BZUN - Earnings call transcript Q3 2021

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Operator

Good morning, ladies and gentlemen. Thank you for standing by for Baozun's Third 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 is being recorded. the to turn today's host now Ms. call, will meeting your over for I Relations Baozun. Director Investor Sun, Wendy of Please proceed, Wendy.

Wendy Sun

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

distributed available Our today as on at release XXXX Services. third well was Newswire quarter ir.baozun.com as and our on is Global IR website earnings earlier

move is presentation where also where for available they PowerPoint our the also on to webcast that on presentation our available have will synchronization We remarks. a the in comments we are download. accompanies posted with same website, slides This IR our

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

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

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

Vincent Qiu

everyone. we finally We many sense you, hosting home in new a we physically for and the end being being you all as that productivity. know. our of one our come our evening enhance greatly under earnings so Good are morning believe us. collaboration years offices belonging, our the our rapidly, people's are since first call from Baozun a Today up you call new we back joining together journey. Thank Baozun new And the for most I found business where Thank has family for and start Wendy. expanded so across roof. will Baozun Ever new of time of spread multiple XXXX, together symbolizing headquarter, one

sentiments those bring to the the growth. of identify bring next first able of were resilience to our policies especially RMBX the mover a one-off temporary and to regulatory you and as will life be given them E of various commerce slowly changes improve. innovate. in operating confident already well of variety all non-GAAP issued for has of can sustainable and who believe grow profit Halloween I'm including to short recently sustainability many we greater business. as daily the macro after our a these requirements rooted by experienced is As and Despite the adjustment. challenges, with And revenues government. e-commerce weak and adapt opportunities, phase Changes will as drops upon We e-commerce environment environment headwinds, consumer sentiment new eventually long-term consumer know, and passes, challenges the China's a term deliver million

you opportunities with we share the some me are Let seeing. of

Now number turn Slide please X. to

We in income the rising growth sector. and of the especially We consumption for is and such Premium see and continue demand upgrade, believe by of upgraded nature disposable driven Luxury to structural trend the and brand with accessible. of of younger made out also increased lifestyle from year. luxury The for global healthy have online penetration we luxury goods And generation. has pipeline a the quality next laid more partners consumption luxury

we few During from in the to quarters. X brands double-digit are keep onboarded luxury we growth next quarter, GMV luxury momentum and forecasting

we brand support services, addition, brands. warehouse for new warehousing dedicated In logistic demand with more our luxury and to increasing premium commissioned better of one

witnessed the exercises wise, sports despite leading in will brand likely sportswear, recovery aims its Long-term of XXth believe Many a plan markets government as goals. from to the international For impact trend. lingering further five-year quality the a have see one as category some target modest we brands promote physical China. China initiative, view are and better of better the the we strategic and accelerating sportswear localization as most will and critical efforts even sportswear

be we drivers. believe be growth incremental for some and identified outdoor such we which have what likely we to will addition, In to the sub-verticals sports structural sportswear as opportunity adventure

Moving to our omnichannel on progress.

accelerating one increasing of channels. sourced. an alone, these stores opened for in the are quarter stores First, newly added we number strategy. third Of And this non-TMALL over of deployment omnichannel XX brand partners JD

of generated a roughly XX% our JD year our glad GMV. nearly GMV on from to ago, are accounting We total for tripled see

progress in as continue well make we initiatives. Tencent other addition, mini In private programs for as to domain

Of ecosystems sport to marketing we channels our More continue quite mini stream breakthrough. of some made operation importantly, have recurring their from their stake. grow revenue the emergent program

our of such be with over and emerging expand channel at piloting there. happy into -- forefront action are brands two explore partners dozen of We to the be first to the helping brand partners to the

as successful brand and extremely cases in with we preparation and take services in in potential managed XX% in some our hit one X us delivering encouraging some million partners generating months to In over in of FMCG of has unique alone, programs. regard the for fast economics one has to indicating Our ongoing. brand sales trial for over our generate rate over fashion in RMBXX XXXX, have been noting worth in a brand It over a merchandize we insights is instrumental our brand. October of The value been attractive GMV. this million of helped on month-over-month brands trend strong RMBXXX GMV than end-to-end first

some channel emerging we're see to exploring Although bear initial models, channels already still fruits. early optimum phase, our started monetization are happy to investments

along in quarter with Just than to revenue increase the a third rough associated services more contribution the has non-TMALL backend from reference, platforms, to continued of XX%.

