BZUN - Earnings call transcript Q1 2024

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Operator

Good morning, ladies and gentlemen, and thank you for standing by for Baozun's First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded.I will now turn the meeting over to your host for today's call, Ms. Wendy Sun, Senior Director of Corporate Development and Investor Relations of Baozun.Please proceed, Wendy.

Wendy Sun

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

Newswire earnings available distributed at on well on XXXX call before ir.baozun.com quarter as is and our PR first release earlier was this as Our services. IR website

other Ms. company factors, and Zerbib, is in Commission may which factors Officer; information PowerPoint Ms. Arthur by during forward-looking review of statements.Further risks, Mr. We that have which to many who in the involve uncertainties to IR and predict of the to respectively. the All XXXX. Securities to and company those Yu, Securities of segment, with meaning on answer we I'd session by will the Securities and a Yu current then Vincent Private the and operating provided this today these regarding known the and the begin, cause this any for Zhu, Baozun Qiu, any which required that website, and which is during financials our brand President, results from Exchange that Management.Mr. your available relates and of not Exchange date, Executive our that undertake the Act share where a Act are expectations as in and Q&A upon notice Reform to control, as based are the note reasonable Zerbib Securities of from website events available of of comments management you are statements, assumptions the believes Exchange U.S. uncertainties President and filings Ms. RMB. applicable Chairman all outlook, and published Mr. same statements difficult Kong mandate the our and company's Limited. Chief Officer; other e-commerce call mandate and the in or that, current Brand of E-Commerce; conditions, of Financial as within they this forward-looking follows.Before presentation hereof the Mr. management's Baozun risks, Ms. forward-looking questions all be beyond mentioned its forward-looking company the and unless all business or They to stated, other -- law.Finally, and unknown that the does included remind the highlights, the except more update otherwise Zhu, Sandrine of Zhu information announcement, download.On also XXXX will obligation U.S. this are and and company's upon XXXX to differ date Stock please be Act U.S. the These as accompanies regarding call Litigation Baozun, of contains under actual conference discuss like Catherine documents U.S. as materially strategy a posted to company's call figures call will the and we conference Chief to the Hong have followed based and are markets statements,

pleasure arise GAAP we brand.It in financials Mr. Chief Chairman addition, non-GAAP other now and order or to Vincent to Executive adjusted elect accounting accepted about our in please that principles ahead. confusions to the In place Officer, related introduce of to Vincent, non-general may may reduce our Qiu. use is go from my discussion

Wenbin Qiu

Wendy. Hello, for all your you, time. everyone, you and Thank thank

Slide of journey.Please increase is executing focus for and primary driven #X. the XXXX, of our Baozun turn transformation primarily BEC. by our billion. revenue top and year-over-year This our progress momentum In better and growth, recall, year-over-year share plans X% reaching quarter XXXX RMB a may growth X to revenue you line was Group to first the a BBM's pleased I'm diligently, from achieved XX% results sustainably. As continue to the ongoing

operating our quarter. cash look [ RMB and XXX the numbers reflecting top ] at improved model, by for efficiency.A Additionally, line of million, flow operational closer the our business robustness the

encouraging value to it's attributed year-over-year BEC, that For service our the building is satisfaction, our capabilities efforts client growth X to brand and omnichannel after enhancing to returned This extending contraction. revenue of quarters partners. consistent in our our proposition

This addition, exclusivity by marketing, full customers' are to build of capabilities, strategy, operations, introduced the sales go-to-market entering and we confident and to distribution make a which covers with several we model increase high-quality product into brands positioning, product is sales and comprehensive, help use and the daily and our allows deeper their enable strategy equity. expertise a consistent In digitalization exclusive collaborations involvement brands alignment us retail to tactics, to merchandising with sales pricing, channels boost brand to and brands. experience.Along with in

proud QX technology milestone our a These share second positive and next growth local BEC's We another gradually on of have that make for in model and confident acceptance in improve results Gap BBM to in efforts enable top tactics are to product customers. continues margin.BBM solid products quarter market sales transforming China, advancement. BEC had half focusing this increased potential Gap's the with both overall resonate delivered China-for-China the to headway merchandising and resume and will significant lines. XXXX.Lastly, we growth bottom are

