Q2 2024 Vipshop Holdings Ltd Earnings Call

August 20, 2024

Operator: Good day everyone and welcome to Vipshop Holdings Limited's 2nd Quarter 2024 Earnings Conference Call.

Unknown Executive: Good day, everyone, and welcome to VIPshop Holdings Limited's second quarter 2024 earnings conference call.

Unknown Executive: Good day, everyone, and welcome to a VIP Shop Holdings Limited second quarter 2012 to four earnings conference calls.

Jesse Jang: Ladies and gentlemen, good day everyone and welcome to Vipshop Holdings Limited's second quarter 2024 earnings conference call. At this time I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed.

Unknown Executive: At this time, I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor

Unknown Executive: At this time, I would like to turn the call to Ms. Jessie Zheng. VIP Shops had a few invitations.

Jessie Zheng: At this time, I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor Relations.

Unknown Executive: Relations.

Unknown Executive: Please proceed.

Unknown Executive: Thank you, operator.

Jessie Zheng: Hello, everyone, and thank you for joining Vipshop's second quarter 2024 earnings conference, call.

Unknown Executive: Thank you, operator.

Jessie Zheng: Thank you, operator.

Jessie Zheng: With us today are Eric Shen, our co-founder, chairman, and CEO, and Mark Wang, our CEO.

Jessie Zheng: Hello, everyone, and thank you for joining the VIP Shop setting quarter, 2024 earnings conference call. With us today, our erection, our co-founder, Chairman, and CEO, Mark Wang, our CFO.

Jessie Zheng: Before management begins their prepared remarks, I would like to remind you that the discussion, today will contain forward-looking statements made under the safe harbor provisions of the, U.S.

Jesse Jang: i

Jessie Zheng: Hello, everyone, and thank you for joining VIPshop's second quarter 2024 earnings conference call.

Jesse Jang: Thank you, operator. Hello, everyone, and thank you for joining VIPshop's second quarter 2024 earnings conference call. With us today are Eric Shen, our co-founder, chairman, and CEO , and Mark Wang, our CFO .

Unknown Executive: Before mentioned begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made and to the safe harbor provisions of the U.S. private security litigation reform act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause extra results to differ materially from our current expectations. Potential risks and uncertainties include unmotivimited to those outlining our safe harbor statements in our earnings release in the public filings with us Securities and Exchange Commissions, which also applies to this call to the extent any forward looking statements may be made.

Speaker Change: Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Jessie Zheng: Private Security and Litigation Reform Act of 1995.

Jessie Zheng: Forward-looking statements are subject to risks and uncertainties that may cause actual, results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in our, safe harbor statements in our earnings release and public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking, statements may be made.

Speaker Change: Overlooking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.

Speaker Change: Potential risks and uncertainties include but are not limited to those outlined in our Safe Harbor Statements.

Speaker Change: in our earnings release and the public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be made. Please note that certain financial measures used on this call, such as non-GAAP operating income, non-GAAP net income, and non-GAAP net income per ADS.

Jessie Zheng: Please note that certain financial merits used on this call, such as non-GAAP operating, income, non-GAAP net income, and non-GAAP net income per ADS are not presented in accordance with U.S. GAAP. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP, merits to GAAP merits.

Unknown Executive: Please note that certain financial matters used on this call, such as non-GAAP operating income, non-GAAP net income, and non-GAAP net income per adias, are not presented in accordance with U.S. gaps. Please refer to our earnings release for details relating to the recommendations of our non-GAAP matters to get married.

Speaker Change: are not presented in accordance with U.S. GAAP. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP merits to GAAP merits. With that, I would now like to turn the call over to Mr. Eric Shen.

Erickson: Is that I would now like to turn a call over to Mr. Erickson. Good morning and good evening, everyone. Welcome and thank you for joining our second quarter of 2024 earnings conference call. In the face of multiple headwinds in the external environment, we had slower momentum in our business. Our team focused on staying eager to respond quickly to external change and achieving operational excellence. In the second quarter, sales were under pressure of the high base and aimed the customer settlement. Paolo Catgrid held up, relatively well, GNV generated from co-brand and SPI members, showed the resilience for the full quarter.

Jessie Zheng: With that, I would now like to turn the call over to Mr. Eric Shen.

Jessie Zheng: With us today are Eric Shen, our co-founder, chairman, and CEO, and Mark Wang, our CFO.

Eric Shen: Good morning and good evening, everyone.

Jessie Zheng: Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the proper provisions of the U.S.

Eric Shen: Welcome and thank you for joining our second quarter 2024 earnings conference call.

Speaker Change: Good morning and good evening everyone. Welcome and thank you for joining our second quarter 2024 earnings conference call.

Eric Shen: In the face of multiple headwinds in the external environment, we had a slower momentum in our, business. Our team focused on staying agile to respond quickly to external changes and achieving, operational excellence.

Speaker Change: In the face of multiple headwinds in the external environment, we had slower momentum in our business.

Speaker Change: Our team focuses on staying agile to respond quickly to external changes and achieving operational excellence.

Eric Shen: In the second quarter, sales was under pressure of the high-base and aimed-at-cautions customer, segment.

Speaker Change: In the second quarter, sales was under pressure of the high-base and aimed-at-cautions customer segment.

Eric Shen: Apparel categories held up relatively well.

Eric Shen: GMV generated from co-brands and SPS members showed resilience for the full quarter. We see this as an indication of the fundamental strengths of our business.

Speaker Change: Appello category held up relatively well. GMV generated from co-brand and SPIC members showed the resilience for the full quarter. We see this as an indication of the fundamental strengths of our business.

Erickson: We see this as an indication of the fundamental strengths of our business. Customer traction remained the mouthed, reflecting our quotient's approach to marketing spend aimed at challenging backdrop. However, active SPI members increased by 11% from year-go and accounted for 40% of our online spending.

Eric Shen: Customer traction remained mounted, reflecting our cautious approach to marketing spend aimed, at a challenging backdrop. However, active SVIP members increased by 11 percent from a year ago and accounted for, 40 percent of our online spending. That's encouraging as a hard-core customer cohort with the most resilient spending power, continues to recognize the unique value of shopping with us.

Speaker Change: Customer traction remained mounted, reflecting our cautious approach to marketing spend aimed at a challenging backdrop.

Speaker Change: However, active SVIP members increased by 11% from a year ago and accounted for 40% of our online spending.

Erickson: That's in college as a hardcore customer cohort with the most resilient spending power continues to recognize the unique value of shopping with us, giving that we are facing ongoing uncertainties in the near term with folks on the long-term thinking that positions us for continued growth in the years ahead. Even as the patterns of spending evolving, the key that did mine were custom choose to shop, have not changed. We are sharpening our focus on enriching merchandising, offering highlighting affordability throughout our supplement while insure a watery breed expense. Together, these have been the co-competence that has helped us navigate difficult times.

Speaker Change: That's encouraging as a hardcore customer cohort with the most resilient spending power continues to recognize the unique value of shopping with us.

Eric Shen: Given that we are facing ongoing uncertainties in the near term, we focus on the long-term, thinking that positions us for continued growth in the years ahead.

Speaker Change: Given that we are facing ongoing uncertainties in the near term, we focus on the long-term thinking that positions us for continued growth in the years ahead.

Eric Shen: Given as the patterns of spending evolving, the key factors that determine where customers, choose to shop have not changed.

Speaker Change: Even as the patterns of spending evolving, the key factors that determine where customers choose to shop have not changed.

Eric Shen: We are sharpening our focus on enriching merchandising offerings, highlighting affordability throughout, our assortment while ensuring a worry-free experience.

Speaker Change: We are sharpening our focus on enriching merchandising offerings, highlighting

Speaker Change: affordability throughout our assortment will ensure a worry-free experience.

Eric Shen: Together, these have been the co-competence that has helped us navigate difficult times.

Speaker Change: Together, these have been the co-competence that has helped us navigate difficult times.

Erickson: Among the beneath highlights, we are pleased with the silly flow of the quality blend's inventory. Thanks to our merchandising capability from strong team talents across categories, we now adapt more quickly to emerging trends, which is important to driving growth by delivering what custom look for. In the first half, we select more than 600 well-known brands to our platform, including a mix of mass brands, new trendy brands, and affordable luxury brands in much richer selections. Our layered approach to brand portfolio is well suited to meet the ever-changing custom needs across income and age cohorts in different regions.

Eric Shen: Among the business highlights, we are pleased with the steady flow of the quality blend, inventory. Thanks to our merchandising capability from a strong team of talents across categories, we now adapt more quickly to emerging trends, which is important to driving growth by delivering what customers look for.

Speaker Change: Among the business highlights, we are pleased with the steady flow of the quality blend inventory.

Speaker Change: Thanks to our merchandising capability from a strong team of talents across categories, we now adapt more quickly to emerging trends, which is important to driving growth by delivering what customers look for.

Eric Shen: In the first half, we selected more than 600 well-known blends to our platform, including, a mix of mass brands, new trendy brands, and affordable luxury brands in much richer selections.

Speaker Change: In the first half, we selected more than 600 well-known brands to our platform, including a mix of mass brands, new trendy brands, and affordable luxury brands in much richer selections.

Eric Shen: Our layered approach to brand portfolio is well-suited to meet the ever-changing customer, needs across income and age cohorts in different regions.

Speaker Change: Our layered approach to brand portfolio is well suited to meet the ever-changing customer needs across income and age cohorts in different regions.

Erickson: We are also in college by the steadily progress in the Made4VIP line, so customize the products. In the second quarter, GME from Made4VIP increased more than 140% from a year ago. Our know-how and expertise is a payload-enabled brand to customize more differentiated products at great price, which were welcomed by many customers. We see a minimally higher portions of custom repeatedly purchased customized products than they do in the general apparel category. And the conventions for Made4VIP has been consistently higher than the average levels seen within the same blend and the same category. Beyond that, we continue to focus on delivering value, providing the right spread of great pricing and quality to our customers.

Eric Shen: We are also encouraged by the steady progress in the made-for-VIP line of customized products. In the second quarter, GME from made-for-VIP increased more than 140% from a year ago.

Speaker Change: We are also encouraged by the steady progress in the made-for-VIP line of customized products. In the second quarter, GME from made-for-VIP increased more than 140% from a year ago.

Eric Shen: Our know-how and expertise as a panel enabled brand partners to customize more differentiated, products at great price, which were welcomed by many customers.

Speaker Change: Our know-how and expertise as a panel enabled brand partners to customize more differentiated products at great prices, which were welcomed by many customers.

Eric Shen: We see a meaningfully higher portion of customers repeatedly purchasing customized products, than they do in the general apparel category, and the conversions for made-for-VIP have been consistently higher than the average levels seen within the same blend and the same category.

Speaker Change: We see a meaningfully higher...

Speaker Change: Potions of Customs repeatedly purchase customized products.

Speaker Change: than they do in the general appellate category. And the conventions made for VIP have been consistently higher than the average levels seen within the same blend and the same category.

Eric Shen: Beyond that, we continue to focus on delivering value, providing the right blend of great, pricing and quality to our customers.

Speaker Change: Beyond that, we continue to focus on delivering value, providing the right band of great pricing and quality to our customers.

Erickson: We consistently optimize ways we work with brand partners to ensure we could generate more savings for our customers.

Eric Shen: We consistently optimize the ways we work with brand partners to ensure we could generate, more savings for our customers.

Speaker Change: We consistently optimize the ways we work with brand partners to ensure we could generate more savings for our customers.

Eric Shen: Recently, we launched some new channels, future time-limited promotions and everyday low price.

Erickson: Recently, we launched some new channels. Future time-limited promotions and everyday low price. These are designed to help our customers make the most of their budget while also providing a reliable resource for brand partners to present their best views. On the other hand, it is enhancing quality control. We have been working hard this year to help customers select contrasted to the volume of brand products by increasing quality inspections throughout our supply chain. In addition, we are adapting and refining our approach to custom engagement. In the second quarter for SPIP, we continue with the launch; our provides sales and special offering both online and offline.

Speaker Change: Recently, we launched some new channels.

Eric Shen: These are designed to help our customers make the most of their budget while also providing, a reliable resource for brand partners to present their best views.

Speaker Change: Future Time-Limited Promotions and Everyday Low Price. These are designed to help our customers make the most of their budget, while also providing reliable resources for brand partners to present their best deals.

Eric Shen: On the other hand, in enhancing quality control, we have been working hard this year to help, customers select a trusted portfolio of brand products by increasing quality inspection throughout our supply chain.

Speaker Change: On the other hand, in enhancing quality control, we have been working hard this year to help customers select a trusted portfolio of brand products by increasing quality inspection throughout our supply chain.

Eric Shen: In addition, we are adapting and refining our approach to customer engagement.

Speaker Change: In addition, we are adapting and refining our approach to customer engagement.

Eric Shen: In the second quarter, for SBAP members, we continue with the launch of a provided, sales and special offering, both online and offline.

Speaker Change: In the second quarter, for SBIP members, we continue with the launch of provided sales and special offerings, both online and offline. We intend to increase the deep...

Erickson: We intended to increase the deep of our lower tape program to serve there uniquely. For young custom, we tailored the layout and design of our homepage, created specialized channels, and made personalized recommendations that better cater to our performance. In the face of the temporary, very, very flea on the top line, we continue to work on the long-term efficiency, slow process, optimization, and technology enhancement across business lines, among other things. For example, we continuously upgrade our merchandise platform to further improve the activity of our team when we are serving brand partners. This has motivated brand partners to invest while generating best ROI technology, AI capabilities, and are increasingly applied to search recommendation and intelligence intelligence shorting assistance to provide the custom with inspiration and improve conversions.

Eric Shen: We intend to increase the deep.., of our loyalty program to serve there uniquely.

Eric Shen: For young customers, we tailored the layout and design of our homepage, created specialized, channels, and made personalized recommendations that better cater to our performance.

Speaker Change: of our loyalty program to serve there uniquely.

Speaker Change: For Young Custom, we tailored the layout and design of our homepage, created specialized channels, and made personalized recommendations that better cater to our performance.

Eric Shen: In the face of the temporary volatility on the top line, we continue to work on the long-term, efficiency through process optimization and technology enhancement across business lines, among other things. For example, we continuously upgrade our merchandise platform to further improve the productivity, of our team when serving brand partners.

Speaker Change: In the face of the temporary volatility on the top line, we continue to work on the long-term efficiency

Speaker Change: through process optimization and technology enhancement across business lines, among other things.

Speaker Change: For example, we continuously upgrade our merchandise platform.

Speaker Change: to further improve the productivity of our team when we are serving brand partners. This has motivated brand partners to invest while generating better ROI.

Eric Shen: This has motivated brand partners to invest while generating best ROI on technology, AI capabilities, and are increasingly applied to search, recommendation, and intelligence shopping assistance to provide the customer with inspiration and improve conversions.

Speaker Change: on technology, AI capabilities, and are increasingly applied to search, recommendation, and intelligence shopping assistance to provide the customer with inspiration and improve conversions.

Erickson: We have a fundamentally sorry, the biggest model that also inherently flexible, but we have much more work to do, and we are only so that we can quickly pivot as customers by all it has changed. As we move ahead, we believe that as long as we stay close to our customers, continuous investing in our merchandising capabilities, and consistently execute on the discounted retail fundamentally, we will be positioned for continuous growth over the long term.

Jessie Zheng: Private Security and Litigation Reform Act of 1994.

Eric Shen: We have a fundamentally solid business model that's also inherently flexible, but we have, much more work to do, and we are on it so that we can quickly pivot as customer priority changes. As we move ahead, we believe that as long as we stay close to our customers, continue, investing in our merchandising capabilities, and consistently execute on the discount retail fundamentally, we will be positioned for continuous growth over the long term.

Speaker Change: We have a fundamentally solid business model that's also inherently flexible, but we have much more work to do, and we are on it so that we can quickly pivot as customer priority change.

Jessie Zheng: Overlooking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations, and others. The potential risks and uncertainties include but are not limited to those outlined in our safe harbor statement in our earnings release in the public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be made.

Speaker Change: As we move ahead, we believe that as long as we stay close to our customers, continue investing in our merchandising capabilities.

Speaker Change: and consistently execute on the discount retail fundamentally. We will be positioned for continued growth.

Mark Wang: At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results. Okay, thanks Eric and Hello01. We deliver another quarter of solid profitability despite ongoing pressure on a top line growth. As we remain responsive to the evolving environment to weather external challenges, we have managed to optimize operational efficiency and achieve healthy margins. Subsequently, consolidated growth margin increased to 23.6% from 22.2% a year ago. Thanks to higher margin category, it makes from a parallel skills in the series of positive matters. None get in the margin attributable to very short spare holders, remained at a high level at 8.1%.

Jessie Zheng: Please note that certain financial measures used on this call, such as non-gap operating income, non-gap net income, and non-gap net income per ADS are not presented in accordance with U.S. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP members to GAAP.

Eric Shen: At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Speaker Change: over the long term.

mark w: At this point, let me hand over the call to our CFO , Mark Wang, to go over our financial results.

Mark Wang: Okay.

Mark Wang: Thanks, Eric, and hello, everyone.

Jessie Zheng: With that, I would now like to turn the call over to Mr. Eric.

Mark Wang: We delivered another quarter of solid profitability despite ongoing pressure on the top-line growth. As we remain responsive to the evolving environment, to weather external challenges, we managed, to optimize our operational efficiency and achieve healthy margins. Specifically, consolidated growth margin increased to 23.6% from 22.2% a year ago.

mark w: Okay, thanks, Eric, and hello, everyone.

mark w: We deliver another quarter of solid profitability despite ongoing pressure on top-line growth.

mark w: As we remain responsive to the evolving environment, to weather external challenge, we've managed to optimize our operational efficiency and achieve healthy margins.

mark w: Specifically, consolidated gross margin increased to 23.6% from 22.2% a year ago.

Mark Wang: Thanks to higher margin category mixed from apparel sales and a series of cost-saving, matters, non-capital margin attributable to VIP shop shareholders remained at a high level at 8.1%.

Speaker Change: Thanks to Higher Margin Category, mixed from apparel sales and a series of cost-saving matters.

Speaker Change: Non-capital margin attributable to VIP shop shareholders remained at a high level at 8.1%.

Mark Wang: Reflecting our disciplined approach to managing our business, in the midst of macro and competition, dynamics, our goals are to balance growth with profitability and protect the long-term health of our business.

Mark Wang: Reflecting our discipline approach to managing our business. In the midst of macro and the competition dynamics, our goals are to balance growth with profitability and protect the long-term health of our business. Well, are also from the near term as softens. We remain confident in our unique position. to drive the sustainable and profitable growth in the long run. With that, we are committed to returning significant cash to our shareholders. We have accelerated our pace of shared buy-back with over $200 million US dollar, having been utilized during the second quarter. In addition, the new share repurchase program of up to $1 billion US dollars will be in place after we fully utilize the remaining amounts under the existing program.

Speaker Change: reflecting our disciplined approach to managing our business.

Speaker Change: In the midst of macro and competition dynamics, our goals are to balance growth with profitability and protect the long-term health of our business.

Mark Wang: While our outlook for the near term has softened, we remain confident in our unique position, to drive sustainable and profitable growth in the long run.

Speaker Change: i

Speaker Change: Well, our outlook for the near term has softened.

Speaker Change: We remain confident in our unique positioning to drive sustainable and profitable growth in the long run.

Mark Wang: With that, we are committed to returning significant cash to our shareholders. We accelerated our pace of share buyback with over 200 million U.S. dollars, having been utilized during the second quarter. In addition, a new share repurchase program of up to 1 billion U.S. dollars, will be in place after we fully utilize the remaining amounts under the existing program.

Eric Shen: Good morning and good evening, everyone.

Speaker Change: With that, we are committed to returning significant cash to our shareholders.

Speaker Change: We accelerated our pace of share buyback with over 200 million U.S. dollars, having been utilized during the second quarter.

