Q1 2026 Vipshop Holdings Ltd Earnings Call

May 21, 2026

Operator: Ladies and gentlemen, good day everyone, welcome to Vipshop Holdings Limited's Q1 2026 Earnings Conference Call. At this time, I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed.

Jessie Zheng: Thank you, operator. Hello, everyone, thank you for joining Vipshop's Q1 2026 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. Potential risks and uncertainties include, but are not limited to, those outlined in our safe harbor statements in our earnings release and public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be made.

Speaker #1: Thank you, Operator. Hello everyone, and thank you for joining VIP Shop's first quarter 2026 earnings conference call. With us today are Eric Shen, our co-founder, chairman, and CEO, and Mark Wang, our CFO.

Speaker #1: Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995.

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

Speaker #1: Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our Safe Harbor statements in our earnings release and public filings with the Securities and Exchange Commission, which also 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 Vipshop's 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 reconciliation of our non-GAAP measures to GAAP measures. With that, I would now like to turn the call over to Mr. Eric Shen.

Speaker #1: Please note that certain financial measures used on this call, such as non-GAAP operating income, non-GAAP net income attributable to shareholders, and non-GAAP net income per ADS, are not presented in accordance with U.S. GAAP.

Speaker #1: Please refer to our earnings release for details relating to the reconciliations of our non-GAAP metrics to GAAP metrics. With that, I would now like to turn the call over to Mr. Eric Shen.

Speaker #1: Good morning and good evening, everyone. Welcome, and thank you for joining our first quarter 2026 earnings conference call. Our first quarter performance reflected a significant calendar-driven shift caused by the later Chinese New Year.

Eric Ya Shen: Good morning and good evening, everyone. Welcome and thank you for joining our Q1 2026 Earnings Conference Call. Our Q1 performance reflected a significant calendar-driven shift caused by the later Chinese New Year. This led to a successful holiday surge in activity that effectively pulled forward demand, resulting in a softer March. What's important to highlight is the sustained health of our customer base. Our holiday results was outstanding, driven by customers who actively sought out our seasonal collection and the value promotions. This strength of that demand, especially in apparel, confirms that we remain a top priority for their spending and gives us real confidence in their long-term resilience. Our customer metrics this quarter further prove that resilience. Total active customers show the positive momentum led by our SVIP members who grew by 9% year-over-year. Their paid members accounting for 55% of our online spending.

Eric Shen: Good morning and good evening, everyone. Welcome and thank you for joining our Q1 2026 Earnings Conference Call. Our Q1 performance reflected a significant calendar-driven shift caused by the later Chinese New Year. This led to a successful holiday surge in activity that effectively pulled forward demand, resulting in a softer March. What's important to highlight is the sustained health of our customer base. Our holiday results was outstanding, driven by customers who actively sought out our seasonal collection and the value promotions.

Speaker #1: This led to a successful holiday surge in active that effectively pulled forward demand, resulting in the softer March. What is important to highlight is the sustained health of our customer base.

Speaker #1: Our holiday results were outstanding, driven by customers who actively sought out our seasonal collection and the value promotions. The strength of that demand, especially in apparel, confirms that we remain a top priority for their spending and gives us real confidence in their long-term resilience.

Eric Shen: This strength of that demand, especially in apparel, confirms that we remain a top priority for their spending and gives us real confidence in their long-term resilience. Our customer metrics this quarter further prove that resilience. Total active customers show the positive momentum led by our SVIP members who grew by 9% year-over-year. Their paid members accounting for 55% of our online spending.

Speaker #1: Our customer metrics this quarter further prove that resilience. Total active customers showed positive momentum, led by our SVIP members, who grew by 9% year over year.

Speaker #1: Their paid members accounted for 50% to 55% of our online spending. We remain focused on the quality of our growth as we move further into the year.

Eric Ya Shen: We remain focused on the quality of our growth as we move further into the year. We are making steady progress in how we optimize merchandising portfolio, engage with customers, and integrate AI to reshift our off-price retail model. Since realigning our team last year, we are seeing the benefits of the faster, more fluid approach to merchandising. By staying focused on customer relevance and deepening category expertise, we've been able to move from market insight to product on shelf more quickly to ensure our deep discount brand inventory hits when demand peaks. We are also driven better cross-category engagement as we create our selection around the broad needs of our customers and develop more effective analytics and marketing tools for brand partners. We are helping shoppers easily discover products across apparel, childcare, and home category.

Eric Shen: We remain focused on the quality of our growth as we move further into the year. We are making steady progress in how we optimize merchandising portfolio, engage with customers, and integrate AI to reshift our off-price retail model. Since realigning our team last year, we are seeing the benefits of the faster, more fluid approach to merchandising.

Speaker #1: We are making steady progress in how we optimize our merchandising portfolio. We have engaged with customers and integrated AI to reshape our off-price retail model. Since realigning our team last year, we are seeing the benefits of a faster, more fluid approach to merchandising.

Eric Shen: By staying focused on customer relevance and deepening category expertise, we've been able to move from market insight to product on shelf more quickly to ensure our deep discount brand inventory hits when demand peaks. We are also driven better cross-category engagement as we create our selection around the broad needs of our customers and develop more effective analytics and marketing tools for brand partners. We are helping shoppers easily discover products across apparel, childcare, and home category.

Speaker #1: By staying focused on customer relevance and deepening category expertise, we will be able to move from market insight to product-owned shelf more quickly. Ensure our deep discount brand inventory hits when demand peaks.

Speaker #1: We are also driving better cross-category engagement as we create our selection along the broad needs of our customer and develop more effective analytics and marketing tools for brand partners.

Speaker #1: We are helping shoppers easily discover products across apparel, trade care, and home categories. Following our last update, we have transitioned our made-for-VIP line into a new phase of growth by raising the bar for quality, style, and value.

Eric Ya Shen: Following our last update, we have transitioned our Made for VIP line into the new phase of growth by raising the bar for quality, style, and value. At the same time, we have tightened our planning with brand partners' seasonal calendars to stay in sync with real-time fashion trends. This approach ensures our line-up is always created and on-trend. Looking ahead, we will continue to evolve their exclusive offering into the primary driver of customer mindshare and brand loyalty. Building on our optimistic buying strategy, we will successfully speed up our buying cycle. Over the past few months, our teams have locked in a high value of exclusive low-priced inventory that is now flowing through the platform. This has enhanced the treasure hunt experience for our customers. We are seeing strong daily habits from our high-value shoppers who return more frequently to discover our latest arrivals.

Eric Shen: Following our last update, we have transitioned our Made for VIP line into the new phase of growth by raising the bar for quality, style, and value. At the same time, we have tightened our planning with brand partners' seasonal calendars to stay in sync with real-time fashion trends. This approach ensures our line-up is always created and on-trend.

Speaker #1: At the same time, we are tightening our planning with brand partners’ seasonal calendars to stay in sync with real-time fashion trends. This approach ensures our lineup is always curated and on trend. Looking ahead, we will continue to involve their exclusive offering into the primary driver of customer mind share and brand loyalty.