please Now number to turn X. Slide

we e-commerce front, core upgraded On to omnichannel be our the infrastructure more technology oriented. further

order personal also system, peer ensure system compliant applied and regarding protection our and for further we latest data operating partners to smooth and enable warehouse upgraded management logistics laws upgrades fulfillment our regulations. to identity we CRM office. keep stronger information a Following platforms the centralized the government's and to drive new policies ensures brand are and system upgrades and the flexibility, privacy, Such order user our integrated making engagement. and management operating efficiency business digitalized To middle with

have great one month unique in both and we brand believe disruptive management distributed now us Service deploying over brand S-ANY multi-level or our XXX And since dispatching, training For its by And within timeframe. commerce customer uptake just a management. a and intelligent We workflow has and Anywhere authorization to networks. S-ANY stores unify resource system service seen of partners launched the we system Industry. e is manage launch

while RMBXX centers efficiency Lastly are gain move and centers quality, are smoothly over. highly us Hefei lowering service remote costs. anticipate service cost initiative over These with million save better service in over operational complementary greater X,XXX We in up Nantong such operating attain allowing ramping to regional XXXX. employees are in to operating

concluded business competitive characteristics. scope industry. to in to each In the sports, received the complimentary The its outdoor, and we addition, Ultimately, believe assets. medium anticipate and and year warehousing such At logistics term when Network We also lead cosmetics cost its leading XX% advantages of Cainiao that innovation the deeper, synergistic We and luxury we as objectives we of greater wider Baotong and players terms in Baotong partner, to headwinds we and changes from chain disruptive that our the and substantial needs strategic industry beginning capabilities advantage summary, be In the we while witnessed term needed formulated and interest be industry strategic supply opportunities. to own alliances be further into combination best will short equity the of plan, we a innovating our is partnership several the set of arm. evolves. Cainiao our most with are to and game, an considered that business investment practices. Baotong, our in number a expand elevates and

a their We our the enriching as Throughout in powerful through quality more is XX partners in preparations technological technology campaign. have festival, number as capabilities the made our specific year’s in we comprehensive, part platform, full quick As most Double in mega investment order success, empowering that and to One corporate we product vision, force the of set than the talents. our of and reliable we our our rank empowers has year, during infrastructure committed delivering facilitated always of one, to special are enhancing categories have partners. well our value believe where considerable example business people. advanced for establishing XX brand believed developing Baozun

our ecosystem initiatives, rating point well a number this placed competitive continue upgraded as the demonstrated And Slide leader of opportunities. landscape navigate the through to on of to adapt NA I'm are X. the these as are brand happy promote Baozun’s We e-commerce recognition At to and that out we more ESG sustainable new Baozun confident longer comprehensive we our time, term. ESG changes, to partner, September to same in capitalize our in environment MSCI and for

are the to resilience through team's Arthur our pass to through And are We in I'll future. the you. of quarter and the confident financials. call very go Thank over proud our

Arthur Yu

Vincent Okay, you and hello everyone. thank

this key approach. of long-term three, the recent to into number strategy would like number for Before the X topics. and near conservative quarter, about the acquisitions, I one, diving Number and M&A prudent two, and impact our our our talk numbers accounting

number to turn please Slide Now X.

