Q3 2021 Baozun Inc Earnings Call

Speaker 1: Good morning ladies and gentlemen. Thank you for standing by for Baozeng's third quarter 2021 earnings conference call. At this time all participants are in listen only mode. After management's prepared remarks there will be a question and answer session. As a reminder today's conference is being recorded. I will now turn the meeting over to your host for today's call Ms. Vindhy Sanh, investor relations director of Baozeng.

Good morning, ladies and gentlemen, thank you for standing by for Baas in third quarter.

2021 earnings conference call at this time, all participants are in listen only mode. After management's prepared remarks.

Will be a question and answer session. As a reminder, today's conference is being recorded.

Now I'll turn the meeting over to your host for today's call Ms. Wendy Sun Investor Relations Director. Please proceed Wendy.

Speaker 2: Thank you, operator. Thank you, everyone, and thank you for joining us today. Our subquarter 2021 earnings release was distributed earlier today and is available on our IR website at IR.baozun.com, as well as on global news web services. They have also posted a PowerPoint presentation that accompanies our comments to the same IR website, where they are available from download.

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

So quarter 2021 earnings release was distributed earlier today and is available on our IR website at IR Dot thousand dot com as well as on global Newswire services. They have also posted a powerpoint presentation that accompanies our KOL moves to the same IR website as well.

They are available for download. This presentation is also available on the webcast, where we will move on the slides and see no conversation based our remarks on the call today from Bowser. They have me sell things into chairman and Chief Executive Officer, Mr. Arthur.

Speaker 2: This presentation is also available on our webcast, where we will move on the slides in synchronization with our remarks.

Speaker 2: On the call today from Beijing, we have Mr. Vincent Chu, Chairman and Chief Executive Officer, Mr. Arthur Yu, our Chief Financial Officer, and Ms. Tracy Li, our Vice President of Strategic Business Development. Ms. Chu will review the business operations and company highlights, followed by Mr. Yu, who will discuss financials and guidance. They will all be available to answer your questions during the Q&A section that follows.

Then chief Financial Officer, and P. C lead our vice President of strategic business development Ms. Jill will review the business operations and the company highlights followed by Mr. Yu, who will discuss financials and guidance. They will all be available to answer your questions. During the Q&A section.

All those.

Speaker 2: Before we begin, I would like to remind you that this conference call contains forward-looking statements relating the meaning of the Security Exchange Act of 1934 and the U.S. Private Security Litigation Reform Act of 1995.

Before we begin I would like to remind you that this conference call contains forward looking statements. They leaned the meaning of the Securities Exchange Act of 19, so people and a U S. Private Securities Litigation Reform Act of 1995.

Speaker 2: These forward-looking statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risk, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ maturely from those in the forward-looking statement.

These forward looking statements are based upon management's current expectations and current market and operating conditions and relates to invest that involve known unknown risks uncertainties and other factors.

Oh definitely co to predict and men Osage are beyond the company's control, which may cause the company's actual results to differ materially from those in the forward looking statements.

Speaker 2: Further information regarding these and other risks and safety factors is included in the company's filing with the USACC and in announcements on the website of Hong Kong Stock Exchange.

Further information regarding these and other risks uncertainties or factors is included in the Companys filings with the U S. H D. C. Any announcement on the website of Hong Kong stock Exchange. The company does not undertake any obligation to update any forward looking statement, except as required.

Speaker 2: The company does not undertake any obligation to update any forward-looking statement except as required and applicable law.

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

Speaker 2: Finally, please note that unless otherwise stated, all figures mentioned during this call are in RMB.

Speaker 2: It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Chu. Vincent, please go ahead.

Speaker 3: Thank you, Wendy. Good morning and evening, everyone. Thank you all for joining us.

Thank you Wendy.

Everyone. Thank you all for joining us.

Speaker 3: Today we are hosting our earnings call for the first time from our new headquarters, where most of the Baozun family has finally come together under one roof.

Today, we are hosting our earnings call for the first time from our new headquarters, where most of the Baldwin family has finally come together under one roof.

Ever since I founded the bulge in backing the Tucson to seven our business expanded so rapidly. So that we are end up being spread across multiple offices for many years and you know.

We call her new home a bulge in your symbolized seem to start off on a new journey and we believe being physically together will greatly enhance our people sense of belonging collaboration and productivity.

As many of you already know.

Speaker 3: China's e-commerce has recently experienced a variety of headwinds.

China's E Commerce has recently experienced a variety of headwinds.

Speaker 3: including weak macro environment, consumer sentiment drops, as well as new policies and the requirements issued by the government.

Weak macro environment consumer sentiment drops as well as new policies and the requirements issued by the government.

Speaker 3: Despite all these short-term challenges, we were able to grow our revenues and deliver a non-GAAP operating profit of $2 million that went off at just $2 million.

Despite all these short term challenges, we were able to grow our revenues and deliver a non-GAAP operating profit of 2 million one off adjustments.

Speaker 3: I'm confident with the great resilience and the sustainability of our business.

I'm confident we'll agree the resilience and the sustainability of our business.

Speaker 3: We believe, given e-commerce is rooted in daily life, as headwinds slowly pass.

We believe given your commerce is rooted in daily life.

We slowly pass.

Speaker 3: Consumer sentiments will eventually improve and various regulatory changes to the e-commerce environment will bring upon the next phase of long-term sustainable growth.

Consumer sentiment will eventually improve.

There is regulatory.

Changes to the ecommerce environment will bring upon the next phase of long term sustainable growth.

Speaker 3: Changes and temporary challenges bring opportunities, especially for those who can identify them to be the first mover to adapt and innovate.

Changes in temporary challenges breathe opportunities, especially for those who can't identify them to be the first mover to adapt and you know it.

Speaker 3: Let me share with you some of the opportunities we are seeing. Now please turn to slide number three.

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

Now please turn to slide number three.

Speaker 3: We continue to see the trend of consumption upgrade, especially in the luxury.

We continue to see the trend of consumption upgrade.

Especially in the luxury and the premium sector.

Speaker 3: We believe the nature of such growth is structural, with consumption upgrade driven by rising disposal income and demand for quality lifestyle of the younger generation.

We believe the nature of such growth is structural with consumption upgrades driven by rising disposable income and demand for quality lifestyle of the younger generation.

Speaker 3: The increase online penetration of luxury has also made luxury goods more accessible.

The increase online penetration of luxury has also made the luxury goods more accessible.

Speaker 3: And we have laid out a healthy pipeline from global luxury brand partners for next year.

We have laid out a healthy pipeline from a global luxury brand partners for next year.

During the quarter, we on boarded seven luxury brands and we are forecasting Jim me from luxury to keep double digit growth momentum in the next few quarters.

Speaker 3: In addition, with increasing demand for premium warehousing and logistic services, we commissioned one more brand new luxury dedicated warehouse to better support our brand.

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

Speaker 3: For sportswear, despite the lingering impact from the Better Quality Initiative, we have witnessed a modest recovery trend. Long-term-wise, as the government aims to further promote sports and physical exercises in the 14th Five-Year Plan,

For sportswear, despite the lingering impact from the better quality initiative.

Witnessed a modest recovery trend long term wise, that's a government aims to further promote sports and the physical exercises in the Fourteens, our five year plan.

Speaker 3: We believe sportswear category will likely see better goals.

We believe sportswear category, we will likely see better growth.

Speaker 3: Many leading international sportswear brands view China as one of the most critical and strategic target markets.

Many leading international sportswear brands.

We view, China as one of the most critical and strategic target markets.

Speaker 3: And some are even accelerating its localization efforts as a brand of China.

In the summer or even accelerating its localization efforts as a brand of China.

Speaker 3: In addition, we have identified what we believe to be structural growth opportunity for some sub-verticals, such as outdoor sportswear and adventure sports, which will likely to be the incremental drivers.

In addition.

We have identified what we believe to be a structural growth opportunities for some sub verticals, such as outdoor sportswear and adventure sports, which we would likely to be the incremental drivers.

Speaker 3: Moving on to our omni-channel programs, progress. First.

Moving on to our omni channel programs progress first.

Speaker 3: An increasing number of brand partners are accelerating the deployment of omni-channel strategies.

Increasing number of brands partners are accelerating the deployment of omni channel strategy.

Speaker 3: And in this quarter alone, we added 54 stores for non-TMOS channels.

And in this quarter alone, we added 54 stores for known Tmall channels.

Speaker 3: of these newly opened stores, over one-third are JD stores.

These newly opened stores over one third of our JV source.

Speaker 3: We are glad to see our GMB generated on JD nearly tripled from a year ago.

We are glad to see our T. M. B generated one J D nearly tripled from a year ago.

Speaker 3: accounting for roughly 10% of our total GMP.

Accounting for roughly 10% of our total GMB.

Speaker 3: In addition, we continue to make programs, in-tension mini-programs for private domain, as well as O2O initiatives.

In addition, we continue to make progress in Tencent mini programs, while private domain, that's wireless o'toole initiatives.

Speaker 3: More importantly, the recurring revenue stream of store operations marketing from our mini-programs ecosystems continue to grow their stake.

More importantly.

The recurring revenue stream of store operations marketing from our mini programs ecosystem.

Continuing to grow their stake.

Speaker 3: Of the emerging channels, we have made quite some breakthroughs, but we are happy to...

Of the merchant channel, we have made quite some breakthrough portfolio.

We are happy to be the first.

Speaker 3: to be at the forefront of action helping our brand partners to explore and expand into such the emerging channel with over 2,000 of brand partners piloting there. Our unique insight in brand value appropriation and merchandising in this regard has been instrumental in delivering strong sales on some of our trial programs.

It will be at the forefront of action, helping our brand partners to explore and expand into such the emerging channel with over two dozen of brands partners are piloting there.

Her unique insights in brand value appropriation.

And the merchandising disregard has been instrumental in delivering strong sales on some of our trial programs.

Speaker 3: In the first nine months of 2021, we helped our brands to generate over $100 million in GMB, with extremely successful cases for one fast fashion brand and one FMCG brand.

In the first nine months of 'twenty or 'twenty, one we helped over our brands to generate over 100 million and GMB.

We are extremely successful cases for one fast fashion brands and one of the FMC G breath.

The trend has been encouraging months over months has seen October along our brand partners generating over 17 million GMB.

Speaker 3: The trend has been encouraging month over month, as in October alone, our brand partners generated over 70 million GMB.

Speaker 3: It is worth noting that in some of our end-to-end services, we have managed to hit a take rate of over 20%.

It is worth nothing that in some of our end to end services, we have managed to hit a take rate of over 20%.

Speaker 3: indicating attractive economics potential for us on Douyin.

Indicating attractive economics potential for us.

Speaker 3: Although some emerging channels are still in early phase of exploring optimum monetization models, we are happy to see our initial channel investments already start to bear fruit.

Although some emerging channel those are still in the early phase.

Exploring optimum monetization models.

We're happy to see our initial channel investments already start to bear fruits.

Speaker 3: Just a rough reference, in the third quarter, our revenue contribution from non-TMO platforms along with the associated back-end services has continued to increase to more than 20%.

Just a rough reference in the third quarter of revenue contribution from non TMO platforms, along with the associated either backend services has continued to increase to more than 20%.

Now please turn to slide number four.

Speaker 3: On the technology front, we further upgraded our core e-commerce infrastructure to be more omni-channel oriented.

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

Speaker 3: Following the government's new policies regarding data privacy, we also upgraded our system for personal identity information protection to ensure brand partners are compliant with the latest laws and regulations.

Following the governments new policy regarding data privacy, we also upgraded our system for personal identity information protection for your short brand partners are compliant with the latest laws and regulations.

Speaker 3: Such upgrades applied to our order management system, warehousing and logistics management system, and CRM ensure smooth order fulfillment and a stronger user engagement.

Such upgrades applied tour all their money in the system warehouse and logistics management system, and CRM ensure smooth order fulfillment and a stronger user engagement.

Speaker 3: To drive business operating efficiency and flexibility, we keep making further upgrades to enable our digitalized, centralized, and integrated operating platforms and the middle office.

Drive business operating efficiency and flexibility.

Keep making further upgrades to enable our digitalized centralized and Ingrid integrated operating platforms in the Middle office.

Speaker 3: ROSS now has a multi-level authorization system helping our brand partners manage distributed network.

Ross No has a multi level authorization system Brent.

<unk> partners manage the distributed networks.

Speaker 3: And we launched Service Anywhere, or SANE, an intelligent customer service management system for unified workflow dispatching, training, and resource management.

And we launched service anywhere or Fannie and intelligent customer service management system, So Julia fireworks for dispatching training and the resource management.

Speaker 3: We believe Sany is both unique and disruptive within the e-commerce industry and we have seen great uptake by over 300 brand stores deploying since its launch and in just one month time frame.

We believe semi is both unique entity disruptive within the e-commerce industry, although we have seen great uptake.

By over 300 stores deploying since its launch and he just one month timeframe.

Speaker 3: Lastly, our remote service centers in Nantong and Hefei are ramping up smoothly, with over 1,000 employees moved over.

Lastly, our remote service centers in Nantong, and Hefei are ramping up shop smoothly with or was solid and the employees moved over.

Speaker 3: These regional service centers and planning are highly complementary, allowing us to obtain better service quality, gaining greater operational efficiency while lowering operating costs.

Are these regional service centers in the study are highly complementary, allowing us to obtain a team better service quality can greater operational efficiency, while lowering operating cost.

Speaker 3: We anticipate such initiative to save over $20 million in operating costs in 2022.

We anticipate such initiative to save over 20 million in operating cost in 2022.

Speaker 3: In addition, we received a 30% equity interest investment from Cainiao Network into Baotong. Our warehousing and logistics are

In addition, we received a 30% equity interest investment from tiny on their work into <unk>.

Warehousing and logistics are.

Speaker 3: At the beginning of the year, when we formulated our medium-term plan, we set objectives that Baotong needs to be a disruptive game, and that is needed to expand business scope to be wider and deeper, while also innovating its supply chain practices.

At the beginning of the year wasn't formulated our medium term plan, we set the objective set volatile needs to be.

Disruptive game and that is needed to expand business scope to be wider and deeper while also innovating its supply chain practices.

Speaker 3: We considered several leading players in the industry to be our strategic partner, each with its own advantages and characteristics.

We considered several leading players in the industry to be honest with each partner each with its own advantages and the characteristic risks.

Speaker 3: Ultimately, we concluded that Baotong and Tsanya are the most complementary in terms of capabilities and assets.

Ultimately, we concluded that the volatility and the time they are the most complementary in terms of our capabilities and assets.

Speaker 3: The combination elevates the partnership competitive advantage in the sports, outdoor, luxury and cosmetics industry.

The combination elevates the partnership competitive advantage in the sports al Dor luxury cosmetics industry.

Speaker 3: We believe such strategic alliance will lead to substantial cost optimization and greater synergistic business opportunities.

We believe such strategic Alliance, we will lead to substantial cost optimization and the greater synergistic business opportunities.

Speaker 3: In summary, we witnessed a number of short-term headwinds and we anticipate further changes as the industry adapts and evolves.

In summary, we witnessed a number of short term headwinds, although we anticipate further changes as the industry adapts and evolves.

Speaker 3: As part of our corporate vision, we have always believed that technology empowers success, and we're committed to delivering quality through developing our people.

As part of our corporate vision, we have always believed that technology empowers success and are committed to delivering quality is through developing our people.

One quick example is our advanced preparations for the year years double 11 Festival, where we are facilitating more than 40 brands. Upon theres two ranks number one in all their value in their specific product categories. During the Mega campaign.

Speaker 3: Throughout the year, we have made considerable investment in enhancing our platform, enriching our technological capabilities, and as well as establishing a special force full of talent.

Throughout the year, we have made.

<unk> investment in housing or a platform in reaching our technology technological capabilities and as well.

Well as establishing a special forces full of pellets.

Speaker 3: We believe Bolton has the most comprehensive, reliable and powerful set of infrastructure in empowering our business partners.

We believe boats and has the most comprehensive reliable and powerful set of infrastructure and empowering our business partners.

We are more confident in your competitive landscape and as a leader and he comes father.

Speaker 3: We are well-placed to navigate through these changes, adapt to the new environment, and capitalize our opportunities.

We are well placed.

To navigate through these changes adapts to the new environment, and Cape and capitalize our opportunities.

Speaker 3: At the same time, we continue to promote sustainable Baltic ecosystem for the longer term.

At the same time, we continue to promote sustainable both bulge in the ecosystem for the longer term.

Speaker 3: And I'm happy to point out that this September MSCI, in recognition of our comprehensive ESG initiatives, upgraded Bosch's ESG rating to NA, as demonstrated on slide number five.

And I'm happy to point out that this September.