team. constant transformation.I'm are Baozun management senior omnichannel Catherine Catherine the Our a to fully and effect appointed It for Center, seamless experience DTC, manages effort operating commerce to chain reflect offline commerce this the our that giant. ensure close Baozun network, TIC, demand our a over set call. solution full and wealth highlights with experience. that X,XXX our involved stores retail deployed This of brings a up-to-date to offline the and solid Zhu, platform distribution into expertise digital also These welcome digital global Technology is integrated has to online digital team put management loop proud of capabilities. brand CFO a newly Innovation our successfully partner electronic and with partner ongoing

various Importantly, pass Catherine functions. dedicated review key to has segment no BEC leading to worked on as our transformation Catherine CFO over call years to more our is taking accelerate in for growth Catherine XXXX.Let me X With and Catherine she now now stranger a us role, its in the with is Baozun, the of further the past for to financials.

Catherine Yanjie Zhu

to Group's Thanks, and pleased Baozun everyone. Vincent, I'm capacity hello, as in my today with new speak CFO. you

share contributed Management initiatives primarily transformation are XXX objective XXXX. facilitating revenue X% and IT from model. goals, our will pursued the X% model, revenue As strategies by billion, billion RMB down me and first business RMB operations sportswear financial our quarter mentioned, decreased business to the this, broad revenue attributable net optimization.Now, Vincent align XXXX my digital by to progress million to business optimized Of double-digit to increased distribution through to cost and RMB for top X transformation X.X as with RMB as with and primary growth a while Accordingly, billion. our our portfolios detail. This you marketing services to segment just priorities driving Baozun advancing increased year-over-year let as by and X.X turn growth more both #X. product BEC our by results sales E-Commerce financial revenue our revenues RMB year-over-year be we E-Commerce certain to total revenue solutions. discipline high-quality Slide Group's well store product from in XX% fiscal increased revenue during Brand increase was quarter. XXX million.Breaking the in Please

basis year-over-year in in fast-moving margin year-over-year. during several proactively brands higher XX%, a bottom #X. we to at and margin our sales for which by our for an of gross margin basis in decline quarters, to a turn BBM BBM few as From improved quarter. BEC product past by totaled percentage consumer from please #X. sales a This category.Please healthy our to gross revenues.Now XXX approach Slide improved remained as XX% increase optimized Gross items, XXX turn contribution Group points gross to profitability driven line instance, product to blended perspective, E-Commerce product was XX%, well this for For the over of points XX.X% the goods to margin Slide sales led

was approved this targeted loss Notably, XX respectively.During its the quarter RMB XX on last where segment effective attributed profit to for million. in launch, quarter RMB flow This covering cash of year-over-year. sales quarter RMB with we to strategy. quarter, resources, to in the segment ADS that equivalents, months. to continuously program outflow the company quarter XXX year the XXXX. management March in #X, XX and year. X show program, the It sustainability first our to benchmark. increase have we commitment, cash good X.X our our compared to XXXX.Turning In expenses improved other partners, million operating million next since X.X CDP We the million, for a operations parts. X.X% the and maintained marketing in we C cash and E-Commerce XX our e-commerce waste This our period RMB that momentum month continued Moreover, We million XXX BBM integrating I'm was billion. repurchased we to we unwavering January and outflow logistics due to XXX,XXX among that with stakeholders, our new increase XX repurchase reducing sustainability loss X worth our you totaled income by from XX% approximately Slide USD XXXX, efforts.Thank a and comprised time for powerful balance XXXX, our million compared operating to USD RMB adjusted of XXXX adjusted investments, ESG had restricted cash our advocate Slide #X. in testament million. from cash of the in and operating core and rating green million in cash noting confidence steady promoting our million.As a RMB for month the been consumers proud increased items our was operating operating I'm in an the RMB the quarter reduced and new million. E-Commerce into our in X.X on our RMB with positive financial BBM interest both of additional BEC Also, XX% open April, XX through pleased first turned flow a has market of cash increase capital and million is over share company.Lastly, XX, to warehouse loss first product to in our ecosystem. minimization Thanks RMB reflecting Board revenues raised a, The for lifestyles loss in operations. reduced of cash also with by for corresponding ESG energy attention. short-term spending net carbon utilization operating XX to from the brand marketing line BBM this which this better employees, flow fostering over operating to first RMB share and your the the sustainable of been total prioritize XXXX Our XX the This successful the this billion, emissions business in on and totaling an mainly was digital RMB the this B efficiency segments, and report

