4Q 2023 Earnings Presentation Disclaimer This presentation does not constitute an offer to sell or issue or solicitation of an offer to buy or acquire securities of Baozun Inc. (the “Company”) in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respe ...

SHANGHAI, March 21, 2024 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun", the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023. Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun, stated, "In 2023, we started our transformation journey, expanding into three business divisions. Throughout the year, we soli ...

sasirin pamai/iStock via Getty Images Elevator Pitch I rate Baozun Inc. (NASDAQ:BZUN) [9991:HK] stock as a Buy. My prior write-up, published on November 13, 2024, drew attention to BZUN's favorable corporate developments. The focus of my current article is BZUN's recently announced share buyback program and the financial prospects of Gap China (a business acquired last year that is part of the company's brand management segment now). I am staying bullish on Baozun after taking into account its new share ...

SHANGHAI, Jan. 24, 2024 /PRNewswire/ -- Baozun Inc. (Nasdaq: BZUN and HKEX: 9991) ("Baozun," the "Company" or the "Group"), a leading brand e-commerce solution provider and digital commerce enabler in China, today announced that the Company's board of directors has authorized the management to set up and implement a new share repurchase program under which the Company may repurchase up to US$20 million worth of its outstanding (i) American depositary shares ("ADSs"), each representing three Class A ordinary ...

Baozun Inc. (NASDAQ:BZUN) Q3 2023 Earnings Conference Call November 22, 2023 6:30 AM ET Company Participants Wendy Sun - Senior Director of Corporate Development and Investor Relations Vincent Qiu - Chairman and Chief Executive Officer Arthur Yu - Chief Financial Officer and President of Baozun E-Commerce Sandrine Zerbib - President of Baozun Brand Management Conference Call Participants Alicia Yap - Citigroup Thomas Chong - Jefferies Sophie Huang - CMBI Operator Good morning, ladies and gentlemen, and than ...

Executive Summary [CEO's Remarks](index=1&type=section&id=CEO%27s%20Remarks) CEO Vincent Qiu noted **5% YoY revenue growth**, improved operating cash flow, Gap Shanghai transformation, and a strategic Location acquisition - Baozun Group achieved **5% YoY revenue growth** and **significant YoY improvement in operating cash flow**[2](index=2&type=chunk) - BBM is transforming GAP Shanghai by shifting from a discount-driven approach to building consumer love for the brand, including new products, store openings, and increased marketing[2](index=2&type=chunk) - **Contemplated 51% equity acquisition** of Hangzhou Location Information Technology Co., Ltd. ("Location"), a top-tier Douyin partner specializing in Apparel and Accessories, to enhance leadership in the Douyin ecosystem[2](index=2&type=chunk) [CFO's Remarks](index=1&type=section&id=CFO%27s%20Remarks) CFO Arthur Yu reported positive Q3 operating cash flow, a first since IPO, driven by optimization and efficiency, with **double-digit GMV growth** - Achieved **positive operating cash flow in Q3 2023**, the first time since IPO, due to business optimization, cost reduction, and improved working capital efficiency[3](index=3&type=chunk) - Achieved **double-digit GMV growth** from both Tencent mini-program and Douyin ecosystems[3](index=3&type=chunk) - Strategic alliance with Location is expected to strengthen the company's position in the dynamic e-commerce environment[3](index=3&type=chunk) Third Quarter 2023 Financial Highlights [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Total net revenues grew **4.7%** to **RMB1,823.6 million**, but operating and non-GAAP losses widened, while net loss attributable to ordinary shareholders decreased | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | Q3 2023 (US$ million) | YoY Change | | :----------------------------------- | :-------------------- | :-------------------- | :-------------------- | :--------- | | Total Net Revenues | 1,741.3 | 1,823.6 | 250.0 | +4.7% | | Loss from Operations | (26.3) | (135.7) | (18.6) | -416.0% | | Operating Margin | -1.5% | -7.4% | - | -5.9 pp | | Non-GAAP Loss from Operations | 16.9 (Income) | (90.4) | (12.4) | -634.9% | | Non-GAAP Operating Margin | 1.0% | -5.0% | - | -6.0 pp | | Adjusted Operating Loss (E-Commerce) | N/A | (40.3) | (5.5) | N/A | | Adjusted Operating Loss (Brand Management) | N/A | (50.1) | (6.9) | N/A | | Net Loss Attributable to Ordinary Shareholders | (168.9) | (126.4) | (17.3) | +25.2% | | Non-GAAP Net Loss Attributable to Ordinary Shareholders | (13.1) | (76.4) | (10.5) | -483.2% | | Basic & Diluted Net Loss per ADS | (2.88) | (2.12) | (0.29) | +26.4% | | Basic & Diluted Non-GAAP Net Loss per ADS | (0.22) | (1.28) | (0.18) | -481.8% | | Cash & Cash Equivalents, Restricted Cash, Short-term Investments (as of Sep 30, 2023) | 3,141.1 (Dec 31, 2022) | 2,930.7 | 401.7 | -6.7% (vs Dec 31, 2022) | Business Highlights [Baozun e-Commerce (BEC)](index=3&type=section&id=Baozun%20e-Commerce%20(BEC)) BEC saw YoY revenue growth in Apparel and Accessories, with non-TMALL GMV at **40.2%** and multi-channel brand partner engagement at **45.0%** - Revenue from store operations of Apparel and Accessories delivered **year-over-year growth**[8](index=8&type=chunk) - GMV from non-TMALL marketplaces and channels increased to **40.2% of total GMV** in Q3 2023, up from **31.1%** in Q3 2022[8](index=8&type=chunk) - **45.0% of brand partners** engaged in store operations across at least two channels, up from **42.4%** a year ago[8](index=8&type=chunk) [Baozun Brand Management (BBM)](index=3&type=section&id=Baozun%20Brand%20Management%20(BBM)) BBM transformed Gap Shanghai towards consumer loyalty, achieving **RMB296.3 million** in product sales with a **55.5% gross profit margin** - BBM focused on **transforming Gap Shanghai** to build consumer love for the brand, moving away from a discount-driven approach[9](index=9&type=chunk) | Metric | Q3 2023 (RMB million) | | :-------------------- | :-------------------- | | BBM Product Sales | 296.3 | | BBM Gross Profit Margin (Product Sales) | 55.5% | Third Quarter 2023 Financial Results [Total Net Revenues](index=3&type=section&id=Total%20Net%20Revenues) Total net revenues increased **4.7%** YoY to **RMB1,823.6 million**, primarily due to the new Brand Management business line | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Total Net Revenues | 1,741.3 | 1,823.6 | +4.7% | - Increase mainly due to incremental revenue from BBM, a new business line launched in Q1 2023[10](index=10&type=chunk) [Product Sales Revenue](index=3&type=section&id=Product%20Sales%20Revenue) Total product sales revenue increased **42.4%** to **RMB707.9 million**, driven by Brand Management, despite a **17.2%** decrease in E-Commerce | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Total Product Sales Revenue | 497.1 | 707.9 | +42.4% | | Product Sales Revenue of E-Commerce | 497.1 | 411.6 | -17.2% | | Product Sales Revenue of Brand Management | - | 296.3 | N/A | - Decrease in E-Commerce product sales attributed to **macro-economic weakness**, stronger seasonality, and optimization of product distribution model[10](index=10&type=chunk) [E-Commerce Product Sales Breakdown](index=4&type=section&id=E-Commerce%20Product%20Sales%20Breakdown) E-Commerce product sales decreased across most categories, with significant declines in Fast Moving Consumer Goods and Electronics, while Others saw a slight increase | Category | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------------------------- | :-------------------- | :-------------------- | :--------- | | Appliances | 212.2 | 179.5 | -15% | | Beauty and cosmetics | 76.2 | 76.3 | 0% | | Fast moving consumer goods | 66.1 | 31.7 | -52% | | Electronics | 50.5 | 25.8 | -49% | | Others | 92.1 | 98.3 | 7% | | Total net revenues from product sales of E-Commerce | 497.1 | 411.6 | -17% | [Brand Management Product Sales](index=4&type=section&id=Brand%20Management%20Product%20Sales) Brand Management product sales totaled **RMB296.3 million**, mainly from Gap Shanghai's retail business, both offline and online - Product sales