MSCI in recognition of our comprehensive ESG initiatives upgraded apologize ESP, Ricky too and they ask.

Demonstrated on slide number five.

Speaker 3: We are very proud of our team's resilience through the quarter and are confident in the future.

We are very proud of our team's resilience through the quarter and are confident in the future.

Speaker 4: I will now pass the call over to Arthur to go through our financials. Thank you. Okay, thank you, Vincent, and hello, everyone.

I will now pass the call over to other that goes through our financials. Thank you.

Okay. Thank you Vince and Hello, everyone.

Speaker 4: Before diving into the numbers for this quarter, I would like to talk about three key topics.

Before diving into the numbers for this quarter I would like to talk about three key topics.

Speaker 4: number one, our M&A strategy, number two, the near and long-term impact of our recent acquisitions, and number three, our prudent and conservative accounting approach. Now please turn to

Number one.

Monday strategy.

But to the near and the long term impact of our recent acquisition.

Number three our prudent and conservative accounting approach.

Now please turn to slide number six.

Speaker 4: Firstly, I'm confident that our M&A plan is making solid progress.

Firstly, I'm confident that all while I'm on the patent.

Solid progress.

Speaker 4: We target complementary business and enhance our vertical competitiveness, expand economies of scale and help make our business portfolio more resilient and balanced.

What are your target complementary business and to enhance all of our blessing KOL competitiveness.

Spanned the economies of scale and help make all the business portfolio mall retail and talent.

We believe the current tough market environment also has an excellent window of opportunity.

Speaker 4: for us to seek and consummate a variety of strategic long-term focused acquisitions at a favourable valuation.

She will seek and consuming a variety of tail, what he's a longtime full class.

Nation.

Favorable valuation.

The initial revenue contribution from our acquisition earlier this year.

Speaker 4: The initial revenue contribution from over-acquisition earlier this year helped drive top-line growth and balance against the market headwind.

Drive top line growth and balanced against the market tightening.

Speaker 4: And we will look to do more of these built-on acquisitions as opportunities arise.

And the way, we would look to do more of these files on acquisition.

Cunard is arises.

Speaker 4: And secondly, while we continue to make notable progress in our iMoney strategy and integrating new acquisitions, let me provide you with the anticipated near and long-term impacts to our business and financial.

And secondly, well, we continue to make multiple programs in our M&A strategy.

Integrating our new acquisition.

Let me highlight you'll wait the anticipated near and long term impact for our business and financial.

Speaker 4: One near-term impact is that world initial revenue contribution benefited our top line this quarter.

One near term impact.

While the initial revenue contribution benefited all of our top line this quarter.

Speaker 4: The associated cost contributed to a small quarterly operating losses of $7 million on a non-debt basis.

They also say I'd hate to halt contribute.

A small quarterly operating losses of $7 million on a non cat basis.

Speaker 4: As acquisitions typically need several quarters to be integrated, we anticipate an improving bottom line contribution in the future.

Acquisition typically need several quarters, the integrated we anticipate improving bottom line contribution in the future.

Speaker 4: On the positive side, we expect greater synergies and ROI once acquisitions fully integrated.

On the positive side.

Mike greenhouse penetrating.

And Oh.

One acquisition fully integrated.

Speaker 4: which will contribute to our financial resilience as well.

<unk> will contribute to our financial retail names as well.

Speaker 4: And thirdly and finally, we strive for a prudent and conservative accounting approach in our financial reporting.

And thirdly, and finally, we strive for approach and conservative accounting approach in our financial reporting.

Speaker 4: every reporting period, we thoroughly evaluate our assets and liabilities.

I remember reporting carrot thoroughly evaluate our iPad and liabilities.

Speaker 4: and this quarter we conservatively made a decision to reduce the outstanding accounts receivables of one distributor where a write-down of 86 million.

And this quarter, we call self pay so they made a decision for retail the outstanding accounts receivables of one <unk>.

Yeah, a write down of eight 6 million.

Speaker 4: Although we have initiated legal proceedings to collect the overdue amount and believe we have a reasonable chance to prevail, we decided it is more prudent at this time to write down 65% of the total amount owned to us.

Although we have initiated a legal proceeding well collect the overdue amount and believe we have a reasonable chance to mobile.

It is more prudent.

That's right Paul.

Part of that total amount almost swap.

Speaker 4: We believe this is a one-off adjustment and it is an isolated incident in our 14 years of history.

We believe this is a one off adjustment and it is an isolated incident and our whole can get.

Speaker 4: Overall, our account receivables are healthy and we have taken measures to strengthen risk management and quality control in the future.

Overall, all of our accounts receivables are healthy on the we'll have to take home.

Risk management and policy punch holes in the future.

Speaker 4: While this shutdown had a negative impact this quarter, it preserved the integrity of our financial reporting.

Well, that's why I.

I had a negative impact this quarter.

The impact of all of it.

Natural reporting.

Now, let me share with you some observation on the consumption from during the quarter. Please turn to slide number seven.

Speaker 4: Now let me share with you some observations on the consumption trend during the quarter. Please turn to slide number 7.

Speaker 4: First, to share some of the macro statistics in light of the weakening of consumption momentum in China.

Just to share some of the muscle of his.

In light of the weakening of consumption momentum in China.

Speaker 4: according to the National Bureau of Statistics of China.

According to the National Bureau of statistics of China.

Speaker 4: Retail sales growth decelerated noticeably to 5.1% year-on-year in the third quarter, compared with 13.9% a quarter ago.

Retail sales growth.

No not hopefully to five 1% year on year in the third quarter comparably 13 nice sometimes.

So while e-commerce continued to gain share of retail apparel.

Speaker 4: While e-commerce continues to gain share of retail, the growth rate of online physical goods for the third quarter also fell to 8.7%, from 13.3% in the second quarter, and 25.8% in the first quarter of 2021.

Online physical goods.

Third quarter profile to eight 7%.

From 13, 3%.

Second quarter, and 20 point 20.

25, 8%.

First quarter of 2021.

Respectively in the previous two quarters.

Speaker 4: This questionnaire categories including apparel and appliance struggles, while FMCG and electronics largely

Good question.

Secondly, including apparel and applying truckloads.

I N C G.

Mark.

Speaker 4: That macro consumption trend was consistent with our financial performance as depicted on slide number 8.

Soft consumption trend.

Consistent with our financial performance.

Slide number eight.

Speaker 4: During the quarter, our total GME increased by 48% to $16.1 billion.

During the quarter on the total <unk> increased by 48%.

<unk> 16 billion.

Speaker 4: However, there was a gap among performance-based sectors.

There was a cat among performance site.

Speaker 4: Electronics did extremely well with 3-digit year-on-year increase as there was an incremental 3C brand that launched several new SKUs during this third quarter.

Electronics compete extremely well wait.

Yeah, all right.

Are there onetime incremental three key brands.

Several new eyes.

During the third quarter.

Speaker 4: In fact, if we are excluding that, our PME growth would have been 2% in line with our observation of wafer consumption.

In fact.

In fact, if we ex that all the <unk> growth would have been too.

In line with our observation.

Consumption.

Speaker 4: In addition to electronics, FMCG and Luxray both deliver high double-digit growth rates.

Yeah.

That's funny.

ETE and luxury Poland deliver high double digit growth rate.

Speaker 4: On the flip side, apparel and accessories declined by the mid-teens percentage during the quarter, with persistent impacts from the BCI, adding further to the weakened consumption sentiment.

I'm pretty excited.

Attach rate declined at a mid teen percentage during the quarter.

I'll take the tax impact from the Dci I think further to the weekend consumption sentiment.

Speaker 4: Sportswear continues to show a year-over-year decline. However, the contraction rate has narrowed, and we now see a modest month-by-month recovery trend.

Sportswear continued to show a year over year decline.

The contraction rate that's narrowed on the wind and I'll see a modest month by month recovery trend.

Speaker 4: Appliance also declined by a mid-single digit.

Also declined by a mid single digit.

Speaker 4: Overall, the GMV split between categories for the first nine months are as follows.

Overall, the GMB split between category for the first nine months I follow.

Speaker 4: Apparels and accessories at 40%, followed by electronics at 30%, FMCG at 16%, and appliance at mid-single digit.

Apparel and accessory at full per ton.

<unk> electronics.

Then I, if I'm, a <unk> 16 per ton and uptime.

Single digit.

We also saw a division between all that.

Speaker 4: We also saw a division between our distribution and non-distribution model this quarter.

Distribution and non distribution model this quarter.

Speaker 4: Specifically, our distribution GMV declined by 13% to $786 million, while non-distribution GMV increased 54% to $15.3 billion.

Specifically, our distribution GMB declined by 13% to $786 million, while none of these figures and TMA inquiry, they pay full per tonnes to $15 3 billion.

Please turn to slide number nine.

Speaker 4: Total net revenues increased by 4% to $1.9 billion, of which our acquisitions contributed a total revenue of $212 million.

Total net revenue increased by 4% to $1 9 billion Openreach.

<unk> contributed a total revenue of $412 million.

Speaker 4: Product sales revenues declined by 13%, mainly due to the decline of key brands in the appliance category.

Product sales revenue declined by 13%.

Due to the decline of key brands in the us in the appliance category.

Speaker 4: Our planned business model transition of a new brand partner, as well as our title control on brand and channel selection criteria for the distribution model. In line

All of the planned business model transition.

Our new brand partner as well as how what type of control brands and China's selection criteria for that.

Distributor model.

In light of the macro uncertainty.

Speaker 4: Our strategy for our distribution model is to pursue high-quality growth with a clear focus on profitability and working capital efficiency.

Our strategy for our distribution model is to pursue a high quality growth with a clear focus on profitability and working capital efficiency.

Now turning to our service revenue.

Speaker 4: It increased by 17% to $1.2 billion.

It increased by 17% to $1 2 billion.

Speaker 4: benefiting from several acquisitions made early this year.

Benefiting from several acquisitions made earlier this year.

Speaker 4: Service revenue of our organic business declined by 4% to about $1 billion, as BCI continued to impact sales of many sportswear brands.

Service revenue of our organic business declined by 4% to about $1 billion.

As D C. I continued to impact sales of minus sportswear brand.

Speaker 4: If we refer to the total outbound orders of our logistic service.

We refer to the total outbound order of our logistic services.

Speaker 4: it declined by more than 25% year-on-year for the quarter.

<unk> declined by more than 25% year on year for the quarter.

Speaker 4: As the proportion of our consignment model reduced, our blended take rate also declined accordingly. During the quarter, the take rate for the non-distribution model was 7.8%, down from 10.3% a year ago.

Is the proportion of our consignment model reduce.

Our blended take rate also declined accordingly.

During the quarter the take rate for the non distribution model was seven 8% down from 10.3% a year ago looking.

Looking at the take rate of the consignment model itself on a like for like basis. It is flat year on year at 12 points to that.

Speaker 4: It is flat year-on-year at 12.2%.

During the third quarter.

Speaker 4: Our overall gross profit totaled $1.3 billion, an increase of 12.7% year-over-year, and our gross profit margin expanded by 540 business points to 68.6% from 63.2% a year ago.

Although overall gross profit totaled $1 3 billion.

I am afraid of.

<unk>, 7% year over year, and our gross profit margin expanded by 540 basis point to 68, 6% from 63, 2% yeah.

Speaker 4: Now let's turn to operating expenses on slide number 10.

Now, let's turn to operating expenses on slide number 10.

Speaker 4: Fulfillment expenses were $634 million, an increase of 51% year-over-year.

Fulfillment expenses was 634 million.

<unk> 51 per ton over yet.

Speaker 4: This quarter, there was an incremental fulfillment cost of $205 million related to our two newly acquired warehouse and supply chain businesses, Baotianpeng and Baobida.

This quarter, there was an incremental fulfillment cost of $205 million related to our two newly acquired warehouse and supply chain businesses.

All the in home and Alibaba.

Speaker 4: sales and marketing expenses were $536 million.

Our sales and marketing expenses were $536 million.

Speaker 4: an increase of 6.9% year-over-year.

An increase of six 9% year over year.

Speaker 4: The increase was mainly due to increased staff as our business skyrocketed, and an expansion in headcount in digital marketing services, which was partially offset by efficiency improvements.

The increase was mainly due to increased staff as our business scales.

And I expansion in heart pump in digital marketing services.

<unk> was partially offset by efficiency improvements.

Speaker 4: Technology and content expenses were $114 million, an increase of 12.2% year-over-year.

Technology and content expenses were $114 million.

An increase of 12, 2% year over year.

Speaker 4: The increase was mainly due to higher staff costs for incremental IT development offset by efficiency improvement.

The increase was mainly due to higher staff costs or incremental ITT vitamin.

I'll start by efficiency improvement.

Speaker 4: G&A expenses increased to $191 million.

G&A expenses increased to $191 million.

Speaker 4: This increase was mainly due to some of our investment in talent and sustainability, as well as a write-down of 86 million in accounts receivables from one specific client that I talked about earlier.

Increase was mainly due to timing of our investment in talent.

And sustainability as well as a lifestyle.

It takes in account receivable from one specific part.

I talked about.

Okay.

Speaker 4: As a percentage of GMV, we continue to optimize all types to drive greater operational efficiency, as displayed on slide number 11.

As a percentage of <unk>, we continue to optimize.

It's like greater operational efficiency as displayed on slide number 11.

Speaker 4: For the third quarter, total OPEX as a percentage of GMV improved by 88 base point to 9.1%, driven by efficiency gain in marketing and technology ratio.

For the third quarter total opex as a percentage of GMB improved by 80 basis points to nine 1%.

But efficiency in marketing and technology threshold.

Speaker 4: More specifically, our sales and marketing improved by 130 base points to 3.3% from 4.6% a year ago.

More specifically, our sales and marketing improved by 130 basis points to three 3% from four 6% a year ago.

Driven by a combination of more effective digital marketing services, and lower marketing and promotional expenses in absolute dollars.

We also improved by 20 basis points from higher efficiency in technology ratio.

This quarter, the total fulfillment ratio was unchanged year over year.

Three 9%.

Speaker 4: Lastly, our GNA, due to the one-off extraordinary breakdown, as well as more strategic investment in talent, increased to 1.2% from 0.5% a year ago.

Lastly, our G&A due to the one off other than your rents.

Breakdown as well as more strategic investments in talent increased to one 2% from <unk>, 5% a year ago.

Now turning to slide number 12.

Speaker 4: Reflecting the above mentioned items, our non-GAAP loss from operations was $84 million during the quarter, and non-GAAP OP margin was negative 4.4%.

Reflecting the above mentioned items, our non-GAAP loss from operations was 84 million during the quarter and non-GAAP op margin was negative four 4%.

Speaker 4: And on slide 13, let me walk you through our analysis on non-GAP operating profit.

And on slide.

13, let me walk you through all the analysis.

Non-GAAP operating profit.

Speaker 4: The slide shows the breakdown of our various operating profits and the cost streams and how they evolved year over year.

This slide shows the breakdown of our various operating profit on the cost of screening and how they evolve year over year.

Speaker 4: I would like to note that this is an indicative number which aims for you to better understand our financial performance.

I would like to note that this is indicative number wait.

For you to better understand our financial performance.

But you're right you can see the pcie continued to have a major negative impact.

Speaker 4: So in red, you can see the BCI continued to have a major negative impact.

Speaker 4: as it drags down the performance of sportswear, fashion apparel, along with our organic logistic business.

I'd say trucks from the performance of sportswear.

Apparel, along with our organic logistic business.

Speaker 4: We are encouraged to see that, while revenues from our distribution model decrease.

We are encouraged to see United while revenues from our distribution model.

Wow.

Revenue from our <unk> fusion model have decreased.

Speaker 4: Operating profit from distribution was largely unchanged year-over-year, benefiting from our high-quality growth factor.

Operating profit from distribution was largely unchanged year over year benefiting from our high quality growth strategy.

Speaker 4: Additionally, some of our strategic investments combined for a negative variance of 42 million, including the temporary higher cost of concurrently occupying two headquarters during our move to both new ones, as well as increasing talent recruitment and investment in our domain and regional service centers.

Additionally, some of our strategic investments combined for a negative environment <unk> 2 million.

Including the temporary higher costs of concurrently occupying two headquarters.

Our move to a new one.

While increasing talent recruitment and investment in our toe in on the regional service centers.

[laughter] improve we saw positive guidance.

Speaker 4: In blue, we saw positive gains in digital marketing, luxury, and technology.

In digital marketing luxury and technology.

Speaker 4: As mentioned earlier, we also had the extraordinary write-down of $86 million, excluding wage, our adjusted non-GAAP operating profit, which is calculated based on the non-GAAP operating profit, adding back the write-down of $86 million, was a positive at $2 million.