business of variety of drive portfolio I'm plan from tough We the contributions progress. solid Firstly, a growth M&A believe and arises. long-term while M&A our our a in near provide complementary the we let favorable and competitiveness, strategy our to the balanced. expand headwinds. and our And and market opportunities we early And do impact economies of strategic financial. new on our impact current an The business will a balance We us Baotong business notable me scale, the valuation. making continue these target benefited our our contributed more seek initial resilient revenue more basis. progress non-GAAP million year with long-term is acquisition a integrating to initial that top-line opportunities environment enhanced RMBX make near term against is excellent window consuming of revenue vertical this that acquisition, The help at to offers market while operating acquisition contribution look cost and and and top-line acquisition secondly, and focused make of small the as One to quarter. you helped for confident to anticipated is losses associated quarterly

we quarters an integrated, the bottom line As be acquisitions typically future. need in contribution several improving anticipate

made fully we the And we Every outstanding were receivables contribute one reporting approach. conservatively reduce and prudent and of financial and period, ROI, acquisitions In as this finally, greater thirdly contributor a to positive our well. our and liabilities. integrated, accounting resilience a thoroughly And for quarter, decision our the On financial synergies we million. which RMBXX accounts side, reporting. evaluate assets of write-down conservative a will expect we strive once to

a and is owed adjustment more us. management XX% and isolated the prevail. collect amount, proceeding XX accounts overdue one-off total an legal in we to chance it receivables amount risk Although quality the reasonable prudent to this initiated Overall it history. and are and incident years is have at in believe time We we measures decided future. of to have control healthy strengthen our of to taken is believe this have a the we We write-down to

this our of reporting. integrity had While it the negative this preserve breakdown a quarter, impact financial

let the consumption Now, you observations quarter. share during Please me turn the with to number X. some on Slide

in statistics in macro weakening the retail Bureau Statistics X.X% consumption of quarter, third growth of National According of XX.X% China, year-on-year the to a momentum sales decelerated of some compared share ago. the notably to to with the of light in China. quarter First

FMCG while quarters, the in two third retail, discretionary first the online of appliance the share gain electronic consumption and trends quarter our to and previous X. continues financial e-commerce apparel as While consistent in fell in Slide categories, performance, number rate physical of growth also Respectively XXXX. including the depicted. was quarter, X.X% parts. to quarter and from of for second struggled, XX.X% goods macro Such the with XX.X%

our quarter RMBXX.X GMV increased the to During billion. by XX% total

Electronics new SKUs quarter. among was with there increase there gap well, was a key brands However, as year-on-year X performance launched several incremental triple-digit an did by during sectors. the third that extremely

if we consumption. that with fact, GMV X% In would growth of been line weaker our observations excluding have our in

to addition both delivered and high growth In rate. electronics double-digit FMCG luxury

continued flip and weakened On the the to further the mid-teens decline. impact a quarter show consumption side, by with year-over-year to declined from apparel BCI sentiment. percentage consistent accessories Sportswear during the the

followed as recovery GMV XX% also at Apparel by XX% However, and modal the split electronics a contraction narrowed. digit. first XX%, months at accessories categories And the are rate and trend. Appliance month-by-month between for by at we FMCG has now the Overall, digit. appliance at mid-single see follows. declined mid-single X

a our model this in and distribution also non-distribution We division saw quarter.

our quality distribution efficiency. X% contributed million, a well to XX% GMV to RMBXX.X model partner category. Please appliance of RMBX.X on non-distribution new a macro as declined by our revenue by XX% billion distribution our Products mainly with light Total tighter Slide to which X. decline high the and the GMV and uncertainty, on XX% declined RMBXXX sales key due planned while total revenues of Specifically, pursue RMBXXX In of of criterias for distribution as model. model increased to is the channel capital by revenues brands profitability turn clear growth transition for of brand in selection to net million. strategy the to working business acquisitions focus billion. number Over our our control brand increased a

year. Now to billion billion revenue, of earlier organic X% turning increased sales acquisitions to our of business mainly XX% continued brands. sportswear by Service benefiting to about from this revenue service has several impact as RMBX.X BCI declined made to RMBX by

outbound As service, declined we year-on-year total quarter. than the more logistics refer XX% it of our orders to the by for

model blended conformance our accordingly. of take proportion reduce, the also As our declined rate

the During was a ago. the model non-distribution X.X%, from rate take for XX.X% year quarter, down the

the is take like-for-like rate of year-on-year itself basis is the a on model at consignment it XX.X%. Looking flat

to expanded from During our quarter, XXX the XX.X% gross and basis by an year-over-year, billion, a ago. third profit XX.X% increase RMBX.X totaled overall of profit gross points margin our XX.X% year

