Q1 2025 Vipshop Holdings Ltd Earnings Call
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Operator: Ladies and gentlemen, good day everyone and welcome to Vipshop Holdings Limited's first quarter 2025 earnings conference call.
Speaker Change: Ladies and gentlemen, good day, everyone and welcome to VIP Shop Holdings Limited first quarter 2025 earnings Conference call.
Jessie Zheng: At this time, I would like to turn the call to Miss Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed. Thank you, Operator. Hello, everyone. And thank you for joining VIPshop's first quarter 2025 earnings conference call.
Speaker Change: At this time I would like to turn the call to Ms. Jessie Zheng VIP shops head of Investor Relations. Please proceed.
Speaker Change: Thank you operator, Hello, everyone and thank you for joining the <unk> first quarter 'twenty 25 earnings conference call with US today are Eric Shen, our co founder Chairman and CEO and Mark Wang our CFO.
Jessie Zheng: With us today are Eric Shen, our co-founder, chairman and CEO, and Mark Wang, our CFO. Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlining our safe harbor statements in our earnings release and the public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be.
Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward looking statements made under the safe Harbor provisions of the U S.
Speaker Change: The Securities Litigation Reform Act up.
Speaker Change: Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.
Speaker Change: Certainly they are incurred.
Speaker Change: I'm not limited to those outlined in our safe Harbor statements in our earnings.
Speaker Change: Filings.
Speaker Change: These mix changes submission, which also apply to this call to the extent any forward looking statements may be made.
Jessie Zheng: Please note that certain financial measures used on this call, such as non-GAAP operating income, non-GAAP net income attributable to VIP shop shareholders, and non-GAAP net income per ADS, are not presented in accordance with the U.S. GAAP. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP measures to GAAP measures.
Speaker Change: Please note that certain financial measures that you sounded cool such as non-GAAP operating income non-GAAP net income attributable to VIP shop shareholder.
Speaker Change: non-GAAP net income prior to that are not presented in accordance with U S. GAAP. Please refer to our earnings release details relating to the reconciliation of our non-GAAP measures to get married.
Eric Shen: With that, I would now like to turn the call over to Mr. Eric Shen. Good morning and good evening, everyone. Welcome and thank you for joining our first quarter 2025 learnings conference. Our first quarter results came in largely as expected. We continue to make progress on our path to return to growth. Our team stayed ahead of trends to offer more unique and quality off-price seasonal items that were more relevant to customer preference. We see apparel category achieved positive growth in the first quarter. Super VIP membership extends its double-digit growth. In the first quarter, active SVIP customers increased by 18% from a year ago and accounted for 51% of our online spending.
Speaker Change: With that I'd now like to turn the call over to Mr. Eric Shen.
Eric Shen: Good morning, and good evening, everyone welcome and thank you for joining our first quarter 2008 on this time than its conference call.
Eric Shen: Our first quarter results came in largely.
Eric Shen: And expect we continue to make progress.
Eric Shen: Our pets two returned to growth.
Eric Shen: Our team stayed ahead or trend to offer more unique and the quality of price even though.
Eric Shen: That was more relevant to customer preference, we see apparel category achieved positive growth in the first quarter.
Eric Shen: Super VIP membership extend its double digit close.
Eric Shen: In the first quarter activity S VIP customer increase.
Eric Shen: By 18% from a year ago and accounted for 51% of our online spending.
Eric Shen: This hard-core cohort of customers show clear strengths in terms of sales and the revenue growth. We are keeping a close eye on the broader custom trend. We still see customers choose more willingness to spend on family and the seasonal essentials and they are gradually catching up on spending in most discretion categories. We remain anchored to the value proposition of discount retail for brands. Certainly upon our long standing merchandising strategy, we are also making change throughout the organizations in how we align with those priorities. operator in greater synergy and the driver unique compelling customer value. Our teams are restructured in the way that more aligned and efficient so that they can act with speed to turn potential into growth.
Eric Shen: Hot or cold cold cuts of the shoe clear trends in terms of sales and the revenue growth.
Eric Shen: We are keeping a close eye on the broader custom trend, we still see customers Chu.
Eric Shen: Yeah.
Eric Shen: Willingness to spend on family and the season, though.
Eric Shen: Essentials, and they are gradually catching up and spending in most of the discretionary categories.
Eric Shen: We are re Mi we are remain anchored to the value proposition of discount retail for bad.
Eric Shen: Certainly upon our long standing merchandising strategy.
Eric Shen: We are also making change outs.
Eric Shen: <unk> organizations in how we align with those priorities.
Eric Shen: Operator in greater synergy and the dreams unique compelling customer value.
Eric Shen: Our teams restructured in a way that's more aligned and efficient so that they can act with speed to potential into gross.
Eric Shen: We will highlight the strategic priority. to grow the share of brand supply at exceptional value to invest in custom engaging initiatives that drive traffic, frequency, and multi-category purchases. and to speed up technology advancement that's driven value creation for business. Starting with merchandising, we are focused on the brand and the products where we have made the biggest differences for customers. It's key factors in driven traffic and customer growth. That's why we believe in the power of merchandising capabilities, which we are leveraging to quickly adapt to trends across fashion apparel, accessories and family lifestyle categories, continuously giving customers more reasons to stay here.
Eric Shen: We will highlight the strategic priorities to grow the share of branded supply at expects.
Eric Shen: Exceptional value to invest in customer engagement initiatives to drive traffic.
Eric Shen: And the multi.
Eric Shen: Multi category purchases.
Eric Shen: And to speed up technology advancement, that's driven.
Accretion Scott business.
Eric Shen: Starting with merchandising we are focused on the brand and the products, where we have made the biggest differentiation for our customers is key.
Eric Shen: Key factors in driven traffic and customer growth.
Eric Shen: That's why we believe in the power of merchandising capability, which we are leveraged to quickly adapt to trends across fashion apparel.
Thanks, Chris and family lifestyle categories continuously giving customers more reasons to stay here.
Eric Shen: One of the best examples in our Made for VIP shop business, which continued to outperform in the first quarter, a total of more than 200 brands joined this program by the end of March. We were close to the brand partner in transforming customized offerings based on customer insights and changing trends. We were moving fast to deliver a more compelling brand of quality and value. We also have the Provence channel for made for VIP shop. We expect it to become the to-go place for customers to discover affordable on-trend products that they cannot find anywhere else. In the first quarter, we also unveiled more unexpected high fashion selections to keep customers coming back to see what's new.
Eric Shen: The Best example, in our later for VIP stroke business, which continued to outperform in the first quarter a total of more than 200 brands. Joan This program by the end of the much. We want we were close to the brand partner in transforming customized operating base.
Eric Shen: Just on customer insights and the training and the changing trends, we are moving fast to deliver a more compelling brand our quality and the value.
Eric Shen: We also have.
Eric Shen: Province Channel for medical VIP shop.
Eric Shen: <unk> is to become the to go place for customers to discover affordable on trend product.
Eric Shen: They cannot find anywhere else.
Eric Shen: In the first quarter, we also our view more.
Eric Shen: Expect high pressured selection to keep customer coming back to see what's new.
Eric Shen: Customers were overjoyed with some of the best views they got, such as Beverly Coach and more. Also, the invite-only provides sales. We are trying to gain traction with customers as a place for fresh sales and treasure hunting. Turning to customers, we aspire to bring together the best of what they want in a unique shopping experience. On top of the compelling products offering, customers know that we stand behind what we sell. That's why our SVIP customers are clearly glowing more attracted to our platform, because of the affordable and reliable nature in our business. We have planned to make the loyalty program bigger and better.
Eric Shen: Customer, we're overjoyed with the best views, they got such as Burberry coach and mall or flu the invite only provides.
Eric Shen: We're trying to gain traction with customers as it plays both branch sale and.
Eric Shen: And the treasury function.
Eric Shen: Turning to customers.