Eric Shen: Looking ahead, we will continue to evolve their exclusive offering into the primary driver of customer mindshare and brand loyalty. Building on our optimistic buying strategy, we will successfully speed up our buying cycle. Over the past few months, our teams have locked in a high value of exclusive low-priced inventory that is now flowing through the platform. This has enhanced the treasure hunt experience for our customers. We are seeing strong daily habits from our high-value shoppers who return more frequently to discover our latest arrivals.

Speaker #1: Building on our optimistic buying strategy, we have successfully sped up our buying cycle over the past few months. Our teams have locked in a high value of exclusive, low-priced inventory that is now flowing through the platform.

Speaker #1: This has enhanced the treasure hunt experience for our customers. We are seeing strong daily habits from our high-value shoppers, who are returning more frequently to discover our latest arrivals.

Speaker #1: This differentiated merchandising approach directly feeds into the strengths of our SVIP program. By offering exclusive access to private sales and unique inventory, we are driving both member acquisition and loyalty.

Eric Ya Shen: This differentiated merchandising approach directly feeds in the strength of our SVIP program. By offering exclusive access to private sales and unique inventory, we are driving both member acquisitions and loyalty. A great example is our recent event with a global athletic brand, where a curated selection delivered a surge in new SVIP sign-ups, particularly among young male shoppers, and sales value many times above the baseline. In line with the push of high-value engagement, we have shifted towards a more targeted acquisitions model using refined algorithm that identifies members with the highest long-term value. By replacing generic benefits with a tiered service system, we are directly rewarding higher spending with exclusive product access, deeper discounts, one-stop customer support, and value-added benefits. This will further optimize conversions and individual spend. These integrated efforts ensure the SVIP program remains our primary engine for sustainable revenues and earnings growth.

Eric Shen: This differentiated merchandising approach directly feeds in the strength of our SVIP program. By offering exclusive access to private sales and unique inventory, we are driving both member acquisitions and loyalty. A great example is our recent event with a global athletic brand, where a curated selection delivered a surge in new SVIP sign-ups, particularly among young male shoppers, and sales value many times above the baseline.

Speaker #1: A great example is our recent event with a global athletic brand, where a curated selection delivered a surge in new SVIP sign-ups, particularly among young male shoppers, and sales value many times above the baseline.

Eric Shen: In line with the push of high-value engagement, we have shifted towards a more targeted acquisitions model using refined algorithm that identifies members with the highest long-term value. By replacing generic benefits with a tiered service system, we are directly rewarding higher spending with exclusive product access, deeper discounts, one-stop customer support, and value-added benefits. This will further optimize conversions and individual spend. These integrated efforts ensure the SVIP program remains our primary engine for sustainable revenues and earnings growth.

Speaker #1: In line with the push for high-value engagement, we have shifted towards a more targeted acquisitions model, using refined screens that identify members with the highest long-term value.

Speaker #1: By replacing generally take benefits with a tiered service system, we are directly rewarding higher spending with exclusive product access, deepened discounts, one-stop customer support, and value-added benefits.

Speaker #1: This will further optimize conventions and individual spend. This integrated effort ensures the SVIP program remains our primary engine for sustainable revenues and earnings growth.

Eric Ya Shen: As the pace of the change in retail accelerates, we were excited to embrace the broad opportunities AI offers. Our initial journey focused on putting the customer first, enhancing experiences through virtual try-ons, smarter search, and recommendations, and automate customer support. We also leveraged AIGC to reach potential customers more effectively with automated content. Having proven this use case, we are now shifting our focus towards scaling that capability for greater operational impact. For example, we are using generative AI to scale personalized marketing. By combining our operational expertise with real-time customer feedback, our AI marketing agent effectively generates tailored creative across video, photo, and text forms. This has already driven a clear lift in our customer acquisition efficiency.

Eric Shen: As the pace of the change in retail accelerates, we were excited to embrace the broad opportunities AI offers. Our initial journey focused on putting the customer first, enhancing experiences through virtual try-ons, smarter search, and recommendations, and automate customer support. We also leveraged AIGC to reach potential customers more effectively with automated content.

Speaker #1: As the pace of change in retail accelerates, we were excited to embrace the broad opportunities AI offers. Our initial general journey focused on putting the customer first, enhancing experiences through virtual try-ons, smart search, and recommendations.

Speaker #1: And automate customer support. We also leveraged AIGC to reach potential customers more effectively with automated content. Having proven these use cases, we are now shifting our focus towards scaling these capabilities for greater operational impact.

Eric Shen: Having proven this use case, we are now shifting our focus towards scaling that capability for greater operational impact. For example, we are using generative AI to scale personalized marketing. By combining our operational expertise with real-time customer feedback, our AI marketing agent effectively generates tailored creative across video, photo, and text forms. This has already driven a clear lift in our customer acquisition efficiency.

Speaker #1: For example, we are using generative AI to scale personalized marketing by combining our operational expertise with real-time customer feedback. Our AI marketing agent effectively generates tailored creative across video, photo, and text forms.

Speaker #1: This has already driven a clear lift in our customer acquisition efficiency. Beyond the marketing, AI is increasingly empowering our brand partners with advanced business analytics, deeper customer cohort insights, and optimized merchandising strategy.

Eric Ya Shen: Beyond the marketing, AI is increasingly empowering our brand partners with advanced business analytics, deeper customer cohort insights, and optimized merchandising strategy. By anchoring our strategy in the off-price model and leveraging best-in-class technology, we have identified more effective ways to serve our customers, from dynamic merchandising to the smart supply chain. This allows us to continue earning customer loyalty through every interaction. We remain committed to investing in our people and our principles. We are confident that by continuously optimizing our operational strategies, we will drive steady profitable growth for the long term. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Eric Shen: Beyond the marketing, AI is increasingly empowering our brand partners with advanced business analytics, deeper customer cohort insights, and optimized merchandising strategy. By anchoring our strategy in the off-price model and leveraging best-in-class technology, we have identified more effective ways to serve our customers, from dynamic merchandising to the smart supply chain.

Speaker #1: By anchoring our strategy in the off-price model and leveraging best-in-class technology, we have identified more effective ways to serve our customer. From dynamic merchandising to the smart supply chain, this allows us to continue earning customer loyalty through every interaction.

Eric Shen: This allows us to continue earning customer loyalty through every interaction. We remain committed to investing in our people and our principles. We are confident that by continuously optimizing our operational strategies, we will drive steady profitable growth for the long term. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Speaker #1: We remain committed to investing in our people and our principles. We are confident that by continuously optimizing our operational strategies, we will drive steadily profitable growth for the long term.

Speaker #1: 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.

Mark Wang: Thanks, Eric, and hello, everyone. Our latest results landed within our guided range, reflecting a dynamic quarter that was heavily influenced by late Chinese New Year. The holiday period triggered a concentrated surge in demand for winter and early spring apparel categories, where our merchandise strength resonates well with a broader base of consumers. By successfully capturing these peak season opportunities, we proved the effectiveness of our coordinated efforts across merchandising, customer engagement, and operations. This operations synergy directly fed into our bottom line. Margins remain healthy and stable and are pinned by highly favorable category mix and our continued operational discipline. As Eric outlined, we maintain focused strategic investment in our key growth drivers, expanding differentiated merchandise offerings, deepening SVIPs engagement, and scaling AI integration across our operations.

