Q4 2024 Baozun Inc Earnings Call
Operator: Good morning ladies and gentlemen, and thank you for standing by for Baozun's 4th Quarter 2024 Earnings Conference. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded.
Good morning, ladies and gentlemen, and thank you for standing by for <unk> fourth quarter 'twenty 'twenty four earnings conference call.
At this time all participants are in a listen only mode.
After the managements prepared remarks, there will be a question and answer session.
As a reminder, today's conference call is being recorded.
Operator: I will now turn the meeting over to your host for today's call, Ms. Wendy Sun.
I will now turn the meeting of it your host for today's call Ms. Wendy Sun.
Wendy Sun: Senior Director of Corporate Development and Investor Relations at Baozun Thank you, operator. Ladies and gentlemen, please do stand by. Thank you, Wendy. You may go ahead. Okay, thank you, operator, and thank you all for waiting. Hello. Hello, operator. Can you hear me now? We can hear you, ma'am. Please go ahead. Okay, thank you. Thank you, operator. And hello, everyone. Thank you for joining us today.
Speaker Change: Senior director of corporate development and Investor Relations at Goldman.
Speaker Change: Please proceed Wendy.
Speaker Change: Thank you operator Hello.
Speaker Change: Ladies and gentlemen, please standby.
Speaker Change: Thank you Wendy you May go ahead.
Speaker Change: Okay. Thank you operator, and thank you all for wages.
Speaker Change: Hello, everyone.
Speaker Change: Hello. Please go ahead of you here.
Speaker Change: We can hear you ma'am. Please go ahead.
Speaker Change: Thank you.
Speaker Change: Thank you operator, and Hello, everyone. Thank you for joining US today, our fourth quarter 2024 earnings release was distributed earlier before this call and is available on our IR website at IR, the Belgian dot com as well as on PR Newswire services.
Wendy Sun: Our fourth quarter 2024 earnings release was distributed earlier before this call and is available on our IR website at ir.baozun.com as well as on PR Newswire Services. They have also posted a PowerPoint presentation that accompanies our comments to the same IR website where they are available for your download.
So post stake a powerpoint presentation that accompanies our comments to the same IR website, where they are available for download on.
Wendy Sun: On the call today from Baozun, we have Mr. Vincent Qiu, Chairman and Chief Executive Officer, Mr. Junhua Wu, Director and Chief Strategy Officer, Ms. Catherine Zhu, Chief Financial Officer, Mr. Arthur Yu, President of Baozun E-Commerce, and Mr. Ken Huang, Chief Financial Officer of Baozun Brand Management. They will all be available to answer your questions during the Q&A session that follows.
Speaker Change: On the call today from Biogen, we have Mr. <unk>, <unk>, Chairman and Chief Executive Officer, Mr. <unk> Director and Chief Strategy Officer, Ms. Kathryn <unk>, Chief Financial Officer, Mr. Arthur E present about E Commerce and Mr. Peng Wang Chief financial.
Speaker Change: Office of thousand brand management, they will all be available to answer your questions. During the Q&A session that follows.
Wendy Sun: Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the U.S. Security Act of 1933 as a mandate, the U.S. Security Exchange Act of 1934 as a mandate, and the U.S. Private Security Litigation Reform Act of 1995. These forward-looking statements are based upon management current expectations and current market and operating conditions and relate to events that involve known or unknown risks and certainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ maturely from those in the forward-looking statements.
Speaker Change: Before we begin I would like to remind you that this conference call contains forward looking statements within the meaning of the U S. Securities Act of 19 study three as a mandate. The U S Securities Exchange Act of 19 said equal as a mandate and the U S. Private Securities Litigation Reform Act of 19 nineties.
Speaker Change: These forward looking statements are based upon management's current expectations and current market and operating conditions as it relates to your mind that involve known unknown risks uncertainties and other factors all states are difficult to predict and nano stage are beyond the company's control.
Speaker Change: Which may cause the company's actual results to differ materially from those in the forward looking statements.
Wendy Sun: Further information regarding these and other risks and searches or factors is included in the company's filings with the U.S. Securities Exchange and its announcement, notice, or other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this card is as of the date and is based on assumptions that the company believes to be reasonable as of the date. And the company does not undertake any obligation to update any forward-looking statement except as required under applicable law.
Speaker Change: Further information regarding these and other risks and subsidiary all factors is included in the company's filings with the U S Securities Exchange and his announcement notice or other document published on the website of stock exchange of Hong Kong Limited.
Speaker Change: All information provided in this call is as of the date and is based on assumptions that the company believes to be reasonable as of to date.
Speaker Change: And the company does not undertake any obligation to update any forward looking statement, except as required under applicable law.
Wendy Sun: Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. In addition, we may elect to use adjusted in place of non-general accepted accounting principle, or non-GAAP, in order to reduce oral confusions that may arise from our discussions about financial related to the GAAP brand.
Speaker Change: Finally, please note that unless otherwise stated all figures mentioned during this conference call.
Speaker Change: M D.
Speaker Change: We may elect to use the gestate in place of non general accepted accounting principles or non-GAAP in order to reduce oral confusions that may arise from our discussion about financial related to the gap brand it.
Vincent Qiu: It is now my pleasure to introduce our chairman and Chief Executive Officer, Mr. Winston Chu. Winston, go ahead, please. Thank you, Wendy. Hi, everyone, and thank you all for your time. I am delighted to report that Baozun continues to execute our three-year transformation plan with strong momentum and consistent quarterly improvement. In the fourth quarter, Baozun Group achieved an 8% year-over-year revenue growth. Our e-commerce division saw a sustainable, substantial 16% increase in non-gap operating profit. while BBM narrowed 2. By 20% On an annual basis, we have met our annual non-gap operating profit break-even target, supported by positive operating cash flow and healthy cash balance.
Speaker Change: It is now my pleasure to introduce our chairman and Chief Executive Officer. Mr. Vincent You May go ahead. Please.
Speaker Change: Yeah.
Speaker Change: Thank you Wendy Hi, everyone and thank you all for your time.
Speaker Change: I am delighted to report that Biogen continues to execute our three year transformation plan with strong momentum and a consistent quarterly improvement.
Speaker Change: In the fourth quarter, Belgium group achieved a 8% year over year revenue growth.
Speaker Change: Our E Commerce Division saw a sustainable substantial 16% increase in non-GAAP operating profits.
Speaker Change: Well P B M narrowed two.
Speaker Change: By 20%.
Speaker Change: Or annual basis, we have met our annual non-GAAP operating profit breakeven targets supported by positive operating cash flow and a healthy cash balance.
