Baozun Inc (NASDAQ:BZUN) Q2 2019 Results Earnings Conference Call August 21, 2019 8:30 AM ET Company Participants Wendy Sun - Investor Relations Vincent Qiu - Chairman and CEO Robin Lu - Chief Financial Officer Junhua Wu - Chief Growth Officer Conference Call Participants Alicia Yap - Citigroup John Choi - Diawa Natalie Wu - CICC Thomas Chong - Jefferies Sally Chan - CLSA Billy Leung - Haitong International Tian Hou - T.H. Capital Jiang Zhang - China Renaissance Joyce Ju - Bank of America Merrill Lynch ...

Company Overview - Baozun is a technology-empowered market leader in China's brand e-commerce service industry[3] - The company has 212 brand partners across 8 categories as of June 30, 2019[4, 42] - Baozun's mission is to help brands succeed in e-commerce[6] - The company offers end-to-end capabilities across the e-commerce value chain[7] Financial Performance - Baozun achieved RMB 29.4 billion in GMV in 2018, a 54% year-over-year increase[4] - In the first half of 2019, GMV reached RMB 17.6 billion, up 59% year-over-year[4] - In the second quarter of 2019, GMV was RMB 9.7 billion, a 60% year-over-year growth[42] - Second quarter 2019 revenue reached RMB 1.7 billion, a 47% year-over-year increase[42] - Non-GAAP income from operations in the second quarter of 2019 was RMB 103 million, a 30% year-over-year growth[42] Competitive Strengths - The company offers seamless omni-channel solutions[17, 18] - Baozun has technology-empowered operations[17] - The company possesses effective data-driven digital marketing capabilities[17] - Baozun has a robust warehousing and fulfillment infrastructure with approximately 350,000 square meters of warehouses in 6 key cities as of December 31, 2018[17, 29]

Financial Data and Key Metrics Changes - Total GMV increased by 58% year-over-year to CNY 7.83 billion, with non-distribution GMV rising nearly 62% to CNY 1.5 billion [18][19] - Total net revenues grew by 40% to CNY 1.29 billion, with product sales revenue increasing by 34% to CNY 618 million and services revenue rising by 45% to CNY 669 million [20][24] - Net income attributable to ordinary shareholders increased by 128% to CNY 34 million, with basic and diluted net income per ADS at CNY 0.59 and CNY 0.57 respectively [24] Business Line Data and Key Metrics Changes - The service fee model led the growth in non-distribution GMV, reflecting the effectiveness of the company's digital marketing services [20][24] - The company added a net of 15 new brands during the quarter, bringing the total number of brand partners to 200, a significant increase from 156 a year ago [12][19] Market Data and Key Metrics Changes - The apparel category, particularly sporting goods and menswear, along with electronics and cosmetics, showed strong performance and growth momentum [9][10] - The company is strategically focusing on high-quality GMV categories, balancing quantitative and qualitative GMV goals [12] Company Strategy and Development Direction - The company restructured into three key groups: E-Commerce Group (ECG), Logistics and Supply Chain Group (LSG), and Technology Innovation Center (TIC) to enhance operational efficiency and service quality [10][11] - The company aims to leverage innovative technologies and omnichannel solutions to empower brand partners and improve decision-making [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of China's e-commerce sector, which continues to integrate into consumers' daily lives [9] - The company anticipates total net revenues for Q2 2019 to be between CNY 1.55 billion and CNY 1.6 billion, representing a year-over-year growth rate of approximately 34% to 38% [25] Other Important Information - The company issued a five-year convertible bond with net proceeds of around $270 million to support growth initiatives and optimize capital structure [18] - The company launched Baozun Cloud, enhancing storage and computing capabilities for SaaS platforms [16] Q&A Session Summary Question: Can you elaborate on the differences between higher quality GMV and the declining take rate for service revenue? - Management explained that the mix of categories, particularly lower take rate categories like electronics, affected the blended take rate in Q1, and emphasized that quality GMV remains the strategy [28] Question: How do you help brand partners fit into Alibaba's strategy for lower tier cities? - Management discussed their omnichannel strategy and collaboration with Alibaba to enable personalized experiences for consumers, while monitoring traffic allocation [31][32] Question: What is the plan for technology team expansion and new products? - Management indicated a balanced approach to headcount and investment in technology, with a focus on enhancing productization and innovation [36] Question: What is the current GMV contribution from domestic clients? - Management noted that most brands are international but emphasized the potential of local brands and the recent JV with a leading domestic FMCG brand [42][46] Question: What is the outlook for take rates for the rest of the year? - Management expects a slightly better take rate than Q1, with ongoing efforts to improve the quality of GMV [55] Question: How is the company addressing the lengthening accounts receivable days? - Management acknowledged the increase due to larger accounts and system updates but assured that they are implementing strict plans for collections and improving billing systems [50] Question: What impact does the trade war have on the business? - Management stated that there has been no observed impact from the trade war on their business, as most brands have been localized in China for years [52]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | ...

Baozun, Inc. (NASDAQ:BZUN) Q4 2018 Earnings Conference Call March 6, 2019 7:30 AM ET Company Participants Vincent Qiu - Chairman and Chief Executive Officer Junhua Wu - Chief Growth Officer Robin Lu - Chief Financial Officer Conference Call Participants Nicky Ge - China Renaissance Billy Leung - Haitong International Alicia Yap - Citigroup Eileen Deng - Deutsche Bank Joyce Ju - Bank of America Merrill Lynch Monica Chen - Credit Suisse Chen Bi - CICC Operator Hello, ladies and gentlemen, and thank you for st ...