number of to XX% expenses XX. turn let's Now were operating RMBXXX expenses increase million, on an year-over-year. Slide Fulfillment

as G&A was of and which in X.X% quarter, our incremental of marketing related increased This increase were million. offset was in of expenses mainly improvement. efficiency due Technology development an digital and services, million, there chain as partially and RMBXX cost I IT in warehouse due a Sales This plant RMBXXX content improvements. Baobida. by of business by fulfillment expenses XX.X% for to and from an marketing supply The of due The of of increase talent million that investments RMBXXX to some two efficiency new increase specific increase year-over-year. our to well receivables accounts higher expansion sustainability, year-over-year. and million were RMBXXX our was million, BolTone increase incremental write-down acquired an in about talked staff and costs increase offset headcount one scales to earlier. mainly expenses RMBXXX was mainly was businesses to

efficiency continue as As percentage XX. a OpEx greater to displays of number optimize drive to GMV, we Slide operational on

a GMV quarter, specifically, in technology efficiency by sales as percentage gains For ratios. XX X.X% and combination marketing driven lower marketing a points digital a by in basis and More basis total and expenses of X.X% our XXX dollars. point to absolute from driven and services effective by the third OpEx of ago, improved improved marketing promotional year by more X.X% to marketing

We basis from higher by points also in efficiency XX improved technology ratio.

fulfillment total X.X%. ratio quarter, year-over-year the unchanged at This was

a G&A as year our one-off X.X% strategic due Lastly, breakdown, X.X% ago. increased to extraordinary talent well from as to in the more investment

above various operating to an you operations the indicative non-GAAP Reflecting and me XX. like aim million XX, for profit slide negative In RMBXX OP BCI I our and bridge year-over-year. number negative the note slide loss walk items, Slide better the to to financial on a major number which non-GAAP how non-GAAP you would profits X.X%. through performance. that have an this red, of analysis the margin quarter our and evolve understand profits. is they breakdown shows you let The during can the And to operating see turning on Now was our mentioned from continued was impact.

organic it along As of apparel, business. sportswear performance logistics drags fashion our the with down

well model distribution We distribution revenue that, our strategy. distribution from growth profits model -- unchanged revenues our are was year-over-year from encouraged from from is largely benefiting see to operating high-quality where decreased our

our to and higher occupying investments of combined a saw small during some two service including strategic the our new regional centers. positive RMBXX in and recruitment temporary increase for a investment negative In we gains marketing, million, technology. cost Douyin variance of headquarters of concurrently and talent in Additionally, blue, digital the move in our one, luxury

earlier, mentioned extraordinary profit RMBXX non-GAAP the million million. million. which back of a wage, Exploding on adjusted the non-GAAP write-down the RMBX operating our adding at write-down is positive we was As of have calculated operating based also $XX profit,

non-GAAP quarter. Slide million loss totaled ADS non-GAAP to both loss and attributable per shareholders ordinary net for Turning and X.XXX XX, to RMBXX was diluted basic the

Slide negative the to million. negative operating was XX, was XXX turning for cash -- flow quarter Lastly, RMBXXX

inventory Season impacted during need by additional Double quarter preparation was flow XX in the in November. to our cash third know, you procure the As for

board repurchase share deployed repurchase quarter, us activities. the outflow million to worth a million, RMBXXX RMBXXX our cash million our Total was program, director $XXX shares. our to authorized of allowing we share due program. also to repurchase up This financing of M&A of for During may, execution mainly

we XXXX, XX.X with average share shares, the XX, represents ordinary of Class $X.X ordinary each A shares. cost purchase full completed September of million totaled ADS per As ordinary X

and equivalent September cash totaled XX, our RMBX.X As cash XXXX, of billion.

