Q1 2025 Baozun Inc Earnings Call

Unknown Executive: Good morning, ladies and gentlemen, and thank you for standing by for Baozun's first quarter 2025 earnings conference call. Currently, all participants are in a listen-only mode. After the management 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 Biogen first quarter 2025 earnings Conference call.

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 I would now like to turn the meeting over to your host for today's call Ms. Wendy Sun Senior director of corporate development and Investor Relations of Biogen. Please proceed Ms Wendy.

Wendy Sun: I would now like to turn the meeting over to your host for today's call, Ms. Wendy Sun, Senior Director of Corporate Development and Investor Relations of Baozun. Please proceed, Ms. Wendy. Thank you, operator. Hello, everyone, and thank you for joining us today.

Thank you operator, Hello, everyone and thank you for joining us today, although the first quarter of 'twenty 'twenty five earnings release lists distribute aid early Ed before this call and is available on our IR website.

Wendy Sun: Our first quarter 2025 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.

I R. The powergen dot com as well as on PR Newswire services and also postpone a powerpoint presentation that accompanies our comments to the same IR website, where they are available for download.

Wendy Sun: They have also postponed a PowerPoint presentation that accompanies our comments to the same IR website, where they are available for your download.

Wendy Sun: On the call today from Baozun, we have Mr. Vincent Qiu, Chairman and Chief Executive Officer, Ms. Catherine Zhu, Chief Financial Officer, Mr. Junhua Wu, Director and Chief Strategy Officer of Baozun Group, and Mr. Qian Huang, Chief Executive Officer of Baozun Brand Management.

Speaker Change: On the call today from Biogen May have Mr. Linton, Xu Chairman and Chief Executive Officer, Ms. Katherine Xu Chief Financial Officer, Mr. Giovanni <unk> Director and chips Chapter strategy Officer, Biogen Group and Mr. Ken Wong Chief Executive Officer of Palatin Brent management.

Vincent Qiu: Ms. Qiu will first share our business strategy and company highlights.

Speaker Change: MS Jill will share our business strategy and company highlights Ms. Zhu will then discuss our financials followed by Mr. <unk> and Mr.

Catherine Zhu: Ms. Zhu will then discuss our financials, followed by Ms. Zhu and Mr. Huang, who will share more about our e-commerce and brand management segments, respectively.

Speaker Change: Who will share more about our e-commerce and brand management segments, respectively. They will all be available to answer your questions. During the Q&A session that follows.

Wendy Sun: 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 Legislation 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, uncertainties, and other factors, all of which are difficult to predict, and many of which are beyond the company's control, which may cause the company's actual results to differ maturely from those in the forward-looking 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 19th of this way as a mandate. The U S Securities Exchange Act of 19th so people as of Monday, and the U S. Private Securities Litigation Reform Act of 19.

Speaker Change: 35.

Speaker Change: These forward looking statements are based upon management's current expectations and Howard market and operating conditions and relate to you last that involve known unknown risks uncertainties and other factors.

Speaker Change: They are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ materially from those in the forward looking statement.

Wendy Sun: Further information regarding these and other risks and certainties or factors is included in the company's filings with the U.S. Security and Exchange Commission and its announcement, notice or other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this call is as of the date here and is based on assumptions that the company believes to be reasonable as of this date. And the company does not undertake any obligation to update any following statement except as required and applicable law.

Speaker Change: Further information regarding these and other risks uncertainties or factors is included in the company's filings.

Speaker Change: Whereas the U S Securities and Exchange Commission and its announcement no tasteful other document published on does that such of the stock exchange of Hong Kong Limited.

Speaker Change: All information provided in this call is as of the date hereof and is based on assumptions that the company believes to be reasonable as of this date 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 MB.

Speaker Change: Finally, please note that unless otherwise stated all figures mentioned during this conference call I M D.

Wendy Sun: In addition, we may like to use adjusted in place of non-general accepted accounting principles or non-GAAP in order to reduce oral confusion that may arise from our discretion about financials related to the GAAP grant.

Linda: Sure Linda.

Linda: Love to use it just aid employee yourself non general accepted accounting principles or non-GAAP in order to reduce all real confusion that may arise from our discussion about financials related to the gap brand.

Vincent Qiu: It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Chiu. Vincent, please go ahead. Thank you, Wendy, to everyone, and thank you all for your time. I'm pleased to report that Baozun continues to execute our strategic transformation with constant quarterly progress. Our revenue streams are now more diversified and our operational excellence continues to transit across the business Baozun Group achieved 4% year-over-year revenue growth. DEC sustained a stable top line while BBM accelerated its strong momentum with 23% year-over-year sales growth. BEC is making strides in quality development and the value generation for our brand partners.

Linda: It is now my pleasure to introduce our chairman and Chief Executive Officer. Mr. Vincent You May send please go ahead.

Speaker Change: Thank you Wendy.

Linda: We thank you all for your time.

Speaker Change: I'm pleased to report that adults, who continues to execute our strategic transformation with constant quarterly progress well.

Speaker Change: Our revenue streams are now more diversified and our operational excellence continues to strengthen across the businesses.

Speaker Change: <unk> achieved 4% year over year revenue growth.

Speaker Change: Do you see sustained a stable top line <unk> strong momentum.

Speaker Change: With 23% year over year growth.

Speaker Change: Do you see is making strides in quality development and the value generation for our brand partners.

Vincent Qiu: Our ongoing progress in omnichannel and content creation initiatives is transforming customer engagement and the shopping experience. We also improved the quality of our product sales model. Achieving both healthy, helpline growth and a cross-margin expansion. In addition, we are leveraging technology and AI applications to build a leaner and efficient organization. These innovations set a clear path for marginal expansion for BEC and foster a culture of excellence. Within BBM, both Gap and Hunter are performing ahead of expectations. Our efforts to localize teams, products, and merchandising plans for GAP are yielding strong results. FGAP China continues to innovate and grow.

Speaker Change: Our ongoing progress omnichannel content creation initiatives is transforming customer engagement and the shopping experience.

Speaker Change: We also improved the quality of our product sales model.

Speaker Change: Achieving both healthy top line growth gross margin expansion.

Speaker Change: In addition, we are leveraging technology and AI applications to build a leaner and efficient organization.

Speaker Change: These innovations set a clear path for margin expansion for PUC and foster a culture of excellence.

