BZUN - Earnings call transcript Q1 2021

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Operator

Good morning, ladies and gentlemen. And thank you for standing by for Baozun’s First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management’s prepared remarks, there will be a question-and-answer session.

As a reminder, today’s conference call is being recorded. the to turn today’s host now Ms. call, will meeting your over for I Investor for Relations [ph], Zhao Nicole Manager Baozun. Please proceed, Nicole.

Unidentified Company Representative

Thank and today. you, thank you for everyone, operator. joining Hello, us

and release Our XXXX as well newswire IR was this global ir.baozun.com is on distributed website first at available earnings earlier services. quarter as our on today,

Qiu Business Chief and call will guidance. Arthur Strategic Yu, company Mr. to Yu, today have Mr. all will Ms. On the President Officer; Li, Development. Baozun, the Vice operations followed Mr. highlights, Vincent and available during review the discuss business Q&A Financial Officer; by Mr. follows. Executive session we answer be They who from Qiu, your questions Tracy our Chairman and and that Chief of financials will

you obligation law. Hong is does the factors the the which control, or Exchange in Further other as statements. forward-looking information Private the I in conference upon in risks, differ which forward-looking forward-looking XXXX. Reform may risks, notice U.S. of based regarding announcements, events of filings the These or begin, would and this forward-looking within on Kong difficult of and known XXXX those uncertainties not predict remind to of with Securities statements U.S. and the market the company’s Act are beyond factors, The to cause like applicable and and the that statements statements and we involve that any the relate current of or from under except the unknown company’s Litigation Securities to conditions company’s the results meaning materially contains to call the of Limited. the Before and and of Act SEC operating update these which to other required other company many all website are undertake current company’s actual are uncertainties included any management’s expectations Exchange published Stock documents

in Finally, is Qiu. mentioned stated, my and to unless are pleasure ahead. Vincent, all It RMB. Vincent please call Officer, Chairman go conference please that now figures Mr. Executive our note otherwise Chief during this introduce

Vincent Qiu

Well, you thank joining us. you, and all for thank Nicole,

of announce to another pleased solid quarter are high-quality growth. We

And revenues our XX% income as XX luxury of these from the total year-over-year with to brands and from to developed added billion, the believe are total Full turn medium-term our including we to doubled on and Slide CNY net as Our Overall, more XX well cosmetics, trust X. have We brand X acquisition. now than partners. increased quality numbers million. plan. apparel, reflect brands health net to the strategic non-GAAP please relationships Jet of food and deliver operations CNY a track we brands, We

with are how key Let progressing our initiatives. highlights we me some about provide X

X. to turn please Now Slide

customer to For progress drive continuous sector this an quarter. our which growth, made is first luxury we’ve example in

Luxury In services. addition contribution. year-over-year. warehouse has a GMV accounting to and XX% and our digital experience for have customization become They of category new interactive also includes generated profit XX% premium apparel value-added all over and greatly This profit user accessory services. we the and higher growing significant the a contributor, in provided on IT and more signing marketing, improved logistics brands,

variety omnichannel are drivers obtain of ahead. strategies, partners customers number to Fosun from and Europe the sales In April May, we a early leads. late with incremental one addition, On the in year helping our through of we that of enhanced luxury and a insight be of to the optimistic visit the our business luxury generated we sector and a acquisition remain our growth alliance our Full promising Fashion Overall, will key emerging Jet capabilities the leading brand team In strategic and Group. position and Jet strengthened in made consulting core the Full channels. brand and

This quarter, in sportswear brands helped Tencent our integrated run several packages their and program mini additional functions SaaS we Douyin platform.

also apparel and accessories stores tested categories. our certain for and FMCG We brands new in PDD

more great with working we Additionally, JD. closely made progress

translated we go-to-market accumulated each the into extensive and right efforts progress, know-how Our setting tremendous platform. for in strategies

the expand This also potential to less that It indicates we successfully a consumer accounted shows year than for have non-Tmall overlap expand brand on our that XX% incrementally XX%. multi-platform XXXX. for our More for further During encouragingly, the initial of our market. we quarter, increase is stores of are channels XX% their assessment, based from GMV, total helping meaningful full partners our great businesses. addressable

sales model the structure process fulfillment spending. all business have results. to and with GMV ago. a per unit year show also content costs and compared On efficiency and front, improved innovation optimization is true marketing cost This business tech-driven reengineering Operating for cost continue metrics, technology and