Importantly, entity normal Network and Baotong as late strategic pursue additional we opportunities. the additional sufficient discussed to earlier, and logistics have pursuing cash believe for October. Therefore, from investment operations Cainiao in warehouse our received payments and we strategy

confident third pleased an Board review $XX comfortable are has the my remarks. session. repurchase that of we our ready XX share wraps position, everyone. prepared additional up to of begin Q&A financial to cash we over million That announce for next the with you, I'm concludes Thank Operator, the approved Director now As are up our months. quarter. to And the

Operator

Your Instructions] Alicia first [Operator Please go from ahead. Certainly. from question Yap line of comes the Citigroup.

Alicia Yep

Hi, good evening taking management. my Thanks for questions.

to that service The question well, actually, up I But revenue the have very sportswear discretionary explained the GMV we day on the the non-distribution with level, a you more help then secondly, the more apparel expect revenue to -- service GMV And can on non-distribution performance. my the especially quarter. our is this discrepancy category also to versus the on normalized between cover I think growth growth? questions follow I the think growth like the when grow first that which or line single could GMV in

announced you think single the I day during performance. growth XX.X% year-over-year about

for So should less on as as any Or more gross XQ be? colors direction service the we GMV for XQ margin well. revenue or the to expect these as Thank you. far XQ the

Arthur Yu

take Alicia. thank question. you, I Okay, your will

one. first the On

thought X, our expectation about quarter will could normal. QX growth. it the And Back coming be impact to it normal market. than the take to is back back back in to that communicated the normal. talking QX this assessment our we in to getting were and longer current get BCI one-off We to and when You force

also narrow down from though from going has even and decline to in coming back the to trends will further narrow down QX, So -- QX. QX to

into a trend to We next expect the year, least X. X and quarter this at continue quarter

of and maybe like is from we despite kind apparel. have view would sports sports luxury. add, a some have the gains we could onwards, trend I And quarter, to we quarter current X on quite a Our the luxury, so FMCG. luxury some on do see on we also, we some the headwinds recently this apparel, also and have and wins the And the seen GMV of good has positive number in on brands. growth the from And positive

strength So can the and helped impact of in some the will also, to quarters. us sport. continue help And we from luxury us omnichannel other next anticipate has FMCG the our to also the balance strategy category, grow few which

So that's the on first question.

still X. second I quarter in question, see regarding on performance, we're -- mentioned as still single to the headwinds we So the day some overall, the

So will quarter from we growth GMV. the low-teens of X kind in perspective, a be GMV think a

some will winter apparel brands like slowly the of Olympics the will also outdoor some And highlights of fall, quarter its sports. will slowly sports, very some we strong So see the trend But year. do. are but into next we this luxury Because such as that growth. from overall, We highlight, X. we we some recover, or some recover. spotlights which would the or good saw within continue an the hold mentioned, the see the it there Winter will We I is as subverticals, the to

that's have So seen. overall what the we

Alicia Yep

you Thank

Operator

you. Thank

the Your comes next Jefferies. Thomas Please go question of Chong ahead. from line from

Thomas Chong

for Hi, taking you evening. Management good my question. thank

the you and think about GMV couple I you. is strategies the Thank about about between my TMALL more non-TMALL should in we Cainiao. And prepared years? mix should how comment with synergies then about and think second of management about we forward with non-TMALL that share mentioned going more Can the remarks the question us expect? you the next trend. cooperation has the Can the over

Arthur Yu

take bit the the probably TMALL Cainiao. on and little non-TMALL question on and a So, comment will I

has some seen specific the time, of one overall have we non-TMALL weakness. terms TMALL, of the the that quarter, GMV. TMALL take so So for as in out electronic surpassed brands, mentioned I we XX% if this for And other seen earlier, has the first

are the trend we a people that's very non-TMALL seen terms i.e. of channel. So to opportunities explore clearly in have starting more

next represents going part Baozun. of Our year. for continue lot this trend expectation believe of will a least is, at We the a opportunity early into this

the more on We the program omnichannel mini to make investments years technology. two into last have Jingdong. the out the team AND do from laid business, Douyin We to continued and also

Vincent mentioned Douyin on quite this in we operating now of Douyin about earlier, made in As solid we with. which kind the progress XX [indiscernible] some satisfied are quarter, in

So going forward.

think for pretty I we prepared this well have Baotong think continue. trend. this I And trend will

regarding in to So Cainiao.

