Baozun (BZUN) 21 Mar 242023 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by for Baozun's Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I will now turn the meeting over to your host for today's call, Ms. Wendy Sun, Senior Director of Corporate Development and Investor Relations for Baozun. Please proceed, Wendy.

operator. you, Thank thank and joining today. us Hello, you everyone, for

well year release and was Our ir.baozun.com available fourth earlier earnings fiscal and as at website call quarter distributed newswire XXXX before our IR on as global on services. is this

posted also that presentation same PowerPoint to available for accompanies they website, where a are comments download. the have We our IR

followed e-commerce; Yu, review On and Mr. our share President Baozun the Chief Brand Executive by development and about financials business Vincent and Qui, the Chairman be the Management. They outlook, the follows. more President Zerbib, call today about will Sandrine strategy by who Qui and Mr. Ms. from to during Mr. company to questions will all answer and Chief Arthur of your Baozun, of discuss Zerbib Management. Q&A and of Officer Baozun we highlights, Baozun the available have that e-commerce Mr. Brand and Financial then session Officer; Yu, Baozun business Ms. will

of the All to begin, Act mandate we factors Private are of which may that other a call involve control, management's forward-looking results market unknown remind Limited. filings company's meaning Litigation Exchange those manufacture you the within are Securities other like Further website I uncertainties current announcement the of as Stock and law. believes provided these relate uncertainties beyond company or the upon actual the to statements, from XXXX Securities conditions the of applicable XXXX. its update predict to U.S. conference required notice based and and the in and date events hereof of the Kong with company's information U.S. statements These forward-looking and the known statements as be other company's any expectations U.S. not does U.S. company documents included is difficult today, Exchange to the is cause obligation and operating information to materially as the the the published on risks, current regarding of of of XXXX risks, as to based in or contains except Exchange Securities and which mandate, that Act and that as Hong Act the statements. is of forward-looking a the in any this under would Commission reasonable this differ Securities or Before factors and undertake forward-looking Reform call on assumptions and

stated, in this note figures please that call during otherwise all conference mentioned are unless Secondly, RMB.

In addition, in accounting the from our we to or GAAP to may non-GAAP accepted discussion adjusted financials order of use place related confusion that principles may accounting any brand. the elect reduce to arise in about non-general

pleasure turn and Vincent to please please Mr. are my Here now it go introduce Slide Qui. Vincent, our is Chief to Chairman and #X, Officer, ahead. Executive

improved chain commerce creation Wendy. from resilience Group all our our service Thank to transformation. contributed transformation. the and quality, omnichannel reinforces to and also you, additional off your kicks ecosystem. BEC Baozun adaptability extends XXXX our time. Thank and XXXX, within Throughout everyone. of for demonstrated EBM revenue Hello, supply capability consolidating leadership stream value journey digital chain supply our you fulfillment.

executed for incremental of health brand strengthened CNY gross of impressive forecast. significantly far first third of the an turn, surprising breakthrough is margin This Total year. management. is our BCI initial We cash management. year both resulted contributions billion, operating annual premiumization international represents the of strategy Baozun group business lay curve. Group's financial in Gap highs. lower This and for Overall, result reengineering key with double foundation grew and of further BBM our the free year-over-year brand has the China losses, is, a solid digit a opportunity BBM revenues efficient flow, X.X both operating group. the XX% to in foundation challenging second from which to achieved capabilities growth in a more also having by and management. component in our and grew X% the process the conditions, record enhanced by established resulting a to our and optimization growth year-over-year flow much market for continue cost This underpinned success cash-generating Baozun longer-term cash and we infrastructure. despite for capital of working from

BCI starting Honda with collaboration is and the that role to good at We a expansion synergy applied into in expertise up, and Singapore expand IP, As following business acquisition the ramps vital Malaysia Honda example transformation its a to of our play BBM this and This will Asia, our of Southeast believe is core operations between business units. of Baozun's the identity. technology year.