Speaker Change: In addition, a new share repurchase program

Speaker Change: of up to 1 billion U.S. dollars will be in place after we fully utilize the remaining amounts under the existing program.

Mark Wang: And as we mentioned on our last earnings call, we plan to commit no less than 75% of our full-year non-GAAP net income attributable to Vipshop's shareholders through discretionary share repurchase and dividend distributions.

Mark Wang: And as we mentioned on our last earning call, we plan to commit no less than 75% of our full-year non-GAAP net income, attributable to VIP Shop shareholders, through this questionnaire, shared repurchase and dividend distributions.

Speaker Change: And as we mentioned in our last earnings call,

Speaker Change: We plan to commit no less than 75% of our full-year non-GAAP net income.

Speaker Change: attributable to Vipshop shareholders.

Mark Wang: Now moving to our detailed quarterly financial highlights.

Speaker Change: Through this questionnaire, you share with purchase and dividend distributions.

Mark Wang: Now moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented low by Intamine B, and all percentage changed a year-over-year chance, a life otherwise noted. Hold on to our revenues for the second quarter of 2024 for NB 26.9 billion. Compare with R&B 27.9 billion in the prior period. Growth profits increased by 2.2% year-over-year to R&B 6.3 billion from R&B 6.2 billion in the prior year period. Growth margin increased to 23.6% from 22.2% in the prior period. Total operating expenses decreased by 4.2% year-over-year to R&B 4.3 billion from R&B 4.5 billion in the prior period.

Eric Shen: Welcome and thank you for joining our second quarter 2024 earnings conference call, in the face of multiple headwinds in the external environment. We had a slower momentum in our business.

Eric Shen: Our team focuses on staying agile to respond quickly to external changes and achieving operational excellence.

Eric Shen: In the second quarter, sales was under pressure of the high base and aimed at cautious customer sentiment.

Mark Wang: Before I get started, I would like to clarify, that all financial numbers presented below are in the MinB and all percentage change are year-over-year changes unless otherwise noted.

Eric Shen: The apparel category held up relatively well.

Speaker Change: Now moving to our detailed quarterly financial highlights.

Eric Shen: GMV generated from co-brands and SPS members showed resilience for the full quarter. We see this as an indication of the fundamental strengths of our business.

Mark Wang: Total net revenues for the second quarter of 2024 were RMB26.9 billion, compared with RMB27.9 billion in the prior period.

Speaker Change: Before I get started, I would like to clarify.

Speaker Change: that all financial numbers presented below are in Chen Mingdi.

Speaker Change: And all percentage change, year-over-year change.

Eric Shen: Customer traction remained mounted, reflecting our cautious approach to marketing spend aimed at a challenging backdrop.

Speaker Change: Total net revenues for the second quarter of 2024 will be $26.9 billion.

Speaker Change: compparweits r m b twenty seven one nine billion

Mark Wang: Gross profits increased by 2.2% year-over-year, to RMB6.3 billion from RMB6.2 billion in the prior period. Gross margin increased to 23.6% from 22.2% in the prior period. Total operating expenses decreased by 4.2% year-over-year, to RMB4.3 billion from RMB4.5 billion in the prior period.

Eric Shen: However, active SVIP members increased by 11% from a year ago and accounted for 40% of our online spending. That's encouraging as a hardcore customer cohort with the most resilient spending power continues to recognize the unique value of shopping with us.

Speaker Change: in the prior period.

Eric Shen: Given that we are facing ongoing uncertainties in the near term, we focus on the long-term thinking that positions us for continued growth in the years ahead, even as the patterns of spending evolving.

Operator: Please proceed.

Operator: Please proceed. Thank you, operator.

Eric Shen: The key factors that determine where customers choose to shop have not changed.

Speaker Change: Gross profits increased by 2.2 percent.

Eric Shen: In the first half, we selected more than 600 well-known brands to our platform, including a mix of mass brands, new trendy brands and affordable luxury brands in much richer selection.

Eric Shen: We are sharpening our focus on enriching merchandising offering, highlighting affordability throughout our assortment will ensure a worry-free experience.

Eric Shen: Together, these have been the co-competence that has helped us navigate difficult times.

Eric Shen: Among the business highlights, we are pleased with the steady flow of the quality blend inventory. Thanks to our merchandising capability from a strong team of talents across categories, we now adapt more quickly to emerging, Trends which is important to driving growth by delivering what customers look for.

Eric Shen: Our layered approach to brand portfolio is well suited to meet the ever-changing customer needs across income and age cohorts in different regions.

Eric Shen: We are also encouraged by the steady progress in the made-for-VIP line of customized products. In the second quarter, GME from Made for VIP increased more than 140% from a year ago.

Speaker Change: year-over-year to RMB 6.3 billion from RMB 6.2 billion in the prior year period.

Eric Shen: Our know-how and expertise is a pair of enabled brand partners to customize, more differentiated products at great price, which were welcomed by many customers, we see a meaningfully higher portions of custom repeatedly purchased customized products, than they do in the general appellate category.

Eric Shen: And the conversions made for VIP has been consistently higher than the average levels seen within the same blend and the same category.

Eric Shen: Beyond that, we continue to focus on delivering value, providing the right brand of great pricing and quality to our customers.

Eric Shen: We consistently optimize the ways we work with brand partners to ensure we could generate more savings for our customers.

Eric Shen: Recently, we launched some new channels, future time-limited promotions and everyday low price. These are designed to help our customers make the most of their budget while also providing reliable resources for brand partners to present their best deals.

Eric Shen: On the other hand, it's enhancing quality control.

Eric Shen: For Young Custom, we tailored the layout and design of our homepage, created specialized channels, and made personalized recommendations that better cater to our performance.

Eric Shen: We have been working hard this year to help customers select a trusted portfolio of brand products by increasing quality inspection throughout our supply chain.

Eric Shen: In the face of the temporary, volutely on the top line.

Speaker Change: marartin increased through twenty-three point six percent

Eric Shen: In addition, we are adapting and refining our approach to customer engagement.

Eric Shen: We continue to work on the long term efficiency, through process, optimization, and technology enhancement across business lines, among other things. For example, we continuously upgrade our merchandise platform to further improve the productivity of our team when we are serving brand partners.

Eric Shen: In the second quarter, for SBAP members, we continue with the launch of provides sales and special offering both online and offline.

Eric Shen: This has motivated brand partners to invest while generating better ROI, on technology, AI capabilities, and are increasingly applied to search, recommendation, and intelligence shopping assistant to provide the customer with inspiration and improve convention.

Eric Shen: We intend to increase the deep, of our loyalty program to serve their unique.

Speaker Change: from 22.2 percent.

Speaker Change: in the prior period.

Speaker Change: i

Speaker Change: Total operating expenses decreased by 4.2% year-over-year to RMB4.3 billion from RMB4.5 billion in the prior year period.

Mark Wang: As a percentage of total net revenues, Total operating expenses decreased to 16.0% from 16.1% in the prior period. Refillment expenses decreased by 0.8% year-over-year, to RMB2.16 billion from RMB2.18 billion in the prior period.

Mark Wang: As a percentage of total net revenues, total operating expenses decreased to 16.0% from 16.1% in the prior period. For human expenses decreased by 0.8% year-over-year to R&B 2.16 billion from R&B 2.18 billion in the prior period. As a percentage of total net revenues, for human expenses was 8.1% compared with 7.8%. in the prior period.

Speaker Change: as a percentage of total net revenues.

Speaker Change: Total operating expenses decreased to 16.0 percent.

Eric Shen: We have a fundamentally solid business model that's also inherently flexible.

Speaker Change: from 16.1% in the prior period.

Eric Shen: But we have much more work to do, and we are on it, so that we can quickly pivot as a customer priority chain.

Eric Shen: As we move ahead, we believe that as long as we stay close to our customers, continue investing in our merchandising capability, and consistently execute on discount retail fundamentally.

Mark Wang: At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Eric Shen: We will be positioned for continued group, over the long term.

Speaker Change: Fulfillment expenses decreased by 0.8% year-over-year to RMB 2.16 billion from RMB 2.18 billion in the prior period.

Mark Wang: As a percentage of total net revenues, Refillment expenses was 8.1% compared with 7.8%, in the prior year period.

Speaker Change: as a percentage of total net revenues.

Operator: Thank you, operator.

Unknown Executive: Hello, everyone, and thank you for joining the VIP shop setting quarter, 2024 earnings conference call.

Speaker Change: Fulfillment expenses was 8.1%.

Mark Wang: Marketing expenses decreased by 17.0% year-over-year to RMB 740.7 million from RMB 892.5 million in the prior year period. As a percentage of total net revenues, marketing expenses decreased to 2.8% from 3.2% in the prior year period.

Speaker Change: compare we seven point eight percent

Mark Wang: Marketing Census decreased by 17.0% year-over-year to R&B 740.7 million from R&B 800.92.5 million year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 10.0% year-over-year to R&B 480.87.22 million from R&B 400.43.0 million in the prior period. As a percentage of children, there are around here, technology and the content expenses was 1.8% compared with 1.6% in the prior period. Generally, the administrative expenses decreased by 6.5% year-over-year to R&B 900.7 million from R&B 963.1 million in the prior period.

Speaker Change: in the prior period.

Speaker Change: Marketing expenses decreased by 17.0%.

Speaker Change: year-over-year to RMB $740.7 million from RMB $892.5 million in the prior period.

Speaker Change: ata plage oftoon revenues

Speaker Change: Marketing Census decreased to 2.8%.

Mark Wang: Technology and accounting expenses increased by 10.0% year-over-year to RMB 487.2 million from RMB 443.0 million in the prior year period. As a percentage of total net revenues, technology and accounting expenses was 1.8%, compared with 1.6% in the prior year period.

Speaker Change: from three two fromong three point two percent in the prior year period

Speaker Change: Technology and Accountant Expenses

Speaker Change: in two by ten point zer percent year-over-year to m b four hundred eighty-seven point nine point -two million from r b four hundred

Mark Wang: General and administrative expenses decreased by 6.5% year-over-year to RMB 900.7 million, from RMB 963.1 million in the prior year period.

Speaker Change: $43.0 million in the prior period.

Speaker Change: surface ener of build their s

Speaker Change: Technology and the content expenses.

Speaker Change: was one point eight percent

Speaker Change: Compare with 1.6%.

Speaker Change: in the prior years.

Speaker Change: General Administrative Expenses

Speaker Change: decreased by 6.5%.

Speaker Change: year-over-year to RMB 900.7 million from RMB 963.1 million in the prior period.

Mark Wang: As a percentage of children, there are around here. General and administrative expenses decreased to 3.4% from 3.5% in the prior period. Income from operations increased by 16.5% year-over-year to R&B 2.2 billion from R&B 1.9 billion in the prior period. Operating margin increased to 8.3% from 6.9% in the prior period. Non-GAAP income from operations increased by 11.6% year-over-year to R&B 2.6 billion from R&B 2.3 billion in the prior period. Non-GAAP operating margin increased to 9.5% from 8.2% in the prior period. Non-GAAP income from operations increased by 11.6% year-over-year to R&B 1.9 billion in the prior period.

Speaker Change: As to the percentages of total narrate revenues,

Speaker Change: General and Administrative Expenses Decreased

Speaker Change: to three point foor steminss

Mark Wang: As a percentage of total net revenues, general and administrative expenses decreased to 3.4% from 3.5% in the prior year period. Income from operations increased by 16.5% year-over-year to RMB 2.2 billion from RMB 1.9 billion in the prior year period. Operating margin increased to 8.3% from 6.9% in the prior year period.

Speaker Change: ph almost you point five percent

Speaker Change: Income from operations.

Speaker Change: increased by 16.5 percent.

Speaker Change: year-over-year to RMB 2.2 billion.

Speaker Change: for RMB 1.9 billion.

Speaker Change: a prior year periit

Speaker Change: Operating Margin increased to 8.3%.

Speaker Change: from sixicked point nine percent

Mark Wang: Non-GAAP income from operations increased by 11.6% year-over-year to RMB 2.6 billion from RMB 2.3 billion in the prior year period. Non-GAAP operating margin increased to 9.5% from 8.2% in the prior year period.

Speaker Change: in the prior period.

Speaker Change: Non-Gap Income from Operations

Speaker Change: increased by 11.6% year-over-year to RMB 2.6 billion.

Speaker Change: from RMB 2.3 billion in the prior year period.

Speaker Change: Non-Gap Operating Margin increased to 9.5%.

Mark Wang: Net income attributable to VIP shop shareholders was RMB 1.9 billion, compared with RMB 2.1 billion in the prior year period, was 7.2%, compared with 7.5% in the prior period.

Speaker Change: from eight point two percent

Speaker Change: in the prior period.

Speaker Change: Net income attributable to Vipshop shareholders.

Speaker Change: was RMB 1.9 billion.

Mark Wang: Non-GAAP operating margin increased by 11.6% in the prior period. was 7.2%. Compare with 7.5% in the prior period. Net income, attribute vote to Vipshop's shareholders per diluted ADS was R&B 3.49. Compare with R&B 3.75 in the prior period. Net income, attributed vote to Vipshop's shareholders was R&B 2.2 billion. Compare with R&B 2.4 billion in the prior period. Net income, attributable to Vipshop's shareholders, was 8.1% compared with 8.6% in the prior period. Net income, attributed vote to Vipshop's shareholders per diluted ADS was R&B 3.91 compared with R&B 4.30 in the prior period. As of June 30, 2024, the company had cash and cash equivalents and restricted cash of R&B 21.6 billion in short-term investments of R&B 1.9 billion.

Speaker Change: Compare with RMB 2.1 billion.

Speaker Change: in the prior period.

Speaker Change: That margin attributable to Vipshop's shareholders.

Speaker Change: was seven point two percent

Speaker Change: Compare with 7.5%

Mark Wang: Net income attributable to Vipshop shareholders per diluted ADS was RMB 3.49, compared with, RMB 3.75 in the prior period.

Speaker Change: in the prior period.

Speaker Change: Net income attributable to Vipshop shareholders.

Speaker Change: Her diluted ADS.

Mark Wang: Non-Gap Net Income attributable to Vipshop shareholders was RMB 2.2 billion, compared with RMB 2.4 billion in the prior period.

Speaker Change: was ourinb three point four nine

Speaker Change: comparareids are't be reallyty po seven and five

Speaker Change: Non-Gap Net Income Attributable to VIP Shop Holders

Speaker Change: was RMB 2.2 billion.

Speaker Change: compare with RMB 2.4 billion in the prior year period.

Mark Wang: Non-Gap Net Margin attributable, to Vipshop shareholders was 8.1%, compared with 8.6% in the prior period.

Speaker Change: Non-Gap Dam Margin Attributable to VIP Shop Stareholders

Speaker Change: was eight point one percent

Speaker Change: compared with 8.6%.

Mark Wang: Non-Gap Net Income attributable to Vipshop shareholders per diluted ADS was RMB 3.91, compared with RMB 4.30 in the prior period.

Speaker Change: in the prior period.

Speaker Change: Non-cabinet income attributable to Vipshop shareholders.

Speaker Change: for diluting ADS.

Speaker Change: was rb's really point ninei one

Speaker Change: compared with RMB 4.30

Mark Wang: As of June 30, 2024, the company had cash and cash equivalents and restricted cash of RMB 21.6, billion and short-term investments of RMB 1.9 billion.

Speaker Change: half after june thirty twothousand and twenty four

Speaker Change: The company had cash and cash equivalents.

Speaker Change: and a restricted cash of RMB21.6 billion.

Speaker Change: and short-term investments of RMB 1.9 billion.

Mark Wang: Looking forward to the third quarter of 2024, we expect our total R&B to be between R&B 20.5 billion and R&B 21.6 billion. Representing a year-over-year decrease of approximately 10% to 5%. Please note that this reflects our current and preliminary view of the market in our regional conditions.

Mark Wang: Looking forward to the third quarter of 2024, we expect our total net revenue to be between RMB 20.5 billion and RMB 21.6 billion, representing a year-over-year decrease of approximately 10% to 5%. Please note that this forecast reflects our current and preliminary view of the market, and operational conditions, which is subject to change.

Speaker Change: Looking forward to the third quarter of 2024.

Speaker Change: We expect it. We expect our children around you.

Speaker Change: to be between RMB20.5 billion and RMB21.6 billion.

Speaker Change: representing a year-over-year decrease of approximately 10% to 5%.

Speaker Change: Please note that this forecast reflects our current and preliminary view of the market and operational conditions.

Mark Wang: We just have that to change.

Unknown Executive: With that, I would now like to open the call to Q&A.

Mark Wang: Okay, thanks, Eric, and hello, everyone.

Mark Wang: We deliver another quarter of solid profitability despite ongoing pressure on top line growth, as we remain responsive to the evolving environment, to weather external challenges.

Speaker Change: which is subject to change.

Speaker Change: With that, I would now like to open the call to Q&A.

Unknown Executive: Thank you, dear participants.

Speaker Change: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 1 1 on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star 1 1 again.

Unknown Executive: As a reminder, if you wish to ask a question, please press star, 11 on your telephone keypad and wait for a name to be announced.

Unknown Executive: Dear analysts, who are proficient in both languages, to slay your question into Chinese as well. Thank you so much for your understanding. Mr. Ba will compile the Q&A roster. This will take a few moments.

Speaker Change: Dear analysts who are proficient in both languages, translate your question into Chinese as well. Thank you so much for your understanding. Please stand by while we compile the Q&A. This will take a few moments.

Thomas Chong: And now we're going to take our first question. And it comes from the line of Thomas Chong from Jeffrey. So that is open, please ask a question. Thank you, Mr. Guanlin. This is my question. I have two questions.

Unknown Executive: To withdraw a question, please press star 11 again.

Mark Wang: We managed to optimize our operationally efficient, and achieve healthy margins. Specifically, Consolidated Gross Margin increased to 23.6%, from 22.2% a year ago. Thanks to Higher Margin Category, mixed from apparel sales and a series of cost-saving matters.

Mark Wang: Non-cash net margin attributable to VIP shop shareholders, remained at a high level at 8.1%, reflecting our disciplined approach.

Unknown Executive: Dear analysts who are proficient in both languages, translate your question into Chinese as well. Thank you so much for your understanding.

Speaker Change: And now we're going to take our first question.

Mark Wang: 這很多經典的西方媒體, in the midst of macro and competitive competition dynamics.

Thomas Chong: And it comes from the line of Thomas Chong from Jeffries. Your line is open, please ask your question.

Mark Wang: Our goals are to balance growth with profitability, and protect the long-term health of our business.

Thomas Chong: The first one is, Mr. Guanlin can share a situation where we are now seeing the situation of the red light, which is the impact of the recovery situation. Mr. Guanlin will not share a situation, which is that we are now seeing the July 8th to the G-MV region of China, which is still the year of our G-MV region.

Speaker Change: Good evening, thank you to the management for accepting my question. I have two questions. The first one is, can the management share the current macro situation we are seeing and its impact on consumer behavior?

Speaker Change: want a ple first on this charge off share can

Speaker Change: Currently, we are observing the trend of GNV from July to August up to now, and also our expectations for GNV.

Speaker Change: Then my second question is about the real landscape of the industry, can you share a bit about it...

Jessie Zheng: Hello, everyone, and thank you for joining the VIP shop setting quarter, 2024 earnings conference call.

Unknown Executive: With us today, our erection, our co-founder, Chairman, and CEO, Mark Wang, our CFO. Before mentioned begins their prepared remarks, I would like to remind you that the discussion today will contain forward looking statements made and to the safe harbor provisions of the U.S, private security litigation reform act of 1995. Forward looking statements are subject to risk and uncertainties that may cause extra results to differ materially from our current expectations. Potential risks and uncertainties include unmotivimited to those outlining our safe harbor statements in our earnings release in the public filings with us securities and exchange commissions, which also applies to this call to the extent any forward looking statements may be made. Please note that certain financial matters used on this call, such as non-gap operating income, non-gap net income, and non-gap net income per adias, are not presented in accordance with U.S, gaps.