Speaker Change: We then P. B M. Both Scott and Hunker are performing ahead of expectations.

Speaker Change: Our efforts to localize Pete's products and merchandising plans with gap.

Speaker Change: These strong results.

Speaker Change: That's kept trying to continuously innovate and grow we remain committed.

Vincent Qiu: We remain committed in delivering exceptional value to customers. Meanwhile, Hunter expanded the product offering category, achieved strong sales growth and received widespread recognition. We will open three new stores simultaneously this May in Beijing, Shanghai and Guangzhou. and Hangzhou. Overall, we closed the quarter with a constant positioning to accelerate our transformation through 2025. Notably, 2025 marks Baozun's 18th anniversary. Symbolic and Strategic Master I'm proud of how far we've. in China Tradition. 18 signifies a time of renewed vigor, maturity, and ambition.

Speaker Change: Livery exceptional value to customers.

Speaker Change: <unk> expanded the product offering category.

Speaker Change: <unk> strong sales tools and received widespread recognition.

Speaker Change: Well capitalize on this momentum and further strengthen homeless footprint.

Speaker Change: We will open three new stores simultaneously this may in Beijing, Shanghai and Guangzhou.

Speaker Change: And hundreds are.

Speaker Change: Overall, we closed the quarter with constant positioning to accelerate our transformation through 2025.

Speaker Change: Notably 2025, <unk> <unk> and <unk>.

Speaker Change: Right.

Speaker Change: Embolic and strategic.

Speaker Change: Milestone.

Speaker Change: I'm proud of how far we've come.

Speaker Change: In China trade issues.

Speaker Change: A key signifies a time of renewed vigor maturity and ambition.

Vincent Qiu: We view this milestone as a reflection of our transformation into an innovation lab platform focusing on long-term value creation.

Speaker Change: We view this more as a reflection of our transformation into an.

Speaker Change: <unk> innovation lab Craftsman focusing.

Speaker Change: Long term value creation.

Catherine Zhu: Now I will turn the call over to our team for a deeper look into our financials and the business performance. Thanks, Vincent. And hello, everyone.

Speaker Change: Now I will turn the call over to our team for a deeper look into our financials and our business performance.

Speaker Change: Thanks, Jim and Hello, everyone.

Catherine Zhu: Now let me provide a more detailed overview of financial results for the first quarter of 2025. Please turn to slide number three. Baozun Group's total net revenue for the first quarter of 2025 increased by 4.3% year-over-year to $2.1 billion. Of this total, e-commerce revenue grew slightly by 1.4% to $1.7 billion, while brand management revenue rose by 23% to $387 million. Breaking down e-commerce revenue by business model Services revenue remains lag at $1.3 billion DEC product sales revenue increased 7.3% year-over-year to $423 million. Driven by strong performance in new category BVM product sales totaled $387 million, representing a 23% year-over-year growth.

Speaker Change: Let me provide a more detailed overview of financial results for the first quarter of 'twenty or 'twenty five.

Speaker Change: Please turn to slide number three.

Speaker Change: Oh, no group's total net revenues for fourth quarter of 2025 increased by four 3% year over year to $2 1 billion.

Speaker Change: Of this total e-commerce revenue grew slightly by one 4% to $1 7 billion.

Speaker Change: One management revenue rose by 23% to 387 million.

Speaker Change: Breaking down your comments around your business model.

Speaker Change: This is revenue remained flat at $1 3 billion.

Speaker Change: E C product sales revenue increase of seven 3% year over year to 423 million.

Speaker Change: Driven by strong performance in your category.

Speaker Change: <unk> product sales totaled 387 million, representing a 23% year over year.

Catherine Zhu: This growth was mainly driven by the strong performance of the GAP brand, with both online and offline channels delivering healthy gains.

Speaker Change: This growth was mainly driven by the strong performance of the Dublin with both online and offline channels delivering healthy gains.

Catherine Zhu: Please turn to slide number four. From a profitability perspective, the blended gross margin for product sales at the group level was 32.4%. Gross profit increased by 18.9% year-over-year to $262 million for the quarter. Breaking this down, but I will keep it in mind. Gross margin for e-commerce product sales expanded to 15%, a 130 basis point improvement compared to 13.7% a year ago. This market expansion was primarily driven by product mix diversification. Gross margin for BVM was 51.6% compared with 53.1% a year ago.

Speaker Change: Please turn to slide number four.

Speaker Change: From a profitability perspective.

Speaker Change: Our blended gross margin for product so it's a good luck.

Speaker Change: Oh, what such a tool.

Speaker Change: 4%.

Speaker Change: Gross profit increased by 18, 9% year over year to 262 million for the quarter.

Speaker Change: Breaking this down but keep in mind.

Speaker Change: Gross margins, what you call much product sales expanded to 18% well why don't you 30 basis point improvement compared to 13.7% Yeah go.

Speaker Change: This margin expansion was primarily driven by product mix diversification.

Gross margins will be begin with 51, 6% compared with 53, 1% a year ago.

Catherine Zhu: The decrease was mainly due to product offering adjustment and optimization of commercial plans for the gap rent.

Speaker Change: The decrease was mainly due to protest opening adjustment and optimization of commercial plan, what the GAAP rent.

Catherine Zhu: Now, turning to bottom-line items. Please refer to slide number 5. During the quarter, our adjusted loss from operations totaled $16.7 million. This included an adjusted operating loss of $46 million from the e-commerce segment, a decline of $58 million from the same period last year.

Speaker Change: Now turning to what line items.

Speaker Change: Please refer to slide number five.

Speaker Change: During the quarter, our adjusted loss from operations totaled 16 7 million. This included an adjusted operating loss of 46 million Some E Commerce segment.

Speaker Change: A decline of eight 8 million from the same period last year.

Catherine Zhu: The decline was mainly due to low seasonality for e-commerce retail in Q1, as well as personnel adjustments and strategic investment initiatives to transform and realign with our operational tactics. We incurred approximately $18 million.

Speaker Change: The decline was mainly due to low seasonality for e-commerce retail in Q1 as well as personnel adjustment on the strategic investment initiatives to transform and we along with our operational tactics.

Speaker Change: We incurred approximately 18 million.

Catherine Zhu: in Restructure Costs Related to Human Resource Reform in the Quarter CDM's Adjusted Operating Laws totaled $21 million, an improvement of 28% from the same period last year.