been guide in has market representative as XXXX to vendor distributed acknowledged happy system. are order for We a Ghana's that Baozun management share

are and is the SAP, global technical This We as capabilities industry. a to only Asian IBM Salesforce. giants, Oracle, be of vendor recognition proud alongside such in service selected the outstanding retail Baozun's

remain and brand our forward, we confident macro are about cautious value uncertainties, business Looking that ongoing to our transformation we strengthened fundamentals has the our owners. yet, proposition

the manner. million our our year the a balance and sustainable flow plans shareholders. to With value seize our diligently repurchase we healthy January, This new continue be this and has XX execute focus approved also opportunities cash main and lasting new Our to to ready provide patiently a of Board share sheet, next in months. a is over to $XX will program

trading to will such program factors and into account taking window marketing fluctuations. time this as from time, We exit

financials [indiscernible] to on and call for a over Let our business, our elaboration update pass me of review Arthur BBM. now more the BEC on e-commerce for

hello, Okay. everyone. Vincent, Thank and you,

declined our to details. X.X do of quarter #X. same the appliance, revenue Baozun economic XXX trained for improvement pursuing me product full to high-quality low After a of the scaled CNY e-commerce offset on to in driven product quick a billion. quarter turn decreased electronics sales to last service nearly partially Slide environment, fourth we categories. of revenue and fast-moving to model, discuss This compared quarter low-margin financials categories. notably million, by Group's and total business review beauty in from was Due billion the health Let CNY XXX value-added of of year, Management Consequently, Please of revenues. BBM for CNY revenue a revenues sequential will total XXXX. which, increased sales fourth a consumer XXXX the incremental care CNY generated BEC X% year XX% and expanded the of weaker business Baozun I goods XX%. sales back our more million. and year-over-year, Further X.X revenue Brand by e-commerce

to year cover margin X Group billion, operations At from good operating better XX% our CNY income sales store for openings quarters. loss gross e-commerce will continued and to profitability sales for Sandrine XX.X by more improved Group grew The million China our totaled revenue sales significantly product Product premiumization product discount which and the gross will than details doubled profit CNY initiatives was product during to to Baozun These million. profit XX.X was the million. total a gross CNY XX% the coming strategy show met China have foundation launch CNY in Our to contribution margin operating BBM of from provide XX%, all for ago. new income in its with control, later. new of BBM. gross and momentum attributable million. X.X was reducing quarter, for from growth expectations. a incremental CNY mainly XXX the

loss X CNY On the from year. period quarter level, narrowed of value CNY as during group a the our onetime loss same last to significant million year million we fair a significantly XXX.X net incurred ago during the

adjusted XXX.X of quarter, Excluding CNY the operating and operating million factors, business the nonrecurring operations narrowed ESOP, million. amortization CNY impact adjusted which from income of income was CNY to BBM XX.X our the other million, XX.X loss during and was e-commerce

the net adjusted was CNY million Our during quarter. income XX.X

total year-over-year. year totaled increase billion, Gross with We of of turn CNY increase X.X Let profit ended quick X.X CNY summary. year-over-year. a to full an XXXX X% us X% of billion, group an revenue

Our turn adjusted XX.X totaled to Slide operating Please CNY million. loss #X.

Turning status. and cash to flow our cash

cash investments CNY billion. XX, restricted totaled X.X XXXX, As cash, short-term equivalents, December of cash and our

continue CNY and XXX.X were capital through reengineering process management. inventory, collection cash flow back-end and and improve XX% and We billing cash XXX.X Annual efficiency to of operating million year-over-year. million, on XX% free working increase CNY cash flow an reflectively

resources business. year. principle Now the high-quality XXXX strategic into and steered our allocation of for a signed the year, business let's BEC the achieving At customer-centric, business. beginning of our BEC. a growth for the of of and year objective dive efforts sustainable throughout transition is [indiscernible] team's we BEC

areas X following As we Slide a in on the have #X. progress made displayed result, as

our with a robust We Nielsen outcomes. implement from the framework MPS improvement This service their XXXX, improve satisfaction I'm improved our XX% [Foreign well on Firstly, score objective contracts Language] clients' in services XXXX. customer for to to growing to ratio. with our MPS are the plans I'm key and enhancement. that in XXXX. collaboration The of and has XXXX. that this of various customer to defining introduced service in glad In Baozun's satisfaction and track framework, renewal of directly migraine our to initiative in is reflects X.XX to report precise over management standards quality client X.XX% XXXX contract pleased renew outstanding we recognition contribute account Baozun, choose further in

key Baozun's strategies beauty into foundation category through focused establish omnichannel Tumi, enabled a From to product in within and growth partners new go-to-market discussions premium of extend categories and spirits, we XX business XXXX. the and participating achieved brand the omnichannel Tapani, acquire automotive in to Dyson, just and reach product capabilities And product in and expanding in marketplaces. with on such growth we Tumi strengthening standpoint, core this business has luxury helped Secondly, JD driving for helped We over XXXX, wine sustainable our platforms. our apparel high-level on e-commerce few. By our growth and from This new brand in will as categories name luxury and effective share formulate partners market brands consistently our health which solid China. we us and including us primary a both category.