X integrated At months. has operating supports a infrastructure ROSS time, BOC, over Our through reengineering. savings platform, cost process brands our same centralized the helped drive over dozen BOC past our the significant

As content to improve data an have and teamwork, communication been their operating XX%. reduce ROSS costs integrated example, functions one-stop accuracy which workflow, On us efficiency. help for improve enhance able standardize by includes brands over design, average,

anticipate saving package have an important efficiency We operating going for this apparel cost and forward. that and a accessory this expanded will service category. broader driver we to And be

and Nantong started will from there track savings our have half in be meaningful both in and operations of ramp centers believe addition, trial remote Hefei on up, the second they after cost that service March. XXXX. both are In We

significant our omnichannel evolving Now to Slide our adapt to infrastructure We to constantly #X. and support widen to Technology strategies. let’s turn helped has IT launched advantage. us competitive upgrades

working Tmall, partners’ brand capital. on we our For on help help Pre-integration differentiated launch strategies platforms. and over multiple reduces help ROSS This brand mini our literally and enhancing including brands We to partners plug-and-play across integrated programs, improves Pinduoduo. us Tencent deploy platform services XX platforms, Douyin, this quickly into sustainably base. example, keep JD a efficiency our

in Our technology stop. never will efforts innovation

machine innovative Machine. greater our mining rates datasets for we assortment growth extensive SEMA learning engine shopping developing Selling It display Recently, leveraging through brand brand and conversion this SEMA are does cost line we planning optimize experiences. top and addition, data-driven maximizes toolkits products partners. of a promoting series In sales. efficiency, By launched and an also we Internally, or recommending and overall strategy. call by this capabilities, to

currently On testing and the SEMA front end, effectively in is traffic beta improving utilization.

key Tmall have a brands across which deploy Programs. to our toolkits few We Tencent identified we plan for and Mini SEMA

in the quarters. data our We making relation to services. we digital streaming are expect on In deployments and broader marketing, live progress also marketing, coming content

established streaming X,XXX live a expanded workforce. for we quarter, to live studio studio the Douyin During our streaming dedicated meters square and

believe the marketing see partners with achieved arena. platform. enhance brand Meanwhile, included We’re few success a with several a Tmall analytics MCN, the investments top-ranking digital Douyin by content partners. on investments marketing to data flexibility XX We our happy of the that equity completed digital partner. MCN these and value will events This equity a have high in and top These proposition digital across our marketing different ecosystems. our a ROI facilitating brand marketing feed fast-growing we news Douyin will reinforce

meters, up our the sharply. specially in cosmetics side, infrastructure categories. On and and square sector, including for apparel expanded where XXXX, the designed to beauty accessories, XXX,XXX capacity of end capacity By we warehouse is the has ramping luxury grown logistics and warehouse demand

on services. focused more providing also We customized

for with budget-friendly offerings. look customer-first a partners. BXB always with capabilities everything and services plan we comprehensive -- will as opportunities service business based enhance our as we to we third Meanwhile, well launched We example, alliance actively we’ll of approach launch mindset, on brand strategic the For continue logistics needs differentiated more a our parties. through to

Now We a commercial development. as our social our to shareholder, commitment in Early the was We while appreciate ranking report. BBB It success view by long to ESG XXXX. the in X. first a were many MSCI on to in is shareholders of industry. This good this of is or we believe preparing we our in our important We survey sustainable May, report. top this sustain Slide run. communities governance published ESG, the participation and e-commerce long-term commitment our stakeholder, reflects and environmental, rated governance,