As mentioned earlier, we also had the extraordinary write down of <unk> 6 million.

Excluding wake our adjusted non-GAAP operating profit, which is calculated based on the non type health care. It can profit impact the write down of 8 million.

That was a positive <unk> 2 million.

Speaker 4: Turning to slide 14, non-GAAP net loss attributable to ordinary shareholders totaled 88 million, and basic and diluted non-GAAP loss per ADS were both 1.21 for the quarter.

Turning to slide 14, non-GAAP net loss attributable to ordinary shareholders totaled $8 8 million.

Basic and diluted non-GAAP loss.

It was about 1.1 dollars 21 for the quarter.

Speaker 4: Lastly, turning to slide 15, operating cash flow for the quarter was negative 740 million. As usual, cash flow was impacted by our need to procure additional infantry during the third quarter in preparation for the double 11 peak season in November .

Lastly, turning to slide 15 operating cash flow for the quarter was negative 400.

Whats magazine's top 114 million euro.

Cash flow was impacted by our need to procure additional inventory during the third quarter in preparation for the double 11 peak season in November.

Speaker 4: During the quarter, we also deployed $178 million for M&A activities.

During the quarter, we also deployed $178 million for M&A activities.

Total financing cash outflow was signed 139 million, mainly due to our execution of share repurchase program.

Speaker 4: Total financing cash outflow was $739 million, mainly due to our execution of share repurchase program.

Speaker 4: This means our Board of Directors authorized a share repurchase program, allowing us to repurchase up to US$125 million worth of our shares.

This may our board of directors authorized a share repurchase program.

Wowing us to repurchase up to $125 million worth of our share.

Speaker 4: As of September 30, 2021, we completed the full purchase, totaled $18.6 million ordinary share, with an average cost of $6.7 per ordinary share.

September the third hit 2021, we completed the full question totaled $18 6 million ordinary shares weighted average cost of 6.7 ordinary shares.

Speaker 4: Each ADS represents 3 plus A ordinary shares.

Each.

Represent three class a ordinary shares.

I saw September 3rd has 2021 our cash and cash equivalent totaled $2 8 billion.

Speaker 4: As of September 30, 2021, our cash and cash equivalent totals $2.8 billion.

Importantly, as discussed earlier, our warehouse and logistics and to take both home received the investments payment from China network in late October.

Therefore, we believe we have sufficient cash for normal operation and pursuing additional strategy.

To pursue additional strategic opportunities.

Speaker 4: As we are confident with our comfortable cash position, I am pleased to announce that the Board of Directors has approved an additional share repurchase of up to US$15 million for the next 12 months.

We are confident with our comfortable cash position.

I'm pleased to announce that the board of directors has approved an additional share repurchase of up to $50 million over the next 12 months.

Speaker 4: That wraps up my financial review for the third quarter and concludes our prepared remarks. Thank you, everyone. Operator, we are now ready to begin the Q&A session.

And that wraps up my financial review for the third quarter and comfortable with our prepared remarks, contrary one operator, we are now ready to begin the Q&A session.

Certainly.

Speaker 1: Certainly. Participants who wish to ask a question, please press star one on your telephone. If you would like to withdraw your question, please press the pound or hash.

Disciplines, who wish to ask a question. Please press star one on your telephone.

If you would like to withdraw your question. Please press the pound or hash key star followed by one to ask your question.

Speaker 1: star followed by one to ask a question.

Speaker 1: The first question comes from the line from City Group.

Your first question comes from the line, that's Alicia Yap from Citigroup. Please go ahead.

Speaker 5: Hi. Good evening, management. Thanks for taking my questions. The first question that I have, actually, I think you explained, you know, very well the discrepancy between the GMB growth, especially on the non-distribution GMB versus the service revenue growth this quarter. But I think my follow-up question from that is

Hi, good evening.

Thanks for taking my questions.

The first question that I have actually I think you explained.

He wrote the discrepancy between the.

The GMB growth, especially on the non distribution <unk> versus the service revenue growth this quarter.

But I think my follow up questions on that one can be a stack.

Speaker 5: When can we expect these discretionary category like the apparels or the sportswear to recover to a more normalized level, which could help our service revenue to grow more in line with the non-distribution GMV growth?

Question every category, we like the apparel sportswear.

To a more normalized level, which could help our service revenue to grow more in line with the non distribution GNP growth.

Speaker 5: And then, secondly, also on the single-phase performance, I think you announced about 16.3% media over year growth during the single-phase performance. So should we expect these more or less the 4Q GMV growth to be, or any colors on the service revenue for 4Q as far as the margin direction for 4Q as well? Thank you.

And then.

Thanks on the also on the performance I think it allows about 16, 3% growth doing guessing does phase performers. So should we expect more or less the four key GMB growth.

To be Oh, any colors on the service revenue for <unk>.

Hum.

Thank you.

Okay.

Speaker 4: Okay, thank you Alicia. I will take your question. On the first one, you were talking about the sport coming back to the normal growth. Back in quarter two, when we communicated to the market,

Okay. Thank you Alicia.

I'll take the question on the first one.

You were talking about the spot coming back to the normal girl Bye.

In quarter, two when we communicated to the market, we thought it could be one off impact and in Q3 and Q4, it will catch them back to normal and our current assessment.

Speaker 4: We thought the BCI could be one-off impact, and in Q3 and Q4, it will be getting back to normal. Our current assessment is that it will take longer than our expectation to get back to normal.

Take longer than our expectation to get back to normal.

Speaker 4: So even though the decline trend has narrowed down from Q3 to Q4, we expect this trend to continue into the next year, at least a quarter 1 and quarter 2.

Even though the decline trend has coming back.

To narrow down from Q3 to Q.

From Q3, and also will go into further narrow down in Q4.

This trend to continue into the next year at least a quarter on.

Quarter two.

Speaker 4: Our current view is maybe from the quarter three onward we could see some positive kind of trend on the spot and apparently.

Our current view is maybe from quarter three onwards, we could see some positive.

Kind of trend on the spot and apparel.

Speaker 4: And also, I would like to add, so despite we have some hype wins on the sports and apparel, we do have some positive gains from the luxury and also FMCG. And in this quarter, we have seen a good growth on the GMV on the luxury, and we recently have won quite a number of luxury brands.

And also I would like to add.

So these banks, we have some headwinds on the sports and apparel, we do have some positive time from the luxury and also <unk> and in this quarter we have.

We have seen a good growth.

On the luxury and we recently had wind quite a numbers of luxury brands. So we anticipate the strength of lapsing will continue in the next few quarters and also our omni channel strategy.

Speaker 4: So we we anticipate the strength of luxury will continue in the next few quarters.

Speaker 4: And also, our omni-channel strategy has helped us to grow the FMCG and some other categories, which also can help us to balance the impact from the sport.

At <unk> <unk> and some other category, which also can help us.

Our balance.

Impact from the spot.

And that's how the.

The first question.

Speaker 4: So on the second question, regarding to the single day performance.

So on the second question regarding to the single day performance.

Speaker 4: We still, as I mentioned, overall we still see some headwinds in the quarter four.

We're still as I mentioned overall, we still see some headwinds in the quarter fall. So from a <unk> perspective, we think quarter four will be a low teen.

Speaker 4: So from a GMV perspective, we think Quarter 4 will be a low-teen kind of growth in the GMV.

Kind of growth in the CMV. So we saw this fall and apparel will slowly.

Speaker 4: So we saw that sports and apparel will slowly, will slowly recover.

We'll slowly recover.

Speaker 4: But overall, it will slowly recover, but within the sports, there are some highlights or some kind of the spotlight we would like to highlight, which is some sub-vertical, such as the outdoor or the winter sports.

But overall it will slowly recover but what do you think the sport there are some highlights or some handle the spotlight, we would like to highlight which I saw some stuff what's your.

Such as the all store or the winter spot because.

Speaker 4: because we will hold the Winter Olympics next year. We see that.

We will hold the Winter Olympics next year, we've seen that.

Speaker 4: from some of the brands we do, we see some good growth.

From some of the brands, we do see some good growth and also as I mentioned the luxury will continue.

Speaker 4: And also, as I mentioned, the luxury will continue its very strong trend into the quarter fall. So that's the overall what we have seen.

Our restaurants and into the quarter fall. So that's the overall, what we have seen.

Thank you.

Thank you.

Speaker 1: Your next question comes from the line of Tom Schaap from Jefferies, please go ahead.

Your next question comes from the line.

Shopping from Jefferies. Please go ahead.

Speaker 6: Hi, good evening. Thanks, management, for taking my question. I think management has mentioned in the prepared remarks about the Long Timor GMV trend. Can you comment about how we should think about the mix between Timor and Long Timor over the next couple of years?

Hi, Good evening, Thanks management for taking my question.

I mentioned in the prepared remarks about the loan he more GMB trend can you comment about how we should think about the mix between T mobile and on T mall over the next couple of years.

Speaker 6: And then my second question is more about the cooperation with China. Can you share with us more about the strategies going forward and the synergies that we should expect? Thank you.

And then my second question is more about our cooperation with China can you share with us more about the strategies going forward and the synergies that we should expect thank you.

Yeah.

Speaker 4: So I will take the question on the T-mode and non-T-mode, and probably comment a little bit on China. Yeah.

So I will I will take the question on the Tmall tmall and properly common political behind Tainio yet.

Speaker 4: So in terms of the T-Mall, so as I mentioned earlier, for this quarter, we have seen the T-Mall has seen some of the weakness. And if we take out that one specific electronic brand.

In terms of the chemo, so as I mentioned earlier.

So this quarter, we have seen the T mall.

<unk>.

As.

Seen some weakening and eight week take halt that's one let's say, it's like electronic brands for the first time, the non chemo has surpassed 50%.

Speaker 4: For the first time, the non-T-Mole has surpassed 50%.

Speaker 4: of overall GMV. So that's a trend we have seen very clearly, i.e. people are starting to explore more opportunities in terms of the non-TMO channel.

<unk>, so that's a trend.

We have seen very clearly I E people are starting to explore more opportunities in terms of the non small channel.

Speaker 4: Our expectation is this is a trend that will continue at least going into the early part of next year. We believe this represents a lot of opportunity for Baltimore.

Our expectation is they say, it's a trend will continue at least into the early part of next year.

We believe they represent a lot of opportunity for Boston.

Speaker 4: We have, from the last two years, continued to make investments into the omni-channel technology.

We have had from the last two years continuing to make investments into the Omnichannel technology when laid out the team.

Speaker 4: We laid out the team to do more business on the mini program and also on Douyin and on Jingdong. As Vincent mentioned earlier, in this quarter we made some solid programs in Douyin, now operating about...

To do more business on the mini program and also.

So in general.

As Vincent mentioned earlier in this quarter, we made some solid progress in building now operating about quantity.

Speaker 4: 20 kind of the spots on Douyin, which we are quite satisfied with.

The thoughts I don't know in which we are quite satisfied way, but going forward I think that trend will continue and I think biogen, we have perhaps take a while for that trend.

Speaker 4: So going forward I think this trend will continue and I think Baojun we have prepared pretty well for this trend.

Speaker 4: So in regarding to time now.

So in regarding to timing.

Speaker 4: Our cooperation with China will bring two synergies. So the first synergy is we have comparable, I mean, we have a very much kind of capability. So from a Chinese perspective, they are doing a lot of business based on a volume basis. And also, they do quite the standard logistics and the warehouse products.

Our cooperation with China will bring towards synergies.

So the first the synergy as we have comparable I mean, we'll have a very.

<unk> kind of capability.

So from a China perspective, they are doing a lot of business based on a volume basis and also they do quite.

The standard logistics and the warehouse product.

Speaker 4: For Baotong, we are focused on the premium and we are focused on customized solutions for the large brands.

Full volatile we're focused on the premium and the way our full her Tom customized kind of solution.

For the large brands. So when we combine together, we will be able to depending on each other to further strengthen our capability and we could introduce.

Speaker 4: So when we combine together, we will be able to depend on each other to further strengthen our capability. And we could introduce the business to each other from Taimiao to Baotun, we think, from a sport, luxury, and cosmetics, which is what Baotun is really strong on. We will get some synergy from the Taimiao network.

The business to each other from Chinese to Boston, we think from a spot luxury and cosmetics, which is what ultimately is really strong on we will get some synergy from the China on network.

Tom the capability.

Speaker 4: On top of the capability, we also contain some resource efficiency. So as we know, Hanyu operates a national network of a large, I mean, of a much bigger kind of scale in terms of logistics and warehouse.

On top of the capability, we also containing some resource efficiency. So as we know the time you operate a national network.

A large I mean, mark Baker kind of scale in terms of logistics and warehouse and by utilizing them that I think he can further reduce our cost base and improve our capital efficiency, while we make investments into the new warehouse. So that could also help Paul.

Speaker 4: And by utilizing that, I think they can further reduce our cost base and improve our capital efficiency when we make investments into the new warehouse. So that could also help Baotong to grow into a much bigger and much efficient business.

To grow into a much bigger market efficient business.

Speaker 3: So based on those two, we think that could be pretty good in terms of going forward. Yeah. Some more, you know, words to say about the timing of cooperation is that

So based on those two things.

That could be a pretty good in terms of going forward.

Some more.

First you'll see about the timing of our corporation set.

Speaker 3: We view cooperation with China as a big business development opportunity for us as well.

We view the.

Our corporation with Xiaomi.

As a big business development opportunity for us as well.

Speaker 3: Because by working with China closely, I think we can have much more BD opportunities for the categories including sports, luxury, apparel, cosmetics, these kind of categories.

By working with kind of closely I think we can.

We have much more.

<unk> opportunities for the categories, including sports luxury apparel cosmetics, it's kind of categories. So in this case, we work with center closely deliver a better and a comprehensive solutions to the industry. So potentially we can work much more.

Speaker 3: So in this case, we work with Sena closely, deliver a better and a comprehensive solutions to the industry. So potentially, we can work with some much more the potential brands in the captioned different categories.

No.

Potential brands, you know you made a caption different categories.

Thank you.

Thank you. Thank you.

Thank you.

Speaker 1: here your next question comes from the line of Charlie chin from China when I see

Your next question comes from the line of.

Charlie Chen from China Renaissance. Please go ahead.

Speaker 7: Thank you. Thank you, management, for taking my questions. I have two questions, one related to GMV and the other related to tick rate. So the first one is regarding the GMV from the distribution business.

Thank you. Thank you management for taking my questions I have two questions one related to <unk> and the data related to takeaway. So the first one is regarding the <unk>.

The distribution business, we can see there was a slight decline of the gym to year on year for this quarter. So we understand the company is doing some strategic optimization. So how should we think about the impact going forward for the HMD from a distribution business and <unk>.

Speaker 7: We can see there is a slight decline of the GMV year-on-year for this quarter. So we understand the company is doing some strategic optimization, so how should we think about the negative impact going forward for the GMV from a distribution perspective?

Speaker 7: And my second question is related to the take rate. So I can see for the non-distribution business, GMV growth actually significantly outpaced revenue growth. So we understand that we are still on the investment stage for non-T-mobile channels as an omni-channel air force.

My question is related to the take rate. So I can see for the non distribution business, Jim via gross actually significantly outpaced revenue growth. So we understand that we are still on the investment stage four non chemo channels.

The channel for us.

Speaker 7: How do you think about this, or what do you think would be a reasonable estimate we can see meaningful improvement of take rate as a result of the long-term investment, seeing some returns? Thank you.

How do we think about this is for what.

What do you think would be a reasonable estimate we can see meaningful improvement of our take rate as a result of the long term investments I've seen some of your trends. Thank you.

Okay.

Speaker 4: Thank you. On the GMV, as you mentioned, we do have seen some decline of the distribution model, but there are three main drivers behind this fact.

Okay.

On the <unk> as you mentioned, we do have seen some decline of the distribution model, but there are three magnified with the hand in fact, the first one is we have initiated Haynes family.

Speaker 4: The first one is we have initiated some of the business model change along with the brand partner or distribution. We convert the distribution model into the service fee model, which for the brand and also for Baozun is actually a good thing because it improves our capital efficiency.

The business model change along with our brand partners or distribution, we covered the distribution model into the service fee model, which.

For the brands and also for Bolton, it's actually a good thing because it's improved our capital efficiency.

Speaker 4: So we don't need to use our own cash to host the infantry. So that's the first factor.

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

To host the inventory so that's the first factor the second factor chain things about <unk>.

Speaker 4: The second factor is, I think about 18 months ago, we initiated a high-quality growth strategy and in this quarter specifically, we stopped some low-return, kind of low-profit

18 months ago, we initiated a high quality growth strategy and in this quarter, specifically, we stopped some low return.

The low profit.

