Q3 2025 Vipshop Holdings Ltd Earnings Call
Speaker #2: Thank you . Operator . Hello , everyone , and thank you for joining VIP Third Quarter 2020 Earnings Conference Call . today With us are Eric Shin , our co-founder , chairman and CEO .
Speaker #2: And Mark Wang , our CFO . Before management begins , their prepared remarks , I would like to that the remind you discussion today will contain forward looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995 .
Speaker #2: Forward looking statements are subject risks and to uncertainties that may cause actual results to differ materially from our current expectations . Potential risks and uncertainties include , but are not limited to , those outlined in our Safe Harbor statements in our earnings release and public filings with the Securities and Exchange Commission , which also applies to this call to the extent any forward looking statements may be made .
Jessie Zheng: Thank you, Operator. Hello everyone, and thank you for joining Vipshop Q3, Q2 2025 earnings conference call. 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 US 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.
Speaker #2: Please note that certain financial measures used on this call , such as non-GAAP operating income , non-GAAP net income attributable to VIP shops , and non-GAAP income per net ads are not presented in accordance with US GAAP .
Speaker #2: Please refer to our earnings release for details relating to the reconciliations of our non-GAAP measures to GAAP measures. With that, I would now like to turn the call over to Mr. Erickson.
Speaker 1: Potential risks and uncertainties include, but are not limited to, those outlined in our safe harbor statements, in our earnings release, and public filings with the Securities and Exchange Commission, which also applies to this quarter to the extent any forward-looking statements may be made. Please note that certain financial matters used this quarter, such as non-GAAP operating income, non-GAAP net income attributable to Vipshop shareholders, and non-GAAP net income per ADS, are not presented in accordance with US GAAP. Please refer to our earnings release for details relating to the reconciliations of our non-GAAP matters to GAAP matters. 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 Q3 2025 earnings conference call. Our Q3 results demonstrate tangible progress on our path back to growth.
Potential risks and uncertainties include, but are not limited to, those outlined in our safe harbor statements, in our earnings release, and public filings with the Securities and Exchange Commission, which also applies to this quarter to the extent any forward-looking statements may be made. Please note that certain financial matters used this quarter, such as non-GAAP operating income, non-GAAP net income attributable to Vipshop shareholders, and non-GAAP net income per ADS, are not presented in accordance with US GAAP. Please refer to our earnings release for details relating to the reconciliations of our non-GAAP matters to GAAP matters. With that, I would now like to turn the call over to Mr. Eric Shen.
Speaker #3: Good morning and good evening, everyone. Welcome and thank you for joining our third quarter 2025 earnings conference call. Our third quarter results demonstrated tangible progress on our path back to growth.
Speaker #3: We are pleased with the clean, with the clear top line expansion led primarily by notable improvement in customer trends and across our core categories.
Speaker #3: Total active customer regained year over year growth , super VIP membership continued to deliver double digit growth in the third quarter . Active super VIP customers grew by 11% year over year , contributing 51% of our online spending .
Eric Shen: Good morning and good evening, everyone. Welcome, and thank you for joining our Q3 2025 earnings conference call. Our Q3 results demonstrate tangible progress on our path back to growth.
Speaker #3: This sustained growth was primarily driven by continuous upgrades to SVP exclusive product and service benefits, coupled with more targeted engagement initiatives, which.
Speaker 1: We are pleased with a clear top-line expansion, led primarily by notable improvement in customer trend and across our core categories. Total active customers regained year-over-year growth. Super VIP membership continued to deliver double-digit growth. In Q3, active Super VIP customers grew by 11% year-over-year, contributing 51% of our online spending. This sustained growth was primarily driven by continuous upgrades to SVIP exclusive products and service benefits, coupled with more targeted engagement initiatives, which effectively convert regular customers. In terms of category performance, we saw accelerated momentum in apparel-related categories through the quarter. Our team successfully delivered a powerful blend of quality, value, and style. This was achieved through the merchandising strategy that highlights high-value brands, trending categories, and popular selling points, all of which are deeply aligned with customer priorities. Against a dynamic industry backdrop, we were navigating this operational environment with agility and efficiency.
We are pleased with a clear top-line expansion, led primarily by notable improvement in customer trend and across our core categories. Total active customers regained year-over-year growth. Super VIP membership continued to deliver double-digit growth. In Q3, active Super VIP customers grew by 11% year-over-year, contributing 51% of our online spending. This sustained growth was primarily driven by continuous upgrades to SVIP exclusive products and service benefits, coupled with more targeted engagement initiatives, which effectively convert regular customers. In terms of category performance, we saw accelerated momentum in apparel-related categories through the quarter. Our team successfully delivered a powerful blend of quality, value, and style. This was achieved through the merchandising strategy that highlights high-value brands, trending categories, and popular selling points, all of which are deeply aligned with customer priorities. Against a dynamic industry backdrop, we were navigating this operational environment with agility and efficiency.
Speaker #3: Effectively converts regular customers in terms of category performance. We saw accelerated momentum in a parallel, really related category through the quarter.
Speaker #3: Our team successfully delivered a powerful blend of quality , value and style . This was achieved through the merchandising strategy that highlights high value brands , trending categories and popular selling points are all of which are deeply aligned with customer priorities against the dynamic industry backdrop .
Speaker #3: We we were navigating this operational environment which agility and efficiency . We are strategically realigned . The organization for long term success , implementing changes to strengthen our unique position as an off price retailer for brands .
Speaker #3: We focused on reinforce the flywheel from merchandising , customer engagement to operation . At our core , we are a merchandising lead company .
Speaker #3: We compete through offering a differentiated assortment. We continue to enhance our leadership in a deep discount product offering, and we are deep.
Speaker 1: We strategically realigned the organization for long-term success, implementing changes to strengthen our unique position as an off-price retailer for brands. We focused on reinforcing the flywheel from merchandising, customer engagement, to operation. At our core, we are a merchandising-led company. We compete through offering affordable and differentiated assortments. We continue to enhance our leadership in a deep discount product offering, and we are deepening our category specialization to curate product offerings that deliver great relevance and distinct value. We start to see new momentum in customer and sales by acting upon engaging bright spots and customer performance. As an example, we are rebuilding our maternal and childcare division to better integrate relevant apparel and non-apparel categories. This reshaped assortment is designed to foster cross-category growth and create lasting value for customers as they journey through different life stages.
We strategically realigned the organization for long-term success, implementing changes to strengthen our unique position as an off-price retailer for brands. We focused on reinforcing the flywheel from merchandising, customer engagement, to operation. At our core, we are a merchandising-led company. We compete through offering affordable and differentiated assortments. We continue to enhance our leadership in a deep discount product offering, and we are deepening our category specialization to curate product offerings that deliver great relevance and distinct value. We start to see new momentum in customer and sales by acting upon engaging bright spots and customer performance. As an example, we are rebuilding our maternal and childcare division to better integrate relevant apparel and non-apparel categories. This reshaped assortment is designed to foster cross-category growth and create lasting value for customers as they journey through different life stages.