to several partner Shanghai-based November Coca-Cola, nature commerce XXXX. are content our XXXX, on with Given followed established leading the was in announcement location, we our and acquisition and This landscape, Zara, of in secured channel e-commerce by leaders creative launched of Amani name a just our center. like partnerships, a the included few. of investing content-based In e-commerce. live division, doing the early a Trucks, Baozun we contracts interest on streaming Leveraging which industry we strategically dynamic

in improvement cost our efficiency efforts continued and we control. Thirdly,

we drive cost year, the and During management established improvements. to committee efficiency lead a control

and more through leaner becoming Our middle are integrated process and back-office functions reengineering.

up scaled as initiatives regional partners employees. efficiency approximately an with by also We more strategic leaders industry into of such data cost new X,XXX transferring XX Microsoft these million. facilities, generating We CNY positions annual operational over of XXX AIT service centers enhancing AI, saving Open and integrated through

capital efforts in records also new financial taking in and management as cash operating Our cash yields in substantial mentioned flow, results, working my flow free update. both

also remains business executing sustainable and ahead, aim for spirit, Looking XXXX health in and and our expand high-quality brand fortify naturally luxury as strategy primary our on apparel our this business the categories and categories and e-commerce. We leadership potential automotive. luxury while to growth. position focus and in We market share to create high beauty believe TAM expanding wine market into our will such and

We our will capabilities. to enhance continue omnichannel

we key locations operating conjunction our is e-commerce of with streaming creative expertise in where daily in so experiences. live and leverage content in One focus Baozun's

March to our location from opportunities completion seize to additional acquisition in of streams and more the create brand positioned BEC. XXXX, now revenue we well Following for partner are

value we In ecosystem addition aiming Little acquisition extended for Don, and our money, to Book, closely traffic working vip.com on content build with marketing partners. for are to Red brand an and also focused

opportunities major in expand channels across e-commerce for also are We positioning exploring as our Dou business emerging sustainable platform, We growth. believe such will opportunity new other us success these and Quezon.

sales are product control. our optimizing past we business product both quality. a we have to been XXXX. margin When refer year we by emphasizing In higher and grow the quality, merchandising business half, we improved inventory and further model in Lastly, high-quality for aiming aim sales enhanced to our and high

business the sales a distribution entails model brand China. exclusive model This as utilizing our omnichannel's government a elected where inventory certain we not this new and level effort, In Baozun in channels, we partnerships online introduced the to managing As serves technology. have gross and for both meet where offline, all terminate standards. margin rates our XXXX, did part digital have of partner

We to channel can in performance online brand, care with Furthermore, business, deliver we a are and data distributors. and compared to continued product Language] double-digit our by sales high confident that applying to deliver Baozun's offline integrate traditional superior category. system leading self-incubated health technology, and [Foreign beauty our growth seamlessly

convinced are will right our for that XXXX. We margin profit established transition. our growth the we business initiative foundation initiatives the in drive in and solid Overall, I this new for believe implemented product revenue both have and sales a

that are have on top for we're generate we now We track EC's bottom healthy XXXX. strengthening cash to line, in confidence continuing flow and

Now let's pass Sandrine. on to

Vincent, to for is us speak Slide #X. my Please joining to you, and with It Thank and great all today. you turn Arthur, thank you. pleasure

vision a an by lifestyle tailored brand, XXXX, recall, strategic BBM to foresight. on you operations acquired and consumer, transform iconic Gap BBM As clear a modern into opportunity with golden Gap in journey, to February embarked innovation reinvigorate the a the fueled brand of Chinese recognizing China, to Greater a