Speaker 4: of the distribution business. So we don't want to do that type of business, especially during the weak market performance. We're concerned quite a lot about the quality of that type of revenue.

All of the distribution business. So that we don't want to do that type of business, especially during.

Weak market performance, we content quite a lot of about.

The quality of that type of revenue.

Speaker 4: And thirdly, as we all know, one small home appliance brand made quite a significant contribution to our overall distribution revenue. And for this quarter, that one brand shows a low single-digit year-on-year decline, which also contributes to this fact. So that's the reason behind the decline of the distribution model. Going forward, we will focus on quality. So if we see

And certainly.

We all know one small home appliance brands made a quite a significant contribution to our overall distribution revenue and for this quarter at one brands shows a low single digit year on year decline.

Decline, which also contributing until they cycle. So that the reason behind the decline of the distribution model going forward, we will focus on quality.

So if we see good business Oh goods category weight.

Speaker 4: a good category which provides us with a good profitable return.

Provide us with a good profitable we turn we changed our distribution model and we definitely would like to do it because the positive side of the distribution model.

Speaker 4: which is a distribution model, then we definitely would like to do it because the positive side of the distribution model is it shows a higher client...

It shows a higher client stickiness waste the brand partner so we have.

Speaker 4: stickiness with the brand partner. So if we have a chance to do it.

Speaker 4: we will use that model to do the profitable business. So that's our strategy.

To do it.

We will.

Use that model to deal with a profitable business. So that's our strategy going forward.

Speaker 5: This is Tracy. I would like to add another point when we talk about the emerging channels like Douyin and TikTok operations, what we observed in the past few months is for this channel, the take rate and also the revenue portion is

And this is for Tracy I would like to add one another pone. So let me talk about the emerging China like go in and Uh Huh.

If you could talk on accretion what do we observed in the past few months spud. This channel the take rate and also the revenue portion is high.

Speaker 5: positively flat or even higher than the Tianmao channel, because right now, in the early stage of the channel development part.

Probably that's all you know higher than 10, Montana Lino.

Early stage outdoor channel development.

Speaker 5: a brand is heavily relying on a partner like Baozun to further dig out the consumer value and also to improve the ROI compared with TML channel. So at that part, which means besides the operation part, we can combine the digital marketing and also, I mean, the technology into the total take rate, which means our revenue income part.

Monday's heavily rely on partners like Biogen to further dig out the consumer value and also to improve the online.

Channel to adopt pod, which means besides the operating partner, we can combine the digital marketing and also I mean, the technology into the total take rate, which means our revenue income tax. So that is the I think one of the positive where you can see the trend.

Speaker 5: So that is the, I think, one of the positive way we can see the trend.

Speaker 4: Yeah, I'm going forward. Yeah. Okay. And also, I would like to add for some of our business model take rate.

Going forward yeah.

And also I would like to add for some of our business model take rate.

Speaker 4: it's not the only measure. We actually look at the profit, the operating profit contributing to the bottom line. So, for example, as I mentioned in the past for the mini program.

The only major we're actually looking at.

Profit operating profit contribution to the bottom line. So for example, as I mentioned in the past for the meaning program in this quarter, we're actually doubled with our revenue year over year and for the mini program, we are making a profit.

Speaker 4: In this quarter, we actually doubled our revenue year-over-year and for the mini-program, we are making the profit for this quarter.

For this quarter, so we focus on not the take rate but.

Speaker 4: So we focus on not the take rate, but

Speaker 4: the profitability of this kind of the business

Profitability.

This kind of the business.

Thank you very much.

Okay. Thank you.

Thank you. Your next question comes from the line, especially shoot from Credit Suisse. Please go ahead.

Speaker 1: Thank you. Your next question comes from the line of Ashley from Credit Suisse.

Speaker 8: Thanks management for taking my questions. Firstly, I want to get management preliminary view on our next year's outlook, given the currently challenging macro environment.

Thanks management for taking my questions, Firstly I want to can management. Please.

And then with you on our next year's outlook given the currently challenging microenvironment.

Speaker 8: And my second question is related to our operation on JD. I understand there has been quite some positive progress there. I want to check on the key categories or brand types we are cooperating on this platform and at the same time, what types of model are we deploying there? Thank you.

And my second question is related to our all Krishna J D. On the stronger has been quite some pop kids program there.

Chuck on the key categories, where brands types, we are cooperating on this platform.

At the same time, what types of model RV decline. Thank you.

Mhm.

Speaker 5: Yeah, so for the Jingdong part, I think.

Yes.

So from a genome park I think.

Commerce push and logic is more similar to two months, partially adopted pump X.

Speaker 5: actually adopt to Jingdong's pop economy environment build-up, which is the main focus for this year and next year for Jingdong. I think Baozun's operation experience can effectively improve the service capability of the non-standard category, like fashion, luxury, beauty, home, and others, which all of this, as mentioned, is our main focus, fashion, luxury, beauty, and home, this kind of non-standard category. And also, I think our value of this is not just about the marketing consumer acquisition, but also the after-sales customer service, and also how to assist the platform in operating their tailor-made solution for the pop-up flagship stores. So this is the direction for the next year.

Amit.

<unk>.

Queued up which is the main focus for this year nothing approaching I think about <unk> I. Appreciate your parents can effectively improved our service capability.

Standard category like fashion luxury beauty, who among others, which all of this I imagine is our.

Main focus, especially luxury beauty and home this kind of knocking on their category and also I think our value on there is not just about the Murphy consumer acquisitions on also the after sales customers.

Customer surveys and also how to assist our platform operating they are tailor made solutions.

I mean, Pablo flashy stuff. So this is the direction.

Speaker 5: So this is the direction for the next year regarding the cooperation with Jingdong. And you can see from the W11, actually, we have doubled the brands participating at Jingdong's W11 this year. And also it's

I mean for the last year regarding the collaboration with <unk> and you can see from the double 11 actually we have doubled.

The brands participating in those type of 11 this year and the also.

Speaker 5: result in the 100% YY growth compared with last year in terms of the transition itself. So the momentum is promising and even in this, I mean, right now actually we're being positively prepared for the double 12.

Without in a 100 per cent wildlife wells compared with last years in terms of the transition.

The momentum is promising and the evening. This I mean, right now actually we're being positive possibly prepare them for the double 12 Oh.

Speaker 5: platform too. I think the momentum is to keep the same pattern. Thank you.

Routing on top of them to I think some momentum later it keeps the same pattern. Thank you okay.

Speaker 4: In terms of the outlook for next year, we are currently in the process of doing our ideal operating plan.

In terms of the outlook for next year.

Conversely in the call center, so doing our operating plan.

Speaker 4: And so at this moment, we only have a direction.

So at this moment, we only have a direction in terms of both the G. N V will you continue to see.

Speaker 4: In terms of for the GMV, we continue to see, given our portfolio of brands, we continue to see a healthy growth year over year, maybe towards a high 18 to even the 20%-ish mark.

Our portfolio of brands continuing to see a higher fee growth year over year, maybe was a high teen to even.

The 20% ish Mark.

Speaker 4: But in terms of the revenue and profit, I think there are still a lot of moving space.

In terms of the revenue and profit I think there are still a lot of moving.

Moving the movie in Spain.

Speaker 4: So if, like I mentioned, we can see a recovery in terms of the overall economy and also the BCI impact stops from Q3 and Q4 next year, then from a revenue perspective, we could see a kind of a double-digit growth on the revenue.

No.

Ah yes.

Like I mentioned, we can see a recovery in terms of the overall economy and also the PCI impact stock from Q3, and Q4 next year and then from a revenue perspective, we could see.

A kind of a double digit growth on the revenue and in terms of the profit while we keep making the profit improvement we think our profitability will well in line with all of our revenue accruals. The same percentage, having said that we.

Speaker 4: While we keep making the profit improvement, we think our profitability will align with our revenue growth to the same percentage.

Speaker 4: We will also look into other M&A opportunities for inorganic growth, and also we will look into other opportunities to make investments into the future, for example, on some technology and to further enhance our omni-channel. So there are still some moving parts at this moment. So once we completed our annual operating plan.

We will also look into other M&A opportunities for inorganic growth and also we will look into other opportunities to make investments into the future. So for example on some technology and to further enhance our omnichannel, though there are still some moving parts.

At this moment so once we completed our annual operating plan.

Speaker 4: In the next few weeks, we will be able to give the market a little bit more guidance

But.

In the next couple of weeks, we will be able to give the market a little bit more guidance.

Sure. Thank you.

Okay.

Speaker 1: Thank you. Your next question comes from the line of Josh C.

Thank you. Your next question comes from the line of.

C G from Bank of America. Please go ahead.

Speaker 9: Thanks, management, for taking the questions. My question was related to, first, is our future M&A strategy in terms of, like, you know, for the rest of the year or next year. If we have seen other areas, we probably want to invest in the future. And second thing, just want to understand the connectivity impact between Ali and, you know, Tencent and how this affected our, you know, operations for brands.

Thanks management for taking my question. My question was related to I'm, sorry, our future M&A.

M&A strategy.

It's not like you know for the rest of Europe.

Next year, we have seen other areas, we'd probably want to invest in the future and second thing just want to understand the connectivity impact a bit.

Twin Ali and I'm, you know 10 cents and how this affected our in operations.

Our brands thanks.

Okay.

Speaker 4: So I will do the M&A strategy first and then maybe Tracy can comment on the connection between Tmall and Tencent. So on the M&A, overall we see the current market environment provides some really attractive evaluation on some of the targets.

I will do the I'm on any strategy first and then maybe Chris you can comment on the Mexican vitucci more so.

So on the M&A.

Overall, we see.

The current market environment provide some real attractive valuation on some of the target.

Speaker 4: and given our cash position we are actively looking for using the inorganic growth to create value for our shareholder and to ensure our future growth.

And given our cash position.

I'd simply looking for using the inorganic growth to create value for our shareholder and to ensure our future growth. So.

Speaker 4: The opportunity we are looking for in the four areas. So the number one is we still think the kind of the TP industry or the service provider industry needs to further consolidation.

The opportunity, we're looking a hole in the full Iran, but the number one is what's the whole thing.

The tender offer.

<unk> TP industry, all the service provider industry needs through further consolidation. So in this quarter in Q3, we're actually completing our acquisition of inflation, which is another E Commerce service provider we have.

Speaker 4: So, in this quarter, in Q3, we actually completed our acquisition of eFashion, which is another e-commerce service provider. We have seen some early signs that integration could lead to some great synergy.

<unk> seen some early signs the integration could lead to some great synergy.

Speaker 4: So we will continue on that, i.e. the e-commerce service provider consolidation, so that's number one.

So we will continue on that.

I E. The E Commerce service provider consolidation, so thats number one.

Speaker 4: The second thing is we will look into the capability enhancement.

Second thing is we will look into that capability in huntsman.

Speaker 4: So in this quarter, we completed the kind of two logistics deals. And also we completed one deal on the digital marketing. So that helped us to build our capability to provide a better solution to our brand partner, to enhance our kind of the stickiness with the customer. And also to win more business, so that's the second one.

So in this quarter, we completed.

The kind of two larger stakes.

And also we are.

Completed one deal.

Digital marketing so that's helped us to build our capability to provide a better solution to our brand partner to enhance all the kind of the stickiness with our customer and also to win more business. So that's the second one.

Speaker 4: The third one is we want to use the investment to improve our cooperation and the business with our brand.

The third one.

Yes.

Wants to use the investments to improve our operation and the business Wade our brands. So for example in the earlier this year, we made an investment into the pushing fashion group and waste the five brands in pushing second group. They all have seen some positive.

Speaker 4: So, for example, in the early this year, we make investment into the fashion group.

Speaker 4: and with the five brands in the Fortune 500 Group.

Speaker 4: They all have seen some positive year-on-year improvement. And our cooperation with the brand partner has been very good.

Year on year improvement and all of our cooperation with our brand partner has been Maury.

We are happy maintenance I'm really good progress. So we will continue on that and finally, we will be looking for some overseas expansion opportunity through both organic and inorganic. So that's overall it's our.

Speaker 4: And finally, we will be looking for some overseas expansion opportunity through both organic and inorganic.

Speaker 4: So that, overall, is our planned strategy for the M&A in the next year or so. And I also would like to add, so after we start to do more structured M&A, we have internally built a strong team of experienced people. And we believe we will be able to capture this opportunity in the following year.

Our planned strategy for the M&A.

Yeah, so and.

I also would like to add so after we started to do.

More structured M&A, we have internally.

Our strong team of experienced people and we believe we will be able to capture.

Germany in the following year.

Speaker 5: And regarding the Tencent and Taobao, we do see there's a lot of improvements on the consumer journey, especially about the share links and also in the payment level regarding the friends pay.

And then regarding the accounting and come on to.

We do see if theres a lot of improvement on the consumer journey, especially about her share links and also the payment model regarding investments paid but actually I think there are some.

Speaker 5: But actually, I think there's not seeing essential changes in the user behavior, which means

Has not seen in central change in user behavior, which means but right now it's hartsville off dramatically with a positive impact on traffic and the conversion itself.

Speaker 5: So right now, it's hard for us to evaluate the positive impact on traffic and the conversion itself.

Speaker 5: in the longer run, we do believe it because we know Taobao has many potential plans.

In the longer run.

We do believe that because we would narrow our tama has many potential plans.

Speaker 5: in the data level interaction that will be carried out in next year. So I think potentially it will bring a massive new wave of traffic for e-commerce.

I mean, they tend to have an interaction that's will be carried out Nike or do I think potentially it will bring a master new wave off with the topic of e-commerce, especially the social App user base is much bigger country. There this point yeah.

Speaker 10: especially the social app user base is much bigger compared to this point, yeah. Thank you.

And it's not that many things.

Thank you can be moved to the next question.

Yeah.

Management can be moved to the next question.

Yes go ahead, and that's why I'm pleased.

Speaker 1: You the next question comes from the line of roband young that.

Thank you. Your next question comes from the line of throughout but young from Sandler. Please go ahead.

Speaker 11: Hi, management. Thanks for taking my question. This is Robin asking on behalf of John Choi. Could management share the number of new brand partners that Baojun added in this quarter in addition to those 54 new stores in the non-Tmall channels?

Hi management. Thanks for taking my question, just Robin asking on behalf of John Choi.

<unk> mentioned.

The number of new brand partners that Biogen added in this quarter. In addition to dose 54, new stores and on Tmall channels. So with these.

Speaker 11: a new brand be able to offset some of the weakness in the first half of 2020.

New brands.

To offset some of the weakness in the first half of 2022. Thank you.

Yeah.

Speaker 4: OK, thank you for the question. I think we currently...

Okay I talked to you for the question I think.

We currently are.

Speaker 4: I mean, from the last quarter, we communicated to the market, we will stop giving guidance or giving the numbers on the numbers of grants.

I mean from the last quarter, we communicated to the market, we will start to gain in guidance or taking the numbers on the numbers of brands.

Speaker 4: That's partly because after we have done several acquisitions, we found there are several different brands being operated by the acquired company, which is very different from our Euro stand. So therefore, we will not give that.

That's partly because after we have done type of acquisition. We found there are several different brands being operated by the acquired company, it's very different from all the.

And so therefore, we will Oh, we will announce that but what we are constantly have seen is there are.

Speaker 4: But what we currently have seen is there are some good brands we have been able to gain from this quarter, and we have seen some of the major brands.

Hum good.

Brian.

You're able to gain from this quarter and we have seen.

Some of the major brands.

Speaker 4: In total, we have gained 29 brands, 9th edition in this quarter.

In total we have going into 'twenty nine front month edition.

This quarter.

Speaker 4: So that's the overall number we have gained in this quarter.

So that's the overall number would have kind of in this quarter.

Speaker 4: We also have seen on top of the new brand.

We also have seen on top of the new brands.

Speaker 4: We also have seen, we have added another 122 stores, which...

We also have seen that we have added another 122 stores wage.

Speaker 4: Many of them are coming from our existing kind of brand partner, which shows our existing brand partner are opening more stores. A lot of them are in the Albany channel. So for example, our existing Tmall brand partner opening JD, opening mini program stores. So that's contributed to the 122 additional stores.

Many of them are coming from our existing kind of brand partner, which shows our existing brand partners are opening more stores a lot of them are in the omnichannel they'll take them four hour.

Tmall brand partner opening J D Albany in mini programs. So.

So that has contributed to the 122 additional staff so going forward as we mentioned earlier the only channel strategy will further expand.

Speaker 4: So going forward, as we mentioned earlier, the omni-channel strategy will further expand.

Speaker 4: We think we will continue to see more thoughts being added in the coming years.

We will.

We think we will continue to see more thought being added in the coming yet because he wants to add something yes, actually I think a member's lives we've definitely a higher much higher than last year I mean the numbers.