Speaker #1: Our latest results landed within our guided range, reflecting a dynamic quarter that was heavily influenced by a late Chinese New Year. The holiday period triggered a concentrated surge in demand for winter and early spring apparel categories.

Speaker #1: Where our merchandise strength resonates well with a broader base of consumers. By successfully capturing these peak season opportunities, we proved the effectiveness of our coordinated efforts across merchandising, customer engagement, and operations.

Speaker #1: This operation synergy directly fed into our bottom line. Margins remain healthy and stable, and they're pinned by highly favorable category mix and our continued operational discipline.

Mark Wang: This operations synergy directly fed into our bottom line. Margins remain healthy and stable and are pinned by highly favorable category mix and our continued operational discipline. As Eric outlined, we maintain focused strategic investment in our key growth drivers, expanding differentiated merchandise offerings, deepening SVIPs engagement, and scaling AI integration across our operations.

Speaker #1: As Eric outlined, we maintain focused strategic investment in our key growth drivers: expanding differentiated merchandise offerings, deepening SVIPs engagement, and scaling AI integration across our operations.

Speaker #1: At the same time, we continue to manage our broader resource pool with strict prudence, dynamically shifting spend to our most productive activities. This balanced approach ensures we sustain solid baseline profitability.

Mark Wang: At the same time, we continue to manage our broader resource pool with strict prudence, dynamically shifting spend to our most productive activities. This balanced approach ensures we sustain solid baseline profitability by prioritizing high-quality, profitable revenue today. Simultaneously, it allows us to systematically strengthen our foundations for the long term, even as we navigate an uncertain macroeconomic backdrop. Turning to shareholder returns, we remain firmly on track to deliver on our 2026 commitment of returning no less than 75% of full-year 2025 non-GAAP net income to shareholders. In April, we completed our annual dividend, distributing approximately $300 million USD. For the quarters ahead, we look forward to executing the remaining balance of our shareholder return program. Our free cash flow outlook is robust, and we have the full financial capacity to meet our full-year allocation targets. Now moving to our detailed quarterly financial highlights.

Speaker #1: By prioritizing high-quality, profitable revenue today, we are simultaneously able to systematically strengthen our foundations for the long term, even as we navigate an uncertain microeconomic backdrop.

Speaker #1: Turning to shareholder returns, we remain firmly on track to deliver on our 2026 commitment of returning no less than 75% of full-year 2025 non-GAAP net income to shareholders.

Speaker #1: In April, we completed our annual dividend, distributing approximately $300 million. For the quarters ahead, we look forward to executing the remaining balance of our shareholder return program.

Mark Wang: In April, we completed our annual dividend, distributing approximately $300 million USD. For the quarters ahead, we look forward to executing the remaining balance of our shareholder return program. Our free cash flow outlook is robust, and we have the full financial capacity to meet our full-year allocation targets. Now moving to our detailed quarterly financial highlights.

Speaker #1: Our free cash flow outlook is robust, and we have the full financial capacity to meet our full-year allocation targets. Now, moving to our detailed quarterly financial highlights.

Speaker #1: Before I get started, I would like to clarify that all financial numbers presented below are in renminbi, and all the percentage changes are year-over-year changes.

Mark Wang: Before I get started, I would like to clarify that all financial numbers presented below are in renminbi and all the percentage change are year-over-year change, unless otherwise noted. Total net revenues for Q1 2026 increased by 1.2% year-over-year to CNY 26.6 billion, from CNY 26.3 billion in the prior year period. Gross profit increased by 6.8% year-over-year to CNY 6.5 billion, from CNY 6.1 billion in the prior year period. Gross margin increased to 24.4% from 23.2% in the prior year period. Total operating expenses were CNY 4.2 billion, comparable with CNY 4.0 billion in the prior year period. As a percentage of total net revenues, total operating expenses were 15.7%, compared with 15.3% in the prior year period. Fulfillment expenses were CNY 2.0 billion, comparable with CNY 1.9 billion in the prior year period.

Speaker #1: Unless otherwise noted, total net revenues for the first quarter of 2026 increased by 1.2% year-over-year to RMB 26.6 billion from RMB 26.3 billion in the prior year period.

Speaker #1: Gross profit increased by 6.8% year-over-year to RMB 6.5 billion from RMB 6.1 billion in the prior year period. Gross margin increased to 24.4% from 23.2% in the prior year period.

Mark Wang: Gross margin increased to 24.4% from 23.2% in the prior year period. Total operating expenses were CNY 4.2 billion, comparable with CNY 4.0 billion in the prior year period. As a percentage of total net revenues, total operating expenses were 15.7%, compared with 15.3% in the prior year period. Fulfillment expenses were CNY 2.0 billion, comparable with CNY 1.9 billion in the prior year period.

Speaker #1: Total operating expenses were RMB 4.2 billion, compared with RMB 4.0 billion in the prior year period. As a percentage of total net revenues, total operating expenses were 15.7%.

Speaker #1: Compare with 15.3% in the prior year period. Fulfillment expenses were RMB 2.0 billion, compared with RMB 1.9 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 7.7%.

Mark Wang: As a percentage of total net revenues, fulfillment expenses were 7.7%, compared with 7.2% in the prior year period. Marketing expenses decreased by 1.8% year-over-year to RMB 719.3 million, from RMB 732.1 million in the prior year period. As a percentage of total net revenues, Marketing expenses decreased to 2.7% from 2.8% in the prior year period. Technology and content expenses decreased by 0.2% year-over-year to RMB 448.2 million, from RMB 449.1 million in the prior year period. As a percentage of total net revenues, technology and content expenses were 1.7%, which stays slight as compared with that in the prior year period. General and administrative expenses were RMB 950.5 million, compared with RMB 950.8 million in the prior year period. As a percentage of total net revenues, general and administrative expenses were 3.6%, which stayed slight as compared with that in the prior year period.

Speaker #1: Compare with 7.2% in the prior year period. Marketing expenses decreased by 1.8% year-over-year to RMB 719.3 million, from RMB 732.1 million in the prior year period.

Speaker #1: As a percentage of total net revenues, marketing expenses decreased to 2.7%, from 2.8% in the prior year period. Technology and content expenses decreased by 0.2% year-over-year.

Speaker #1: To RMB 448.2 million, from RMB 449.1 million in the prior year period. As a percentage of total net revenues, technology and content expenses were 1.7%.

Mark Wang: As a percentage of total net revenues, technology and content expenses were 1.7%, which stays slight as compared with that in the prior year period. General and administrative expenses were RMB 950.5 million, compared with RMB 950.8 million in the prior year period. As a percentage of total net revenues, general and administrative expenses were 3.6%, which stayed slight as compared with that in the prior year period.

Speaker #1: Which stays flat as compared with that in the prior year period. General and administrative expenses were RMB 950.5 million, compared with RMB 950.8 million.

Speaker #1: In the prior year period, as a percentage of total net revenues, general and administrative expenses were 3.6%, which stayed flat as compared with that in the prior year period.

Speaker #1: Income from operations increased by 9.7% year-over-year to RMB 2.5 billion, from RMB 2.3 billion in the prior year period. Operating margin increased to 9.4%.