Speaker #3: We are deepening our category specialty specialization to curate product offering that deliver great relevance . And this distinct value , we start to see new momentum in customer and sales by acting upon engaging bright spots and customer performance as an example , we are rebuilding our methanol and child care division to better integrate relevant apparel and nonparallel categories .
Speaker #3: This reshaped assortment is designed to foster cross-category growth and create lasting value for customers as they journey through different life stages.
Speaker #3: We are bringing this level of specialty specialization across each category in our business. In addition, we have opportunities to scale through our differentiated product portfolio.
Speaker #3: One is made for VIP shop , which again delivered a strong growth in the sales quarter . We are deepening our collaboration with more high value brand partners .
Speaker #3: The team is capitalized on our categories , insights to motivate brands to to allocate and create more incident and on trend supplier and at competitive competitive price .
Speaker 1: We are bringing this level of specialization across each category in our business. In addition, we have opportunities to scale through our differentiated product portfolio. One is made-for-Vipshop, which again delivered strong sales growth in the quarter. We are deepening our collaboration with more high-value brand partners. The team is capitalizing on our category insights to motivate brands to allocate and create more in-season and on-trend suppliers at competitive prices. A compelling case in point is a leading running shoe brand, which drove 50% of its September sales on our platform from made-for-Vipshop after making selected popular items exclusive to us. Another case is a leading women apparel brand, which built sales momentum by customizing more deep discount, high-demand offerings from its inventory fabrics.
We are bringing this level of specialization across each category in our business. In addition, we have opportunities to scale through our differentiated product portfolio. One is made-for-Vipshop, which again delivered strong sales growth in the quarter. We are deepening our collaboration with more high-value brand partners. The team is capitalizing on our category insights to motivate brands to allocate and create more in-season and on-trend suppliers at competitive prices. A compelling case in point is a leading running shoe brand, which drove 50% of its September sales on our platform from made-for-Vipshop after making selected popular items exclusive to us. Another case is a leading women apparel brand, which built sales momentum by customizing more deep discount, high-demand offerings from its inventory fabrics.
Speaker #3: A competitive, compelling case in point is a leading running shoe brand, which drove 50% of its September sales on our platform from Made for VIP.
Speaker #3: After making selected popular items exclusive to us, another case is the leading women's apparel brand, which builds sales momentum by customizing more deep discounts.
Speaker #3: High-demand offerings from our inventory of fabrics. The other line of differentiation is the carefully curated portfolio of popular items, which we proactively source from both domestic and global brand partners.
Speaker #3: We've seen strong momentum when we offer the right blend of quality, value, and style, giving the fashion relevance. It generates a wide appeal among young and middle-class customers who increasingly come back to enjoy the fun of flash sales and the treasure hunts. Beyond the merchandising, it's about how we do better in apparel for our customers.
Speaker 1: The other line of differentiation is a carefully curated portfolio of popular items, which we proactively source from both domestic and global brand partners. We've seen strong momentum when we offer the right blend of quality, value, and style, and given the fashion relevance, it generates wide appeal to young and middle-class customers who increasingly come back to enjoy the fun of flash sales and the treasure hunts. Beyond the merchandising is how we do better to appeal to customers. In addition to sustaining strong mindshare with our core customer cohorts, we are actively experimenting with new marketing formats such as infused content and short-form dramas by adopting an integrated strategy across marketing, growth, and engagement. We are seeing early wins. This approach enables a disparate balance of cost efficiency and strategic reinvestment, improving our performance in acquiring, actively, and retaining customers.
The other line of differentiation is a carefully curated portfolio of popular items, which we proactively source from both domestic and global brand partners. We've seen strong momentum when we offer the right blend of quality, value, and style, and given the fashion relevance, it generates wide appeal to young and middle-class customers who increasingly come back to enjoy the fun of flash sales and the treasure hunts. Beyond the merchandising is how we do better to appeal to customers. In addition to sustaining strong mindshare with our core customer cohorts, we are actively experimenting with new marketing formats such as infused content and short-form dramas by adopting an integrated strategy across marketing, growth, and engagement. We are seeing early wins. This approach enables a disparate balance of cost efficiency and strategic reinvestment, improving our performance in acquiring, actively, and retaining customers.
Speaker #3: In addition, to sustain a strong mind, we are sharing with our core customer cohorts. We are actively experimenting with new marketing formats such as infused content and short-form dramas by adopting an integrated strategy across marketing, growth, and engagement.
Speaker #3: We are seeing early wins . This approach enables a this . This approach enables a disciplined balance of cost efficiency and the strategic reinvestment , improving our performance in acquiring actively and retaining customers to further engage our customers along their journey .
Speaker #3: We focus on facilitating the blending and discovering of the broad range of the new and existing offerings. Our notable improvement in earlier searching and recommendations.
Speaker #3: Our our systemic upgrade of relevant models . Ergoline , Ergoline and product operations have translated into the measurable gains in the third quarter .
Speaker #3: Enhancements in our search and recommendation systems have led to a tangible increase in conversions directly, contributing to sales growth. We also continue to elevate the experience for our SVIP customers.
Speaker 1: To further engage our customers along their journey, we focus on facilitating the broadening and discovering of the broader range of the new and existing offerings. Our notable area of improvement is search and recommendations. Our systemic upgrade of relevant models, AI algorithms, and product operations have translated into measurable gains. In Q3, enhancements in our search and recommendation systems led to a tangible increase in conversions, directly contributing to sales growth. We also continue to elevate the experience for our Super VIP customers. We want them to feel special, valued, and delighted with every visit, and we are delivering on this promise more consistently. In Q3, we launched a series of invitation private sales. Super VIP customers were granted exclusive access to the curated selection of major brands at deep discount, which delivered a powerful sense of value and successfully boosted membership loyalty.
To further engage our customers along their journey, we focus on facilitating the broadening and discovering of the broader range of the new and existing offerings. Our notable area of improvement is search and recommendations. Our systemic upgrade of relevant models, AI algorithms, and product operations have translated into measurable gains. In Q3, enhancements in our search and recommendation systems led to a tangible increase in conversions, directly contributing to sales growth. We also continue to elevate the experience for our Super VIP customers. We want them to feel special, valued, and delighted with every visit, and we are delivering on this promise more consistently. In Q3, we launched a series of invitation private sales. Super VIP customers were granted exclusive access to the curated selection of major brands at deep discount, which delivered a powerful sense of value and successfully boosted membership loyalty.
Speaker #3: We want them to feel special , valued and delighted with every visit , and we are delivering on this promise more consistently in the third quarter , we launched a series of buy in invitation private sale sales as VIP customer was granted .
Speaker #3: Exclusive access to the curated selection of major brands at Deep Discount, which delivered a powerful sense of value and successfully boosted membership loyalty.
Speaker #3: Lastly , we expect we expect technology to play a strong role to tap into the potential of growth and efficiency . We are clear on the on the path to accelerate the AI application across our business .
Speaker #3: Our immediately focus is on deploying AI agent to enhance key areas , including search and recommendations , customer service , external marketing and business and analytics .