Eric Shen: Prior to bring together the best what they want in a unique shopping experience.
Eric Shen: On top of the compelling.
Eric Shen: Our product offering customer know that we've done.
Eric Shen: Behind what we sell.
Eric Shen: That's why all the <unk> customers are clearly below even more attractive to our principle because.
Eric Shen: And the reliable nature our business.
Eric Shen: We help them to make the loyalty program bigger and the better we are focused on how we could further differentiate H for example, our customer often family shoppers, who allow us to travel so new second quarter S. VIP member received more relevant and rewarding life pretty rigid.
Eric Shen: We are focused on how we could further differentiate it. For example, our customers are often family shoppers who loves travel. So new as second quarter SVIP member receive more relevant and rewarding life privileges such as gold card upgrade for Changlong theme park and hotel recommendations and so on. We also increase the power of AI throughout the customer experience in many ways. will be include our AI powered algorithm to enhance the logic behind the search and the recommendations. We were leveraging general AI to create high-impact content, including smart mix-and-match content that make product page more compelling, and the automatic customer view summary that highlight key insights to help shoppers.
Eric Shen: Such as go to Cox upgrades for term loan.
Eric Shen: Park and hotel optimizations and so.
Eric Shen: We have also increased the power of our AI throughout the customer experience in many ways.
Eric Shen: We were being improve our AI powered.
Eric Shen: Related to enhance.
Eric Shen: Logic behind the search and recommendations, we were leveraging general AI to create high impact and to incur.
Eric Shen: Including smart mix and match content, that's make product page more compelling.
Eric Shen: And automated customer view, the summary that highlights key insights to help shoppers will also apply AI to customer service handling product inquiries.
Eric Shen: We also applied AI to customer service, handling product inquiries, generating personal related recommendations, and potentially acting as a smart shopping assistant. Also, by leveraging general AI, we generally target marketing creatives for diverse platforms and audiences, helping enhance customer acquisition efficiency. So we will continue to invest in opportunities for long-term success. We look to set ourselves apart, provide more than what customers expect, and building the unique experience. against a backdrop of ongoing uncertainty.
Eric Shen: <unk>.
Eric Shen: Personally latest recommendations and potentially acting as a smart shopping assistant.
Eric Shen: Also by leveraging general AI, we generally target marketing creatives.
Eric Shen: Diverse platform and all the help.
Eric Shen: Helping enhance customer.
Eric Shen: Acquire.
Eric Shen: Additions efficiencies. So we will continue to invest in opportunities for long term success, we look to set ourselves apart provides more than what customers expect and building unique experience.
Eric Shen: Just a backdrop of ongoing uncertainty.
Eric Shen: I'm confident in our team. we who have never navigated through several years of volatility to keep pace with customer trends double down on execution our strategy and regain growth track.
Eric Shen: In our team.
Eric Shen: Who.
Eric Shen: <unk> never navigate slow several years avoid volatility to keep pace with customer trends double down on.
Eric Shen: Execution of our strategy and regain close truck.
Mark Wang: At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results. Thanks, Eric. And hello, everyone. In the first quarter, we just pinned solid profitability despite sales pressure due to muted sentiment on this questionnaire. As we prudently increase the investment in building customer and brand momentum, the state grows opportunity. Margin softened modestly compared with a year ago. but still help up healthily meeting our expectations. is underscored our capacity to drive operational efficiency. build on years of efforts and refining internal management.
Eric Shen: At this point, let me hand over the call to our CFO Mark Wang to go over our financial results.
Mark Wang: Thanks, Eric and Hello, everyone.
Mark Wang: In the first quarter with solid profitability.
Mark Wang: Sales pressure due to muted sentiment on discretionary spend.
Mark Wang: As we prudently increased the investments in building customer and our brand momentum to seize growth opportunities.
Mark Wang: Margins softened modestly compared with a year ago.
Mark Wang: So still held up.
Mark Wang: Totally within our expectations.
Mark Wang: Just underscored our capacity to drive operational efficiencies.
Mark Wang: Built on years of efforts and refining internal amendments.
Mark Wang: As Eric mentioned, We are driving important teams within the organization for our long term success. It will be an enhanced mindset across the business. Fun Growth, Synergy, and the Efficiency Opportunity. we can pay to the bottom We will remain focused on executing this strategic priority. for the greater agility while maintaining discipline.
Mark Wang: Okay.
Eric Shen: As Eric mentioned.
Speaker Change: We are driving important teams within the organization for long term success.
Eric Shen: It will be in May.
Eric Shen: On site across the business to fund growth synergy and efficiency opportunities.
Eric Shen: We can take to the bottom line.
Eric Shen: We will remain focused on executing the strategic priorities for.
Eric Shen: With greater agility, while maintaining discipline.
Mark Wang: Turning to our shareholder return program. Our full year 2025 commitment remains unchanged. returning no less than 75%. of the 9 billion RMB full year 2024 non-cap net income to shareholders. here today. We have returned over 400 million US dollars to shareholders. which include approximately 250 million US dollars in annual dividend distribution. and over 150 million U.S. dollars in share repurchase.
Eric Shen: Turning to our shareholder return program.
Eric Shen: Our full year 2025 amendment.
Tim: And Tim.
Tim: Returning no less than 75%.
Tim: The 9 billion RMB full year 2024, non-GAAP net income to shareholders.
Tim: Year to date.
Tim: We have returned over 400 million U S dollar to shareholders.
Tim: Which include approximately $250 million dollar annual dividend distributions.
Tim: And over 150 million U S dollar is share repurchase.
Mark Wang: Now moving to our detailed quarterly financial highlights.
Tim: Now moving to our detailed quarterly financial highlights.
Mark Wang: Before I get started, I would like to clarify. that all financial numbers present below are in RMB. All the percent had changed, a year over a year change.
Tim: Before I get started.
Tim: I would like to clarify.
Tim: That all financial numbers presented below are Union b.
Tim: And 1% had teams a year over year changes.
Mark Wang: A Life Otherwise Noted Hold on the RAM news for the first quarter of 2025. worth 26.3 billion RMB compared with 27.6 billion RMB in the prior year period. Gross profit was RMB 6.1 billion compared with RMB 6.5 billion in the prior period. Gross margin was 23.2%. compared with 23.7% in the prior period. Total operating expenses decreased by 1.6% year over year to RMB $4.0 billion. from RMB 4.1 bidding in the prior period. as a percentage of total net revenue. Total operating expenses were 15.3%. compared with 14.8%. in the prior year period. Fulfillment expenses decreased by 4.8% year over year to RMB 1.9 billion from RMB 2.0 billion.
Tim: Our lives otherwise noted.
Tim: Total net revenues for the first quarter of 2025.
Tim: $26 3 billion RMB.
Tim: There were $27 6 billion RMB in the prior year period.
Tim: Gross profit was RMB.
Tim: $6 1 billion compared with RMB, six 5 billion in the prior year period.
Tim: Gross margin was 23, 2%.
Tim: Comparable.
Tim: 23, 7% and the <unk>.
Tim: Higher year period.
Tim: Total operating expenses.
Tim: Creased by one 6% year over year to RMB four 1 billion.
Tim: From RMB four 1 billion in the prior year period.
Tim: As a percentage of total net revenues.
Tim: Total operating expenses.
Tim: There were 15, 3%.
Tim: Compared with 14, 8%.
Tim: In the prior year period.
Tim: So we feel net expenses decreased by four 8% year over year to RMB, one 9 billion from RMB two <unk> billion.
Mark Wang: in the prior year period. as a percentage of total now revenues. Fulfillment expenses were 7.2%. which remains stable as compared with that in the prior period. marketing expenses increased by 6.0% year over year to RMB 732.1 million from RMB 690.9 million in the prior year period. as a percentage of total net revenue. marketing expenses were 2.8%. compare with 2.5% in the prior year period.
Tim: Prior year periods.
Tim: As a percentage of total net revenues.