Speaker Change: This is the development trend of Apparel and Standardized Category, and then from the perspective of GNV's strategy for the future, we can share our views.

Thomas Chong: And then the second question is, Mr. Guanlin's real summary. About the monthly G-MV trend, our expectations for the full year.

Unknown Executive: Mr. Bao will compile the Q&A notes, so this will take a few moments.

Unknown Executive: With us today, our erection, our co-founder, Chairman, and CEO, Mark Wang, our CFO.

Unknown Executive: Please refer to our earnings release for details relating to the recommendations of our non-gap matters to get married.

Speaker Change: Thanks management for taking my question. My first question is about...

Unknown Executive: And now we're going to take our first question.

Speaker Change: The Consumer Sentiment in Macro Uncertainties. Any comments that can be shared about the monthly GMV trend or expectations for the full year? And my second question is about the competitive environment. Can management comments about how we should think about the apparel and the standard?

Unknown Executive: And it comes from the line of

Erickson: Paolo Catgrid held up, relatively well, GNV generated from co-brand and SPI members, showed the resilience for the full quarter. We see this as an indication of the fundamental strengths of our business. Customer traction remained the mouthed, reflecting our quotient's approach to marketing spend aimed at challenging backdrop. However, active SPI members increased by 11% from year-go and accounted for 40% of our online spending. That's in college as a hardcore customer cohort with the most resilient spending power continues to recognize the unique value of shopping with us, giving that we are facing ongoing uncertainties in the near term with folks on the long-term thinking that positions us for continued growth in the years ahead.

Thomas Chong: And my second question is about the competitive environment. Communication comments about how we should think about the parallel and the sanitized category. And how is the G-MV goal for these two categories, the quarter to date, and any color about the contribution about the parallel category right now? Thank you.

Thomas Chong: Thomas Chong from Jefferies.

Unknown Executive: Your line is open.

Speaker Change: and the standardized category. And how is the GMV growth for these two categories according to date? And any comment about the contribution about the apparel category right now? Thank you.

Unknown Executive: Please ask a question.

Erickson: I will answer the first question about the overall environment. As far as we can see, the consumption is the most important. In fact, the overall rate is low. As far as the overall rate is concerned, the overall rate is high. As far as they think, they want to buy a little bit of gold, not like last year. So, as far as we can see, the overall environment is normal. So, as far as we can see, the overall rate is low. As far as the overall rate is concerned, the overall rate is low. As far as we can see, the overall rate is low.

Speaker Change: Let me answer, the first question is about the overall environment.

Speaker Change: So we have seen that recent consumption is actually generally sluggish. So overall, how is consumer sentiment?

Speaker Change: That is to say, for them, shopping as a whole means they feel like they have to buy.

Speaker Change: Buy fewer but better items, rather than buying casually like in the past.

Speaker Change: So overall, we see that the general environment is average. As for the question just asked by the analyst, from July to August , we generally see that the situation continues. In July and August , we see that overall consumer behavior...

Speaker Change: This reaction is actually not much different from what we saw in four, five, and six. It's basically continuing in a similar manner.

Speaker Change: So the second point is, looking into the future, regarding our entire business, because our business is divided into wearables and standard products.

Speaker Change: So we ourselves see, for example, recently

Speaker Change: neitherthe qr acq an cho a woman'sthe

Erickson: As far as the overall rate is concerned, the overall rate is low.

Speaker Change: In terms of wearables, our decline is not significant because wearables are still our strong suit, so the decline is not significant.

Speaker Change: However, we have dropped quite a bit in the bid evaluation because we estimate that there are many competitive reasons involved. This includes price comparison subsidies and so on.

Speaker Change: Therefore, because we did not provide subsidies ourselves, it actually weakened the competitive advantage of our standard products. So in the upcoming Q3 and Q4, we will find ways to continue developing our wearable products, including stabilizing our FVIP customer base.

Speaker Change: So, additionally, we need to find ways to get our SVIP members to buy standard products, and also get non-SVIP members to buy them. Let's think of ways to reduce the decline in standard products. We need to try to recover the significant drop in standard products as much as possible.

Erickson: Even as the patterns of spending evolving, the key that did mine were custom choose to shop, have not changed. We are sharpening our focus on enriching merchandising, offering highlighting affordability throughout our supplement while insure a watery breed expense. Together, these have been the co-competence that has helped us navigate difficult times. Among the beneath highlights, we are pleased with the silly flow of the quality blend's inventory. Thanks to our merchandising capability from strong team talents across categories, we now adapt more quickly to emerging trends, which is important to driving growth by delivering what custom look for.

Erickson: Okay, in terms of our question on a macro environment, we see that consumption continues to be quite muted due to macro uncertainty. We don't know whether the consumption momentum is going to be sustainable. And as consumers are being quite cautious, discerning, and selective, we feel that as quite uncertain, going forward, quoted today, we see such trends continue. And that's why we see Jamie Gross quoted today is pretty comparable to what we have seen in Q2, not too much improvement from the prior culture.

Mark Wang: Well, our outlook for the near term has stopped, we remain confident in our unique position, to drive sustainable and profitable growth in the long run.

Mark Wang: With that, We are committed to returning significant cash to our shareholders. We accelerated our pace of share buyback with over 200 million U.S. dollars, having been utilized during the second quarter.

Mark Wang: 以上言論不代表本台立場, a new share repurchase program, of up to $1 billion will be in place after we fully utilize it.

Unknown Executive: Before mentioned begins their prepared remarks, I would like to remind you that the discussion today will contain forward looking statements made and to the safe harbor provisions of the U.S, private security litigation reform act of 1995.

Erickson: In the first half, we select more than 600 well-known brands to our platform, including a mix of mass brands, new trendy brands and affordable luxury brands in much richer selections. Our layered approach to brand portfolio is well suited to meet the ever-changing custom needs across income and age cohorts in different regions. We are also in college by the steadily progress in the Made4VIP line, so customize the products. In the second quarter, GME from Made4VIP increased more than 140% from a year ago.

Speaker Change: Okay, in terms of our question on the macro environment, we see that consumption continues to be quite muted.

Mark Wang: The remaining amount, under the existing program.

Speaker Change: due to macro uncertainty.

Mark Wang: And as we mentioned, our last earning call.

Mark Wang: We planned to meet, no less than 75%, of our full-year non-GAAP net income, accessible to Vipshop shareholders, through this questionnaire is shared with purchase and dividend distribution.

Speaker Change: we don't know whether the consumption

Speaker Change: momentum is going to be sustainable.

Erickson: Our know-how and expertise is a payload-enabled brand to customize more differentiated products at great price, which were welcomed by many customers. We see a minimally higher potions of custom repeatedly purchased custom-ized products than they do in the general appellal category. And the conventions for Made4VIP has been consistently higher than the average levels seen within the same blend and the same category. Beyond that, we continue to focus on delivering value, providing the right spread of great pricing and quality to our customers. We consistently optimize ways we work with brand partners to ensure we could generate more savings for our customers.

Speaker Change: and as consumers are being inquired.

Speaker Change: cautious, discerning, and selective. We feel that it's quite uncertain going forward.

Erickson: Recently, we launched some new channels. Future time-limited promotions and everyday low price. These are designed to help our customers make the most of their budget while also providing reliable resource for brand partners to present their best views. On the other hand, it is enhancing quality control we have been working hard this year to help customers select contrasted to the volume of brand products by increasing quality inspections throughout our supply chain. In addition, we are adapting and refining our approach to custom engagement.

Speaker Change: Quarter-to-date, we see such trend continue and that's why we see GME growth quarter-to-date is

Erickson: In the second quarter for SPIP we continue with the launch, our provides sales and special offering both online and offline. We intended to increase the deep of our lower tape program to serve there uniquely. For young custom, we tailored the layout and design of our homepage, created specialized channels, and made personalized recommendations that better cater to our performance.

Speaker Change: pretty comparable to what we have seen in Q2, not too much improvement from the prior quarter.

Thomas Chong: Can you share with us the trend of GMV from July to August, and what are our expectations for GMV?

Erickson: On the second question in terms of apparel and non-apparel trends, we continue to see apparel also performing non-apparel categories. Portage-based, we only see a slight decrease in terms of Jamie in apparel categories versus a larger decrease in non-apparel categories. This is pretty much due to heightened industry competition, with everybody is looking at private persons and offering subsidies, which we don't actually follow; we choose not to follow at all costs. that to some extent makes our sensitive side of the item more susceptible to competition. In the second half, we plan to continue to stabilize our competitive strategies with a power category, especially whether to continue to grow as the IT customers and the improved year of frequency and average ticker size.

Erickson: In the face of the temporary, very, very flea on the top line, we continue to work on the long-term efficiency, slow process, optimization, and technology enhancement across business lines, among other things. For example, we continuously upgrade our merchandise platform to further improve the activity of our team when we are serving brand partners. This has motivated brand partners to invest while generating best ROI technology, AI capabilities, and are increasingly applied to search recommendation and intelligence intelligence shorting assistance to provide the custom with inspiration and improve conversions. We have a fundamentally sorry, the biggest model that also inherently flexible, but we have much more work to do, and we are only so that we can quickly pivot as customers by all it has changed.

Speaker Change: On the second question, in terms of apparel and the non-apparel trend, we continue to see apparel outperforming non-apparel categories.

Erickson: As we move ahead, we believe that as long as we stay close to our customers, continuous investing in our merchandising capabilities, and consistently execute on the discounted retail fundamentally, we will be positioned for continuous growth over the long term.

Speaker Change: Quarter to date, we only see a slight decrease in terms of GME in apparel categories.

Speaker Change: versus a wider, a larger decrease in non-apparel categories. This is pretty much due to heightened industry competition. Everybody is looking at price comparisons and offering subsidies.

Mark Wang: At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results. Okay, thanks Eric and Hello01. We deliver another quarter of solid profitability despite ongoing pressure on a top line growth. As we remain responsive to the evolving environment to weather external challenge, we have managed to optimize operational efficiency and achieve healthy margins. Subsequently, consolidated growth margin increased to 23.6% from 22.2% a year ago.

Speaker Change: which we don't actually follow, we choose not to follow at all costs, that to some extent

Speaker Change: makes our standard sized items more susceptible to competition. In the second half, we plan to continue to stabilize our competitive edges with apparel categories.

Mark Wang: Thanks to higher margin category, it makes from a parallel skills in the series of positive matters. None get in the margin attributable to very short spare holders, remained at a high level at 8.1%. Reflecting our discipline approach to managing our business. In the midst of macro and the competition dynamics, our goals are to balance growth with profitability and protect the long term health of our business. Well, are also from the near term as softens. We remain confidence in our unique position, to drive the sustainable and profitable growth in the long run.

Speaker Change: Especially, we're going to continue to grow our SBIP customers and improve their frequency and average ticket size.

Erickson: And on the other hand, we're making a series of adjustments to a standardized item, so we're trying to narrow its laws. And we're trying to bring this system that's a touch at this. We plan to leverage our IT members to increase their broad categories, particularly as well as increase the intention from non-IP customers as well. Thank you.

Speaker Change: On the other hand, we're making a series of adjustments to standardize the items, so we're trying to narrow its loss, and we will try to bring this business segment back to Plattage at least.

Mark Wang: With that, we are committed to returning significant cash to our shareholders. We have accelerated our pace of shared by-back with over $200 million US dollar, having been utilized during the second quarter. In addition, the new share repurchase program of up to $1 billion US dollar will be in place after we fully utilize the remaining amounts under the existing program. And as we mentioned on our last earning call, we plan to commit no less than 75% of our full-year non-gap net income, attributable to VIP shop shareholders through this questionnaire shared repurchase and dividend distributions.

Speaker Change: We plan to leverage our SBIP members to increase their product categories, purchases, as well as increase the intention from non-SBIP customers as well.

Mark Wang: Growth margin increased to 23.6% from 22.2% in the prior period. Total operating expenses decreased by 4.2% year-over-year to R&B 4.3 billion from R&B 4.5 billion in the prior period. As a percentage of total net revenues, total operating expenses decreased to 16.0% from 16.1% in the prior period. For human expenses decreased by 0.8% year-over-year to R&B 2.16 billion from R&B 2.18 billion in the prior period. As a percentage of total net revenues, for human expenses was 8.1% compared with 7.8%, in the prior period.

Thomas Chong: My second question is about the real structure of the industry.

Alicia Yap: Now we're going to take our next question. And the question comes to learn of Alicia Yap from CT. Your line is open. Piece has to question. Hello. Thank you. Good evening. There are two questions. First of all, I'd like to ask you a question. Just now, we just talked about this. The question is, how much do we have? How many SKUs do we have now? How much do we have now? The number of SKUs is higher.

Mark Wang: Now moving to our detailed quarterly financial highlights.

Speaker Change: Thank you.

Thomas Chong: Can you share with us the trend of the development of apparel and standardized categories?

Mark Wang: Before I get started, I would like to clarify, that all financial members, Presented below by Ying-Chen Min-Bi, and all the percentage teams, year-over-year, or lives, otherwise noted.

Speaker Change: Thank you.

Thomas Chong: And can you share your thoughts on the future of GMV?

Speaker Change: Now we're going to take our next question.

Mark Wang: Total net revenues for the second quarter of 2024 will be $26.9 billion, compare with RMB$27.9 billion, in the prior period.

Mark Wang: Gross profits increased by 2.2%, year over year, to RMB 6.3 billion, from RMB 6.2 billion in the prior year period.

Mark Wang: Post-mortem increase to 23.6% from 22.2%, in the prior period. Total operating expenses decreased by 4.2% year-over-year, to RMB $4.3 billion, from RMB 4.5 billion, in the prior year of hearing, as a percentage of total net revenue.

Alicia Ap: And the question comes to the line of Alicia Yap from Citi. Your line is open. Please ask your question.

Mark Wang: Total operating expenses decreased to 16.0%, from 16.1% in the prior period. HUMAN EXPENSES, decreased by 0.8% year-over-year to RMB 2.16 billion, from RMB 2.18 billion, in the prior period, as a percentage of total net revenue.

Mark Wang: Marking Census decreased by 17.0% year over year to R&B 740.7 million from R&B 800-92.5 million in the prior period. At a percentage of total NLM use, Marking Census decreased to 2.8% from 3.2% in the prior period. Technology in a content expenses increased by 10.0% year over year to R&B 487.9.2 million from R&B 400-43.0 million in the prior period. At a percentage of total NLM use, technology in a content expenses was 1.8% compared with 1.6% in the prior period.

Alicia Ap: Hello. Thank you. Good evening. Good evening.

Speaker Change: There are two questions. First, I would like to ask, we just mentioned this special brand of Vipin.

Speaker Change: Currently, we would like to know approximately how many SKUs our special brand has, and what percentage of GNV it accounts for this quarter. Additionally, we would like to know if the selling price and profit margin are relatively high. If possible, please share more information on this. The second question is actually to understand more about the SBIP members. We know that their loyalty is relatively high, but we are not sure if the management has observed any recent behaviors of these SBIP members.

Mark Wang: General administrative expenses decreased by 6.5% year over year to R&B 900.7 million from R&B 963.1 million in the prior period. At a percentage of total NLM use, general administrative expenses decreased to 3.4% from 3.5% in the prior period. Income from operations increased by 16.5% year over year to R&B 2.2 billion from R&B 1.9 billion in the prior period. Operating margins increased to 8.3% from 6.9% in the prior period. Non-gap income from operations increased by 11.6% year over year to R&B 2.6 billion from R&B 2.3 billion in the prior period.

Alicia Yap: If they are aware of their behavior, and they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior, they are aware of their behavior. The first question is related to the characteristics of the product.

Speaker Change: Some changes, for example

Speaker Change: Are they also looking for products with relatively lower prices, or is their purchasing frequency actually...

Thomas Chong: Thanks, management, for taking my question.

Mark Wang: 服务员费用, 是8.1%的股票 compare with 7.8%, in the prior period.

Mark Wang: Marking Fences, decreased by 17.0%, year-over-year, to RMB 740.7 million, from RMB $892.5 million, by Europe Hero, as a percentage of total net revenue.

Mark Wang: Marketing Census decreased to 2.8%, from 3.2%, in the prior period.

Speaker Change: Thanks, management, for taking my questions. I have two questions. First is that I'm just wondering if management can share some of the operating metrics for the make for VIP, the customized products, you know, in terms of the numbers of SKU under these customized products, and how much of that is actually contributing to this quarter GMV and also, the ASP and the margins is higher than

Mark Wang: Technology and Accounting Experts, increased by 10.0% year-over-year, to RMB 487.2 million from RMB 400.

Thomas Chong: My first question is about the consumer sentiment, in macro uncertainties.

Mark Wang: $43.0 million in the prior period, as a percentage of total net revenue.

Mark Wang: Technology and Accounting Expenses. 1.8% compare with 1.6% in the prior period.

Mark Wang: General Administrative Expenses, decreased by 6.5%, year over year to RMB 900.7 million from RMB 963.1 million in the prior period, as a percentage of total net revenue.

Mark Wang: General and Administrative Expenses Decreased, to 3.4%, from 3.5% to 2.5% in the prior period.

Mark Wang: Income from operations, increased by 16.5%, year over year to RMB 2.2 billion, of RMB 1.9 billion, in the prior year period. Operating margin increased to 8.3%, from 6.9%, in the prior period. Non-Gap Income from Operations, increased by 11.6% year-over-year, to RMB 2.6 billion, from RMB 2.3 billion in the prior year period.

Mark Wang: Non-Gap Operating Margin increased to 9.5%, from 8.2%, in the prior period.

Thomas Chong: Any comment that can be shared about the monthly GMV trend, our expectations for the full year?

Thomas Chong: And my second question is about the competitive environment.

Speaker Change: and underlying products.

Speaker Change: And then the second question is, just wondering, because I know that the SVIP members should be remaining very sticky and resilient. Just wonder if management has also observed any change of their behavior recently. For example, are these SVIP members also looking for more lower AFP, those value for money products, or they are actually buying slightly less frequent than before? Thank you.

Mark Wang: Non-gap operating margins increased to 9.5% from 8.2% in the prior period. That income attributable to R&B 1.9 billion compared with R&B 2.1 billion in the prior period. That margin attributable to R&B 2.1 billion compared with R&B 2.1 billion compared with R&B 2.1 billion in the prior period, was 7.2%. Compare with 7.5% in the prior period. Net income, attribute vote to Vipshop's shareholders per diluted ADS was R&B 3.49. Compare with R&B 3.75 in the prior period.

Alicia Yap: Because we, in the whole show, if we are going to sell out the product, about 40% of the product, we are talking about a different product. There are some products that they made for us. And some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that they made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, some of the products that we made for us, and the deep discounted products, like those SKUs, with 70% of retail price.

Speaker Change: Let me answer the first question, which is about that special product, because we...

Speaker Change: On the entire website, if we talk about wearable items, we have sold about 40% or more. We have products that are different from others. Some of these are...

Speaker Change: The brand custom-made it specifically for us. Then there are some that the brand specifically allocates to us. That is to say, some brands supply different brands, but they specifically allocate a batch of goods to us.

Speaker Change: Additionally, there are some low-discount items. Since we originally specialized in low discounts, we have removed items that are below 30% off or generally low-discounted. So overall, this is how it is; we handle different types of goods accordingly.

Mark Wang: Net income, attribute vote to Vipshop's shareholders was R&B 2.2 billion. Compare with R&B 2.4 billion in the prior period. Net income, attribute vote to Vipshop's shareholders was 8.1% compared with 8.6% in the prior period. Net income, attribute vote to Vipshop's shareholders per diluted ADS was R&B 3.91 compared with R&B 4.30 in the prior period. As of June 30, 2024, the company had cashed and cashed equivalence and a restricted cash of R&B 21.6 billion in short term investments of R&B 1.9 billion.

Speaker Change: The sales of Chuanbai exceeded 40%.

Speaker Change: So what we're saying here is that actually in the next step

Speaker Change: We will continue to persist because we are still looking for well-known brands.