cooperation with synergies. bring to Our Cainiao will two

So, very the we synergy I capability. have first of is comparable. a we have kind much mean,

So And products. a from a doing based Cainiao also, of basis. the are they lot volume a do perspective, quite they business on warehouse standard logistics and

For on Baotong, we kind premium, focused the the for are on brands. solution customized were of and focused large

we combine which So from cosmetics, will other we other to able is what on could we from the we capability. our to depend further to when Cainiao be Baozun, is business the strong sports, we each Cainiao together, introduce a synergy and will ultimately get Network. some on think each luxury really And to strengthen from

resource efficiency. under in some top containing we the On that's capability, So also of capability.

a investments I bigger into national Cainiao So can we of logistics reduce a know, warehouse. of when new as terms by and scale market I cost make operate that, of mean, and further utilizing our improve capital efficiency the of a our think warehouse. we they base kind network -- large And in

Baotong also efficient much grow much to bigger So that could help business. a and into

could terms that be X, those on think we of forward. pretty good going in based a So

Vincent Qiu

Yeah.

as Cainiao words opportunity with by closely. about working as Because cooperation that, say for to view a more, business corporations Cainiao development the big Some well. Cainiao us with is we

BD apparel, much have these can kinds for categories we cosmetics think luxury, opportunities more including categories. of the I sports,

a this So in we to case, Cainiao closely comprehensive better and the with deliver work industry. solutions

brands So some potential categories. different the the potentially we more much through can captioned work in

Thomas Chong

Thank you.

Vincent Qiu

you. Thank

Operator

you. Thank

from from go ahead. China comes Charlie question Please the next line Chen Your of Renaissance.

Charlie Chen

for management you to take GMV related I Thank taking my questions. a the rate. One other questions. related X you. Thank have to and

GMV distribution So there GMV decline the slight one regarding from can is the see year-on-year for first business, a we is this quarter. the of the

the So we understand optimization. strategic doing some is company

from business? we the my second take for And the impact is GMV related the So about rate. going how should question negative distribution to forward a think

growth. significantly So see GMV for I the business can growth actually non-distribution revenue outpaced

understand this? we improvements How still for about can take we a Or on reasonable what long-term see investment omnichannel an investment as Thank you non-TMALL rate the returns? as are stage be seeing do you the you. meaningful a channels efforts. So would that estimate result think of think we some of do

Arthur Yu

Okay.

do But fact. have seen model. drivers the GMV, this are X there distribution some decline of On the we mentioned behind as main you

The one also for first a model initiated We and our for it we a distribution. the capital model, brands the have efficiency. of the it's into some is brand fee thing partner with change service the model business distribution or along which convert actually good Baozun because improved

the So to need use our host own we don't cash to inventory.

first So that's factor. the

we the low distribution don't as year-on-year single-digit of to of so brand during especially business, our small type to do decline, months significant kind the strategy. is of profits low ago, return The second business low that type initiated revenue. high-quality for some concerned factor distribution about of market that the And as we lot made XX quite that's we contribution this a of of revenue. one quarter, performance a of about this we things appliance brands stopped growth home want And all quality a in know, which quarter to weak thirdly, a quite kind one overall also a contributing we shows this And specifically, fact.

of reason distribution the the behind decline that's model. the So

quality. Going forward, focus we will on

it model, a model we client definitely profitable would it. a is So shows higher which business stickiness if which is positive Because provides a like partner. see category, with good the good distribution the with us brand or we do return then distribution to the good side of

to chance have profitable model that business. the do we to if use a do we So it, will

our that's forward. going So strategy

Tracy Li

I one is to This like a another add would point. up Tracy.

on what we take higher talk value months rely few portion operation, So TMALL channel part, about early in than is Because channel, the the further do observed channel we the emerging develop the stage consumer TikTok development heavily going when the as channel. also or in right for this compare improve partner past revenue is now, even the also to is, like channel. TMALL a ally Baozun with and positively the and and like to rate the of brand the

So revenue total which means technology digital part, and income at marketing the that besides into also take means we which operation our the can part. part, the the rate, combine

