Q4 2020 Baozun Inc Earnings Call
Your line.
[music].
Uh huh.
Okay.
Good morning, ladies and gentlemen, thank you for standing by for Biogen's food.
A full year 2020 earnings conference call at this time, all participants a listen only mode. After management's prepared remarks, there will be a question and answer session.
Reminder, today's conference call is being recorded I will now turn the meeting O T. A host for todays call Mr.
Wendy Sun Investor Relations Director. Please proceed Wendy.
Thank you.
Hello, everyone and thank you.
I'm, a fourth quarter and full year 'twenty 'twenty.
It was distributed earlier today.
Available.
I I got.
As well on a global newswire services.
You can also find a powerpoint presentation a couple.
Our comments today.
A website I had a section is also a quarterly results and the webcast and presentation.
On the calls a day from Biogen may have a Mr. Vincent Gilles Chairman and Chief Executive Officer, Mr. Arthur a chief financial Officer, and need a Tracy D. Our BD Vice President.
Mr. Xu will review with a business operations and company highlights followed by Mr. Yu, who will discuss financials and guidance. They have a I'll be available to answer your questions. During the Q&A section that follows.
It's all a big Guy I'd like to my view that this conference call contains forward looking statements they've made the meaning of the Securities Exchange Act of 19th of April and then you watch probably a securities Litigation Reform Act of 1995, no forward looking statements are based upon management's current.
Expectations and current market and operating conditions and relates to revise that involve known or unknown risks uncertainties and other factors all stage a difficult to predict and men a stage a beyond the company's control, which may cause the company's actual results could differ materially from those.
In a forward looking statement.
Further information regarding these and other risks uncertainties or factors is included in the company's filings with the U a E C and a announced announcement no taste and other documents published on the website of the stock exchange a Hong Kong limited the cash.
Company does not undertake any obligation to update any forward looking statement, except as required under applicable law.
Finally, please note that unless otherwise stated all figures mentioned during this call a.
R&D. It is now my pleasure to introduce our non SR.
He's executive officer, Mr. We've been true I think.
Yeah.
Thank you Wendy and thank you all for joining us.
And in the second quarter.
I'm pleased to report another some himself as a result.
During the fourth quarter from the partners accelerating their digital transformation in response to rapid changes across the ecommerce landscape in China.
The nature of our consumption is evolving rapidly.
Our unique position as a leader a solution driven platform progress puts us at a center of this evolution.
With technologies that enable us to keep our brand partners a hats off a curse.
If you're a following along we saw from presentation a start on slide number two.
We executed on our strategy toward a fourth quarter revenue.
A lot to share a few key highlights with you, including a record a breakthrough double 11 campaign strong momentum in brand equity fishing with a net of six per apartment is to reach to a solid 200 and a.
60 shrink.
And a continuous operating margin enhancement overall from a non-GAAP operating profit grew by a 54% while non-GAAP net income increases by a 67 per cent.
We believe.
These achievements demonstrate the effectiveness of our high quality growth strategy and it reflects a long term a accumulative results of our investments in technology infrastructure.
Now moving on to slide number three.
Powered by technology and innovation.
We have been able to achieve continuous a breakthroughs that improve customer experience and enhance operational efficiency.
From your point of view, the 11 day long probably 11 campaign has become a touchstone validating the efforts we have put into creating such a solid it's effective and efficient infrastructure.
During the quarter, we upgraded our telematics technology, a system and extending a capacity for 5 million orders per hour to support a record breaking order a search.
In addition, we launched a variety of automation and a one six okay.
S. P. A rollout labeling trough video processing and a sales intelligence applications from our proprietary retail operations support system or a rock.
Leveraging Baldwin club infrastructure, a I always am.
Analytics, we launched a virtual intelligence dashboard, a system that improves operational efficiency, while reducing risk.
From a digital marketing perspective, we're focused on direct deployment of creative and innovative engagements to drive consumer exposure and a commission rate.
Appointment of data driven analytical tools and the insights it enables us to help a branded partners better understand their customers and engage with a more effectively through price a precise targeting and a positioning.
Besides this fourth quarter.
We established a 1000 square meter a less streaming studio.
I'll also a three degrees in a store last year, I mean into sales operations and streamline our portfolio a flash floods streaming solutions.
The only a warehouse and logistics side for a culprit. This a years extended a double peak during the double 11 campaign with a.
Not only upgraded our capacity and a equipment, but also use algorithms to optimize real time big data monitoring across the entire order flow process.
Cool other procurement efficiency.
All of these efforts enabled us to a large Houston arrivals services for several of our garden departments that allows us to deliver over 80% a packages from consumers within 24 hours.
Which is a good term greatly enhanced customer experience.
All of these efforts briefly has a value proposition for a brand partners, allowing them to extend a touch points and a capture emerging opportunities for omni channel strategies at a third party service provider, a reinforcement infrastructure and a tech assets a lot.
Allocated resources, Inc.
Optimal way based on a universal on that strategy.
But as we look ahead, a slide number four we will use a drink our vision of technology empowered future success, and we'll continue delivering for our brand partners a customer centric e-commerce solution to reinforce our value proposition.
A capitalized on the opportunities we are launching a 345 year medium term strategy strategic plan to achieve our objective of sustainable and profitable growth.
First.
We will adopt a customer first approach.
Drive growth by focusing on a service differentiation to meet the brand partners by words with me.
We will explore business opportunities and to implement a customer segmentation strategies attract potential new business.
From both our existing and a new brand partners.
No we have been a market leader in China's a blending commerce service industry. We believe we are.
There are a lot of opportunities for us to become number one.
More of a sub categories to increase market share.
Secondly, we will drive through a.
Drive growth through new business expansion.
We believe that e-commerce in China in your box.
There are increasing opportunities to explore new channels, such as a 10th of a mini program.
And the JV platforms in.
And I'm in a time, where we will continue to explore new business models in accordance with a new channels.
Thirdly, we will seek even greater optimization of our cost structure.
So a technology driven business process reengineering and a service quality oriented location strategy.
That's all of our initial step.
We recently established a two additional remote service centers.
We had a low cost a series of mental and a growth rate.
Which we believe will improve service quality and reduced costs from the second half a plenty plenty of water.
Lastly on slide number five what it was abundantly clear through a plenty plenty what's that our people a greatest assets.
This is key to our culture and a based on all of the media profit delivering quality through developing people.
I'm proud of the resilience agility and a commitment demonstrated by the Baldwin team and.
And honored to have once again awarded the Shanghai, a best employer pulp certainly.
Here I'm excited to announce a major office move planned for the second half of 2021.
Please blend and you will have quarters with over 40000 square meters.
We believe a new bulbs in Kansas.
There are a growing 17 support future business expansion and nurture the bulging culture of leading edge innovation.
Everyone have a I'll pass the call over for author who will go over our financials. Thank you okay.
Thanks Felicia.
Hello, everyone. Thank you a whole joining all the earnings calls a day.
I will talk about our financial performance fuel on a full year 'twenty 'twenty.
It's part of a power at this point.
Free until what.
Let me start please default quote a 'twenty 'twenty financial result, we paid on slide number seven in our prepared presentation.
We saw impressive growth in total a T M EBIT quarter, which increased by $28 seven per tonne from 20 to a 90 day.
Breaking this down all of these pre deal from C. N V rose by $13 six per tonne from $1 6 billion.
And all of a non seems to deal from CMV inquiry.
On a one to one 2 billion.
Overall, the 2020, a double 11 campaign evolved.
It's a marketing activities singing the emergence of Covid.
The longer the duration we are.
Wait a day parties come across categories and across multiple markets.
We have also up to a higher return rate a fourth quarter posted a double 11 as a result of a Sunday 11th a promotion Karen.
Although the entire retiree life to some discrepancies between the fourth quarter DNV and capitalizing on the value.
We believe that we have money they flow across the board.
We also have a statistics a limitation income offset from Brian.
If you produce a model for quite a high friends, who make unprofitability.
Oh five per barrel we.
We believe the lungs that having a balance will outweigh the near term impact I suppose a strengthened relationship wavefront net.
Expanding our salary.
A breaking it down by category.
You can see on the right side of the slide.
During the quarter, we continued to see modest apparel a momentum in both class luxury and I find a C category.
The apparel category has a outstanding quarter.
You know Pedro a passing grade waste includes both via a luxury a marathon women's clothing comfortably with almost a pay per tonne of our cohorts ANV.
During the quarter, we saw a nearly 30% year on year apparel.
Your line is humming.
Which represents about 25 per ton a total T M. B show, a major apparel as well with a contract per ton increase year over year.
The impact of optimization of the smartphone sector throughout the year.
I'm a teacher you contribute eight or 10 per tons of our total T M D and hydro toppled with a growth rate on a long day.
Yeah, Jason this quarter, because we proactively adjusted our promotional strategy for first line and profit.
One of the key categories of that he would produce a modal cosmo kind of a pilot had a negative growth rate.
But we have seen that these come and sales training improving equaled a 121 per watt.
Now moving onto a slide number eight.