Speaker Change: Hmm restructuring.

Speaker Change: Restructuring costs related to human resource before in the quarter.

Speaker Change: Adjusted operating loss totaled 21 million an improvement of 28% from the same period of last year.

Catherine Zhu: Lastly, please turn to slide number six. We published our 2024 Sustainability Report highlighting tangible progress across environmental, social, and governance measures in April. We achieved a 36% reduction in Scope 1-2 carbon emissions versus our base year 2021, and we are on track with our commitment to reduce by 50% by 2030.

Speaker Change: Lastly, please turn to slide number six.

Speaker Change: We published our 'twenty 'twenty four sustainability report highlighting tangible progress.

Speaker Change: Rental social and the governance magic in April.

Speaker Change: Yeah Chi the statistics, but then reduction in scope one two carbon emissions.

Speaker Change: As our base year 2021.

Speaker Change: We are on track with our commitment to reduce by 50%.

Speaker Change: 2030.

Catherine Zhu: These initiatives demonstrate our commitment to building a sustainable and responsible business.

Speaker Change: These initiatives demonstrate our commitment to building sustainable and responsible business.

Junhua Wu: Let me now pass the call over to Junhua to update you on VET, on e-commerce business. Thanks, Catherine, and hello, everyone. Since resuming full active duties in March, I'm pleased to report that BEC is now firmly aligned with our commitment to profitability and a sustainable growth. In Q1 2025, we made meaningful progress across key strategic priorities, revitalizing e-commerce, enhancing our value proposition, expanding omni-channel capabilities, and driving technology-led efficiency improvement. These early achievements align closely with the objectives of our 2025 Annual Operating Plan, which emphasizes integrated business management, profit-focused execution, and a leaner, more agile organizational mode.

Dream closet: Let me now I'll pass the call over to Dream closet.

Speaker Change: T O e-commerce in this.

Speaker Change: Thanks, Katherine and Hello, everyone since resuming full active duties in March I'm pleased to report that B E. C is now firmly aligned with our commitment to profitability and sustainable growth.

Speaker Change: In Q1, 2025, we made meaningful progress across key strategic priorities revitalize and ecommerce enhancing our value proposition expanding omnichannel capabilities and are driving technology lab efficiency improvements. These early achievements align closely with the objectives of our 2025.

Speaker Change: The operating plan.

Speaker Change: Which emphasize integrated business management profit focused execution and a leaner more agile organization old modem.

Junhua Wu: Now, let me quickly walk through some of our operational highlights in the e-commerce segment for the first quarter of 2020. BEC revenue totaled $1.7 billion, largely flat compared to the same period last year. However, our strategic investment in enhancing distribution capabilities is beginning to yield compelling results.

Now, let me quickly walk through some of our operational highlights and the E Commerce segment for the first quarter of 2025.

Speaker Change: B E C revenue totaled $1 7 billion largely flat compared to the same period last year. However, our stretch it investments and enhancing distribution capabilities is beginning to yield compelling results.

Junhua Wu: Please turn to slide number seven. In Q1, BEC's product sales grew by 7%, driven by standout category performance in home and furniture, alcohol, and health and nutrition. Gross profit margin also improved by 130 basis points to 15%, supported by breakthroughs in new categories and renewed terms with several existing brand partners.

Speaker Change: Please turn to slide number seven in Q1, the easiest part of our sales grew by 7% driven by standout category performance in home and furniture alcohol and health and nutrition gross profit margin also improved by 130 basis points to 15% supported by breakthroughs in new category.

Speaker Change: And with new terms with several existing brand partners.

Junhua Wu: Turning to BEC service perspective as shown on slide No. 8, while BEC service revenue remained flat, we made structural mixed change aimed at quality enhancement. Revenues from online store operations grew by 12% year-over-year, driven by strong performance in the luxury and apparel categories, as well as continued progress in omnichannel initiatives. Notably, we achieved strong double-digit revenue growth on JD and Douyin, and triple-digit growth on Red Note for the quarter. Recently, Baozun was nominated as part of the first batch of Red partners, uniquely among traditional Tmall partners.

Speaker Change: Turning to B E C service perspective as shown on slide number eight while he see service revenue remaining flat with nice structural mix change aimed at quality in hospice revenues from all I saw operation grew by 12% year over year, driven by strong performance in the luxury and apparel categories as well.

Speaker Change: As continued progress in Omnichannel initiatives, notably, we achieved strong double digit revenue growth on J D and E and.

Speaker Change: And triple digit growth on rationale for the quarter recently, Belgium was nominated as part of the first batch of Rep partners uniquely among traditional Tmall partners.

Junhua Wu: In the construction segment, revenue from warehouse and logistics, as well as digital marketing and IT, each declined by a middle single-digit year-over-year. The decline in warehouse and logistics revenue was mainly due to reduced volume from several key clients in the sportwear segment. While we anticipate the challenges to persist with certain clients, we have proactively focused on expanding our B2B business and business development in emerging segments such as outdoor and FMCG categories within our warehouse operations. In our digital marketing business, we prioritize value-added marketing while optimizing passive performance marketing to enhancing profitability and capital allocation efficiency.

Speaker Change: In a contraction of segments revenue from warehouse and logistics as well as digital marketing and E. Each declined by a middle single digit year over year the decline in warehouse and logistics revenue was mainly due to reduced volume from several key clients in a spot where segment, while we anticipate the challengers.

Speaker Change: Persistent with certain clients, we have proactively focused on expanding our <unk> business and our business development and emerging segments, such as outdoor and F. C. G category within our warehouse operation.

Speaker Change: In our digital marketing business, we prioritize value added marketing, while optimizing passive performance marketing to enhancing profitability and capital allocation efficiency.

Junhua Wu: As content becomes increasingly critical to success in e-commerce, we are committed to innovating in content creation capabilities to stay ahead of the curve.

Speaker Change: As content becomes increasingly critical to success in E. Commerce, we are committed to innovating and content creation capabilities to stay ahead of the curve.

Junhua Wu: Recently, our content creation efforts were recognized in the Alimama Ecosystem Conference, where we received awards for Top Performance Team in Taobao Operations and Top Data-Driven Investment Team, as well as the Alimama Future Business Award.

Speaker Change: Our content creation efforts were recognized India, Alibaba ecosystem Conference, where we received awards for top performers teen in Taobao operation and top data driven investment team as well as the Alibaba future business all what.