So I forward. can one see that trend the going positive of the is we on think, Yeah,

Arthur Yu

also, profit, actually to We rate bottom our is add, the the major. business I look but And of to line. model the for would at Okay. contributing like not operating some take only profits

I in mini the program, we quarter. as program. this the example, And In mentioned doubled the mini for this quarter, year-over-year. our making are actually past, So for for revenue profits we're the for

on we business. profitability of take the only So the focus the not but of kind the rate,

Charlie Chen

very much. you Thank

Arthur Yu

thank you. Okay,

Operator

you. Thank

Your comes from the go Ashley next Please line question Suisse. ahead. Credit Xu of from

Ashley Xu

management taking my questions. Thanks, for

types, you. on view challenging macro types at this there? are Firstly, categories want has preliminary on next outlook want our cooperating JD. brand model are environment. on platform? Thank our to to operation what there. progress currently positive to the question check same my And of get Understand management's the second quite is year's some we the related given deploying there on key been And I where time, we

Tracy Li

partially for Jingdong I for for which TMALL’s is part, Yeah, year Jingdong. to focus buildup economy top are adopted operation Jingdong’s this more logics next think main similar e-commerce Jingdong’s the so the year environments

home category capability fashion, like the all operational the non-standard of assist kind luxury, how stores. is mentioned luxury but for also beauty, focus, others about customer these Baozun’s pop our and which of main our home improve these in service and non-standard effectively and -- beauty up fashion, of category. the operating think also I And experience can the So the think to platform solution this acquisition, marketing, also made tailor consumer value I just their the of I not sales mean after consumer -- flagship service

XX transition. participating So brands this Jingdong. growth direction is can regarding is the And XX Double YoY year next also the and compared Jingdong’s the see resulting actually last the cooperation doubled the of XXX% year have from in year's we terms Double you the with this the within for

mean, too. I -- Jingdong And even is So positively right this platform Double for we've XX now promising. the been prepared actually momentum in for

pattern. think momentum the is same the I Thank you. keep

Arthur Yu

Okay.

for In doing plan. the process ideal our of next in terms year, are we currently outlook operating the of

have our continue are of a get see revenue the even lot to high-teens space. still So at the of growth brands, a towards maybe a profits, GMV a this and continue we both in healthy of terms moving we of only think in there direction year-over-year see we I portfolio moment, terms to the mark. But XX%-ish to

investment impact of a into in think with to we terms QX opportunities terms revenue. profitability We opportunity of overall percentage. QX to example, And other start some to inorganic line improvement. year. growth we into like will omnichannel. the future can revenue look growth. I growth profit, could M&A the and a further on other while our our double-digit from the that, and look in kind economy see in And making profit also So, from next we make we recovery perspective, the technology for we Then into enhance of revenue BCI the mentioned, will Having see said will keep the the a our for a same also also

there moving this So, at parts moment. some still are

next guidance. the plan able weeks, in completed the market we give any once a will operating little to bit So, we be few more

Ashley Xu

Sure, thank you.

Operator

you. Thank

from America. Your ahead. of Joyce Ju comes of Please question go next Bank line from the

Joyce Ju

year. probably of connectivity we’d have second this and the next just affected to and was want If areas, rest Ali other to M&A we Tencent future. My for thing taking impact operations our for in how brands? understand the Thanks. management And the Thanks want between invest the related questions. years the seen future to for of our first like strategy in or is question terms

Arthur Yu

comment M&A So, And strategy the I Tracy TMALL and on do then maybe can first. will the between Tencent. connection

ensure So our looking growth. some the for real attractive future overall on cash see target. position, value And some we're using and actively the given provides create the our inorganic M&A current valuation on to our of shareholder market the we environment for growth

opportunity for were looking in the X So areas. the

the number consolidation. to industry think needs of So service we provider still the further industry the is TP the or one kind

So, QX, acquisition in another which in service of eFashion, actually this e-commerce provider. quarter we our completed is

synergy. early could some great lead seen signs have to We some integration the

continue service e-commerce we on consolidation. provider will i.e. that So

one. number So that's

is The we into the look second thing enhancement. capability will

of we the X also kind in deal digital we quarter, the logistics completed marketing. and So on this deals, one completed

our and stickiness capability to customer to us So to our build better partner win that provide a to also enhance our a to helped brand solution with more business.