Our T M b growth translated into a substantial growth in revenue.
Are you currently in service revenue.
Hold on a net revenue increased by 28.2 per ton to a 3.35 billion.
What are you seeing much part of our sales revenue decreased by 14 per panel for one 5 billion services revenue increased by $25 60 per tonne for one Nike Inc.
The increase in product sales revenue household products increased to $1 3 billion from one why do we cannot.
Product sales growth margin declined from $12 seven per ton, mainly due to discounting initiatives during a time, where you live and Karen.
Obtained in a category.
Our blended gross margin was 62 per ton.
Roughly in line with locked yet.
Now moving onto slide number nine.
Along with the business growth.
Fulfillment expenses increased to $851 million from 665 million last year.
All of a fulfillment expenses as a percentage of G. N V improved to $3 seven per ton.
By all the efficiency program and offset by an increase in the labor although day rates.
Lately due to the expanded top line you'll have them carry this year.
Sales and marketing expenses decreased to sign a $141 million from 640 items in a lot yet.
I saw a temporary adult T M B a.
All of a sales and marketing expense ratio improved two three points to per ton from $3 60 per ton a year ago, mainly due to the effectiveness of our digital marketing services.
Patients economy from deploying the latest technology Internet operations.
Yeah.
Technology, I'm kind of a make fun well 110 million.
This was an improvement as a percentage of T&D from 0.6 per tonne from 0.5 per ton.
Most of the improvement was due to a more effective cost control productivity improvements.
Apart from of our development pipeline.
G&A expenses slightly increased to 16 9 million from 67 million last year.
This was mainly due to our investments in talent acquisition and new construction.
I know what effect by in fact, a cost control and procurement initiatives.
As a percentage of T N V. The G&A expenses ratio improved to a zero point.
Improved from 0.4 per tonne, but they're a 3% wage reflected a continuous trains.
A replay economies of scale, while we grow all of a business.
Now I'll move onto slide number 10.
Oh, Yeah, all income from operations increased by $53 four per ton year over year to a 391 million.
On a non cash expenses income from operations was $333 million.
It's a place to a 0.8 per ton from last year.
Operating margin increased 9%, while non-GAAP operating margin reached having a percent.
Oh.
The interest income nice interest expense, a narrow to a thorough point 4 million down by 19, 5%. This is mainly driven by paying off the majority of our short term borrowing during the fourth quarter.
Now on to slide number 11.
Non-GAAP net income attributable to ordinary shareholders of both.
Totaled 272 million.
An increase of 68 point focus items.
It's a saddle a non type E. T. A yen were RMB 371, and 3.58, respectively wage growth by three 9% and subject to a per ton respectively.
I'll now move to a slide number 12.
Overall, it was a remarkable year and we're very pleased with our financial results.
Not only were able to deliver high quality growth, resulting in a 2% growth in net revenue and a 45 per cent increase in non operating profit.
We also achieved a second I'll take the tape yet a positive operating on a free cash flow.
Okay.
31st 2020.
We've had a 5 billion in cash cash equivalents.
Total investment income yes.
Yellow sun per pound after our successful a phantom three companies Inc.
This gives us a solid foundation to pursue a sustainable and profitable future growth.
Looking ahead into 2021.
And just outline of a new strategic plan are there will.
Was there a continuous could enhance our value proposition by focusing on how from a quote to drive growth.
We go to day, both organically and authenticate through a Monday opportunities.
I believe my name a few have seen our recent I'm Anthony.
And this year.
A one off the work to further expand our capabilities in a mini program growth.
Frankly, the value proposition in kind of an ecosystem.
Another one I used to capture emerging opportunities in a luxury sector.
I'm glad to say the integration of both deal, it's while I'm tracking on a.
I'd like to see tangible financial results starting in the second quarter of 2020 per watt.
We are also making progress in strengthening our omni channel capabilities, such as <unk> and Kingdom and continue to explore opportunities in new business model innovation through a GPO initiative.
It's worth mentioning that.
For the first time I annualize the bases all of a 'twenty 'twenty non chemo channel.
Concrete full over a 25 per ton of total D&B.
Wage non OPEC total commentary M. B also a sub pump having a hard time.
For the first time.
While there might be some initial investment.
We believe these results are encouraging.
And we are confident we will strength a high let's keep on line.
Reaching sufficient a cytometry team a first.
Sustainable and profitable top line growth.
In addition, we will continue to optimize all of a costly throw technology line efficiency.
Business process reengineering initiatives.
We believe this will transform how we serve our brand partners by improving our service quality and reducing cost at the same class.
And last but not least you all of this stuff kind of a penalty income it's over a long term growth well.
We're initiating a comprehensive E P program to improve environmental social and governance aspects of the company to create long term value for our shareholders.
And this concludes our prepared our prepared remarks.
Now operator, you are now ready to begin the Q&A session.
Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please press star one on your kind of a shouldn't keep up and basically a name to be announced.
We have the first question is from the line of Binnie Wong from HSBC. Please go ahead.
Hi, Good evening management, a thank you for taking my questions here, so and congratulation on a strong type a b and wrapping up 'twenty 'twenty 'twenty 'twenty with a good start I sort of had a quarter, especially on a market insight.
A meaningful improvement on the margin.
And then this is something that's also almost close to a historical high right and so if you think that like any structural drivers do you think that.
I guess, a coastal states that we.
You can think about that a little puffball, let's say 'twenty 'twenty, one and should we expect that day.
You're talking about earlier, you should expect actually a pet.
A higher a amazing I guess, they take a long time much in pockets from here.
And then a second question is also saying kind of thing to see that you could talk about this a non T. Mo channel with a contribution is also a rising a that contribution right here.
Non interest of 25 per cent a total and so if you can you help us just understand in terms of that 25 per cent well, how they allocate a is it some meaningful plan a.
Maybe from into a French flagship stores, a hobby, especially when you're 5% allocated just just a just to get on a bus and call understanding a thank you so much.
Okay.
And I will take the first line about the marketing incentive on for a while to make some comments and then a real class on provisions for a second question yeah.
So in terms of the marketing in a country funds a one way.
Our investments into technology, and all of a optimization oncology from Brian <unk> with <unk>.
I've seen a strong outlook into that country until one of a marketing.
So there are several effects that one line some inc.
Some of the categories like the luxury suites, what you've drawn a very smooth Martin from highways.
Texas, and what I know a theme a great growth in that high rent and secondly, Oh a.
Oh, you're facing a centralized lifestyle, a technology and innovation I now see a sometime a had coming from.
We have seen some really strong driver for you on our profitability and all of a overall margin.
In the a implanting a ton per watt.
At the same time I just wanted to add another common country. Each one to one I used a year.
I just a we mentioned, we're actually making investments into new channel.
New business models.
We will expect to see some other investment, but we believe this investment will leave us from higher top line growth Inc.
Oftentimes a one and also in the next a three to five years. So that's also from the market.
Are there a opinion I'm a here for your second question I'm sorry.
I think a.
In the last years is a.
Quite a different a year cause a when you see there's a very catered a trend of.
Multiple channel Omni channel China's a realizing them quite quickly.
He is the first time a few as we've said it's a first time that the non chemo channel contributes more than 25 10 Bucks a total G M D.
You can start off with a 25% a we are seeing a.
It'll channels like.
The official web store, a like a mini program and J D. All growing quite a.
A currently.
So I think the a detailed a distribution channel.
Can you know.
Change a more views on that later on and.
The interesting thing said I think a lot of growth now take a subtle off the new channels as the a private domain, so called private domain or a company initiative, a like a mini program, even though in a for a lot a burn in six years as a private company.
So I think they will put more resources than a trade channel.
Channel differently from.
A major transaction base channels. So I think for this year looking forward I think there will be a lot of dynamics.
Going to happen in the no profit.
Private domain or non traditional a you know.
Thank you Ben.
Well. Thank you I think I don't really think line I think it was a.
Great. Thank you I guess, a a quick follow up on your comment so should we think structurally because there's more and more channel hey, you're coming from.
And from what they're shopping data platforms, but it doesn't mean that brands actually be in line more to use a second party type a solutions like towers, you need a more of a higher demand because now they have multiple channel and they don't know how to allocate since I don't know.
And that takes your expertise.
Even more because you'll have a sticky a customer who was trying to.
So the more diversified income this channel, it's actually a work through with a friend.
For bausch and longer term growth.
A follow up quite a bit.
Sure. Thank you for a follow up question I think traditionally a 40 year true transactional a part of the ecommerce portion of.
Have you established a very strong solid foundation to enable a brand partners to do business as a long line. So I think for these new channels a basic fee for the mid end and a background I think in mostly the same example technology other processing payment collection.
For humans.
It was because of a service all these kind of a thing is basically the same so actually we can just use a infrastructure built up in the past and a keep serving all the non U.
New business and a you know a two.
Two two.
Average cost per home as well so a legend.
Number one number two is that a 40 from a new channel, yes, I think.
From a new channel for songs.
A I think the marketing the way they spend their marketing dollars will be made a difference. So that's why we think the marketing capability is so important for the.