Vincent Qiu: Baozun e-commerce has resumed annual top line growth of two years of contraction. To navigate an ever-evolving market, we have enhanced our creative content capabilities and leveraged our technologies to help brand partners to capitalize on platform interconnectivity, data intelligence, and AI-driven efficiency. By expanding into emerging channels like Douyin, Rednote, and WeChat, we achieved a 16% year-over-year increase in online store operations revenue this quarter. Additionally, value-added services, including digital marketing and IT solutions, grew by 15% year-over-year. We believe this strengthening fundamentals position BEC well for high quality and sustainable growth. BBM is experiencing accelerated revenue growth and expanding its store for the During the quarter, we generated a 17% year-over-year revenue increase.
Speaker Change: Boswell E Commerce has resumed annual top line growth up two years of contraction.
Speaker Change: To navigate an ever evolving market, we have enhanced our creative content capabilities and leverage our technologies to help brand partners to capitalize on platform Interconnectivity.
Speaker Change: Data intelligence and AIG then efficiencies by.
Speaker Change: By expanding into emerging channels like a coal unit or a node in the wechat, we achieved a 16% year over year increase in online store operations revenue this quarter.
Speaker Change: Additionally value added services, including digital marketing and the it solutions grew by 15% year over year.
Speaker Change: We believe these strengths in the fundamentals position <unk>, well for high quality and sustainable growth.
Speaker Change: B B.
Speaker Change: Curious to see accelerated revenue growth and expanding its store footprint.
Speaker Change: During the quarter, we generated a 17% year over year revenue increase.
Vincent Qiu: Notably, Gap Offline Revenue has grown for the first time since our acquisition. In Tier 2 cities, we have adopted an acolyte approach by engaging franchises. for Thor Expansion. Strengthened by global and local partnership This strategy extends our reach across the broader China market while minimizing expansion risk. Additionally, Hunter has expanded its presence with new store openings in Malaysia and Shanghai. Each lunch attracted significant food traffic and the media attention. Further Elevating Honda's Brand Presence and Appeal These collective efforts boast our confidence in sustaining BBM's robust top-line momentum.
Speaker Change: Notably GAAP offline revenue has grown for the first time since our acquisition.
Speaker Change: In tier two cities, we have adopted a SLI approach by engaging franchise.
Speaker Change: Forceful expansion.
Speaker Change: Strengthened by global and local partnerships this strategy expense.
Speaker Change: Reach across a broader China market, while minimizing expansion risks.
Speaker Change: Additionally, Hunter has expanded its presence with new store openings in Malaysia, and the Shanghai.
Speaker Change: Each launch attracted significant foot traffic and the media attention.
Speaker Change: Other elevating <unk> brand presence and appeal.
Speaker Change: These collective efforts and bolster our confidence in sustaining pbms robust topline momentum.
Speaker Change: Yes.
Vincent Qiu: The year 2025 marks the culmination of our strategic transformation and sets the stage for future growth. We have strengthened our senior management team to drive this next phase. My co-founder, Junhua Wu, has taken on a role, a hands-on role, a more hands-on role as Chief Strategy Officer of Baozun Group. overseeing both BEC and TIC, while Qun Huang continues to excel as CFO of BBM and has now also assumed the role of CEO of Gap China. These two high achievers bring energy innovation to our leadership, fostering a more entrepreneurial and innovative cultures across the group.
Speaker Change: So year 'twenty 'twenty five marks the culmination of our strategic transformation and this sets the stage for future growth.
Speaker Change: We have strengthened our senior management team to drive this next phase.
Speaker Change: My co founder Chihuahua has taking a role hands on role more hands on role as Chief strategy Officer of Hudson Group.
Speaker Change: Overseeing both be easy NTIC, well count continues to excel as CFO of P. B M and it has now also assumed the role of CEO of <unk> China.
Speaker Change: These two high achievers spring energy innovation through our leadership fostering a more entrepreneurial and innovative cultures across the globe.
Speaker Change: Nope.
Qun Huang: Now I will hand the call over to Qun Hua to share a few words followed by our team who will provide a deeper dive into our financials and the business performance. Thanks, Vincent. And hello, everyone.
Jim: Now I will hand, the call over to Jim <unk> to share a few words, followed by our team who will provide a deeper dive into our financials and the business performance.
Jim: Thanks, Vincent and Hello, everyone I'm excited to share my vision to elevating Biogen ecommerce as southwest cofounder and a director.
Qun Huang: I'm excited to share my vision to elevating Baozun eCommerce. As Baozun's co founder and a director, I'm dedicated to leading with an emphasis on profitability and a sustainable growth. Technology is the cornerstone of our success. In today's rapidly evolving digital e-commerce landscape, we are all well-equipped to distinguish ourselves as the driving force behind our brand partner's sales engine. Our competitive edge lies in enduring partnerships, omni-channel expertise, and value-driven strategies that create lasting impact. Execution requires discipline and a great team. By fostering a culture of ownership and entrepreneurship, we empower our teams to take initiative, drive innovation, and make impactful decisions.
Jim: Dedicated to leading with an emphasis on profitability and our sustainable growth.
Jim: Technology is the cornerstone of our success in today's rapidly evolving digital E. Commerce landscape. We are all well equipped to distinguish ourselves as a driving force behind our brand partner sales engine.
Jim: Our competitive edge lives in enduring partnerships omnichannel expertise and the value driven strategies that create lasting impact.
Jim: Execution requires discipline and a great team.
Jim: <unk> carrying a culture of ownership and entrepreneurship, we empower our teams to take initiative drive innovation and make impactful decisions.
Qun Huang: Baozun's future is profit-focused, tech-empowered, and customer-centric.
Jim: <unk> future is profit focused tech empowered and customer centric.
Qun Huang: I'm fully committed.
Jim: I'm fully committed.
Catherine Zhu: Now I'll hand the call over to Catherine to provide financial update. Thanks, Qun Huang. And hello, everyone. Now let me provide you our fourth quarter and full year of 2024 financial results in more detail. Please turn to slide number three. Baozun Group's total net revenues for the fourth quarter of 2024 increased by 8% year-over-year to $3 billion. Of this, e-commerce revenue grew 6% to $2.5 billion, while brand management revenue grew 17% to $535 million. Breaking down e-commerce revenue by business model, services revenue increased by 9% year-over-year to $1.9 billion for the quarter. This growth was primarily driven by a 16% increase in revenue from online store operations and a 15% increase in revenue from digital marketing and IT solutions.
Catherine: Now I'll hand, the call over to Catherine to provide financial updates.
Catherine: Thanks, <unk> and Hello, everyone.
Catherine: Now, let me provide you our fourth quarter and full year of 2011.
Catherine: The financial results in more detail.
Catherine: Please turn to slide number three.
Catherine: <unk> total net revenues for the fourth quarter of 2024 increased by 8% year over year to 3 billion.
Catherine: This E Commerce revenue grew 6% to $2 5 billion, while brand management revenue grew 17% to 535 million.