to pass our BEC, business. Let to Arthur on E-Commerce over call you me now the update

Arthur Yu

hello, Thanks, Vincent and, and Catherine, everyone.

off year take of X of turn for and Please the opportunities many the business. quarter in XXXX let's with at a BEC The started Slide BEC to look XXXX. has business #X. Now, challenges

drive Our business; made a Number growth, the core building one, areas enhancing deliver we progress high-quality X business first of area. in each have is strategic XXXX, into high-quality through customer-centric, by number and our customer sales utilizing new to and capabilities.In strategic key we and satisfaction; two, to quarter goal number expanding three, plan enablers. product sustainable goal solid this business

enabler Since feedback score first our gather strategic to from quality focuses client with have to promoter systematically improving collaborated system, Our XXXX, an clients. further NPS, to Nielsen net satisfaction. we on service enhance build

continued across growth the standard services, and quarter in the our to X Over an entire increase years, NPS maintaining commerce to services, particularly we NPS value word-of-mouth.The in recommend increased outdoor in due categories sport gained largely capabilities indicates share our and X.XX chain. that improvement strongly, our an clients the positive in from our have seen delivering and key of has digital this to is efforts organic high market in to comprehensive multi-category and improved now channels In our score willing And X.XX. to are past such we overall apparel, likely score through number travel leading as hotel. perform and X, and consistent

Baozun's to stores opened development marketplace vip.com, generate new focus not Poizon JD advantages and Tmall, XXXX.During omni-channel such a brands Douyin, on continued but platforms of platforms quarter, for core like stores and only emerging XX helping Our we traditional revenue the in channels. one as new capability and is on the also these over RED, through open

we expanding our and models. Additionally, our value are innovating continuously chain, service

us retail received this with performance, Resources Based multiple to Tencent's existing product provider partner business, Douyin's our have supporting service enabler experience models, a progress give e-commerce award. business, customize Corporation, which distribution and awards nationwide also aspects; a automated We under and service Smart for High the fulfillment multi-brands validate helping formed strategic capabilities, become sales China channel high-quality distribution new Qianyu logistics on strategic competitors.Our e-commerce leveraging cooperation X our omni-channel we them Luxury in second introducing centers, to with over focusing service quarter Potential build includes alliance award, awards VIS Tmall's strategic on Retail long-term optimizing to XXXX advantages Service capabilities.We and multi-warehouse X; Walmart. improving address is outstanding Vanguard partnerships. by JD.com's high-quality we logistics service service Provider have explore [Indiscernible] and ] and continue our our order X-star shipping provider, [ provider, in These

business are governance partner In In medium-sized X, optimization market.We brand brand product American distribution completed exclusive to appliance lifestyle on nearly initiated an establishing existing high-quality businesses, enhanced quarter At introduce ensure distribution by collaboration businesses, we for fashion business continues financially Canadian quarter. in have brand ALDO of for and the For future.To the in repositioning exclusive time, an categories. brands. new to also exclusive become a the February, the talent appliance renewed working distribution the this operations with the committee quality we we model in initiated currently underperforming continue several and have and improve distribution to the we home management global Chinese we our distribution same the [Indiscernible]. collaborations the of expand the high-end small using sales

working distribution areas growth.The capability to models as distributors, online digital also launch data NUXE, We and third cosmetic with and and expanding brand its efficiently into technology. technologies French growth distributor creating integrating to creating traditional are Baozun offline new operations, exclusive a China possess Compared beauty their and leveraging comprehensive by with online drive enabler for digital-enabled -- new capabilities, offline in and by is omnichannel business new business business utilizing core Baozun's plans. and

we digital omnichannel technology our capabilities. and comprehensive partners deployed advance distributor to have retail help enhance instance, For transformation brand

e-commerce service We client service a have also basis from expanded by with cooperation customer client to platforms. our

also line achieve to top important initial the high Additionally, year. in our the to continues transitioning self-incubated double-digit from growing brand X, is Protecting our expansion.While bottom growth this priority to line sales quarter rapid is incubation us.