Tim: <unk> expenses were seven 2%.
Tim: Which remains stable as compared with that in the prior year period.
Tim: Marketing expenses increased.
Tim: <unk> increased by 6.0%.
Tim: Year over year to RMB, $732 1 million from RMB $699 million in the prior year period.
Tim: As a percentage of total net revenues.
Tim: Marketing expenses were two eight.
Tim: 8%.
Tim: Comparable was two 5% in the prior year period.
Mark Wang: Technology and Content Expenses. decreased by 6.8% year over year. to RMB $449.1 million. from RMB 481.9 million in the prior period. as a percentage of children their revenues. Technology and Content Expenses were 1.7%. which remains stable as compared with that in the prior period. General and administrative expenses increased by 2.3% year over year. to RMB 950.8 million from RMB 929.1 million in the prior year period. as a percentage of total net revenue. General and Administrative Expenses were 3.6%. compared with 3.4%. in the prior period. Income from operations was RMB 2.3 billion. compared with RMB 2.8 billion in the prior period.
Tim: Technology and the content expenses.
Tim: <unk> by six 8% year over year.
Tim: To RMB $449 1 million.
Tim: From RMB $481 9 million in the prior year period.
Tim: As a percentage of total net revenues.
Tim: And all of you and the content expenses or one 7%.
Tim: Which remains stable as compared with that in the prior year period.
Tim: Okay.
Tim: General and administrative expenses.
Tim: <unk> by two 3% year over year to RMB $950 8 million.
Tim: From RMB $929 1 million in the.
Tim: Prior year periods.
Tim: As a percentage of total net revenues.
Tim: General and administrative expenses were three 6%.
Tim: Compared with three 4%.
Tim: Prior year periods.
Tim: Income from operation operations was RMB, two 3 billion.
Tim: Compared with RMB, two 8 billion in the prior year period.
Mark Wang: Operating Margin was 8.7%. compared with 10.0% in the prior period. Non-Gap Income from Operations with RMB 2.6 billion. compared with RMB 3.1 billion in the prior period. Non-GAAP operating margin was 10.0%. compared with 11.1%. in the prior period. Net income attributable to VIP shop shareholders was RMB 1.9 billion. compared with RMB 2.3 billion in the prior period. and margin attributable to VIP shop shareholders. was 7.4%. compared with 8.4% in the prior period. Net income attributable to VIP shop shareholders per diluted ADS. was RMB 3.72 compared with RMB 4.18 in the prior period. Non-government income attributable to VIP shop shareholders was RMB 2.3 billion.
Tim: Operating margin was eight 7%.
Tim: Compared with 10.0% in the prior year period.
Tim: non-GAAP income from operations.
Tim: Was RMB two 6 billion.
Tim: Compared with RMB, three 1 billion.
Tim: Prior year period.
Tim: non-GAAP operating margin was 10.0%.
Tim: Compared with 11, 1% and the <unk>.
Tim: Prior year periods.
Tim: Net income attributable to <unk> shareholders was RMB, one 9 billion.
Tim: Comparable was RMB, two 3 billion in the prior year period.
Tim: Net margin attributable to VIP shops shareholders.
Tim: We're seven 4%.
Tim: Compared with eight 4% in the prior year period.
Tim: Net income attributable to VIP shops shareholders per diluted ads.
Tim: Was RMB three.
Tim: 72 <unk>.
Tim: <unk> 4.18.
Tim: In the prior year period.
Tim: non-GAAP net income attributable to discuss shareholder was RMB two 3 billion.
Mark Wang: compared with RMB 2.6 billion. in the prior period. Non-capital margin attributed to VIP shop shareholders was 8.8% compared with 9.3%. in the prior period.
Tim: Compared with RMB, three 6 billion.
Tim: Higher year period.
Tim: non-GAAP net margin attributable to beneficial to.
Tim: Shareholders were eight 8%.
Tim: Compared with nine 3%.
Tim: In the prior year period.
Mark Wang: Non-Gap Debt Income Attributable to VIP Shop Shareholders or diluted ADS. RMB 4.43 compared with RMB 4.66 in the prior period.
Tim: non-GAAP net income attributable to VIP shop shareholders.
Tim: Diluted.
Tim: With RMB one.
Tim: <unk> 43.
Tim: Compared with RMB 466.
Tim: In the prior year period.
Mark Wang: As of March 31st, 2025. The company had a cash and a cash equivalent. and a restricted patch of RMB. $28.9 Billion and short term investment of RMB 192.3 million.
Tim: As of March 31, 2025.
Tim: The company had cash cash equivalents.
Tim: And our restricted cash.
Tim: RMB.
Tim: 28 or $9 billion.
Tim: And short term investments of RMB $192 3 million.
Mark Wang: Looking forward to the second quarter of 2025. We expected our total net revenues to be between RMB 25.5 billion and RMB 26.9 billion. representing a year-over-year decrease. of approximately 5% to 0%.
Tim: Looking forward to the second quarter of 2025.
Tim: We expected our total net revenues.
Tim: To be between RMB, $25 5 billion and.
Tim: And RMB 20 649 billion.
Tim: Representing a year over year decrease.
Tim: Approximately 5% to timber to zero percent.
Mark Wang: Please note. This forecast reflects our current and a preliminary view of the market. No creational conditions. which is subject to change.
Tim: Please note.
Tim: This forecast reflects our current and preliminary view of the market now.
Tim: On the operational conditions.
Tim: Which is subject to change.
Jessie Zheng: with that I would now like to open the call to Q&A. Thank you.
Tim: With that.
Tim: I would now like to open the call for Q&A.
Operator: To ask a question you'll need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again.
Tim: Thank you to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.
Operator: We kindly ask analysts to translate questions into Chinese if you are bilingual. Please stand by while we compile the Q&A roster. Thank you.
Speaker Change: We kindly ask analysts to translate question into Chinese if you all by Nick <unk>. Please standby, while we compile the Q&A roster.
Tim: Okay.
Tim: Thank you.
Operator: We'll now take our first question.
Tim: We will now take our first question.
Thomas Chong: First question is from Thomas Chong from Jeffreys. Please go ahead. Good evening, thank you for accepting my question. My first question is, in the past few months, has there been a significant change in consumer sentiment? Can you share with us if there has been any changes in 618 compared to last year?
Speaker Change: First question is from Thomas Chong from Jefferies. Please go ahead.
Thomas Chong: Hey, good morning.
Tim: Tom It's all of that.
Tim: And what the Goldman TNF.
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Tim: Nick.
Unknown Executive: Thanks management for taking my question. My question is about the recent consumer sentiment. events happening like TARIF, macro headwinds, etc., and how we should think about the revenue and the earnings outlook for the full year 2025. And my second question is about the upcoming Juneteenth campaign. Can management comment about the latest sentiment and how the events are different from last year or similar to last year from an industry perspective? Thank you.
Tim: Basketball.
Speaker Change: Thanks management for taking my question. My question is about the visa is consumed.
Tim: Amen.
Tim: Can management comment about.
Tim: The monthly trend so far.
Tim: Until then.
Tim: Then last follow up.
Tim: You bet, it's happening like however, Matt.
Tim: Macro headwinds that's true and.
Tim: And how we should think about the Bakken Neal and the earnings outlook for the full year trying to quantify.
Tim: And my second question is about the upcoming picnic teams campaign.
Tim: Can management comment about.
Tim: The latest.
Tim: Sentiment.
Tim: And how are you Brian.
Tim: Starting from last year or similar to last year.
Tim: From an industry perspective, thank you.
Unknown Executive: Okay, let me answer this question. The overall consumer trend for 2025 is very general in January and February. Because many of the consumption in the Spring Festival was last year. So January and February are very general. In March, there are some improvements. The situation in April and May looks a little better than in March. So this is the overall consumer trend we are seeing at the moment.