Speaker 5: Actually, I think in numbers-wise, we're definitely much higher than last year, I mean, the numbers. But the pattern is different because this year, most of our new clients are concentrating on the luxury and this kind of category, which means we need longer time to prepare for the open up.

The passing steeper and because those are your most of our new client base.

Like does it contemplate the luxury and this kind of category, which means we need longer time to prepare for that open up.

Speaker 5: which means we put efforts in the Q2 and even Q3. But we have it in, I mean, maybe Q1 next year or Q2 next year. So you can see, Vincent just published some memory in the Q1 next year. We're gonna open over 20 stores in luxury. So that is actually the efforts we invested this year. And also on the other part is, I think, for the emerging channel like TikTok and the Jingdong. This more like extend our current brands into the new channels. So we call it the existing client new channels. And on this part, we have a very steady growth this year because actually, I think the infrastructure investment, including technology and the logistics have helped us more to fluency to the help our client to open their, I mean, only channel strategy. So all of this will also be contributed in the Q4 and also in the Q1 next year, yeah, thank you.

Which means we put efforts in our Q2 and even Q3, but we harvest in I mean, maybe Q1 next year on Q2 last year. So you can see our isn't just the publishing some of them are in that are in that.

Our Q1 last year, we got over 20 starts in luxury so that is actually the opposite.

We invested this year and also on the other party is a I think for the emerging channel I could talk on the Kingdom, there's more like expand our current brands into the new channels. So we call. These the existing kind new channels and on this part do we have a very steady.

This year, because actually I think the infrastructure enough money, including technology and Murdo just hop off mall to Lucy.

We don't see today help alcon to open there.

I mean only channel strategy. So this all of this will also be a come to be able to in Q.

Q4, and also in the in.

In Q1 last year.

<unk>.

Speaker 12: Thank you.

Thank you.

Speaker 1: As there are no further questions at this point of time, I would like to hand the call back to management for any closing remarks.

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

Speaker 2: Thank you, operator. In closing, on behalf of the Biocentric Management Team, we'd like to thank you for your participation in today's call. If you have any further questions, please feel free to reach out to us. Thank you again for joining us today. This concludes the call.

Thank you operator in closing on behalf of the management team I'd like to thank you for your participation in todays call.

You have any further questions. Please feel free to reach out to us. Thank you again for joining US today. This concludes the call.

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Speaker 13: Thanks for watching!

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Speaker 1: Good morning ladies and gentlemen. Thank you for standing by for Bausin's third quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. As a reminder, today's conference is being recorded. I will now turn the meeting over to your host for today's call, Ms. Windy Sun, Investor Relations Director of Bausin.

Good morning, ladies and gentlemen, thank you for standing by for <unk> third quarter 2021 earnings Conference call. At this time all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session. As a reminder, today's call.

<unk> is being recorded.

I will now turn the meeting or would your hosts for today's call Ms. Wendy Sun.

Mr Relations director of Boston. Please proceed Wendy.

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

Speaker 2: Thank you, operator. Thank you, everyone, and thank you for joining us today. Our third quarter 2021 earnings release was distributed earlier today and is available on our IR website at ir.boson.com, as well as on Global Newsware Services. They have also posted a PowerPoint presentation that accompanies our comments to the same IR website, where they are available for download.

<unk> 2021 earnings release was distributed earlier today and is available on our IR website at IR Dot thousand dot com as well as on global Newswire services. They have also posted a powerpoint presentation that accompanies our comments to the same IR website, where they are.

Available for download. This presentation is also available on the webcast, where we will move on the slides.

Speaker 2: This presentation is also available on our webcast, where we will move on the slides in synchronization with our remarks.

So no conversation, there's our remarks.

Speaker 2: On the call today from Belgium, we have Mr. Vincent Chiu, Chairman and Chief Executive Officer, Mr. Arthur Yu, our Chief Financial Officer, and Ms. Tracy Lee, our Vice President of Strategic Business Development. Ms. Chiu will review the business operations and the company highlights, followed by Mr. Yu, who will discuss financials and guidance. They will all be available to answer your questions during the Q&A section that follows.

On the call today from Biogen R&D, how Mr. <unk>, Zhu Chairman and Chief Executive Officer, Mr. Arthur E. L F.

The Chief Financial Officer, and they see Lee Vice President of strategic business development.

MS. Jill will review the business operations and the company highlights followed by Mr. <unk>, who will discuss financials and guidance. It will all be available to answer your questions. During the Q&A section that follows.

Speaker 2: Before we begin, I would like to remind you that this conference call contains forward-looking statements delaying the meaning of the Security Exchange Act of 1934 and the U.S. Private Security Litigation Reform Act of 1995.

Well again I would like to remind you that this conference call contains forward looking statements. They lay in the meaning of the Securities Exchange Act of 19 Stifel and the U S. Private Securities Litigation Reform Act of 1995. These forward looking statements are based upon management's current expectations and.

Speaker 2: These forward-looking statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risk, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ maturely from those in the forward-looking statement.

Current market and operating conditions and relates to invest that involve known unknown risks uncertainties and other factors.

I'll definitely call to predict and men Osage beyond company's control, which may cause the company's actual results to differ materially from those in the forward looking statement.

Speaker 2: Further information regarding these and other risks and safety factors is included in the company's filing with the USACC and in announcements on the website of Hong Kong Stock Exchange.

Further information regarding these and other risks uncertainties or factors is in.

Could it in the Companys filings with the U S. ACC any announcement on the website of Hong Kong stock Exchange. The company does not undertake any obligation to update any forward looking statement, except as required and applicable law. Finally, please note that unless otherwise stated.

Speaker 2: The company does not undertake any obligation to update any forward-looking statement except as required and applicable law.

Speaker 2: Finally, please note that unless otherwise stated, all figures mentioned during this call are in RMB.

All figures mentioned during this call. It is now my pleasure to introduce our chairman and Chief Executive Officer, Mr. Vincent Gilles mentioned please go ahead.

Speaker 2: It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Chiu. Vincent, please go ahead.

Speaker 3: Thank you, Wendy. Good morning and evening, everyone. Thank you all for joining us.

Thank you Wendy good morning, or the evening, everyone. Thank you all for joining us.

Today, we are hosting our earnings call for the first time from our new headquarters.

Speaker 3: Today we are hosting our earnings call for the first time from our new headquarters, where most of the Baozun family has finally come together under one roof.

Most of the potent family has finally come together under one roof.

Speaker 3: Ever since I founded Baozun back in 2007, our business expanded so rapidly so that we are end up being spread across multiple offices for many years until now. We call our new home a Baozun New One, symbolizing the start of a new journey, and we believe being physically together will greatly enhance our people's sense of belonging, collaboration, and productivity.

Ever since our founding the bulge in back in 2007, our business expanded so rapidly. So that we are end up being spread across multiple offices for many years until now.

We call our new home builds a new one symbolizing the startup of our new journey and we believe been physically together will greatly enhance our people's sense of belonging collaboration and productivity.

As many of you already know.

Speaker 3: China's e-commerce has recently experienced a variety of headwinds.

China's E Commerce has recently experienced a variety of headwinds include.

Including weak macro environment consumer sentiment drops as well as new policies and the requirements issued by the government.

Speaker 3: Despite all these short-term challenges, we were able to grow our revenues and deliver a non-gap operating profit of $2 million after a one-off adjustment.

Despite all these short term challenges, we were able to grow our revenues and deliver a non-GAAP operating profit of $2 million.

Adjustments.

I'm confident with our grid resilience and the system the ability of our business.

Speaker 3: We believe, given e-commerce is rooted in daily life, as headwinds slowly pass.

We believe given e-commerce is rooted in daily life and it is how do we slowly pass cars.

Speaker 3: Consumer sentiments will eventually improve and the various regulatory changes to the e-commerce environment will bring upon the next phase of long-term sustainable growth.

Consumer sentiment will eventually improve.

There is regulatory changes to the ecommerce environment will bring upon the next phase of long term sustainable growth.

Speaker 3: Changes and temporary challenges bring opportunities, especially for those who can identify them to be the first mover to adapt and innovate.

Changes in temporary challenges opportunities, especially for those who can't identify them to be the first mover to adapt and innovate.

Speaker 3: Let me share with you some of the opportunities we are seeing. Now please turn to slide number three.

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

Now please turn to slide number three.

Speaker 3: We continue to see the trend of consumption upgrade, especially in the luxury.

We continue to see the trend of consumption upgrade.

Especially in the luxury and the premium sector.

Speaker 3: We believe the nature of such growth is structural, with consumption upgrades driven by rising disposal income and demand for quality lifestyle of the younger generation.

We believe the nature of such growth is structural with consumption upgrade that's driven by rising disposable income and demand for quality lifestyle of the younger generation.

Speaker 3: The increased online penetration of luxury has also made luxury goods more accessible.

The increase online penetration of luxury has also made the luxury goods more accessible.

Speaker 3: And we have laid out a healthy pipeline from global luxury brand partners for next year.

And we have laid out a healthy pipeline from global luxury brand partners for next year.

Speaker 3: During the quarter, we onboarded seven luxury brands and we are forecasting GME from luxury to keep double-digit growth momentum in the next few quarters.

During the quarter, we on boarded seven luxury brands and we are forecasting Jim me from luxury to keep double digit growth momentum in next few quarters.

Speaker 3: In addition, with increasing demand for premium warehousing and logistic services, we commissioned one more brand new luxury dedicated warehouse to better support our brand.

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

Speaker 3: For sportswear, despite the lingering impact from the Better Quality Initiative, we have witnessed a modest recovery trend. Long-term-wise, as the government aims to further promote sports and physical exercises in the 14th Five-Year Plan,

For sportswear, despite the lingering impact from the better quality initiative.

Witnessed a modest recovery trend long term wise and so government aims to further promote sports and the physical exercises in the Fourteens five year plan.

Speaker 3: We believe sportswear category will likely see better goals.

We believe sportswear category, we will likely see better growth.

Speaker 3: Many leading international sportswear brands view China as one of the most critical and strategic target markets.

Many leading international sportswear brands.

We view, China as one of the most critical and strategic target markets.

Speaker 3: And some are even accelerating its localization efforts as a brand of China.

And some are even accelerating is localization efforts as a brand of China.

Speaker 3: In addition, we have identified what we believe to be structural growth opportunity for some sub-verticals, such as outdoor sportswear and adventure sports, which will likely to be the incremental drivers.

In addition.

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

Speaker 3: Moving on to our omni-channel programs, progress. First.

Moving on to our Omnichannel programs progress first.

Speaker 3: An increasing number of brand partners are accelerating the deployment of omni-channel strategy.

Increasing number of brands partners are accelerating the deployment of our Omnichannel strategy.

Speaker 3: And in this quarter alone, we added 54 stores for non-TMO channels.

And in this quarter alone, we added 54 stores for known chemo channels.

Speaker 3: of these newly opened stores, over one-third are JD stores.

These newly opened the stores over one third of our JV source.

Speaker 3: We are glad to see our GMB generated on JD nearly tripled from a year ago.

We are glad to see <unk> generated on JD nearly tripled from a year ago.

Speaker 3: accounting for roughly 10% of our total GMP.

Accounting for roughly 10% of our total GMB.

Speaker 3: In addition, we continue to make programs, in-tension mini-programs for private domain, as well as O2O initiatives.

In addition, we continue to make progress in Tencent mini programs, while private domain as well as o'toole initiatives.

Speaker 3: More importantly, the recurring revenue stream of store operations marketing from our mini-programs ecosystems continue to grow their stake.

More importantly.

The recurring revenue stream of store operations marketing from our own mini program ecosystems continue to grow their stake.

Of the merchant channel, we have made quite some breakthrough.

Speaker 3: of the emerging channels. We have made quite some breakthroughs, but we are happy to...

We are happy to be there first.

Speaker 3: to be at the forefront of action, helping our brand partners to explore and expand into such an emerging channel, with over two dozen of brand partners piloting there. Our unique insight in brand value appropriation and merchandising in this regard has been instrumental in delivering strong sales on some of our trial programs.

It will be at the forefront of actions, helping our brand partners to explore and expand into such the emerging channel with over two dozen of brands partners are piloting there.

Her unique insights in brand value appropriation.

And the merchandising in this regard has been instrumental in delivering strong sales on some of our trial programs.

Speaker 3: In the first nine months of 2021, we helped over our brands to generate over 100 million in GMB with extremely successful cases for one fast fashion brand and one FMCG brand.

In the first nine months of 'twenty or 'twenty, one we helped over our brands to generate over 100 million and GMB.

We are extremely successful cases for one fast fashion brands and FMC deep breath.

Speaker 3: The trend has been encouraging month over month, as in October alone, our brand partners generated over 70 million GMB.

The trend has been encouraging months over months October along with our brand partners generated over 70 million GMB.

Speaker 3: It is worth noting that in some of our end-to-end services, we have managed to hit a take rate of over 20%.

It is worth nothing that in some of our end to end services, we have managed to hit a take rate of over 20%.

Speaker 3: indicating attractive economics potential for us on Douyin.

Indicating attractive economics potential for us.

Sure.

Speaker 3: Although some emerging channels are still in early phase exploring optimum monetization models, we are happy to see our initial channel investments already start to bear fruit.

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

Speaker 3: Just a rough reference, in the third quarter, our revenue contribution from non-TMO platforms along with the associated back-end services has continued to increase to more than 20%.

Just a rough reference in the third quarter of revenue contribution from non TMO platforms, along with the associated backend services has continued to increase to more than 20%.

Now please turn to slide number four.

Speaker 3: On the technology front, we further upgraded our core e-commerce infrastructure to be more omni-channel oriented.

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

Speaker 3: Following the government's new policies regarding data privacy, we also upgraded our system for personal identity information protection to ensure our brand partners are compliant with the latest laws and regulations.

Following the governments new policy regarding data privacy, we also upgraded our system for personal identity information protection to ensure brand partners are compliant with the latest laws and regulations.

Speaker 3: Such upgrades applied to our order management system, warehousing and logistics management system, and CRM ensure smooth order fulfillment and stronger user engagement.

Such upgrades applied tour over there.

And in the system warehouse sand and logistics management system in the CRM ensure smooth order fulfillment and a stronger user engagement.

Speaker 3: To drive business operating efficiency and flexibility, we keep making further upgrades to enable digitalized, centralized, and integrated operating platforms and the middle office.

The drive business operating efficiency and flexibility.

Keep making further upgrades to enable our digitalized centralized and the Ingrid integrated operating platforms in the Middle office.

Speaker 3: ROSS now has a multi-level authorization system helping our brand partners manage distributed networks.

Ross No has a multi level authorization that system.

<unk> partners manage distributed networks.

Speaker 3: And we launched Service Anywhere, or SANI, an intelligent customer service management system for unified workflow dispatching, training, and resource management.

And we launched service anywhere or Fannie and intelligent customer service management systems with unified workflow dispatching training and the resource management.

Speaker 3: We believe Sany is both unique and disruptive within the e-commerce industry and we have seen great uptake by over 300 brand stores deploying since its launch and in just one month time frame.

We believe semi is both unique and disruptive will be.

The e-commerce industry, although we have seen great uptake by over 300 brands stores deploying since its launch in just one month time frame.

Speaker 3: Lastly, our remote service centers in Nantong and Hefei are ramping up smoothly, with over 1,000 employees moved over.

Lastly, our remote service centers in Nantong.

Ramping up shop smoothly.

With aura was smaller than the employees moved over.

Speaker 3: These regional service centers and planning are highly complementary, allowing us to obtain better service quality, gaining greater operational efficiency while lowering operating costs.

These regional service centers in the study are highly complementary, allowing us to obtain obtain better service quality King.

Greater operational efficiency, while lowering operating cost.

Speaker 3: We anticipate such initiative to save over $20 million in operating costs in 2022.

We anticipate such initiative to save over 20 million in operating cost in 2022.

Speaker 3: In addition, we received a 30% equity interest investment from Cainiao Network into Baotong. Our warehousing and logistics are

In addition, we received a 30% equity interest investment from China on their work into Bolton, our warehousing and logistics are.

Speaker 3: At the beginning of the year, when we formulated our medium-term plan, we set objectives that Baotong needs to be a disruptive game, and that it needed to expand business scope to be wider and deeper, while also innovating its supply chain practices.

At the beginning of the year when we formulated our medium term plan, we said the objective set volatile needs to be.

Disruptive game and that is needed to expand business scope to be wider and deeper.

We're also innovating is supply chain practices.

Speaker 3: We considered several leading players in the industry to be our strategic partner, each with its own advantages and characteristics.

We considered several leading players in the industry to be our strategic partner each with its own advantages and the characteristics.