Emerging new channels, a we you remember we did this in a more than three years ago, and now I think our digital marketing capabilities.
A very strong than before so in this case, we can deliver a amgen a solution for the brands on a new channels and platforms.
Thank you.
Yeah.
I had a point from recent comments about the multiple channel.
Well actually not from that Youll see the organic growth where are new from the organic waste when you kind of a capability as well. So for example, you may remember isolate field. So we are utilizing the SaaS capability of <unk> to a cookie.
Part of a from pattern.
Uh huh.
From kind of a mini program solutions, which help us to.
We delivered a growth a two hour brand partner in a very effective and also a good service line.
It's why we're out putting a.
All of those capabilities together.
Okay. Thank you a sense if there's anything okay.
Okay.
Thank you we have a mixed gretchen up from the line of Alicia Yapp from Citigroup. Please go ahead.
Hi, Thank you good evening management.
In my call and congratulations on a solid quarter a.
I have two questions. The first one related to a recent partnership with ice cream and could management help us to frame the financial opportunity a in comes off the incremental upside from the revenue so even to acquisitions out there new brands.
On to the future a monetization improvements.
There is a at least a lawn and garden you know debating that software as a primary traffic domain platform.
Second question.
Yeah from an e-commerce setting back.
Can you share a Chinese new year, because travel restrictions and all that so they're actually seeing a strong guide.
Sure.
So not sure if I'm a bathroom.
A similar trend that niche a niche.
It sounded a bit stronger than usual.
So a could you elaborate on the day.
Is that a strong demand on fashion electronics items.
Thank you.
Okay.
I think a I will take the first question I click and then a.
Hum, especially may come at a time of the Chinese new year.
Okay.
I sleep since the acquisition, we have started to conduct several a workshop.
So the Wolfcamp a is looking into the I T and stay Pat of both company. What we're looking for ways to have a integrated solution, which combines the virus from class from hand, and the virus from Hawaii and the operating capability of Bolton from.
Create a solution and that's a loose in a will be a attractive proposition to a brand partner in that kind of from a deposit them. So this is the first thing we're currently doing.
And secondly, we have seen a there has already a.
Cross selling opportunity, which we have already seen which is there a used a table a kind of brand we have introduced a to isolate and not a kind of the petro brands with I think they get into a we've seen a introduction to us. So we're confident that it will lead to some tangible financial right.
<unk> Martinson.
Certainly a we're not looking to get into a digital advertising operations, because I sleep historically, a very strong in.
In a typical off from what type of area and we are looking at how to combine a.
All of a a condo.
Hello, Oh, a teacher from axiom and to create synergy and to create a better outcome a full.
A four hour brands have now so combining a OTO three things together, we think we will start to see the financial result from a second call healthy from.
And now purely just a with some category interest say this is purely coming from a I click here and not some sort of I'd say Q because the reason, we do a kind of but I believe you are used to build our capability for a lot of a policy.
Regional mini program team, a mini program business, but it'll take a so it.
We are comfortably able to true with a top line growth of.
<unk> thousand and for the 2008 funds a lot, but it's difficult for fleets to say wait let's say if I said comfortably okay. So I think it's not.
I think.
But we're confident about a program.
Okay.
A second lines above a C Y a sales sales.
So you know yeah, yeah sure.
I think it's a question we think a freedom to be Oh, My God, a self resolved do you see a good sign regarding the odds of a concept.
It's not a consumer assumption regarding the creams and also we think that probably tell me a bit.
And it's gonna be a continue for the whole years and a also you can see actually we haven't done a deal with a promising a revision.
Or a platform since the beginning of this a year and a mom who can see to improve the consumer interest parents and enhance membership from this asset management is not a major topics. So two other limitation from the Q1 honestly, it's a platform.
Spanning across many angles to improve the customer journey for example to reduce the complexity on fishing net kind of them and it's a decrease the promotion kind of a synchronized that that line.
Topic and also a to create a more friendly environment a brand in all sorts of his comments to give them a thumbs up.
I'm, a I'm glad you kind of a SAP on all of this a akerson a matter has been I think can be the environment to be more healthy and a and also how many people thought a thought that for the purpose of a growth and two brands I think it's also a back to their target plan, a media and a promotion and also then.
That's my mom comes from everything to us at a time and therefore, a potent Honda deal a we actually we do believe me the twins.
Consumer perception regarding the independent R&D teams and also likes to say Hey, this is gonna be a truly topic for the whole year. That's why we have seen a much more attention from opportunities like clean, especially on the self owned by screening and also a shockingly do production performance advertising and also interactive.
Can you talk analogy.
<unk> expense up a basket.
I'm, a new marketing too.
Thank you.
Thank you.
Thank you we have a mixed gretchen from the line of Joe.
She true from Bank of America. Please go ahead.
Good evening, ladies and author in line.
Congrats on a solid.
And thanks for taking my question. My first question was related to that I'm, just curious to your outlook as we know a foundation has already discussed them with a brand for this year. It's like you know growth fun just once you get an idea for a day.
Language, a discuss that like you know outlets with brands like if you have any like on a like outlet, which do you see different from like Nokia a generally speaking you just need a growth plan a how it compared to a lot here and is there anything you know.
New areas, we should actually okay, and the second question what's related to cash.
The addressable market class, we of our new channels and a new new categories, we know like parts and actually well.
To expand its presented and I'm Lucky a nation like Celgene a week.
A wechat and also a J D. Just wanted to get a putting.
When you take a idea of how big well being a potential market how how how much contribution we should actually expect scientists in China as a in the following a yes. Thanks a lot.
Okay.
I hope they will.
Yeah, I will that be from to talk about a first question and then I will cover the second net okay.
Thank you for a question here for a pump. He couldn't you want a look I think a lot of from a.
Surprising compensated surprises.
Uh huh.
But I think a firstly a from the brands and a point of view you can see a lot her from you.
In the interest and the initiatives property.
On the or a private domain a inc.
Moving to a official TCE or if there's a web source a mini program app.
Kind of thing and also some a new channel expansion plans a sausage.
So I think a 2021 may be a first a year for the burnt to trying to allocate a lot of resources on multiple platforms share three.
So I think a.
In this case there'll be a lot of.
You used to use like a beta application related applications and a CRM, there's kind of a omni channel driven solutions.
Solutions.
It is quite important and also talking about the.
The size of the business and plenty of anyone I think we kind of referred to a.
Aggregated a G N V for E shelf a platform. So generally I think that is a you know.
A.
The addressable market or the brands.
But the expectations for the a remote channels, especially those who a which previously not a brand e-commerce a market players from Ryan I was getting more and more.
E Commerce oriented so I think a potential is huge so from <unk>.
Second one is about the.
That's a bull market yeah, yeah, so a sofa.
For a market I think they will.
A one on one hand, and they will keep a hands on a macro trend I E where the brand happiness, we will select a holiday sell their products and Bolton West VIP, possibly a opening in China.
Oh, we have to own and channel capability.
It doesn't matter, how a change from tmall or 90 miles without that to support all of a customer and in terms of.
A category, where actually a see a still a very strong in terms of the luxury and apparel.
Kind of a category. This is wage well maintenance that you might come in into a photos of all of our market share and also we have seen a.
Some from a new opportunity in the house per wafer is after the COVID-19 people now making a.
Further attention to their own personal health. So we think that there will be a some new opportunities in that as well.
And finally.
On a new business model a.
A.
Seeing some a.
New ways of cooperating with the fine partner under the T. P O initiatives and that will help us to further strengthen our relationship with a brand partner a waitress fading a small room for further growth.
It's a business so that's like a.
So that's all a view on China on a time on alternatives for next year.
Right.
Thank you.
The next question.
Yeah.
They create a dish can remarket the next Gretchen.
Hey.
Okay.
Yeah.
Yep Yep.
Next question comes from a like storms chunk discovery.
Hi, Good evening, Thanks management for taking my questions and congratulations on a solid set of results.
I think this is the first time that would be a talk about a the three to a five year.
So it's a Japan may I ask about a how are we should think about it a translating into a financial outlook. Thank you.
Okay sounds good.
Right.
I think we have spent a time to look into all of a secretary pulling forward a week almost always to deliver a sustainable and profitable apparel a over a long term view is depend young with a market growth overall range, where I look to become a business with 150.
A billion Dnb in three to five Years' time, and we would like to make a operating profit of 2 billion I know they range from five years Perry. So this is our all of a co and our financial outlook.
Okay.
Okay.
It'd be good to know that you've been expressed interest in dish.
Yeah.
The next question comes from line of executing a hell of a from Th capital. Please go ahead.
Yeah. Thank you management channel, So I felt a T M D a.
Not that you should be ashamed can be as a percentage of total a continued to decline so can management share with us from.
Uh huh.
And the outlook in that front.
In terms of a true small adult a distribution and services. How do you think you know those are a composition compensation will be in a future.
Okay.
Thank you for the question independent of the distribution model.
You can see Inc. Q4, it's actually a nonperforming from like so this is.