We will their their enabling new our together and investments continuing potential exceed Overall, to deepened look careers are service forward and benchmarks Baozun. strive we e-commerce resources to create our the human opportunities. develop set with in people optimistic e-commerce about to well. we to Meanwhile, new sector to industry as brand in the

will We will financials. believe both We keep drive growth call now and Thank are go we to I to achieving capture our innovating track selective through profitable them over our over Arthur to pass growth. organically long-term M&A. on sustainable you. and well to and

Arthur Yu

to Okay. saw which strong Thank Hello, billion. on increased We everyone. start Slide you, growth in GMV, total will XX% I CNY XX.X Vincent. by #X.

our apparel nondistribution accessories, and apparel CNY distribution Tmall. strong continue by billion. CNY on with to on rose sector by to increased GMV we strong nearly luxury new luxury XX% the and board it and X.X Breaking brands grow to The billion, momentum down growth XX% Our helped XX.X% in performance categories. the of FMCG category, GMV year-on-year see electronics XX.X

grew However, a March especially XX% overall of brands. the by FMCG now we accessories of contributed for faced some growth year. year-on-year year-over-year, concern base Cotton impacted This growth category, to and triple-digit Electronics Initiative. accounts apparel nearly from raised temporary the in sportswear headwinds due Better FMCG last while low XX% negatively the about GMV.

trend year-on-year our slow is the of categories. resilience appliance significantly hand, GMV backed compared XXXX. other believe the with demonstrates but we across the portfolio brand range growth our We improving and our business a On model the of by category, the diversified wide see QX from balanced growth healthy still of

to increased turn increased billion. service XX% billion. to to CNY sales please Slide increased to XX% net revenues revenue XXX revenues XX% X and CNY by million, X Product Now X. Total by CNY by

While growth was impacted QX COVID-XX. service badly When sales not not overall period longer fast a XX%, that sales XXXX, product from for the service CAGR as revenue to trend. remember both growth revenues a demonstrates at product which the XXXX as across revenue growth were service revenues and we our revenues, XXXX by around the revenue look healthy were in in

a margin XX.X% a gross from decline due in XX.X% improved change slight sales quarter. product last from mix, a ago category Our to it year was but XX.X%,

year was ago was This made we Our take product progress a from take a XX.X% due our The in overall ago. rate down model strategy. reduction to sales. nondistribution from the gross down in higher revenue was profit an for rate margin X.X% as expected omnichannel slightly from year X.X%, XX.X%,

first of take at for emerging is comparable XX% earlier, the not quarter mentioned of some least platform to Tmall of for the accounts early phase. non-Tmall The in new Vincent XXXX, our the channels GMV. of total approximately As rate

rate. our dilute somehow will it blended take So

channels continue profitability new run. model the will more scale mature, rate As in take in actually we and we to and believe the our improve service business ultimate long

the anticipate quarters. rate we of grows, channels over the emerging the continue new next take from dilution few contribution the as However, will

let’s was growth. a marketing to year. our million expenses technology in more of turn expenses CNY reflects to a In lower-cost growing effective content GMV of Most and as to ago. on increased improvement X.X% #XX. X.X% investments was increased and and and business, pipeline. XXX and and last deploying we system year increased improved in to delivery to The made attributable efficiency XX gains this Technology product support X.X% prioritization to development of latest Now expenses to from mainly better and X.X% operating were mainly increase X.X% variety digital use XX percentage our a expenses our to Sales GMV G&A a expected efficiency This of were mainly as from effectiveness last-mile million. percentage improved XXX CNY ago GMV a marketing operations. fulfillment CNY of efficiency long-term year Slide CNY of improved to improved expenses from and control, the percentage services was to of with a carriers. line million of as due X% the cost our and attributable from our improvements million

services. Firstly, we for especially recruited talent, our growing omnichannel new

our in order compensation the packages and We for roles attract in retain critical the talent industry. also best to our upgraded

professional in expenses to to M&A increase related incur Secondly, activities. And our thirdly, additional increased we an started we headquarters. new have to fees saw our related

above As G&A from GMV, and factors. partially more the to by offset a stringent expenses efficiencies cost from X.X% percentage third-party slightly These control. increased procurement to X.X% the were of primarily due