Speaker 1: Lastly, we expect technology to play a strong role to tap into the potential of growth and efficiency. We are clear on the path to accelerate the AI application across our business. Our immediate focus is on deploying AI agents to enhance key areas, including search and recommendations, customer service, external marketing, and business analytics. We expect these innovations to create a more engaging customer experience, empower brands with advanced tools, improve marketing efficiency, and generate actionable business insights. As an example, we are seeing good adoption of our try-it-on AI feature. Customers really enjoy using it to virtually try on clothes, save looks, and share with friends before buying. We are also gaining traction with AI ads. As a growing share of campaigns, we leverage AI to upgrade marketing creatives and media placements, boosting customer acquisition efficiency. We are encouraged by the momentum in our business.
Lastly, we expect technology to play a strong role to tap into the potential of growth and efficiency. We are clear on the path to accelerate the AI application across our business. Our immediate focus is on deploying AI agents to enhance key areas, including search and recommendations, customer service, external marketing, and business analytics. We expect these innovations to create a more engaging customer experience, empower brands with advanced tools, improve marketing efficiency, and generate actionable business insights. As an example, we are seeing good adoption of our try-it-on AI feature. Customers really enjoy using it to virtually try on clothes, save looks, and share with friends before buying. We are also gaining traction with AI ads. As a growing share of campaigns, we leverage AI to upgrade marketing creatives and media placements, boosting customer acquisition efficiency. We are encouraged by the momentum in our business.
Speaker #3: We expect these innovations to create a more engaging customer experience in our power brand with advanced tools, improve marketing efficiency, and generate actionable business insights.
Speaker #3: As an example, we are seeing good adoption of our Try It On AI feature. Customers really enjoy using it to virtually try on clothes, save looks, and share with friends before buying.
Speaker #3: We are also gained traction with AI ads as well as a growing share of campaign . A campaign , new leveraged AI to upgrade marketing creatives and media placements , boosting customer acquisition efficiency .
Speaker #3: We are encouraged by the momentum in our business. Our operations are better aligned, and our teams are collaborating at a new level to unlock synergies.
Speaker #3: As we continue to adapt to stay ahead of market trends and customer experience expansions, the entire organization is leaning into the opportunities ahead of us.
Speaker #3: We have great confidence in our long term roadmap for sustainable , profitable , profitable growth . At this point , let me hand over the our call to CFO , Mark Wang , to go over our financial results .
Speaker 1: Our operations are better aligned, and our teams are collaborating at a new level to unlock synergies. We continue to adapt to stay ahead of market trends and customer experience expansions. The entire organization is leaning into the opportunities ahead of us. We have great confidence in our long-term roadmap for sustainable, profitable growth. 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. I'm pleased to report a set of healthy financial results for Q3. Total net revenues turned to growth and exceeded expectations, along with solid earnings expansion. This performance validates our disciplined model that balances growth investment with value creation, upholding our long-stated goal of achieving high-quality growth.
Our operations are better aligned, and our teams are collaborating at a new level to unlock synergies. We continue to adapt to stay ahead of market trends and customer experience expansions. The entire organization is leaning into the opportunities ahead of us. We have great confidence in our long-term roadmap for sustainable, profitable growth. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.
Speaker #3: Thanks, Eric, and hello everyone. I am pleased to be here.
Speaker #4: Report a set of healthy financial results for the third quarter. Total net revenues turned to growth and exceeded expectations, along with solid earnings expansion.
Speaker #4: This performance validates our disciplined model that balanced growth investment with value creation, upholding our long-stated goal of achieving high-quality growth.
Speaker #4: Our strategic yet prudent growth investment focused on value driven opportunities in merchandising expansion , especially into the differentiated portfolio , consumer facing marketing , better engagement with customers , as well as AI centered technology advancements throughout our operations .
Mark Wang: Thanks, Eric, and hello, everyone. I'm pleased to report a set of healthy financial results for Q3. Total net revenues turned to growth and exceeded expectations, along with solid earnings expansion. This performance validates our disciplined model that balances growth investment with value creation, upholding our long-stated goal of achieving high-quality growth.
Speaker #4: Our aligned with our longer , with our long term roadmap for success . We make sure everything we do should be powering our virtual flywheel within the business .
Speaker 1: Our strategic yet prudent growth investment focused on value-driven opportunities in merchandising expansion, especially into the differentiated portfolio, consumer-facing marketing, better engagement with customers, as well as AI-centered technology advancements throughout our operations, all aligned with our long-term roadmap for success. We make sure everything we do should be powering our virtual flywheel within the business that translates into sustainable and profitable growth. As Eric stated, we are seeing the benefits of recent strategic change. We are engaged by the progress made so far and expect to see the impact of our initiatives built into the rest of the year and beyond. We have great confidence in our long-term outlook and our capabilities to deliver value for all stakeholders. Again, I would like to reaffirm our commitment to shareholder returns in 2025, which is no less than 75% of the CNY 9 billion full-year 2024 non-GAAP net income.
Our strategic yet prudent growth investment focused on value-driven opportunities in merchandising expansion, especially into the differentiated portfolio, consumer-facing marketing, better engagement with customers, as well as AI-centered technology advancements throughout our operations, all aligned with our long-term roadmap for success. We make sure everything we do should be powering our virtual flywheel within the business that translates into sustainable and profitable growth. As Eric stated, we are seeing the benefits of recent strategic change. We are engaged by the progress made so far and expect to see the impact of our initiatives built into the rest of the year and beyond. We have great confidence in our long-term outlook and our capabilities to deliver value for all stakeholders. Again, I would like to reaffirm our commitment to shareholder returns in 2025, which is no less than 75% of the CNY 9 billion full-year 2024 non-GAAP net income.
Speaker #4: That translates into sustainable and profitable growth. As Eric stated, we are seeing the benefits of recent strategic changes. While encouraged by the progress made so far, we expect to see the impact of our initiatives built into the rest of the year and beyond.
Speaker #4: We have great confidence in our long-term outlook and our capabilities to deliver value for our stakeholders. Again, I would like to reaffirm our commitment to shareholder returns.
Speaker #4: In 2025 , which is no less than 75% of the 9 billion RMB full year 2020 . Four . non-GAAP net income . So far this year .
Speaker #4: We are on track for the path. I've returned a total of over $730 million to shareholders through a combination of dividend payments and share buybacks.
Speaker #4: Now moving to our detailed quarterly financial highlights . Before I get started , I would like to clarify that all financial numbers present below are in renminbi and all percentage change year over year change unless otherwise noted .
Speaker 1: This year, we are firmly on track with the path. I've returned a total of over $730 million to shareholders through a combination of dividend payments and share buybacks. Now, moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented below are in RMB, and all the percentage changes are year-over-year changes unless otherwise noted. Total net revenues for Q3 2025 increased by 3.4% year-over-year to RMB 21.4 billion from RMB 20.7 billion in the prior year period. Gross profit was RMB 4.9 billion compared with RMB 5.0 billion in the prior year period. Gross margin was 23.0% compared with 24.0% in the prior year period. Total operating expenses were RMB 3.9 billion compared with RMB 3.8 billion in the prior year period.