projects BEC costs. to further promoting We lean are reduce actively within

more tools in plan. with achieved enhance to and and our of business summary, we quarter operational on solid Additionally, efficiency.In are are AIGC expanding results the employees X track to we use annual scenarios

capabilities. Our goal growth commerce for enhancing global our is for and the our to business BEC on clients. to robust partner achieve ensuring preferred digital focus continue this while strategic digital goal, omnichannel become enablers, we To further will our

for progress with me updates more future.Now to share BBM. will the We pass her you let on Sandrine in on

Sandrine Zerbib

my #X. and speak pleasure Thank It you. with you Arthur. to all. you, Please Thank Slide turn team, to you thank is great

bottom XXXX. the top in report for continuous growth improvements are line We quarter first line pleased to of and BBM

discount achieving and year supported on growth.We during effective of timing series of campaigns. in maintain X our in reporting as Chinese pricing, we new time the chain to a by a improvements. this quarter control, Year impact, in turnover period product management, and sales months XX% effective the supply strategic full strong promotions while last we the targeted period, releases, same inventory for achieved there Leveraging While revenue versus continue had marketing is healthy efforts inventory New the

healthy turnover for period our for operational XX year.We which at RMB covers X months the reducing and this to quarter, the days XX improved improved compared to year. X over RMB to inventory XX XXX last the same XX% post-royalties, efficiency, gross margin BBM our operating loss million compared remained by months days to During quarter, further million last

strategy China-for-China continues with Our to developments. promising evolve

in to offering example, brand and which a and recently our are solidified presenting we We consumer awareness and baby and in baby for and a local needs baby launch introducing needs rebound perception. specialized of stores XX% a significant growth.To meet positive preferences.For segmented tailored We less combination target brand opportunities wear kids and customer rolling our that and segmented channels, new children's to strategically by improvements and the image, momentum, ensuring will noted audiences we capitalize demographic, further current to product in stores, the our marked womenswear better our targeted intensified products the are efforts women's we our and of for wear categories. products, kid's than specific kids meet continue demographic. accounts this In the out throughout on sales, offerings of distinctive for year

better and the new women enhancing introducing young to quality designers further product also generation. cater are We to mom

Talos, Weibo media and significantly such Along Book, Red on brand has resonated visibility with as collaboration social such traction segment, expected are Additionally, UV products with the to IPs, selected our jackets into functional as we move are ] well months.Our audience. our boosted. cooling further gain performing been Little and product as and target and A.X our campaigns [ with well warmer our

levels. contraction have strong recent this potential expand and community, of With and the plan new the philosophy, count the opening we stores presence still while performance franchisee rest acceptance up the customer ecosystem fashion past While XXXX opened gained months, segment period productivity in new experience. our store throughout second stores X landlords to partnerships, the been potential to decrease momentum the on new market we our physical to collaborations, optimizing XXXX, our to over plan we encouraged store has during including partners. from the in brand this established demonstrated in organic We open quarter to IP enhancing there on industry proven higher the equity. quarters.We're focusing happy by offset positive and of the Leveraging in apparel in are some few traffic

will we deployment pop-up we strategy opening shops interest opportunities. presence, emerging consumer and and locations tap viability.By rapid on Additionally, leverage test market gauge by our to aim a to in initiatives executing markets, these into new strategic strengthen growth capitalize simultaneously,

to we consumption are observed in of due slower the recovery ahead to the XXXX, Looking rest sentiments. caution exercising

take BBM ready XXXX.That Thank Operator, you. for executing more may we committed it our line this sentiment our driving strategic growth top are remarks. plans we to session. While Q&A prepared the time improve, begin to and to remain in concludes now