Catherine: Breaking down E Commerce revenue by business model services revenue increased by 9% year over year to $1 9 billion for the quarter.
Catherine: This growth was.
Catherine: Really driven by a 16% increase in revenue from our lifestyle operation and a 15% increase in revenue from.
Catherine: Digital marketing solutions.
Catherine Zhu: Meanwhile, VEC product sales revenue decreased by 4% year-over-year to $572 million. Mainly due to the relatively weak performance of Appliance category as we prioritized profitability over revenue growth in this category. BPM product sales totaled 535 million for the quarter. Reflecting a 17% year-over-year growth. This increase was mainly driven by the strong performance of the GAAP brand, with both online and offline sales achieving healthy growth. Please turn to slide number four. From a profitability perspective, our blended gross margin for product sales at group level was 30%, while gross profits increased by 5% to $332 million. Breaking this down by our key business lines Gross margin for e-commerce product sales was 10.8% for the quarter, compared with 12.4% a year ago.
Catherine: Meanwhile, Pvz product sales revenue decreased by 4% year over year to 572 million, mainly due to the relatively weak performance of appliance category as we prioritized profitability over revenue growth in these categories.
Catherine: <unk> product sales totaled 535 million for the quarter.
Catherine: Reflecting a 17% year over year growth.
Catherine: This increase was mainly driven by the strong performance of the gap brand with both online and offline sales achieving healthy growth.
Catherine: Please turn to slide number four.
Catherine: From a profitability perspective.
Catherine: Our blended gross margin for product sales at group level was sub 2%, while gross profit increased by 5% to $322 million.
Catherine: Breaking this down by our key business lines.
Catherine: Gross margin for e-commerce product sales or 10 points.
Catherine: 8% for the quarter compared with 12, 4% a year ago.
Catherine Zhu: This decrease was mainly due to a change in category mix. but remained relatively stable compared to the previous quarter. Last Margin for BPM was 50.4% compared with 52.9% a year ago. The decrease was mainly due to higher discounts during quarterly gap promotion.
Catherine: This decrease was mainly due to a change in category mix.
Catherine: <unk> remained relatively stable compared to the previous quarter.
Catherine: Gross margin for PBF was 54% compared with is at two 9% a year ago.
Catherine: The decrease was mainly due to higher discounts during quarterly GAAP promotion.
Catherine Zhu: Now turning to bottom line items, please refer to slide number five. During the quarter, our adjusted income from operations totaled $103 million, an improvement of $28 million, or 37% from a year ago. This included an adjusted operating profit of $137 million from the e-commerce segment. an improvement of 16% compared with $118 million in the same period of last year. BDM's adjusted operating loss totaled $34 million, an improvement of 20% compared to $43 million in the same period of last year. Our non-GAAP net income attributable to shareholders for the quarter was $46 million. and improvement of 59% year-over-year from 29 million in the same period of last year.
Catherine: Now turning to bottom line items, please refer to slide them advice.
Catherine: During the quarter, our adjusted income from operations totaled a $103 million.
Catherine: Improvement on $28 million or 37% from a year ago. This.
Catherine: This included an adjusted operating profit of 157 million from E Commerce, gentlemen, and improvement of 16% compared with $118 million in the same period of last year.
Catherine: <unk> adjusted operating loss totaled 34 million, an improvement of 28% compared to 43 million in the same period of last year.
Catherine: Our non-GAAP net income attributable to shareholders for the quarter was $46 million.
Catherine: An improvement of 59% year over year from 29 million in the same year of Lockheed.
Catherine Zhu: Let's turn to a quick 4-year summary The group's total revenue was $9.4 billion, an increase of 7% year-over-year Of which, e-commerce net revenues were $8.1 billion, an increase of 6% year-over-year, while BVM net revenues were $1.5 billion, an increase of 16% year-over-year. Our adjusted operating income totaled $11 million, an improvement of $34 million compared with adjusted operating loss of $24 million in fiscal year 2023.
Catherine: Let's turn to a quick four year summary.
Catherine: Total revenue was $9 4 billion, an increase of 7% year over year.
Catherine: E Commerce net revenues were $8 1 billion, an increase of 6% year over year, why Bbs revenues were $1 5 billion, an increase of 16% year over year.
Catherine: Our adjusted operating income totaled 11 million, an improvement of 34 million compared with adjusted operating loss of 24 million in fiscal year 2023.
Catherine Zhu: In addition, we successfully completed our share repurchase program, which was authorized by our board in January 2024. As of the last open window trading day of January 17, 2025, we repurchased approximately 5.3 million ADRs through the open market for 14.7 million USD. This represents approximately 9% of our total shares outstanding at the beginning of the program. As of December 31, 2024, our cash and cash equivalents, restricted cash and short-term investments totaled $2.9 billion, compared with $3.1 billion a year ago.
Catherine: In addition, we successfully completed our share repurchase program, which was authorized by our board in January 2024.
Catherine: As of the last open window trading day of January 17, 2025.
Catherine: We purchased approximately $5 3 million.
Catherine: So with all the market.
Catherine: The $14 $7 million.
Catherine: This represents approximately 9% of our total shares outstanding at the beginning of the program.
Catherine: As of December 31st 2024, our cash cash equivalents restricted cash and short term investments totaled two 9 billion compared with $3 1 billion a year ago.
Arthur Yu: Let me now pass the call over to Arthur to update you on VC, our e-commerce business. Okay, thank you, Catherine. And hello, everyone.
Oscar: Let me now pass the call over to Oscar to update you.
Oscar: Our E Commerce business.
Oscar: Okay. Thank you Katherine and Hello, everyone.
Arthur Yu: Let me share the key operational achievements of the fourth quarter and how we closed the year. Now please turn to slide No. 6 for operational highlights. We are glad to report that BEC maintained its momentum in the fourth quarter, achieving a 6% year-over-year increase in total revenue. and a 16% improvement in non-cab operating profit. More encouraging, our annual e-commerce top line resumed growth, rising 6%. Our growth continues to be driven by strong brand partnerships and category expansion. By the end of 2024, our brand portfolio has expanded to over 490,000. up from approximately 450 a year ago.
Oscar: Let me share the key operational achievement of the fourth quarter and how we close the year.
Oscar: Now please turn to slide number six for operational highlights.
Oscar: We are glad to report that <unk> maintained its momentum in the fourth quarter, achieving a 6% year over year increase in total revenue.
Oscar: And a 16% improvement in non-GAAP operating profit.
Oscar: More encouraging although e-commerce pulp volumes resumed growth rising 6%.
Oscar: Our growth continues to be driven by strong brand partnerships and category expansion.
Oscar: By the end of 2020 for our brand portfolio has expanded to over 490.
Oscar: Up from approximately 450, a year ago.