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Unknown Executive: In addition, we look forward to our own income. Because in Q1 and Q2, we are actually negative growth. Negative growth may be 0 to negative 5. But we hope that in the second half of the year, for example, in Q3 or Q4, we will turn positive. That is, how do we twist it back. So I hope that JV will also turn positive. In addition, for the entire year's profit forecast, we think that we still have some ways in terms of profit. We are also relatively stable. So in theory, we think that this year's profit rate will not be too different from last year's profit rate.
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Unknown Executive: So overall, even if the business is not good this year, or in the first half of the year we are 0 to negative 5, it may be better in the second half of the year. So we think that the overall GMV will not fall sharply. So we say to fight for positive. In terms of profit, we believe it is stable.
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Unknown Executive: Secondly, regarding 618, as of now, all e-commerce companies in 618 have been running for a long time, for a month. Since May 17th, everyone has been running for a month. So now, in fact, many consumers also reacted, that is to say, e-commerce companies have been running for such a long time, everyone is actually a little bit against it. In addition, back in the day, consumers liked to stockpile goods. But now, looking at the overall environment, everyone thinks that they can buy anything at any time, so they don't need to stockpile. In addition, it's not that everyone has to choose some really good and valuable things to buy.
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Tim: Yes.
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Unknown Executive: As we said, if it's not valuable, everyone will buy less. So we actually see the overall Chinese consumer trend. We say that everyone is getting more and more... It's not like buying and selling at random back then. So maybe it's really choosing something valuable or your own necessity to pay for these things. So this is roughly my description.
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Eric Shen: Okay, regarding your first question on consumption, I think in the past few months we do see signs of improvement in overall consumption sentiment. After muted start in January and February, actually we do see some marginal improvement in March in terms of sales and into the second quarter, April plus May to date, we see actually even better sales momentum. Um, and for the 2025 full year out. We maintain our view that we are going to will regain growth track in the second half, in the third quarter or the fourth quarter, after a negative five to zero growth trend in the first half.
Tim: Okay regarding your first question.
Tim: Consumption.
Tim: I think in the past few months, we do see signs of improvement taking over or consumption sentiment.
Tim: After muted.
Tim: In January and February actually we do see some modeling improvements in March in terms of sales.
Tim: The second quarter.
Tim: April cloud native data.
Tim: <unk> actually even better.
Tim: Jim.
Tim: And therefore, the 10 attended by full year outlook.
Tim: We men and.
Tim: We're dealing with.
Tim: We are going to.
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Tim: We regained growth track in the second half.
Tim: Third quarter or the fourth.
Tim: Quarter.
Tim: After.
Tim: Net 2520.
Mark Wang: And on margin, so we have a good command of our overall profit.
Tim: Gross churn in the first half.
Tim: On margins. So we have a good kumamoto for overall profitability.
Tim: Disciplined.
Unknown Executive: Unknown. Thank you. We maintain our new margins as well. We believe that on a four-year basis, our net margins will be largely comparable to what we had achieved in 2016. And in terms of the second question on the June 18th promotion, actually, you may have noticed that the industry promotion quite evently in large among and consumers are growing accustomed to this promotion. everything is readily available.
John: Gentlemen, John.
Tim: Management also.
Tim: We maintain our view.
Tim: Margins as well.
Tim: Please.
Tim: From a full year basis, our net margin will be largely comparable as we had achieved in.
Tim: Tony hunting for.
Tim: Yeah.
Tim: And.
Tim: In terms of the second question on.
Tim: On June 18th promotion.
Tim: Anthony.
Speaker Change: You may have noticed that the industry promotion has been quieter than the lost among.
Speaker Change: Among them.
Speaker Change: Consumers outgrowing our customer too.
Tim: Promotions in the subsidies.
Tim: Everything is readily available they actually don't have to.
Unknown Executive: They actually don't Unknown Executive, Alicia Yap, Ronald Keung, Thomas Chong, Eddy Wang, Wei Xiong, Jessie Zheng, Jialong Shi, Vipshop Holdings value, how they focus on ideals. So they are still responding. Promotions if these are these, you know, they do have a shopping needs in terms of family and seasonal. but the overall trend becomes quite normalized. for VIP shop. We just focus on unique quality and off-price. You know, value for money, a deal for consumers. Thank you.
Tim: Stockpile anything.
Tim: They do look for.
Tim: That is why the focus on deals.
Tim: Responding to.
Tim: Promotions.
Tim: I think they do have more shopping.
Tim: In terms of Sandy and a 6 million sessions.
Tim: But the overall churn you have become quite small lines will ever body. So from VIP Shao Lee just a focus on providing.
Tim: You make a quality.
Tim: Off price.
Tim: That is money deals for consumers.
Tim: Thank you.
Tim: Thank you.
Operator: We'll now take our next question.
Tim: We will now take our next question.
Alicia Yap: This is from Alicia Yap from Citigroup. Please go ahead. Hi, thank you, Shen Zhong, Mark Zhong, Jessie, good evening, thank you for accepting my question. I actually have two questions. One is about, although our business is not directly related to cross-border e-commerce, this tariff is not directly related, but I am curious to know if there are some, because in April or these two months, some of the clothes and accessories that were originally exported to the market, in April or May, were there any that were temporarily transferred to the domestic market for sale, and this affected some users' needs to switch to other platforms?
Speaker Change: This is from Alicia Yapp from Citigroup. Please go ahead.
Alicia Yapp: Hi, Thank you.
Tim: Joe.
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Joseph Cohen: Joseph Cohen CEO.
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Tim: Tony.
Speaker Change: Now equals one youll quarter shade Shaw, John Johnson Tommy chips.
Alicia Yap: The second question is, I don't know if we are considering a second listing in Hong Kong. I will translate it myself. apparel that's supposed to aim for the export market, that were temporarily diverted to the domestic market in April or the last couple months, that actually attract away some of the user demand to the competitor sites. Second quick question is that, just wondering if our management or company have any view about potential secondary listing in Hong Kong. Thank you.
Speaker Change: Hello, Thiago once you do it for all but I'll mention Daniel Neal Isa.
Joseph Young: Joseph Young gotten done.
Speaker Change: Yes, Thanks management for taking my question.
Speaker Change: Have a question related to the.
Speaker Change: The tariff understand our business does not have a direct collaboration with the cross border sales and also the tariffs, but just wonder.
Speaker Change: Some of this.
Speaker Change: Excess supply from apparel desktop hosts to Anne for the export market that would temper lobby.
Speaker Change: To the domestic market in April or the last couple of months that attract always some master user demand too.
Speaker Change: The competitor sites second quick question is that just wondering if management company have any view about potential.
Speaker Change: <unk> listing in Hong Kong. Thank you.
Eric Shen: I will answer the first question, and Mark will answer the second question. Because we don't export, we have little impact on tariffs. Maybe some health products, American health products, are affected. But it's not a big deal. Some American products are not produced in the U.S. So tariffs are not added. We also see that in April, the country also advocated that we start to connect foreign trade enterprises to each platform. But it takes some time for foreign trade enterprises to move in. For example, it used to be the right to do foreign trade, but now it has to be transformed.
Speaker Change: No we work with Opdivo and <unk> women E mail number women pieces.
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Eric Shen: In China, the standard Chinese label verification is not so fast. So we are still connecting. But now we see that tariffs are a little less tense than before. But in the future, these foreign trade enterprises will also take some two-way roads. So give more time. I believe that there will be more good foreign trade enterprises in the supply chain. It will also see China's domestic market as a backup or a plan. So what we see now is that the overall foreign trade turnover is not as fast as we thought.
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Mark Wang: Let me translate. In terms of the tariff question, we have very limited exposure. and we do have a very limited amount. all among you as already. And in terms of for company. the massive market, we do see that because in April, we already started to work. going to see the possibilities to help. But it takes time because there are a lot of different standards for export versus demand. and Trademark and Quality Certification, etc. We believe over time. Expo companies, especially with quality. We will choose the American market as one of the options for them to gain a wider market.