Junhua Wu: Q1 2025 demonstrates BEC's focus and precise execution. e-commerce is regaining momentum. Distribution is skating profitability. Omni-channel platforms are advancing, and technology investments are driving measurable efficiency. These results validate our annual plan's profit-centric framework.

Speaker Change: Q1, 2025 demonstrates be he sees focus and precise execution.

Speaker Change: E Commerce is regaining momentum.

Speaker Change: Fusion is getting profitability omnichannel platforms are advancing and technology investments are driving mashable efficiencies. These results validate our annual class prostate central framework with solid execution and a clearer strategic mandate B C is poised to deliver lasting values for our 2012.

Junhua Wu: With solid execution and a clear strategic mandate, BEC is poised to deliver lasting value throughout 2025 and beyond.

Speaker Change: Five and beyond now I'll pass the call to Kemper and update on Belgian brand management.

Qian Huang: Now I'll pass the call to Ken for an update on Baozun Brand Management. Thank you, team, and thank you all. Please turn to slide number nine for additional insights into BBM. I'm happy that we carried our strong momentum into Q1, achieving 23% year-on-year sales Acceleration from 70% in the previous quarter. Total BPM revenue for the quarter was $387 million, driven by improvements across key operating metrics. Including same store sales goals, traffic goals and the commercial Overall, our theme store sales growth improved to 5%.

Kemper: Thank you team and thank you all please turn to slide number nine for additional insights into BPM.

Kemper: I'm happy that we carried our strong momentum into Q1, achieving 10 history, representing a year on year sales skills and acceleration.

Kemper: Separation from 70% in the previous quarter.

Kemper: <unk> revenue for the quarter was 387 million driven by improvements across key operating metrics, including same store sales calls are terrific growth in the commission rate.

Kemper: Overall, our same store sales growth improved to 5% for the quarter.

Qian Huang: As discussed in our previous call, our strategic priorities moving forward are clearly defined. Channels, merchandising, and marketing. In the first quarter, we achieved the goals in both online and offline channels, even amidst ongoing macroeconomic challenges. Throughout 2024, we conducted a comprehensive store network optimization and collaborated with key strategic partners to tap into emerging markets. In the first quarter, we closed another four stores. Our optimized offline network has achieved healthier productivity with double-digit growth in sales per square meter compared to a year ago. More encouraging, stores opened in second half of 2024 have generally achieved higher efficiency.

Kemper: Discussing our previous call our strategic priorities moving forward are clearly defined.

Kemper: Kennels merchandising and our marketing.

Kemper: In the first quarter, we achieved a gross in both online and offline channels, even amidst ongoing macroeconomic challenges throughout.

Kemper: 2024, we conducted a comprehensive store network optimization, and they're collaborating with key strategic partners to tapping into emerging markets.

Kemper: In the first quarter, we close to another four stores or optimize the offline network has achieved the healthy airport activity with double digit growth in sales per square meter compared to a year ago more encouraging stores opened in the second half of 'twenty 'twenty four general.

Kemper: General.

Kemper: <unk> achieved a higher efficiency.

Qian Huang: Year-to-date, we have secured an opening pipeline of more than 40 new stores, with about 10 set to officially open in the second quarter.

Kemper: Year to date, we have secured an opening.

Kemper: Our line of more than 40, new stores with about 10 said through official opening in the second quarter.

Qian Huang: Our merchandising strategy remains closely attuned to market dynamics. In the first quarter, we focused on responsive product planning and comparing pricing strategy, all of which have strengthened customer engagement, hence traffic and conversion. We also leveraged data analytics to identify and target high-potential customer segments in emerging markets. Tailoring our product offerings to meet their specific needs.

Kemper: Our merchandising strategy remains closely attuned to mark to market dynamics in.

Kemper: In the first quarter, where you're focused on more responsive product planning and their competitive pricing strategy, all of which have strengthened customer engagement and traffic and conversion.

Kemper: We're also leveraging data analytics to identify and target high potential customer segments and emerging markets.

Kemper: Tailoring, our product offerings to meet their specific needs.

Qian Huang: Our marketing initiatives in Q1 further deepened Gap's brand resonance through localized storytelling. A standout example was our collaboration with the Forbidden City during the Chinese Spring Festival, which showcased our ability to blend China's rich cultural heritage with Gibbs-branded DNA. Emphasizing comfort, safety and quality. By the end of the first quarter, the Forbidden City collaboration had generated a total sales of 10 million and also recorded at the highest sales rate for any IPA collaboration in our history during the same period.

Kemper: Our marketing initiatives in Q1 further deepened gifts brand aggressiveness through localized the storytelling.

Kemper: A standout example, what's all work collaboration was forbidden city jewelry, and Chinese Spring Festival, which showcased our ability to blend. The chime is reached culture heritage with gifts brand a D. A M.

Kemper: Emphasizing commvault safety and quality.

Kemper: At the end of first quarter. The popularity of collaboration they have generated a total sales of 10 million and also recorded at the highest the sell through rates for any IPO collaborations in our history do you read the same period.

Qian Huang: Building more local cultural relevance is one of our key strategies in China. We will continue to explore and engage in more collaborations with Chinese culture IPs to enhance our market influence.

Kemper: Judy more local cartridge relevancy to the wallboard, where key strip strategies in China, We will continue to explore and engaging more collaborations with Chinese coach Ip's, Handsaw where market influence.

Qian Huang: In January, we kicked off our community engagement trial, Brand and Bear Events, at our flagship store in Shanghai. This initiative is designed to create a memorable experience for families and children who are fostering a positive brand image. We also amplified our reach by leveraging social media platforms and influences to better connect with younger audiences. Our Brain Not Bare campaign deepens emotional connections with consumers, contributing kids and babies to be the highest growing sector during the quarter. We plan to expand such community engagement initiatives to other cities in the coming quarters. Overall gross margin for BBM grew 20%, with the blended gross margin remaining healthier at 52% for the quarter.

Kemper: In January we kicked it off in our community engagement trial grin and bear events at all of our flagship store in Shanghai. This initiative is designed to create memorable experience for families center children's who are fostering a positive brand image.

Kemper: We also amplified our reach by leveraging social media platforms, and new branches to better connect with the younger audience, our brand that their campaign deepened emotional connections with consumers contributing kids and babies to be the highest growing sector during the quarter.