Arthur Yu: This includes around 330 brand partners in online store operations. 340 in Digital Marketing and IT Solutions and 180 in warehousing and logistics.
Oscar: This includes around 330 brands partners all lines the operation.
Oscar: 340, <unk> digital marketing solution.
Oscar: And 100 AC warehousing and logistics.
Arthur Yu: On slide number 7, we are pleased to collaborate with our brand partners on end-to-end solutions. with most engaging with us through omni-channel approaches in value-added services. Install operations alone, omni-channel adoption has increased from 44.7% to 48.8%. Our key categories performed well during the 14 days. Total apparel service revenue grow by 27% year over year. with sportswear increased by 18%. Luxury, Returning to Growth, and Other Apparel Achieving an Impressive 62% Revenue Income We continue to optimize our service offerings across various channels to help brand partners grow. We also upgraded our business intelligence offering to provide real-time visualized data insights across channels.
Oscar: On slide number seven we are pleased to collaborate with our brand partners.
Oscar: Joanne solution.
Oscar: Waste, most engaging with us through Omnichannel approaches in value added services.
Oscar: Install operations Hello, Omnichannel adoption.
Oscar: Sorry from 44, 7% to 48, 8%.
Oscar: Our key categories performed while during the quarter.
Oscar: Total apparel service revenue grew by 27% year over year.
Oscar: Wade sportswear increased by 18%.
Oscar: Luxury returning to growth.
Oscar: Other apparel, achieving pricing, 62% revenue increase.
Oscar: We continue to optimize our service offerings across various channels for brand partners girl.
Oscar: We are also upgrading our business intelligence offering to provide real time visualized.
Oscar: Across channels.
Arthur Yu: Making it easier for brands to track performance. This quarter, we launched Douyin Business Intelligence. And by the end of 2024, we were working with over 30 brands on content-driven store live streaming. Overall, Douyin Mankind's triple-digit growth during the quarter. Contributing 6% of e-commerce revenue We are the latest live streaming event for a Spanish fast fashion brand. We hit a peak viewership of 35,000. Total paid views of 5 million and sold out 100% of the featured products.
Oscar: Making it easier for brands to track performance.
Oscar: This quarter, we launched W business intelligence.
Oscar: And by the end of 2024, we will working way or third hey, Brian on content driven installed lifestream.
Oscar: Overall volume maintained triple digits growth during the quarter contributed 6% of E Commerce revenue.
Oscar: Our late stage livestream events for our Spanish faster patient breath.
Oscar: <unk> a pique the OFC of 35000.
Oscar: Total page views of 5 million.
Oscar: And sold out the 100% of the featured products.
Arthur Yu: Our efforts were recognized with the Douyin E-commerce Diamond Brand Service Provider Award, the highest honor at the latest Douyin E-commerce Awards in January. On right note, we strengthened our capabilities in content creation. Influencer collaboration and data driven marketing. In 2024, we have executed over 50 brand marketing campaigns and 1000 live stream sessions. with more than 18,000 KOLs in our established network. This initiative in Red Note enables brand partners to run targeted campaigns and boost their presence in the market. Client satisfaction remains a priority And our efforts are paying off. Over the past three years, our Net Promoter Score, NPS, has steadily improved.
Oscar: Although efforts.
Oscar: Hi.
Oscar: W E Commerce Diamond brand service provider award the highest honor the late stage with OEM homeless Award in January.
Oscar: All right now.
Oscar: We strengthened our capabilities and content creation.
Oscar: We introduced our clients.
Oscar: Influenza.
Oscar: Clyde.
Oscar: <unk> and <unk>.
Oscar: There is a market.
Oscar: In 2024, we have to date.
Oscar: Please take brand marketing campaign and the <unk>.
Oscar: 1000 live streaming sessions.
Oscar: With more than 18000 Kols in our established a nice one.
Oscar: These initiatives you guys note enable brand partners to run targeted campaigns.
Oscar: Their presence in the market.
Oscar: Okay.
Oscar: Client satisfaction remains a priority.
Oscar: Our efforts are paying off.
Oscar: Over the past three years, our net promoter score.
Oscar: Has steadily improved.
Arthur Yu: In the latest Nielsen survey released this month, our NPI raised to 8.53 in 2024, up from 8.23 last year. Our key account also shows strong loyalty with a 95% renewal rate.
Oscar: The latest Nielsen Survey released this month.
Oscar: <unk> reached two 8.53 in 2020 full up from 823 last year.
Oscar: Our key accounts also show strong loyalty, we are 95% renewal rate.
Oscar: Yeah.
Arthur Yu: Health Optimization is another focus Our regional service centers continue to ramp up, and as of end of 2024, approximately 2,700 of our staff were located in these centers. We also continue to integrate AI into our service and aware system. During the recent W11, we deployed our iSwift AI assistant for customer service. and the feedback was highly positive. As we cut response time by 13%, we are improving customer satisfaction and conversion rate.
Oscar: Cost optimization is another forecast.
Oscar: Our regional service centers continue to ramp up and as of end of 2024.
Oscar: Approximately 2700 of our staff were located in these centers.
Oscar: We also continued to integrate AI into our service on the way our system.
Oscar: During the recent double 11, we defined our suite of AI assistant full customer sorry.
Oscar: And the feedback was highly positive.
Oscar: As weak comps response time by 30%, while improving customer satisfaction and accomplishment.
Oscar: Okay.
Arthur Yu: SBEC completes the first phase of its transformation initiated in 2023. and return to a path of growth.
Oscar: <unk> completed the first phase of its transformation initiated in 2023.
Oscar: I will return to a path of growth.
Arthur Yu: I believe this is the right time for me to pass the baton to Junhua and pursue a career of unity outside of Baozun. It has been an incredible journey, and I'm deeply grateful for the support and collaboration I have received from everyone over the past five years at Baozun. I have full confidence that Baozun will continue to thrive and reach new heights in the years to come.
Oscar: I believe this is the right time for me to pass the baton to achieve them.
Oscar: And pursue a career opportunity outside of budget.
Oscar: It has been an incredible journey.
Oscar: Deeply grateful for the support and collaboration.
Oscar: <unk> from everyone over the past five years I apologize.
Oscar: I have full confidence that both you will continue to thrive and reached new heights in the years to come.
Ken Huang: Now I will pass to Ken for an update on VPN. Thank you team and thank you all.
Speaker Change: Now I will pass to <unk> for an update on TBS.
Speaker Change: Thank you team and thank you all please turn to slide number eight for additional insights into <unk> progress through Q4.