Mark Wang: Income from operations increased by 9.7% year-over-year to RMB 2.5 billion, from RMB 2.3 billion in the prior year period. Operating margin increased to 9.4% from 8.7% in the prior year period. Non-GAAP income from operations increased by 3.5% year-over-year to RMB 2.7 billion, from RMB 2.6 billion in the prior year period. Non-GAAP operating margin increased to 10.2% from 10.0% in the prior year period. Net income attributable to Vipshop shareholders increased by 13.6% year-over-year to RMB 2.2 billion, from RMB 1.9 billion in the prior year period. Net margin attributable to Vipshop shareholders increased to 8.3% from 7.4% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 4.48 from RMB 3.72 in the prior year period. Non-GAAP net income attributable to Vipshop shareholders was RMB 2.31 billion, compared with RMB 2.31 billion in the prior year period.

Speaker #1: From 8.7% in the prior year period. Non-GAAP income from operations increased by 3.5% year-over-year to RMB 2.7 billion, from RMB 2.6 billion in the prior year period.

Speaker #1: Non-GAAP operating margin increased to 10.2%, from 10.0% in the prior year period. Net income attributable to Vipshop shareholders increased year-over-year to RMB 2.2 billion.

Speaker #1: From RMB 1.9 billion in the prior year period. Net margin attributable to VIP shareholders increased to 8.3%, from 7.4% in the prior year period.

Mark Wang: Net margin attributable to Vipshop shareholders increased to 8.3% from 7.4% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 4.48 from RMB 3.72 in the prior year period. Non-GAAP net income attributable to Vipshop shareholders was RMB 2.31 billion, compared with RMB 2.31 billion in the prior year period.

Speaker #1: Net income attributable to Vipshop shareholders per diluted ADS increased to RMB 4.48, from RMB 3.72 in the prior year period. Non-GAAP net income attributable to Vipshop shareholders was RMB 2.31 billion.

Speaker #1: Compared with RMB 2.31 billion in the prior year period. Non-GAAP net margin attributable to Vipshop shareholders was 8.7%, compared with 8.8% in the prior year period.

Mark Wang: Non-GAAP net margin attributable to Vipshop shareholders was 8.7%, compared with 8.8% in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB4.68 from RMB4.43 in the prior year period. As of 31 March 2026, we had cash and cash equivalents and restricted cash of RMB28.3 billion and short-term investments of RMB2.7 billion. Looking forward to Q2 2026, we expect our total net revenues to be between RMB24.5 billion and RMB25.8 billion, representing a year-over-year decrease of approximately 5% to 0%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions, which is subject to change. With that, I would now like to open the call to Q&A.

Speaker #1: Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB 4.68, up from RMB 4.43 in the prior year period. As of March 31, 2026, we had cash, cash equivalents, and restricted cash of RMB 28.3 billion.

Speaker #1: And shelter investment of RMB 2.7 billion. Looking forward to the second quarter of 2026, we expect our total net revenues to be between RMB 24.5 billion and RMB 25.8 billion.

Speaker #1: Representing a year-over-year decrease of approximately 5% to 10%, versus 0%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions.

Speaker #1: Which is subject to change. With that, I would now like to open the call to Q&A.

Speaker #2: Thank you. If you would like to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced.

Operator: Thank you. If you would like 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 and one again. Please kindly translate your question into Chinese if you are bilingual. Please stand by while we compile the Q&A roster. Thank you. We will now take the first question today. This is from Thomas Chong from Jefferies. Please go ahead.

Speaker #2: And to withdraw your question, please press star one, and then one again. Please kindly translate your question into Chinese if you are bilingual. Please stand by while we compile the Q&A roster.

Speaker #2: Thank you. We'll now take the first question today. This is from Thomas Chong from Jefferies. Please go ahead.

Speaker #3: 晚上好，谢谢管理层接受我的提问。呃，我的问题是，呃，第一个是关于我们，呃，现在看到，呃，4月份，呃，还有5月份，现在我们看到，呃，GMV，呃，的趋势可以，呃，分散一下嘛，因为，呃，我们也看到了在物流行业那边也看到行业的单量呢，其实都在放缓。呃，所以想看一下我们GMV，呃，未来一端的趋势。呃，第二的话呢，呃，是关于，呃，618的，呃，想问一下我们对今年的618跟去年的话呢，呃，觉得会有什么的，呃，不一样。呃，另外的话就是，呃，如果是现在看，呃，的消费情绪的话，我们应该怎么看，呃，下半年的一个展望。谢谢。呃，那么转 state into English。呃，thanks management for taking my question. 呃，my first question is about the monthly GMV trend. Given that we have seen some softness in industry parcel volume in the past few weeks or even last month, so, how is our monthly GMV so far?

Thomas Chong: 是关于六一八的。想问一下我们对今年的六一八跟去年比觉得会有什么不一样？另外如果是现在看消费情绪，我们应该怎么看下半年的展望？谢谢。Let me translate into English. Thanks management for taking my question. My first question is about the monthly GMV trend. Given that we have seen some softness in industry parcel volume in the past few weeks or even last month. How is our monthly GMV so far? My second question is relating to June 18th. How should we think about the events this year versus last year?

Speaker #3: And my second question is relating to June 18th. How should we think about the events this year versus last year? And, on top of that, how is consumer sentiment these days that we should think about for the outlook for the second half?

Thomas Chong: On top of that, how is the consumer sentiment these days that we should think about the outlook for H2? Thank you.

Speaker #3: Thank you.

Speaker #4: 好，我来回答就是我们其实，整个Q1是表现不错的。那么尤其是1、2月份，啊，那么中国因为放，放假的时候，那个春节是有错位，所以我们一般都把1、2分，1、2月份放在一起看。那么1、2月份其实涨得非常好。那么这里面呢，其实也有像比如说我们去年因为暖冬嘛，导致很多用户其实没买东西，所以放到1、2月份买了。那么1、2月份非常好，但是3月份呢，我们看到其实3月份其实有下跌。那么我们觉得我们也问了各个行业，那么其实大家都差不多，3月份觉得特别差。那么另外呢，从4月份开始以来，啊，但是我们的Q1还不错，因为1、2月份涨得非常好，哪怕3月份跌一点，其实整体的表现还可以。但是4月份呢，我们就看到其实4月份的生意也不好，就4月份其实那个跌幅比3月份还大一点，但不是很吓人的大。那么就是说我们觉得整体情况没有我们想象这么好，到5月我们目前为止，我们觉得其实也是负增长。那么但是也不是负的很多，会比4月份好一些，所以说我们这次对Q2我们觉得，那么因为4月、5月已经过了一半了，呃，一半时间了，所以我们觉得其实没有这么乐观，所以说我们觉得我们报guidance还是报一个0到负。那么对未来的618我们自己觉得总体来讲也不会有太大的，呃，很好，也不会有太差，因为反正基本差不多，因为还有可能因为现在618大家时间比较拖得长，其实从5月份就开始了，所以说我们认为618相对平稳吧，所以说我们对Q2是做了一个保守的预估。那么另外呢，就是我们对全年其实呢，Q1还可以，Q2跌了一些。那么我们自己想在Q3、Q4争取要把那个要保证相对平稳吧，所以说我们总体对下半年的展望，我们认为希望就是尤其是消费，啊，包括对衣服的消费，我们希望大家还是在下半年，会有一些好的好的情况吧，所以但是我们对总体的全年的展望，我们应认为也相对稳稳稳健吧。