year-over-year. CNY for attributable while XX #XX. Slide shareholders operations from X.XX and On quarter. totaled CNY Basic X.XX, million, XX increased X.X%. of increased income was CNY basis, XXX% non-GAAP operating CNY and And XX operations to Operating XXX% Slide X.X%, for the million XX non-GAAP million. an year. last to increase turn margin by non-GAAP please margin respectively, on CNY from #XX, XXX% CNY net a EPS was to diluted to from year-over-year by this was quarter ordinary income Now Income million non-GAAP

billion investments. equivalent As of March X.X CNY XXXX, cash, cash XX, we in had and short-term

increase earlier program is USD repurchase share allocation over are with headwinds Despite Lastly, concerns approach Better our announced better This XX use May today, pleased to our short-term capital our value. million months on program XXXX. by and disciplined focus XXX XXth great some to of Overall, cash from from has shown business resilience. starting the financial consistent we next our of results. raised Initiative, Cotton we with shareholder the

now This sustainable session. our to year we concludes throughout prepared ahead, strategies continue will everyone. you the our you, are to begin shareholders. profitable and deliver the Q&A Thank Looking to execute remarks. our ready and growth Operator,

Operator

question from the first from the coming have Alicia We Citigroup. Instructions] line Yap of [Operator

Alicia Yap

question the have a XX June I upcoming regarding promotion.

month that to management have of difference the you compared are last share campaigns? be these to promotion they also marketing are sentiment more willing any scale-back promotion? can merchants will the to consumer in actually, prepare? preparations us, Have terms X with prudent XX for budget spend year? in year, with seen already June event, that of for on and what the terms approaching merchants’ more Or their started the this And So the readiness the they biggest

Arthur Yu

Tracy, can the So take maybe, question? first you

Tracy Li

Yes.

is X order only fiber we prepare left, -- the view. going take I from the question XX now, can of whole the -- model month right think if point in we to I X company for have the think to

brands the right for for think, corresponding by from also mature X/XX lower have And all other been the I year, Tmall means, see the merchant-wise some preparation also after from can is our this and regulation, tools by are time the of to and itself our besides this more like see much to Firstly to platform demonstrated ways brands, has and especially the cadence think growth, and the which merchants channels then before. cadence yes. going realize released -- And platform actually the our merchants, want a will this. brands And more multiple highlight middle-sized actually we the compared their the new be been the larger entry than another this promotion from waiving closer fees providing costs, more part, lower are and brands of smaller has I brand for from And platform barriers their new improved. and P&L the with is Alibaba for prepared we year’s are to friendly more to the I point our little deposit last can and you actually, actually this and brands, platform and part, for now, we’ve longer with been you Tmall other finding collaborative year. emerging

Operator

from of Credit Ashley Xu The next line Suisse. the from question comes

Ashley Xu

I questions. got X

cotton the mentioned you And Could we that and what’s about next more And second would how How in of large see would and impact continue? from impact long the the should for how both the and impact full the issue. Selling you question stage? what elaborate on progress First Machine. the have please is that my this? year we latest expect should about be is XQ terms in

Vincent Qiu

Okay.

Machine take Arthur thing, your to Ashley, and about question then about BCI. first I will second the answer ask the one Selling I’ll

think it’s a encouraging, As Machine, stage. but results what still is in Selling we quite generated now the mentioned, I early quite

can out deliver team quite we want future, tool, I other long. this lot brands for incremental task we brands. solid future. see of the to the we toolkits potential more the think and before near instrumental Yes, major in and be think their I for roll result not a optimistic a can deeper we the generate to these are of anyway, in very we So can -- But this a we just that sales will for is the this think today to

about one BCI, second the Now Arthur?