Due to one off of a personnel applying a.
Hum.
Personal applying per ounce, which is a big from which has a overall a soft demand in the overall performance in a Q4 2020 and actually both in a all the online channel performing better than a fact.
Brendan a offline channel and also the hemo channel performing Pfizer then out of China online. So basically play a we're confident in terms of a so this is only a one time and a performance problem. So Inc. Q1 day together will have already seen a trend of recovery.
And we are seeing a youthful and hopefully a.
So they from well be able to recover and Bolton with half share our insights into the branch will help them to recover quickly through a chemo.
China online and secondly.
The reason why it has a impact it's also due to the highly from a return rate in terms of the high discount because it's a different yoshimoto from both of them. So we actually all day.
Brent I mean, we didn't go further on the discounts younger to achieve the volume actually go for the profit and also the longer term brand image.
Because as a responsible brand partner for things that something we should be doing and intends to hold a higher return rate, it's actually a industry a down for the Q4 due to the expense.
The extended coverage of type a 11th so overall, we hope this is a trend for the Q4 and hopefully if you wanted to hear what you will see a recovery.
Thank you so much from them.
A question.
Yeah, Okay and keep going.
Please.
Okay. So as a follow up questions regarding your omni channel. So I realize a lot too Brian that shaking out cash.
In a much more a fresher newer channels go beyond Tmall and yeah. So in other channels you know in terms of a operator, a Nike you guys.
Are there any existing operators and yet you know how how do you you know a.
I have to say a position yourself in the other channels like Oh.
So who shoot all in J D a.
Yeah, you know what is your competitive advantage over existing operator, you put there Amy so that's the second question. Thank you.
Okay. Thank you for the a certain question a this winter.
A actually for the a emerging channels like or even or you just mentioned Michel Homeshore, a traditionally one of not a lot not.
Not a loves a existing operating a service departments.
Just because a previously this kind of a channel a platform a small phase G M a platform.
Right I'll be a changing there more and more a turning to a e-commerce a business entity because.
They need a burns from the brand's a meteor expenditures and also a you know a transaction business and all that so so.
It's a new one so you see emerging a recovery from emerging channels.
So for football doing a weird.
The others, but a 40 a from the other operations, although we did have a about a 10 years old.
E Commerce operating interest experiences and also we have a.
Being a U S team.
In digital marketing for a multiple channel from almost three years. So given this too I mean fulfillment capabilities technology, plus digital marketing a more than three years of investments I think we are very solid and very strong in facilitating the brand e-commerce, driven and a new <unk>.
Emerging channels. Thank you.
Thank you Vincent.
That's all my questions.
Okay.
Yeah.
We have a brand.
From a line of Charlie Chan from Shanghai, where Krishna. Please go ahead.
Yeah. Thank you. Thank you management to taking my question I have a two questionnaire a first of all it is about the brand partner pipeline, how does that look like a especially we understand that the company has been exploring the opportunities from.
Categories like premium brands like a Ras as well as a health food so how's the progress there.
And in particular any initial signals that's a food that is helping the company to catch a break through into the premium brand segment.
I'll take the first one I first of all thank you.
Oh, Okay, Oh I'll be there for your I'm sorry, your first question.
So I can't say that.
The company is a more and more a capable and bringing onboard a new.
A renewal rent apartments and truly a.
A difference categories.
Categories.
No I think the a pipeline very strong a we see not only the.
Demand for the a traditional channels like Tmall.
It is a growing pipeline, but also the primary domain opportunities is also a lot. So a I think for a you know a different platform and silicon.
Are you getting more and more you know.
I'll, just say a more and more rich a.
You know a pipe line items and before the a category that we think that's a different categories like.
A question like a cosmetic select a premium luxury.
You know very promising so we are happy to see that but if we just I think they are very experienced in talking to a.
A global brands and premium brands, so we're working with them closely.
I wanted to a work work.
Work with a local team off the a premier brands, but also in a global cheap. So in this case I think we care a four months, a better positioning and a integrated strategies to work with the essential from a friend. Thank you. Please go out from a second one.
Sure sure. Thank you.
A second question. This is one of a high level.
Changes can be a brands a partner strategy as we understand last year was a pretty difficult year on a full year impact of Covid. So after a full year I mean, how how does.
How did your company a recognize the difference between the D. A.
Market activity is now versus pre Covid I understand you're talking about a.
A private demand et cetera can you give us more details on how they spend their dollars differently all day.
Using a.
A private domain to GAAP SKU traffic or maintained their users or any other details that'd be a can't share more with us a that would be great. Thank you.
Okay.
Yeah, I think the last a year the Cobra, you're a is a very special and it changes it has a profound influence to the brand e-commerce or a digital marketing strategies.
Strategies.
I think right now you can.
Commerce or did utilization it's been a you know the center of a strategy of most of the a consumer brands.
They are you know.
More and more resources and enhance their position a position.
Did you see initiatives and also e-commerce, which a marketing.
You know a initiatives. So I think a key for this one is that as a center of a strategy that means the brands we're investing.
A long term not only a short term so for a short term is channel itself is discounting and promotions for a long term, it's a more above system, it's more of a capability and talent. So in this case a you know we are quite comfortable where can we support them for longer term a partnership.
Yeah, and just to add a comment on that is we have seen a brand partner.
Difference Ah Ah Ah So top line tells a different channel. So for example in Q4 and a 200 here without one of the major.
One of a major sports have now a top brands have now to do some so in line radio show with a a tape and reel a group results and a that we have seen more than putting a parking spot about different channel.
Great. Thank you very much that's all that's not true.
Thank you.
Okay.
Yes.
Q.
You'd have to make a scratch.
From the line of.
Actually issue from a credit Suisse. Please go ahead.
Okay.
So on the knee program because in the past and we have seen that in fact, your take rate is actually lower than a service fee model on tmall.
A lot to understand whether this is attributed to flat to a difference in these two platforms or it's just due to different development stage and if we look at a long time, we see similar monetization opportunity a mini program compared to a few months. Thank you.
Okay, Oh a question.
I think for a there's just a lot of discussions happening for a mini program.
E Commerce I think you know from a three years ago, a we have a formula a a very solid teams who serves a client who opened stores mini program right. Now we have already a 10 soft existing many programming a you know.
Working for different brands so.
So we think a bit.
There is a lot of a potential from that talking about the.
The structure of a differ.
Different platforms, especially for them in a program I think they are quite different from a traditional once a female cause.
It is more.
It's more marketing to them on a more.
It's a dream.
Transactions a.
So is so for example that a small b it smells a commission for the platform or even if you're a smaller platform is a.
Actually a a.
Separated from.
Private domains on the ecosystem, so you're moving things are quite important and it because.
There is a social commerce space so for doing the.
A much transactions these are easier than a traditional a than a traditional platforms.
So I think a mid case, yes, the front and maybe it's not as.
As you know a lot a lot of things to be done as a traditional platform from a football game and I think the middle and I like the order fulfillment. The order processing has got a backend order fulfillment.
So in this case, we listen.
A value chain.
A part I think the cost structure around the profit a milder will be in a safe harbor.
Okay.
The transaction seems to use them before but marketing a.
It's a more a comprehensive so a in this case I think a we can't pull them up with a long term a a very healthy a charge model a 40.
<unk> from partners. Thank you.
Yes.
Okay.
Yeah.
The next question comes from the line a sticky.
John from she actually she sees growth.
Hi management. Thanks for taking my question a reach towards a net additional brands a nurse in the fourth quarter, a what's five to six a we know we are adjusting our portfolio in the fourth quarter. So just wondering how many brand partners a terminated the corporation with us and how many new brand partners, we acquired them.
The fourth quarter, a what is our brand acquisition strategy moving into 'twenty 'twenty, one a kind of a share some corridor a karnes a brand pipeline a any color would be very helpful. Thank you.
Okay. So in terms of a the brand partner a only a.
We only had a new edition for corporate pole and Coca Cola Historically speaking a smelter a quarter, where a lot of brand partner will open a chemo a.
So that's because it's often a double 11 and a from a safe to say, it's actually a not a bad number from our perspective from a full year perspective, we actually added 35 new from happening.
This a good contribution to a.
Our portfolio.
Secondly, I just wanted to maybe a talk about a principle in terms of adding a brand partner they only looking for both brands, having a weight will contribute to all of a sustainable and profitable growth I E. Our proposition.
Paul a bolton findings from the brand partner and how we can create.
A holy Cow Health Department to grow that this meant a we're not a company where okay. Tom extremely low policyholder to win the business. So in this case, a we will optimize our portfolio.
The brand's happiness, a kind of the overall strategy on selecting the best you keep having a small meet our value proposition, but we will do as a waste.
We will try to a title keep a although overall apparel and title says as many at one time as possible.
Thanks very helpful.
Okay.
Q it's a.
No further questions I would like him to call a doctor windy.
Thank you operator.
In closing on behalf of the valves a management team we'd like to thank you for your participation in today's call. The class a notes that information feel free to reach out to us. Thank you for joining us today.