Eric Ya Shen: 好，我来回答。我们其实整个Q1是表现不错的，尤其是一二月份。中国因为放假的时候，春节是有错位，所以我们一般都把一二月份放在一起看。那么一二月份其实涨得非常好。这里面其实也有像比如说我们去年因为暖冬导致很多用户其实没买东西，所以放到一二月份买了。那么一二月份非常好，但是三月份我们看到有下跌。我们也问了各个行业，其实大家都差不多，三月份觉得特别差。另外从四月份开始以来，我们的Q1还不错，因为一二月份涨得非常好，哪怕三月份跌一点，其实整体的表现还可以。但是四月份我们就看到生意也不好，四月份其实跌幅比三月份还大一点，但不是很吓人的大。那么就是说我们觉得整体情况没有我们想象的这么好。到五月目前为止，我们觉得其实也是负增长，但是也不是负得很多，会比四月份好一些。所以说我们这次对Q2我们觉得，因为四月五月已经过了一半时间了，所以我们觉得其实没有这么乐观，所以说我们觉得我们报guidance还是报一个0到负。那么对未来的六一八，我们自己觉得总体来讲也不会有太好的，也不会有太差，因为反正基本差不多。还有可能因为现在六一八大家时间比较拖得长，其实从五月份就开始了。所以说我们认为六一八相对平稳，我们对Q2是做了一个保守的预估。那么另外就是我们对全年其实Q1还可以，Q2跌了一些，我们自己想在Q3、Q4争取保证相对平稳。所以说我们总体对下半年的展望，我们认为尤其是消费，包括对衣服的消费，我们希望大家还是在下半年会有一些好的情况。但是我们对总体的全年的展望，我们认为也相对稳健。

Eric Shen: 好，我来回答。我们其实整个Q1是表现不错的，尤其是一二月份。中国因为放假的时候，春节是有错位，所以我们一般都把一二月份放在一起看。那么一二月份其实涨得非常好。这里面其实也有像比如说我们去年因为暖冬导致很多用户其实没买东西，所以放到一二月份买了。那么一二月份非常好，但是三月份我们看到有下跌。我们也问了各个行业，其实大家都差不多，三月份觉得特别差。另外从四月份开始以来，我们的Q1还不错，因为一二月份涨得非常好，哪怕三月份跌一点，其实整体的表现还可以。但是四月份我们就看到生意也不好，四月份其实跌幅比三月份还大一点，但不是很吓人的大。那么就是说我们觉得整体情况没有我们想象的这么好。到五月目前为止，我们觉得其实也是负增长，但是也不是负得很多，会比四月份好一些。所以说我们这次对Q2我们觉得，因为四月五月已经过了一半时间了，所以我们觉得其实没有这么乐观，所以说我们觉得我们报guidance还是报一个0到负。那么对未来的六一八，我们自己觉得总体来讲也不会有太好的，也不会有太差，因为反正基本差不多。还有可能因为现在六一八大家时间比较拖得长，其实从五月份就开始了。所以说我们认为六一八相对平稳，我们对Q2是做了一个保守的预估。那么另外就是我们对全年其实Q1还可以，Q2跌了一些，我们自己想在Q3、Q4争取保证相对平稳。所以说我们总体对下半年的展望，我们认为尤其是消费，包括对衣服的消费，我们希望大家还是在下半年会有一些好的情况。但是我们对总体的全年的展望，我们认为也相对稳健。

Speaker #2: Okay, so we actually started the year on a very strong note. We have seen a holiday surge during the January to February period.

Jessie Zheng: Okay. We actually started the year on a very strong note. We have seen holiday surge during the January to February period, when consumers are actually concentrate their buying activities, and that effectively pulled forward demand. Following the holiday period, we saw a very apparent moderation of sales in March. As we enter Q2, the April data does not turn out very well. It's not improving from March and into May to date are still very challenging. Actually we saw a slight pickup in consumer activity. As we have been through half of the quarter, it seems that we have relatively low visibility on consumer sentiment and activity. How the rest of the quarter will turn out still depends on the month-long industry promotion, which we also don't have very big expectations.

Speaker #2: When consumers are actually concentrating their buying activities, that impact effectively pulls forward demand. So, following the holiday period, we saw a very apparent moderation of sales in March, and as we enter the second quarter, the April data does not turn out very well.

Jessie Zheng: As we enter Q2, the April data does not turn out very well. It's not improving from March and into May to date are still very challenging. Actually we saw a slight pickup in consumer activity. As we have been through half of the quarter, it seems that we have relatively low visibility on consumer sentiment and activity. How the rest of the quarter will turn out still depends on the month-long industry promotion, which we also don't have very big expectations.

Speaker #2: Slightly, i-it's, it's not improving from March. And, into May to date, it's still very challenging. But actually, we saw a slight pickup in consumer activity.

Speaker #2: But as we have been through half of the quarter, it seems that we have relatively low visibility on consumer sentiment and activity. How the rest of the quarter will turn out still depends on the month-long industry promotion, which we also don't have very big expectations for.

Speaker #2: So, we think it's prudent—it's more prudent for us to give a conservative guidance and reset our second quarter expectations. Turning to our outlook for the full year, we think we still have opportunities in the second half.

Jessie Zheng: We think it's more prudent for us to give a conservative guidance and reset our Q2 expectations. Turning to our outlook for the full year, we think we still have opportunities in the H2. We believe as consumer sentiment may be improving marginally, we should be able to capture opportunities in discretionary spending, especially apparel. We look forward to making the best effort to maintain a steady operational performance for the H2. For the full year, I will continue to believe that we will maintain steady outlook.

Speaker #2: And we believe as consumer sentiment may be improving marginally, we should be able to capture opportunities in discretionary spending, especially apparel. And we look forward to making the best efforts to maintain steady operational performance for the second half.

Speaker #2: So, for the full year, we continue to believe that we will maintain a steady outlook.

Speaker #3: Thank you.

Thomas Chong: Thank you.

Speaker #5: Thank you. We will now take the next question. This is from Vicky Wu from CICC. Please go ahead.

Operator: Thank you. We will now take the next question. This is from Vicky Wu from CICC. Please go ahead.

Speaker #6: Okay, thank you, Guan Yichen.接受我的提问，哈，我想请教一下关于深山奥莱的一些进展。一个呢，是想，啊，能不能帮我们拆一下这个深山一季度的一些表现，然后另外一个的话，我们也是关注到这个唯品会商业REITs也即将发售了，想了解一下这个REITs在发行之后的话，会怎样去影响一下这个报报表端。嗯，I will translate by myself。呃，thanks management for taking my question. I would like to ask for some, updates regarding Shanshan Outlets.