BBM's with in consumer only vision was was levels a products all power modern talents resonates style We to to XX brand Greater revitalize #X. of aspirations of products, execution XX And core and months, achieved Slide to had was also China discounts messaging consumer. remarkable consumers from a of consumer-centric technology-driven a from discount-driven loyalty reignite closed in transformation Gap American moving abnormally not by in discount-driven culturally a DNA. model evident plagued to and again modern pursued by coupled key away and solutions The stores following, diverse the just reinterpret the GAP and to Chinese Chinese and relevant Our that is impeccable the brand the multicultural make teams, over indicated just elements GAAP love China. to GAAP round. The for took mission which the one goal results. business health on with as deeply We but year high localizing of

of on team set and premiumization whole restructuring, chain and comprehensive This elevate as effectively. operational the a execute strategy of to improving store implementing First, and systems well We support business. to a We by design, systems our in as to processes strategy robust team putting and focus new the Then on brand. product the turnaround optimizing personnel enhancements product focusing right systems on and brand assembling processes. key supply embarked image. segmentation, place our workflows included hiring

driving break products from as appealing China-for-China discounts approach, brand and right which points, consumers, time. people the openings factor product social reached new basis through deliver cycle with the in perpetual celebrity about campaigns. launched right media at the key endorsements, goal combining X,XXX imposed an excluding the integrated percentage, go-to-market right to new margin store locally discount for focus to new and a product control We the royalty. Our We gross increase was and products has We of instead to on thanks the designed aiming our introduced to the image.

opposed of creating brand the We concept, box previous our our the enhancing transforming than store immersive more concept. and We're commercial which into as new channels big type stores boutique to opened brand more is also just experiences. DNA,

further pop-ups stores Beijing. store. in enhanced year that square new customers. In-store Omni scenario-based as but in meter optimizing Chengdu, insights achieving seamless co-location and portfolio and a now in offering stores experience atmospheres space regaining as into a well generating Our resonate implemented experience. in beyond consumers. full including relevant square and for smaller each efficiency are creating retail size, merchandise, successfully enriching existing We've meter stores increase customer Guangzhou buzz newly stores new XX% in We We've store engagements XX Shenzhen Leveraging in for the experience, destination the flagship on physical are festive of CRM, a with for and social efficiency, better serialized higher WeChat campaigns customer basis. opened and and store XXXX, versus the opened a the

have existing our same-store sales. in comparable stores XX% notable seen rise Additionally, a

also welcomed have our by recognition new the customers, only warmly Our industry. stores gained retail but been within not brand have

achieved objectives these within that report We are our in to frame. areas the time proud we

only our based our the In fact, the effectiveness team business. in in on fundamentals aspects XXXX continue build targets. margin, for not of the to strengthened around the momentum gross foundation, In solidify exceeded but strategies our of XXXX, we will on Gap met the in brand revitalize demonstrates brand such growth we to and the China. and turning as our some dedication This

line top safe guarding our gross XXXX profit pursue we While remains growth, paramount.

online will our discount production controls special this and We achieve for increased through business. tailored stringent

us of efforts, to control China achieve We as expenses, XXXX lead turnaround continued planned. expect that will these with combined Gap in

completed parts and a Southeast We Authentic Brands of become of Hunter. Hunter's Asia. have be joint focusing like acquisition kickoff and China BBM transfers Greater the And with for official and tasks in co-own are quarter Group. of coming venture product now licensee Hunter's will established we store the we China the the in our and Intellectual Greater planning. Lastly, second has Property operations in IP preparation Southeast The on Currently, phase, Asia. endeavors with

business are expansion BCI We business Thank brand's to including China session. our in have This distribution as for diversifying the Southeast you. further Malaysia ambitious concludes Operator, begin support prepared accelerate well to potential ready units, Baozun in international our plans aim Hunter's this to new we and now we Hunter's into remarks. as and Asia. channels Leveraging unlock in our categories region. and Q&A Singapore in the full expanding growth,

today [Operator question-and-answer begin first The comes Citigroup. Instructions] now from with Yap Alicia session. question will We the

in observed macro over overall have consumption expectation year. questions. shopping have What the that the the past what is this two for and is One consumption the management's outlook months X is you XXXX. sentiment I of latest

sure, I'm it's promotion is started previous this you XX could to you early, that still versus the not have question for be And year's so festival? While June we What do period? this XXX year for promotional different second plan year business. for then the BBM expect think

decision-making you for in purchasing the average the operating, make that store, have been which the user store have behavior online share add if meaningful could brands then And acquire your is portfolio value for the comparisons. you you difference of us go see what most some to spending you to with example, terms or user your you can more add is to brands wondering, you your what BBM And few noticed the of there Just for kind habit, to that any offline of opportunity business, a at the criteria? versus management?

