traditional balance profitable various we we actually and margins, outlook. mindshare to are and times, a net continuing relatively we've acquisition, future second many sale on customer we've many to we profitability. growth our growth outlook think acquire line we Language] question mentioned of long-term that base And our discount for to past in we're And very resilient And level expand, customer younger question to and shoppers, continue business will solid half beyond, been digital advertising And quarters the maintain for top discount profitability. we been consumers those have channels [Foreign on of XXXX.

innovative after been channels, the such And future, We short by are try year-over-year who of be quarter. of decent platforms. the have to shoppers up customer streaming, the up ramp cetera, increasing number we will video, active shoppers born in in younger to in exploring the X% in attract more second acquisition very et to seeing contribution live as more XXXX our

Thomas Chong

[Foreign Language]

Operator

next Thank the you, from move Nelson Chang next from comes ahead. go shall for line we question? the The question Citi. of Please

Nelson Chang

Hi taking my questions. for management. Thanks

I have questions. So follow two up

is regarding outlook. question your and first The guidance your

So have of regarding quarter, view grow do guidance faster of So year any you your or merchandising next expect the profile. my fourth third future? growth the growth user in the to beyond industry looking and new is quarter on do term revenue than on second medium industry? the question expectation normalization And discount Vipshop you preliminary also

if terms acquisition new Language] in their tier more spending qualitative from platform? [Foreign management user like the provide from behavior can of channels colors mix So lower and cities short wondering this video

Eric Shen

apparel are [Foreign Language] you less, we e-commerce to Vipshop, if industry the number traditional versus outlook terms look segment, aware we greater at are face be fundamentally one might that related business you we if solid the in see might discount we but sale. platforms, the tech a and competition, of Okay, in should compared

will discount competency core in We confident particular outpace that other in are this very peers sale our segment.

ecommerce growth grow know may looking still for you that relatively As for are for we long-term XX% us, year-over-year, the future. but steady industry the like general

across seeing of of and in GMV In so behavior been not acquisition in cities. tiers have is user trend change the or different of there we very users ARPU contribution, of stable much different user terms tiers of behavior terms cities,

David Cui

add me this. on Let on something

other So, many in other and I with related carry think other that, we focusing want the may more e-commerce apparel to e-commerce while on we categories. terms differentiate ourselves platforms platforms only categories

of we in are that terms the process leading we confident how the and inventories. have sales -- we So, maybe apparels leaders

platforms. should we So to categories e-commerce as compared these other outperform in

Nelson Chang

much. very you Thank

Operator

you. Thank

Wu next We is from ahead. This have International. of from our the coming Natalie Haitong go Please question. line

Natalie Wu

Hi, the I'm the initiatives my behalf concerned question of of about company. is Thanks evening management. on good And question. for My new taking asking question Natalie. first

we management So businesses share can us recent And new share our developments? is there any user now their or are engagement that second more about a understand to any concerned we user experience. taking My trial color initiatives help question are about in? can and

refinements management improving in Just now about I the second platform. experience user mentioned think that were some quarter the on there

what understand any Language] that those specifically are wondering in metrics user engagement? were [Foreign the help improvement operating could refinements Just us there and

Eric Shen

Language] [Foreign

David Cui

[Foreign Language] I'll add on something this.

grew as our As earlier, by QX, Super paid mentioned of XX%. nearly VIP of end the

a So members to tend spend average than Super VIP lot an more customer.

contributed our already one it's GMV. So third of total

to further we QX, VIP extra members an provided increased on services. selected members, our actually targeted our and incentive in VIP merchandise. X% to off better Super So Super a including our product We improved

membership So of a members. provide improve privileges popular privileges Super May translate their certain more continue VIP future active, customers to into also in And memberships. for active that more experience. will we as And life shopping hopefully more will Super to VIP we in to added

Eric Shen

discount back that We've have made we on reinforced do Okay, the to first trying our business. enhance enhance focused we core focused first it merchandising development. we business is on and our brands our buyer strategy Actually, on that the target question clear been centered sale on our portfolio we are our question, optimize that We're acquisition to very with second and everything new and capabilities. executional to To end, and competitiveness. strategy. brand our

We core market. discount are long-term in retail consolidating the our competency

on XX% focus management execution is of retail strategy. discount and of So the merchandising

been investing We've priority. our innovation, fulfill a that's course, innovated efforts Of to are current we but of in trying not lot our areas.

enhancing experience some operational is refinements. of through user our terms In

for be good brands, all You are good and good prices good consumers with that and should that have merchandise to be looking with services. quality matched aware good

in relationship metrics, less leveraging hand our NPS increasing express have And the our standards, delivery. terms bringing the return service end strengthen on user and level, back including our or significantly. experience of investing we So end other with a in we've our efforts hassle very been customer with to things our heavily that exchange improving core been service evaluating is customer our front like an next

continue in in efforts enhancing So user experience. in invest -- our we'll to our the customer and our future, service bringing enhancing

Natalie Wu

Management. you, Thank

Operator

Thank you.

from next of Robin line the from have We Please, the Young Daiwa. ahead. question go

Robin Young

year thanks quarters, Hi, users user is to This the still Choi. my users the on [Foreign less management to over seeing the year taking it in second is see ramp is that for their company? we their impacts but question. on by asking Language] time? four up of to And also next any John are when we have we I expect spending, couponing our questions, spending of the first or next decline, new behalf ARPU the should acquired ARPU is regulations, positive expect would two year? normalize, question half ramp like half given up that on past older negative growth be should second XXXX Robin strong showing and this a year-on-year from And or the we

Eric Shen

come to spend. well question ARPU at ahead, as it's as customers, a on haven't we quarters to our historically the pace Language] takes because new going in means second decline mentioned Okay, customers, for it's have your which first trends, our on old quarter, but moderate [Foreign ARPU but a time recently been in be [indiscernible] it is the on

but time very basis, their seen their So for a apparent to of these types have we two spending, ramp quarter-over-quarter it spending. on up pickup takes customers in

are worried that. we not actually, about So too

Vipshop going spending has into GMV, grow invest SVIP our their SVIP improve ARPU As going program. such internet we user in would regulation, believe help us long net and terms developments security, we especially We over regulations we've merchants force a your members to ahead, that open over going competition. data cloud, improve have and to improve and to has are as our well translate That we on membership we -- there ARPU base, fair we total as market in competition, to transparent their as benefit the extent. exclusivity ARPU been to on we'll recent our On is time. customers more question as means of also to want some more overall a contributed as of going can third time. unfair so the with to heavily will mentioned And the on that are

partner with further to on an our which opportunity more have of increasing brands, our platform. number reach merchandise will branded will We selections

So generally we is this are from less. welcoming development regulatory very them more benefit going because Vipshop or to

Operator

ending Please Q&A Due now you. Thank to Jessie to for the I hand today. that will constraints, conference to over. for like concludes back time our session any remarks. take

Jessie Fan

Thank you for taking us the time to join today.

If you with to me. next to don't follow your hesitate forward questions have contact or ups, quarter. any please We look speaking

Operator

that gentlemen, Ladies call and our Thank you. your Thank concludes today. conference for for you all participation.

You may disconnect your lines now.

Vipshop Holdings Limited (VIPS) 18 Aug 212021 Q2 Earnings call transcript