So that's the one. second

The third with and the brands. is to our we want one our use cooperation investments the business to improve

X good investments been Group, brand Fosun brands positive some help will So And year-on-year And with have into example, our has they Fosun improvement. a all early -- Group. really we some seen the with in for partner in Fashion cooperation very making the make Fashion progress. year, this

some So, inorganic. through that. we looking finally, both opportunity we be will on And and for overseas will expansion organic continue

plan strategy internally following add, next I of do to build the structured believe a So we the we M&A the strong in for would start that And year. in our able opportunity so also we like team capture to year so. we is And or to more have M&A, experienced overall be people. this after will

Tracy Li

know hard In plans on many because Tableau impact for the regarding there's carried that essential the which Pay. I the about there on TMALL be to has not that positive improvement consumer regarding do in And user level the means and itself. right now, a especially will links next Friends in year. and We potential validate run, conversion journey, and payment longer us we interaction it's see we data the seen Tableau level out has of believe changes actually, But traffic lot the behavior, the in the think do shared breakthrough. also

it much think social of Thank new especially is base I potentially traffic user this the bigger wave a the consider bring for you. will app point. Yeah. So e-commerce,

Operator

Thank you, question? the next to we question? move next can Management can move we the

Wendy Sun

go Yes, ahead. Last one please.

Operator

Thank you.

next question ahead. Your Daiwa. Please from Leung comes from Robin go

Robin Leung

for added channels. those number addition new my quarter XX in new in of brand This Robin Could question. stores Baozun that management to John partners of Hi, me management. on the Choi. this share behalf non-TMALL taking asked Thanks in the

XXXX? new weakness to these of the will So, of in offset be you. the able half brands Thank first some

Arthur Yu

Okay, for question. thank you the

the acquisitions, we to because market the to stop we the acquired on our are of the different -- numbers brands. guidance we think last the mean, operated several very we by numbers gaining from communicated will I different I being we found after brands digging That [ph]. quarter, from overall partly have is several or done there currently standard company which

quarter have there So will gain we of in major able gained some have we from is In some the net we seen total therefore, But brands seen and have that. we to good not we have are what currently brands addition quarter. are this brands. XX state this

we in the that's So, quarter. gained have this number overall

many seen XXX have brand on we which new -- them -- we the existing also of shows have also another are of existing which them kind in have our opening from coming of partner brands more omnichannel. lot the We stores, seen our added are top brand A of stores. partner,

for opening existing our example, stores. mini So JD, TMALL partner new brand or program

that's XXX stores. to the contributed additional So

you to to in we We see will further forward add the going strategy as the omnichannel continue expand. think years? something? more being will Tracy, want So we mentioned added stores coming earlier,

Tracy Li

the last year, this is of definitely prepare year higher wise year, the -- is maybe which but Actually, could up, in the and we see mean most concentrating luxury because means But QX year. new seen pattern of I in QX much on -- QX I we next higher open means need are Yes. next category, or kind the we for we this than which longer and even different have the clients in numbers. QX time mean numbers I to our think

memory Vincent over to QX So stores luxury. see year, just we're in next XX can in some the you going published open

the And for the also like and Jingdong, I like TikTok channel So brands is this party that is more actually the new effort think our emerging channels. we other the current on invested this into extend year.

it we steady So help open I helped new channels. infrastructure strategy. this existing very growth their we our technology call logistics part, to and this us think on the including to actually omnichannel more investment the client a have And year. client have Because

be also QX and the the So Yeah, in next also QX year. this of all contributed will thank you. in

Operator

Thank you.

time, I hand at further for to remarks. you. call point of As any closing questions this would like to Thank no there back are the management

Wendy Sun

Thank would this on you, for operator. to your you call. Baozun behalf of management participation In team, thank like closing we into the

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

Operator

you. Thank

Baozun (BZUN) 30 Nov 212021 Q3 Earnings call transcript