Speaker Change: So there are more good things, more discounts. Additionally, we also hope to...

Speaker Change: Everyone sells different goods, so in this way, we can avoid what's called vicious competition. What we're saying here is that within this context...

Speaker Change: We will continue to strengthen this because we say that defective products will be sold at special sales, which means good products at low prices. This is something that will not change, so we will continue to focus on this aspect in the future.

Speaker Change: Actively expand and deepen

Speaker Change: So the second aspect is about SVIP. Our SVIP segment is still relatively stable, but this year we have noticed that the per-customer transaction, that is, the unit price, the per-customer unit price...

Speaker Change: Actually, nothing has changed, except for the quality of shopping.

Speaker Change: There is a very small drop, possibly a decrease of two to three points. So overall, we think it is manageable. For example, the shopping frequency in a quarter might drop from, say, 15 orders to possibly 14.5 orders.

Unknown Executive: Forward looking statements are subject to risk and uncertainties that may cause extra results to differ materially from our current expectations. Potential risks and uncertainties include unmotivimited to those outlining our safe harbor statements in our earnings release in the public filings with us securities and exchange commissions, which also applies to this call to the extent any forward looking statements may be made.

Mark Wang: Looking forward to the third quarter of 2024, we expect our total R&B to be between R&B 20.5 billion and R&B 21.6 billion. Representing a year over year decreased of approximately 10% to 5%. Please note that this reflects our current and preliminary view of the market in our regional conditions. We just have that to change.

Speaker Change: It's just a minor change, so we can't predict any significant changes. Additionally, in Q2 and Q3 this year, we will continue to increase the proportion of our SVIP members. We will convert more non-SVIP members into SVIP members because we believe

Unknown Executive: Please note that certain financial matters used on this call, such as non-gap operating income, non-gap net income, and non-gap net income per adias, are not presented in accordance with U.S, gaps.

Speaker Change: The service for our SVIP is very good.

Speaker Change: So we also carefully select for him. Our entire website does not sell such random things. Therefore, overall, we believe that firmly consolidating SVIP is still a long-term goal for us in the future.

Unknown Executive: Please refer to our earnings release for details relating to the recommendations of our non-gap matters to get married.

Mr. Erickson: Is that I would now like to turn a call over to Mr. Erickson.

Unknown Executive: With that, we would now like to open the call to Q&A. Thank you, dear participants. As you remind me, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 11 again. Dear analysts, who are proficient in both languages to slay your question into Chinese as well. Thank you so much for your understanding. Mr. Ba will compile the Q&A roster. This will take a few moments.

Speaker Change: soet

Speaker Change: So even if, because having more SVIP members will actually increase our return rate, since SVIP members tend to buy more and return more, we still believe that overall it is worth it, because our SVIP members...

Mr. Erickson: Good morning and good evening, everyone.

Unknown Executive: And now we're going to take our first question.

Mr. Erickson: Welcome and thank you for joining our second quarter of 2024 earnings conference call. In the face of multiple headwinds in the external environment, we had slower momentum in our business.

Speaker Change: The spending of SVIP users is much higher than that of non-SVIP users. Overall, the increase is much larger. Therefore, in general, our current SVIP base is still stable. We hope to continue to expand and increase it.

Thomas Chong: Can management comment about how we should think about the apparel and the standardized category?

Thomas Chong: And how is the GMV growth for these two categories according to date?

Thomas Chong: And any comment about the contribution about the apparel category right now?

Mark Wang: Net income attributable to Vipshop shareholders, was RMB 1.9 billion, compare with RMB 2.1 billion, to the prior hearing. Net Margin Attributable to VIP Shop Stareholders, was 7.2%. Compare with 7.5, in the prior period.

Mark Wang: Net Income Attributable to VIP Shop Shareholders, per diluted ADF, was RMB 3.49, compared with RMB 3.75, in the prior year period.

Mark Wang: Non-Gap Net Income Attributable to VIP Shop Shareholders, was RMB 2.2 billion, compare with RMB 2.4 billion, in the prior year period.

Mark Wang: Non-gap margin attributable to Vipshop shareholders, was 8.1%, compared with 8.6%, in the prior year of service, non-cabinet income attributable to Vipshop shareholders for Diluting ADS, was RMB 3.91.

Mark Wang: Compare with RMB 4.0, 3-0, in the prior year period. 6月30日, 二零二四, The company had cash and cash equivalents, and restricted cash of RMB21.6 billion, and Strong-Term Investments, of RMB 1.9 billion.

Mr. Erickson: Our team focused on staying eager to respond quickly to external change and achieving operational excellence.

Speaker Change: In terms of customized products, it's actually part of our unique offerings on our platform.

Mark Wang: Looking forward, the third quarter of 2024.

Thomas Chong: And it comes from the line of Thomas Chong from Jeffrey.

Mark Wang: We expect it, we expect our children around you, to be between RMB20.5 billion and RMB21.6 billion, representing a year-over-year decrease, of approximately 10% to 5%. Please note that this forecast reflects our current and preliminary view of the market, and Operational Conditions, which is subject to change.

Mark Wang: With that, I would now like to open the call to Q&A.

Thomas Chong: So that is open, please ask a question. Thank you, Mr. Guanlin. This is my question.

Speaker Change: Within the apparel category, we have over 40% unique offerings, including customized products.

Thomas Chong: I have two questions. The first one is, Mr. Guanlin can share a situation where we are now seeing the situation of the red light, which is the impact of the recovery situation. Mr. Guanlin will not share a situation, which is that we are now seeing the July 8th to the G-MV region of China, which is still the year of our G-MV region. [inaudible] About the monthly G-MV trend, our expectations for the full year.

Mr. Erickson: In the second quarter, sales were under pressure of the high base and aimed the customer settlement.

Speaker Change: exclusive access to brand inventory and deep discounted products like those SKUs with 70% of retail price.

Mr. Erickson: Paolo Catgrid held up, relatively well, GNV generated from co-brand and SPI members, showed the resilience for the full quarter. We see this as an indication of the fundamental strengths of our business.

Alicia Yap: So it's a combination of the great merchandises that we offer to our customers.

Mark Wang: Thank you.

Operator: Dear participants, as a reminder, if you wish to ask a question, please press star 1 1 on your telephone keypad and wait for a name to be announced.

Operator: To withdraw a question, please press star 1 1 again.

Speaker Change: So it's a combination of the great merchandise and the great prices that we offer to our customers.

Alicia Yap: And in the going forward, we will continue to deepen our differentiated product offerings to avoid direct competition with our peers.

Speaker Change: And going forward, we will continue to deepen our differentiated product offering to avoid direct competition with our peers.

Alicia Yap: The third question regarding SBIP customer protection, actually we see we have a very solid foundation of SBIP customers, whose average ticket size remains quite stable. But when we do see their shocking frequency has been slightly less and before roughly about 2 to 3% compared to the times they used to shop on a pack wall. We think of these frequency, although antiprecious is quite a magical. We don't see a very significant change in the behavior of SBIP customers. And we do see a lot of potential of growing our SBIP customer base in the coming quarters, especially in leveraging our service capabilities, nourishing their trust on our pack walls, because we don't.

Mr. Erickson: Customer traction remained the mouthed, reflecting our quotient's approach to marketing spend aimed at challenging backdrop.

Speaker Change: The second question regarding SVIP customer traction. Actually we see we have a very solid foundation of SVIP customers.

Thomas Chong: And my second question is about the competitive environment. Communication comments about how we should think about the parallel and the sanitized category. And how is the G-MV goal for these two categories, the quarter to day, and any color about the contribution about the parallel category right now?

Speaker Change: whose average ticket size remains quite stable, but we do see their shopping frequency has been slightly less than before, was roughly about, roughly 2% to 3%.

Speaker Change: As compared to the time they used to shop on our platform, we think the frequency of the vendor pressure is quite imaginable. We don't see a very significant change in the behavior of SBIP customers.

Unknown Executive: Thank you. [inaudible] that to some extent makes our sensitive side of the item more susceptible to competition. In the second half, we plan to continue to stabilize our competitive strategies with a power category, especially whether to continue to grow as the IT customers and the improved year of frequency and average ticker size. And on the other hand, we're making a series of adjustments to a standardized item, so we're trying to narrow its laws. And we're trying to bring this system that's a touch at this. We plan to leverage our IT members to increase their broad categories, particularly as well as increase the intention from non-IP customers as well.

Speaker Change: And we do see a lot of potential of growing our FVIP customer base in the coming quarters, especially leveraging.

Operator: Dear analysts who are proficient in both languages, translate your question into Chinese as well. Thank you so much for your understanding.

Operator: Please stand by while we compile the Q&A and our studies will take a few moments.

Alicia Yap: We will focus on quality branded offerings instead of, you know, and stay away from cheap knock-offs. So that's why we are confident that we will continue to grow the base of SBIP customers as we are, as they are Apple. At the next day, we have our SBIP contribution; we will see. We generally take up a little bit, and as a matter of fact, it's very attractive. We do have very attractive returns in terms of RTP, because in terms of RTP, they spend much more as compared to now, as we are key customers. Thank you.

Speaker Change: Our service capability is larger than they are just on our platform because we focus on quality branded offerings instead of, you know, and stay away from cheap knockoffs.

Speaker Change: So that's why we are confident that we will continue to grow the base of SVIP customers as well as their R pools.

Speaker Change: Ultimately, with higher SVIP contribution, we will see

Speaker Change: return will take up a little bit, but mathematically it's very attractive. We do have a very attractive return in terms of LTV because in terms of ARTful, they spend much more as compared to non-SVIP customers.

Speaker Change: i

Speaker Change: ch

Andre Chang: Now we are going to take on the next question. And the next question comes to a learn of Android Chang from JP Morgan. Your learn is open piece after question.

Operator: And now we're going to take our first question.

Speaker Change: Thank you.

Thomas Chong: And it comes from the line of Thomas Chong from Jefferies.

Speaker Change: Now we're going to take our next question.

Operator: So the line is open.

Andrea Trunks: And the next question comes from the line of Andre Chang from JP Morgan. Your line is open, please ask your question.

Thomas Chong: Thank you.

Unknown Executive: 我回答一下,第一個問題就是問整體的大環境,那麼我們自己看到最近的消費其實整體算低迷的,那麼總體的消費者情緒呢,就是說對整體的購物,等於他們覺得就是要買少而精,而不是像當年這麼隨便買,所以說總體我們看到這個大環境一般。那麼另外剛剛分析師問的,就是我們從七月到八月,我們總體看到這個情況還是繼續延續,就是七月八月我們看到總體的消費者反應跟我們看到的四五六的其實差不了很多,基本上是差不多在延續。那麼第二個呢,就是我們看啊,就是在未來,就是說關於我們的整個生意,因為我們的生意呢,有分穿戴和標品,那麼我們自己看到,比如說最近那個Q2,Q3,其實我們自己在穿戴上面,我們跌幅不大,因為穿戴還是我們的強項啊,跌幅不大,但是呢,我們在標品上面跌的比較多,因為我們估計這裡面有很多是競爭的原因, 就是因為在標品上面,大家比價補貼啊,那個比價補貼啊等等,那麼更因為我們自己沒進行補貼,所以說其實削弱了我們的標品的競爭優勢,所以我們接在接下來的Q3,Q4,我們會想辦法在標那個穿戴還是持續發展,包括穩住我們的SVIP的基本盤。那麼另外呢,我們想辦法讓標品啊,讓我們的SVIP買,那麼包括讓非SVIP買,重新我們想想,想辦法在標品上面,就是跌幅不要這麼大,再把標品等於從原來的跌幅比較大,那麼我們把它搬,儘量把它搬回來。

Unknown Executive: From the prior quarter. On the second question, in terms of apparel and non-apparel trends, we continue to see apparel outperforming non-apparel categories.

Unknown Executive: Quarter to date, we only see a slight decrease in terms of GME in apparel categories, versus a wider, a larger decrease in non-apparel categories.

Unknown Executive: This is pretty much due to heightened industry competition, with everybody looking at price comparisons and offering subsidies, which we don't actually follow.

Unknown Executive: We choose not to follow at all costs, that to some extent makes our standard sized items more susceptible to competition.

Speaker Change: Good evening, management. I have two questions to ask. The first one is about how we should consider our investment and our margin moving forward.

Speaker Change: If we look at the forecast for the third quarter, it seems that revenue might decline by 5 to 10 points. This indicates that the company may still prefer to use its financial resources more cautiously, and therefore, it is unlikely to deliberately lower prices or aggressively attract customers. Instead, the focus will remain on our inventory.

Speaker Change: To attract more natural customer return and transactions

Speaker Change: So, in terms of this margin, compared to the second quarter, because there has been some normalization over the past few quarters, how should we think about the margin for the second half of the year?

Andre Chang: So we are going to take on the next question, and we are going to take on the next question. Thank you, management, for taking my question. My first question is about margin and the infestment. Charging from this 5% to 10% young year decline of the third quarter revenue, does that mean the company will remain highly disciplined in the infestment of marketing use acquisition? So the second quarter, the second half margin will remain no supported.

Speaker Change: Yes, and another question is regarding the financial investment. I noticed that the operating cash flow in the second quarter turned into an outflow, which is relatively rare given our profitability. Could the management comment on why there is this cash outflow?

Thomas Chong: Please ask your question.

Speaker Change: ?????????? Thank you, management, for taking my question. My first question is about margin and the investments.

Speaker Change: Judging from this 5% to 10% year-on-year decline over third quarter revenue, does that mean the company will remain highly disciplined on investment of marketing user acquisition?

Speaker Change: So the second, third quarter, second half margin will remain, you know, supported.

Andre Chang: Considering there's no normalization of margin in the second quarter versus the previous few quarters, how should we think about the modern trend in the third quarter and the second half?

Speaker Change: Considering there's a normalization of margin in the second quarter versus the previous few quarters, how should we think about the margin trend in third quarter and the second half?

Eric Shen: 晚上好,谢谢管理层接受我的提问,我有两个问题,第一个是管理层可以分享一下我们现在看到宏观的一个情况,就是对消费的程序的影响,管理层可不可以分享一下,就是我们现在看到7月份,8月到现在的GMV的一个趋势,还有就是传联我们对GMV的预期。然后,我第二个问题是关于行业的竞争格局的,可以分享一下,就是服装和普选评级的那个发展的一个趋势吗?然后,从GMV的增速未来,可以分享一下我们的看法。谢谢管理层接受我的提问,我的第一个问题是关于消费者的态度,包括不确定性,任何的颜色都可以分享,关于GMV的月份趋势,我们的期望是全年,我的第二个问题是关于竞争的环境,管理层可以分享一下我们应该如何思考服装和普选评级, 还有关于GMV对这两个评级的增长是怎样的,还有关于服装评级的任何颜色,谢谢。我回答一下,第一個問題就是問整體的大環境,那麼我們自己看到最近的消費其實整體算低迷的,那麼總體的消費者情緒呢,就是說對整體的購物等於他們覺得就是要買少而精,而不是像當年這麼隨便買,所以說總體我們看到這個大環境一般,那麼另外剛剛問的那個分析師問的就是我們從七月到八月, 我們總體看到這個情況還是繼續延續,就是七月八月我們看到總體的消費者這個反應跟我們看到的四五六的其實差不了很多,基本是差不多在延續,那麼第二個呢,就是我們看啊,就是在未來,就是說關於我們的整個生意,因為我們的生意呢,有分穿戴和標品,那麼我們自己看到,譬如說最近那個Q二Q三, 其實我們自己在穿戴上面,我們跌幅不大,因為穿戴還是我們的強項啊,跌幅不大,但是呢,我們在標品上面跌的比較多,因為我們估計這裡面有很多是競爭的原因,就是因為在標品上面,大家比價補貼那個比價補貼啊等等,那麼更因為我們自己沒進行補貼,所以說其實削弱了我們的標品的競爭優勢,所以我們接在接下來的Q三Q四。我們會想辦法在標那個穿戴還是持續發展,包括穩住我們的SVIP的基本盤,那麼另外呢,我們想辦法讓標品啊,讓我們的SVIP買,那麼包括讓非SVIP買重新我們想想想辦法在標品上面就是跌幅不要這麼大,再把標品等於從原來的跌幅比較大,那麼我們把它盡量把它搬回來。 Okay, in terms of our question on the macro environment, we see that consumption continues to be quite new.

Eric Shen: Due to macro uncertainties, we don't know whether the consumption.., momentum is going to be sustainable.

Andre Chang: And my second question is about the operating cash flow. Despite very decent profit, we see no operating cash outflow in the second quarter, which is rare. Can management highlight what's the reason behind it?

Eric Shen: And as consumers are being quite cautious, discerning, and selective, we feel that it's quite uncertain going forward.

Eric Shen: Quarter-to-date, we see such trends continue, and that's why we see GME growth quarter-to-date, pretty comparable to what we have seen in Q2, not too much improvement from the prior.

Speaker Change #100: And my second question is about the operating cash flow. Despite a very decent profit, we see an operating cash outflow in the second quarter, which is rare. Can management highlight what's the reason behind it? Thank you.

Eric Shen: On the second question, in terms of apparel and non-apparel trends, we continue to see apparel outperforming non-apparel categories.

Eric Shen: Portrait to date, we only see a slight decrease in terms of GME in apparel, versus a larger decrease in non-apparel categories.

Eric Shen: This is pretty much due to heightened industry competition with everybody is looking at price comparisons and offering subsidies, which we don't actually follow.

Andre Chang: Thank you.

Eric Shen: We choose not to follow at all costs, makes our standard sized items more susceptible to competition.

Eric Shen: In the second half, we plan to continue to stabilize our competitive edges with apparel categories.

Mark Wang: My first question is related to the development of the development of the future of the whole company. The whole thing is that the company has a strict standard of LTV standards. In the end, we stopped. of different perspectives. Up to all, we haven't found a very good channel for supply customers, so we will remain disciplined in terms of marketing and for the second half. We are confident it's going to remain quite stable, and because of Brent Panerser under a lot of pressure nowadays, they have to bid for in less additional dollars for traffic and for returns of goods, etc.

Unknown Executive: Thank you.

Speaker Change #101: Yes, I will answer the first question, which is about the allocation of funds for the future development of the entire company. Basically, we will still actively acquire customers.

Unknown Executive: Now we're going to take our next question.

Speaker Change #102: However, our company has a strict standard, which is the LTV evaluation standard. Once we reach this point, we stop, meaning we no longer proceed because we think acquiring new customers is too expensive.

Speaker Change #103: We haven't been able to break even for several years, so we decided to stop. However, our current strategy is already more extensive than last year's strategy because we feel that the current environment is not good. We still need to increase customer acquisition, but there will be a limit. Therefore, we will continue this year as well.

Speaker Change #104: Go find more Hoxink channels, including with

Speaker Change #105: Many platforms and collaborations, in other words, gaining more channels, but we still insist.

Speaker Change #106: This degree, meaning if it exceeds our standards, we won't invest. So overall, we estimate our market expenses.

Alicia Yap: And the question comes to learn of Alicia Yap from CT. Your line is open piece has to question. Hello. Thank you. Good evening. There are two questions. First of all, I'd like to ask you a question. Just now, we just talked about this. The question is, how much do we have? How many SKUs do we have now? How much do we have now? The number of SKUs is higher.

Speaker Change #107: In the second half of this year, because we haven't seen some good channels, if there are good channels, the costs are actually controllable. So overall, we won't spend too much on market expenses.

Speaker Change #107: the meing while they just a woman is it i hadn under

Mr. Erickson: However, active SPI members increased by 11% from year-go and accounted for 40% of our online spending.

Speaker Change #107: In terms of labor, we are actually quite stable. So, overall, we are currently...

Mr. Erickson: That's in college as a hardcore customer cohort with the most resilient spending power continues to recognize the unique value of shopping with us, giving that we are facing ongoing uncertainties in the near term with folks on the long-term thinking that positions us for continued growth in the years ahead.

Mr. Erickson: Even as the patterns of spending evolving, the key that did mine were custom choose to shop, have not changed.