Vicky Wu: 感谢管理层接受我的提问。我想请教一下关于杉杉奥莱的一些进展，一个是想能不能帮我们拆一下杉杉一季度的一些表现。另外一个的话，我们也是关注到唯品会商业REITs也即将发售了，也想了解一下这个REITs在发行之后的话，会怎样去影响一下这个报表端。I will translate by myself. Thanks management for taking my question. I would like to ask for some updates regarding Shanshan Outlets. First, would you walk us through Shanshan's first quarter performance?

Speaker #6: First, would you walk us through Shanshan's first quarter performance? And second, we've noticed that the VIP Shop commercial rate is about to be launched. How should we assess its subsequent impact on the financial statements?

Vicky Wu: Second, we've noticed that the Vipshop commercial REIT is about to be launched. How should we assess its subsequent impact on the financial statements? Thank you.

Speaker #6: Thank you.

Mark Wang: Well, thanks for your question. Actually, Shanshan Outlets business is quite strong in Q1, and the GMV grows around 30% year-over-year. Thanks for your question regarding the REITs. I think some of the investors may be aware that Vipshop commercial REITs obtained official approval from the CSRC and the Shanghai Stock Exchange in late April, and complete the pricing process on 19 May. There are two underlying assets. Shanshan Outlets in Zhengzhou and Harbin, both are mature outlets operate for around 10 years. Both outlets hold leading position in their regional markets. Zhengzhou Outlets is the highest grossing outlets in Henan province, while the Harbin Outlets ranks first in Heilongjiang province. The commercial REITs issued feature more flexible policy regarding the fund usage and expansion mechanism.

Speaker #3: Well, thanks for your question. And actually, Shanshan Outlets' business is quite strong in the first quarter, and the GMV grows around 30% year over year.

Speaker #3: So, and thanks for your question regarding the REITs, and I think some of the investors may be aware that Vipshop Commercial REIT obtained official approval from the CSRC and the Shanghai Stock Exchange.

Speaker #3: In late April, we began the process and completed pricing on May 19th. There are two underlying assets: Shanshan Outlets in Zhengzhou and Harbin. Both of these material outlets have been operating for around 10 years.

Mark Wang: There are two underlying assets. Shanshan Outlets in Zhengzhou and Harbin, both are mature outlets operate for around 10 years. Both outlets hold leading position in their regional markets. Zhengzhou Outlets is the highest grossing outlets in Henan province, while the Harbin Outlets ranks first in Heilongjiang province. The commercial REITs issued feature more flexible policy regarding the fund usage and expansion mechanism.

Speaker #3: And both outlets hold leading positions in their regional markets. Zhengzhou Outlets is the highest-grossing outlet in Henan Province, while the Harbin Outlets ranks first in Heilongjiang Province.

Speaker #3: And, the commercial REITs issued feature more flexible policy regarding the fund usage and expansion mechanism. And actually, in addition to these three outlets already used as underlying assets for the REITs, we also hold another 18 outlet projects demonstrating strong potential for future expansion.

Mark Wang: Actually, in addition to these three outlets already used as underlying assets for the REITs, we also hold another 18 outlets projects demonstrating strong potential for future expansion. We will conduct further evaluation based on our strategy and market conditions. For the accounting treatment for this Zhengzhou and Harbin, we subscribed for 49% of the total shares in the commercial REITs. In simple terms, we will lose control and we will deconsolidate the investment from our financials and recognize the related investment again accordingly. More specifically, on a GAAP basis, we will book a one-time investment gain of around CNY 5.3 billion in Q2, an increase of CNY 1.7 billion income tax expenses. Cash flow-wise, we will see a significant increase in net cash inflow of CNY 1.7 billion in Q2. Thanks.

Speaker #3: We will conduct further evaluation based on our strategy and market conditions. And, for the accounting treatment, for this, Zhengzhou and Harbin, we sub we subscribe for 49% of the total shares in the commercial REITs.

Speaker #3: In simple terms, we will lose control and we will de-consolidate the investment from our financials and recognize the related investment again accordingly. And more specifically, on a gap basis, we will book a one-time investment gain of around 5.3 billion per MB in the third quarter, in the second quarter.

Mark Wang: In simple terms, we will lose control and we will deconsolidate the investment from our financials and recognize the related investment again accordingly. More specifically, on a GAAP basis, we will book a one-time investment gain of around CNY 5.3 billion in Q2, an increase of CNY 1.7 billion income tax expenses. Cash flow-wise, we will see a significant increase in net cash inflow of CNY 1.7 billion in Q2. Thanks.

Speaker #3: Increase of 1.7 billion income tax expenses and cash flow-wise, we will see a significant increase in net cash inflow of RMB 1.7 billion in the second quarter.

Speaker #3: Thanks.

Speaker #5: Thank you. We will now take the next question. This is from Alicia Yap from Citigroup. Please go ahead.

Operator: Thank you. We will now take the next question. This is from Alicia Yap from Citigroup. Please go ahead.

Alicia Yap: Hi。管理层晚上好，谢谢接受我的提问。我有两个问题，第一个问题是，刚刚我们管理层说到四月份，其实我们看到的是一个负增长，然后五月份到此为止，可能也应该是一个负增长。然后上周的社零，看到四月份社零的总额在服饰其实是增长3.6%。然后想管理层大概说一下，是不是有大部分的销售转到了线下？另外就是说，如果不是的话，或者是其他线上的平台，是不是从我们这里抢走了一些市场份额？这个是第一个问题。第二个问题其实也是跟第一个问题有关的，就是杉杉奥莱，您刚刚说到这个quarter是涨了三十几。然后管理层是不是看到从消费者的行为是比较往线下去购物呢？还是说是因为杉杉提供了一些品类，或者是一些商品在我们唯品会线上是没有的，所以就导致了更多的消费者转移到线下去购物？我自己翻译一下。So thanks management for taking my questions.

Speaker #6: hi. Guan Yichen,晚上好。谢谢接受我的提问。我有两个问题。第一个问题是，嗯，刚刚我们管理层说到那个4月份其实我们看到的是一个负增长，然后5月份，呃，到此为止可能也，也应该是一个负增长。然后，呃，上周的这个社林，呃，看到4月份，呃，社林的这个总额在服饰其实是增长3.6，然后想管理层就是大概说一下这个，嗯，是不是有大部分的这个销售转到了线下，然后另外就是说如果，如果不是的话，或者是，呃，其他线上的平台是不是从我们这种，我们这里抢走了一些市场份额。啊，这个是第一个问题。然后，呃，第二个问题其实也是跟，呃，第一个问题有关的，就是这个332来。我们刚刚说到，呃，这个quarter是涨了这个，啊，三十几嘛，然后是你管理层是不是看到从消费者的这个行为，呃，是比较往线下去购物呢，还是说，呃，是因为山山提供了一些那个品类，呃，或者是一些商品在我们唯品会线上是没有的，所以就，呃，导致了更多的消费者转移到去线下去购物。啊，我自己翻译一下。嗯，so thanks management for taking my questions. I wanted to follow up. I think management earlier mentioned that, since you guys, saw April, is a negative growth, for your platform, and then maybe May there's also so far, month to date is also, seems to be negative.