Arthur Yu

Yes, some on share thoughts let BCI. the me

so categories impacting a what’s difficult, to for happen hard apparel and mainly I Therefore, us going of of and or start brands. the issue mainly and We manage throughout is properly which returns. customer our a the of type seen very have BCI, the the very since what next. of April, the predict the see Baozun sportswear -- looks line It’s But end helping profile, top the the sensitive are brands impact and we the think fashion we to starting decide impact year. For May, the outcome it’s is brands recovery, the and brands seen the a keeping and make generate to see for outcome have are X/XX the some helping and to low like manage true growth. to sign to we March when to into to communication the the full from waiting investment to decide impact advertising the to

forward scenario is but of be as impact we half kept the for in base Our QX business think will the unchanged. planning outlook one-off hit, second our a will

that’s our for So BCI. overview the

Operator

We of have of the from Ju Bank from line next the question Joyce America. coming

Joyce Ju

for this the congrats Management, quarter. results

the in promotion, given a, for XX for year, have just follow-up to this the that which check a June . June want want we year have [indiscernible] to non-Tmall yes, question see so actually is I event, channel, we greater XX exposure for Just on first, this

Vincent Qiu

Sorry.

Arthur Yu

maybe. little very sorry, you up I’m Joyce, clear. not a bit, you are Can breaking

Joyce Ju

better Is it sure. now? Oh,

Arthur Yu

a Yes, go, give you it can yes.

Joyce Ju

Or our changed? to we provided Oh, non-Tmall bit could an exposure year of like what’s in yes. in actually what little the a Sure. channel, you us increasing need more prepare XX percentage services more with share -- have second in see quarter, we And prepare? I given now given incremental GMV. our this like the question mean to non-Tmall is promotions need other this increase platform prepare be to to within actually the -- customers significant of June terms for

to mid and understand to platform long this to which how short contributes change the ratio term. trying Just also term the like incremental over this growth most we should like to expect and

Arthur Yu

So maybe, non-Tmall -- non-Tmall side, yes. what’s talk Tracy, I about in about talk will then there, the and the

Tracy Li

Sure.

the how I to now, omnichannel I view. like the, say, from think right to this also take regarding landscape X point of would

a you their we longer commerce the healthy and brand in adopting their term growth. this prepared sustainable real need and view building brands have estate by actually, China’s For are online from point future proofing. They The [indiscernible] a to to see the continue constantly environmental. of

So from see even split you I the promotion different split platforms. angles coming, to the can and and the this different point the of use to view, -- X/XX, also in they’ve to also been part, [indiscernible] and different mean, tools on try trying

efforts, platform. on closed-loop That’s we see they a from why potential especially in of the means business -- categories, and also been I right own beauty look May can they’ve That realize as Baozun’s utilize pop-up this. good up, stream a when before X/XX the there, can as of some You fashion, live our great, so even shows make ways campaign XX of to some channels to luxury, to our in better mean, and test is those the e-commerce especially water, act the think strong workforce also, there, content-oriented here I trying there a the And that and do the build yes. been in the model from also platform. emerging consumer progress second DAU I think, and have we landscape our itself, platform we’ve the also come make to investments the sure quick point environment to in in business which

Arthur Yu

Okay.

mix will the increase. the I of about Now omnichannel some make comments

percentage, Tmall the non-Tmall increase is the of from for the channel, channels the store our of not dot-com. program, from the significantly basically, of but saw the and mini far So outside falling brand most increase we all behind of

channel, enhance if in service this for So after pace solution our that though we so healthily. Tmall enhance to Alibaba’s XX% And to can year-on-year which that as is We non-Tmall you the our we technology where itself year-over-year customer. actually in of an Tmall further the want looking growth channel, this delivered made -- we fast proof also, the growth. offer Tmall repeat is market, in even channel progress kind I a is capability, we omnichannel growing Baozun, very from are of ahead over

demonstration well. successful to a be actually in channel it’s help Baozun’s as the brands So of to Tmall capability the

Going making more go keep our to into helping growth investments to omnichannel forward, their the deliver business. we for strategy for -- will and our helping the to partners incremental

Joyce Ju

quick take should Or follow-up. also, you of remind Just for from to Are actually similar channels? blended coming we with very percentage different? us more And a are what’s they other other than our they a like just the expect Tmall? Could economics channels, higher having different GMV rate track?