This year, we are firmly on track with the path. I've returned a total of over $730 million to shareholders through a combination of dividend payments and share buybacks. Now, moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented below are in RMB, and all the percentage changes are year-over-year changes unless otherwise noted. Total net revenues for Q3 2025 increased by 3.4% year-over-year to RMB 21.4 billion from RMB 20.7 billion in the prior year period. Gross profit was RMB 4.9 billion compared with RMB 5.0 billion in the prior year period. Gross margin was 23.0% compared with 24.0% in the prior year period. Total operating expenses were RMB 3.9 billion compared with RMB 3.8 billion in the prior year period.
Speaker #4: Total net revenues for the third quarter of 2025 increased 3.4% year over year to RMB 21.4 billion, up from RMB 20.7 billion in the prior year period.
Speaker #4: Gross profit was RMB 4.9 billion, compared with RMB 5.0 billion in the prior year period. Gross margin was 23.0%, compared with 24.0% in the prior year period.
Speaker #4: Total operating expenses were $3.9 billion, compared with RMB 3.8 billion in the prior year period. As a percentage of total net revenues, total operating expenses were 18.5%, compared with 18.2% in the prior year period.
Speaker #4: Fulfillment expenses were RM 1.9 billion, compared with RMB 1.7 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 8.7%, compared with 8.4% in the prior year period.
Speaker 1: As a percentage of total net revenues, total operating expenses were 18.5% compared with 18.2% in the prior year period. Fulfillment expenses were RMB 1.9 billion compared with RMB 1.7 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 8.7% compared with 8.4% in the prior year period. Marketing expenses were RMB 667.2 million compared with RMB 617.8 million in the prior year period. As a percentage of total net revenues, marketing expenses were 3.1% compared with 3.0% in the prior year period. Technology and accounting expenses were RMB 438.6 million compared with RMB 454.2 million in the prior year period. As a percentage of total net revenues, technology and accounting expenses were 2.1% compared with 2.2% in the prior year period. General and administrative expenses were RMB 984.6 million compared with RMB 957.8 million in the prior year period.
As a percentage of total net revenues, total operating expenses were 18.5% compared with 18.2% in the prior year period. Fulfillment expenses were RMB 1.9 billion compared with RMB 1.7 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 8.7% compared with 8.4% in the prior year period. Marketing expenses were RMB 667.2 million compared with RMB 617.8 million in the prior year period. As a percentage of total net revenues, marketing expenses were 3.1% compared with 3.0% in the prior year period. Technology and accounting expenses were RMB 438.6 million compared with RMB 454.2 million in the prior year period. As a percentage of total net revenues, technology and accounting expenses were 2.1% compared with 2.2% in the prior year period. General and administrative expenses were RMB 984.6 million compared with RMB 957.8 million in the prior year period.
Speaker #4: Marketing expenses were $667.2 million, compared with RMB $617.8 million in the prior year period, as a percentage of total net revenues.
Speaker #4: Marketing expenses were 3.1%, compared with 3.0% in the prior year period. Technology and content expenses were RM 438.6 million, compared with RM 454.2 million in the prior year period.
Speaker #4: As a percentage of total net revenues, technology and accounting services were 2.1%, compared with 2.2% in the prior year period. General and administrative expenses were RM.
Speaker #4: 984.6 million , compared with RMB 957.8 million in the prior year period . As a percentage of net revenues total , general and administrative expenses were 4.6% , which remained stable as compared with that in the prior year period .
Speaker #4: Income from operations was RMB 1.26 billion, compared with RMB 1.33 billion in the prior year period. Operating margin was 5.9% compared with 6.4% in the prior year period.
Speaker 1: As a percentage of total net revenues, general and administrative expenses were 4.6%, which remained stable as compared with that in the prior year period. Income from operations was RMB 1.26 billion compared with RMB 1.33 billion in the prior year period. Operating margin was 5.9% compared with 6.4% in the prior year period. Non-GAAP income from operations was RMB 1.6 billion compared with RMB 1.7 billion in the prior year period. Non-GAAP operating margin was 7.5% compared with 8.2% in the prior year period. Net income attributable to Vipshop shareholders increased by 16.8% year-over-year to RMB 1.2 billion from RMB 1.0 billion in the prior year period. Net margin attributable to Vipshop shareholders increased to 5.7% from 5.1% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 2.42 from RMB 1.97 in the prior year period.
As a percentage of total net revenues, general and administrative expenses were 4.6%, which remained stable as compared with that in the prior year period. Income from operations was RMB 1.26 billion compared with RMB 1.33 billion in the prior year period. Operating margin was 5.9% compared with 6.4% in the prior year period. Non-GAAP income from operations was RMB 1.6 billion compared with RMB 1.7 billion in the prior year period. Non-GAAP operating margin was 7.5% compared with 8.2% in the prior year period. Net income attributable to Vipshop shareholders increased by 16.8% year-over-year to RMB 1.2 billion from RMB 1.0 billion in the prior year period. Net margin attributable to Vipshop shareholders increased to 5.7% from 5.1% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 2.42 from RMB 1.97 in the prior year period.
Speaker #4: Non-GAAP income from operations was RMB 1.6 billion, compared with RMB 1.7 billion in the prior year period. Non-GAAP operating margin was 7.5%, compared with 8.2% in the prior year period.
Speaker #4: Net income attributable to Vipshop shareholders increased by 16.8% year over year to RMB 1.2 billion, up from RMB 1.0 billion in the prior year period.
Speaker #4: Net margin attributable to VIP shareholders increased to 5.7% from 5.1% in the prior year period. Net income attributable to value shareholders per diluted ADS increased to RMB 2.42 from RMB 1.97 in the prior year period.
Speaker #4: Non-GAAP net income attributable to Vipshop shareholders increased by 14.6% year over year to RMB 1.5 billion, from RMB 1.3 billion in the prior year period.
Speaker #4: Non-GAAP net margin attributable to Vipshop shareholders increased to 7.0%, up from 6.3% in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB 2.98 from RMB 2.47 in the prior year period.
Speaker 1: Non-GAAP net income attributable to Vipshop shareholders increased by 14.6% year-over-year to RMB 1.5 billion from RMB 1.3 billion in the prior year period. Non-GAAP net margin attributable to Vipshop shareholders increased to 7.0% from 6.3% in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB 2.98 from RMB 2.47 in the prior year period. As of 13 September 2025, the company had cash and cash equivalents and restricted cash of RMB 25.1 billion and short-term investment of RMB 5.9 billion. Looking forward to Q4 2025, we expect our total net revenues to be between RMB 33.2 billion and 34.9 billion, representing a year-over-year increase of approximately 0% to 5%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions, which is subject to change.
Non-GAAP net income attributable to Vipshop shareholders increased by 14.6% year-over-year to RMB 1.5 billion from RMB 1.3 billion in the prior year period. Non-GAAP net margin attributable to Vipshop shareholders increased to 7.0% from 6.3% in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB 2.98 from RMB 2.47 in the prior year period. As of 13 September 2025, the company had cash and cash equivalents and restricted cash of RMB 25.1 billion and short-term investment of RMB 5.9 billion. Looking forward to Q4 2025, we expect our total net revenues to be between RMB 33.2 billion and 34.9 billion, representing a year-over-year increase of approximately 0% to 5%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions, which is subject to change.