Speaker Change #108: The environment, actually, is the external one, including the competitive environment of e-commerce and brands.

Speaker Change #108: le ed

Speaker Change #110: The environment is also very poor, including many external charges, such as data fees. Additionally, various things like return insurance and so on actually have very high costs.

Mr. Erickson: We are sharpening our focus on enriching merchandising, offering highlighting affordability throughout our supplement while insure a watery breed expense.

Mr. Erickson: Together, these have been the co-competence that has helped us navigate difficult times.

Speaker Change #111: However, we have achieved it, and we will not raise prices this year. We will maintain our current price to avoid putting a greater burden on our brand.

Alicia Yap: If you can share this information, and the second question, I'd like to know more about the SBIP members. We know that their age is higher, but we don't know if the management is aware of their SBIP's behavior. [inaudible] they are aware of their behavior, Let me answer the question. The first question is related to that special product. Because we, the whole website, if it is a product that we sell out, we should have 40% of it.

Speaker Change #112: The logistics costs might be higher than usual because our overall shipping rate is higher now. This means the logistics operation costs will be higher as well. So overall, our entire...

Speaker Change #111: The overall investment is still relatively stable. We expect in the second half of this year

Speaker Change #111: Moreover, we also have this principle, which is that because our current growth is negative growth, we can't say that today we...

Speaker Change #113: Encountering this negative growth, we messed around and ended up losing our profits. So overall, we are still relatively stable. We estimate that from Q3 to Q4, our profits won't be as good as last year, but we believe they won't be bad either. It will definitely be in a very stable state.

Eric Shen: Especially, we're going to continue to grow our SBIP customers and improve their frequency and average ticket size.

Speaker Change #113: So this is the first question I answered, and Marco will answer the second question.

Speaker Change #114: Okay, first, let me translate Eric's comments in terms of a question on investment.

Speaker Change #115: We continue to proactively acquire customers.

Speaker Change #116: And we have, to some extent, relaxed our thresholds as to LTV in terms of customer acquisition.

Speaker Change #117: So, we are prudently investing in new channels, but we continue to be quite disciplined, we continue to evaluate the effectiveness and the efficiency of customer acquisition from different perspectives.

Speaker Change #117: After all, we haven't found a very good channel for us to acquire customers, so we will remain disciplined in terms of marketing spend for the second half.

Speaker Change #118: Margin-wise, on the GP margin side, we are confident it's going to remain quite stable and because brand partners are under a lot of pressures nowadays.

Alicia Yap: We are a product that is different from other people. There are some products that they made for us, and some of them are products that we sell to us, which is that there are some products that they give different products,[inaudible] and the deep discounted products, like those SKUs, with 70% of retail price. So it's a combination of the great merchandises that we offer to our customers. And in the going forward, we will continue to deepen our differentiated product offerings to avoid direct competition with our peers.

Speaker Change #119: They have to bid for additional dollars for traffic and for return of goods, etc. But our philosophy of working with brand partners is always to create a win-win situation, so we are not going to...

Mark Wang: But our philosophy of working with Brent Paners is always to create a win-win situation, so we are not going to increase our take rate for Brent Paners. We don't want to create additional burdens for them, so GDP margin will remain quite stable. And on the expense side, we do foresee a little bit higher of the human expenses, with returns of a single building slightly higher. So we probably don't see too much operating leverage for our consumers. Overall, we believe that in the second half, we will continue with our proof-inting investments. So margins and the net profit in that for the dollar amount will be quite manageable as compared to last year.

Speaker Change #120: increase our take rate for brand partners. We don't want to create additional burdens for them, so keeping margin will remain quite stable.

Eric Shen: And on the other hand, we're making a series of adjustments to standardize...

Speaker Change #121: And on the expense side, we do foresee a little bit higher performance expenses with the return rates still going slightly higher.

Eric Shen: We are trying to narrow its loss and we will try to bring this business segment back to Plattage at least.

Eric Shen: Thank you.

Unknown Executive: In the second half, we plan to continue to stabilize our competitive edges with apparel categories.

Speaker Change #121: So we probably don't see too much operating leverage as well for humans.

Unknown Executive: Especially, we're going to continue to grow our SBIP customers and improve their frequency and average ticket size.

Speaker Change #121: Overall, we believe that in the second half,

Speaker Change #121: We will continue with our presenting that then.

Speaker Change #121: So margins and net profit in absolute dollar amount will be quite manageable as compared to last year, although net profit may not be as good as the second half of last year.

Mark Wang: Although net profit may not be as good as the second half of last year, it should be quite comparable.

Unknown Executive: On the other hand, we're making a series of adjustments to standardized items.

Unknown Executive: We're trying to narrow its slots and we will try to bring this business segment back to the plattage at least.

Unknown Executive: We plan to leverage our SBIP members to increase their product categories, purchase rates, as well as increase the intention from non-SBIP customers as well.

Speaker Change #121: It should be quite comparable.

Mark Wang: Okay.

Mark Wang: The second question regarding the operating catch flow, let me answer your question. The net cash from operating activities for the second quarter decreased primarily due to the following reasons. The first one is a rounded decline year over year. In the second reason in this year, 618 promotion, I mean the shopping festival, started in the middle of May. So, which means we need to pay the related costs and expenses to our suppliers in June instead of July. And the third reason is that state and the Ministry of Taxation advocate the implementation of fully digitalized the eFAPIAL system this year.

Speaker Change #122: Okay, for the second question regarding the operating cash flow, let me answer your question.

Speaker Change #122: The net cash from operating activities for the second quarter decreased.

Speaker Change #122: primarily due to the following reasons.

Speaker Change #122: The first one is the revenue decline year-over-year.

Speaker Change #122: OK.

Speaker Change #123: And the second reason is this year, 618 promotion, I mean the shopping festival, started in the middle of May.

Speaker Change #123: So which means we need to pay the related costs and expenses to our suppliers in June instead of July .

Speaker Change #124: And the third reason is that the State Administration of Taxation advocates the implementation of fully digitalized e-file payout system this year.

Mark Wang: And which means the recipient of FAPIALs earlier, a little bit earlier. So, in this connection, we pay our supplier a little bit faster than that in last year. So this is three main reasons for the operating catch flow exchange.

Speaker Change #124: And which means the recipient of PayPal is earlier, a little bit earlier. So in this connection, we pay our supplier a little bit faster than that in last year.

Speaker Change #124: So these are the three main reasons for the operating cash flows change.

Unknown Executive: Thank you.

Unknown Executive: Excuse me, Andrea; any further questions? No, thank you. Thank you so much.

Speaker Change #124: Excuse me, Andre, any further questions?

Unknown Executive: Now, we're going to take our next question.

Jialong Shi: Now we're going to take over the next question. And the next question comes from Lan of Renault Cone from Goldman Sachs. Here, Lan is open piece after question. Thank you, General Mark. I would like to ask you two. The first thing is that our CNB and revenue may be making a mistake. So let's take a look.

Operator: Now we're going to take our next question.

Andrew: No, thank you.

Andrew: Thank you so much.

Unknown Executive: And the question comes to the line of Alicia Yap from Citi.

Speaker Change #126: Now we're going to take our next question.

Alicia Yap: And the question comes to the line of Alicia Yap from Citi.

Alicia Yap: Your line is open.

Speaker Change #127: And the next question comes from Ronald Keung from Goldman Sachs. Your line is open, please ask your question.

Operator: Your line is open, please ask your question.

Speaker Change #128: Thank you, General Manager Zhen. I have two questions. First, there might be a gap between our GMP and revenue.

Jialong Shi: This return rate, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this. This return rate, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, is this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this, this this, this, this, this, this, this, this, this, this, this, this, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the the, the, the, the, the, the, the, the, the, the, the, the, the, In terms of your question, Jamie and Robin and Gap, it's a result of the return rate.

Speaker Change #129: Around 5 points, so I want to check if our return rate has increased. At the same time, I noticed that the order volume is decreasing, but the GMB is flat. Can we understand this as the average order value (AOV) increasing? This seems a bit different from the macro environment. Is it possible that people are buying more to maintain the unit price, but in the end, returning more items? Therefore, our order volume is down, GMB is flat, and the return rate seems to be increasing.

Alicia Yap: The third question regarding SBIP customer protection, actually we see we have a very solid foundation of SBIP customers, whose average ticket size remains quite stable. But when we do see their shocking frequency has been slightly less and before roughly about 2 to 3% compared to the times they used to shop on a pack wall. We think of these frequency although antiprecious is quite a magical, we don't see a very significant change in the behavior of SBIP customers.

Speaker Change #130: Secondly, I would like to ask about our technology and content sector. It seems to be the only area where our special expenses have increased. So, I want to know where we are investing, and given the current pressure on our revenue, is there any room for efficiency improvement in this area? Let me translate that.

Speaker Change #131: Thank you, management. I have two questions. One is, I see that the GNV and revenue has a gap, so that the return rates have gone up. When I see the order volume, it has...

Speaker Change #131: Gone.

Speaker Change #132: down while GMB has been flat. So thinking about these relationships, is it fair to say people are still buying a bit more despite the macro environment to get the free delivery and then return more of the items? Is that some of the dynamics that we're seeing? Second is I see the technology and content cost has gone up versus the kind of muted revenue. So where are we investing in technology? Do we see some room to streamline or cut some of these costs given the headwinds on the revenue side? Thank you.

Alicia Yap: And we do see a lot of potential of growing our SBIP customer base in the coming quarters, especially in leveraging our service capabilities, nourishing their trust on our pack walls, because we don't. We will focus on quality branded offerings instead of, you know, and stay away from cheap knock-offs. So that's why we are confident that we will continue to grow the base of SBIP customers as we are, as they are Apple.

Mr. Erickson: Among the beneath highlights, we are pleased with the silly flow of the quality blend's inventory.

Alicia Yap: Hello, thank you.

Speaker Change #133: I will answer the first question. What we see is that our current return rate is actually influenced by last year's return rate.

Mr. Erickson: Thanks to our merchandising capability from strong team talents across categories, we now adapt more quickly to emerging trends, which is important to driving growth by delivering what custom look for.

Speaker Change #134: Relatively speaking, the impact of this year's return rate is less than last year's. For example, if we look at the financial report, last year the impact was about three percentage points due to the high return rate affecting the revenue by three points. This year, it might be around two points.

Mr. Erickson: In the first half, we select more than 600 well-known brands to our platform, including a mix of mass brands, new trendy brands and affordable luxury brands in much richer selections.

Alicia Yap: At the next day, we have our SBIP contribution, we will see, we generally take up a little bit, and as a matter of fact, it's very attractive. We do have very attractive returns in terms of RTP, because in terms of RTP, they spend much more as compared to now as we are key customers. Thank you.

Speaker Change #135: It just dropped by two points

Mr. Erickson: Our layered approach to brand portfolio is well suited to meet the ever-changing custom needs across income and age cohorts in different regions.

Speaker Change #135: So, additionally, we see that the order volume is decreasing, but I noticed that the customer's

Speaker Change #136: There hasn't been much change in the course orders and construction orders. So overall, we haven't seen users saying anything because these numbers are after returns. So overall, we see that the things bought haven't become cheaper.

Eric Shen: 關於陳婉嫻的訪問,謝謝您的訪問。有两个问题,首先想请问一下,就是刚刚我们有说到这个Vipshop,也就是唯品会的特制品牌,现在就是大概我们这个特制品牌有多少SKU,然后在这个季度占比GNV大概多少, 然后这个售价还有这个利率是不是比较高,如果可以分享多一点这个信息,然后第二个问题呢,其实是想就是多了解一下,就是这个SVIP会员,我们知道他们的这个年性是比较高, 但是不知道管理层有没有就是观察到他们这个SVIP的这个行为,最近是不是也有一些变化,比如说他们会不会也在寻找就是就是比较就是优惠价格比较低的一些产品,或者是他们的这个购买频率其实是会有略低了,我自己翻译一下。谢谢管理层接受我的问题,我有两个问题,第一个是,我只是在想,如果管理层可以分享一些的运营准划,对于VIP的特制品牌,你知道,以SKU的数字来看,在这些特制品牌之下, 他们的特制品牌是比较高的,然后第二个问题是,我只是在想,因为我知道SVIP的成员应该保持非常坚强和坚强, 所以我只是在想,如果管理层最近也有观察到他们的行为有什么变化,比如说,这些SVIP成员也在寻找一些比较低的ASP,那些价值钱的产品,或者是他们其实在买的频率稍微低于之前,谢谢。我回答一下,第一個問題就關於特製商品,因為我們整個網站上如果說穿戴類我們賣出去大概有40%以上,我們是屬於跟別人不一樣的商品,這裡面有一些是品牌專門給我們定做的,還有一些就是我們品牌專門給我們分貨的,就是說其實有些品牌它給不同的品牌,但是專門給我們一盤貨。那麼另外還有一些是低折扣的商品,因為本來我們是做低折扣出身的嘛,所以說比如說這種三折以下的或者低折扣的基本我們都拿掉,所以說總體是這樣子,就是說整體這個就是說不同的貨品我們。穿戴的销售超过40% In terms of customised products, it's actually part of our unique offerings on our platform, within apparel categories.

Mr. Erickson: We are also in college by the steadily progress in the Made4VIP line, so customize the products.

Eric Shen: We have unique offerings including customized products, exclusive access to brand inventory and deep discounted products like those, can use with 70% of the retail price. So it's a combination of, a great merchandise, a great price that we offer to our customers.

Speaker Change #136: The value of the items is actually about the same, but you will just buy fewer of them.

Eric Shen: And in the going forward, we will continue to deepen our differentiated product offering to avoid direct competition with our peers.

Unknown Executive: Now we are going to take on the next question.

Speaker Change #136: So this is the first point. As for the second point, it's about the technology. Regarding technology, we actually started from last year.

Andre Chang: And the next question comes to a learn of Android Chang from JP Morgan. Your learn is open piece after question. [inaudible] Thank you management for taking my question. My first question is about margin and the infestment. Charging from this 5% to 10% young year decline of the third quarter revenue, does that mean the company will remain highly disciplined in the infestment of marketing use acquisition? So the second quarter, the second half margin will remain no supported.

Speaker Change #137: We have invested quite a lot in large models. Besides talent, we also need servers, buy cards, etc. We have spent a considerable amount of money on this. However, since this is a long-term, continuous, and gradual process, we believe that actually...

Speaker Change #138: After all, we have so many users above us, so much data, and so many areas for improvement. Using large models to improve tracking and so on, we believe it is still valuable. Therefore, we have not reduced it recently.

Speaker Change #138: The investment in this area will continue to happen because, after all, we see that the overall proportion of technical costs is high, but not excessively high. We believe it will bring us value in the future, so we will continue to invest in this area.

Speaker Change #139: In terms of your question on GME and the revenue gap, it's a result of the return rate. A return rate actually is trending a little bit higher but has...

Mark Wang: A return rate actually is trending a little bit higher, but has moderated a lot from the growth of last year. It's translated into impact on Robin. Last year, we had 2% impact on Robin from return rate, a lot of 3% versus 2% for this year. So return rate has been managed relatively well and has started to stabilize on a platform. In terms of every order signs, the total number of orders, we actually don't see too much change with average order signs as consumers are still sticking to the brand they prefer, so they don't know intentionally by cheaper, they're just buying a slightly less compared to before because they are becoming more selective and a little bit discerning especially for when it wants to choose the one and where to shop, so we don't see too much change in terms of consumer behavior especially the VIP customers.

Speaker Change #140: moderated a lot from the growth of last year. It's translated into impact on revenue. Last year, we had 2%.

Speaker Change #140: impact on revenue from return rate versus 3% versus 2% for this year.

Mr. Erickson: In the second quarter, GME from Made4VIP increased more than 140% from a year ago.

Speaker Change #140: The return rate has been managed relatively well and has started to stabilize on our platform.

Speaker Change #140: In terms of average order size versus the total number of orders, we actually don't see too much change with average order size.

Andre Chang: Considering there's no normalization of margin in the second quarter versus the previous few quarters, how should we think about the modern trend in third quarter and the second half? And my second question is about the operating cash flow. Despite very decent profit, we see no operating cash outflow in the second quarter, which is rare, can management highlight what's the reason behind it? Thank you.

Speaker Change #141: Consumers are still sticking to the brand they prefer, so they don't intentionally buy cheaper. They're just buying slightly less as compared to before because they are becoming more selective.

Speaker Change #142: and a little bit discerning, especially when I want to choose when and where to shop. So we don't see too much change in terms of consumer behavior, especially the SBIB customers.

Mr. Erickson: Our know-how and expertise is a payload-enabled brand to customize more differentiated products at great price, which were welcomed by many customers. We see a minimally higher potions of custom repeatedly purchased custom-ized products than they do in the general appellal category.

Unknown Executive: The first question is about the development of the development of the future of the whole company. The whole thing is that the company has a strict standard of LTV standards. In the past few years, we have not been able to return to China. However, our current strategy has been bigger than last year's strategy. [inaudible] of different perspectives. Up to all, we haven't found a very good channel for supply customers so we will remain disciplined in terms of marketing and for the second half.

Mark Wang: And the second question regarding technology and accountant investment, since last year we have made many improvements in large models including tabs, service, etc. We will continue to invest from because we believe technology enhancement is very important to driving long-term value, especially given our large share of customers and the data. We do see a lot of improvements; we believe a prudent investment in packaging and content will be valued accretive over the long term as a percentage of total revenue. Technology and accountant is going to be a little bit higher, so it's not too much and it's totally manageable.

Mr. Erickson: And the conventions for Made4VIP has been consistently higher than the average levels seen within the same blend and the same category.

Speaker Change #143: And the second question regarding technology and accountant investment.

Speaker Change #144: Since last year, we have made meaningful investments in large models, including talent, service, etc.

Mr. Erickson: Beyond that, we continue to focus on delivering value, providing the right spread of great pricing and quality to our customers.

Speaker Change #145: We will continue to invest on this front because we believe technology enhancement is very important to driving long-term value, especially given our large scale of customers and data, we do see a lot of room for improvement.

Speaker Change #145: we be

Speaker Change #146: Our prudent investment in technology and content will be valued accretive over the long term. As a percentage of total revenue, technology and content is going to be a little bit higher, but not too much. And it's totally manageable.

Unknown Executive: Thank you. Now we're going to take all the questions for today.

Speaker Change #147: once we did on you

Alicia Yap: Please ask your question.

Eric Shen: On the second question regarding SBIP.

Alicia Yap: Hello.

Speaker Change #148: Thank you.

Jialong Shi: And the question comes from Lan of Jia Long Xi from Nomura. Your Lan is open to ask the question. The question comes from Lan of Jia Long Xi from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nomura, your Lan is from Nom I have two questions and one question is about in our hearsay from our industry checks.

Speaker Change #149: Now we're going to take our last question for today.

Alicia Yap: Thank you.

Alicia Yap: Good evening.

jal shei: And the question comes to line of Jialong Shi from Nomura. Your line is open, please ask your question.

Eric Shen: We have a very solid foundation of SVIP customers whose average income is around $1,000 a month, remain quite stable, but we do see their shopping frequency has been slightly less than before.

Eric Shen: Roughly about, roughly 2 to 3 percent, compared to the time they used to shut down a pipe bomb, we think the frequency of the pressure is quite a match.

Alicia Yap: I have two questions.

Alicia Yap: First of all, I would like to ask, we just talked about Vipshop, a licensed brand of Vipshop Holdings.

Speaker Change #151: Thank you to the management for accepting my question. I have two questions. The first question is that we have recently heard from some channels that since the middle of this year, some e-commerce platforms seem to have lowered their requirements for low prices in certain categories, including apparel. So I would like to ask, as Vipshop is a very important channel in the apparel category, have we noticed any relaxation in the low-price requirements for apparel? If there is any relaxation, what impact will this have on us in the second half of this year?

Alicia Yap: Now, how many SKUs does this brand have?