Just a call.
Thank you.
Ladies and gentlemen, the best country a country today, thank you for participating.
All disconnect now thank you.
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Good morning, ladies and gentlemen, thank you for standing by for Biogen's fourth quarter and full year 2020 earnings conference call. At this time, all participants a listen only mode. After management's prepared remarks, there will be a question and answer session. As a reminder, today's countries cold is being recorded.
I will now turn the reaching out to a closed for two days from now.
It wouldn't be Shen Investor Relations director.
Please proceed Wendy.
Thank you operator, Hello, everyone and thank you both joining us today I'm, a fourth quarter and full year 2020 earnings release was distributed earlier today and is available.
I a website at IR <unk> com.
Com as well as a global Newswire service day. It can also find a powerpoint presentation.
Companies all comments today on our IR website at a sections also a quarterly results and the webcast and presentation I'm a.
A day from Biogen may have a Mr. Vincent Gilles Chairman and Chief Executive Officer, Mr. After a chief financial officer and need a chase D. Our BD by surprise.
Mr. Xu will review with a business operations and company highlights followed by Mr. <unk>, who will discuss financials and guidance they will.
I'll be available to answer your question doing a Q&A section that follows.
A big Guy I'd like to end my view that this conference call contains forward looking statements. They think the meaning of the Securities Exchange Act of 1934, and a U S. Private Securities Litigation Reform Act of 1995, no forward looking statements are based upon management's current effects.
A patient and current market and operating conditions and relate to revise that involve known unknown risks uncertainties and other factors all states are difficult to predict and then a stage are beyond the company's control, which may cause the company's actual results could differ materially from those in the.
We're looking statements from.
Information regarding these and other risks and Sundhage or factors is included in the company's filings. So you I see C and.
<unk> announced announcements no taste and other documents published on the website of the stock exchange a Hong Kong Limited a company that's not undertake any obligation to update any forward looking statement, except as required under applicable law.
Finally, please note that unless otherwise stated all figures mentioned during this call a.
It is now my pleasure to introduce Alex and then Keith.
Executive Officer, Mr Wei bin Kim.
Thank you Wendy and thank you all for joining us.
Being a busy and exciting quarter.
Im pleased to report another solid set as a result.
During the fourth quarter brand partners accelerating their digital transformation in response to a rapid changes across the ecommerce landscape in China.
Nature of a online consumption is evolving rapidly.
Unique positioning as a leader solution driven platform progress puts us at a center of this evolution.
With technology that enable us to keep our brand partners a head of the curve.
If you're a following along with a presentation I'll start on slide number two.
We executed our strategies to all of a fourth quarter, we would like to share a few key highlights with you, including a record a breakthrough double 11 campaign strong momentum in blended acquisition with a net that's called <unk> six per our partners to reach towards a 200 and a 63.
And a continuous operating margin enhancements overall from a non-GAAP operating profit grew by a 54% while non-GAAP net income increased by 67%.
We believe these.
These achievements demonstrate the effectiveness of our high quality growth strategy and it reflects a long term a cumulative results of our investments in technology infrastructure.
Now moving onto slide number straight empowered by technology and innovation.
We have been able to achieve continuous breakthroughs that improve customer experience and enhance operational efficiency.
From my point of view, the 11 day long double 11 campaign has become a touchstone validating the efforts, we have put into creating such a solid effective and efficient infrastructure.
During the quarter, we upgraded our dynamic technology, a system and extended a capacity for a 5 million orders per hour to support a record breaking quarter in research.
In addition, we launched a variety of automation and a one click toolkit.
S. K, a rollout labeling short video processing and a sales intelligence applications from our proprietary retail operations support system or a wrong.
By leveraging Baldwin club, a infrastructure a I always.
Buildings, and big data analytics, we launched a virtual intelligence dashboard, a system that improves operational efficiency, while reducing risk.
From a digital marketing perspective, we're focused on direct deployment of creative.
It is a engagements to drive consumer exposure and a commission rate.
Deployment of data driven analytical tools and a human service enables us to help a branded partners better understand their customers and engage with a more effectively through price precise targeting a positioning.
Besides just a fourth quarter.
We established a 1000 square meter a less streaming studio that allows us to integrate a few store last remains into daily operations, and a streamline or a portfolio of live streaming solutions.
The only a warehouse and logistics side for corporate is a year's extended a double peak during the double 11 campaign, we bought only upgraded our capacity and a equipment, but also used algorithms to optimize real time big data monitoring across the entire order flow a process, we improved order flow.
Your line efficiency.
All of these efforts enabled us to a launch instant arrival services for several of our branded partners that allows us to deliver over 80% of our packages from consumers within 24 hours.
Which is a return.
Leading customer experience.
All of these efforts briefly you have got a value proposition for a brand partners, allowing them to extend touch points and a capture emerging opportunities for omni channel strategies.
Third party service provider or a in English.
Infrastructure and a tech assets a lot.
A allocated resources.
And optimal way based on a universal on that strategy.
As we look ahead slide.
It's a number four we either through our vision of technology empowered future success, and we'll continue delivering for a brand partners. A couple a centric e-commerce solution to reinforce our value proposition to capitalize on the opportunities we are launching a 345 from here.
Your medium term strategy strategic plan to achieve our objective of sustainable and profitable growth.
First we will adopt a customer first approach.
A drive growth by focusing on a service differentiation from meet the brand partners by worse.
We will explore business opportunities and implement a customer segmentation strategies to attract potential new business from both our existing and a new brand partners.
No we have been the market leader in China's E Commerce service industry. We believe we are.
There are a lot of opportunities for us to become number one.
More of a sub categories to increase market share.
Secondly, we will drive through.
Drive growth through new business expansion.
We believe that e-commerce in China in your box.
There are increasing opportunities to explore new channels, such as the person a minute program.
And the JV platforms.
In the Middle class will continue to explore new business models in accordance with a new channels.
Thirdly, we will seek even greater optimization of our cost structure.
Through technology, driven business process, reengineering, and a service quality oriented locations revenue.
That's our initial step.
We recently established a two additional remote service centers.
In a low cost a series of mental one of the growth rate, which we believe will improve service quality and a reduced cost from the second half a plenty plenty of water.
Lastly on <unk>.
Slide number five what it was abundantly clear throughout 2020 was that our people a greatest assets.
This is key to a culture and the based on our immediate profit delivering quality through developing people and proud of the resilience agility and a commitment demonstrated by the bottom teeth and honored to have once again being awarded a Shanghai best employer a certainty.
Here I'm excited to announce a major office move planned for the second half of 2021.
Three brand new headquarters with over 40000 square meters.
We believe the new bulbs in Kansas.
From a base are growing 17 support future business expansion and a nurture the bulging culture of leading edge innovation.
Everyone have a I'll pass the call over to Arthur will go over our financials. Thank you.
Right.
From two reasons.
Hello, everyone. Thank you for joining all the earnings call today.
I will talk about our financial performance and fuel on a full year 2020.
As part of a priority in 2021.
Let me start with the fourth quarter 'twenty 'twenty financial results, which is on slide number seven in our prepared presentation.
We saw impressive growth in Tahoe T M EBIT quarter, which increased by $28 seven per tonne from $24 90 day.
Breaking this down our display built in free and we rose by $13 six per tonne from one 6 billion.
And all of a novelty figure from CMV inquiry, that's a per ton to a ton per one 2 billion.
Overall, the 2020, a double 11 campaign evolved a lot into marketing activities thinking the emergence of COVID-19 and the longest duration.
Hum.
A waste a deeper discount across categories.
Multiple market cycles.
We have also up to a higher retirees a fourth quarter posted a double 11 as a result of it.
Expanding the 11th day promotion carrier.
Although the pie a retiree life to some discrepancies between the fourth quarter DNV and capitalizing on a bundle.
We believe that we have money they flow across the board.
We're also a strategic play limit income on a surf and Brian.
They built a model for part a high.
Randy Mike and profitability.
Oh five per barrel, we believe the lungs that haven't done a thing will outweigh the near term impact I suppose a strengthened relationship waste from partners.
Pending our salaried store.
Breaking it down by category.
You can see on the right side of the slide.
During the quarter, we continued to see modest a girl with momentum in both black luxury and I find that the C category.
The apparel category has a.
Outstanding quarter.
As you know the apparel category, which includes both via a luxury a month and women's clothing comfortable with almost 80 per ton of our cohorts ANV.
During the quarter, we saw a nearly 13% year on year.
Electronics, which represents about 25 per ton a total T. M. B show a major hurdles haswell lighthouse content per ton increase year over year.
But the impact hope optimization of the smartphone sector throughout a year.
I'm a teacher you contribute hate overcoming per tons of our total CMV and hydro topple a decreased growth rates on a long time.
Yeah, a patient this quarter, because we proactively adjusted our promotional strategy for first thing in profit.
One of the key categories of that he would produce a model.
No.
<unk> had a negative growth rate.
But we have seen that these come on sales trends improving in close to a 181 per watt.
Now moving onto a slide number eight.