Speaker 3: Ultimately, we concluded that Baotong and Tsanya are the most complementary in terms of capabilities and assets.

Ultimately, we concluded that the volatility and the time they are the most complementary in terms of our capabilities and assets.

Speaker 3: The combination elevates the partnership competitive advantage in the sports, outdoor, luxury and cosmetics industry.

The combination elevates the partnership competitive advantage in the spores al Dor luxury and the cosmetics industry.

Speaker 3: We believe such strategic alliance will lead to substantial cost optimization and a greater synergistic business opportunity.

We believe such strategic Alliance, we will lead to substantial cost optimization and the greater synergistic business opportunities.

Speaker 3: In summary, we witnessed a number of short-term headwinds and we anticipate further changes as the industry adapts and evolves.

In summary, we witnessed a number of short term headwinds, although we anticipate further changes as the industry adapts and evolves.

Speaker 3: As part of our corporate vision, we have always believed that technology empowers success, and we're committed to delivering quality through developing our people.

As part of our corporate vision, we have always believed that technology empowers success and are committed to delivering quality is through developing our people.

Speaker 3: One quick example is our advanced preparations for the year's Double 11 Festival, where we have facilitated more than 40 brand partners to rank number one in order value in their specific product categories during the MAGA campaign.

One quick example is our advanced preparations for the year years double 11 festival, where were facilitated more than 40 brands partners to rank number one in all their value in their specific product categories. During the Mega campaign.

Speaker 3: Throughout the year, we have made considerable investment in enhancing our platform, enriching our technological capabilities, and as well as establishing a special force full of talent.

Throughout the year, we have made to the ruble investment in housing or a platform enriching the technology technological capabilities and as well.

Well as establishing a special forces full of pellets.

Speaker 3: We believe Bolton has the most comprehensive, reliable and powerful set of infrastructure in empowering our business partners.

We believe boats and has the most comprehensive reliable and powerful set of infrastructure and empowering our business partners.

Speaker 3: We are more confident in our competitive landscape. And as a leader of brand e-commerce founder.

We are more confident in your competitive landscape and as a leader of E Commerce father.

Speaker 3: We are well-placed to navigate through these changes, adapt to the new environment, and capitalize on our opportunities.

We are well placed.

To navigate through these changes adapts to the new environment, and Kipp and capitalize our opportunities.

Speaker 3: At the same time, we continue to promote sustainable Baltic ecosystem for the longer term.

At the same time, we continue to promote sustainable both bozeman ecosystem for the longer term.

Speaker 3: And I'm happy to point out that this September MSEI, in recognition of our comprehensive ESG initiatives, upgraded Boson's ESG rating to NA, as demonstrated on slide number five.

And I'm happy to point out that this September.

MSCI in recognition of our comprehensive ESG initiatives upgraded it causes ESG rating to it made as demonstrated on slide number five.

Speaker 3: We are very proud of our team's resilience through the quarter and are confident in the future.

We are very proud of our team's resilience through the quarter and are confident in the future.

Speaker 4: I will now pass the call over to other to go through our financials. Thank you. Okay. Thank you, Vincent. And hello, everyone.

I will now pass the call over to other to go through our financials. Thank you.

Okay. Thank you and Hello, everyone.

Speaker 4: Before diving into the numbers for this quarter, I would like to talk about three key topics.

Before diving into the numbers for this quarter I would like to talk about three key topics number one our M&A strategy.

Speaker 4: number one, our M&A strategy, number two, the near and long-term impact of our recent acquisitions, and number three, our prudent and conservative accounting approach. Now please turn to

Number two the near and the long term impact of our recent acquisition and number three our prudent and conservative accounting approach.

Now please turn to slide number six.

Speaker 4: Firstly, I'm confident that our M&A plan is making solid progress.

Firstly I'm confident that all while I'm on the patent is making solid progress.

Speaker 4: We target complementary business and enhance our vertical competitiveness, expand economies of scale, and help make our business portfolio more resilient and balanced.

When you target complementary businesses and enhance our core competitiveness.

They expand the economies of scale and help make our business portfolio more resilient and talent.

Speaker 4: We believe the current tough market environment offers an excellent window of opportunity.

We believe the current tough market environment offers an excellent window of opportunity.

Speaker 4: for us to seek and consummate a variety of strategic long-term focused acquisitions at a favourable valuation.

Hello to seek and consuming Alvarez hail, Hey, Jake long term focused acquisition at a favorable valuation.

Speaker 4: The initial revenue contribution from over-acquisition earlier this year helped drive top-line growth and balance against the market headwind.

The initial revenue contribution from our acquisition.

Yes.

Drive top line growth and balanced against a market headwind.

Speaker 4: And we will look to do more of these files on acquisitions as opportunities arise.

And the way, we will look to do more of these files on acquisition.

Opportunities arises.

Speaker 4: And secondly, while we continue to make notable progress in our iMoney strategy and integrating new acquisitions, let me provide you with the anticipated near and long-term impacts to our business and financial.

And secondly, while we continue to make multiple programs in our M&A strategy.

And integrating our new acquisition.

Alright, you weight, the anticipated near and long term impact to our business and financial.

Speaker 4: One near-term impact is that world initial revenue contribution benefited our top line this quarter.

One near term impact is that while the initial revenue contribution benefits our top line this quarter.

Speaker 4: The associated cost contributed to a small quarterly operating losses of $7 million on a non-debt basis.

<unk> had caused contribute a small quarterly operating losses of 7 million on a noncash basis.

Speaker 4: As acquisitions typically need several quarters to be integrated, we anticipate an improving bottom line contribution in the future.

Acquisition typically need several quarters to be integrated.

We anticipate an improving bottom line contribution in the future.

Speaker 4: On the positive side, we expect greater synergies and ROI once acquisition is fully integrated.

On the positive side we.

I expect great has penetrated and Rois, one acquisitions fully integrated well.

Speaker 4: which will contribute to our financial resilience as well.

Will contribute to our financial retail in as well.

Speaker 4: And thirdly and finally, we strive for a prudent and conservative accounting approach in our financial reporting.

And thirdly, and finally, we strive for appropriate and conservative accounting approach in our financial reporting.

I remember reporting period, we thoroughly evaluated our iPad and liabilities.

Speaker 4: every reporting period, we thoroughly evaluate our assets and liabilities.

Speaker 4: And this quarter, we conservatively made a decision to reduce the outstanding accounts receivables of one distributor via a write-down of 86 million.

And this quarter, we conservatively made a decision to reduce the outstanding accounts receivable of one introduced.

We're a write down of $86 million.

Speaker 4: Although we have initiated legal proceedings to collect the overdue amount and believe we have a reasonable chance to prevail, we decided it is more prudent at this time to write down 65 percent of the total amount owned to us. We believe this is

Although we have initiated a legal proceeding well collect the OLED Amar and believe we have a reasonable chance to mobile.

I think it is more prudent at this time, all right stop taking 45% of the total amount almost swap.

What do you believe this is a one off adjustment and it is an isolated incident in our whole can get okay.

and it is an isolated incident in our 14 years of history.

Overall, our account receivables are healthy and we have taken measures to strengthen risk management and quality control in the future.

Overall, our accounts receivables are healthy and we'll have to take out.

Brands risk management and quality control in the future.

While this shutdown had a negative impact on this culture, it preserved the integrity of our financial reporting.

Well this restaurant had a negative impact this quarter.

The integrity of our financial reporting.

Now let me share with you some observations on the consumption trend during the quarter. Please turn to slide number 7.

Now, let me share with you some observation on the Consumptions from.

During the quarter, please turn to slide number seven.

but to share some of the macro statistics in light of the weakening of consumption momentum in China.

To share some of the muscle of his stake in light of the weakening of consumption momentum in China.

according to the National Bureau of Statistics of China.

According to the National Bureau of statistics of China.

Retail sales growth decelerated noticeably to 5.1% year-on-year in the third quarter, compared with 13.9% a quarter ago.

Retail sales growth.

Salary paid no not hopefully to five 1% year on year in the third quarter comparably 13, 9% a quarter ago, while E. Commerce continued to gain share of retail apparel online physical goods.

While e-commerce continues to gain share of retail, the growth rate of online physical goods for the third quarter also fell to 8.7%, from 13.3% in the second quarter, and 25.8% in the first quarter of 2021.

Third quarter profile to eight 7%.

From 13, 3% in the second quarter.

'twenty and.

I'm 25, 8%.

Quarter of 2021.

Respectively in the previous two quarters.

This questionnaire categories including apparel and appliance struggles, while FMCG and electronics largely.

Question.

Second grade, including apparel and applying struggled.

C G in electronics.

Yeah.

That macro consumption trend was consistent with our financial performance as depicted on slide number 8.

Soft consumption.

Consumption trend.

Consistent with our financial performance the.

Depicted on slide number eight.

During the quarter, our total GME increased by 48% to $16.1 billion.

During the quarter on the total GLA increased by 48% to $16 1 billion.

However, there was a gap among performance-based sectors.

However, there was a cat among performance site.

Electronics did extremely well with three-digit year-on-year increase, as there was an incremental 3C brand that launched several new SKUs during this third quarter.

Electronics, Pete extremely while we frequently you aren't getting right.

There was an incremental three three brands that launched several new <unk> during the third quarter.

In fact, if we are excluding that, our PMV growth would have been 2% in line with our observations of weaker consumption.

In fact.

In fact, if we excluding that all the <unk> growth would have been 2%.

In line with our population.

Our consumption.

In addition to electronics, FMCG and Luxray both deliver high double-digit growth rate.

Yes.

Yes, <unk> for electronics.

ETE and luxury.

Delivered high double digit growth rate.

On the flip side, apparel and accessories declined by the mid-teens percentage during the quarter, with persistent impacts from the ECI, adding further to the weakened consumption sentiment.

I'm pretty excited.

Payroll attach rate declined at a mid teen attendance during the quarter wave <unk> impact from the Dci.

Further to the weakened consumption sentiment.

Sportswear continued to show a year over year decline.

However, the contraction rate has narrowed and we now see a moderate months by months recovery trend.

Applying also declined by a mid-single digit.

Appliance also declined by a mid single digit.

Overall, the GMV split between categories for the first nine months are as follows.

Overall, the <unk> split between category for the first nine months I follow up.

Apparel and accessories at 40%, followed by electronics at 30%, FMCG at 16%, and appliance at mid-single digit.

Apparel and accessory at 14%.

Followed by electronics at a 13% <unk> 16 per ton and upon.

Single digit.

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

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

Specifically, our distribution GMV declined by 13% to 786 million, while non-distribution GMV increased 54% to 15.3 billion.

Specifically, our distribution GMB declined by 13%.

786 million, while non distribution <unk> TMA increased 54% to 15 3 billion.

Please turn to slide number nine.

Total net revenues increased by 4% to $1.9 billion, of which our acquisitions contributed a total revenue of $212 million.

Total net revenue increased by 4% to $1 9 billion.

Page <unk>.

Acquisitions contributed a total revenue of $212 million.

Product sales revenues declined by 13%, mainly due to the decline of key brands in the appliance category.

Product sales revenue declined by 13%, mainly due to the decline of key brands in the us in the appliance category.

Our planned business model transition of a new brand partner, as well as our title control on brand and channel selection criteria for the distribution model. In line

Our plan is a business model transition.

Our new brand partner as well as our tighter control on brands and channel selection criteria for the distribution model.

In light of the macro uncertainty.

Our strategy for our distribution model is to pursue high-quality growth with a clear focus on profitability and working capital efficiency.

Our strategy for our distribution model is to pursue a high quality growth with a clear focus on profitability and working capital efficiency.

Now turning to our service revenue.

It increased by 17% to $1.2 billion.

It increased by 17% or $1 2 billion.

benefiting from several acquisitions made earlier this year.

Benefiting from several acquisitions made earlier this year.

Service revenue of our organic business declined by 4% to about $1 billion, as BCI continued to impact sales of many sportswear brands.

Service revenue of our organic business declined by 4% to about $1 billion ASP.

As <unk> continued to impact sales of minus both wire breath.

If we refer to the total outbound orders of our logistic service.

We refer to the total outbound order of our logistic services.

it declined by more than 25% year-on-year for the quarter.

Declined by more than 25% year on year for the quarter.

As the proportion of our consignment model reduced, our blended take rate also declined accordingly. During the quarter, the take rate for the non-distribution model was 7.8%, down from 10.3% a year ago.

Is the proportion of our consignment model reduce.

Our blended take rate also declined accordingly.

During the quarter the take rate for the non distribution model was seven 8% down from 10.3% a year ago looking.

looking at the take rate of the confinement model itself on a like-for-like basis.

Looking at the take rate of the consignment model itself on a like for like basis. It is flat year on year at 12, 2%.

It is flat year-on-year at 12.2%.

During the third quarter.

Our overall gross profit totaled $1.3 billion, an increase of 12.7% year-over-year, and our gross profit margin expanded by 540 business points to 68.6% from 63.2% a year ago.

Our overall gross profit totaled $1 3 billion.

An increase of 12, 7% year over year and our gross profit margin expanded by 540 basis point to 68, 6% from 63, 2% a year ago.

Now let's turn to operating expenses on slide number 10.

Now, let's turn to operating expenses.

On slide number 10.

Fulfillment expenses were $634 million, an increase of 51% year-over-year.

Fulfillment expenses was $634 million.

Increase of 51% year over year.

This quarter, there was an incremental fulfillment cost of $205 million related to our two newly acquired warehouse and supply chain businesses, Baotiantong and Baobida.

This quarter, there was an incremental fulfillment cost of $205 million related to our two newly acquired warehouse and supply chain businesses.

All the <unk> and <unk>.

sales and marketing expenses were $536 million.

Our sales and marketing expenses were $536 million.

an increase of 6.9% year-over-year.

An increase of six 9% year over year.

The increase was mainly due to increased staff at our business scale and an expansion in headcounts in digital marketing services, which was partially offset by efficiency improvements.

The increase was mainly due to increased staff as our business scales.

And I expansion in high comps in digital marketing services.

<unk> was partially offset by efficiency improvements.

Technology and content expenses were $140 million.

An increase of 12, 2% year over year the.

The increase was mainly due to higher staff costs or incremental IT development offset by efficiency improvement.

The increase was mainly due to higher staff costs for incremental development.

All set by efficiency improvement.

G&A expenses increased to $191 million.

G&A expenses increased to $191 million.

This increase was mainly due to some of our investment in talent and sustainability, as well as a write-down of 86 million in account receivables from one specific client that I talked about earlier.

This increase was mainly due to timing of our investment in talent and sustainability as well as a lifestyle of $86 million in accounts receivable from one specific client.

I talked about.

Okay.

As a percentage of GMV, we continue to optimize all types to drive greater operational efficiency, as displayed on slide number 11.

As a percentage of <unk>, we continue to optimize opex looks like greater operational efficiency as displayed on slide number 11.

For the third quarter total opex as a percentage of DMV improved by 80 basis points to nine 1% driven by efficiency in marketing and technology ratio.

For the third quarter, total OPEX as a percentage of GMV improved by 88 base point to 9.1%, driven by efficiency gain in marketing and technology ratios.

More specifically, our sales and marketing improved by 130 base points to 3.3% from 4.6% a year ago.

More specifically, our sales and marketing improved by 130 basis point to three 3% from four 6% a year ago.

driven by a combination of more effective digital marketing services and lower marketing and promotion expenses in absolute dollars.

Driven by a combination of more effective digital marketing services, and lower marketing and promotional expenses in absolute dollars.

We also improved by 20 base points from higher efficiency in technology ratio. This quarter, the total fulfillment ratio was unchanged year over year at 3.9 percent.

We also improved by 20 basis points from higher efficiency in technology ratio.

This quarter the total fulfillment ratio was unchanged year over year at three 9%.

Lastly, our GNA, due to the one-off extraordinary breakdown, as well as more strategic investment in talent, increased to 1.2% from 0.5% a year ago.

Lastly, our G&A due to the one off extra other menu or breakdown as well as more strategic investments in talent.

Increased to one 2% from <unk>, 5% a year ago.

Now turning to slide number 12.

Reflecting the above mentioned items, our non-gap loss from operations was 84 million during the quarter and non-gap OP margin was negative 4.4%.

Reflecting the above mentioned items, our non-GAAP loss from operations was $84 million during the quarter and non-GAAP op margin was negative four 4%.

And on slide 13, let me walk you through our analysis on non-GAP operating profit.

And on slide two.

13, let me walk you through.

<unk> non-GAAP operating profit.

The slide shows the breakdown of our various operating profit and cost streams and how they evolved year over year.

This slide shows the breakdown of our various operating profit on a cost per screen and how they evolve year over year.

I would like to note that this is an indicative number which aims for you to better understand our financial performance.

I would like to note that this is indicative number wait.