Speaker Change #151: What will be the impact of this? And then the second question is, follow-up, two follow-ups. One is, in our current revenue and gross profit, what is the approximate proportion coming from the standard products category? And the second follow-up is, currently, the SBIP...

Speaker Change #151: What is the approximate contribution percentage of this quantity to the GNV?

Eric Shen: We don't see a very significant.., and the behavior of.

Alicia Yap: And how much does it account for compared to GMV?

Eric Shen: And we do see a lot of potential of growing our SBI, and others.

Eric Shen: Thank you.

Speaker Change #152: ??,??????? I have two questions and one question is about

Eric Shen: Howard Thurgood.

Jialong Shi: We heard from some channel check that some major Chinese e-commerce platforms appear to have losing the requirement on low prices for certain categories, including a power of category. So I just wonder if VIVIP has seen any changes in the operating environment and if there is a losing in on low prices by competitors, what are the possible impacts on VIVIP's second half outlook? And my second question is a follow-up, and you just wonder what is the percentage of sales and growth profit generated by the standardized items, and also what is the latest quarterly number of SVIP customers and their contribution to the online GNV.

Speaker Change #153: in our hearsay from our industry checks.

Speaker Change #154: We heard from some China check that some major Chinese e-commerce platforms appear to have loosened the requirement on low prices for certain categories, including apparel category. So just wonder if Vips has seen any changes in the operating environment, and if there is a loosening on low prices by competitors, what are the possible impacts on Vips second half outlook?

Alicia Yap: And is the price and interest rate relatively high?

Alicia Yap: If you can share more information.

Alicia Yap: And the second question, I would like to know more about the SBIP members.

Alicia Yap: We know that they are relatively young.

Speaker Change #155: And my second question is a follow-up, and we just wonder what is the percentage of sales and the gross profit?

Alicia Yap: But I don't know if GMV has observed their SBIP behavior.

Alicia Yap: Has there been any change recently?

Speaker Change #156: generated by the standardized items and also what is the latest quarterly number of SVIP customers and their contribution to the online GMV. Thank you.

Erickson: Thank you. So the first question is about the situation of the overall situation. The situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation. So the situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation The second point is that the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation of the overall situation the overall situation of the overall situation to offer.

Alicia Yap: For example, are they also looking for some products with lower prices?

Alicia Yap: Or is their purchase frequency a little lower?

Unknown Executive: We are confident it's going to remain quite stable and because of Brent Panerser under a lot of pressure nowadays, they have to bid for in less additional dollars for traffic and for returns of goods etc. But our philosophy of working with Brent Paners is always to create a win-win situation so we are not going to increase our take rate for Brent Paners. We don't want to create additional burdens for them so GDP margin will remain quite stable.

Speaker Change #157: So the first question is about the current low price situation overall. Overall, we look at this year.

Speaker Change #158: Starting this year, the overall environment has indeed been poor. Therefore, all platforms are actually looking for low prices. Recently, we have seen that...

Speaker Change #159: That situation is still ongoing, meaning everyone is still engaging in low prices and promotional activities.

Alicia Yap: Let me translate for myself.

Alicia Yap: Thanks, management, for taking my questions.

Mr. Erickson: We consistently optimize ways we work with brand partners to ensure we could generate more savings for our customers.

Speaker Change #160: One after another, so each platform is as low as possible. So overall, we see that the future should still be like this. For us, overall, because we are...

Mr. Erickson: Recently, we launched some new channels.

Speaker Change #161: We are working on well-known brands, and we are doing well-known brands at low prices. So, we hope...

Speaker Change #161: So provide the best possible things to users, not inferior ones, and that includes ourselves.

Unknown Executive: And on the expense side, we do foresee a little bit higher of the human expenses with returns of a single building slightly higher. So we probably don't see too much operating leverage for our consumers. Overall, we believe that in the second half, we will continue with our proof-inting investments. So margins and the net profit in that for the dollar amount will be quite manageable as compared to last year. Although net profit may not be as good as the second half of last year, it should be quite comparable. Okay.

Speaker Change #162: Actually, this year we have removed many unreliable brands and merchants from our website. So theoretically, we believe that we are not just pursuing business, but we are pursuing the value that users feel after making a purchase.

Alicia Yap: I have two questions.

Alicia Yap: First is that, I'm just wondering if management can share some of the operating metrics for VIP, the customized products in terms of the numbers of SKU under these customized products.

Speaker Change #162: So, we think about how we can better leverage the advantages of our brand's special sales. And then, because the competition will continue, we need to find ways to do better. The second point is about the question regarding that.

Speaker Change #163: The gross profit situation of standard products and non-standard products, overall, the gross profit of wearable products will be higher than that of standard products.

Speaker Change #164: However, if we look at net profit, because the return rate for standard products is relatively low, overall, the contribution of standard products to our company's profit is also quite good. So this year, we are considering...

Unknown Executive: The second question regarding the operating catch flow, let me answer your question. The net cash from operating activities for the second quarter decreased primarily due to the following reasons. The first one is a rounded decline year over year. In the second reason in this year, 618 promotion, I mean the shopping festival, started in the middle of May. So which means we need to pay the related costs and expenses to our suppliers in June instead of July.

Speaker Change #164: Currently, we are losing more standard products and fewer wearable items. So, we should strive to put more effort into standard products to bring back more business. This way, it will be beneficial for our profits anyway.

Unknown Executive: And the third reason is that state and the Ministry of Taxation advocate the implementation of fully digitalized the eFAPIAL system this year. And which means the recipient of FAPIALs earlier, a little bit earlier. So in this connection, we pay our supplier a little bit faster than that in last year. So this is three main reasons for the operating catch flow exchange. Excuse me, Andrea, any further questions? No, thank you. Thank you so much.

Unknown Executive: Now we're going to take over the next question.

Speaker Change #165: So, the third point is about our current SVIP scale, which is now 7.4 million. These users, because our total annual users might be around 80 to 90 million, but these 7.4 million users contribute 47% of the annual sales.

Mr. Erickson: Future time-limited promotions and everyday low price. These are designed to help our customers make the most of their budget while also providing reliable resource for brand partners to present their best views.

Speaker Change #166: Okay, in terms of your first question on low-price strategy, we continue to see low-price competition going on within the industry. There are a lot of promotion subsidies and we will continue to see that momentum going forward.

Eric Shen: Larry, on our platform, we will focus on quality branded offerings instead of and stay away from chicken muck.

Eric Shen: So that's why we have come, will continue to grow the faith, at the.

Eric Shen: At the next Delay, with higher admiству contribution… a little bit, and that's Matt, very attractive.

Eric Shen: We do have a very and others.

Eric Shen: Thank you, because they, in terms of art, they spend much more, compared to now.

Eric Shen: Thank you.

Speaker Change #167: but for Vipshop we continue to focus on quality brand.

Operator: Now we're going to take our next question.

Speaker Change #167: merchandise. And we try to offer our customers, we sell

Andre Chang: And the next question comes from the line of Andre Chang from JP Morgan.

Operator: Your line is open, please ask a question.

Speaker Change #167: good products at great prices. We are not chasing for business scale. We focus on delivering value to our customers and we'll continue with that strategy.

Andre Chang: 管理層晚上好那我這邊有兩個問題請教第一個就是關於這個我們接下來怎麼考慮這個投資跟這個我們的Margin 我們如果根據這個三季度現在看起來這個預估可能會下滑五到十個點的營收那就表示說公司可能還是傾向於更謹慎的使用手上的這個財務資源可能就不會刻意的去降價或是激進的活客然後還是專注在這個用我們的這個貨盤去吸引這個比較自然的這個客戶回流跟交易那是不是這個Margin這樣子來說的話那跟這個二季度比因為跟這個過去幾個季度有一定的這個Normalization 就可能正常化了一些那我們要怎麼想這個下半年的Margin 對那另外一個問題就是說那疊加上這個財務的投資我注意到二季度這邊的這個營運現金流變成一個比較就是一個流出就以我們這個獲利來說比較少見能不能請管理層Comment一下就是說這個現金流的外流是為什麼那讓我翻譯一下我的問題 Thank you management for taking my question My first question is about margin and the investment Judging from this 5% to 10% young year decline over third quarter revenue Does that mean the company will remain highly disciplined on investment of marketing use acquisition So the third quarter second half margin will remain no supported Considering there's like no normalization of margin in the second quarter versus the previous few quarters How should we think about the margin trend in third quarter and the second half And my second question is about the operating cash flow Despite very decent profit We see no operating cash outflow in the second quarter which is rare Can management highlight what's the reason behind it Thank you, 我回答第一個問題,就是關於整個公司對未來的發展的資金分配,我們其實整體還是會積極獲課,只是我們公司有一個嚴格的標準,就是LTV評估的標準,到了這個點我們就停了,因為我們覺得新課帶回來的話太貴了, 几年都回不了本,所以说我们就停,但是呢我们目前这个策略已经比去年的策略已经那个尺度更大了一些,因为我们觉得现在环境不好,我们还是要加大获客,但是呢会有个度,所以说今年的我们也会积极去寻找更多的获新客渠道,对吧,包括跟很多平台合作等等啊,就是说获更多的渠道,但是我们还是坚持这个度,就是说如果超过我们的标准,那我们就不做了。就不投,所以说总体而言呢,我们市场费用,我们估计今年下半年就因为我们没看到一些很好的渠道,就如果有好的渠道,其实成本都是可控的,所以总体而言的市场费用我们也不会太大,那么另外呢,就是我们其实在前端的毛利方面,我们其实都比较稳,那么我们其实现在整体的环境啊,就是外面的,其实电商的竞争环境,包括品牌啊, 品牌的那个整体的环境也很差,包括外面的收费也很多,包括流量费,另外呢,各种各样的什么那个退货险啊等等,其实费用很高,但是呢,我们做到今年我们不调,就是说也不会提高,就是我们还是保持我们这一口价,我们避免给我们的品牌更大负担,那么另外呢,我们有可能会在那个那个物流费用上,可能会比, 原来的正常会高一些,因为我们现在整整体的退货率会比原来高嘛,那就变成这个物流操作费用会高一些,所以整体呢,就是我们整个的整个投资还是比较稳健的,我们预计在今年下半年。而且我们也是有这个原则,就是说,因为我们现在的那个增长,负增长嘛,就是说我们不能说今天我们碰到这个负增长,我们瞎搞一通,结果呢,把利润也搞没了,所以说总体而言呢,我们总体还是比较稳健的,我们自己预估Q3到Q4,利润我们会没有去年这么好啊,但是呢,我们认为也不差,肯定是一个很稳健的状态,所以这是我回答的第1个问题,第2个问题 Okay, first, let me translate Eric's comments in terms of a question on investment.

Mark Wang: We continue to proactively acquire customers and we have, to some extent, relaxed our stress, We continue to be quite disciplined, we continue to evaluate the effectiveness and the efficiency of customer acquisition from different perspectives.

Mark Wang: After all, we haven't found a very good channel for.

Mark Wang: So we will remain disciplined in terms of marketing.

Jialong Shi: And the next question comes from Lan of Renault Cone from Goldman Sachs, here Lan is open piece after question. Hey, thank you, Zheng, Mark, I want to ask you two. The first is that our CNB and revenue can possibly be done by five points. So let's take a look at our return rate, right? Is this the rate is high? Then, in the meantime, I saw that Ding Dang's price is low, so that the GNB is flat.

Speaker Change #167: And in addition, on the quality side, where we focus on...

Speaker Change #167: Building a Trusted Portfolio or Brand.

Speaker Change #167: to our customers. Actually...

Speaker Change #167: Starting from this year, we have cleaned up.

Speaker Change #168: quite a lot of merchants.

Erickson: So, we only focus on, you know, those quality brands and focus on quality products. On the second question, regarding a GC margin for a parallel end, a parallel, a parallel carry, a little bit higher GC margin than non-apparel categories. But to the bottom line, actually, because the standardized items are much lower returns, so they have pretty good contribution flowing to the bottom line. In the second half, we'll try to bring the business of standardized items back to growth track, so that they can have a positive impact on the end margin as well. Lastly, on SVIP of customers base, we have 7.4 million active Super VIP customers at the end of the second quarter.

Speaker Change #169: or brand partners with low-quality product offerings. So we only focus on those quality brands and focus on quality products.

Jialong Shi: Can you understand that it is the price of the data that you buy, the LV is high. This is a little different from Hong Kong, the environment is a little different, right? We may not be able to buy a little more, we eat a little more, but at the end of the day, a little more. So, we, of course, the GNB is flat, and then the flow rate is high.

Mark Wang: Margin-wise, on the GP margin side, we are confident it's going to remain quite stable because brand partners are under a lot of, We, and then this, they have, invest additional dollars for traffic and for for Returns of Goods, etc.

Mark Wang: But our philosophy of working with brand partners is always to create a win-win situation.

Speaker Change #170: On the second question regarding GQ margin for apparel and non-apparel. Apparel carry a little bit higher GQ margin than non-apparel category.

Mark Wang: So we are not going.

Alicia Yap: How much of that is actually contributing to this quarter GMV? And also, the ASP and the margins is higher than non-customized products.

Alicia Yap: And then the second question is, just wondering, because I know that the SBIP members should be remaining very sticky and resilient.

Alicia Yap: Just wonder if management has also observed any change of their behavior recently.

Mark Wang: So I also want to put on a response to see if we can increase our takeway for brands to make distribution easily.

Jialong Shi: The second is to ask us the technology and content of this piece, it may be that we use it as a whole, so we want to know[inaudible] still buying a bit more despite the microenvironment to get the free delivery and then return more of the items. Is that some of the dynamics that we're seeing? Second is I see the technology and content cost has gone up versus the new tech revenue, so aware we're investing in technology, do we see some room to streamline or cut some of these costs given the headwinds on the revenue side?

Alicia Yap: For example, are these SBIP members also looking for more lower ASP, those value-for-money products?

Mark Wang: We do not want to create additional burdens for them, so GP margin will remain 0.4%.

Alicia Yap: Or are they actually buying slightly less frequently than before?

Mark Wang: And on the expense side, we do foresee a little bit higher performance expenses with the return rate, and others.

Speaker Change #170: But to the bottom line, actually, because standardized items have much lower returns, so they have pretty good contribution going to the bottom line. In the second half, we'll try to bring the business of standardized items back to growth track so that they can

Mark Wang: So we probably don't see too much operating leverage from us as humans.

Alicia Yap: Thank you.

Unknown Executive: 我回答一下第一個問題,就關於那個特製商品啊,因為我們整個網站上如果說穿戴類,我們賣出去大概有40%以上,我們是屬於要跟別人不一樣的商品,這裡面呢,有一些是品牌,專門給我們定做的。那麼還有一些呢,就是我們那個品牌專門給我們分貨的,就是說其實有些品牌他給不同的品牌嘛,但是呢,專門給我們一盤貨,那麼另外呢,還有一些是低折扣的商品,因為本來我們是做低折扣出身的嘛,所以說譬如說這種三折以下的或者低折扣的基本我們都拿掉,所以說總體是這樣子,就是說整體這個就是說不同的貨品,我們穿戴的銷售超過40%。那麼這裡面呢,就是說我們其實在接下來還會繼續堅持,因為我們要求的是還是知名品牌嘛,那麼有更多的好東西,那麼更多的折扣,另外呢,就是說我們也盡量希望大家賣的貨不一樣,那麼這樣的話呢,避免這種叫惡性競爭啊,那麼我們說的就是我們在這裡面還會繼續加強,因為我們說唯品會是做特賣,就是好貨低價,那麼這是我們不變的。所以說後續我們在這個方面還會積極做大做深,那麼第二方面呢,就是問SVIP啊,就是說我們SVIP還這個盤子還是基本比較穩,但是呢,今年我們會發現像用戶的客單,就是說單價客單價其實沒有變,那麼唯獨在購物品質上面有個很小的跌幅啊,可能跌個兩個點到三個點,所以說整體而言呢,我們覺得可控,就是他的年,呃,譬如說一個季度。的購物品質從隨便說啊,可能從15單變成可能14.5單只是一個微小的變化,所以說我們倒這個倒不覺得特別變化,另外呢,我們其實今年在Q2Q3,我們還會持續加大我們的SVIP的佔比,那麼我們會把更多的非SVIP轉化成SVIP,因為我們認為像我們的SVIP的服務非常好,那麼包括我們也給他。精選,那麼我們我們整個網站也不賣這種亂七八糟的東西,所以總體而言呢,我們認為把SVIP牢牢鞏固住,還是我們以後一個長期的策略,那麼哪怕因為SVIP其實多了以後啊,會提高我們的退去率啊,因為SVIP買多退多嗎?但是呢,我們認為總體換算下來還是值得的,因為我們在SVIP的消費的up比非SVIP消費很多。消費的這個整體的up要都大很多,所以總體而言呢,我們從目前的SVIP盤基本還穩,那麼我們希望是繼續加大擴大。 In terms of customized products, actually part of our unique offerings on our platform, within apparel categories, we have over 40% unique offerings, including customized products.

Unknown Executive: We have exclusive access to brand inventory and deep discounted products like those SKUs with 70% of retail price. So it's a combination of the great merchandise and the great prices that we offer to our customers.

Unknown Executive: And going forward, we will continue to deepen our differentiated product offering to avoid direct competition with our peers.

Unknown Executive: The second question regarding SVIP customer traction. Actually, we see we have a very solid foundation of SVIP customers whose average ticket size remains quite stable. But we do see their shopping frequency has been slightly less than before, roughly 2-3% compared to the time they used to shop on our platform.

Mark Wang: Overall, we believe that in the second half, we will continue with our present investments.

Unknown Executive: We think the frequency of vendor pressure is quite manageable.

Mark Wang: So margins and net profit in absolute dollar amount will be quite manageable as compared to last year.

Mark Wang: Although net profit may not be as good as the second half of last year, it should be it should be quite comparable.

Mark Wang: Okay, for the second question regarding the operating cash flow, let me answer your question. The net cash from operating activities for the second quarter decreased, primarily due to the following reasons. The first one is around the decline year over year.

Mark Wang: And the second reason is this year, 618 promotion, I mean the shopping festival, started in the middle of May. So, which means we need to pay the related costs and expenses to our suppliers in June instead of July.

Mark Wang: And the third reason is that the State Administration of Taxation advocates the implementation of a fully digitalized e-file payout system this year, and which means the recipient of PayPal is earlier, a little bit earlier.

Mark Wang: So in this connection, we pay our supplier a little bit faster than that in Las Vegas.

Mark Wang: So these are the three main reasons for the operating cash flows.

Mark Wang: Diolch yn fawr am y cwestiynau eraill, Andre.

Mark Wang: No, thank you.

Speaker Change #171: have positive impact on the entry margin as well.

Speaker Change #172: Lastly, on SVIP customer base, we have 7.4 million active Super VIP customers by the end of second quarter.

Unknown Executive: We don't see a very significant change in the behavior of SVIP customers.

Unknown Executive: And we do see a lot of potential of growing our SVIP customer base in the coming quarters, especially leveraging our service capabilities, leveraging their trust on our platform.

Unknown Executive: Because we will focus on quality branded offerings and stay away from cheap knockoffs.

Unknown Executive: So that's why we are confident that we will continue to grow the base of SVIP customers as well as their pool.

Unknown Executive: Additionally, with higher SVIP contribution, we will see return rates pick up a little bit.

Unknown Executive: But mathematically, it's very attractive. We do have a very attractive return in terms of LPP because in terms of output, they spend much more as compared to non-SVIP customers.