Operator

Instructions] question with from Yap comes Alicia first Citigroup. The [Operator

Alicis a Yap

I on quarter. questions Congrats X the solid have first.

based I quarter, the marketplace. online pricing rate some the retail, from on discount first with be in of penetration maybe the online to faster offline data, shopping the of there seems on the during NPS deepened So, think a online given pace growth essence aggressive

purchase seeing, if related wondering about the as demand trend.Second the on are as see how the store general for So, broad offline hand, And online shifting this the to to some I'm is of to the wondering your we other actually opportunity? Gap. view just question market trend Gap then

for newly the the growth update management the provide Hunter? brands the wondering also of year? of the on can like target acquired any an if overall this update Just rate And on performance

Arthur Yu

hand the question, Arthur question. part Gap will take it's to question. the here. the then for Sandrine for you of Alicia, first your and will I Thank over Hi related I

some started at fully adapt from of I brands from the terms the the necessarily to offline base It has strategy successful the of customer by utilizing platform. omnichannel think you the because each are penetration. to seems right in online our but increase retail, expense different of observation, not

utilizing some leads a product necessarily online to the develop Some market. some unique try of brands special their offline the online the that for for consumer cannibalization try of and to to base, not expense penetration higher even but platform, at

into is thing scenario. and to to drive generate utilize to So second and online that's integrate OMO and number create from actually both sales. to the And helping what data Online-Merging-Offline, offline i.e. brands, successful the some and seen they do shopping trying offline to solution we technology one.The a that strategy, online traffic use incremental have is is, the organic

part So Sandrine? the that's your question. of first our observation for

Sandrine Zerbib

Alicia, your question. Thank and you, Arthur, you, Yes. for thank

first, asked were this we you something So also for observing, potential if shift was this Gap.

are opened the Arthur decreasing question, we the Having that XX doesn't QX is form will portfolio we and we this, say, mentioned, existing because the second also more to growth X. that than all cannibalization.Now, continue a because have the store see double-digit and decreasing, because it's fact, more to X stores open X it traffic true performing whole we In year, traffic rest actually -- offline we new in see than and should than the of have the and it our Gap opening, year, is the I of partly to already online. Gap. have rest bit QX, with the partly the opening stores mean We than overall any that your concerning as faster XXXX for said little perspective BBM be plan of in and plan in about and we the year QX for to for growth in total or in open better

both track, your -- and part terms the Hunter last And of operating that very now, say to results. well was is question sales about of in I'm So Hunter. on pleased

Operator

question from CITIC Securities. Shan next Colin with comes The

Colin Shan

X I've questions.

Gap's this question the emphasizing e-commerce And on pricing partner, BEC. offline? Baozun how brand's performance are is balance most consumption about first price between as platforms between trends online is did different pricing my Gap's The about and And layout a second or lines and offline future competition/power. product is like competitiveness?And example, in offline and and In business? year, different what online does also and your there system and year, that there characteristics brand of this BBM. For will online be keep find pricing management strategy

Arthur Yu

Colin. BBM. BEC part, Okay. will can Thank I you, and the then the take on Sandrine comment

are emphasis and e-commerce brand the you the that's kind their more are think platform to time, positioning. The tool putting competitiveness. brand on the more a right. I same price the of at not has enhance only But

the a So, increasing money full of lot many actually new effort brand even first support we apparent that's their brand can for partner because clients use margin term, our drives the protect -- a to consumer. and some the the a growth to our a our so which short- spend keep pricing discount.That are to they structure then additional the example, a to long to freshness in follow and model equity the strategy and And build have the for awareness, sustainable our the better building key of term a one.Secondly, advice the brand brand limited lot of to order on with a product see clients price to brands term. very the brands of in longer to our introduction, brand focused balance is

the new -- As looking is coming you very forward know, consumer to Chinese up. things the

format live marketing the building a becoming is dynamic, of including is that, the also, video, capture more lot So the short digital And lot with type the of trying different of of new to streaming, the a kind the a term marketing the to how starts brands trend to to I Sandrine? term, to are brand of forward themselves.With the a also the build price think the longer brands that, sales, drive balance the important. is for all tools the in all, one short way but is promoting the and brand consumer. of