Kemper: We plan to expand the search community engagement initiatives to other cities in the coming quarters.

Kemper: Overall gross margin for BB M grew 20% with a blended gross margin remaining healthy.

Kemper: 52% for the quarter.

Qian Huang: Operationally, we made continuous progress in efficiency and Our GIS data operating loss narrowed by 28% year-over-year to $21 million. Thanks to this clean cost management and better unit economy.

Kemper: Operationally, we made continuous progress in efficiency has spent our adjusted operating loss narrowed by 28% year over year to $21 million.

Kemper: Thanks to disciplined cost management and better unit economics.

Qian Huang: Looking ahead, BBM's partnership with Gap Inc continues to strive, fueled by our local expertise and strong execution. With double-digit top-line growth in Clearview for 2025, we are in a strong position to further unlock new avenues for growth and improve profitability as we keep scaling.

Kemper: Looking ahead, the Pbms partnership with Skippy, Inc continues to strive fueled by our local expertise and the strong execution.

Kemper: With double digit topline growth and clear view for 2025, well you've got a strong position to further unlock new avenues for growth and improved profitability as we keep scaling.

Qian Huang: That concludes our prepared remarks. Thank you.

Kemper: That concludes our prepared remarks, thank you operator.

Unknown Executive: 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 then 1 on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star, then two.

Kemper: Operator, we're now ready to begin the Q&A session.

Kemper: Thank you we will now begin the question and answer session.

Kemper: To ask a question you May Press Star then one on your Touchtone phone.

Kemper: If you're using a speakerphone please pick up your handset before pressing the keys.

Kemper: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Alicia Yap: And our first question will come from Alicia Yap with Citigroup. Please go ahead, ma'am. Hi, good morning, so good evening management for taking my questions. I have a couple of questions here.

Alicia Yap: And our first question will come from Alicia Yap with Citigroup. Please go ahead ma'am.

Kemper:

Hi, Good morning, I felt that you can imagine you think my questions I'll pick a couple of questions. Yeah. One E. Yet just saw if management can give us update and comes off what I said.

Junhua Wu: One is that just if management can give us updates in terms of what your expectations for this year 6-1-8 and then any preliminary result that we can see from just the past like one week or so on the promotion and then across your different e-commerce platform, how do you think is actually trending, which platforms is actually generating or getting more attractions? And then second question is that I know we've been working on the IT and also logistics service. I'm wondering, you know, have we actually able to get more brands actually onboarding to use our IT services and also the logistics services?

Kemper: Patients often shifts at one eight and then any preliminary.

Kemper: That you can't see it from just the past like one we also on the promotion and then across your defend our E. Commerce platform. How do you think it's you know, it's it's actually trending a which perform since that you generally are getting more attraction and then second question.

Kemper: Is that I know, we've been working on the I T and also logistics service I'm wondering you know any also Uh huh.

Kemper: Can we have we are actually able to get more brands actually on boarding to use our I T cell basis and also the logistics of it says thank you.

Junhua Wu: Thank you.

Junhua Wu: Okay, thank you, Alicia, for the question. This is Junhua.

Kemper: Okay. Thank you Alicia for the question. This is gene Fox. So let me address your first question about the campaign 618. So this is <unk> <unk> is the longest the campaign by far so it started from the 13th of May to the 20th of June So it's.

Junhua Wu: So let me address your first question about the campaign of 6-18. So this 6-18 is the longest campaign by far. So it started from the 13th of May to the 20th of June. So it's about a 37 days campaign. So if you're talking about some kind of difference, you know, between this 6-18 with the others, is they provide a lot of instant discounts at day one. And without giving a lot of threshold discounts, they provide some lower tiers with a sliding scale, starting from 200 minus 20 to 5,000 minus 500. So as you can see that, you know, this is only about like eight days after the 13th of May.

Kemper: About 37 days campaign. So if you are talking about the some kind of difference between this 618 ways. The others is they provide a lot of instant discounts at daiwa and without giving a lot of threshold discounts. They provided some lower tiers with a sliding scale starting from 200.

Kemper: Minus 22, 5000 minus 500, so as you can see that you know this is only about like hey days after researching as of May So I can only share your view with the first wafers out so as far as we're concerned and we observed from our number. So the first wave came really well a lot of brands they keep ramping up your presale stage.

Junhua Wu: So I can only share you with the first wave result. So as far as we're concerned, and we observed from our number, so the first wave came really well. A lot of brands, they keep ramping up their pre-sale stage and their existing transactions convert rate is really pretty well. And in terms of the cancel rates, now the current data suggests that we have a single mid-digit, you know, lower down than the last year, so which means a better result. The return rate is also relatively lower than last year, which is also a better result.

Kemper: And they are existing transactions kind of run rate is really pretty well and in terms of the cancel rate now the current the current data suggests that we had a single digit you know are lower.

Kemper: Lower down than it did last year, so which means that better results.

Kemper: Our return rate is also relatively lower than last year, which is also a better result, but as far as we still have about 50% of the shipments do ongoing. So maybe we can share that data later on after the next wave.

Junhua Wu: But as far as we still have about 50% of the shipments still ongoing. So maybe we can share the data later on after the next wave, or, you know, someday in the middle of June. So in the categories differentiation, we look forward to see, of course, the first one is home appliance category, and the consumer electronics category is wrapping up very well because of the subsidiaries from the government. And also luxury category and the fashion apparel category is also very catching up. So we can see that the home appliance category and the fashion luxury category is leading the 618 by far.

Kemper: Some day in the middle of June.

Kemper: So India categories differentiation, we look forward to see of course, the first one is home a home appliance category and consumer electronics category is ramping up very well because of the subsidies from the government and also luxury category in a fashion apparel category is also very catching up so we can see that the home appliance category and our fashion luxury.

Kemper: Category is leading the 618 by far.

Junhua Wu: And the second thing is about the IT services and logistic services. So for the IT part, so you can see that our revenue growth has a little bit declined year over year because the cadence of IT services is very different from the regular store like our flagship store operations. So they have to just, you know, find a new client and based on different kind of the solution they provide, the revenue contribution period and cadence is very different. But a lot more brands, they are focusing on the new one-stock solution to leverage their online inventory with their offline inventory, especially with their offline flagship stores.

Kemper: And the second thing is about the it services and logistics services. So for the I T. Part. So you can see that our revenue growth has a little bit decline.

