Release Date: November 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Baozun Inc (BZUN, Financial) reported a 13% year-over-year increase in total revenues, indicating strong growth momentum.
- The e-commerce segment achieved a 14% revenue increase, driven by improvements in services and product sales.
- The DouYin business experienced triple-digit growth, showcasing successful strategic integration and innovation.
- The brand management segment resumed growth with a 10% year-over-year increase, marking a turnaround for the Gap brand in China.
- Baozun Inc (BZUN) successfully implemented efficiency-enhancing measures, such as the intelligent customer service assistant S-Whiz, improving service quality and operational efficiency.
Negative Points
- Despite revenue growth, Baozun Inc (BZUN) reported an adjusted operating loss of CNY85 million, indicating ongoing profitability challenges.
- The gross margin for e-commerce product sales decreased due to a higher proportion of promotional rebates.
- The company faced a high return rate during the Double 11 shopping festival, impacting overall operating efficiency.
- Persistent macroeconomic pressures and slower-than-expected consumer recovery remain concerns for future performance.
- The apparel and sports categories on JD platform, while showing potential, still represent a smaller market compared to Tmall, indicating limited current scale.
Q & A Highlights
Q: Can management elaborate on the overall performance during this year's Singles' Day, specifically which categories performed better or worse than expected? How did Gap China perform, and were there any notable changes in shopping behavior compared to last year?
A: Arthur Yu, President of Baozun E-Commerce, noted that categories like apparel, sports, and luxury performed well, while small appliances and travel were below expectations. The event was characterized by a true omnichannel approach, with all major channels showing double-digit growth. Ken Huang, CFO of Baozun Brand Management, added that Gap's performance improved, with a higher ranking in men's apparel on Tmall and double-digit sales growth across platforms.
Q: With more platforms rolling out AI advertising tools, how will Baozun embrace AI technology to capture opportunities, especially for smaller domestic brands?
A: Arthur Yu explained that Baozun has been applying AI technology to improve efficiency and decision-making. The S-Whiz tool enhances customer service by simplifying operations and improving service quality. Baozun Business Intelligence helps brands analyze market data for better merchandising and planning strategies.
Q: How does Baozun view the slowdown in GMV growth rate of live streaming e-commerce platforms, and will there be adjustments to the business strategy?
A: Arthur Yu stated that Baozun's omnichannel operations are not fundamentally affected by trends in individual channels. The company provides tools and analysis to help brands allocate resources effectively. Vincent Qiu, CEO, added that Baozun's established capabilities across channels allow it to adapt and optimize resource allocation based on future potential.
Q: What is the outlook for categories like luxury apparel, FMCG, and consumer electronics post-Double 11, and how is the monthly sales performance?
A: Arthur Yu noted a softening in sales post-Double 11 due to heavy promotions, but expects recovery in apparel sales as the weather gets colder. The growth rate for luxury apparel and FMCG is flat year-over-year, with a cautious outlook for next year. Baozun aims to provide high-quality service and expand into new categories.
Q: How does Baozun expect the consumption trend and opportunities in the next year, and what is the outlook for top line and margin?
A: Arthur Yu anticipates a stabilization in consumption, with brands focusing on building internal capabilities. Baozun will emphasize service quality and innovation to maintain its stronghold in core categories and expand into new ones. Vincent Qiu expressed optimism due to government policies and initiatives, focusing on optimizing operations for better business outcomes in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