Speaker Change: Neither market gathered.
Speaker Change: Let me translate.
Speaker Change: In terms of the tariff.
Speaker Change: <unk>.
Speaker Change: We have very limited exposure.
Speaker Change: Uh huh.
Speaker Change: And we do have a very limited amount.
Speaker Change: Hey, Ross.
Speaker Change: Christian so far in the U S market.
Speaker Change: Health care products.
Speaker Change: Among U S origins product.
Speaker Change: Oh, yes.
Speaker Change: Sure Barry.
Speaker Change: And in terms of.
Speaker Change: Ethical companies trying to dive, whereas they are at.
Speaker Change: Homegoods to domestic market.
Speaker Change: It does.
Speaker Change: You see that the closing April.
Speaker Change: Have already starting to work with.
Speaker Change: Hudson.
Speaker Change: Trying to see the consequences.
Speaker Change: Help them.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Customers.
Sure.
Speaker Change: But it takes time because they are novel.
Speaker Change: Different vendors.
Speaker Change: Go ahead.
Speaker Change: Domestically.
Speaker Change: Products in terms of well, Brian trademark and quality certifications et cetera.
Speaker Change: We believe over time.
Speaker Change: Excellent.
Speaker Change: Specialty.
Speaker Change: Uh huh.
Speaker Change: Quality supply chain capability.
Speaker Change: The mark to market one of the options for.
Speaker Change: For them too.
Speaker Change: Wider.
Mark Wang: wider a base of consumers within China. and we are trying to grab any opportunity. arising from that in terms of, you know, getting a fit to our culture, our brand. But it takes time.
Speaker Change: Oh wider are based off while consumers dong within China.
Speaker Change: We are trying to grab any opportunities.
Speaker Change: Arising from that and Ken Zaslow.
Speaker Change: Two oncology up rent declines et cetera.
Speaker Change: It takes time.
Mark Wang: Okay, Eddy, thanks for your question regarding the Hong Kong listing. And we have been closely following changes in the capital market development. and evaluating the options of Hong Kong listings internally. So we'll keep the market posted if there's any progress.
Speaker Change: Okay.
Speaker Change: Thanks for your question regarding the Hong Kong listing and we have been closely following changes in the capital market developments and are evaluating the option of Hong Kong listing internally.
Speaker Change: So we will keep the market posted if there is any progress. Thank you.
Speaker Change: Thank you.
Operator: We'll now take our next question.
Speaker Change: We will now take our next question.
Wei Xiong: This is from Wei Xiong from UBS. Please go ahead. Good evening, management. Thank you for accepting my question. I have two quick questions. The first one is about our SVIP.
Speaker Change: This is from <unk> <unk> from UBS. Please go ahead.
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Speaker Change: <unk> quite a bit.
Speaker Change: Macquarie gentlemen, Doug <unk> with Jefferies. Your Toby I'll, let Jeff No nomination glad he's from Goldman Sachs AMA, Jean <unk> Hello.
Wei Xiong: Because the members have been increasing steadily, can you update the management to further stimulate and transform our SVIP strategy? Also, what is our goal for the second half of the year and next year? The second question is also a quick one. In terms of the competition pattern in the e-commerce industry, have we seen any updates in terms of the uncertainty of the macro? I will translate it myself. Thank you, management, for taking my questions. I have two questions. The first one is regarding our SVIP program. We can see the SVIP member growth has been very steady over the past few quarters.
Speaker Change: So I'm going to ask Jackie Scott about Gigamedia logical thoughtful.
Speaker Change: So that will be pushed up beyond that Dr. Vishal quite of Lindsay Joseph.
Speaker Change: Yeah, Julian the children closed thumbs up from the line of JDSU, Jeff Mccall.
Speaker Change: I would now like to GSI.
Speaker Change: Thank you management for taking my questions.
Speaker Change: Two questions. The first one is regarding our <unk> VIP program, we can see the asset team member growth has been very steady over the past few quarters can we please update our strategy here to further drive to ask the FTE growth going forward and do we have any goal for the second half and next year.
Wei Xiong: Can we please update our strategy here to further drive the SVIP growth going forward? And do we have any goal for the second half and next year?
Wei Xiong: And second, just a quick one, could management update the competitive landscape change you have seen over the past few months amid the macro uncertainty for the e-commerce competition? Thank you.
Speaker Change: Just a quick one can management update the competitive landscape change you have seen over the past few weeks amount over the past few months amid the macro uncertainty for the E Commerce competition. Thank you.
Speaker Change: Neither woman kitchen sink with Opdivo and <unk> as a woman is S. VIP the Thunder for example.
Eric Shen: I would like to answer the first question first. We think that the growth of SVIP is very good. We think that it is not a problem to maintain a double-digit growth all year round. We also think that the growth of Q1 is very good. We also think that the growth of Q2 is very good. And our policy is relatively stable. We think that the growth of SVIP is not a problem. In addition, we are also thinking about more good things. We are thinking about how to sell our SVIP exclusively or sell it to our SVIP first.
Speaker Change: The woman, who generally senior in the trend in some of the symptoms on May one.
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Speaker Change: <unk>, Inc.
Speaker Change: Woman. She said one generally SBS it didn't have was the winner.
Speaker Change: Thanks, John for the how do we seek the most job this was real quick.
Speaker Change: That might be less VIP codes as Jim maybe on the SBA piece.
Eric Shen: Because we want to accumulate more unique value for SVIP, make it feel loyal, including the unique experience, etc. In this case, we believe that we will do these better. We believe that more SVIP will come, including the annual revenue of SVIP will be higher. So we are also actively thinking about various ways to accumulate the amount of our SVIP. We believe that because the sales of these SVIP have already accounted for 51% of us, the future may be higher. So we actually have to take good care of these SVIP users.
Speaker Change: We will ensure that uses Shang Chile.
Speaker Change: Pete as to be able to take that.
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Speaker Change: That sounds upon the what MS young seem to see a woman by <unk> 17.
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Eric Shen: The second is about the industry's pattern. As we all know, the industry is very complex. The e-commerce industry is also in a very bad situation. If we want to survive in the e-commerce industry, we have to stick to our trademark. We used to be a discount company, and we are a top-notch e-commerce company. We have to be a good brand, with a good price, and a good service. We don't care how the outside world thinks about us. For example, there are a lot of models. Whether it's selling, broadcasting, or e-commerce, we believe that we should continue to dig deep in our existing business, and continue to accumulate our advantages, especially the advantages of cooperating with brands.
Speaker Change: Beyond that discipline and unique.
Speaker Change: Good job.
Speaker Change: Two doctors choose upon years of agenda.
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Speaker Change: Then way switch as to what the highs it shouldnt be that settlement, so just kenya with into the year with solid tissue somewhat the mud tissue, Chile women they use.
Speaker Change: <unk> is a complete package.
Eric Shen: We should focus on low-discount products, such as online discounts. I think that in this area, we may have some space. So our overall pattern, and our overall pattern for the future, and our own positioning. So first on SVIP customers, we do see very solid momentum in the growth of SVIP customers. And it has extended continue. in Q1 and Q2. and we think we have a very strong confidence. continue to achieve. for the full year of 2019. And of course, we are also working on a lot of international provide a more unique, exclusive product off. all through inviting a private sale.
Speaker Change: So that you don't use the Moe.
John to that woman digital duck Pizza a quota.
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Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: First on VIP customers.
Speaker Change: We do see very solid momentum in our Broadsoft VIP customer.
Speaker Change: It has doubled.
Speaker Change: Double digit growth as one zebra.
Speaker Change: It continues to be so.
Speaker Change: In Q1, and Q2 to date.
Speaker Change: We think we have very strong confidence that we can continue to achieve double digit growth.
Speaker Change: It is customary.
Speaker Change: For the full year of kind of any fine and.
Speaker Change: We're also working.