Ken Huang: Please turn to slide number 8 for additional insights into BBM's progress through Q4. I am proud to report that we sustained strong momentum through Q4 2024, delivering 17% while over a year sales growth, making one of our strongest performances in recent years. This growth was driven by continued expansion across both online and offline channels. Same store sales increased for the second consecutive quarter, despite the challenged macroeconomic environment. Importantly, offline revenues continue to positive growth for the first time since our acquisition, demonstrating the impact of store optimization and enhanced in-store experience. In the second half of 2024, we opened 40 new stores, including 16 in Q4, which performed strongly in new Tier 1 and Tier 2 cities such as Changsha and Zhuhai.
Speaker Change: I'm proud to report that we sustained a strong momentum through Q4, 'twenty 'twenty four delivering 17% while over a year.
Speaker Change: Sales gross making one of our strongest performances in recent years. This growth was driven by continued expansion of our costs, both online and offline channels.
Speaker Change: Same store sales increased for the second consecutive quarter, despite the challenging macroeconomic environment.
Speaker Change: Importantly, offline revenues continue to positive it goes for the first time since our August equity position.
Speaker Change: Demonstrating the impact of store optimization and enhanced in store experiences.
Speaker Change: In the second half of 'twenty to 'twenty four we opened 40, new stores, including 16 in Q4, which performed strongly new tier one and tier two cities such as return Shar into July.
Ken Huang: We leverage the strategic partner model to expand in emergent cities, securing premium retail spaces, and further strengthening our competitive edge. The unique economics of these new stores are highly promising, driven by strong productivity and a healthy store-level margin. By the end of 2024, we managed 152 Gap Stores across various cities and the total store footage is back on gross. Tregy Terry While we opened the new stores throughout the year, we also strategically closed underperforming locations to optimize our offline network, making 2024 a year of structural upgrades. Looking ahead, we plan to accelerate our expansion by prioritizing high-traffic locations that maximize sales potential.
Speaker Change: We leverage their strategic partner model to expand the emergencies, securing premium retail spaces and the further strengthening our competitive edge.
Speaker Change: Unit economics of these new stores are highly promising driven by strong productivity and a healthy start at low margins.
Speaker Change: By the end of 2024, we managed 152 gap stores across various cities and the total store footage to ease back on where our gross.
Speaker Change: Tragedy tourism.
Speaker Change: While we opened the new stores throughout the year, we also strategically closed.
Speaker Change: The bombing locations to optimize our offline network, making 2020 for a year of a structure.
Speaker Change: <unk>.
Speaker Change: Looking ahead, we plan to a Saturday tower expansion by poorer always housing in high traffic locations death, and maximize sales potential.
Ken Huang: In 2025, we aim to open approximately 50 new stores, resulting in a net increase of 40 stores after accounting for strategic closure. We continue to strengthen Gap's brand DNA and reinforce our iconic category. Through our close collaboration with Gap Inc's global merchandise team, we have refined product localization while preserving the brand core identity. Moving forward, we are prioritizing design improvement. Supply Chain Refinements and Deliberate Product Planning to Enhance Our Offerings and Margin Performance We are also aligning marketing strategies more closely with culture trends and local collaborations to deepen consumer engagement. Our recent partnership with Forbidden City stands out as one of the most successful IP collaborations in the past 3 years, highlighting the power of well-executed brand storytelling.
Speaker Change: We intend to identify we aim to open approximately 50, new stores, resulting in a net increase of 40 stores after accounting for strategic closures.
Speaker Change: We continue to strengthen gifts brand DNA and they are bringing forth our iconic categories.
Speaker Change: Through our close collaboration with <unk> global merchandise team when we have refined the product localization, while preserving their brand of core identity moving.
Speaker Change: Moving forward, we are prioritizing design improvements.
Speaker Change: By chain refinements and deeper reach product planning to enhance our offerings and our margin performance.
Speaker Change: We're also aligning marketing strategies more closely with culture trends and the local collaborations to deepen consumer engagement.
Speaker Change: Our recent partnership with the <unk> stands out as one of the most successful IP collaborations is a positive three years, highlighting the power of where ex gear data brin storytelling.
Ken Huang: Our key strategic pillars for 2025 include channels. First channels expand across shopping malls, outlets, and strong online platforms, while ensuring a balanced and sustainable retail mix. Second, merchandising, stressing product segmentation and planning to provide stable, high-quality offerings that resonate with our consumers. Third, Marketing. Enhance brand storytelling through culture-driven engagement, entertainment, and strategic collaboration. In summary, BBM's partnership with Gabin Inc, boasted by our localized approach and operational excellence, continues to drive tangible results. With a clear roadmap, we are well-positioned to maintain our strong momentum and capitalize on new opportunities. In 2025, we strive for double-digit top-line growth while continuously improving operational efficiency and profitability.
Our key strategic pillars for 'twenty to 'twenty five in crude channels first channels expand across shopping malls audits and the strong online platforms, while ensuring a balanced and sustainable retail mix.
Speaker Change: Second merchandising strengths in product recommendation and are planning to provide a stable high quality offerings that are resonating with our consumers.
Speaker Change: Third marketing.
Speaker Change: <unk> brand storytelling through culture, driven engagement entertainment and the strategic collaborations.
Speaker Change: In summary, <unk> partnership with giving bolstered by our localized approach and I. Appreciate no excellence continues to drive tangible results with a clear roadmap, we are well positioned to maintain our strong momentum and capitalize on new opportunities.
Speaker Change: In 2025, we strive for double digit topline growth, while continuously improving operational efficiency and profitability.
Ken Huang: That concludes our prepared remarks. Thank you.
Speaker Change: That concludes our prepared remarks. Thank you operator, we are now ready to begin the Q&A session.
Operator: Operator, we are now ready to begin the Q&A session. Thank you. We will now begin the question and answer session. To ask a question, you may press star and then 1 on your telephone keypad.
Speaker Change: Thank you.
Speaker Change: We will now begin question and answer session.
Speaker Change: To ask a question you May press Star then one on your telephone keypad.
Operator: If you are using a speakerphone, please pick up your handset before pressing the start If at any time your question has been addressed and you would like to withdraw your question, please press star and then At this time, we will pause momentarily to assemble our...
Speaker Change: If you are using a speakerphone please pick up the handset before pressing the star keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Alicia Yap: The first question we have is from Alicia Yap of Citigroup. Please go ahead. Good evening, management. Thanks for taking my question. My question is related to consumer consumption sentiment.
Speaker Change: The first question, we have is from Alicia Yap of Citigroup. Please go ahead.
Alicia Yap: Good evening management. Thanks for taking my question. My question is related to consumer consumption sentiment have management observed an improvement in consumer consumption gentleman over the past two months, especially with the supportive modules from government and promotional activity.
Alicia Yap: Has management observed any improvement in consumer consumption sentiment over the past two months, especially with the supportive measures from government and promotional activities during the International Women's Day? What is management expectation for 2025 growth and what are the key drivers? And how should we view the benefits Baozun could capture from smartphone trading subsidies?