Alicia Yap: I wanted to follow up. I think management earlier mentioned that seems like you guys saw April is a negative growth for your platform, and then maybe May that also so far month to date is also seems to be negative. I think last week we have the China retail sales data. Its total apparel sales is actually grew 3.6% in April. Just wanted to see where is the disconnect. Is it a lot of these spending been shifting to offline? Is it there are some of the market share. Our market shares are losing to other online platform. Related to that is also on the Shanshan outlet. Also, I think management mentioned the platform grew like 30-plus%. Also wanted to know, is this because of the consumer behavior that you observe started to shift more to the offline shopping?

Speaker #6: But then, I the, you know, China, retail sales data, is a total apparel sales. It's actually, grew 3.6% in April. so just wanted to see, where is the misconnect.

Speaker #6: is it a lot of these, spending been shifting to, offline or is it, there are some of the, you know, the, the market share, you know, our market shares are losing to other online platforms.

Speaker #6: And then related to that is also, on the Shanshan outlet, also, I think management mentioned the platform grew like 30-plus percent. Also, I wanted to know, is this because of the consumer behavior that you observed starting to shift more to offline shopping?

Speaker #6: or is it because, Shanshan actually, have certain merchandise that, VIP online doesn't have? Thank you.

Alicia Yap: Is it because Shanshan actually have certain merchandise that VIP online doesn't have? Thank you.

Speaker #4: 那个我来回答一下，就是我们也看到就统计局的数字是3.6，那么，呃，社林，那么服饰类，啊，那么我们看到去年全年也是3.6。但是呢，如果拆开看的话，就是线下其实会跌的。呃，那个就是说它增长，不是，就是线上，会跌的，反而是线下，那个就是说比线上的趋势会好。所以说我们最近也在看这个问题。那么，呃，呃，包括那个就是我们在想是不是因为可能现在的线上的退货率高，那么包括很多用户也回到线下，包括商家也在线下投入。那么但是我们估计像这种我们是估计，啊，就是可能是这么一段时间，但是我们希望也会有好转，啊。那么另外呢，就是像我们这块的话，比如说山山它增长得蛮快，那么因为山山的体用，那么那个它的占比还是蛮高的。所以说尤其体用占比，体用户外的占比蛮高的话呢，它的增长更明显。像我们，比如说我们4月份跌的时候，但是我们的体用品类也没跌，是增长的，只是我们说的在尤其我们的核心的男女服装，呃，男女的男装女装，啊，童装，啊，这些跌。所以说我们自己看到其实消费者需求还是有，那可能在品类方面，啊，转做一些转移，啊，所以说我们那个可能像整体的这个就是这个我们说的线上服装的生意，可能我们要过再过一些时间我们才能看到一些趋势。

Eric Ya Shen: 我来回答一下。我们也看到统计局的数字是3.6，那么服饰类我们看到去年全年也是3.6。但是如果拆开看的话，线下其实会跌的。就是说线上会跌的，反而是线下比线上的趋势会好。所以说我们最近也在看这个问题，我们在想是不是因为可能现在的线上的退货率高，包括很多用户也回到线下，包括商家也在线下投入。但是像这种我们估计可能是这么一段时间，但是我们希望也会有好转。那么另外像我们这块的话，比如说山山它增长得蛮快，因为山山的体用它的占比还是蛮高的。所以说尤其体用户外的占比蛮高的话，它的增长更明显。像我们，比如说我们四月份跌的时候，但是我们的体用品类也没跌，是增长的，只是我们说的在尤其我们的核心的男女的男装、女装、童装这些跌。所以说我们自己看到其实消费者需求还是有，可能在品类方面做一些转移。所以说可能像整体的我们说的线上服装的生意，可能我们要再过一些时间我们才能看到一些趋势。

Eric Shen: 我来回答一下。我们也看到统计局的数字是3.6，那么服饰类我们看到去年全年也是3.6。但是如果拆开看的话，线下其实会跌的。就是说线上会跌的，反而是线下比线上的趋势会好。所以说我们最近也在看这个问题，我们在想是不是因为可能现在的线上的退货率高，包括很多用户也回到线下，包括商家也在线下投入。但是像这种我们估计可能是这么一段时间，但是我们希望也会有好转。那么另外像我们这块的话，比如说山山它增长得蛮快，因为山山的体用它的占比还是蛮高的。所以说尤其体用户外的占比蛮高的话，它的增长更明显。像我们，比如说我们四月份跌的时候，但是我们的体用品类也没跌，是增长的，只是我们说的在尤其我们的核心的男女的男装、女装、童装这些跌。所以说我们自己看到其实消费者需求还是有，可能在品类方面做一些转移。所以说可能像整体的我们说的线上服装的生意，可能我们要再过一些时间我们才能看到一些趋势。

Speaker #6: 嗯，OK。So the NBS data, the, apparel sales, the growth, of, 3.6% you had mentioned, actually refers to both online and offline. based on our observation, actually online we have noted, noted, we have seen a very notable decline, and, w-we are actually quite in line with the industry trend.

Jessie Zheng: Okay. The NBS data, the apparel sales, the growth of 3.6% you have mentioned actually refers to both online and offline. Based on our observation, actually online, we have seen a very notable decline, and we are actually quite in line with the industry trend. Offline, we do see very strong growth. We believe it could be the difference of consumer activity with online and offline shopping. When they do online shopping, they tend to return a lot. That would make the sales and revenue data more compressed. With offline, consumers do shift part of their spending increasingly to outlet channels. It is actually the same with merchants, with brand partners. They have been shifting a little bit more resources to offline outlet channels as well. We think it's still partially holiday driven.

Speaker #6: and offline, we do see very strong growth. w-we believe, it could be a the difference, of, consumer activity, with online and offline shopping. when I do online shopping, they tend to return, a lot.

Speaker #6: So that would make the sales and, after re-revenue data, more compressed. And with offline, consumers do shift part of their spending increasingly to outlet channels.

Speaker #6: And it's actually the same with merchants, with brand partners. They have been shifting a little bit more resources to offline outlets, channels as well.

Speaker #6: but we, we think, it's, it's, it's still a partially holiday-driven, and, going forward we have, to see whether, the momentum can be sustained. in addition, the offline outlet, the outperformance is actually benefiting from, higher concentration, of certain categories.

Jessie Zheng: Going forward, we have to see whether the momentum can be sustained. In addition, the offline outlet out-performance is actually benefiting from a higher concentration of certain categories, especially sportswear and outdoor products. That makes their sales performance exceptionally strong because consumers tend to shop into these categories as just fitting in with their lifestyle. It's actually the same thing with the online category performance. Even in April and May, when we do see a broader weakness in apparel categories, sportswear and outdoor products continue to outperform. I think the real weakness is actually going into more discretionary apparel categories like womenswear and menswear, which are pretty much fashion driven. I think we still need some time to see whether the discretionary spending will turn out better than expected going forward.

Speaker #6: Especially sportswear and outdoor products—that makes their sales performance exceptionally strong, because consumers tend to shop in these categories as just being fitting in with their lifestyle.

Speaker #6: And, it's actually the same thing with the, online category performance. even in, April and, and May, when we do see a broader weakness in the apparel categories, sportswear and outdoor products, products continue to outperform.

Speaker #6: I think the real, weakness is actually, going into, discretionary, more discretionary, apparel categories like, women's wear and men's wear, which are pretty much fashion-driven.