Unknown Executive: 謝謝, 管理層,晚上好我這邊有兩個問題請教, 第一個就是關於我們接下來怎麼考慮投資跟我們的預算我們如果根據這個三季度現在看起來預估可能會下滑五到十個點的營收, 那就表示說公司可能還是傾向於更謹慎的使用手上的財務資源可能就不會刻意的去降價或是激進的活客, 然後還是專注在用我們的貨盤去吸引比較自然的客戶回流跟交易那是不是Margin這樣來說的話, 跟二季度比因為跟過去幾個季度有一定的normalization 就可能正常化了一些, 那我們要怎麼想下半年的Margin 另外一個問題就是說, 加上財務的投資我注意到二季度這邊的營運現金流, 變成一個比較流出就以我們這個獲利來說比較少見, 能不能請管理層comment一下就是說這個現金流的外流是為什麼, 那我翻譯一下我的問題謝謝管理層接受我的問題, 我的第一個問題是關於Margin和投資我們如何看待三季度和二季度的Margin, 我的第二個問題是關於營運現金流儘管有很好的利潤, 但我們看到二季度的營運流出是很少見的, 能不能請管理層說明原因謝謝, 我回答第一個問題,就是關於整個公司對未來的發展的資金分配,就是說我們其實整體還是會積極獲課,只是我們公司有一個嚴格的標準,就是LTV評估的標準,就是到了這個點我們就停了, 就是說因為我們覺得新客帶回來的話太貴了,幾年都回不了本,所以說我們就停,但是我們目前這個策略已經比去年的策略尺度更大了一些,因為我們覺得現在環境不好,我們還是要加大獲課,但是會有個度,所以說今年我們也會積極去尋找更多的獲新客渠道,包括跟很多平臺合作等等。就是說也不會提高,就是我們還是保持我們這一口價,我們避免給我們的品牌更大負擔,那麼另外呢,我們有可能會在那個那個物流費用上可能會比原來的正常會高一些,因為我們現在整整體的退貨率會比原來高嘛,那就變成這個物流操作費用會高一些,所以總體呢,就是我們整個的整個投資還是比較穩健的,我們預計在今年下半年。而且呢,我們也是有這個原則,就是說因為我們現在的那個增長負增長嘛,就是說我們不能說今天我們碰到這個負增長,我們瞎搞一通,結果呢,把利潤也搞沒了,所以說總體而言呢,我們總體還是比較穩健的,我們自己預估Q3到Q4利潤,我們會沒有去年這麼好啊,但是呢,我們認為也不差,肯定是一個很穩健的狀態,所以這是我回答的。第一個問題,第二個問題呢,巴克來回答。 different perspectives.

Erickson: They are accounted for roughly 47% of our online spending.

Unknown Executive: After all, we haven't found a very good channel for us to acquire customers, so we will remain disciplined in terms of margin spend for the second half.

Unknown Executive: Margin-wise, on the GP margin side, we are confident it's going to remain quite stable and because our brand partners are under a lot of pressures nowadays, they have to bid for, invest additional dollars for traffic and for returns of goods, etc.

Unknown Executive: But our philosophy of working with brand partners is always to create a win-win situation, so we are not going to increase our take-away for brand partners.

Unknown Executive: We don't want to create additional burdens for them, so GP margin will remain quite stable.

Unknown Executive: And on the expense side, we do foresee a little bit higher performance expenses with the return rates still going slightly higher, so we probably don't see too much operating leverage for a few months.

Unknown Executive: Overall, we believe that in the second half, we will continue with our present investment, so margins and net profit in absolute dollar amount will be quite manageable as compared to last year, although net profit may not be as good as the second half of last year, it should be quite comparable.

Unknown Executive: Okay, a second question regarding the operating cash flow.

Speaker Change #172: They accounted for roughly 47% of our online spending.

Unknown Executive: Let me answer your question.

Unknown Executive: The net cash from operating activities for the second quarter decreased primarily due to the following reasons. The first one is the revenue decline year-over-year. Okay, and the second reason is this year, 6-1-8 promotion, I mean the shopping festival, started in the middle of May, so which means we need to pay the related costs and expenses to our suppliers in June instead of July.

Unknown Executive: And the third reason is the state administration of taxation advocates the implementation of fully digitalized e-FAPL system this year, and which means the recipient of FAPL is earlier, a little bit earlier, so in this connection, we pay our supplier a little bit faster than that in last year.

Unknown Executive: So this is three main reasons for the operating cash flows change.

Unknown Executive: Excuse me, Andrew, any further questions?

Unknown Executive: No, thank you.

Unknown Executive: Thank you so much.

Mark Wang: Thank you so much.

Erickson: Thank you.

Unknown Executive: Due to time constraints, this concludes today's Q&A session.

Speaker Change #173: Thank you.

Unknown Executive: Now we're going to take our next question.

Jessie Zheng: At this time, I will turn the conference back to Jessie for any closing remarks. Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IRQ. We look forward to speaking with you next quarter.

Unknown Executive: And the next question comes from, Lionel Kong from Goldman Sachs.

Speaker Change #173: Due to time constraints, this concludes today's Q&A session. At this time, I will turn the conference back to Jessie for any closing remarks.

Unknown Executive: Your line is open, please ask your question.

Unknown Executive: 主持人李显龙, In terms of your question on GME and the revenue gap, it's a result of the return rate. A return rate actually is trending a little bit higher but has moderated a lot from the, growth of last year.

Operator: Now we're going to take our next question.

Unknown Executive: If translated into impact on revenue, last year we had 3% versus 2% for this year. So return rate has been managed relatively well and has started to stabilize on our platform.

Ronald Keung: And the next question comes from Ronald Keung from Goldman Sachs.

Unknown Executive: In terms of average order size versus the total number of orders, we actually don't, see too much change with average order size as consumers are still sticking to the brand they prefer.

Jessie Zheng: Due to time constraints, this concludes today's Q&A session.

Operator: Your line is open, please ask your question.

Unknown Executive: So they don't intentionally buy cheaper.

Unknown Executive: Now we're going to take our last question for today.

Jessie Zheng: At this time, I will turn the conference back to Jessie for any closing remarks.

Ronald Keung: 诶,谢谢张总,Mark,那想问两个,第一就是这个我们GMB和revenue中间可能差了五个点左右,所以想听一下我们这个return rate是不是,这个退货率是不是提高了,那同时间我看到那个订单量是下降,但GMB是flat,能不能够理解是大家买的这个单票反而AOV是提高,这个就跟我的宏观环境有一点,有一点不一样,是不是大家可能买的这个单票反而AOV是提高,这个就跟我的宏观环境有一点,有一点不一样,是不是大家可能买的这个单票反而AOV是提高,这个就跟我的宏观环境有一点,有一点不一样,是不是大家可能买的这个单票反而AOV是提高,这个就跟我的宏观环境有一点, [inaudible] 第二我看到科技费用和内容成本有些上升,帰税的环境有些上升, 那么我们在科技方面投入到哪里,见到铜钱有没有足够以阻止这些费用, 看来财务方面越拿越前,谢谢大家参与, 我回答第一個問題就是我們看到就是說其實我們現在的退貨率啊就是我們去年受退貨率的影響比較大今年的退貨率的影響比去年少那譬如說大概如果財報上看啊大概是譬如說去年我們影響三個點吧就是退貨率高了會影響財報的收入三個點今年可能是兩個點就跌兩個點那麼另外我們看到其實那個單量是下降的但是我看到客戶的客單件單其實沒什麼變化所以總體而言的這裡是沒看到用戶說因為我們這些數都是退去後的啊所以總體而言的我們看到就那個就買的東西沒有說便宜那麼東西的價值其實差不多只是買的會少了一些那么这是第一个,第二个呢,就是问技术这块,我们这块呢,其实技术这块呢,我们从去年开始,我们投了蛮多在大模型这块,那么大模型这块除了人才,还有就是要服务器,买卡等等啊,我们也花了不少钱,但这块的话呢,就是说,因为这个是一个长期持续渐进的过程,所以说呢,我们认为其实,毕竟我们上面有这么多的用户,那么这么多的数据, 那么包括这么多可改进的,用大模型来改进追踪等等的,那么我们认为还是有价值,所以说最近我们也没有减这方面的投入,那么就是持续让他们发生,因为毕竟看到这个整体的技术费用占比会高,但是呢,就是不是高很多,我们认为希望未来给我们带来价值,所以说我们这块的就持续投入。 In terms of your question on GME and the revenue gap, it's a result of the return rate.

Unknown Executive: They're just buying slightly less as compared to before because they're becoming more selective, and a little bit discerning, especially when they want to choose when and where to shop.

Jesse Jang: Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter.

Unknown Executive: And the question comes to the line of Jialong Shi from Nomura.

Jessie Zheng: Thank you for taking the time to join us today.

Eric Shen: A return rate actually is trending a little bit higher but has.., moderated a lot from the growth of last year.

Unknown Executive: So we don't see too much change in terms of consumer behavior, especially the SBIB customers.

Jessie Zheng: We look forward to speaking with you next.

Jialong Shi: Your line is open.

Jessie Zheng: If you have any questions, please don't hesitate to contact our IR team.

Eric Shen: It's translated into impact on revenue. Last year we had impact on revenue from return rate of 3% versus 2%. The return rate has been managed.

Unknown Executive: And the second question regarding technology and accountant investment, since last year, we have made meaningful investments in large models, including talent, service, et cetera. We will continue to invest on this front because we believe technology enhancement is very, important to driving long-term value, especially given our large scale of customers and data we do see a lot of room for improvement. We believe a prudent investment in technology and accountant will be value accretive over, the long term.

Jialong Shi: Please ask your question.

Eric Shen: Regularly well and has started to stabilize in the past.

Unknown Executive: As a percentage of total revenue, technology and accountant is going to be a little bit, higher, but not too much.

Jialong Shi: Thank you for accepting my question.

Eric Shen: In terms of average order size versus the total number of orders, we actually don't see too much change with average order size.

Unknown Executive: And it's totally manageable.

Jialong Shi: I have two questions.

Eric Shen: We hope this helps!

Unknown Executive: Thank you.

Jialong Shi: The first question is, we have recently heard some channels say that since the end of, this year, some e-commerce platforms seem to have lowered the requirements for low-priced products, including clothing products.

Eric Shen: they're becoming more, and a lot of it is learning, especially, when I want to choose for when and where to shop.

Jialong Shi: So I would like to ask, as Weipin is a very important channel in the category of clothing, have we seen any fluctuation in the low price of clothing?

Eric Shen: So we don't see too much, change in terms of consumer behavior.

Jialong Shi: If there is fluctuation, how will it affect us in the second half of this year?

Eric Shen: And the second question regarding technology and accountant investment.

Jialong Shi: The second question is two follow-ups.

Unknown Executive: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day. Thank you.

Jessie Zheng: This concludes today's conference call.

Eric Shen: Since last year, we have made meaningful investments in large models, including talent, service, etc. We will continue to invest on this front because we believe technology enhancement is very important to driving long-term value, especially given our large-scale, We do see a lot of room for improvement. We believe a prudent investment in technology and content will be value-accretive over the long term.

Unknown Executive: This concludes today's conference call.

Jialong Shi: The first one is our current income and gross profit.

Eric Shen: As a percentage of total revenue, technology and content is going to be a little bit higher, and it's totally magic.

Unknown Executive: Thank you for participating.

Jialong Shi: How much is the proportion of goods from the target category?

Jessie Zheng: Thank you for participating.

Eric Shen: 謝謝, Thank you.

Unknown Executive: You may now all disconnect.

Jialong Shi: The second follow-up is the current number of SBIP and the contribution ratio of GNV.

Operator: Now we're going to take our last question for today.

Jessie Zheng: You may now all disconnect.

Jialong Shi: Thank you.

Jialong Shi: And the question comes to the line of Jialong Shi from Nomura.

Jialong Shi: I will translate it myself.

Jessie Zheng: Have a nice day.

Unknown Executive: Have a nice day.

Operator: Your line is open.

Jialong Shi: I have two questions.

Speaker Change #174: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Jialong Shi: Please ask your question.

Jialong Shi: One question is about our hearsay from our industry checks.

Jialong Shi: 谢谢管理层接受我的提问我有两个问题第一个问题就是我们最近有听到一些渠道讲说从今年年中以来一些电商平台好像是降低了对于低价一些品类包括服饰品类的低价的要求所以想请教一下作为唯品会是服饰品类里面一个非常重要的渠道咱们有没有看到友商在服饰的低价这方面有没有一些松动这个对我们的影响如果有松动的话这个对我们今年下半年的影响会是怎么样的然后第二个问题就是一个就是我们现在的这个我们的现在的这个收入和这个毛利里面来自于标品这个品类的占比大概分别是多少然后第二个就是目前的这个这个数量还有他的这个 GNV的这个贡献占比大概是多少谢谢我自己翻译一下 I have two questions and one question is about you know our hearsay from our industry checks we heard from some China check that some major Chinese e-commerce platforms appear to have loosened the requirement on low prices for certain categories including apparel category So just wonder if VI VIPS has seen any changes in the operating environment and if there is a loosening on low prices by competitors what are the possible impacts on VIPS second half outlook and my second question is a follow up and just wonder what is the percentage of sales and the gross profit generated by the standardized items and also what is the latest quarterly number of SVIP customers and their contribution to the online GNV Thank you, 那么第一个问题是问整体现在那个低价的情况那么总体我们看今年开始因为确实整体的环境都不好所以说各个平台其实都在搞低价那么我们最近看那个情况还是持续的就是说大家还是搞低价另外促销活动接二连三座那么各个平台尽可能的低那么所以说我们总体看到未来应该还是这样的情况那对我们来讲我们其实整体因为我们是搞知名品牌那么我们是搞知名品牌低价那么所以说我们是希望那么尽可能的提供好东西给用户而不是差东西那么包括我们自己其实今年我们在网站上还清了很多不靠谱的品牌商家等等所以说理论上我们认为不是追求生意但是我们追求用户买到以后觉得有价值那么所以说我们自己认为后续我们如何的更好发挥我们的品牌特卖的优势那么再就是说接下来因为这个竞争还会持续啊所以说我们其实要想办法做得更好那么第二点呢就是问关于那个, 标品跟非标品的毛利情况那么总体而言呢就是我们其实标品跟就是穿戴的毛利会高过标品但是呢就是说我们如果看净利的话因为标品的退据率比较低嘛所以说总体而言那么就是说其实标品给我们公司的利润贡献也不错所以说我们今年也在想今年就是说目前我们标品丢的多穿戴丢的少那么我们争取在标品上面再发发力把生意再多一些回来那么这样的话呢就是对我们的利润反正也是好事情那么第三个呢就是问现在的我们的SVIP现在规模是740万那么我们这些用户因为我们整个年度用户可能八九千万但是这740万的用户呢一年会贡献47%的销售, Okay, in terms of your first question on low-price strategy, we continue to see low price.

Jialong Shi: We heard from some channel checks that some major Chinese e-commerce platforms appear, to have loosened the requirement on low prices for certain categories, including apparel category.

Eric Shen: We continue to focus on quality brands, and we will continue to see that momentum going forward. But for Vipshop, we continue to focus on quality brands.

Jialong Shi: So I just wonder if Vips has seen any changes in the operating environment, and if there, is a loosening on low prices by competitors, what are the possible impacts on Vips' second half outlook?

Eric Shen: Merchandise and we try to offer our customers, for good products at a great price.

Jialong Shi: And my second question is a follow-up.

Eric Shen: We are not chasing for business scale.

Jialong Shi: And I just wonder what is the percentage of sales and the gross profit generated by the, standardized items?

Eric Shen: We focus on delivering value, and we'll continue with that strategy.

Jialong Shi: And also, what is the latest quarterly number of SBIP customers and their contribution to, the online GNV?

Eric Shen: And in addition, on the quality side, we focus, Building truck, Portfolio of Brands.

Jialong Shi: Thank you.

Eric Shen: Actually, starting from this year, we cleaned up.

Unknown Executive: 那么第一个问题是问整体现在那个低价的情况,那么总体我们看今年开始,因为确实整体的环境都不好嘛,所以说各个平台其实都在搞低价,那么我们最近看那个情况还是持续的,就是说大家还是搞低价,另外呢,促销活动接二连三座,那么各个平台尽可能的低。那么所以说我们总体看到未来应该还是这样的情况,那对我们来讲呢,我们其实整体因为我们是搞知名品牌,那么我们是搞知名品牌低价,那么所以说我们是希望那么尽可能的提供好东西给用户,而不是差东西啊,那么包括我们自己,其实今年我们在网站上还清了很多不靠谱的品牌商家等等啊,所以说理论上的我们认为不是追求。生意,但是呢,我们追求用户买到以后觉得有价值,那么所以说我们自己认为后续我们如何的更好发挥我们的品牌特卖的优势,那么在就是说接下来,因为这个竞争还会持续啊,所以说我们其实要想办法做得更好,那么第二点呢,就是问关于那个标品跟非标品的毛利情况啊,那么总体而言呢,就是我们其实标品跟就是穿戴的毛利啊,那么我们其实要想办法做得更好,那么第二点呢,就是问关于那个标品跟非标品的毛利情况啊,那么总体而言呢,就是我们其实标品跟就是穿戴的毛利啊,那么总体而言呢,就是我们其实标品跟就是穿戴的毛利, 会高过标品,但是呢,就是说我们如果看净利的话,因为标品的退据率比较低嘛,所以说总体而言,那么就是说其实标品给我们公司的利润贡献也不错,所以说我们今年也在想今年,就是说目前我们标品丢的多,穿戴丢的少,那么我们争取在标品上面再发发力,把生意再多一些回来,那么这样的话呢,就是对我们的利润,反正也是好事情,那么第三个呢,就是问现在的我们的SVIP现在规模是740万,那么我们这些用户,因为我们整个年度用户可能八九千万,但是这740万的用户呢,一年会贡献47%的销售额。我们尽量为客户提供好的产品,我们并不追求商业水平,我们专注于为客户提供价值,我们将继续使用这种策略。除此之外,在质量方面,我们专注于为客户建立信任的品牌或品牌,其实从今年开始,我们与低价格的品牌伙伴提供了不少产品。 offerings.

Eric Shen: Quite a lot, or Brent Palmer's with low quality.

Unknown Executive: So we only focus on those quality brands and focus on quality products.

Eric Shen: So we all make the.

Unknown Executive: On the second question regarding a GQ margin for apparel and non-apparel, apparel carry a little bit higher GQ margin than non-apparel categories, but to the bottom line, actually, because standardized items have much lower returns.

Eric Shen: You know, those are quality brands and focus on quality products.

Unknown Executive: So they have pretty good contributions going to the bottom line.

Eric Shen: On the second question regarding GP margin for apparel and non-apparel. Apparel carry a little bit higher GP margin than non-apparel category.

Unknown Executive: In the second half, we'll try to bring the business of standardized items back to growth track so that they can have positive impact on the NP margin as well.

Eric Shen: But to the bottom line, actually.., of Standardized Items and much lower returns.

Unknown Executive: Lastly, on FVIP customer base, we have 7.4 million active Super VIP customers by the end of second quarter. They accounted for roughly 47% of our online spending.

Eric Shen: So they have pretty good contributions going to the bottom line.

Unknown Executive: Thank you.

Eric Shen: In the second half, we'll try to bring the business of standardized items, back to growth track so that they hypothesis impact on the NP margin as well.

Unknown Executive: Due to time constraints, this concludes today's Q&A session.

Eric Shen: Lastly, on SBIT customer base, we have, 7.4 million active Super VIP customers, at the end of the second quarter. They accounted for roughly 47% of our online spending.

Jessie Zheng: At this time, I will turn the conference back to Jessie for any closing remarks.

Eric Shen: Thank you.

Jessie Zheng: Thank you, for taking the time to join us today.

Jessie Zheng: If you have any questions, please don't hesitate to contact our IR team.

Jessie Zheng: We look forward to speaking with you next quarter.

Unknown Executive: Thank you. [inaudible] But I see the cost is low, but I see the cost is low, but I see the cost is low In terms of your question, Jamie and Robin and Gap, it's a result of the return rate. A return rate actually is trending a little bit higher but has moderated a lot from the growth of last year. It's translated into impact on Robin, last year, we had 2% impact on Robin from return rate, a lot of 3% versus 2% for this year, so return rate has been managed relatively well and has started to stabilize on a platform.