revenue of Brand Management was **RMB296.3 million**, mainly from Gap Shanghai's retail business (both offline and online)[13](index=13&type=chunk) [Services Revenue](index=4&type=section&id=Services%20Revenue) Services revenue decreased **10.3%** YoY to **RMB1,115.8 million**, mainly due to reductions in warehousing, fulfillment, digital marketing, and IT solutions | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Services Revenue | 1,244.2 | 1,115.8 | -10.3% | - Decrease primarily due to **RMB65.7 million reduction** from warehousing and fulfillment and **RMB44.3 million reduction** from Digital marketing and IT solutions[14](index=14&type=chunk) [Services Revenue Breakdown by Business Model](index=4&type=section&id=Services%20Revenue%20Breakdown%20by%20Business%20Model) Services revenue declined across all categories, with warehousing and fulfillment, and digital marketing and IT solutions seeing the largest reductions | Category | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------------------------- | :-------------------- | :-------------------- | :--------- | | Online store operations | 347.9 | 340.7 | -2% | | Warehousing and fulfillment | 492.4 | 431.7 | -12% | | Digital marketing and IT solutions | 403.9 | 362.7 | -10% | | Total net revenues from services | 1,244.2 | 1,115.8 | -10% | [Online Store Operations Revenue Breakdown](index=5&type=section&id=Online%20Store%20Operations%20Revenue%20Breakdown) Online store operations revenue decreased **5%**, with growth in Sportswear offsetting declines in Luxury and other categories | Category | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------------------------- | :-------------------- | :-------------------- | :--------- | | Apparel and accessories | 231.9 | 248.4 | 7% | | - Luxury | 92.9 | 86.3 | -7% | | - Sportswear | 80.4 | 101.3 | 26% | | - Other apparel | 58.6 | 60.8 | 4% | | Others | 116.0 | 92.3 | -20% | | Total net revenues from online store operations in services | 347.9 | 329.5 | -5% | [Operating Expenses](index=5&type=section&id=Operating%20Expenses) Total operating expenses rose **10.9%** to **RMB1,959.4 million**, mainly due to Gap Shanghai acquisition, but decreased **7.8%** excluding it | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Total Operating Expenses | 1,767.5 | 1,959.4 | +10.9% | - Increase mainly attributed to the acquisition of Gap Shanghai; excluding Gap Shanghai, operating expenses decreased by **7.8%**[16](index=16&type=chunk) [Cost of Products](index=5&type=section&id=Cost%20of%20Products) Cost of products increased **18.4%** to **RMB491.2 million**, primarily driven by incremental costs related to Gap Shanghai | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Cost of Products | 414.8 | 491.2 | +18.4% | - Increase primarily due to incremental cost of **RMB130.5 million** related to Gap Shanghai[17](index=17&type=chunk) [Fulfillment Expenses](index=5&type=section&id=Fulfillment%20Expenses) Fulfillment expenses decreased **11.0%** to **RMB513.0 million**, driven by lower revenue, freight savings, and customer service optimization | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Fulfillment Expenses | 575.9 | 513.0 | -11.0% | - Decrease due to lower warehouse/logistics revenue, **RMB27.7 million freight savings** from subsidiary divestiture, and customer service savings from regional service centers[17](index=17&type=chunk) [Sales and Marketing Expenses](index=5&type=section&id=Sales%20and%20Marketing%20Expenses) Sales and marketing expenses increased **5.8%** to **RMB637.5 million**, mainly due to incremental costs from Gap Shanghai | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Sales and Marketing Expenses | 602.4 | 637.5 | +5.8% | - Increase mainly due to incremental **RMB81.7 million** related to Gap Shanghai[18](index=18&type=chunk) [Technology and Content Expenses](index=6&type=section&id=Technology%20and%20Content%20Expenses) Technology and content expenses increased **22.5%** to **RMB120.4 million**, reflecting ongoing investment in innovation and productization | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Technology and