Speaker Change: Julian the international woman.
Speaker Change: What is management expectation for 2025 wells and what are the key drivers.
Speaker Change: Should we build that bandwidth at Biogen could capture from smartphone subsidy.
Alicia Yap: And my second question is related to GapChina. Can management update us on GapChina's same-store sales growth and performance of other brands under BBM?
Speaker Change: And my second question is related to China can management update us or get China same store sales growth and performance of other brands and the Pbms and my last question is from Mr. Wong with do you have returned to company. There's some neat what are your key initiatives and top priority.
Alicia Yap: And my last question is for Mr. Wu. With your return to company recently, what are your key initiatives and top priorities for Baozun? And will there be any meaningful change of strategic direction for the company in the coming months?
Speaker Change: For Belgium, and will there be any meaningful change our strategic direction for the company in the coming months. Thank you.
Junhua Wu: Thank you. Okay, thank you for your question. This is Junhua.
Jean So: Okay. Thank you for your question. This is Jean So let me address your first question and your last question. So your first question is about the consumption sentiment over the past two months so our observations.
Junhua Wu: So let me address your first question and your last question. So your first question is about the consumption sentiment over the past two months. So our observations during the past Queen's Day was very good. So we drove a quite decent growth in terms of our revenue, and a lot of brands have achieved their higher targets worldwide. You know, in the past two months, we see a lot of categories growing rapidly. For example, like the home appliance category, and the smartphone business consider we have a support from the government subsidiary support. So in those two categories, our services lies in driving our conversion rate and increase the right capital efficiency into our distribution model and our services model.
Jean So: During the past Queen's day was very good so we drove that.
Jean So: Decent growth in terms of our revenue and a lot of brands highest achieved there are higher targets Y O y.
Jean So: In the past two months, we see a lot of categories is growing rapidly for example idea home appliance category and a smartphone benches consider we have a support from the government subsidy support so in those two categories. Our services lies in driving our conversion rates and increased our REIT money efficiently capital.
Jean So: Efficiency into our distribution model and our service model. So we are expecting a higher a momentum off the consumption sentiment.
Junhua Wu: So we are expecting a higher momentum of the consumption sentiment in the future.
Jean So: Future.
Junhua Wu: So the third question is what's my working priorities when I just back to the front line. So my day-to-day focus lies in two areas. The first is bottom line oriented. So I'm going to just optimize our existing team structure and implement our salary structure and the incentive program. And also I'm going to focus on day-to-day financial management related to the business, including like the AR and AP, and how do we leverage our capsule in the right way. Also, under our distribution model, I'm going to optimize the terms we work with our partners and enroll more high-quality revenue-based distribution business and try to just release a lot of sometimes low-efficiency kind of the business in terms of a district model and service model.
Speaker Change: So the third question is the Oh.
Speaker Change: What's my walking priorities when I just back to the front line.
Speaker Change: My day to day focus lies in two areas. The first is bottom line oriented so I am going to just optimize our existing team structure and the inclement our salary structure and the incentive program and also I'm going to focus on day to day financial management related.
Speaker Change: Two of the business, including <unk>.
Speaker Change: In AP and how do we leveraging our capsule in the right way.
Speaker Change: Also under our distribution model ongoing to optimize the terms, we've worked with our partners and enroll more high quality revenue base distribution business and.
Speaker Change: Tried to adjust release a lot of some low efficiency kind of the business in terms of a different model and a service model.
Junhua Wu: For the top line focus, I'm going to lay my emphasis on same-store growth by looking into a deeper dive into our day-to-day operations and also driving more initiatives on the omni-channel kind of harmonized with each other like Douyin, Tencent Smart Retail, and Red Note. Also, driving marketing capability is the key in this year. And we also want to leverage a lot of AI initiatives in terms of driving our top line and increase our bottom line efficiency.
Speaker Change: For the top line focus I'm going to lay my emphasize on same store growth by looking into a deeper dive into our day to day operations and also driving more initiatives on the omnichannel kind of harmonize with each other like dogging Tencent smart retail and retinal. It's also driving marketing capability is.
Speaker Change: The key in this year and we are also want to leverage a lot of AI initiatives in terms of driving our top line and increase our bottom line efficiency.
Junhua Wu: So, for business development, we have our new strategy for this year. We can share more later on when we are meeting those kinds of questions. And we also want to optimize our business structure in terms of our DC model and consignment model.
Speaker Change: For our business development, we have our new strategy for this year, we can share more later on when we are meeting those kind of questions and we also want to optimize our business structure in terms of our D C model and consignment model.
Ken: Then my answer yes. Okay. This is Ken for your second question about BB M I.
Ken Huang: This is Ken. For your second question about BBM, I think our sales growth is coming from both same-store growth and also our new expansion of stores. For the same-store gap, we had a low single-digit same-store growth in Q4 2024. And for Hunter, because Hunter is relatively small in terms of the percentage sales revenue contribution to the total BBM sales. volume. But it grows very rapidly and the same store growth rate is over 100% last year. And for the new store expansion, I think we also see very good trends in our new openings, especially in Q4, in new Tier 1 cities and Tier 2 cities.
Speaker Change: I think our sales growth coming from both.
Speaker Change: Same store growth and also our new expansion of stores.
Speaker Change: The same store GAAP.
Speaker Change: Low single digit same store growth in Q4 2094.
Speaker Change: And therefore hunter because hunters.
Speaker Change: This more in terms of the percentage sales revenue contribution to the total pbms sales.
Speaker Change: <unk>.
Speaker Change: But it grows very rapidly and same store growth rate is over we'll have 100% last year.
Speaker Change: For the new store expansion I think we also see very good trends.
Speaker Change: New openings, especially in Q4, new tier one cities and tier two cities.
Ken Huang: Our sales per square meter is ranked over many of our competitors. And for Hunter, we opened our first store in Shanghai and now we will accelerate our expansion in Tier 1 cities including Shanghai, Beijing, Shenzhen and some new Tier 1 cities such as Hangzhou. That's all for now.
Speaker Change: Our sales per square meters.
Speaker Change: It's ranked over.
Speaker Change: Over many of our competitors and the four <unk>, we opened our first store in Shanghai and then now we are we will accelerate our expansion in tier one cities, including Shanghai.
Speaker Change: Aging Shenzhen enter some new tier one cities such as Hangzhou.
Speaker Change: That's all from me.
Speaker Change: [laughter].
Chris Ha: The next question we have is from Chris Ha of Huatai Securities, please go ahead. Hi, management. Thank you for taking my question. Congratulations on the solid result this quarter. And I have two questions for the management. The first is about the competition.
Speaker Change: The next question, we have is from Chris <unk> of <unk> Securities. Please go ahead.
Speaker Change: Hi management.