Unknown Executive: In terms of every order signs, the total number of orders, we actually don't see too much change with average order signs as consumers are still sticking to the brand they prefer, so they don't know intentionally by cheaper, they're just buying a slightly less compared to before because they are becoming more selective and a little bit discerning especially for when it wants to choose the one and where to shop, so we don't see too much change in terms of consumer behavior especially the VIP customers.

Unknown Executive: And the second question regarding technology and accountant investment, since last year we have made many improvements in large models including tabs, service, etc. We will continue to invest from because we believe technology enhancement is very important to driving long-term value, especially given our large share of customers and the data we do see a lot of improvements, we believe a prudent investment in packaging and content will be valued accretive over the long term as a percentage of total revenue technology and accountant is going to be a little bit higher, so it's not too much and it's totally manageable.

Unknown Executive: Thank you, now we're going to take all the questions for today.

Jialong Shi: And the question comes from Lan of Jia Long Xi from Nomura, your Lan is open to ask the question. [inaudible] I have two questions and one question is about in our hearsay from our industry checks. We heard from some channel check that some major Chinese e-commerce platforms appear to have losing the requirement on low prices for certain categories, including a power of category.

Jialong Shi: So I just wonder if VIVIP has seen any changes in the operating environment and if there is a losing in on low prices by competitors, what are the possible impacts on VIVIP's second half outlook? And my second question is a follow-up and you just wonder what is the percentage of sales and growth profit generated by the standardized items and also what is the latest quarterly number of SVIP customers and their contribution to the online GNV. Thank you.

Unknown Executive: So the first question is the situation of the whole country. The situation of the whole country today is not good because the whole environment of the whole country is not good at all. So everyone in the whole country is in the world. [inaudible] to offer. So, we only focus on, you know, those quality brands and focus on quality products. On the second question, regarding a GC margin for a parallel end, a parallel, a parallel carry, a little bit higher GC margin than non-apparel categories.

Mr. Erickson: On the other hand, it is enhancing quality control we have been working hard this year to help customers select contrasted to the volume of brand products by increasing quality inspections throughout our supply chain.

Mr. Erickson: In addition, we are adapting and refining our approach to custom engagement.

Mr. Erickson: In the second quarter for SPIP we continue with the launch, our provides sales and special offering both online and offline.

Unknown Executive: But to the bottom line, actually, because the standardized items are much lower returns, so they have pretty good contribution flowing to the bottom line. In the second half, we'll try to bring the business of standardized items back to growth track, so that they can have a positive impact on the end margin as well.

Mr. Erickson: We intended to increase the deep of our lower tape program to serve there uniquely.

Mr. Erickson: For young custom, we tailored the layout and design of our homepage, created specialized channels, and made personalized recommendations that better cater to our performance.

Unknown Executive: Lastly, on SVIP of customers base, we have a 7.4 million active Super VIP customers at the end of the second quarter. They are accounted for roughly 47% of our online spending. Thank you.

Mr. Erickson: In the face of the temporary, very, very flea on the top line, we continue to work on the long-term efficiency, slow process, optimization, and technology enhancement across business lines, among other things. For example, we continuously upgrade our merchandise platform to further improve the activity of our team when we are serving brand partners.

Mr. Erickson: This has motivated brand partners to invest while generating best ROI technology, AI capabilities, and are increasingly applied to search recommendation and intelligence intelligence shorting assistance to provide the custom with inspiration and improve conversions.

Mr. Erickson: We have a fundamentally sorry, the biggest model that also inherently flexible, but we have much more work to do, and we are only so that we can quickly pivot as customers by all it has changed.

Jessie Zheng: Due to time constraints, this concludes today's Q&A session. At this time, I will turn the conference back to Jessie for any closing remarks. Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IRQ. We look forward to speaking with you next quarter.

Mr. Erickson: As we move ahead, we believe that as long as we stay close to our customers, continuous investing in our merchandising capabilities, and consistently execute on the discounted retail fundamentally, we will be positioned for continuous growth over the long term.

Mark Wang: At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day. Thank you.

Mark Wang: Okay, thanks Eric and Hello01.

Mark Wang: We deliver another quarter of solid profitability despite ongoing pressure on a top line growth. As we remain responsive to the evolving environment to weather external challenge, we have managed to optimize operational efficiency and achieve healthy margins. Subsequently, consolidated growth margin increased to 23.6% from 22.2% a year ago.

Mark Wang: Thanks to higher margin category, it makes from a parallel skills in the series of positive matters.

Mark Wang: None get in the margin attributable to very short spare holders, remained at a high level at 8.1%.

Mark Wang: Well, are also from the near term as softens.

Mark Wang: We remain confidence in our unique position, to drive the sustainable and profitable growth in the long run.

Mark Wang: And as we mentioned on our last earning call, we plan to commit no less than 75% of our full-year non-gap net income, attributable to VIP shop shareholders through this questionnaire shared repurchase and dividend distributions.

Mark Wang: Now moving to our detailed quarterly financial highlights.

Mark Wang: Before I get started, I would like to clarify that all financial numbers presented low by Intamine B, and all percentage changed a year-over-year chance, a life otherwise noted.

Mark Wang: Hold on to our revenues for the second quarter of 2024 for NB 26.9 billion.

Mark Wang: Compare with R&B 27.9 billion in the prior period.

Mark Wang: Growth profits increased by 2.2% year-over-year to R&B 6.3 billion from R&B 6.2 billion in the prior year period. Growth margin increased to 23.6% from 22.2% in the prior period. Total operating expenses decreased by 4.2% year-over-year to R&B 4.3 billion from R&B 4.5 billion in the prior period.

Mark Wang: As a percentage of total net revenues, total operating expenses decreased to 16.0% from 16.1% in the prior period.

Mark Wang: For human expenses decreased by 0.8% year-over-year to R&B 2.16 billion from R&B 2.18 billion in the prior period. As a percentage of total net revenues, for human expenses was 8.1% compared with 7.8%, in the prior period.

Mark Wang: Marking Census decreased by 17.0% year over year to R&B 740.7 million from R&B 800-92.5 million in the prior period.

Mark Wang: At a percentage of total NLM use, Marking Census decreased to 2.8% from 3.2% in the prior period.

Mark Wang: Technology in a content expenses increased by 10.0% year over year to R&B 487.9.2 million from R&B 400-43.0 million in the prior period.

Mark Wang: At a percentage of total NLM use, technology in a content expenses was 1.8% compared with 1.6% in the prior period.

Mark Wang: General administrative expenses decreased by 6.5% year over year to R&B 900.7 million from R&B 963.1 million in the prior period.

Mark Wang: At a percentage of total NLM use, general administrative expenses decreased to 3.4% from 3.5% in the prior period.

Mark Wang: Income from operations increased by 16.5% year over year to R&B 2.2 billion from R&B 1.9 billion in the prior period.

Mark Wang: Operating margins increased to 8.3% from 6.9% in the prior period. Non-gap income from operations increased by 11.6% year over year to R&B 2.6 billion from R&B 2.3 billion in the prior period.

Mark Wang: Non-gap operating margins increased to 9.5% from 8.2% in the prior period.

Mark Wang: That income attributable to R&B 1.9 billion compared with R&B 2.1 billion in the prior period.

Mark Wang: That margin attributable to R&B 2.1 billion compared with R&B 2.1 billion compared with R&B 2.1 billion in the prior period, was 7.2%.

Mark Wang: Compare with 7.5% in the prior period. Net income, attribute vote to Vipshop's shareholders per diluted ADS was R&B 3.49. Compare with R&B 3.75 in the prior period.

Mark Wang: Net income, attribute vote to Vipshop's shareholders was R&B 2.2 billion. Compare with R&B 2.4 billion in the prior period.

Mark Wang: Net income, attribute vote to Vipshop's shareholders was 8.1% compared with 8.6% in the prior period.

Mark Wang: Net income, attribute vote to Vipshop's shareholders per diluted ADS was R&B 3.91 compared with R&B 4.30 in the prior period.

Mark Wang: As of June 30, 2024, the company had cashed and cashed equivalence and a restricted cash of R&B 21.6 billion in short term investments of R&B 1.9 billion.

Mark Wang: Looking forward to the third quarter of 2024, we expect our total R&B to be between R&B 20.5 billion and R&B 21.6 billion.

Mark Wang: Representing a year over year decreased of approximately 10% to 5%.

Mark Wang: Please note that this reflects our current and preliminary view of the market in our regional conditions.

Mark Wang: We just have that to change.

Unknown Executive: With that, we would now like to open the call to Q&A.

Unknown Executive: Thank you, dear participants.

Unknown Executive: As you remind me, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced.

Unknown Executive: To withdraw a question, please press star 11 again.

Unknown Executive: Dear analysts, who are proficient in both languages to slay your question into Chinese as well.

Unknown Executive: Thank you so much for your understanding.

Unknown Executive: Mr. Ba will compile the Q&A roster. This will take a few moments.

Thomas Chong: And now we're going to take our first question.

Thomas Chong: And it comes from the line of Thomas Chong from Jeffrey.

Thomas Chong: So that is open, please ask a question.

Thomas Chong: Thank you, Mr. Guanlin.

Thomas Chong: This is my question.

Thomas Chong: I have two questions.

Thomas Chong: The first one is, Mr. Guanlin can share a situation where we are now seeing the situation of the red light, which is the impact of the recovery situation.

Thomas Chong: Mr. Guanlin will not share a situation, which is that we are now seeing the July 8th to the G-MV region of China, which is still the year of our G-MV region.

Thomas Chong: [inaudible] About the monthly G-MV trend, our expectations for the full year.

Thomas Chong: And my second question is about the competitive environment.

Thomas Chong: Communication comments about how we should think about the parallel and the sanitized category.

Thomas Chong: And how is the G-MV goal for these two categories, the quarter to day, and any color about the contribution about the parallel category right now?

Thomas Chong: Thank you.

Unknown Executive: [inaudible] that to some extent makes our sensitive side of the item more susceptible to competition.

Unknown Executive: In the second half, we plan to continue to stabilize our competitive strategies with a power category, especially whether to continue to grow as the IT customers and the improved year of frequency and average ticker size.

Unknown Executive: And on the other hand, we're making a series of adjustments to a standardized item, so we're trying to narrow its laws.

Unknown Executive: And we're trying to bring this system that's a touch at this.

Unknown Executive: We plan to leverage our IT members to increase their broad categories, particularly as well as increase the intention from non-IP customers as well.

Unknown Executive: Thank you.

Alicia Yap: Now we're going to take our next question.

Alicia Yap: And the question comes to learn of Alicia Yap from CT.

Alicia Yap: Your line is open piece has to question.

Alicia Yap: Hello.

Alicia Yap: Thank you.

Alicia Yap: Good evening.

Alicia Yap: There are two questions.

Alicia Yap: First of all, I'd like to ask you a question.

Alicia Yap: Just now, we just talked about this.

Alicia Yap: The question is, how much do we have?

Alicia Yap: How many SKUs do we have now?

Alicia Yap: How much do we have now?

Alicia Yap: The number of SKUs is higher.

Alicia Yap: If you can share this information, and the second question, I'd like to know more about the SBIP members.

Alicia Yap: We know that their age is higher, but we don't know if the management is aware of their SBIP's behavior.

Alicia Yap: [inaudible] they are aware of their behavior, Let me answer the question.

Alicia Yap: The first question is related to that special product.

Alicia Yap: Because we, the whole website, if it is a product that we sell out, we should have 40% of it.

Alicia Yap: We are a product that is different from other people.

Alicia Yap: There are some products that they made for us, and some of them are products that we sell to us, which is that there are some products that they give different products,[inaudible] and the deep discounted products, like those SKUs, with 70% of retail price.

Alicia Yap: So it's a combination of the great merchandises that we offer to our customers.

Alicia Yap: And in the going forward, we will continue to deepen our differentiated product offerings to avoid direct competition with our peers.

Alicia Yap: The third question regarding SBIP customer protection, actually we see we have a very solid foundation of SBIP customers, whose average ticket size remains quite stable.

Alicia Yap: But when we do see their shocking frequency has been slightly less and before roughly about 2 to 3% compared to the times they used to shop on a pack wall.

Alicia Yap: We think of these frequency although antiprecious is quite a magical, we don't see a very significant change in the behavior of SBIP customers.

Alicia Yap: We will focus on quality branded offerings instead of, you know, and stay away from cheap knock-offs.

Alicia Yap: So that's why we are confident that we will continue to grow the base of SBIP customers as we are, as they are Apple.

Alicia Yap: At the next day, we have our SBIP contribution, we will see, we generally take up a little bit, and as a matter of fact, it's very attractive.

Alicia Yap: We do have very attractive returns in terms of RTP, because in terms of RTP, they spend much more as compared to now as we are key customers.

Unknown Executive: Thank you.

Andre Chang: Now we are going to take on the next question.

Andre Chang: And the next question comes to a learn of Android Chang from JP Morgan.

Andre Chang: Your learn is open piece after question.

Andre Chang: [inaudible] Thank you management for taking my question.

Andre Chang: My first question is about margin and the infestment.

Andre Chang: Charging from this 5% to 10% young year decline of the third quarter revenue, does that mean the company will remain highly disciplined in the infestment of marketing use acquisition?

Andre Chang: So the second quarter, the second half margin will remain no supported.

Andre Chang: And my second question is about the operating cash flow.

Andre Chang: Despite very decent profit, we see no operating cash outflow in the second quarter, which is rare, can management highlight what's the reason behind it?

Andre Chang: Thank you.

Andre Chang: The first question is about the development of the development of the future of the whole company.

Andre Chang: The whole thing is that the company has a strict standard of LTV standards.

Andre Chang: In the past few years, we have not been able to return to China.

Andre Chang: However, our current strategy has been bigger than last year's strategy.

Andre Chang: [inaudible] of different perspectives.

Andre Chang: Up to all, we haven't found a very good channel for supply customers so we will remain disciplined in terms of marketing and for the second half.

Andre Chang: We are confident it's going to remain quite stable and because of Brent Panerser under a lot of pressure nowadays, they have to bid for in less additional dollars for traffic and for returns of goods etc.

Andre Chang: But our philosophy of working with Brent Paners is always to create a win-win situation so we are not going to increase our take rate for Brent Paners.

Andre Chang: We don't want to create additional burdens for them so GDP margin will remain quite stable.

Andre Chang: And on the expense side, we do foresee a little bit higher of the human expenses with returns of a single building slightly higher.

Andre Chang: So we probably don't see too much operating leverage for our consumers.

Andre Chang: Overall, we believe that in the second half, we will continue with our proof-inting investments.

Andre Chang: So margins and the net profit in that for the dollar amount will be quite manageable as compared to last year.

Andre Chang: Although net profit may not be as good as the second half of last year, it should be quite comparable.

Andre Chang: Okay.

Andre Chang: The second question regarding the operating catch flow, let me answer your question. The net cash from operating activities for the second quarter decreased primarily due to the following reasons.

Andre Chang: The first one is a rounded decline year over year.

Andre Chang: In the second reason in this year, 618 promotion, I mean the shopping festival, started in the middle of May.

Andre Chang: So which means we need to pay the related costs and expenses to our suppliers in June instead of July.

Andre Chang: And the third reason is that state and the Ministry of Taxation advocate the implementation of fully digitalized the eFAPIAL system this year.

Andre Chang: And which means the recipient of FAPIALs earlier, a little bit earlier.

Andre Chang: So in this connection, we pay our supplier a little bit faster than that in last year.

Andre Chang: So this is three main reasons for the operating catch flow exchange.

Unknown Executive: Excuse me, Andrea, any further questions?

Unknown Executive: No, thank you.

Unknown Executive: Thank you so much.

Jialong Shi: Now we're going to take over the next question.

Jialong Shi: And the next question comes from Lan of Renault Cone from Goldman Sachs, here Lan is open piece after question.

Jialong Shi: Hey, thank you, Zheng, Mark, I want to ask you two.

Jialong Shi: The first is that our CNB and revenue can possibly be done by five points.

Jialong Shi: So let's take a look at our return rate, right?

Jialong Shi: Is this the rate is high?

Jialong Shi: Then, in the meantime, I saw that Ding Dang's price is low, so that the GNB is flat.

Jialong Shi: Can you understand that it is the price of the data that you buy, the LV is high.

Jialong Shi: This is a little different from Hong Kong, the environment is a little different, right?

Jialong Shi: We may not be able to buy a little more, we eat a little more, but at the end of the day, a little more.

Jialong Shi: So, we, of course, the GNB is flat, and then the flow rate is high.

Jialong Shi: Is that some of the dynamics that we're seeing?

Jialong Shi: Second is I see the technology and content cost has gone up versus the new tech revenue, so aware we're investing in technology, do we see some room to streamline or cut some of these costs given the headwinds on the revenue side?

Jialong Shi: Thank you.

Jialong Shi: [inaudible] But I see the cost is low, but I see the cost is low, but I see the cost is low In terms of your question, Jamie and Robin and Gap, it's a result of the return rate.

Jialong Shi: A return rate actually is trending a little bit higher but has moderated a lot from the growth of last year. It's translated into impact on Robin, last year, we had 2% impact on Robin from return rate, a lot of 3% versus 2% for this year, so return rate has been managed relatively well and has started to stabilize on a platform.

Jialong Shi: In terms of every order signs, the total number of orders, we actually don't see too much change with average order signs as consumers are still sticking to the brand they prefer, so they don't know intentionally by cheaper, they're just buying a slightly less compared to before because they are becoming more selective and a little bit discerning especially for when it wants to choose the one and where to shop, so we don't see too much change in terms of consumer behavior especially the VIP customers.

Jialong Shi: And the second question regarding technology and accountant investment, since last year we have made many improvements in large models including tabs, service, etc.

Jialong Shi: We will continue to invest from because we believe technology enhancement is very important to driving long-term value, especially given our large share of customers and the data we do see a lot of improvements, we believe a prudent investment in packaging and content will be valued accretive over the long term as a percentage of total revenue technology and accountant is going to be a little bit higher, so it's not too much and it's totally manageable.

Unknown Executive: Thank you, now we're going to take all the questions for today.

Jialong Shi: And the question comes from Lan of Jia Long Xi from Nomura, your Lan is open to ask the question.

Jialong Shi: [inaudible] I have two questions and one question is about in our hearsay from our industry checks.

Jialong Shi: And my second question is a follow-up and you just wonder what is the percentage of sales and growth profit generated by the standardized items and also what is the latest quarterly number of SVIP customers and their contribution to the online GNV.

Jialong Shi: Thank you.

Jialong Shi: So the first question is the situation of the whole country.

Jialong Shi: The situation of the whole country today is not good because the whole environment of the whole country is not good at all.

Jialong Shi: So everyone in the whole country is in the world.

Jialong Shi: [inaudible] to offer.

Jialong Shi: So, we only focus on, you know, those quality brands and focus on quality products.

Jialong Shi: On the second question, regarding a GC margin for a parallel end, a parallel, a parallel carry, a little bit higher GC margin than non-apparel categories.

Jialong Shi: But to the bottom line, actually, because the standardized items are much lower returns, so they have pretty good contribution flowing to the bottom line.

Jialong Shi: In the second half, we'll try to bring the business of standardized items back to growth track, so that they can have a positive impact on the end margin as well.

Jialong Shi: Lastly, on SVIP of customers base, we have a 7.4 million active Super VIP customers at the end of the second quarter. They are accounted for roughly 47% of our online spending.

Unknown Executive: Thank you.

Unknown Executive: Due to time constraints, this concludes today's Q&A session.

Jessie Zheng: At this time, I will turn the conference back to Jessie for any closing remarks.

Jessie Zheng: Thank you for taking the time to join us today.

Jessie Zheng: If you have any questions, please don't hesitate to contact our IRQ.

Jessie Zheng: We look forward to speaking with you next quarter.

Jessie Zheng: This concludes today's conference call.

Jessie Zheng: Thank you for participating.

Unknown Executive: You may now all disconnect.

Unknown Executive: Have a nice day.

Unknown Executive: Thank you.

Q2 2024 Vipshop Holdings Ltd Earnings Call

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