Speaker Change: A lot of initiatives too.
Speaker Change: Drive the SDLP customer growth.
Speaker Change: In terms of.
Speaker Change: Merchandising, we're trying to provide more.
Speaker Change: Exclusive.
Speaker Change: Uh huh.
Speaker Change: Off price.
Speaker Change: Uh huh.
Speaker Change:
Product offerings.
Speaker Change: In light of maybe a private sale to attract more at the VIP customer.
Eric Shen: are more. and by doing so we believe that increase the retention. and others. Thank you. online spending will grow from the current to even a higher level in the foreseeable future.
Speaker Change: And by doing so we believe that well.
Speaker Change: Increased retention VIP customer.
Speaker Change: And we do believe that.
Speaker Change: Over time.
Speaker Change: CIP contribution inkjet in soft launch.
Speaker Change: All lines spending will grow from the current 51%.
Speaker Change: Two.
Speaker Change: To even.
Speaker Change: A higher level.
Speaker Change: Foreseeable future.
Eric Shen: and second in terms of industry Apparently, it's a very hyper competitive. environment. We believe only way for VIP shop to survive. compete and to win in this e-commerce market. to remain anchored to the value proposition of discount retail for rent. and although there are a lot of. business models in terms of how to sell. live streaming platforms or shell-based e-commerce. But the long term Unknown Speaker 1. Thank you. In terms of where they choose to shop, there have always been great merchandise, great prices and great services. So we will continue to deepen our initiatives in terms to enhance the flywheel from merchandise.
Speaker Change: And second in terms of industry dynamics, apparently it's a very.
Speaker Change: Hyper competitive.
Speaker Change: Environment.
Speaker Change: We believe that the only way, it's all VIP shop to survive.
Speaker Change: Mitchell.
Okay.
Speaker Change: In the e-commerce sector.
Speaker Change: Sure.
Speaker Change: Turning to the value proposition of <unk>.
Speaker Change: Retail for Bren.
Speaker Change: Going forward.
Speaker Change: Tony.
Speaker Change: This is <unk> Chung from call to sell the products, including a live streaming platform or shell.
Commerce.
Speaker Change: Hey.
Speaker Change: Long term factors that drive consumers in terms of.
Speaker Change: In terms of where they choose to shop has always been.
Speaker Change: Great merchandise at great prices and great.
Speaker Change: Great services.
Speaker Change: So we will continue to.
Speaker Change: Deepen our.
Speaker Change:
Speaker Change: Misha tests in terms to enhance the flywheel from merchandise too.
Eric Shen: are valued to customer. would believe that by remaining highly focused. and Gizcon Retail for Brands. online. and this is the gateway for consumers to access our deep We believe we have the capabilities and. Thank you.
Speaker Change: Two customer engagement.
Speaker Change: We believe that by remaining highly focused on.
Speaker Change: This call retail for Bren.
Speaker Change: Gradually become online outlet.
Speaker Change: Thank you.
So basically to all consumers.
Speaker Change: Deep discount.
Speaker Change: Offering.
Speaker Change: We believe we have the capabilities and the capacity to compete in this market.
Speaker Change: Thank you.
Operator: We will now take our next question.
Speaker Change: We will now take our next question.
Jialong Shi: This is from Jialong Shi from Nomura. Please go ahead. Hi, Mr. Shen, Jessie, and Peter. Good evening. Thank you for accepting my question. I have a few questions.
Speaker Change: This is from Jia long <unk> from Nomura. Please go ahead.
Hey.
Speaker Change: Thanks Jesse.
Speaker Change: It sounds like you could get harder hit in <unk>.
Speaker Change: Or maybe to answer your call.
Jialong Shi: First, can you share with us the latest SVIP purchase frequency, the quarterly purchase frequency, and the ARPU trend? How is it compared?
Speaker Change: Got.
Speaker Change: Sure.
Speaker Change: Thanks, Doug.
Speaker Change: I think the SVI Jason.
Speaker Change: Go Maxine Tito connections.
Speaker Change: Our full <unk>.
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Speaker Change: Tissue system, Yonder downhaul mainland to Hawaii tertiary.
Jialong Shi: Second, can you tell us the latest SVIP purchase frequency trend and how it compares to the previous SVIPs? Third, I would like to know that although we are facing various challenges in the current business environment, the management team has given 75% of the profits last year to the shareholders. Is this trend still the same?
Speaker Change: Hey, guys.
Speaker Change: In Q2, the tick tick tick Ashish. Thank you James Sidoti Ishares, Yonder designed novartis or Shanghai.
Speaker Change: And then <unk> got plenty of Tom.
Speaker Change: Again gauge for that.
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Speaker Change: Sure sure sure sure way to.
Jialong Shi: I will answer these three questions myself. These challenges for the e-commerce industry, I just wonder if management still maintains the previous capital return guidance for this year. Thank you.
Speaker Change: To address that.
Speaker Change: Thanks Scott.
Speaker Change: Good evening management I have three questions and the first question is what is that its trend excuse me what is the latest trend.
Speaker Change: What is the latest shopping frequency ARPA trend for Super VIP members and the second question is what is the latest trend for your return rate.
Speaker Change: And third and last question is just by August tonnages.
Speaker Change: For the e-commerce industry just one.
Speaker Change: Management still maintained our previous capital return guidance for this year. Thank you.
Mark Wang: The first question I want to answer is about SVIP. Our SVIP is relatively stable. We can see that their annual uptrend is falling. The main reason is that we have a lot of new SVIPs. New SVIPs increase a lot. If we look at the same SVIP in the past two years, their uptrend is slightly falling. If we look at the total SVIP, it will fall more than this. In general, we look at the loyalty of SVIP, the number of visits, the number of purchases, etc. It will fall a little bit more than before. There is not much change.
Speaker Change: We will quit.
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Speaker Change: The up for chooses to.
Speaker Change: At the moment to the other good news.
Speaker Change: Even what machine the S VIP with Thomas <unk>.
Speaker Change: The <unk> will come.
Speaker Change: Sure Yes.
Speaker Change: We had peaked.
Speaker Change: We did.
Speaker Change: So we did the Mizuho can go to the SBA piece with did a piece of the Deutsche <unk> S. VIP, the Thompson to LIFO and <unk> <unk>.
Speaker Change: And I gave the India <unk> Mackay.
Mark Wang: We are looking for better SVIPs to meet the needs of consumers. We are talking about personalization and promotion. We want them to be able to buy a lot of SVIPs that their family needs. We have a lot of SVIPs, but some of them are not our strengths. We are looking for more SVIPs to meet the needs of consumers.
Speaker Change: So you saw what many cheesy at Asia, the Monaco, how the placebo nine.
Speaker Change: <unk> just yourself, Peter <unk> Nikko to assortment Jamba Cushing quietly sold all quarters.
Speaker Change: No.
Speaker Change: Adaptive charging so cheap.
Speaker Change: Predominantly we will be conducting.
Speaker Change: Looking Lena you mentioned that <unk> was the one.
Speaker Change: Sure. Thanks, Sean.
Speaker Change: So just hoping to the streets.
Mark Wang: The second question is about the return rate. We are relatively stable, because we don't have this kind of big ups and downs policy. In fact, many years ago, it has always been this kind of policy. That is, we started implementing the unconditional on-the-door refusal very early. So we actually see that the return rate every year is probably a little more than two points up. Because like other platforms, it may be very strong in recent years. But in fact, in the past six or seven years, it may increase by more than two points every year. But I guess the entire consumer, the consumer of Chinese e-commerce, actually has higher and higher requirements for e-commerce services.
Speaker Change: The material or the wind future supply in U 200 number will Mitch just a quick one.
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Speaker Change: A woman chooses to do Chilean Buck kind of mania, yet because it's suddenly a good tortilla.
Speaker Change: Two quite upon the keeping will move toward Gucci to us it's a good healthy too soon.