For you to better understand our financial performance.

So in red, you can see the BCI continued to have a major negative impact.

But you're right you can see the PCI continued to have a major negative impact.

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

Trac, Tom performance of sportswear fashion apparel, along with our organic logistic business.

We are encouraged to see United while revenues from our distribution model is.

We are encouraged to see that while revenues from our distribution model decrease.

While all while revenue from our <unk> fusion model a decreased altra.

Operating profit from distribution was largely unchanged year-over-year, benefiting from our high-quality growth.

Operating profit from distribution was largely unchanged year over year benefiting from our high quality growth strategy.

Additionally, some of our strategic investments combined for a negative variance of 42 million, including the temporary higher cost of concurrently occupying two headquarters during our move to build a new one, as well as increasing talent recruitment and investment in our domain and regional service center.

Additionally, some of our strategic investments combined for a negative environment until <unk> 2 million.

Including the temporary higher costs of concurrently occupying two headquarters.

Our move to both the new one.

While increasing talent recruitment and investment in our toe in on the regional service centers.

In blue, we saw positive gains in digital marketing, luxury, and technology.

In Peru, we saw positive gains in digital marketing luxury and technology.

As mentioned earlier, we also had the extraordinary write-down of $86 million, excluding wage over adjusted non-GAAP operating profits, which is calculated based on the non-GAAP operating profits. Adding back the write-down of $86 million was a positive at $2 million.

As mentioned earlier, we also had the extraordinary write down of eight 6 million.

Excluding wage our adjusted non-GAAP operating profit.

It's calculated based on the non type health care. It can profit, adding back the write down of eight 6 million was a positive <unk> 2 million.

Turning to slide 14, non-GAAP net loss attributable to ordinary shareholders post held 88 million and basic and diluted non-GAAP loss.

Turning to slide 14, non-GAAP net loss attributable to ordinary shareholders totaled $88 million, and basic and diluted non-GAAP loss per ADS were both $1.21 for the quarter.

Yes.

Both one one.

121 for the quarter.

Lastly, turning to slide 15, operating cash flow for the quarter was negative 740 million. As Europe cash flow was impacted by our need to procure additional infantry during the third quarter in preparation for the double 11 season in November .

Lastly, turning to slide 15 operating cash flow for the quarter was negative 400 was negative 114 Union as euro cash flow was impacted by our need to procure additional inventory during the third quarter.

In preparation for the double 11 peak season in November.

During the quarter, we also deployed $178 million for M&A activities.

During the quarter, we also deployed $178 million for M&A activity.

Total financing cash outflow was $739 million, mainly due to our execution of share repurchase program.

Total financing cash outflow was 139 million, mainly due to our execution of share repurchase program.

This means our Board of Directors authorized a share repurchase program, allowing us to repurchase up to US$125 million worth of our share.

This may our board of directors authorized a share repurchase program, allowing us to repurchase up to $125 million worth of our share.

As of September 30, 2021, we completed the full purchase, totaled $18.6 million ordinary share, with an average cost of $6.7 per ordinary share. Each ADS represents 3 plus A ordinary shares.

September the 30th 2021, we completed the full question totaled $18 6 million ordinary shares weighted average cost of 6.7 ordinary shares.

Each ads.

Represent three class a ordinary shares.

As of September 30, 2021, our cash and cash equivalent totaled $2.8 billion.

I saw September 3rd has 2021 our cash and cash equivalent totaled $2 8 billion.

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

Importantly, as discussed earlier.

<unk> and logistics and to take both home received the investments payment from China network in late October.

Therefore, we believe we have sufficient cash for normal operation and pursuing additional strategy.

And to pursue.

Additional strategic opportunities.

As we are confident with our comfortable cash position, I am pleased to announce that the Board of Directors has approved an additional share repurchase of up to US$15 million for the next 12 months.

We are confident with our comfortable cash position.

Pleased to announce that.

The board of Directors has approved an additional share repurchase of up to $15 million over the next 12 months.

And that wraps up my financial review for the third quarter and comfortable with our prepared remarks, contrary one operator, we are now ready to begin the Q&A session.

That wraps up my financial review for the third quarter and concludes our prepared remarks. Thank you, everyone. Operator, we are now ready to begin the Q&A session.

Certainly. Participants who wish to ask a question, please press star one on your telephone. If you would like to withdraw your question, please press the pound or hash.

Certainly.

Disciplines, who wish to ask a question. Please press star one on your telephone if you would like to withdraw your question. Please press the pound or hash key.

star followed by one to ask a question.

Followed by one to ask your question.

The first question comes from the line from Citigroup.

Your first question comes from the line that Alicia Yap from Citigroup. Please go ahead.

Hi. Good evening, management. Thanks for taking my questions. The first question that I have, actually, I think you explained, you know, very well the discrepancy between the GMB growth, especially on the non-distribution GMB versus the service revenue growth this quarter. But I think my follow-up question from that is

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

The first question that I have actually I think you explained.

Sorry about the discrepancy between.

The GMB growth, especially on the non <unk> <unk> versus the service revenue growth this quarter.

But I think my follow up questions on that one can be a stack these discretionary categories like apparel sportswear.

When can we expect these discretionary category like the apparels or the sportswear to recover to a more normalized level, which could help our service revenue to grow more in line with the non-distribution GMV growth?

However to a more normalized level, which could help our service revenue to grow more in line.

With the non distribution GNP growth.

And then, secondly, also on the single-phase performance, I think you announced about 16.3% media over year growth during the single-phase performance. So should we expect these more or less the 4Q GMV growth to be, or any colors on the service revenue for 4Q as far as the margin direction for 4Q as well? Thank you.

And then.

Also on this page.

I think you announced about 16, 3%.

Growth doing this thing does safe.

So should we expect more or less for Q GMB growth too.

To be or any colors on the surface rather neutral for Q, that's why the margin walk yourself. Thank you.

Okay.

Okay, thank you Alicia. I will take your question. On the first one, you were talking about the sport coming back to the normal growth. Back in quarter two, when we communicated to the market,

Okay, Lisa I will take the question on the first one.

You were talking about us coming back to the normal accrual.

Nike Inc quarter, two when we communicate to the market we felt the PCI it could be one off impact and in Q3 and Q4, it will get back to normal and our current assessment.

We thought the BCI could be one-off impact, and in Q3 and Q4, it will be getting back to normal. Our current assessment is that it will take longer than our expectation to get back to normal.

Take longer than our expectation to get back to normal.

So even though the decline trend has narrowed down from Q3 to Q4, we expect this trend to continue into the next year, at least a quarter 1 and quarter 2.

So even though the decline trend has coming back.

To narrow down from Q3 to Q.

From Q3, and also will go in to further narrow down in Q4.

Expect this trend to continue into the next year at least a quarter in quarter two.

Our current view is maybe from the quarter three onward we could see some positive kind of trend on the spot and apparently.

Our current view is maybe from quarter three onwards, we could see some positive <unk>.

Kind of trend on the spot and apparel.

And also I would like to add, so despite we have some hype wins on the sport and apparel, we do have some positive gains from the luxury and also FMCG. And in this quarter, we have seen a good growth on the GMV on the luxury and we recently have won quite a number of luxury brands.

And also I would like to add.

So these banks, we have some headwinds on the spot and apparel, we do have some positives from the luxury and also <unk> and in this quarter we have.

We have seen a good growth the CMV on the luxury and we recently has waned quite a numbers of luxury brands.

So we anticipate the strength of luxury will continue in the next few quarters.

We anticipate the strength of luxury will continue in the next few quarters and also our Omnichannel strategy.

And also, our omni-channel strategy has helped us to grow the FMCG and some other categories which also can help us to balance the impact from the sport. So that's all.

Half two growth <unk> and some other category, which also can help us too.

To balance that.

Impact from the spot.

So that's on the.

On the first question.

So on the second question, regarding to the single day performance.

On the second question regarding to the single day performance.

We still, as I mentioned, overall we still see some high winds in the quarter four.

We're still as I mentioned overall, we still see some headwind in the quarter fall. So from <unk> perspective, what do you think quarter four will be a low teen.

So from a GMB perspective we think waterfall will be a low in kind of growth in the GMB.

Growth in the CMV. So we saw this fall and apparel will slowly.

So we saw the sports and apparel will slowly will slowly recover.

I will slowly recover.

But overall, it will slowly recover, but within the sports, there are some highlights or some kind of the spotlights we would like to highlight, which is some sub-vertical, such as the outdoor or the winter sports.

But overall it will slowly recover but within the sports there are some highlights or some kind of the spotlight, we would like to highlight which is some stop vertical such as the all store or the winter spot because.

because we will hold the Winter Olympics next year. We see that.

We will hold the Winter Olympics next year, we see that.

from some of the brands we do, we see some good growth.

From some of the brands, we do see some good growth and also as I mentioned that luxury will continue.

And also, as I mentioned, the luxury will continue, it's very strong trend into the quarter fall. So that's the overall what we have seen.

Very strong trend.

Into the quarter fall so that's the overall.

We have seen.

Thank you.

Okay. Thank you.

Your next question comes from the line of Tom Schaap from Jefferies, please go ahead.

Your next question comes from line of Tom.

So from Jefferies. Please go ahead.

Hi, Good evening, Thanks management for taking my question.

Hi, good evening. Thanks, management, for taking my question. I think management has mentioned in the prepared remarks about the Long Timor GMV trend. Can you comment about how we should think about the mix between Timor and Long Timor over the next couple of years?

As mentioned.

You mentioned in the prepared remarks about the lawn team more GMB trend can you comment about how we should think about the mix between T mobile and on T Mall opened.

A couple of years.

And then my second question is more about the cooperation with China. Can you share with us more about the strategies going forward and the synergies that we should expect? Thank you.

And then my second question is more about the cooperation with China can you share with us more about the strategies going forward and the synergies that we should expect thank you.

Yes.

Okay.

So I will take the question on the Timo and non-Timo, and probably comment a little bit on Tainiu. Yeah.

Yes.

So I will I will take the question on the Tmall Tmall and appropriately common political behind Tainio yet.

So in terms of the T-Mall, so as I mentioned earlier, for this quarter, we have seen the T-Mall has seen some of the weakness. And if we take out that one specific electronic brand,

So in terms of the chemo, so as I mentioned earlier.

So this quarter, we have seen the T mall.

<unk>.

It has.

<unk> seen some weakening and eight week take halt that's one let's say.

Electronic brands for the first time, the non T Mo has surpassed 50% off.

For the first time, the non-T-mole has surpassed 50%.

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

Overall CMV, so that's a trend.

We have seen very clearly I E people are starting to explore more opportunities in terms of the non human channel.

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

Our expectation is let's say, it's a trend.

We'll continue at least into the early part of next year.

We believe.

Represents a lot of opportunity for Boston.

We have, from the last two years, continued to make investments into the omni-channel technology.

Have you had from the last two years continuing to make investments into the Omnichannel technology when laid out the team.

We laid out the team to do more business on the mini program and also on Douyin and on Jingdong. As Vincent mentioned earlier, in this quarter we made some solid programs in Douyin, now operating about...

To do more business on.

The mini program and also.

So in our view.

As Vincent mentioned earlier in this quarter, we made some solid progress in building now operating about 20.

20 kind of the spots on Douyin which we are quite satisfied with.

Hello assault, although in wage.

We are quite satisfied way before.

So going forward I think this trend will continue and I think Baldwin we have prepared pretty well for this trend.

So going forward I think that trend will continue and I think biogen, we are prepared to take a while for that trend.

So in regarding to Chai Miao.

So in regarding to timing.

Our cooperation with China will bring two synergies.

Our cooperation with China will bring two synergies. So the first synergy is we have comparable, I mean, we have a very much kind of capability. So from a Chinese perspective, they are doing a lot of business based on a volume basis. And also, they do quite the standard logistics and the warehouse products.

So the first the synergy as we have comparable I mean, how about Bari.

Matched kind of capability so from a China perspective, they are doing a lot of business based on a volume basis.

So they do quite.

The standard logistics and the warehouse product.

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

Full portal, we're focused on the premium and the way our focus on customized kind of solutions.

Paul.

The large brands so when we combine them together, we will be able to.

So when we combine together, we will be able to depend on each other to further strengthen our capability. And we could introduce the business to each other from Taimiao to Baotun, we think, from a sport, luxury, and cosmetics, which is what Baotun is really strong on. We will get some synergy from the Taimiao network.

Depending on each other to further strength.

Our capability and we could introduce.

The business to each other from China to Boston, we think from a spot luxury and cosmetics.

What about <unk> is really strong on we will get some synergy from the <unk> network.

At that time the capability.

On top of the capability, we also contain some resource efficiency. So as we know, China operates a national network of a large, I mean of a much bigger kind of scale in terms of logistics and warehouse.

On top of the capability, we also containing some resource efficiency. So as we know the time you operate a national network of a large.

Mark Baker kind of scale in terms of logistics and warehouse.

And by utilising that, I think we can further reduce our cost base and improve our capital efficiency when we make investments into the new warehouse. So that could also help Baotong to grow into a much bigger and much more efficient business.

And by utilizing them that I think he can further reduce our cost base and improve our capital efficiency, while we make investments into the new warehouse. So that could also help our bottom.

To grow into a much bigger and more efficient business.

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

So based on those two things.

That could be a pretty good in terms of going forward.

Some more.

The words to say about the timing of our corporation as such.

We view cooperation with China as a big business development opportunity for us as well.

We view the.

Cooperation with Sino.

U S a big business development opportunity for us as well because by working with closely I think we can have.

Because by working with China closely, I think we can have much more BD opportunities for the categories including sports, luxury, apparel, cosmetics, these kind of categories.

We have much more.

Opportunities for the categories, including sports.

Luxury apparel cosmetics is kind of categories. So in this case, we work with center closely deliver a better and a comprehensive solutions to the industry. So potentially we can work much more.

So in this case, we work with Sena closely, deliver a better and a comprehensive solutions for the industry. So potentially, we can work with much more potential brands in the captioned different categories.

No.

Potential brands.

EMEA captioned different categories.

Thank you.

Thank you.

Thank you. Your next question comes from the line of Charlie some channel.

Thank you.

Your next question comes from the line of.

Charlie Chen from China Renaissance. Please go ahead.

Thank you. Thank you, management, for taking my questions. I have two questions, one related to GMV and the other related to tick rate. So the first one is regarding the GMV from the distribution business.

Thank you. Thank you management for taking my questions I have two questions one related to G. M D and a data related to a take rate. So the first one is regarding the GMB.

The distribution business, we can see there is a slight decline of <unk> year on year for this quarter. So we understand the company is doing some strategic optimization. So how should we think about the impact going forward for the <unk> from a distribution business and <unk>.

We can see there is a slight decline of the GMV year-on-year for this quarter. So we understand the company is doing some strategic optimization, so how should we think about the negative impact going forward for the GMV from a distribution perspective?

And my second question is related to the take rate, so I can see for the non-distribution business, GMV growth actually significantly outpaced revenue growth. So we understand that we are still on the investment stage for non-T-mobile channels as an omni-channel efforts.

Second question is related to the take rate second seat for the non distribution business, Jim via gross actually significantly outpaced revenue growth. So we understand that we are still on the investment stage four non chemo channels.

The channel for us.

How do you think about this, or what do you think would be a reasonable estimate? We can see meaningful improvement of take rates as a result of the long-term investment since some returns. Thank you.

How do we think about this is for what.

What do you think would be a reasonable estimate we can see meaningful improvement of.

Our take rate as a result of the long term investments are seeing some returns. Thank you.

Okay.

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

Okay.

On the <unk> as you mentioned we.

We do have seen some decline of the distribution model, but there are three main drivers behind the fact, the first one is we have initiated hain some of that business model change along with our brand partners or distribution, we covered the distribution model.

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

For the service fee model wage.

For the brands and also for Bolton, it's actually a good thing because it's improved our capital efficiency.

So we don't need to use our own cash to host the infantry. So that's the first factor.

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

To hold the inventory so that's the first factor the second factor.

The second factor is, I think about 18 months ago, we initiated a high-quality growth strategy and in this quarter specifically, we stopped some low-return, kind of low-profit

Things about.

<unk> 18 months ago, we initiated a high quality growth strategy and in this quarter, specifically we stopped some.

No return.

Low profit.

of the distribution business, so that we don't want to do that type of business, especially during the weak market performance. We're concerned quite a lot about kind of the quality of that type of revenue.

Hum.

The distribution business. So that we don't want to do that type of business, especially during the weak market performance, we content quite a lot of about.

Kind of the quality of that type of revenue.