Kemper: Year over year, because the cadence of the IV services is very different from the regular store like our flagships will operations. So they have to just you know are assigned a nuc.

Kemper: Clients and based on different kind of solution. They provide the revenue contribution period and cadence is very different but a lot more brands. They are focusing on the new one stop solution to leverage our online inventory with you offline inventory, especially with your offline flagship stores, so more and more brands. They are explored the possibility of wastewater.

Junhua Wu: So more and more brands, they are exploring the possibility with Baozun's IT team to think about the one-stock solution. So we have a strong confidence that in the coming Q3 and Q4, we can catch up the revenue growth.

Speaker Change: James <unk> to think about a one stop solution. So we had a strong coffee than that in the coming Q3 and Q4, we can catch up the revenue growth.

Junhua Wu: For the logistic service traction, so we can say that right now, as you might know, that we're focusing on several key clients, as like the report just said. So we focus on several key clients and their business is remaining flat. Some of them are declining. So keep supporting those clients. So we need to just, you know, keep supporting them and increase the quality of the services and also have a new development of new B2B and some kind of return reverse warehousing and logistic services as a complement.

Speaker Change: For the logistic service traction. So we can say that right now as you might know that we are focusing on several key class as like the report just said so we focus on several key clients and the our business is remaining flat some of them are declining so as it keeps supporting those clients. So we need to just keep supporting.

Speaker Change: Dan and increase the quantity of the services and also have a new development of new B to B and some kind of the return reversed warehousing and logistics services as a compliment.

Speaker Change: Okay hope that makes sense to you.

Speaker Change: Yeah.

Unknown Executive: The next question will come from JYN with SITIC. Please go ahead. Good evening, management. Thank you for taking my question. Congratulations on this quarter's strong performance.

The next question will come from Jay when Jay why in with Citic. Please go ahead.

Speaker Change: Okay.

Speaker Change: Good evening management. Thank you for taking my question. Congratulations on strong woman. My first question is regarding the Pbms sector.

Qian Huang: My first question is regarding the BBM sector. Is there any updates for the gap operation strategy? And how does the company plan to balance scale expansion with profitability? And is Baozun considering acquiring more new brands? That's my first question.

Speaker Change: Are there any updates for the GAAP operation strategy and how does the company plan to balance scale expansion with profitability and then and.

Speaker Change: It is potent considering acquiring more new brands I was actually my first question. My second question is concerns reason the collaboration between writing notes and the T. Mo what is about the strategy and have companies think brands allocate more resource to that note. Thank you.

Qian Huang: My second question concerns the recent collaboration between RedNote and Tmall. What is Baozun's strategy? And have companies seen brands allocate more resources to RedNote?

Qian Huang: Thank you.

Qian Huang: Okay, this is Ken. I will answer the first question about the strategy of GAP. I think from 2025, our strategy is quite clear in product marketing and the channels for product that we are further enhancing the GAP's DNA. We are trying to enhance our key GAP categories including GAP denim, GAP khaki, GAP sweatshirt, and the GAP kids and babies.

Ken: Okay. This is Ken.

Ken: Answer the first question how about the <unk>.

Speaker Change: <unk> yeah.

Speaker Change: I think two from 'twenty to 'twenty five hour the strategy is quite clear.

Speaker Change: Product marketing and channels for product that we are.

Speaker Change: Further enhancing the gifts DNA, we are trying to enhance our key categories, including gift banning gift kaki gifts, where short term acute N P. P J.

Qian Huang: Care Degree. And in the same time, we want to be more balanced, balanced between the local assortments and global products to bring more value to our Chinese customers. And for marketing, we are creating more local culture elements, including the IP collaboration with Forbidden City, we just did, and we will continue to do this year. And starting from last month, we also launched a series of reno campaigns with the key KOLs, delivering our connections with our customers through music and download. And the third one about channel, I think for online channels, we are expanding all channels and our advantage is our faster response to every platform.

Speaker Change: And again the same time, we want to be more balanced between the local assortments in our global products to bring more value to our Chinese customers and the fall marketing, we are creating more local country regiments in recruiting the IP collaboration with Apple.

The city, we just did and we will.

Speaker Change: And you do this year and starting from last month, we also launched the <unk>.

Bruce: Sure Bruce.

Speaker Change: O ran those campaigns.

Speaker Change: The key Kols.

Speaker Change: Delivering our connections with our customers through music and dance.

Speaker Change: And the third one about channel I think for online channels. We are expanding in all channels and all were advantage. You saw were a faster response to the to every platform and we are further improving our supply chain for our online exclusive products and four.

Qian Huang: And we are further improving our supply chain for our online exclusive products. And for offline, we are partnering with a in different regions for us to further expanding our local stores in emerging markets. So in terms of balancing our skill and the profits, I think we are. Continue looking for the increase of scale. As we mentioned, we will keep a double-digit increase this year. We target to open 50 stores, new stores, this year. So with the increased scale, it will help us to balance our back-office cost and in the end to break even. So we want to keep this momentum, quarter by quarter, to deliver solid results and in the end to reach a break-even point in the last quarter.

Speaker Change: Offline, we are partnering with a number of strategy strategic partners in different regions for us to further.

Speaker Change: Expanding our local stores in emerging markets. So in terms of balancing our scale and a coffee. So I think we are.

Speaker Change: Continue looking for the increase of scale as we mentioned we were keep a double digit increase this year.

We target to open 50 stores new stores this year, so with the <unk>.

Speaker Change: Increased scale it will help us to.

Speaker Change: Our back office cost and in the end to breakeven. So we want to keep this momentum.

Speaker Change: Quarter by quarter to deliver solid results and the Indiana to reach a breakeven point.

Speaker Change: Point in the last quarter, but of course, we are when we are balancing the scale and profit while also considering the our brand. So we were still continue investing our brand marketing.

Qian Huang: But of course, we are, when we are balancing the scale and the profit, we are also considering our brand. So we will still continue investing in our brand market.

Qian Huang: but yes it's it's it's really Challenge, but in this, it's really a challenge, but in the same time, I think we are confident by working with the Gap Inc's team together for the branding part.

Speaker Change: But yes, it's really.

Speaker Change: Challenge, but and this is really a churn anybody at the same time I think we are confident.

Speaker Change: By working with the <unk> team together for the branded part.

Speaker Change: Okay.