Speaker Change: Sunday is helping too.
Speaker Change: What we saw that coming through yes, its really the adult space, where the Canadian citizens, just opinion, while liquid yoyo, which Sheila <unk>.
Mark Wang: So we estimate that this increase will continue every year.
<unk> unique.
Mark Wang: Okay, first let me translate your first two questions. In terms of the SBIP operating metrics, it has been quite successful. up wise and we do diluted impact from new SBI. We need time. and Inc. But if you look at the two-year cohort. and we are trying to leverage more unique. exclusive merchandising to increase the loyalty frequency we do see a lot of potential there because a lot of because many of our FBID customers are family shoppers who look to shop across It's just a matter of time for us to, you know... and to increase these, to translate this across category purchase potential into growth.
Speaker Change: Now Megan CFO likely.
Speaker Change: Okay.
Speaker Change: Any chance Tonight.
Speaker Change: Two questions.
Speaker Change: In terms of VIP operating metrics that it has been quite stable.
Speaker Change: <unk> lives and we do see a small decline.
Speaker Change: Diluted impact on mute.
Speaker Change: We need time to ramp up that spending.
Look at the two year.
Speaker Change: As VIP customers actually declined so much.
Speaker Change: Smaller.
Speaker Change: We are trying to leverage.
Speaker Change: Kent.
Speaker Change: Exclusive on merchandising to increase the loyalty of frequency and cross category opportunities.
Speaker Change: I'd customer.
Speaker Change: And we do see a lot of potential there because a lot of that because many of our VIP customer in Asia.
Speaker Change: First of all look too.
Speaker Change: Sure.
Speaker Change: Across categories.
Speaker Change: Lastly, just a matter.
Speaker Change: Time to optimize our personal lines.
Speaker Change: Our recommendation to increase.
Speaker Change: To translate these.
Speaker Change: Ron.
Speaker Change: Category purchase.
Speaker Change: Sure.
Mark Wang: in terms of return rates, overall the return in the past quarter, it has increased by a little bit over to Office Energy Point. We have a very stable return policy for customers and in the past six to seven years.
Speaker Change: Growth.
Speaker Change: In terms of return right overall, the return rate has been stabilized.
Speaker Change: I think in the past quarter. It has increased by a little bit over.
Speaker Change: Two of the synergy point.
Speaker Change: We have a very stable return policy for customers.
Speaker Change: Six to seven years, and we had been.
Mark Wang: cigar ring. Oh my gosh. moderated over time to a low single digit increase every year, rather than and others.
Speaker Change: Adhering to that policy.
Speaker Change: Why all retirees.
Speaker Change: Moderate overtime to a low single digit.
Speaker Change: Increase ever.
Speaker Change: Every year.
Rather than.
Mark Wang: Thank you.
Unknown Executive: Transcription by CastingWords I'll sum up.
Speaker Change: Dramatic increases.
Speaker Change: Those are some of the other platforms.
Mark Wang: Okay, Jialong, regarding your third question, let me give you a full picture for this point. So although we are facing short-term pressure and the dynamic industry change, we have a solid business model and with disciplined operations and a solid execution, so we are confident that we can achieve relatively stable and healthy profits in the cash-in flow. So we have returned over 3 billion US dollars to shareholders since April 2021 in the form of buyback and dividends. And year-to-date, we have returned over 400 million U.S. dollars to shareholders, which include approximately 250 million U.S. dollars in annual dividend distribution.
Speaker Change: Okay regarding your effect of your third questions.
Speaker Change: Let me give you a full picture for this point so although we are facing short term pressure in the dynamic industry change we.
Speaker Change: Have a solid business model.
Speaker Change: With disciplined operations and the solid execution. So we are confident that we can achieve relatively stable and healthy profit and the cash inflow.
Speaker Change: So we have returned over 3 billion U S dollar to shareholders since April 21 in the form of buyback and dividends.
Speaker Change: And year to date, we have returned over 400 million U S dollar.
Speaker Change: Shareholders, which include approximately 250 million U S dollar I know dividend distributions and.
Mark Wang: and over 150 minutes through our Buy Back program. So I would like to emphasize for 2025, as we mentioned before, we are going to return no less than 75% of our full year 2024 non-GAAP net income to shareholders. in discretionary share repurchase and dividend distribution. Thank you.
And over 150 million through our buyback program.
Speaker Change: So I would like to emphasize for 2025 as we've mentioned before we are going to return no less than 75% of our full year 274, non-GAAP net income to shareholders.
Speaker Change: And discretionary share repurchase and dividend distributions.
Speaker Change: Thank you.
Speaker Change: Thank you.
Operator: and I'll take our next question.
Speaker Change: We'll now take our next question.
Eddy Wang: This is from Eddy Wang from Morgan Stanley. Please go ahead. Hello, Mr. Shen, Mr. Mark, and Jessie. Thank you for accepting my question. I have two questions. First, I saw that there is a national subsidy channel in our app. I want to ask, in the first quarter, including this year's second quarter and the second half of the year, can we do more on the editing of the national subsidy? And how much help will it be to us, including the whole GNV and income? This is the first question.
Eddy Wang: This is from Eddy Wang from Morgan Stanley. Please go ahead.
Speaker Change: Hey, Mark So just thinking about how Oh Tijuana.
Speaker Change: What's it been Fernando Valencia.
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Eddy Wang: The second question is, I saw that Shanshan recently posted a rate. So I want to ask, in the first quarter, will more money be invested in Shanshan's development? And will our overall pace be two or three times faster than before? Or do you have other plans? These are my two questions. And I will translate them myself. Thank you, management, for taking my questions.
Speaker Change: Eagle Alteon.
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Speaker Change: I'll add that you thought that sort of a quick I'm quite sure. How is this all kind of what's your how does that what does it level. Once you a whole lot to do.
Speaker Change: Thank you management for taking my questions I have two questions first is about the trading policy.
Eddy Wang: I have two questions. First, it's about the trading policy. I noticed that we have a channel on the app which is focused on the trading program. So I'm just wondering what kind of sales and incremental sales or GNV are actually coming from the trading program? And how should we expect this benefit in the second quarter and the second half?
I noticed that so we have a channel on the App.
Speaker Change: His focus on the trading program.
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Eddy Wang: And the second question is, I just noticed that we have issued a rate for Shanshan Online. So is there any kind of change of the Shanshan strategy after we get the funding fund rate? Thank you.
Speaker Change: Noticed that we have.
Speaker Change: Should our rates for the Samsung <unk>.
Speaker Change: So.
Speaker Change: Is there any kind of change of the.
Speaker Change: Strategy.
Speaker Change: After we get the final fund rates. Thank you.
Eric Shen: Okay, let me answer the first question, and Mark will answer the second one. The first one is that the main reason why we are doing this is that we want to make more money on our home appliances. Our home appliances business is not very successful, especially when it comes to the customers' perception of Vipshop's home appliances. Therefore, we see that making more money on home appliances is not very helpful for our GMV business. We just calculated that it is about 1% of our GMV business. In theory, this will not help our business growth in the short term.
Speaker Change: Yes.
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Speaker Change: So as a tier two asset.
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Eric Shen: So first on the trading program, you know, the trading program mostly covers home appliances. and also consumer. feel a lot by Hold the plane. on VIPshop, they don't have that kind of a mind So in total, we expect.
Speaker Change: Sure.
Speaker Change: So firstly on the trading program.
Speaker Change: Yes.
Speaker Change: Hi.
Sure the trading program I'll take cover.
Speaker Change: Our home appliances of which is.
Speaker Change: Scott.
Sure.
Speaker Change: And also.
Speaker Change: Sure.
Speaker Change: Alongside.
Speaker Change: Client VIP VIP shop.
Speaker Change: All that kind of.
Speaker Change: Sure.
Speaker Change: In total we expect.