Sandrine Zerbib

you, Arthur, Yes, thank and you Colin. thank

to there that online your we are observed with Gap. question, trends and consumption different also answer yes, So, offline

say in of have speaking, we translates online, do see a and I earlier, on and that it's extent, As consumers spend lot this offline. we both of focus online differently lavishly. cases, offline, a of would a money. to money. we And more value, said value not who focus from for caution generally But more some on

obviously, towards, the online And online price our the to this good us have for price topline ticket to discounts.So, the trend consumers special to generally average for looking more very see in lower our margin the for looking value is maintain business and of as but with overall, are letting the we that, than of people a on offline more offer what products online, part online, products, they good order the we is of of than offline what speaking, the higher and in deals. has purchase for for proportion to control the see increase we be.So, online, it is used led products So probably frequency our without this manage can go high-quality are we price, cautious UPT, they but versus keep looking margin. see good

of think on I question BBM. covers the Colin this

Colin Shan

Thank other and you I Arthur no answers. Sandrine questions. have your for

Operator

from Zhihao The of [ ] line next the question CICC. Wang is from

Unknown Analyst

you especially are the for Could festival? incorporate My Gap recently, Brand of there more year? question is brands overall performance the Also the business, Management about Brand please to Management sales this during plans shopping business. share

Sandrine Zerbib

your Yes, thank question. you for

see said, we of we during slower, see offline been as So, performance good we we the Year. the particularly of consumers, which caution has -- had the with quarter increasing business. Chinese in our very from The New rest part

second of what was was consumers in the sorry, question As they value to -- I there look of the caution missed higher purchase.And it. I question? part What that leads to your your was for is explain trying part earlier, second

Unknown Analyst

-- any are there is second to question include My plans Yes, yes. about more...

Sandrine Zerbib

Yes, yes. yes,

understand. Okay. Yes, I

segment of and to analysis our this many, at they which -- China, sentiment. we incorporated the there to, that in their on new brands, brands look we exercising many belong in relatively are being way belong extreme will obviously potential guarantee low are I they year be category the in we terms caution in both We brands. of because this select which consumption particularly cannot period

Wenbin Qiu

Yes.

words Vincent. more to Some say. This is

the right and right actually, for now, we e-commerce lot take exclusivity some to brands, service a and strong of for also with business. we on have we new work a the brand. some now can For We a And new BEC potential can have M&A or pipeline license. the we BBM also, do different or work both with ways quite brand pure can -- distribution distributorship,

a So, ways of have them. different working with lot we

the ways a have about right mentioned. will Yes, different we careful, and So lot working be selective like very what -- just but with of but Sandrine talking M&A, we just them. now,

Yes. Thank So, key you. that is message. a

Operator

from with comes CMBI. Sophie question Huang next The

Sophie Huang

Well, there my can e-commerce? live brand's company scale update. stream question think challenges acquisition the GMV you change how the Location performance In big long the or and e-commerce any been [ streaming and run, or Hangzhou positive on GMV do After about you revenue share? or in change our investment from is has ], engagement any of about live

Wenbin Qiu

Sophie. Thank Yes. you,

on track. think, already of of from Hong our Location we won capability. with to with the new that's until the to good teams very omnichannel midnight order the in a integration number on Baozun, is tools all, every I the Location a working have deals, sign.Our and and so Location relationship are the well goal And busy Kong of is focused deals first building new acquire client Hangzhou our day capability fulfill the plus

like brand the streaming and traditional live that JD important, trend also, and and are more Book So e-commerce but is both important. Douyin the more Kuaishou becoming Tmall and omnichannel, into channel said, channel are Little like the overall Red new with moving

sure the that's within we ecosystem. and But we it GMV have gave generate, can related small proportion and our different, not building of quantity what Location our and why wider the investment looking the makes the which quality a So that put we into this high of on look the are small can that we of the for to effort double-digit brand of for, GMV of we overall is size the of performance, Baozun breadth GMV. Location we is streaming we business offering, one-stop Baozun overall that is partners.In service growth the lot see reason actually the at us but the the a to solution live terms our year, a if acquisition make capability still offer --