Speaker #4: As of September 13th , 30 , 2025 , the company had cash and cash equivalents and restricted cash of RMB 25.1 billion and short term investments of RMB 5.9 billion .
Speaker #4: Looking forward to the fourth quarter of 2025 . We expect expect our total net revenues to be between RMB 33.2 billion and R&B 34.9 billion , representing a year over year increase of approximately 0% to 5% .
Speaker #4: Please note that this forecast reflects our current and preliminary view of the market and our operational conditions, which is subject to change.
Speaker #4: With that, I will now like to open the call to Q&A.
Speaker #1: Thank you . To ask a question , please press star one one on your telephone and wait for your name to be announced .
Speaker #1: And to withdraw your question, please press star one one again. We do ask you to translate your question into Chinese if you are bilingual.
Speaker #1: And our first question will come from Thomas Cheung with Jefferies. Your line is open.
Speaker 1: With that, I would now like to open the call to Q&A. Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We do ask you to translate your question into Chinese if you are bilingual. Our first question will come from Thomas Chong with Jefferies. Your line is open. ????????????????????????????????????????????????????????????????????????????DAU????????????????????????????????????????????????????????????????????????????????????????????Q4???10??11?????GMV???????????????????????????? Thanks, Management, for taking my question. My first question is about the online shopping competitive landscape. Can Management comment about the latest trend as well as the potential impact coming from quick commerce? My second question is about the monthly GMV momentum quarter to date. How's the performance we are seeing in October and November, and how we should think about the 2026 outlook? Thank you.
With that, I would now like to open the call to Q&A.
Operator: Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We do ask you to translate your question into Chinese if you are bilingual. Our first question will come from Thomas Chong with Jefferies. Your line is open.
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Thomas Chong: ????????????????????????????????????????????????????????????????????????????DAU????????????????????????????????????????????????????????????????????????????????????????????Q4???10??11?????GMV????????????????????????????
[Translator]: Thanks, Management, for taking my question. My first question is about the online shopping competitive landscape. Can Management comment about the latest trend as well as the potential impact coming from quick commerce? My second question is about the monthly GMV momentum quarter to date. How's the performance we are seeing in October and November, and how we should think about the 2026 outlook? Thank you.
Speaker #5: My first question is about the online shopping competitive landscape. Can management comment on the latest trend as well as the potential impact coming from quick commerce?
Speaker #5: And my second question is about the monthly GMV momentum of quarter to date . How's the performance ? We are seeing in October and November ?
Speaker #5: And how should we think about the 2026 outlook? Thank you.
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Speaker 1: a prudent growth strategy. Okay, so first, in response to your question on quick e-commerce, I think we are definitely not going into quick e-commerce, but we are looking at what appeals to customers that are attracted to quick e-commerce. Convenience is something that matters, but that matters more in grocery shopping, food delivery, and some household essentials that are not well spent in advance, etc., and are not in apparel-related categories, which consumers typically do not care so much about fast delivery. Anyway, we've made progress with that convenience as part of our worry-free value proposition to customers. For example, there are a few notable things. One is the delivery metrics. Next-day delivery has been rolled out for certain standardized categories and products in some cities. Second is accelerating the delivery of apparel products in some key cities.
a prudent growth strategy. Okay, so first, in response to your question on quick e-commerce, I think we are definitely not going into quick e-commerce, but we are looking at what appeals to customers that are attracted to quick e-commerce. Convenience is something that matters, but that matters more in grocery shopping, food delivery, and some household essentials that are not well spent in advance, etc., and are not in apparel-related categories, which consumers typically do not care so much about fast delivery. Anyway, we've made progress with that convenience as part of our worry-free value proposition to customers. For example, there are a few notable things. One is the delivery metrics. Next-day delivery has been rolled out for certain standardized categories and products in some cities. Second is accelerating the delivery of apparel products in some key cities.
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Speaker #2: Okay , so first , in response to your question on quick e-commerce , I think we are definitely not going into quick e-commerce , but we are looking at what appeals to customers that are attracted to quick e-commerce and convenience is something that matters , but that matters more in grocery shopping , food delivery and some household essentials that are not well planned in advance , etc.
Speaker #2: are not in apparel related categories , which consumers are typically do not care so much about . Fast delivery . But anyway , we've made progress with that convenience .
Speaker #2: As part of our worry free value proposition to customers . I think , for example , there are a few notable things . One is the delivery metrics .
Speaker #2: Next , delivery has been rolled out for certain standardized categories , products in some second is accelerating the delivery of apparel in some key products cities .
Speaker #2: And lastly, logistics trajectories are optimized for customer returns to the warehouse, etc. So these efforts are still focused on driving refined supply chain management to support business growth, as well as operating efficiency.
Speaker #2: Secondly, in terms of the recent GMV sales trend, if we look at October and November to date, we are actually seeing decent growth momentum.
Speaker #2: The entire W11 promotional period . We actually recorded a decent year on year growth . So we are reasonably positive on the the business performance of the fourth quarter , which we guided 0 to 5% .
Speaker 1: Lastly, the logistics track trajectories are actually optimized for customer returns to our warehouses, etc. These efforts are still focused on driving refined supply chain management to support business growth, as well as operating efficiency. Secondly, in terms of the recent GMV sales trend, if we look at October and November to date, actually we are seeing a decent growth momentum as the entire W-11 promotional period. We actually recorded a decent year-over-year growth, so we are reasonably positive on the business performance of the fourth quarter, which we guided at 0% to 5% revenue growth. For 2026, we do see there are opportunities in up-priced retail for brands, and we are, on the other hand, expecting consumer sentiment to normalize a bit more. We will still have reasonable expectations for growth.
Lastly, the logistics track trajectories are actually optimized for customer returns to our warehouses, etc. These efforts are still focused on driving refined supply chain management to support business growth, as well as operating efficiency. Secondly, in terms of the recent GMV sales trend, if we look at October and November to date, actually we are seeing a decent growth momentum as the entire W-11 promotional period. We actually recorded a decent year-over-year growth, so we are reasonably positive on the business performance of the fourth quarter, which we guided at 0% to 5% revenue growth. For 2026, we do see there are opportunities in up-priced retail for brands, and we are, on the other hand, expecting consumer sentiment to normalize a bit more. We will still have reasonable expectations for growth.
Speaker #2: Revenue growth . And for 2026 , we do see there are opportunities in off price for retail and we are on the other hand , we do expect a consumer sentiment tend to normalize a bit more .
Speaker #2: So we will do have reasonable expectations for growth and but we are preserving a roadmap for a balanced growth . And profitability . So that's that's roadmap for for long term success .
Speaker #2: That is simply high-quality development.
Speaker #5: Thank you .
Speaker #1: Thank you. Our next question is going to come from Alicia Yap with Citigroup. Your line is open.