And thirdly, as we all know, one small home appliance brand made quite a significant contribution to our overall distribution revenue. And for this quarter, that one brand shows a low single-digit year-on-year decline, which also contributes to this fact. So that's the reason behind the decline of the distribution model. Going forward, we will focus on quality. So if we see

Certainly.

We all know one small home appliance brands made a quite a significant contribution to our overall distribution revenue and for this quarter at one brands shows a low single digit year on year decline.

Decline, which also contributing to this back so that the reason behind the decline of the distribution model going forward, we will focus on quality.

So if we see good business Oh goods category weight.

a good category which provide us with a good profitable return.

Provide us with a good profitable return we changed our distribution model then we definitely would like to do it because the positive side of the distribution model.

which is a distribution model, then we definitely would like to do it because the positive side of the distribution model is it shows a higher client...

It shows a higher client stickiness waste the brand partner so we have much.

stickiness with the brand partner. So if we have a chance to do it.

we will use that model to do the profitable business. So that's our strategy.

To do it.

We will.

Use that model to do the profitable business. So that's our strategy going forward.

This is Tracy. I would like to add up one another pony. So when we talk about the emerging China like going and tick tock operation, what do we observed in the past a few months is for this channel, the take rate and also the revenue portion is

This is Tracy I would like to add one another pone. So let me talk about the emerging China like billing and ER.

If you can talk on accretion what do we observed in the past few months is this channel the take rate and also the revenue portion is positively that are even higher than the two Montana Rhino ACH in the early stage out the channel development had a plan.

positively flat or even higher than the Tianmao channel, because right now, in the early stage of the channel development part.

a brand is heavily relying on a partner like Baozun to further dig out the consumer value and also to improve the ROI compared with TML channel. So at that part, which means besides the operation part, we can combine the digital marketing and also, I mean, the technology into the total take rate, which means our revenue income part.

These heavily rely on partners like Biogen to further dig out the consumer value and also to improve the ally compelling chemo channel to adopt pod, which means besides the operation patent we can combine the digital marketing and also I mean, the technology into the total take rate, which means our revenue.

Income tax so that is I think one of the positive way, we can see the trend.

So that is the, I think, one of the positive way we can see the trend.

Yeah, I'm going forward. Yeah. Okay. And also, I would like to add for some of our business model take rate.

Going forward, Okay, and also I would like to add for some of our business model take rate is not the only major we actually look at.

it's not the only measure. We actually look at the profits, the operating profits contributing to the bottom line. So, for example, as I mentioned in the past, for the mini program,

Operating profit contribution to the bottom line. So for example, as I mentioned in the past for the medium program.

In this quarter, we actually doubled our revenue year-over-year and for the mini-program, we are making the profit for this quarter.

In this quarter, we're actually doubled our revenue year over year and for the mini program, we are making.

Profit of a holiday quarter so.

So we focus on not the take rate, but

<unk> will focus on the take rate but.

the probability of this coming off the business.

The ability of.

Please turn off the business.

Thank you very much.

Okay. Thank you.

Thank you. Your next question comes from the line of Ashley from Credit Suisse.

Thank you. Your next question comes from the line, especially shoot from Credit Suisse. Please go ahead.

Thanks management for taking my questions. Firstly, I want to get management preliminary view on our next year's outlook, given the currently challenging macro environment.

Thanks management for taking my questions. Firstly wanted to get management's preliminary review on our next year's outlook given the currently challenging macro environment.

And my second question is related to our operation on JD. I understand there has been quite some positive progress there. I want to check on the key categories or brand types we are cooperating on this platform and at the same time, what types of model are we deploying there? Thank you.

Second question is really key to our operation on JD understand there has been quite some positive progress there I wanted to check on the key categories, where brands types. We are cooperating on this platform and other.

At the same time, what types of model RV decline. Thank you.

Mhm.

Yes, so for the Jingdong part, I think Jingdong's e-commerce operation logic is more similar to Tmall, especially adapt to Jingdong's pop economy environment build up, which is the main focus for this year and next year for Jingdong. So I think about Jingdong's operation experience can effectively improve the service capability of the non-standard category, like fashion, luxury, beauty, home, and others, which all of this, as mentioned, is our main focus, fashion, luxury, beauty, and home, this kind of non-standard category. And also, I think our value of this is not just about the marketing consumer acquisition, but also the after-sales customer service, and also how to assist the platform in operating their tailor-made solution for the pop-up flagship store.

Yes.

So from a genome part I think.

Humans ecommerce accretion logic is more similar to two months, partially adopt hitting those pump economic environments.

Queued up which is the main focus for this year nothing approaching I think about <unk> I. Appreciate your parents can effectively improved our service capability off the non Thunder category like fashion luxury beauty, who among others, which all of this I imagine is our.

Main focus, especially luxury beauty and home, there's kind of nothing they're category and also I think our value and there is not just about the martine consumer acquisitions and also the after sales customer.

Customer service and also how to assist our platform in operating their tailor made solutions.

I mean, Paul Toms flashy stuff. So this is the direction.

So this is the direction for the next year regarding the cooperation with Jingdong. And you can see from the W11, actually, we have doubled the brands participating at Jingdong's W11 this year. And also it's

I mean for the last year regarding the collaboration with them and you can see from the double 11 actually we have doubled.

The brands participating in those type of 11 this year and the also.

result in the 100% YY growth compared with last year in terms of the transition itself. So the momentum is promising and even in this, I mean, right now actually we're being positively prepared for the double 12.

Without in a 100% wildlife relative compared with last years in terms of the transition.

The momentum is promising and the evening. This I mean right now actually we're being positive positively prepaying for the double 12.

for Jingle Platform 2, I think the momentum is to keep the same pattern. Thank you.

So it's all genotype two.

Thank the momentum.

Keep the same pattern. Thank you okay.

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

In terms of the outlook for next year. We are currently in the cost of doing our operating plan.

And so at this moment, we only have a direction.

So at this moment, we only have a direction in terms of both the GMB or you continue to see.

In terms of for the GMV, we continue to see, given our portfolio of brands, we continue to see a healthy growth year over year, maybe towards a high 18 to even the 20%-ish mark.

Our portfolio of brands and continuing to see a higher.

Growth year over year, maybe was a high teen to even.

The 20% ish Mark.

But in terms of the revenue and profit, I think there are still a lot of moving space.

But in terms of the revenue and profit I think there are still a lot of moving.

Moving the moving space.

So if, like I mentioned, we can see a recovery in terms of the overall economy and also the BCI impact stopped from Q3 and Q4 next year, then from a revenue perspective, we could see a kind of a double-digit growth on the revenue.

No.

Okay.

Like I mentioned, we can see a recovery in terms of the overall economy and also the PCI impact stock from Q3, and Q4 next year and then from a revenue perspective, we could see.

A kind of a double digit growth on the revenue and in terms of the profit while we keep making the profit improvement we're seeing our profitability will well in line with all of our revenue accrual to the same percentage, having said that.

While we keep making the profit improvement, we think our profitability will align with our revenue growth to the same percentage.

We will also look into other M&A opportunities for inorganic growth, and also we will look into other opportunities to make investments into the future, for example, on some technology and to further enhance our omni-channel. So there are still some moving parts at this moment. So once we've completed our annual operating plan.

We will also look into other M&A opportunity for organic growth and also we will look into other opportunities to make investments into the future. So for example on some technology and to further enhance our omnichannel. So there are still some moving parts.

This moment so once we completed our annual operating plan.

Sure.

Ed.

in the next few weeks, we will be able to give the market a little bit more guidance.

In the next few weeks, we will be able to give the market a little bit more guidance.

Sure. Thank you.

Thank you.

Thank you. Your next question comes from the line of.

Thank you. Your next question comes from the line of Jai Singh.

<unk> from Bank of America. Please go ahead.

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

Thanks management for taking my question My question was related to.

Our future M&A.

M&A strategy.

Like for the rest of your thoughts on next year, we have seen other areas, we'd probably want to invest in the future and second thing just wanted to understand the connectivity impact.

Quinn, Alibaba and Tencent and how this affected our operations.

Brent Thanks.

Okay.

So I will do the M&A strategy first and then maybe Tracy can comment on the connection between Tmall and Tencent. So on the M&A, overall we see the current market environment provides some really attractive evaluation on some of the targets.

I will do the <unk> strategy first and then maybe Chris you can comment on that.

Maxim between chemo and so on.

Monday.

Overall, we see the.

The current market environment provide some real attractive valuation on some of the target and given our cash position.

And given our cash position, we are actively looking for using the inorganic growth to create value for our shareholder and to ensure our future growth.

Simply looking for using the inorganic growth to create value for our shareholders and to each.

For our future growth.

The opportunity we are looking for in the four areas. So the number one is we still think the kind of the TP industry or the service provider industry needs to further consolidation.

The opportunity we're looking a hole in the full Iran. For the number one is we still think.

The tender offer.

The <unk> industry.

The service provider industry needs through further consolidation. So in this quarter in Q3, we're actually completing our acquisition of pension which is another E Commerce service provider we.

So in this quarter, in Q3, we actually completed our acquisition of eFashion, which is another e-commerce service provider. We have seen some early signs that integration could lead to some great synergy.

<unk> seen some early signs that integration could lead to some great synergy.

So we will continue on that, i.e. the e-commerce service provider consolidation. So that's number one.

So we will continue on that.

Aida E Commerce service provider consolidation. So thats number one the second thing is we will look into the capability enhancement.

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

So in this quarter, we completed the kind of two logistics deals. And also we completed one deal on the digital marketing. So that helped us to build our capability to provide a better solution to our brand partner to enhance our kind of the stickiness with the customer. And also to win more business, so that's the second one.

So in this quarter, we completed.

The kind of two larger stakes.

And also we.

Completed one deal.

Armed with digital marketing, so that's helped us to build our capability to provide a better solution to our brand partner to enhance all the kind of the stickiness with our customer and also to win more business. So that's the second one.

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

Third one is.

We want to use the investments to improve our operation and the business Wade our breath. So for example in the earlier this year, we made investments into the pushing of fashion group and <unk>.

For example, in the early this year, we made investment into the Fuxing Fashion Group.

and with the five brands in Fushion Fashion Group.

Five brands in pushing second group. They all have seen some positive year on year improvement and all of our cooperation with our brand partner.

They all have seen some positive year-on-year improvement. And all the cooperation with the brand partner has been very, we have been making some really good progress. So we will continue that.

Murray.

<unk>.

We have been making some really good progress. So we will continue that and finally, we will be looking for some overseas expansion opportunity through both organic and inorganic so that overall is our.

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

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

Our planned strategy for the M&A in the Nike, Yeah, So and I also would like to add so after we started to do.

More structured M&A.

Internally.

Our strong team of experienced people and we believe we will be able to capture this opportunity in the <unk>.

Falling yet.

And regarding the Tencent and Taobao, we do see there's a lot of improvement on the consumer journey, especially about the share links and also in the payment level regarding the friends pay.

And then regarding the accounting and Palma Ashwin.

Q, Steve there's no no not improvement around the consumer journey, especially about for sure in inks and also the payment level regarding different pay.

But actually, I think there's not seeing essential changes in the user behavior, which means

But actually I think comparison.

We're not seeing in central changes in the user behavior, which means but right now it's hartsville Astrazeneca has a positive impact on traffic and the conversion itself.

So right now it's hard for us to validate the positive impact on traffic and the conversion itself.

In the longer run, we do believe it because we know Taobao has many potential plans.

In the longer run.

We do believe that because we narrow our tomo Hudson's many potential plans.

in the data level interaction that will be carried out in next year. So I think potentially it will bring a massive new wave of traffic for e-commerce.

I mean data level interaction will be carried out last year. So I think potentially if we're bringing on NAFTA new wave off with the topic of e-commerce, especially the social App user base is much bigger company there at this point yeah.

especially the social app user base is much bigger compared to this point, yeah. Thank you.

And can that many times.

Thank you can we move to the next question.

Management can be much the next question.

Yes go ahead, and that's why I'm pleased.

Thank you. The next question comes from the line of Rob and now from Bella.

Thank you. The next question comes from the line of throughout the young from Sandler. Please go ahead.

Hi management. Thanks for taking my question, just Robin asking on behalf of John Choi.

Hi, management. Thanks for taking my question. This is Robin asking on behalf of John Choi. Could management share the number of new brand partners that Baojun added in this quarter in addition to those 54 new stores in the non-Tmall channels?

<unk> mentioned.

The number of new brand partners that Biogen added in this quarter. In addition to dose 54, new stores and on Tmall channels. So with these.

New brands be able to offset some of the weakness in the first half of Twenty.

New brands.

Able to offset some of the weakness in the first half of 2022. Thank you.

Yes.

Okay, thank you for the question. I think we currently...

Okay. Thank you for the question I think.

We currently are.

I mean, from the last quarter, we communicated to the market, we will stop giving guidance or giving the numbers on the numbers of grants.

I mean from the last quarter, we communicated to the market, we will start to gain in guidance or taking the numbers on the numbers of brands.

That's partly because after we have done several acquisitions, we found there are several different brands being operated by the acquired company, which is very different from our Eurostand. So therefore, we will not give that.

That's partly because after we have done type of acquisition. We found there are several different brands being operated by.

Acquired company, it's very different from our euro and so therefore, we will we.

We will announce that.

But what we currently have seen is there are some good brands we have been able to gain from this quarter, and we have seen some of the major brands.

But what we.

They have seen their op.

I'm good.

Brands, we have been able to gain from this quarter and we have seen.

Some of the major brands.

In total, we have gained 29 grand, ninth edition, in this quarter.

In total we have going into 'twenty nine front month edition.

This quarter.

Um, so that's the overall number we have going in this quarter.

So that's the overall number would have kind of in this quarter.

We also have seen, on top of the new brands, we also have seen we have added another 122 stores, which...

We also have seen on top of the new brands.

We also have seen that we have added another 122 stores wage.

Many of them are coming from our existing kind of brand partner, which shows our existing brand partner are opening more stores. A lot of them are in the Albany channel. So for example, our existing Timo brand partner opening JD, opening mini program stores. So that's contributed to the 122 additional stores.

Many of them coming from our existing kind of brands partner, which shows our existing brand partners are opening more stores a lot of them are in the omnichannel they'll take them out.

They've seen hemo brands partner opening J D Albany, and many programs.

That has contributed to the 122 additional installed so going forward.

So going forward, as we mentioned earlier, the omni-channel strategy will further expand.

We mentioned earlier, the only channel strategy will further expand.

we think we will continue to see more thoughts being added in the coming years.

Well.

We think we will continue to see more thought being added in the coming yet.

Actually, do you want to add something? Yes, actually, I think in numbers-wise, we're definitely much higher than last year, I mean, the numbers. But the pattern is different, because this year, most of our new clients is concentrating on the luxury and this kind of category, which means we need a longer time to prepare for the open up.

One on something yes, actually I think a member of the wisely definitely higher much higher than last year, I mean, the numbers, but the pathway is different because those of you or most of our new client base.

Like does it contemplate the luxury and this kind of category, which means we need longer time to prepare for that open up.

which means we put efforts in the Q2 and even Q3. But we have it in, I mean, maybe Q1 next year or Q2 next year. So you can see, Vincent just published some memory in the Q1 next year, we're going to open over 20 stores in luxury. So that is actually the efforts we invest this year. And also on the other part is, I think, for the emerging channels like TikTok and Jingdong, this more like extend our current brands into the new channels. So we call it the existing client new channels. And on this part, we have a very steady growth this year because actually I think the infrastructure investment including technology and the logistics have helped us more to fluency to the help our clients to open their, I mean, omni-channel strategy. So this, all of this will also be contributed in the Q4 and also in the Q1 next year. Yeah, thank you.

Means we put efforts in Q2, and even Q3 thoughts we have is thinking I mean, maybe Q1 next year or Q2 next year and you can see.

And then from just the publishing some memory.

In.

Q1 last year with over 20 start in luxury so that is the actually the uppers. We invested this year and also on the other part is I think for the emerging channel like could talk and the Kingdom. This more like expand our current.

And into the new channels, so lately connie's the existing client new channels and on this part do we have a very steady growth. This year, because actually I think the infrastructure enough may including technology and logistic hop off mall to influencing.

Fluency to the help our clients.

There are I mean omnichannel strategy.

All of this will also be come to be able to in a kind of Q4 and also in that.

In the Q1 next year. Thank you.

Thank you.

Thank you.

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

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

Thank you, operator. In closing, on behalf of the Bowson Management Team, we'd like to thank you for your participation in today's call. If you have any further questions, please feel free to reach out to us. Thank you again for joining us today. This concludes the call.

Thank you operator in closing on behalf of the management team, we'd like to thank you for your participation in today's call. If you have any further questions. Please feel free to reach out to us. Thank you again for joining US today. This concludes the call.

Yes.

Okay.

Great. Thank you.