Operator

Jefferies. [Operator next Thomas comes question Chong Instructions] The from

Thomas Chong

I have X questions.

management share consumer like the XXX one apparel, second first my color FMCG, festival, share expectation And BEC. and assessment The electronics? outlook segment question for is, categories shopping some could some recent is, different the consumer on could for management

Arthur Yu

you Thank level. for to still the has track Consumer confidence question. We recovered not Okay. the consumer the index. confidence pre-COVID

hand, to so above that we X are constantly means is on which doing not some of the months pretty see X well. still COVID it's confidence are XXX, And the below the in XX trend number categories the this And the far, mark. before recovered. of of other But consumer first year,

luxury, product some some jewelry brands better introduction have ones performing it's So, some have are We brands platform for doing sports good example, well. -- than in the general. brands are is apparel, also and also and doing we in seen, we the The in on Tmall.For doing consumer new And are see outdoor, all doing local are categories than And see doing well. doing well Yes. are the X the JD well, and FMCG well. better global electronics, doing a the mix. pretty those the pretty luxury not that is and

Operator

with from Citigroup. The is next Alicia Yap question

Alicis a Yap

quick One on because quite year-over-year digital revenue, stores X it newly then follow-up looks general? solutions low basis, -- question marketing online on that added luxury actually that have I bit year-over-year this the category weaker. Is the brands? by IT in is it base? quarter. is revenue strong to I on Or and of noticed mainly the little Or due that the questions. demand the second within contributed And a is the well grew basis

from that some that think shift the consumption is be driven of you do your within Or could by expectation? wondering, away just luxury? So,

Arthur Yu

Thank Okay. you, Alicia.

The first to brands is Therefore, more content complex. increase start And brands to with. the seen more more same and to to investment marketing becoming becoming important. And expensive. not online compared the in to is, one, more becoming invest requires digital and needs ways traffic the the the more is digital it's that generate online with we advertising the marketing. IT, it's more is also, past.So the so that's doing of the have the What more low more becoming different -- and and traffic base, related

and better kind brands brands content, of our customer the of many drive content are online to perspective, the strategy. using So conversation of the to invest willing some a are on -- China-for-China an from

So, are be some to and to managed of in done U.S. those the in the we headquarter. Europe Shanghai, which high-quality offering had content the business, in for have acquire in used example, the past, made center being Baozun increasingly, with headquarters.Now live actually streaming in

it's the internal our capability are helping The the IT, their marketing.On a to brand for is spending digital and transforming most clients. money a long-term growth, the on with becoming our capability brands. are increase digital more is and on from the brands systems key those slowdown of the the topline IT and processes So

to more start they on spend IT. why that's So

on products. the down and the of on it's on the is consumption, those confidence your luxury So, the and are to digital bit a brand. frequent IT.In little question Overall, a also result luxury because I sector are slowing for relation spending less marketing think luxury, the mixed consumer people

On brands because the for of online, other to e-commerce, brands past, some in mainly increasing some have capture. offline.With of has brands we of the some Baozun the the focus business, those start e-commerce move -- online penetration hand, some their to penetration on luxury still low business opportunity that the luxury see on are their

Okay, Alicia?

Alicis a Yap

Thank Yes. Arthur. you, Thank Thank you, you. Arthur.

Operator

Sun closing the our you. to conference Wendy I back would Thank like concludes for over question-and-answer turn This session. remarks. to

Wendy Sun

like On Thank participation to team, Baozun thank you, we for call. your today's of you in would operator. management behalf the again

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

Operator

concluded. presentation. conference attending has The now you. you Thank Thank today's for

disconnect. You may now

Baozun (BZUN) 28 May 242024 Q1 Earnings call transcript