Speaker 1: We are pursuing a roadmap for balanced growth and profitability. That is the roadmap for long-term success, and that is distinctly high-quality development. Thank you. Thank you. Our next question is going to come from Alicia Yap with Citigroup. Your line is open. Hi, good evening, Management. Can you hear me okay? Yes. Yes, we can. Hello, can you? Okay. Yeah, thanks for taking my questions. ??????????????????????????????????????????????????????? merchandise ???????????????????????????????????????????????????????????????????????????????????????????????????????????????? SVIP ??????????????????????????????????????????????????????????????????? Vipshop ????????????????????????????????? SVIP ??????????????????????????????????????????????????????????????? Thanks for taking my questions. The first question is, can Management elaborate the details, changes, and the restructuring of your merchandising team? How do these changes help the latest quarter performance? Are these mainly on improving your predictions of the customer preference, or is it for improving your relationship on securing better merchandise that fits to your Super VIP members?
Speaker #6: Hi. Good evening, management. Can you hear me okay?
We are pursuing a roadmap for balanced growth and profitability. That is the roadmap for long-term success, and that is distinctly high-quality development. Thank you.
Speaker #2: Yes yes .
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Operator: Thank you. Our next question is going to come from Alicia Yap with Citigroup. Your line is open.
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Alicia Yap: Hi, good evening, Management. Can you hear me okay?
Operator: Yes. Yes, we can.
Alicia Yap: Hello, can you? Okay. Yeah, thanks for taking my questions. ??????????????????????????????????????????????????????? merchandise ???????????????????????????????????????????????????????????????????????????????????????????????????????????????? SVIP ??????????????????????????????????????????????????????????????????? Vipshop ????????????????????????????????? SVIP ???????????????????????????????????????????????????????????????
Speaker #6: You women svip . We Liu should yongfu and I'll be seeing the pink tie . So thanks for taking my questions . The first question is can management elaborate the details , changes and the restructuring of your merchandising team and do these changes help the latest quarter performance .
Speaker #6: And are these mainly on improving your predictions of customer preferences, or is it to improve your relationship in securing better merchandise that fits your super VIP members?
Speaker #6: And how do you anticipate the change? The changes could further help you know the financial performance. And second question is, can you also elaborate how AI has been helping VIP in terms of your financial growth?
[Translator]: Thanks for taking my questions. The first question is, can Management elaborate the details, changes, and the restructuring of your merchandising team? How do these changes help the latest quarter performance? Are these mainly on improving your predictions of the customer preference, or is it for improving your relationship on securing better merchandise that fits to your Super VIP members?
Speaker #6: Can AI help to target the churned users and also attract them back to the VIP platform? Thank you.
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Speaker 1: How do you anticipate the change, the changes could further help, you know, the financial performance? My second question is, can you also elaborate how AI has been helping VIP in terms of your financial growth? Can AI help to target the churn user and also attract them back to VIP platform? Thank you. ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? SVIP??????????????????????????????? renew ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ??????????? AI ????AI ????????????? AI ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? SVIP ??????????? AI ????????????????????????? AI ????????????????????????? AI ?????????????????????????????????????????????? AI ? AI ???????????????????????????????????? AI ??????????????????????????????????????????????????????????????????? Okay, first, on the recent organizational changes, it's simply that we, we've re-re-realigned the entire organization for long-term development. Actually, it's not a one department change; it's across the entire organization, among different teams, including merchandising, customer, operation, and technology, etc. I think that the major purpose of this organization change is to infuse more agility and efficiency into our business model, especially our founders.
How do you anticipate the change, the changes could further help, you know, the financial performance? My second question is, can you also elaborate how AI has been helping VIP in terms of your financial growth? Can AI help to target the churn user and also attract them back to VIP platform? Thank you.
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Jessie Zheng: ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? SVIP??????????????????????????????? renew ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ??????????? AI ????AI ????????????? AI ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? SVIP ??????????? AI ????????????????????????? AI ????????????????????????? AI ?????????????????????????????????????????????? AI ? AI ???????????????????????????????????? AI ???????????????????????????????????????????????????????????????????
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Speaker #2: Okay , so first on the recent organizational changes , its simply that we . We we realigned the entire organization for long term management .
Speaker #2: actually It is not a one department change . It's across the entire organization between among different teams , including merchandising , customer operation technology , and , etc.
[Translator]: Okay, first, on the recent organizational changes, it's simply that we, we've re-re-realigned the entire organization for long-term development. Actually, it's not a one department change; it's across the entire organization, among different teams, including merchandising, customer, operation, and technology, etc. I think that the major purpose of this organization change is to infuse more agility and efficiency into our business model, especially our founders.
Speaker #2: I think the major purpose of this organization changes to infuse more agility and efficiency into our business model, especially since our founders, two founders are actually much more hands-on with daily operations.
Speaker #2: So the teams can make quick decisions and turn these decisions into actions. We also replaced some of the senior leaders of the major teams with merchandising.
Speaker #2: A new talents and so , so basically we've refreshed the entire organization and we make a consistent upgrades so that teams can collaborate in a new levels to unlock synergies .
Speaker 1: Two founders actually are much more hands-on, daily operations. The teams can make quick decisions and turn these decisions into actions. We've replaced some of the senior leaders of the major merchandising team with new talent. Basically, we've refreshed the entire organization, and we make a consistent upgrade so that teams can collaborate at new levels to unlock synergies. For example, on the merchandising side, as we mentioned on the call, for some of the divisions, we are trying to build a reshaped assortment, including apparel and the non-apparel categories, to foster cross-category purchases and customer engagement. We've actually adopted an integrated approach from marketing, growth, and engagement so that we can become more efficient to attract, activate, and retain customers through a series of adjustments.
Two founders actually are much more hands-on, daily operations. The teams can make quick decisions and turn these decisions into actions. We've replaced some of the senior leaders of the major merchandising team with new talent. Basically, we've refreshed the entire organization, and we make a consistent upgrade so that teams can collaborate at new levels to unlock synergies. For example, on the merchandising side, as we mentioned on the call, for some of the divisions, we are trying to build a reshaped assortment, including apparel and the non-apparel categories, to foster cross-category purchases and customer engagement. We've actually adopted an integrated approach from marketing, growth, and engagement so that we can become more efficient to attract, activate, and retain customers through a series of adjustments.
Speaker #2: For example, on the merchandising side, we mentioned on the call for some of the divisions that we are trying to build a reshaped assortment, including apparel and non-apparel categories, to focus on bolstering cross purchases and customer engagement.
Speaker #2: We've actually adopt a integrated approach from marketing growth and engagement so that can we become more efficient to attract and activate and retain customers through a series of adjustments and and also on on the technology side , we focus on building the teams into the next phase of technology advancement , etc.
Speaker #2: so we are making we are implementing all these changes so that we can always stay ahead of market trends and customer expectations . On the second question about AI .
Speaker #2: Definitely, we are trying to accelerate AI application across our business. Just a simple, you know, AI application can be very vital to driving business growth and efficiency.
Speaker 1: We also focus on building the teams into the next phase of technology advancement, etc. We are implementing all these changes so that we can always stay ahead of market trends and customer expectations. On the second question about AI, definitely we are trying to accelerate AI application across our business. Just a simple, you know, AI application can be very vital to driving business growth and efficiency. For example, we've added a lot of visualized model background to facilitate customer experience in trying a virtually try-on clothes and making better choices, etc. Actually, AI has brought benefits to conversion, directly contributing to sales growth.