Okay. Alicia, for your to about on pass the to will I the I will Sandrine Vincent take one, and first yes. and questions, one, then talk second

there Regarding say confidence, the to as recovered within low. And I very see has where that, some very see, quickly. still not we category has some still highlights actually But the have can figure consumption are sentiment, consumer we performed can is point the sentiment the better.

healthy store, all and nutrition. example, food For

So seen those a the on consumption. recovery have which we good are the spotlights

off plan will Regarding in May. start XXX, for kicked we formally That XXX. haven't the

important. promotion important, capability focused ongoing perspective customer, to the which build sales more different customer and good improve for is from and and we base try and is ready becoming and is daily have big on trying more operation And means getting daily seen operation the I the becoming which more However, have the already for more a this service a customer example, with XXX. a sales engage good doing year the to to for doing the a

question. So my first Sandrine? that's for

Vincent. Yes. Thank you,

questions. you, for thank So your Alicia,

going better progress question we able it's online. online, premiumization clear your about about the previously. offline part margin So Nevertheless, mean consumer I of to have behavior. I online much is faster off-line been achieve than pretty gross that talked also than is versus the that first

it's question mind, your being criteria, say, but this and cycle multiple criteria. to in the Then would question, I'm So takes actually which are with extremely the I longer. key at a looking we really of we are say, second going time. It criteria four regarding selective are opportunities,

which that dynamic in segments, is, The are and very belong operating to. still first looking very China. which growth, brands pockets are category We're are the segment in and for brands the these interesting of one obviously, in there

markets. some to China need criteria key that these develop potentially brands second potential The have in and Asian Southeast to true the Greater is

to is are China not It's with third only. particularly brands one has at. The brands what is the our synergies so able make really enable one that the able our And product. successful to us. to And of be really for to been really we we a far China, current criteria with second a will the to us that is regards the on four transaction key act work leadership. portfolio, be supply meaning but need progression the with synergetic key looking difference through These to which for GAAP, fourth one, chain, really digital right on we need to the are the technology

question The from Thomas comes next Chong with Jefferies.

My trends talk remarks, you and question growth improving for as our operating profitability. in secondly, we GMV? prepared about highlighted the to efficiencies, into contribution we outlook the non-Tmall looking And first, can are then the

I M&A. some And trend about just finally get our our operating in is and margin want our then more outlook. of thoughts the to expenses cash about use about color our more our and So

them by Four one me take Okay, Yes, one. questions. let Thomas.

The channel. first outlook non-Tmall for one,

in in And will and have we a on it's my put lot mentioned follow Hansen part, a I earlier of As trend strategy is a and doing omnichannel emphasis channel. XXXX. we

because capabilities the has doesn't It increased. the us non-Tmall capability the channels also however, itself, traffic omnichannel. our perspectives, rest. by and to are we the number the like We the a do evolving looking matter where But believe we landscape, not We more allow is the the looking will looking are channel number into more and at at important. goes. are e-commerce of becoming and the China From vip.com of complexity omni-channel new given

with along will to adjust able We brand be very very the easily. quickly and

one. that's first So the

operating about efficiency. is question second Your

in saving way. at savings. very program, BEC in a significant very a we the management cost efficiency So established lean looking capture that and already from And delivered the structured committee to perspective, have opportunity how we

So transferred for XXX from XX locations, center mentioned, which more That's regional as -- example, generate one delivered than positions of those I has has just lower-cost to service million program our examples. of savings. Shanghai CNY

in of how We the set examples those drive of have terms savings. a cost to

we In things. third-party we is in put deliver of One streamlined the When control. terms emphasis of the procurement. that the secondly, margin overhead two as also to the from save talk is the over BBM, is procurement, the lot actually well, Sandrine we over we money. focus to savings third-party driving a on improvement. business, the have terms in of currently about take of I margin will improvement on And to pass gross the which XX% the overhead Sandrine?