Our two young Lee growth translated into a substantial growth in revenue.
Currently in service revenue.
Total net revenue increased by 28.2 per tonne for.
So a 3.35 billion.
Wait in line product sales revenue decreased by 14 per panel for one 5 billion services revenue increased by 25, 6% to $1 9 billion.
Waste a increase in product sales revenue household products increased to $1 3 billion from one why do we a lot.
<unk> sales growth margin declined from $12 seven per ton.
Due to discounting initiatives during the double 11 carrier and a.
Attained in the category.
Our blended gross margin was 62 per ton broadly in line with last year.
Now moving onto slide number nine.
Along with a business girl, a fulfillment expenses decreased to $851 million from 665 million last year.
Although a fulfillment expense as a percentage of <unk> improved to $3 seven per ton held by our efficiency program.
That by an increase in the labor, although in a rate.
Related to the expanded top a 11th carry this year.
Sales and marketing expenses increased to sign a $141 million from 640 items in a last year.
As a percentage of P M B a.
All of a sales and marketing expense ratio improved from 3.2% from $3 <unk> per ton a year ago, mainly due to the effectiveness of our digital marketing services.
We shouldn't be going from a volume the lately as a technology Internet operations.
Yeah.
Technology and content from $110 million. This was an improvement as a percentage of.
Our free NV from 0.6 per tonne to 0.5 per ton most of the improvement was due to a more inside to save cost control productivity improvements.
In spite of a prioritization of our development pipeline.
G&A expenses slightly increased to 16 9 million from 67 million last year.
This was mainly due to our investments in talent acquisition and infrastructure.
And what of that by in fact, a cost control and procurement initiatives.
As a percentage of T N V. The G&A expenses ratio improved to a zero point.
Improved from 0.4 per ton, so thorough three per ton, which reflects a continuing a trend.
Moving to economies of scale, while we grow our business.
Now moving onto slide number 10.
Income from operations increased by $53 four per ton year over year to a $391 million.
A non cash expenses income from operations was 333 million.
If they pay a 3.8% from last year all free.
Operating eight 9%, while non-GAAP operating margin reached have you put that.
Oh perfect day.
The income nice interest expense, a narrow to zero point $4 million.
By a 95% this is mainly driven by paying off the majority of our short term borrowing during the fourth quarter.
Yeah.
Now on to slide number 11.
Non-GAAP net income attributable to ordinary shareholders of closing totaled 272 million.
Increase of 68, 4%.
Basic and diluted non-GAAP EPS were RMB, 371, and 358, respectively wage growth.
That's a three 9% and subject to a per ton respectively.
I'll now move to a slide number 12.
Overall 28 was a remarkable year and we are very pleased with our financial results now.
Not only were able to deliver high quality growth, resulting from a 2% growth in net revenue and a 45 per ton increase in non operating profit.
But we also achieved a second I'll take the tape yeah, a positive operating on a free cash flow.
As of December 31st 2020.
That's a 5 billion in cash cash equivalents.
Total investment income.
Yellow somehow come after our successful Franklin for a company.
And if they start a solid foundation to pursue a sustainable and profitable future growth.
Looking ahead into 2021.
Just outlined you know all of a new strategic plan.
We will continue to enhance our value proposition by focusing on how come up with to drive growth.
We do two day, both organically and that makes a throw a monday opportunity.
I believe my NAV.
You have seen our recent.
And this year.
One of the was to further expand our capabilities a mini program to strengthen the value proposition in tons from ecosystem.
Another one I used to capture emerging opportunities in a luxury sector.
I'm glad to say the integration both deal is on track and a way I'd like to see tangible financial results starting in the second quarter of 2020 per watt.
We are also making progress in strengthening our omni channel capabilities.
So in Kingdom and continue.
Opportunities in new business model innovation through GPO initiative.
It's worth mentioning that.
For the first time.
Annualized a basis, our 'twenty 'twenty non chemo channel a concrete flow.
Over a 25 per ton of pulp.
Okay.
In wage non hopefully a total common CMP also a sub pump.
For the first time.
While there might be some initial investments we believe these results are encouraging.
And we are confident we will strength a high with a permanent.
Suddenly, reaching sufficient a five generating a sustainable and profitable top line growth.
In addition, we will continue to optimize all of a cost base through technology line efficiency.
Business process reengineering initiatives. We believe this will transform how we serve our brand partners by improving our service quality and reducing cost at the same class.
A lot, but not a fleet you are there to enhance sales kind of a penalty income it's over a long term growth while initiating a comprehensive E T program to improve environmental social and governance aspects of the company.
To create long term value for all of a shareholder.
And this concludes our appraisal.
Our prepared remarks. Thank you very much non operator, you are now ready to begin the Q&A session.
Ladies and gentlemen, we will now begin the question and answer session.
You wish to ask a question. Please press star one on your kind of a shouldn't keep up in Wakefield name to be announced.
We have the first question from a line of Binnie Wong from HSBC. Please go ahead.
Hi, Good evening management, a thank you for taking my questions here, So I'm, taking a congratulation on a strong type a b cell and wrapping up 'twenty 'twenty 'twenty 'twenty with a good start I sort of had.
A quota, especially on a market side, so we see a meaningful improvement on the margin.
And then this is something that's also almost close to a historical high right and then do you think that like any structural drivers you're seeing that.
I guess, a coastal states that we.
Can't think of a path forward to 'twenty 'twenty, one and should we expect that day.
<unk> been talking about earlier.
You should expect actually a better a higher latency.
I guess, they think a longtime much in pockets from here.
And then a second question is also a very encouraging to see that you didn't talk about this a non team or a channel.
A contribution is also a rising a definitely condition right here.
For interest.
5%, a total and so if you can you help us just understand in terms of that 25 per cent a well how are they allocate that there's some meaningful plan or a maybe come into a branch flagship stores, a holly, especially when you're a 5% allocated just just a just to get on a bus tent.
Paul understanding thank you so much.
Okay. Thank you Bonnie and I will take the first line about the marketing incentive on a per watt makes some comments and then a real class on producing for a second question yeah. So.
So in terms of the marketing incentive funds a one way.
Our investments into technology, and all of a optimization of our different brands, we have seen a strong outlook into that country, it's fun to watch our marketing.
There are several factor one range.
Hum.
In some.
Some of the categories like the luxury.
He is on organic growth Martin from <unk>.
Always a the other factor on what I know a theme a great growth in that high rate and secondly, Oh, a oh, what you pay for a centralized light fiber technology and innovation I now see a balance had coming from.
<unk> seen some really strong driver for you on our profitability and all of a overall Martin.
In the a inconsequential what.
At the same time I couldn't quantify it another common Huntington plus a one year investment.
I just a we mentioned, we're actually making investments into new channel and new business models.
Uh huh.
Proceeds from other investments.
We believe this investment will leave us from higher top line growth in funding costs, a one and also a but a nice a three to five years. So that's a my outlook on a market.
A opinion I'm a tier for your second question from.
That's I think a.
Last years.
Is a quite different a year cause.
He was a very catered turned off.
A multiple channel omni channel China's a realizing a quick.
Quickly.
So it's a first time a few as well.
It's a first time there'll be a non chemo channel contributes more than 25 10 Bucks a total GMB.
Sorry, though if there's a 25% a we are seeing a several channels like.
The official a store like a mini program in J D O a growing quite a.
Currently.
So I think the a b.
A detailed a distribution channel we can you know.
Change more views on that later on and the interesting thing that I think a lot of growth now take several of the new channels, a see a private domain, so called private domain or a company initiative a lot.
A minute program, even though for a lot a plan to fix it.
Private domains.
So I think they will put more resources and a trade.
Channel differently from the.
The major transaction base channels. So I think for this year looking forward I think there will be a lot of dynamics.
Moving to happen in the a.
Private domain or non traditional.
Thank you Ben.
Well. Thank you I think I don't think and I think it was a great. Thank you I just had a quick follow up on your comment so should we think structurally because there's more and more channel and you also mentioned from a consulting to a platform that doesn't mean that brands actually be in line more to use a third party.
How do you sense a solution like how would you even more of a higher demand because now they have multiple channel and they don't know how to allocate since they don't know what day it was.
That's a skill expertise.
And even more now because you have ex to keep a customer we're trying to.
So the more diversified income. This channel is that you worked with a friend for bausch and longer term growth.
Thank you.
A follow up call.
Sure. Thank you for a follow up questions I think traditionally for the year true transactional a part of the E Commerce hub Boston have established a very strong solid foundation.
In April a brand partners to do business strong line. So I think for the new channels a base.
For the mid end and a background I think in mostly the same example technology other processing payment collection.
Order fulfillment customer as soon as customer service. All these kind of a thing is basically the same so actually we can just use a infrastructure that built up in the past and a keep serving all the new business and a two two.
Leverage the cost down as well so there's a number one number two is that a 40.
From a new channel, yes, I think a from a new channel for growth.
I think a marketing the way they spend their marketing dollars moving both difference. So that's why we think the marketing capability is so important for the.
Emerging new channels.