Speaker #6: So, I think we still need some time to see whether the discretionary spending will turn out better than expected going forward. Thank you.

Alicia Yap: Thank you.

Speaker #2: Thank you. We will now take the next question. This is from Ronald Kung from Goldman Sachs. Please go ahead.

Operator: Thank you. We will now take the next question. This is from Ronald Keung from Goldman Sachs. Please go ahead.

Ronald Keung: 谢谢Mark、Jessie。想问两个问题吧。第一个就是我们看到这个GMV和收入这个gap这个季度比较大，想知道是山山这个online to offline的这个比例accounting原因呢？还是是return，就这个退货率又有一些提高？第二就想看，因为现在三月、四月、五月都比较弱，到底这个是一个技术原因，还是这个会不会变成我们下半年也是这样的一个trend？因为我看去年三季度其实增速还是比较健康，所以base也不低。所以想听一下最近几个月会不会对我们整年或下半年增长的判断会有一些变化。我翻译一下。Thank you management for taking my question.

Speaker #7: Yes, yes. I'm Don Mark, Jessie. 想问两个提问吧。第一个就是我们看到这个GMV和收物这个gap这个季度比较大，那想知道是闪闪这个online offline的这个比例，啊，counting原因呢，还是是这个，呃，return就这个退货率又有一些提高。嗯，第二就想看这个，因为现在3月、4月、5月都比较弱呢，那到底这个是一个技术原因，这个high base还是这个会不会变成我们下半年也是这样的一个trend？因为我看去年三季度其实增速还是比较健康，所以base也不不不低。那所以想听一下这个最近几个月会不会对我们整年或者下半年这个增长的判断会有一些变化。那我翻译一下。 Thank you, management, for taking my question. First, I want to ask about the GMV gap.

Ronald Keung: First want to ask about the GMV gap with revenue. Is that due to Shanshan or maybe the return rates have changed? Second is, given that the March, April, May trends have been quite soft, should we take this or read this into H2, given the base in Q3 last year is not a low one, which therefore the base is normal. How should we think of the recent trends and translating to our expectations into H2? Thank you.

Speaker #7: with revenue, is that due to Shanshan or maybe the return rates have changed? Second is, given that the March, April, May trends have been quite soft, should we take this or read this into the second half, given the base in, in the third quarter last year is not, a, a low one, which, therefore the, the basis is, normal?

Speaker #7: So, how should we think of the recent trends and translate our expectations into the second half? Thank you.

Speaker #8: Well, thanks for your question. And let me answer the first question. Actually, the year-over-year growth gap between revenue and the GMV in the first quarter increased due to the following two reasons.

Mark Wang: Well, thanks for your question. Let me answer the first question. Actually, the year-over-year growth gap between revenue and GMV in Q1 increased due to the following two reasons. The first one is the return exchange rate slightly increased year over year due to higher contribution from apparel categories and SVIP members. Secondly, just you mentioned, they increased the GMV contribution from Shanshan. Given that Shanshan operates on a commission-based model, so from accounting-wise, we recognize this revenue based on net method, which resulting revenue to GMV gap become wider.

Speaker #8: The first one is the return exchange rate slightly increased, year over year, due to higher contribution. From apparel categories and SVIP members. And secondly, as you mentioned, the increased GMV contribution from Shanshan outlets.

Speaker #8: Given that Shanshan operates on a commission-based model, so from a county-wise perspective, we recognize its revenue using the net method, which results in the revenue to GMV gap becoming wider.

Eric Ya Shen: 那我来回答第二个问题，关于是不是我们说的很危险，我们觉得倒不至于，因为我们其实跌的那个数字，就假设4月最多跌的数字也就是在0到负5之间。但是其实跟我们原来预估的数字，因为我们原来预估涨，所以说其实是有一些差距的。那么我们觉得可以再过些时间再看看整体的趋势。那么三四五不好，跟我们说的天气也有关系，就是换季的话不明显。所以说我们觉得近段时间是有一些消费趋势的问题。但是我现在不敢打保票，可能过一些时间我们再看。那么看大家尤其对服饰类的购买需求，其实有没有慢慢旺盛起来。

Eric Shen: 那我来回答第二个问题，关于是不是我们说的很危险，我们觉得倒不至于，因为我们其实跌的那个数字，就假设4月最多跌的数字也就是在0到负5之间。但是其实跟我们原来预估的数字，因为我们原来预估涨，所以说其实是有一些差距的。那么我们觉得可以再过些时间再看看整体的趋势。那么三四五不好，跟我们说的天气也有关系，就是换季的话不明显。所以说我们觉得近段时间是有一些消费趋势的问题。但是我现在不敢打保票，可能过一些时间我们再看。那么看大家尤其对服饰类的购买需求，其实有没有慢慢旺盛起来。

Speaker #7: 那我来回答第二个问题，就是关于那个就是不是我们说的很危险，我们觉得倒不至于，因为我们其实跌的那个数字，啊，就假设4月最多跌的数字也就是在0到-5之间，啊，但是呢，其实跟我们原来预估的数字，因为我们原来预估涨，啊，所以说其实是有一些差距的。那么我们觉得可以再过些时间再看看整体的趋势。那么3、4、5不好跟我们说的这个天气也有关系，就是换季的话不明显，啊，所以说我们觉得，呃，那个就近段时间是有一些这个消费趋势的问题。呃，那是我现在不敢打保票，可能过一些时间我们再看。那么看大家尤其对服饰类的这种购买需求是有没有慢慢旺盛起来。

Speaker #6: 啊，in terms of our full year outlook, even when we say it's, near-term pressure, from March, to May to date, we think, it's still within our control.

Jessie Zheng: In terms of our full year outlook, even when we face near-term pressure from March to May to date, we think it is still within our control. It's just from -5% to 0%. That's the range we are confident to maintain. Also the recent softness is related to a number of factors, weather condition, seasonal transition to spring and the summer apparel. Of course, there is a bit of uncertainties on consumer sentiment and behavior, etc. We may need more time to see whether the trend will be improving going forward. For the full year, we think our full-year target is still achievable. By continuously optimizing our operational strategies, we should be able to maintain at least a steady business performance.

Speaker #6: It's just in from negative 5% to 0%. That's the range. We are confident to maintain. and also the recent softness, is related to a number of factors, weather conditions, seasonal, transition to a spring and, and a summer apparel.

Speaker #6: of course, there is a bit of, uncertainty on consumer sentiment and behavior, etc. so we, may need more time to see whether the trend, will be improving going forward.

Speaker #6: But, for the full year, we think our full-year target is still achievable. And by continuously optimizing our operational strategies, we should be able to maintain at least a steady business performance.

Ronald Keung: 谢谢。

Speaker #7: Thank you.

Speaker #6: Thank you.

Jessie Zheng: Thank you.

Speaker #2: Thank you. Due to time constraints, that concludes today's Q&A session. At this time, I will turn the conference back to Jessie for any closing remarks.

Operator: Thank you. Due to time constraints, that concludes today's Q&A session. At this time, I will turn the conference back to Jessie for any closing remarks.

Speaker #1: Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter.

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. 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.