Speaker Change: Thank you for taking my question congratulation on the solid result, this quarter and I have two questions.
Speaker Change: The management, so firstly about the competition.
Chris Ha: As we see more changes in merchant policy from e-commerce platforms, like going to cut commission rates for several categories, how should we expect the potential influence to Baozun's fundamentals from the changing competitive landscape in e-commerce sector? And the second question is about the consumption recovery trends. So, with more consumption stimulus policies rolled out, how should we look at the consumption recovery trend in 2025? And could management share more cuts on the growth outlook for Baozun's key categories? That's my two questions. Thank you. Okay, thank you.
Speaker Change: <unk>.
Speaker Change: And we see more changes in merchant policy from E Commerce platforms.
Speaker Change: Going to crop commission rates for several categories.
Speaker Change: How should we expect the potential interest to Bartlett fundamentals from the changing competitive landscape in e-commerce sector.
Speaker Change: And.
Speaker Change: The second question is about the recovery trends, so it's more consumption within minutes policies roll outs.
Speaker Change: How should we look at the consumption of recovery trends.
Speaker Change: 2025.
Speaker Change: Could management share more colors on the growth outlook for those key categories.
Speaker Change: That's my two questions. Thank you.
Speaker Change: Okay. Thank you I believe those two questions for me on <unk>. So the first question is about the Dow Inc. So we all know that the <unk> growth rate on <unk>.
Qun Huang: I believe those two questions are for me. I'm Qun Huang. So the first question is about the Douyin. So we all know that the GMV growth rate on Douyin is competitively higher than the GMV growth rate on the other platforms. But from our perspective, so like Tmall and JD, they are still the largest GMV platform, so consider the transaction. But Douyin, they cut off our commissions based on the GMV growth in our categories, especially in the fashion, apparel, and the luxury category. So we see a very decent growth in those categories. And we also benefit in those kind of the commission rate supports, basically from the whole landscape.
Speaker Change: Competitively you know higher than the.
Speaker Change: The GMB growth rate on the other platform itself, but from our perspective, so like Tmall and JD. They are still the largest.
Speaker Change: <unk> gross but <unk> platform, so considered the transaction.
Speaker Change: Dow Inc. They cut off of commission is based on the <unk> growth in our categories, especially in the fashion apparel and luxury category. So we see a very decent growth in those categories and we are also a benefit in those kind of the commission rates of course basically from the whole landscape. So we are trying to address it.
Qun Huang: So we are trying to just expand our services and drive more our existing partners onto Douyin platform. And we also will harmonize the Douyin traffic in to the Tmall and the other JD kind of platform to leverage our omni-channel strategy to make sure that the content and all those different kind of the rich content initiatives on Douyin can benefit from the all kind of range of the transactions on Tmall and JD.
Speaker Change: <unk>, our services and drive more of our existing partners onto <unk> platform and we also will harmonize adult in traffic into that Tmall and the other J D.
Speaker Change: <unk> to leverage our omnichannel strategy to make sure that the content and all those different.
Speaker Change: Different kind of rich content initiatives until Ian can be benefit from the all kind of range off the transactions on Tmall and JD. That's the first question before the consumption and the overall expectation on 2025 I believe we are serving over 400 different brands and each brand that they have a different.
Qun Huang: That's the first question. For the consumption and the overall expectation on 2025, I believe we are serving over 400 different brands. And each brand, they have a different strategy looking into their expectation in 2025. Some of the brands, they are still maintaining a high growth strategy. Some of them, they are playing in a very different game rule. So a lot of our brand partners in certain categories, they are focusing themselves in the product development and design. And they plan to just optimize their sales in this year, late this year, or maybe early next year.
Speaker Change: Strategy looking into your expectation in 2025 some of the brand there is still maintaining a high growth strategy. Some of them. They are playing in a very different game rule. So a lot of our brand partners in certain categories. They are focusing themselves in the product development and design and they plan to adjust optimize their sales in <unk>.
Speaker Change: This year late this year or maybe early next year. So based on our portfolio of the categories. So we cannot give you a very unified the trend in terms of the consumption expectation of 2025, but we maintain a very.
Qun Huang: So based on our portfolio of the categories, so we cannot give you a very unified trend in terms of the consumption expectation of 2025. But we maintain a very high expectation and a very optimized outlook to the 2025 in terms of our GNV growth, revenue, and operation profits. Thank you.
Speaker Change: High expectation and a very optimized.
Speaker Change: Look to the 2025 in terms of our GSV growth revenue and operating profit. Thank you.
Operator: Thank you, men. Ladies and gents. Just another reminder, if you would like to ask a question, you may press star and then 1 to join the queue.
Amanda: Thank you Amanda.
Speaker Change: Yeah.
Speaker Change: Ladies and gentlemen, just another reminder, if you would like to ask a question you May Press Star and then one to join the queue.
Jiawei Yan: The next question we have is from Jiawei Yan of Citigroup. Please go ahead. Good evening, management. Thanks for taking my question.
Speaker Change: The next question is from Joe <unk> of Citigroup. Please go ahead.
Joe: Good evening management. Thanks for taking my question. My first question is that J D. Dot Com has actively invested in the clothing category since the end of 'twenty 'twenty four and this trend is expected to continue in 2025, so what's the biogen's strategy.
Jiawei Yan: My first question is that JD.com has actively invested in the clothing category since the end of 2024. And this trend is expected to continue in 2025. So what's the Baozun's strategy in this channel?
Jiawei Yan: And my second question is that, how does the company view the rise of AI tools such as DeepSeek? And what are the main application scenarios in the business side? Is there any quantitative data available for sharing? Thank you.
Joe: And my second question is that how does the company view the rights of all AI tools, such as <unk> and what are the main application scenarios in the business side is there any quantitative data available for Sherry. Thank you.
Qun Huang: Okay, thank you for the question. The first question is about the fashion apparel category regularly grows on JD.com. So, Baozun, we are omni-channel focused. So, we served the JD a long time ago. A lot of our brand partners has already put their business on Tmall and JD and the other platforms. So, the first thing is we're going to, and sorry, fashion apparel is also a very strong category of Baozun. So, we definitely going to help our existing clients moving their business on to JD.com, especially in the fashion apparel categories. And we're also going to leverage our expertise in the fashion apparel categories to drive more business and more new clients on to JD to benefit all their growth trend.
Speaker Change: Okay. Thank you for the question. The first question is about the fashion apparel category rapidly grows on JD dot com. So Belgium, we are omnichannel focus so we serve the J D. A long time ago, a lot of our brand partners has already put their business on Tmall and JD Andy other platforms. So the.
Speaker Change: First thing is we're going to and sorry fashion apparel is also a very strong category of Belgium.
Speaker Change: We definitely going to help our existing clients moving their business onto J D dot com and especially in the fashion and apparel categories and we're also going to leverage our expertise in the fashion apparel categories to drive more business and more new clients onto JD to benefit or there are gross trend. So yes.