Speaker Change: Yeah.

Junhua Wu: Thank you.

Speaker Change: Thank you.

Junhua Wu: Again, if you have a question, please press star, then 1. I think the second question regarding the later rubric and Tmall, and also whether the company's plans for acquiring new brands are not just yet, maybe Mr. Junhua, you can share. Maybe you can say something about the Tmall first. Yes, sure. Yes, yes.

Speaker Change: Again, if you have a question. Please press Star then the second question I think the second question regarding the regulator level again.

Speaker Change: And also whether the company's fastball acquiring new brands I know just yet maybe it means that you have all of them you can't get there you can see some of you have other VIP members yeah sure more yes.

Junhua Wu: I believe that you were asking about the RADCAT initiative. So let me explain that to you, use a before and after kind of scenario. So before the RADCAT initiative, we used to spend a lot of marketing spending on Retinol for seeding for new arrivals and for driving some heat for consumers can really just get a lot of content on Retinol before they drop in transactions. So like 10 years ago, when a consumer made their decision for purchasing, they used to go open in PDP and then reading a lot of reviews of the product and then make a decision.

Speaker Change: Yes, yes, I believe that you were asking about the <unk> initiative. So let me explain that to you use it before or after kind of scenario. So before the Iraq cat. Neither initiative, we used to spend a lot of marketing spending ratner for seating for new arrivals. Therefore, driving some Keith for you know consumers can really just get a loft.

Speaker Change: Content on Ratner before day dropping transaction. So like you know like 10 years ago, when a consumer and made their decision for purchasing they used to go open in PDP and then reading a lot of reviews of the product and they make the decision and now they are using right now for a UGC content platforms are getting a lot of information from different angle and then make that pace.

Junhua Wu: And now they're using Retinol for as a UGC content platform to getting a lot of information from different angles and then place a transaction on the Tmall, JD, or wherever they are familiar to. But the RADCAT project is directly provide a way to just link directly from the content or a different link or different heats or different forwarding from Retinol directly to Tmall transaction PDP page. You can seamlessly experience that kind of thing. So the RAD project to us is more related to the performance marketing part. So for now in the 618 campaign, several of our partners already reallocate some of their online performance marketing budget from the in Tmall search the performance marketing budget to the RADCAT project.

Speaker Change: Transaction on the Tmall JD or wherever they are familiar to you, but the rack has project is directly provide a way to just link directly from the content or a different link are different he's a different forwarding from retinal which directly to the TMR transaction PDP page you can seamlessly experienced that.

Speaker Change: One of the things so that Rep project, it's to US it's more related to the a performance marketing parks. So for now India 618 campaign several of our brand partners already relocate some of their online performance marketing budget from the N T mall searches a performance marketing budget to the Rep Rep cat.

Junhua Wu: So we can directly just invest on driving traffic on Retinol from all the seeds or the content and getting the transaction done. Compared with the ROI for now, the ROI is relatively higher than the one on the Tmall insight performance marketing results. So because this is very new, the RADCAT initiative is only just open for two weeks and we have only several brands for trying that kind of the initiative and we will get back to you with a more detailed result after we have a significant awareness and balancing all those kinds of ROI in a stable way.

Speaker Change: So we can't directly just you know are in that are driving traffic on ratner from all the seeds order content and getting the transaction done computer with the ally for now the ally is relatively higher than the one on the Tmall insights performance marketing results. So because this is very new to red hat.

Speaker Change: But only just open for two weeks and we have already several brands for trying that kind of the initiatives and we will get should get back to you with a more detailed results. After we have a significant awareness and balancing all those kind of all lives in a stable way.

Vincent Qiu: Yeah, I hope that makes.

Speaker Change: I hope that makes sense to you.

Vincent Qiu: Okay, this is Vincent. I'm making some comments for your third part of the questions, which is a new brand acquisition plan for the, I think it is for the brand management part of our business. BBM actually our strategy is a portfolio strategy which means we will do multiple brands and trying to build up the synergy in different brands so that is the So far, we have two brands already. First one is Gap, second one is Hunter, both doing quite well. And for other new brands, they can be either on board for BBM platform, or if it is majorly a distribution model, it can be also on board our BEC platform.

Vincent You: Okay. This is vincent.

Vincent You: Maybe some comments for you were sort of her home for Christmas, which is a new brand acquisition plan for the I think it is.

Vincent You: <unk> management.

Vincent You: Part of our business.

Vincent You: BB M actually our strategy as the portfolio strategy, which means we will do multiple brands.

Vincent You: Trying to build up the.

Vincent You: The synergy.

Vincent You: Yes, so that is the strategy. So far we have two brands already first why is that gap second lines Hunter bolstering quite well.

Vincent You: And for other new brands, they can be either onboard or BB M platform or if it is majorly distribution model is can be also onboard our BDC platform. So we havent home platforms for the new brands on board.

Vincent Qiu: So we have four platforms for the new brands to onboard. Sometimes you can imagine that BEC and BBM will meet. in the Middle. So that gives the potential brands more opportunities to work either more focused on products development or channel development. So we always have a quite strong pipeline for BEC and also BBA. Recently, given the macroeconomic situation, we're quite, you know, careful and cautious in onboarding new But we are seeing more and more synergies between brands, and it's the brands in these medium, and also between. and DML. Hope that answers your question. Thank you.

Vincent You: And then some.

Vincent You: Sometimes you can imagine that.

Vincent You: Easy in the BB M. We will meet.

Vincent You: Meanwhile, you use.

Vincent You: In the middle so that you could give us a potential brands more.

Vincent You: Opportunities for Geezer.

Vincent You: Our focus on product development or channel development.

Vincent You: So.

Vincent You: We have always we always have a quite strong pipeline for <unk>.

Vincent You: Ah recently, given their macroeconomic situations where.

Vincent You: Careful and cautious you onboard a new brands.

Vincent You: But we are seeing more and more synergies between brands and it's the granting visa and DBM and also between.

Vincent You: D M D C.

Vincent You: Hope that answers the question. Thank you.

Vincent You: Thank you very clear.

Unknown Executive: Very clear.

Chris Cowell: The next question will come from Chris Cowell with Hightower Securities. Please go ahead. Thank you, management, for taking my question.

Chris Howe: The next question will come from Chris Howe with High Tower Securities. Please go ahead.

Chris Howe: Oh, Thank you management for taking my question.