Arthur Yu

Okay.

in of days terms early the in we’re omnichannel. So

take making about cost are we different still investment. talked for not other the in the Tmall. the We good channels in a model. also, is as the stage of channels Therefore, as has rate And different the past

But of very be significantly with growth what look simpler in don’t Tmall for the want go Hence, have if expense do take actually So which we at operations. profit. a with cost operation that, less clear, for made different the having to program, is what charging will has we rate model requires our Tmall example, you to the said mini it compared compared channel. the marked

long-term looking We sustainable for growth. are

making develop, aim term. So new and the our will in that channel we medium profitable we channels longer for

Operator

the from have Thomas next question We coming Jefferies. from Chong

Thomas Chong

I have questions. X

our question And management my strategies? M&A first on is, we question optimization about trend can more operating the expenses? base is, on second cost talk can more and So elaborate

Arthur Yu

Okay.

go for I cost the So secondly strategy. So on I One first. M&A is X on And the base, strategy questions. base, we M&A how the heard kind cost right? of will optimize is

we time. plan last medium-term laid our basically, out So

want company X years’ XXX So to to a time. billion become GMV CNY X we in

using line. to our way for at that, to order we -- only objectives. driver. do deliver not growth grow we organic growth, think are will be We to M&A actively as if top in a able go Therefore, we’re our looking our actually we So the we’ll medium-term

secondly, the in to the that’s And capability we are or through enhance own better. service that we as -- able be customer our M&A. expanding, we direction aiming our to so way, our need of customer first requirements and for our will So improve

it. at the therefore, external one us use acquire to at to it So our we’re time, And capability the looking capability to at on internal same to help look hand, faster. we do do

So actually for example, strategic iClick, catch to on customer. quickly you if to think the alliance program, of which with helps capability it’s us for so mini in helping our the the -- SaaS actually provide up a service very us to -- better

second So that’s the And third then one. one. the

seen have we channels new where we huge a the seen growth have So -- some some channels potential. has

example, for Douyin. So

we companies, live So equity some actually some enhance made this in help us our investments streaming to into live which capability. quarter, streaming

all actually the actively M&A to looking grow the as mind, will our So different and with using we in a that driver at targets business.

the So strategy. that’s on M&A

On the cost optimization.

So pillar. one this our of is strategic

What to saving we based early platform goal have lot Nantong automation to initiative management. we we at delivered in RSC, tools that from a Remote same a a our is all for us. of and want are can the a what time, a lower-cost technology that, work way is our technology to to at the mentioned achieving way One there also Center, ROSS of a which this. through actually service year this very process high-cost company. customer by to labor better is moving a i.e., optimization a the through build developed. do we in we is we doing our call actually are locations, acquire which Center, to and system and where, efficiency, X have we for enabler the BOC, we Hefei. ways lower second we are With structured Shanghai start on Operating cost, operations cost we Business from enhance the of into the The actually through use in Service higher-skilled do the location drive earlier, So is And significant

labor service, bigger XX% our see And and the will the compromising think between cost we from reengineering So actually location-driven cost between we in technology to impact adding those process that on something overall to things together. if base. see customer a XX% we able we way, the actually we’re if seen, From be percentage. X you efficiency efficiency some early a to labor efficiency, if have something we’re without about XX% trials adding just see XX% rate cost

So business now we unit Baozun going the will initiatives expanding base think X of are Baozun, systematically the and cost wider to we those within improve we forward.

Operator

coming next have this from We the Feitong from Zhang CICC. question, is

Feitong Zhang

I questions. X have

one First brands. new know our new regarding to brands. I want to is

on I Fosun, corporation, know This of Will And to local our to more is more Full brands, quarter, we what iClick investments with want is, what or merchants question our or same-store regulation? post have is to our many new it understanding friendly or to better to brands. sales brands cetera? my number brand question. the new view portfolio. coming first or platform growth management Tmall cooperation for this quarter? from my This have Jet those second et also, is And be