with for absolute but mean obviously, Arthur control discount mentioned, so has discounted, key part gross of an off-line, products, as procurement they're -- important brand. round bring they all good because that online is it just or I and Well, convince we good over the our the come products margin, it, we our been see us year buy because the consumers be not and a but are really to

marketing to to results, right the on one, these the messaging. and communication but in consumers. attract more had This extreme the is we to So product at attractive in with that's order right and bring stores right in also discounts, marketing which are order discipline number to get time exercise

Sandrine. of strategy. on Yes. and And the cash M&A also use

seen, we you've of a position. our as cash, net keep high healthy because flow, relatively for cash So the

value the term, deliver that in are we the We're very shareholder both a both a short will in we use situation. opportunities. term start financial into term, term. on cash In market do using has and we looking current healthy under our M&A, program strategic to announced, fit as we're the to we target our and So also repurchase share, has and longer selective Vincent approved program the the the And status. Board once long when short have looking cash for at will

for longer-term to So effectively drive able use value will in very this our we the be our cash shareholders. to way,

So Thomas. that's answer, my

[Operator Wang from Instructions] with The next comes Zhihao CICC. question

the first your International you plan question launch the Baozun's brand mentioned details in in some Could Southeast will my and of the business is that business? on investment the is could company's will you My Baozun in in for be used that, share AIGC you the second that question please share Asia. strategies how XXXX? AIGC the And Honda

Vincent. Zhihao, this Wang is

we The international first this BCI. question business, call is about our

we this e-commerce think business years' also a is. established that services efforts, two, brand, deliver X and number who I can established well. our brand full have team team we after to And one, as almost a target number

that well, only doing we omnichannel region, this online help services that the in in as cannot provide e-commerce means the China, to traditional like have Southeast So we are Asia business, just the also yes. in brands but business we can offline

So this to us potential gives region. this of a lot to brands help expand into their business

e-commerce business. offices to also run countries several brand services the and established have for the in business we now, right different So

business. the a for Honda So is good example brand

going Singapore this off-line We we're in brand marketing are year. for and and And conducting also year, stores online marketing stores open of this to middle Malaysia.

our be utilized the experiences Asia. home to all will data be first business. into will also Singapore, we're Southeast in So business the And run omnichannel two technologies going this Malaysia places

that question. So first is for your

I about just The to this want AIGC. levels. one talk second in is two

soft, that level players. America text we or when the First that all business of whole matter kind big we is no matters photos general. in these branded no or videos, Means AIGC in utilize these two we it's from to a want use opening results BBM, group, or generate business, BEC units,

-- of AIGC in units. can different all see our So functions you capabilities business almost

that in players. So is, general, we are capability this outside from adapting

edge to capability, have them on resources also want to help we their based specific based create to pour general more directions Secondly, some competitors. the the that, own for on business some against we leading

stage. So it's still right now, early

-- are concept. We of proof are them doing of some

because hope can But more year Hunter. this of minimum now, especially right we compared work brands, make Some we the Gap to them and previous years products. payable they are progress much closely with

I better that much question. this in results your direction. Yes, for have than before So second we is think

Securities. Citic with next Colin The Yang question comes from

from I'm about two Colin I BBM. Citic Yang have questions Securities. And

GAAP that saw offline be an second key this brand margin And is in further quarter. and adopted The the as what's offline achieved would that market same process, experience in question progress of of China's narrow-down the in quarters double-digit past leveraged further during in first the of we your significant what your And Gap, is be experience brands improve loss Hunter? directly? GAAP especially store future? know-how the fourth the such And sales how in better of is can measures a in running to online that the and what running the And other growth fully your operations international in expectation?

Colin. Okay.