We also focus on building the teams into the next phase of technology advancement, etc. We are implementing all these changes so that we can always stay ahead of market trends and customer expectations. On the second question about AI, definitely we are trying to accelerate AI application across our business. Just a simple, you know, AI application can be very vital to driving business growth and efficiency. For example, we've added a lot of visualized model background to facilitate customer experience in trying a virtually try-on clothes and making better choices, etc. Actually, AI has brought benefits to conversion, directly contributing to sales growth.
Speaker #2: For example, we've added a lot of visualized model backgrounds to facilitate customer experience in trying on clothes virtually and making better choices, etc.
Speaker #2: . So actually AI has . Has brought benefits to conversion directly contributing to sales growth . Also , we made a lot of efforts on AI advertising , growing share of our marketing campaigns actually leverage AI generated content to upgrade marketing creatives and media placement .
Speaker #2: This has actually boosted customer acquisition efficiency. Of course, we are also experimenting with AI agents to be used in solving problems like customer churn or how to keep customers longer on our platform.
Speaker 1: Also, we've made a lot of efforts on AI advertising. A growing share of our marketing campaigns actually leverage AI-generated content to upgrade marketing creatives and media placement. This has actually boosted customer acquisition efficiency. Of course, we are also experimenting with AI agents to be used in solving problems like customer churn out or how to keep customers longer on our platform, how to improve their customer experience with our platform. We do believe AI has a lot of potential in driving efficiency as well as supporting our long-term growth. Thank you. Our next question will come from Andre Chang with JPMorgan. Your line is open. ??????????????????????????????????????????????????????????????????????????????????????????????????????GMP?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Thank you, management, for taking my question. I have two questions. The first question is about the operation. We noticed the company delivered decent net profit growth in the third quarter.
Also, we've made a lot of efforts on AI advertising. A growing share of our marketing campaigns actually leverage AI-generated content to upgrade marketing creatives and media placement. This has actually boosted customer acquisition efficiency. Of course, we are also experimenting with AI agents to be used in solving problems like customer churn out or how to keep customers longer on our platform, how to improve their customer experience with our platform. We do believe AI has a lot of potential in driving efficiency as well as supporting our long-term growth. Thank you.
Speaker #2: How to improve their customer experience with our platforms. We do believe AI has a lot of potential in driving efficiency as well as supporting our long-term growth.
Speaker #1: Thank you. And our next question will come from Andre Chang with JP Morgan. Your line is open.
Speaker #7: You . Your . Know . You . Know . Thank you management , for taking my I have two The questions . first question is about the operation .
Operator: Our next question will come from Andre Chang with JPMorgan. Your line is open.
Andre Chang: ??????????????????????????????????????????????????????????????????????????????????????????????????????GMP??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
[Translator]: Thank you, management, for taking my question. I have two questions. The first question is about the operation. We noticed the company delivered decent net profit growth in the third quarter.
Speaker #7: We the noticed delivered decent net profit growth in the third quarter . However , the operating profit and operating margin still deliver some decline year on year .
Speaker #7: Now , management mentioned before that the the increasing GMV and revenue should help economy scale and margin recovery . So we want to know when and do whatever the management expect that the and operating operating profit can return to positive year on year growth .
Speaker #7: The second question is about the recent news talking about the company's consideration of a Hong Kong listing. We wonder if there is anything the management can share on this front.
Speaker 1: However, the operating profit and the operating margin still deliver some decline year on year. Management mentioned before that, you know, the increasing GMV and the revenue should help economic scale and the margin recovery. We want to know when and through what effort the Management expect that the operating margin and the operating profit can return to positive year on year growth. The second question is about the recent news, talking about the Management, the company's thinking about Hong Kong listing. We wonder anything the Management can share on this front. Thank you very much. Hello, I'm Mark. Thanks for your question.
However, the operating profit and the operating margin still deliver some decline year on year. Management mentioned before that, you know, the increasing GMV and the revenue should help economic scale and the margin recovery. We want to know when and through what effort the Management expect that the operating margin and the operating profit can return to positive year on year growth. The second question is about the recent news, talking about the Management, the company's thinking about Hong Kong listing. We wonder anything the Management can share on this front. Thank you very much.
Speaker #7: Thank you very much .
Speaker #4: Hello , Mark , thanks for your question . Your regarding our gross margin and actually our gross profit margin declined in the third quarter .
Speaker #4: And it reflects our efforts to provide more customer incentives, especially for SVP and other high-value customers, as well as the standardized products to maximize sales and revenue growth.
Speaker #4: And for the longer term, we expect gross profit margin to be comparable to the level in 2024 and largely stable around 23%, depending on the change of product mix from quarter to quarter.
Mark Wang: Hello, I'm Mark. Thanks for your question.
Speaker #4: So except that regarding the marketing expenses , we also increased a little bit . The marketing expenses to attract more customers . And we think that in the future , those merchandising capabilities and also the AI technology application and also the marketing expenses will also the main trigger for our GMV growth and for your second question , actually , we have been closely followed the changes for the market for the capital market .
Speaker 1: Your first question is regarding our gross margin, and actually our gross profit margin declined in the third quarter and reflects our efforts to provide more customer incentive, especially for Super VIP membership and other high-value customers, and the standardized products, to maximize sales and revenue growth. For the longer term, we expect the gross profit margin to be comparable to the level in 2024 and largely stable around 23%, depending on the change of product mix from quarter to quarter. Except that, regarding the marketing expenses, we also increased a little bit the marketing expenses to attract more customers. We think that in the future, those merchandising capabilities, and also the AI technology application, and also the marketing expenses, will also be the main trigger for our GMV growth.
Your first question is regarding our gross margin, and actually our gross profit margin declined in the third quarter and reflects our efforts to provide more customer incentive, especially for Super VIP membership and other high-value customers, and the standardized products, to maximize sales and revenue growth. For the longer term, we expect the gross profit margin to be comparable to the level in 2024 and largely stable around 23%, depending on the change of product mix from quarter to quarter. Except that, regarding the marketing expenses, we also increased a little bit the marketing expenses to attract more customers. We think that in the future, those merchandising capabilities, and also the AI technology application, and also the marketing expenses, will also be the main trigger for our GMV growth.
Speaker #4: If there is any progress, we will update the market. Thank you.
Speaker #1: Thank you. And our next question will come from Wei Shung with UBS. Your line is open.
Speaker #8: Hey . Can one . Thank you . For taking my question we've . Firstly , seen the active customer number and revenue growth have turned positive this quarter .
Speaker 1: For your second question, actually we have been closely following the change in the market, in the capital market. If there is any progress, we will update the market. Thank you. Thank you. Our next question will come from Wei Sheng with UBS. Your line is open. ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? Thank you, management, for taking my question. Firstly, we've seen the active customer number and revenue growth have turned positive this quarter. Should we expect continued sequential improvement in the fourth quarter? What are our investment plan and operational focus for users and for customers at the moment? How should we think about the user growth and the revenue growth for next year? Secondly, just wondering, what are our latest thoughts on the shareholder return program for next year? Thank you. ??????????????????????????????????Q4???????????0?5???????????????????Q3?????????????????Q????2026????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????SVIP??????????????????????????????????2026???????????????????????????????????????????????????????????????Mark???? Mm-hmm.