Arthur Yu

talk Tracy can Vincent the take can first will the and about Tracy second one. one, I and Okay. and --

actually brands organic Jet. Firstly, XX of a and the growth acquisition from both the mix Full is the also

same-store channels Jet well brands actually contributed within the have at Full we look basically, X actually we year-over-year So XX secondly, growth, growth. same-store actually XX% store, we brands the if the if same acquired. brand But brands up it’s for the same-store top omnichannel And to strategy the same the is growth our go actually growth year-over-year. grow Tracy? which it’s as the XX% to on of means year-on-year, helping XX%, to look at

Tracy Li

Sure. Yes.

event a think a also, we it’s And have doing regulation, post of the published right Tmall lot Regarding now. Tmall. the of with I drafts lot closed-door

has by deposit the the new and fees barriers You cost of to more the closer merchants. friendly and providing and been waiving been can new lower some They Alibaba entry have more demonstrated see actually by lower with merchants tools to to brands.

point I thing think think the is hub. out like local on brands. especially companies also, they Shanghai brands’ the And to small direct and will and we one for P&L, I the improvement middle-sized about have would

think the improve like further Tmall will TALK, also So closed-door expressed in Tmall the experience TP. in priority TOP their event, and to last -- create month consumer be the merchants service the in leader and year this has and April, for environment I the marketplace provider better first a

-- So better their in help movement will And -- and will of the starting the will Shanghai, together. sports our and from companies so other serve in Tmall follow. collaboration the is brand a further site. consumer since the will also will Alibaba selling units the think on Baozun first also beauty units categories I to you. also, -- And also outdoor operation in and to Group headquarters strengthen Tmall’s will, located other lot with and Thank relocation this of the goods Shanghai some relocation international move wave also units fact to

Operator

the from Chen We have next which China from Charlie question, is Renaissance. coming

Charlie Chen

is Charlie. This

I one about take So question have rate. the

rate So emerging you channels are that just take to the for comparable channels. mentioned not Tmall

how that brands sort grow is channels also, rate? subsidies are rate details helping of think in take category take those So are giving you new us can lower forward. new the channels you the to so selling because rates naturally share trend And voluntarily a take having that new channels lower about taking the some you of you low going in whether the from product with question rate take more or or are are initially follow-up the you those are do the

Arthur Yu

Okay, for Charlie. question. Thanks the

new One of think perspective, it’s in take the a factors from both actually you is just channel a categories. about. mix mentioned on different the I rate

comparable a to we like a profit the because business, costs also has difference. -- in we has -- cost the and We a that mini I is, program, So line. cost lower potential much see bottom importantly seen have like we rate. take historically looking order we in the generate earlier, contribute will like through platform we by business mentioned which do the do into most for revenue incur do business it’s But business the FMCG category, to don’t the the actually is JD, example, the which stronger like rate. a When to of structure how

in model actually we’re on channels, different the the purely GMV, focused revenue. not new at looking focused on the the we’re actually by So

a it if should be significant take GMV a revenue, with business it’s but rate has lower for generates which example, impacted healthy bigger doing forward. then a going cost the kind margin, of a So we with a we

are take not on focused the we but we profitability. on bottom rate, are line So focused

that’s is we So number did in one. Number two early some make the phase. investments

mentioned a take brand present we’ll on a of So technology a to actually investments earlier, is will very request, for quickly a Vincent our into lot plug-and-play channels. it has as system, example, actually board. on basis, When which new --

business, investment that next that, after the -- So our we the the will that’s gave technology from a new efficiency, few investing -- we the we to investment the area channels. keep the profit scale us be will able quarters. and of take which the built benefit investment and of has will scale also and the see in increase have after margin the rate But after

going plan the forward. So that’s

Operator

hand at our questions please further As we I would to have Nicole, no the Instructions] to take back over. conference this host. like [Operator moment,

Unidentified Company Representative

In Thank to would of your for on in participation management you, thank like team, behalf today’s call. operator. we you Baozun’s closing,

concludes If you please feel require to Thank free This us call. further today. us. joining any information, you for to out the reach

Baozun (BZUN) 18 May 212021 Q1 Earnings call transcript