So on gross been good improvement our gross has margin the expected. a But margin. faster actually first was and even faster had question, at for was plan. was of expected. your had we heart of think the than It planned clearly We the better honestly, what than we surprise what I improvement of it

the course, is surprise, still business. I improve I actually overall there it's think the pleasant important But notice Of to that room would most further still, it's say. fundamentals to the of

change first work, to technology. did which work was a already data. that's 'XX, of to phase obviously, to bring platform have quite the China that the refining further further new in it's product working we and We segmentation legacy Gap to Baozun also on would systems some going improve, clear, but what to thanks we of by pretty using our Now be product systems, explained through, of all and

this in refined to and almost in data, really, information. much we further us we second want terms us enabling in enabling in of instant to our be have go this once and reaction thinner of also even understanding have terms very messaging to product consumers of Now phase,

So on discounts. lot discipline. the forward. But overall discipline a also our It's overall, margin. margin that's regarding about for gross requires gross the continued strategy And also going

think, and to a I improvement our to back growth store continued Now clearly, we want openings, with online business. our of more a store approach go multichannel strategy to productivity,

your that's part question. So the first for of

It's trying we're consumers the experience, of and worked terms put and learning people it's answer with products. of about number right even to be and of experience are is Colin. with our two, quite is it's about this overall of your and one, this interesting stores, for this also part the second And my clearly, of And in stories, teams the to necessary team enhancement weaker this something in constantly in the to terms question, That's important. really number interesting it's happy the On about the also questions, business. in synergies, consumption, I important consumers' I team. the people. machine, systems. time the together, how interesting think hard the But about all more to enchant going we product from But a think

platforms trend? question the my the e-commerce power talking follow-up Very clear all And changes price BEC. and from behavior? about about Baozun BBM. [Audio did consumers' about any for -- the react year, perspective how almost Since I are characteristics to of of beginning And emphasizing a you consumption the how question have the this in about Gap]And and would see

have the actually say, platform we has it's If Yes, price and a the a also perspective, make the believe consumer. and it's to service delivering From observed We a also platforms. each from a been brand point also good question. always I sure consumer the on increased a And quality actually level the advertise of Colin. the better trend. theme. good we'll to the service Yes,

have will good lot mean doesn't quality will the always be not brands money So Value brand market. quality of consumers. for a a by favored good

for choose on latest define is the very compare is e-commerce brands how design one So current and all technology that opportunity how where to Number things. and the buy, two dynamic -- e-commerce platform strategy for consumers to drives important. those in good and transparency the stand, an omnichannel of a the to provides they

where help. our Baozun to our use experience can So and that's technology

Secondly, the conversion. and This experience How can experience. purchasing technology using do brands to is to improve what online also the the the we increase the to them to enhance. data help for

well technology, that are we with believe positioned, So data. strong are trend, we in we we're strong very very in

experience different will to in e-commerce. allow us across dynamic current huge categories a the share grow market We have the of

HSBC. from The comes question with next Charlene

on behalf of asking I'm Charlene.

X challenges have this year? chance is this see this has and entering We into understand or And decline revenue segment, should adjustment stabilize challenges we we product sales can are can for about product some any been trend the here? the the So question the there So regarding and a I think XXXX? growth years. what segment. key drivers under How that sales

for the Yes. you Thank question.

it For increase onwards. revenue of see to X to starts quarter as sales all, from the already product sales, started the has X. And we first in X, quarter the plant stabilization will product quarter see

product things. on risk of sales a business emphasize is we the year, product perspective, two we see one lot the the of an to from From is we terms. put expect two revenue number control better inventory. the from And For What commercial is increased management on BEC. emphasis sales. full Number the

reduce we the We to in our margin. a the will cash requirement on our time, and inventory negotiation, level flow. commercial the will to enhance same risk At our protect straight make terms gross we rationalize the sure put

So that's first one. the

product business mentioned a this for Secondly, I exclusive sales distribution new on brand. ownership introduced as is acquiring earlier, model focused we on which a the year,

this will sales So that as our increase, bottom see drive double-digit of we and than by further our we efficiency and we believe and top of will can revenue. do and online to earlier, brand, we Using the be And growth. drive we in using to enhance also both and offload. I in model, help online the full and our sales part line data the technology, throughout we all XXXX, intubated will our to business. seen product control able better both we has those traditional [indiscernible] initiatives, mentioned and a line system, channels, our distributors thirdly, believe Baozun sales technology. data system have With will that can both own And drive product the expect will

concludes our Wendy remarks. any conference This over Sun to to turn session. would for question-and-answer like back closing I the

you the in Thank today's like you, of On to participation operator. thank your we'd management Baozun for call. all team, behalf

free just any you. us. reach to further questions, to have feel out you If This Thank concludes call. the

you, Thank Okay. everyone.

The conference Thank today's attending now presentation. you concluded. has for

disconnect. You may now