Mark Wang: any contribution from be around 1% of our total GMEs, so it's not to have a meaningful Okay, Eddie, thanks for your second question regarding the Shenzhen OLX Greece program. And OLX business in China is huge and fast-growing. The OLX business is a long proven and profitable offline business. Which positioning is also discount retail for brands? Well, Vipshop is also a leading online discount retailer for brands. So definitely, we have, we have huge synergies with outlets business, not only from the brand partner side, but also from the user side. At the end of last quarter, we have 20 Shenzhen outlets.
Any contribution from the trading program Rob.
The around the 1% of our total jammie.
Speaker Change: We're going to be to have a meaningful impact.
Speaker Change: Asia performance.
Speaker Change: Okay. Thanks.
Speaker Change: Thanks for your second question regarding the <unk> program.
Speaker Change: All of that business in China is huge and fast growing.
Speaker Change: It's been as a lung coolant in the profitable of Lumpiness, which positioning is also a discount retail for brand.
Speaker Change: We have Vishal. This is also a leading online discount retailer for brands. So definitely we have we have.
Speaker Change: Huge centers with all its benefits not only from the partner side, but also from the user side.
Speaker Change: At the end of last quarter, we have 20 shows how wellness.
Mark Wang: We are one of the largest OLS group in China. And the underlying assets, Ningbo Shanjing, has been in operation for 14 years. and is one of our best and popular outlets in extension groups. So we have submitted the REIT application documents to the China Securities Regulatory Committee and the Shanghai Stock Exchange for their review and approval. And the rest could be recorded as a financing class. we can respond by enrolling more or less products into race. And the funds can be used to reinvest into new OLS projects and merge and acquisition existing projects. So which will help us to expand our online business more efficiently?
Speaker Change: Well, while we're the largest OLED group in China.
Speaker Change: And the underlying assets nimble Shan Shan.
Speaker Change: Has been in operation for 40 years.
Speaker Change: Well, if our fastener public OLED expansion group.
Speaker Change: So we have submitted.
Speaker Change: The race applications documents to the China <unk>.
Speaker Change: Securities Regulatory committee and the Shanghai stock exchange for their review and approval.
Speaker Change: And the reason it.
Speaker Change: Could be regarded as a financing platform.
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Speaker Change: And the funds can be used to reinvest into new OLED predicts and the merger and acquisition of existing projects.
Speaker Change: It will help us to expand.
Mark Wang: Thank you.
Speaker Change: I'll, let Dennis while efficiently. Thank you.
Speaker Change: Thank you.
Roger Duan: We'll now take our next question. This is from Roger Duan from Barclays. Please go ahead. Thank you for accepting my question. I have a small question about the pace of our marketing and profit margin. You just mentioned that in the second half of this year, we may want to grow and turn GME into real estate. But you also mentioned that from the perspective of the whole year, we hope to achieve a similar level of profit margin as last year. I would like to ask, in the second half of this year, how should we look at the pace of our marketing and subsidies?
Speaker Change: Thank you, we'll now take our next question.
Speaker Change: Okay.
Speaker Change: This is from Roger Duan from Barclays. Please go ahead.
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Roger Duan: Thank you, management, for taking my question. My question is on sales marketing and margins for this year. Management previously mentioned that we want to have GME return to positive growth in the second half of the year, while also maintaining a quite stable margin profile for the remainder of the year. So my question is on how should we think about your marketing campaign cadence and the balance between spending on marketing and maintaining a margin profile for the year. Thank you. We still have control over the market fees. For example, last year, we had a market fee of 2.7 yuan.
Speaker Change: Let's see.
Speaker Change: Thank you management for taking my question. My question is on sales and marketing and margins for this year.
Speaker Change: Previously mentioned.
Speaker Change: Wanted to have Jim you returned to positive growth in the second half of the year, while also maintaining a quite stable margin profile for the remainder of the year. So my question is on how should we think about.
Speaker Change: Your marketing campaign.
Speaker Change: Cadence and the balance between spending on marketing and maintaining margin profile for the year. Thank you.
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Eric Shen: Q1 is 2.8 yuan. We don't want to exceed 3 yuan for the whole year. So, we still have control over the market fees, especially when it comes to LTV. For example, Q1 and Q2, we had a good growth in new customers, but we didn't spend a lot of money. We made a lot of adjustments, including how users see our brand, how they see our sales, instead of just going there to get customers. In fact, this is also a principle in the future for old customers. So, in theory, we still keep our own pace In addition, when it comes to marketing, for example, we do a lot of TV shows, and we make a lot of precise investments.
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Eric Shen: Recently, we have been working with a lot of more powerful media outlets, etc. So, we are actually constantly thinking about all kinds of ways to find the most valuable or cost-effective, and the most rewarding. And in the future, we will look for this kind of investment in a healthy way. So, in general, we are still confident in our spending on the market. In terms of market spend, action market spend has very married. for the rest of the year. for Rawley. and around.
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Speaker Change: So our marketing spend and our concern has been very measured.
Speaker Change: I'm going to do that.
Speaker Change: For the year.
Speaker Change: If you look at our numbers.
Speaker Change: Paul.
Speaker Change: As a percentage of.
Speaker Change: Total revenue was two 7% in Q1 with two 8%.
Speaker Change: We believe.
Eric Shen: is going to be and we continue to evaluate the effectiveness of our marketing initiatives from a lot of Um, so, so we, we, we, we, we, we, we don't believe that, um, um, uh, marketing spend is the only way to drive customer growth. to help. 1 and Q2 growth in UK. Growing Wisely. But we actually don't. And of course, we are trying to diversify our marketing channels, including branding. Unknown. Spending partnerships with major media. And we are trying to look for the most valuable channels for us to invest, that we Renmo Yuan, Kent Arnold, Alan friend, Hannibal Groves in Basically, we have a very good command.
Speaker Change: It's going to be.
Speaker Change: 3%.
Speaker Change: We continue to evaluate that.
Speaker Change: Our marketing initiatives.
Speaker Change: A lot of perspective essentially.
Speaker Change: PV side.
Speaker Change: So we don't.
Speaker Change: We don't believe that.
Speaker Change: Marketing spend is the only way to drive customer growth with combined nation of merchandise.
Speaker Change: Great.
Speaker Change: To drive customer growth.
Q1 and Q2.
Speaker Change: Growth in new customers.
Speaker Change: Lastly, we actually went down so much.
Speaker Change: Marketing.
Speaker Change: And of course the weir.
Speaker Change: Ryan just diversify our marketing channels, including branding.
Speaker Change: Our TV sponsorships.
Speaker Change: And tuck embarking on a lot of external channels.
Speaker Change: Pending partnerships.
Speaker Change: Partnerships.
Speaker Change: Amen.
Speaker Change: And we are trying to look to.
Speaker Change: Look for the months valuable channels.
Speaker Change: Is that we can have the best.
Speaker Change: Hi.
Speaker Change: Bob.
Speaker Change: The Pentagon.
Speaker Change: Quality customer.
Speaker Change: So basically.
Speaker Change: No.
Speaker Change: We have been very good.
Speaker Change: Some of our marketing spend.
Unknown Executive: We don't think. Thank you.
Speaker Change: We don't think it's going to be on track for our margin.
Speaker Change: Thank you.
Jessie Zheng: Due to time constraints, that concludes today's Q&A session.
Jesse: Due to time constraints that concludes today's Q&A session. At this time I will turn the conference back to Jesse for any closing remarks.
Jessie Zheng: At this time, I will turn the conference back to Jessie for any closing remarks. Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next time.
Jesse: Thank you for taking the time to join US today. If you have any questions. Please don't hesitate to contact our IR team.
Jesse: Over to speaking with you next quarter.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Thanks for watching!
Jesse: This concludes today's conference call. Thank you for participating you may now disconnect.
Jesse: Okay.
Jesse: [music].
Jesse: Okay.
Jesse: Okay.
Yes.
Jesse: [music].
Jesse: Okay.
Jesse: [music].