Junhua Wu: I have two questions. The first question is about the apparel and sports, and I think these two categories are performing very well this quarter compared to the overall weak market consumption sentiment. Could you please share the key drivers behind it, and how should we think about the future trends of these two categories?

Chris Howe: I have two questions. The first question is about the apparel and the sports and.

Chris Howe: And I think these two categories.

Chris Howe: Performing very well this quarter and compare it to the overall weak market consumption sentiment.

Chris Howe: Could you please share the key drivers behind that and how should we think about the future trends. All these two categories and my second question is about DBM sector. As 618 campaign approach how should we think about the potential opportunity of integration of the P. P M.

Junhua Wu: And my second question is about the BBM sector. As a 618 campaign approach, how should we think about the potential opportunity of integration of the BBM sector and BEC sector during the 618 campaign? Thank you. These are my two questions.

Chris Howe: And B C sector during the six.

Chris Howe: 18 campaign. Thank you.

Chris Howe: These are my two questions.

Junhua Wu: Okay, Chris, the first question, this is Junhua, the first question is regarding the apparel and sportwear category, so this is for me. So, yes, indeed, the apparel, especially sportswear and luxury apparel category, they are the key, you know, in the battlefield across different platforms, especially as far as you might know that, you know, JD, they've been restructured and hired some kind of key, you know, players to, in charge of their apparel category, which used to work for Tmall. So apparel and sportswear and luxury, they are rat racing in a very heavy way, especially in those big campaigns like 6018, they've been spending a lot of, you know, providing coupons and instant discount in this category.

Chris Howe: Okay. Chris. The first question is just the first question is regarding the Paradise footwear category. So this is for me.

Chris Howe: So, yes, indeed, the apparel, especially sportswear and luxury apparel category. They are the key you know in the battlefield across different platforms, especially as far as you might know that.

Chris Howe: They've been restructure and Harrison and kind of the key players to charge off the our apparel category.

Chris Howe: He used to work for Tmall, so apparel and sportswear and luxury they are racing in a very heavy way, especially in those big campaigns like six to 18, they've been spending a lot of you know are providing coupons and instant discount in this category.

Junhua Wu: So, yes, you know, as far as the momentum currently for apparel and sportswear industry, everybody is catching up and some of the leading brands, they are ramping up. So they've been spending a lot of drivers in differentiating different consumers. They spend a lot of investment into segregating different kind of consumers by different tiers, like they set up the apparel into trendsetters, quality chasers, pragmatic consumers, and, you know, price sensitive consumers. So based on the consumer study, so we've been spending a lot of time finding the right assortment, leveraging the right message, you know, using the right marketing approach way to send a group of assortment to the right group of consumers to make the right transaction.

Speaker Change: Yes, you know as far as the momentum currently for apparel and sportswear industry, everybody is catching up and some of the leading brands. They are ramping up so they've been spending a lot of drivers in differentiate different consumer stay spent a lot of investment into a segregated different kind of consumers by different tiers.

Speaker Change: Like are they set up the apparel into Trendsetters quality Chase Earth pragmatic consumers and price sensitive consumers. So based on the consumer study. So we've been spending a lot of time, finding the right assortment leveraging the right message you know using the right marketing approach way just sent a group hop assortment with a rifle part.

Speaker Change: Consumers can make the right transaction, so for apparel sportswear and luxury category, so more and more resources are spending into the day to day operations based on data. They provided based on historical data based on a lot of merchandising and assortment collections. We can work with our brand partners. So we look forward to foreseen. This category has a bad.

Junhua Wu: So for apparel, sportswear, and luxury category, so more and more resources are spending into the day-to-day operations based on data bank they provide, based on historical data, based on a lot of merchandising and assortment collections we can work with our brand partners.

Junhua Wu: So we look forward to foreseeing this category has a better momentum in this 6-18 and maybe across this year. And for the second question, for the synergies between BBM and the BEC, I think we mentioned that the synergies we are having from the beginning, because for BBM, all our brands, both our brands, we are working very closely with BEC for TP service, DP service, logistic service, IT service, digital marketing service. It's not just for 618, it's for our day-to-day work. And especially mentioning to the 618, I think the advantage is we have more, for BBM, we have more all channels information in advance and the resources management.

Speaker Change: Our momentum in this $6 18 at maybe across this year.

Speaker Change: Okay, and then for the second question for the synergies between <unk> and I think we mentioned that the synergies are.

Speaker Change: We are having from the beginning because.

Speaker Change: <unk> all of our brands both of our brands with government and we are working very closely with PUC.

Speaker Change: GPU servers GPU servers logistics service service digital marketing service is not just for $6 18, which for our they they work and especially mentioned into the <unk> I think of the advantages we have more for BB M. We have more channels informing.

Speaker Change: <unk>, new bonds and the resources.

Speaker Change: Management. So we can anticipate what we should have response to each platform and BB am us platform.

Junhua Wu: So we can anticipate what we should respond to each platform. And BBM as a platform that can produce products itself, we are, our advantage is to make our production more responsive, fast response to the different platforms' needs. So I think this is a major advantage between BBM and BEC when we are facing a fast-changing platform strategy.

Speaker Change: And produce product for yourself.

Speaker Change: We are our advantages to them.

Speaker Change: May call worth approaching more responsive faster responses to the day.

Speaker Change: Frame platforms needs. So I think that this is a major advantage between P. P. M. The beauty when we are facing a fast changing platform strategies.

Unknown Executive: Thank you all for your cooperation.

Speaker Change: Thanks Ross.

Speaker Change: Question <unk>.

Unknown Executive: Again, if you have a question, please press star, then 1.

Speaker Change: Again, if you have a question. Please press Star then one.

Unknown Executive: This concludes our question and answer session.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to management for any closing remarks. Please go ahead.

Vincent Qiu: I would like to turn the conference back over to management for any closing remarks. Please go ahead. Okay, thank you operator.

Speaker Change: Okay. Thank you operator.

Unknown Executive: On behalf of the Baozun management team, we would like to thank you 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 today. This concludes the call. Thank you. The conference is now concluded. Thank you for attending today's presentation.

Speaker Change: I have with Cabela's and management team, we would like to thank you for your participation in today's call. If you require any further information feel free to reach out to us.

Speaker Change: Thank you for joining us today. This concludes the call. Thank you.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Unknown Executive: You may now disconnect.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].