For your second question, actually we have been closely following the change in the market, in the capital market. If there is any progress, we will update the market. Thank you.
Operator: Thank you. Our next question will come from Wei Sheng with UBS. Your line is open.
Wei Xiong: ???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
Speaker #8: Should we expect continued sequential improvement in the fourth quarter? What are our investment plans and operational focus for our users and customers at the moment?
Speaker #8: And how should we think about the user growth and revenue growth for next year ? And secondly , just wondering , are we having any do we have what are our latest thoughts on on the shareholder return program for next year ?
Speaker #8: Thank you .
[Translator]: Thank you, management, for taking my question. Firstly, we've seen the active customer number and revenue growth have turned positive this quarter. Should we expect continued sequential improvement in the fourth quarter? What are our investment plan and operational focus for users and for customers at the moment? How should we think about the user growth and the revenue growth for next year? Secondly, just wondering, what are our latest thoughts on the shareholder return program for next year? Thank you.
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Jessie Zheng: ??????????????????????????????????Q4???????????0?5???????????????????Q3?????????????????Q????2026????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????SVIP??????????????????????????????????2026???????????????????????????????????????????????????????????????Mark???? Mm-hmm.
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Speaker #2: So let me first translate your our response to your question on customer and revenue growth for 2026 . And beyond . I think for the longer term , we always stay focused on achieving , you know , steady growth in customer revenue and earnings .
Speaker #2: We believe the sustainable and profitable growth model , revenue growth model should be driven by high quality growth in customers as well as so for the near term , we do expect customer growth will accelerate .
Speaker 1: Let me first translate your question, our response to your question on customer and revenue growth for 2026 and beyond. I think for the longer term, we always stay focused on achieving, you know, steady growth in customer revenue and earnings. We believe the sustainable and profitable growth model, revenue growth model, should be driven by high-quality growth in customers as well as pool. For the near term, we do expect customer growth will accelerate, for example, in Q4, as compared to Q3 in terms of year-over-year growth. For 2026, we continue to believe that revenue growth should be driven by growth in customer number and, in addition to up. We've made a lot of efforts in driving customer growth, and we've experimented with a lot of new ways, in whether it's marketing formats or channel investment, etc.
[Translator]: Let me first translate your question, our response to your question on customer and revenue growth for 2026 and beyond. I think for the longer term, we always stay focused on achieving, you know, steady growth in customer revenue and earnings. We believe the sustainable and profitable growth model, revenue growth model, should be driven by high-quality growth in customers as well as pool. For the near term, we do expect customer growth will accelerate, for example, in Q4, as compared to Q3 in terms of year-over-year growth. For 2026, we continue to believe that revenue growth should be driven by growth in customer number and, in addition to up. We've made a lot of efforts in driving customer growth, and we've experimented with a lot of new ways, in whether it's marketing formats or channel investment, etc.
Speaker #2: For example , in Q4 as compared to Q3 . In terms of the year over year growth . for 2026 , And we we continue to believe that revenue growth should be driven by growth in customer numbers and in addition to we made a lot of efforts in driving customer growth , and we experimenting with a lot of new ways in whether it's formats marketing or channel investment , etc.
Speaker #2: all these efforts are oriented to acquire new customers , high quality new customers , activate dormant or inactive customers , as well as continue to expand our SVP High Value customer base .
Speaker #2: So we do have confidence that for the long term, we can drive the top-line growth on the basis of both customer growth and expansion.
Speaker 1: All these efforts are orientated to acquire new customers, high-quality new customers, activate dormant or inactive customers, as well as continue to expand our SVIP, high-value customer base. We do have confidence that, for the long term, we can drive the top-line growth on the basis of both customer growth and pool expansion. Okay. For the second question regarding the total return to the shareholder, our return to growth demonstrates our disciplined capabilities to manage the business to achieve balanced goals. We are more confident that we can achieve relatively stable and healthy profit and cash flow levels. For the past, we have returned over $3.4 billion to shareholders since April 2021 in the form of buyback and dividend.
All these efforts are orientated to acquire new customers, high-quality new customers, activate dormant or inactive customers, as well as continue to expand our SVIP, high-value customer base. We do have confidence that, for the long term, we can drive the top-line growth on the basis of both customer growth and pool expansion.
Speaker #4: Okay, for the second question regarding the total return to our return to growth, demonstrated our disciplined capabilities to manage the business to achieve balanced goals. We are more confident that we can achieve relatively stable and healthy profit and cash flow levels.
Speaker #4: And for the past, we have returned over $3.4 billion to shareholders since April 2021, in the form of buybacks and dividends.
Speaker #4: And for 2025 , we are on track with our commitment to returning 75% of the full year 2024 non-GAAP net income to shareholders and as of the date we published the third quarter results , we have returned a total of over 730 million USD through dividends and buyback and .
Mark Wang: Okay. For the second question regarding the total return to the shareholder, our return to growth demonstrates our disciplined capabilities to manage the business to achieve balanced goals. We are more confident that we can achieve relatively stable and healthy profit and cash flow levels. For the past, we have returned over $3.4 billion to shareholders since April 2021 in the form of buyback and dividend.
Speaker #4: For the next year , actually , we will continue to our business to grow invest in and improving profit and support our to generate cash dividend payment and buyback .
Speaker 1: For 2025, we are on track with our commitment to returning no less than 75% of the full year 2024 non-GAAP income to shareholders. As of the date we published the third quarter results, we have returned a total of over $730 million through dividends and buyback. For the next year, actually, we will continue to invest in our business to grow, improving profit, and generate cash to support our dividend payment and buyback. We will evaluate appropriate level next year. Thank you. Thank you, Management. Thank you. I show no further questions in the queue at this time. I would now like to turn the call back to Jessie for 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.
For 2025, we are on track with our commitment to returning no less than 75% of the full year 2024 non-GAAP income to shareholders. As of the date we published the third quarter results, we have returned a total of over $730 million through dividends and buyback. For the next year, actually, we will continue to invest in our business to grow, improving profit, and generate cash to support our dividend payment and buyback. We will evaluate appropriate level next year. Thank you.
Speaker #4: We will evaluate the appropriate level next year. Thank you.
Speaker #8: you . Thank Management .
Speaker #1: Thank you. I show no further questions in the queue at this time. I would now like to turn the call back to Jessie for closing remarks.
Speaker #2: Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our team.
Speaker #2: We look forward to speaking with you next quarter.
[Translator]: Thank you, Management.
Operator: Thank you. I show no further questions in the queue at this time. I would now like to turn the call back to Jessie for closing remarks.
Jessie Zheng: Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team.
Speaker 1: We look forward to speaking with you next quarter. This concludes today's conference call. Thank you for participating, and you may now disconnect.
We look forward to speaking with you next quarter.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.