You remember we did this in a more than three years ago, and now I think our digital marketing capabilities.
You know very strong than before so in this case, we can deliver a amgen a solution for the a brand new channels on the platform.
Thank you.
Yeah.
So at that point, a recent comment about the multiple channel.
Well actually not from a yield from the organic growth, we're moving the organic way from your hand, our cash.
The reality is that as well.
Paul you May remember isolate field, who are utilizing the SaaS capability of Iclusig to cause he played a role from patents.
Uh huh.
From kind of a media programs solution without.
To deliver the growth.
As a two hour brand partner in a very effective and also a quick service line. So this is why we are putting all of those capabilities together.
Okay. Thank you I think if there's anything okay.
Okay.
Thank you we have a mixed gretchen from a line of Alicia Yap from Citigroup. Please go ahead.
Hi, Thank you good evening management.
My call and congratulations on a solid quarter a.
I have two questions. The first one piece.
With me later tune a recent partnership with a great.
Could management help us to frame the financial opportunity a in comes off the incremental upside from the revenue so even to acquisitions after a new brands.
On to the future a monetization improvement at least that's a thing threatened a with a lawn and garden, you know debating that Boston private traffic domain platform.
Second question.
Yeah from an e-commerce here means in fact.
<unk> share of Chinese new year because.
It's a travel restrictions and all that so they're actually seeing a strong I'm glad that you show a channel.
So not sure if a biogen also.
A trend that we should count on.
Yeah, he tried it a bit.
A strong glad that mutual interest.
Could you elaborate on day tomorrow is that a strong demand on fashion electronics items like that.
Thank you.
Okay.
Thank you I will take the first question I click and then a new.
Hum, especially my comments on the Chinese new year.
Okay.
Since the acquisition with a stoppage to conduct several a workshop.
So the Wolfcamp a is looking into the I T and state of both company. What we're looking for ways to have a integrated solution, which combines the virus from class from Han and the virus from Oh I'm not on.
On the operating capability of Bolton from.
Create a solution a nice duluth and will be a attractive proposition to all of a brand partner in a concentrated position. So this is the first thing we're kind of a lately.
And secondly, we have seen a there has already.
Selling opportunity, which we have already seen which is there is a table kind of a brand we have introduced a leak and another kind of the petro brands with I'd sneak into a.
We see the introduction twice a week.
Confidence that he will lead to some tangible financial result, marson and thirdly, a we're now looking into a digital advertising operations, because I think historically, a very strong inc.
In a typical afterwards.
Heightened area and we are looking at how to combine a.
All of a.
Hello, Oh, a teacher from axiom and to create more synergy and to create a better outcome a full.
A four hour brand partner, so combining a OTO three things together, we think we will start to recede a financial result from a technical healthy yes.
Now purely just with some tactical HSA. This is purely from a <unk> and now stands at a I think deal because the reason we do this kind of I believe eight to field our capability for a lot of Boston a regional mini program team a minute program.
But it'll take a so.
We are comfortably able to true with a top line growth of.
<unk> thousand 801, but it's difficult to sleep to say wait, let's say say comfortably okay. So I click on a wafer it's not likely.
But we are confident about a program.
Okay Yeah.
Secondly, its above a C y a.
Sales.
Yeah.
Yeah.
I think it's a question, we think actually a thumbs up in line.
Sales without reducing a good sign regarding the although not.
The consumer assumption regarding the creams and also we think that probably becoming a better.
The trend is gonna be a continue for the whole year.
Also you can see actually we haven't done a deal with a promising a revision.
Major a platform since the beginning of this a year and a mom who can see to improve the consumer interest parents and enhanced membership.
Remember she was on a fast management is a major topics. So two other limitation from the Q1, we haven't seen a per platform.
You're spending money.
Many angles to improve the customer journey for example to reduce the complexity on pushing like any of them and to decrease the promotion kind of a synchronized starts off with a topic and also to create a more friendly environment to brands and all sorts of his comments.
On the on the E Commerce platform. So all of this our efforts on the top line.
Has things I think can be the environment to be more healthy and a.
And also a common theme for a tour for the purpose of a growth and two brands I think it's also a back to be a part of the plan on media in a promotion also day. That's my mom comes from a data asset no longer time, and therefore, a fall just hunker deal a we actually we do believe me a twins.
Consumer perception regarding the entertainer orangeade and also lifestyle oriented he's got a be a a truly topic for the whole year. That's why we have seen a much more attention from opportunities like clean, especially on the self owned by screening and also a shock leave you a production performance advertising and also interacting Martin.
You're talking about a day.
<unk> expense.
I'm, a new marketing too.
Thank you.
Yeah.
Thank you.
Thank you we have a mixed gretchen from the line is charged future from Bank of America. Please go ahead.
Good evening, ladies and author Wendy Congrats on a solid.
Fourth quarter and thanks for taking my question.
My first question was related to that I'm, just curious to your outlook as we know.
A foundation of hard hats already discussed them with a brand for this year. It's like you know growth, but just wanted to get an idea for a dead.
Language a discuss the line.
You know outlooks with brands like if there are any like a light.
Net which do you see different from like last year, a generally speaking you see the growth plan, a how it compared to a lot here and is there any like you know.
A new area, we should actually focus and the.
Second question was related to the GAAP.
The addressable market closely of how a new channels and a new new categories, we know like well it doesn't actually well look to expand its presented and.
Cash and like Celgene a week.
A wechat and also a J D.
She's got a.
When you take a idea of how big while being a potential market.
How how much contribution we should actually expect scientists from China is in a.
Yes, Thanks a lot.
Okay.
Hopefully it will.
Yeah, I will talk about a quick question and then I will cover the second one okay.
Thank you for a question here for a punky a 'twenty one look I think a lot more from a.
Surprising condensate a surprises.
Uh huh.
But I think a firstly a from the brands a point of view you can see a lot from you.
Interest in the initiatives property.
On the or a private domain.
Improving the official TCE or if there's a web source a mini program.
A thing and also some a new channel extension a so.
And I think a 2021 may be a first near all of a book to trying to allocate a lot of resources on multiple platforms.
So I think.
In this case there'll be a lot of.
You use like a beta application related applications and a CRM, there's kind of a omni channel driven a.
A solutions.
It is quite important and also talking about the.
The size of the business and plenty of anyone I think we kind of referred to a.
Aggregated.
In the fall and shelf a platform so generally I think studies.
No.
The addressable market or the brands.
But the expectation for the channels, especially those who a which previously not a brand e-commerce a marketplace right now is getting more and more.
When Congress oriented so I think a potential is huge so from <unk>.
Second one is about the cash.
For a market yeah, yeah. So you haven't so far.
Cash flow market I think they will.
One on one hand, and they will keep a hands on a macro trend I E where the brands happiness, we will select a holiday sell their products and both of them last year, because we are opening in channel.
We have dominant channel capability.
As a macro probably changed from tmall or 90 miles without that to support our customer.
Impairment.
A category, where actually a see a still a very strong in terms of the luxury and apparel.
A kind of category. This is wage we're making that investment into a photo for all of our market share and also would have seen a.
Some are from a.
A new opportunity in the out per wafer is after the COVID-19 people now making a.
Further attention to their own personal health is a way.
Thanks.
There will be some day.
Your line is in that as well.
And finally.
On a new business model a way.
A seeing some.
New ways of cooperating with the <unk>.
Line customer.
The GPO initiatives and that will help us per foot.
From our relationship with a brand partner a week he.
He is fading a small room for further growth.
Existing business so that's that.
So that's how we view the China overtime on alternatives for Nokia.
Right.
In Q.
The next question.
Yeah.
Yeah.
They create a dish can remark as a express it.
Hey.
Okay.
Yes.
Yes go ahead.
Next question comes from the line stoppage junk discovery.
Hi, Good evening, Thanks management for taking my questions and congratulations on a solid set of results.
I think this is the first time that would be a talk about a the three to five year.
So to just pin them later.
I ask about a how are we should think about it a ton.
Taking into a financial outlook. Thank you.
Okay.
Right.
I think we have spent a time to look into our secretary pulling forward a week.
Although it's always a deliver a sustainable and profitable apparel a.
All of a long term view is depend young with a market growth overall range. We are looking to become a business with 150 billion Dnb in three to five years' time, and we would like to make a operating profit of 2 billion I know, there's a three to five yes Kerry so there's a.
Our ortho and our financial outlook.
It'd be good to make a next question Christian fish.
Yeah.
The next question comes from the line executing a higher from here.
Kathy Please go ahead.
Yeah. Thank you management channel, So I felt a T M D a.
Not that you should be a shame can be as a percentage of total a continued to decline.
Can management share with that from Oh, your thoughts and the outlook in that from a inc.
So the truth is a small though.
Distribution a services how do you think.
Those are a composition compensation will be in the future.
Okay.
Thank you for the pricing independent of the distribution model.
You can see in Q4, it's actually a nonperforming from like so this is do.
Q2, one more of a personal applying.
A personal applying per annum, which is a big brand, which has a overall a soft from an overall performance in a Q4 2020 and actually both of them a all the online channel performing bank than a fact.