Qun Huang: So, yes, the JD.com in their apparel and beauty category, their executive management team has already been newly appointed to someone else. So, we are going to definitely work together very closely with their management team to make sure that we can also implement a very strong growth on JD.com in the future.
Speaker Change: J D Dot Com India.
Speaker Change: Yeah.
Speaker Change: Arrow and our beauty category, our executive management team has already been <unk>.
Speaker Change: Already appointed so someone else. So we're going to definitely work together very closely with their management team to make sure that we can also implement it very strong growth on <unk> com in the future.
Qun Huang: The second is about the AI initiatives and what kind of the tool are benefiting our business. So talking about the AI, basically we are focusing on AI driving our efficiency for the bottom line, and also AI are trying to just increasing our top line growth. So for the bottom line, we developed a lot of AI tools, like smart customer service tools, to helping our customer service agent. So leveraging our existing knowledge-based database, and also helping them to drive more efficiency on finding products. For the product management and digital asset management, we have already implemented some system for our existing clients and our distribution business models to making sure that we can, using lesser people, using AI technology to help us efficiently to drive a lot of automation in terms of the digital assets creation, and the management, and the data collection, etc.
The second is about the AI initiatives and what kind of the tool are benefiting our business. So talking about the AI basically we are focusing on AI driving our efficiency for the bottom line and also a I'm trying to just increasing our top line growth. So for the bottom line, we developed a lot of AI tools like <unk>.
Speaker Change: <unk> customer service tools to helping our customer service agents to leveraging our existing knowledge based database and also helping them to drive more efficiency on finding products for the our product management and digital asset management, we have already implemented some system for our existing clients and our.
Speaker Change: Distribution business models to making sure that we can using lesser people using AI technology to help us efficiently to drive a lot of automation in terms of the digital asset creation and management and the data collection et cetera, and for also our company internal matching ally financial.
Qun Huang: And for also our company internal management, like financial department, and our HR department, we're also going to leverage some AI agent technology to increase, for example, our financial reconciliation period, something like that. So in terms of the revenue top line, we are trying to develop some tools. Maybe like on Red Note, we are helping them to drive a lot of different kind of promotions, and also driving a smart decision on targeting the right consumer. It's helping our driving the right top line, and also matching the right products. So we are on our way, chasing the latest technology.
Speaker Change: Heartland and our HR Department, we're also going to leverage some AI agent technology to increase our for example, our financial re constellation PRA something like that so in terms of the revenue top line, we are trying to develop some tools.
Speaker Change: Maybe you know.
Speaker Change: Like on Ret notes, we are helping them to drive a lot of different kinds of promotions and also driving a smart decision on targeting the right consumer is helping our driving the right top line and also matching the right products. So we are on our way.
Speaker Change: You know chasing the latest technology technology is also the key off Belgium, we have a lot of technology engineers. So we believe we are very promising and the future leveraging AI technology for our business. Thank you.
Qun Huang: Technology is also the key of Boston. We have a lot of technology engineers, so we believe we are very promising in the future leveraging AI technology for our business.
Unknown Executive: Thank you. That's very clear.
Speaker Change: Thank you that's very clear and could you. Please also follow up on that note you added note.
Jiawei Yan: And could you please also follow up on Red Note plans as well? And yeah, yeah, that's my third question. Thank you.
Speaker Change: At the Vail and yeah, Yeah. That's my question. Thank you.
Qun Huang: Okay, so let me put your question on the landscape of a customer journey. So, we are leveraging Retinol, also talking about a customer journey. So, when we are targeting a new customer, we need to consider their customer journey like where is the opportunity and where is the brand awareness or product awareness of Retinol and how do we drive the interest of a customer. How do we just push them to purchase the product and how do we maintain the loyalty of the product or the brand. So Retinol currently is in the very front line of driving the opportunity.
Speaker Change: Okay. So let me put your question on the landscape of our customer journey. So we are leveraging retina also talking about the customer journey. So when we are targeting a new customer we need to consider there are customer journey like where is the opportunity and where is the brand awareness or product awareness.
Speaker Change: Retinal and how do we drive the interests of our customer how do we just pushed them to purchase the product and how do we maintain the loyalty of the consumer for this product or the brand. So retinol currently is in a very frontline of driving the opportunity. So we are not directly promoting a specific S. K U.
Qun Huang: So we are not directly promoting a specific SKU or product on Retinol because it's not the way to driving business on Retinol. We are driving a lot of content, making sure that we can set up the emotion linkage before making transactions. Let them know that, for example, in the fashion apparel category, how do we do the daily setup, how do we dress up for a fine dining and how do we just make sure that we can use a very high technology for a product to increase their life cycle status and their life quality. And how do we really just help them to understand what's the trendy technology or something like that.
Speaker Change: Product on rat note, because it's not the way to driving business on retina, we are driving a lot of content, making sure that we can set up the emotion linkage before making transactions, let them know that for example in the fashion apparel category. How do we do that data set up how do we dress up for as far as for a final time and how.
Speaker Change: Or do we just make sure that we can use very high technology for our product to increase the our lifecycle status.
Speaker Change: Kind of like quality and how do we really just help them to understand what the trendy technology or something like that so we can drive a lot of content by using our AI technology by using <unk> to send a lot of Steve Rattner, and we drive the attention to a certain.
Qun Huang: So we can drive a lot of content by using our AI technology, by using our KOL and KOC to send a lot of seats on Retinol. And then we drive the attention to a certain brand or a certain product. And then we convert them, making sure that they are interested and then give them a lot of reasons with a transaction deal to make the first purchase and then repeat. And then we drive them back on continuously providing a lot of content on Retinol, create a very healthy circle. Yeah, that's my answer. Thank you.
Speaker Change: Brand or a certain product and then we convert then making sure that they are interested and then gave them a lot of reasons with a transaction deal to make the first purchase and then repeat and then we drive them back on continuously providing a lot of content a retinal create a very healthy circle, yes. That's my answer thank you.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Yeah.
Wendy Sun: Thank you, at this time we have no further questions and I would like to hand over back to management for any closing Thank you, Operator. On behalf of the Baozun Management Team, we would like to thank you all for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us again.
Speaker Change: Thank you at this time, we have no further questions and I would like to hand back to management for any closing remarks.
Speaker Change: Thank you operator on behalf of <unk> management team.
Speaker Change: Thank you all for your participation in today's call if you would.
Speaker Change: Any further information feel free to reach out to us. Thank you for joining meta game. This concludes the call.
Operator: This concludes the call. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines. Sponsored ADR Class A
Speaker Change: Ladies and gentlemen that concludes today's conference. Thank you for joining US you may now disconnect your lines.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].