That's a whole.
Wholesale channel and also the hemo channel performing a tighter than at a China online. So basically a we're confident in terms of a so this is only a one time and a performance culture. So Inc. Q1 day will have already seen a trend of a recovery and we are seeing.
A improvement hopefully a so they from.
Friends will be able to recover and Bolton with half share our insight into the branch will help them to recover quickly through a chemo a.
China online and secondly.
The reason why it has a impact is also due to the highly from higher return range in terms of the high discount because it's a district yoshimoto from both of them. So we actually.
Hi, Brent inmates, we Didnt go further on the east from younger to achieve the volume actually thoughtful profit and also the longer term brand image.
Because as a responsible brand partner for things not something we should be doing and intends to open a higher return rate, it's actually a industry a known for the Q4 due to the extent due to the <unk>.
<unk> per rate of type a 11th so overall, we hope this is a trend for the pure for omni and hopefully if you wanted to hear what you will see a recovery.
Thank you so much from them.
A question.
Yeah, Okay and keep going.
Please.
Okay. So as a follow up question regarding your omni channel. So I realize a lot too Brian that's seeking out cash.
In a much more fresh or a newer channels go beyond tmall and yeah. So in other channels you know in terms of a operator, a Nike you guys.
Are there any existing operators.
And yet you know how how do you you know I have.
I have to say a position yourself in the other channels like a.
So who should sell J D.
Yeah, you know what is your competitive advantage over existing operators. He took their Amy so that's the second question. Thank you.
Okay. Thank you for me a second question a this winter.
Actually for the year.
The emerging channels like.
Or you just mentioned a shelf onshore.
They are traditionally one of not a lot not a lot a exist.
The operating a service departments.
Just because a previously this kind of a shallow a platform a small face from TMA platform.
And I'll be a changing there more and more a turning to a e-commerce business entity because they.
They need a burn.
Lance a meteor expenditures and also a.
The transaction businesses on a so so.
It's a new one basically merging a recording from emerging channels.
Ill hop out doing a weird.
You ask the others, but a 40 year from there the operations, although we did have a more than three years.
Congress operating interest experiences and also we have a b.
Are you investing.
In digital marketing for a multiple channel a hormonal juniors. So given this too I mean fulfillment capabilities technology, plus digital marketing a more than three years of investments I think we are very solid and very strong in.
Facilitating a brand e-commerce business.
And also a new emerging channels. Thank you.
Thank you Vincent.
That's all my question.
Okay.
On a Q.
We have a R.
Question from.
The line of Charlie Chan from Shanghai, What Krishna. Please go ahead.
Yeah. Thank you. Thank you management to taking my question I have a two question.
First of all it is about the brand partner pipeline, how does that look like a especially we understand that the company has been exploring the opportunities.
Categories like premium brands like a Ras as well as a health food so how's the progress there.
In particular any initial signals that's a food that is helping the company to catch a break through into the premium brand segment a.
I'll take the first one first of all thank you.
Oh, Okay, Oh I'll be here for your I'm sorry, your first question.
So I can't say that.
The company is more a more capable and bringing onboard.
A new brand partners, including.
A difference.
Categories, but right now I think the a pipeline very strong we see now.
Maybe.
Demand for the a traditional channels like Tmall a.
It's a growing pipeline, but also the private domain opportunities you also a law so a I think for a.
A different platform and silicon.
You're getting more and more.
I'll say, a more and more rich.
From a pipeline items and before the the.
Categories, We think that's a different categories like.
A light fashion like a cosmetic select a premium luxury.
You know very promising so we are happy to see that a food yet I think they are very experienced in talking to a.
A global brands and a premium brand. So we are working with them closely not only to a work work with a local team off the a premium brands, but also the global team. So in this case I think we care a four month, a better positioning and a integrated strategies to work with a.
Essentially a friend. Thank you. Please go out with a second one.
Sure sure. Thank you.
Second question. This is one of a high level.
It'd be a brand's a partner strategy a internet as we understand last year was a pretty difficult a year on a full year impact of COVID-19. So after a full year I mean, how how does.
A part of your company.
Recognize a difference between the.
Marketing activities now versus pre Covid.
Talk about C. A R.
Private demand et cetera can you give us more details on a.
How they spend their dollars differently.
Using a prep.
Private domain to capture new traffic are maintained their users or any other details that you can share more with us a that would be great. Thank you.
Okay.
Yeah, I think the last year, the Covid here, a very special and it changes it is.
A profound influence to the brand E Commerce, a digital marketing.
Strategies.
I think right now.
Commerce or did utilization it's been a you know.
The center of a strategy of most of the a consumer brands.
So they are you know.
Putting more and more resources to enhance their position a position Amit a PVC initiatives and also a signature marketing.
A initiatives so.
I think a key for this one is that as a center of the strategy. So that means the brands where you invest.
For a long term not only a short term so for a short term is channel sales is discounting promotions a long term, it's a more above system, it's more about the capability talent. So in this case.
We're quite comfortable where can we support them for longer term up a partnership.
Yeah, and just to add a comment on is we have seen a brand partner.
Four different a setback on tells a different channel. So for example in Q4 and a 200 here without one of the major.
One of our make a spouse partner a 12 ground Mount to do something so in line video show with a a tape and reel and a group result, and a that.
We have seen more than having a posting class about different channel.
Alright. Thank you very much that's all that's not true. Thank you.
Yes.
Cute.
The next question.
From the line of.
Actually issue from.
Credit Suisse. Please go ahead.
Yeah.
So on a mini program.
Sales in the past we have seen that in fact, your take rate is actually lower than the service fee model on Tmall a fifth.
A lot to understand whether this is attributed to flat to a difference in these two platforms or it's just due to you from development stage and if we look at a long time Lucy seem a lot monetization opportunity.
For a gram compared to a few months. Thank you.
Okay. That's helpful. A question.
Therefore, there's just a lot of discussions happening for a mini program.
E Commerce I think you know from.
From a three years ago, we have a formula a a very solid team.
So if a client who opened stores mini program right now we have already a pen soft existing many programing.
Looking for different brands.
So we think.
There is a lot of a potential from that talking about the.
The structure of a.
From platforms, especially for a minute program I think they are quite different from a traditional once a female cause.
It is more.
It's more marketing to them on a more data driven.
No transactions.
So is this.
So for example that a small fee.
It smells a commission a floor and a platform or even if you're a smaller platform. It's a.
Actually a a.
Separately.
From a private domains on the ecosystem.
<unk>, which is a credit button and it because.
There is a social commerce space so for doing the E.
How much transactions these are easier than a traditional.
<unk> done a traditional platforms.
So I think in this case, yes, the front and maybe it's not class.
A lot of things to be done as a traditional platform.
I think the Menlo and I like the order fulfillment of the order processing and a backend order fulfillment.
So in this case.
Reaching a M.
A part I think.
A cost structure and a profit model will be the same for the pharma Inc.
A transaction since you gave them before but marketing.
It's a more a comprehensive so a in this case I think a we can't afford them up with a long term a very healthy a charge model.
For NUPLAZID partners. Thank you.
Yes.
Yeah.
Yeah.
The next question comes from the line.
Shang from GIC she discovered.
Hi management. Thanks for taking my question a reach towards a net a day.
And a brand partners in the fourth quarter, a what's five to six a we know we are adapting our brand portfolio in the fourth quarter. So just wondering how many brand partners a terminated the corporation with us and how many new brand partners. We acquired in the fourth quarter, a what is our planned acquisition strategy moving into 'twenty one.
I'll come a share some corridor a cards a brand pipeline a any color would be very helpful. Thank you.
Okay.
So it's a brand partner only a.
We only had a decent for corporate level and a quota for historically speaking a small from a quarter, where a lot more from patent that we have opened a chemo a.
Yeah.
So that's because it's a after the double 11.
From a safe to say, it's actually a.
Not a bad number from our perspective from a full year perspective, we're actually added 35, a new fans happening a waste.
Great.
A good contribution.
Through our portfolio and secondly, I just wanted to maybe a talk about a principle in terms of eating a its a brand partner the only looking for both from partner weight will contribute to all of a sustainable and profitable growth I E. Our proposition as a whole.
Potent binding to the brand partner and how we can create.
How big a health department to grow that this meant a we are now.
Constant where hope has an extremely low policy all day to win the business. So in this case, we will optimize our portfolio.
The brand's happiness, a kind of the overall strategy on selecting the best you can keep happening now meet our value proposition, but we will wait a waste.
So we will try to try to keep a.
Our overall growth and try to sell as many at one time as possible.
Thanks very helpful.
Okay.
In Q2.
No further questions I would like them to call.
Back to a windy.
Sure.
Thank you operator.
A causal.
On behalf of somebody with a management team we would like to thank you for your participation in today's call.
On a further information feel free to reach out to us. Thank you for joining us today that concludes the call.
[noise] cute.
Ladies and gentlemen that does conclude your conference for today. Thank you for participating.
This can make no. Thank you.