Content Expenses | 98.3 | 120.4 | +22.5% | - Increase due to **ongoing investment in technological innovation and productization**, partially offset by cost control[19](index=19&type=chunk) [General and Administrative Expenses](index=6&type=section&id=General%20and%20Administrative%20Expenses) General and Administrative expenses surged **119.5%** to **RMB214.5 million**, primarily due to Brand Management and strategic investments | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | General and Administrative Expenses | 97.7 | 214.5 | +119.5% | - Increase primarily due to incremental **RMB110.2 million** related to Brand Management (including Gap Shanghai) and strategic investments in Creative Content to Commerce[19](index=19&type=chunk) [Operating and Net Loss](index=6&type=section&id=Operating%20and%20Net%20Loss) Operating loss significantly widened, and non-GAAP operating loss turned negative, while net loss attributable to ordinary shareholders decreased YoY [Loss from Operations](index=6&type=section&id=Loss%20from%20Operations) Loss from operations widened by **416.0%** to **RMB135.7 million**, with non-GAAP loss from operations turning negative due to Gap Shanghai and BEC | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Loss from Operations | (26.3) | (135.7) | -416.0% | | Operating Margin | -1.5% | -7.4% | -5.9 pp | | Non-GAAP Loss from Operations | 16.9 (Income) | (90.4) | -634.9% | - Non-GAAP loss from operations mainly due to **loss from Gap Shanghai** (though narrowed on comparable basis) and **lower BEC profitability** from weak macro conditions and seasonality[20](index=20&type=chunk) [Net Loss Attributable to Ordinary Shareholders](index=6&type=section&id=Net%20Loss%20Attributable%20to%20Ordinary%20Shareholders) Net loss attributable to ordinary shareholders decreased by **25.2%** to **RMB126.4 million**, with basic and diluted net loss per ADS also improving | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :----------------------------------- | :-------------------- | :-------------------- | :--------- | | Net Loss Attributable to Ordinary Shareholders | (168.9) | (126.4) | +25.2% | | Basic & Diluted Net Loss per ADS | (2.88) | (2.12) | +26.4% | [Non-GAAP Net Loss Attributable to Ordinary Shareholders](index=6&type=section&id=Non-GAAP%20Net%20Loss%20Attributable%20to%20Ordinary%20Shareholders) Non-GAAP net loss attributable to ordinary shareholders increased by **483.2%** to **RMB76.4 million**, with non-GAAP net loss per ADS also rising | Metric | Q3 2022 (RMB million) | Q3 2023 (RMB million) | YoY Change | | :----------------------------------- | :-------------------- | :-------------------- | :--------- | | Non-GAAP Net Loss Attributable to Ordinary Shareholders | (13.1) | (76.4) | -483.2% | | Basic & Diluted Non-GAAP Net Loss per ADS | (0.22) | (1.28) | -481.8% | Segment Information [Description of Segments](index=7&type=section&id=Description%20of%20Segments) Baozun updated its operating segments to E-Commerce and Brand Management following the Gap Shanghai acquisition, detailing their respective focuses - Operating segments **updated to (i) E-Commerce and (ii) Brand Management** after Gap Shanghai acquisition[23](index=23&type=chunk) - E-Commerce segment comprises **BEC (mainland China e-commerce services) and BZI (e-commerce outside mainland China)**[23](index=23&type=chunk) - Brand Management segment focuses on **holistic brand management**, including strategy, marketing, retail, e-commerce operations, supply chain, and technology[24](index=24&type=chunk) [Segments Data](index=7&type=section&id=Segments%20Data) E-Commerce net revenues decreased by **11.4%**, while Brand Management contributed **RMB299.6 million**; both segments reported adjusted operating losses | Metric | Q3 2022 (RMB thousand) | Q3 2023 (RMB thousand) | YoY Change | | :----------------------------------- | :---------------------- | :---------------------- | :--------- | | Net Revenues (E-Commerce) | 1,741,272 | 1,543,276 | -11.4% | | Net Revenues (Brand Management) | - | 299,645 | N/A | | Total Consolidated Net Revenues | 1,741,272 | 1,823,642 | +4.7% | | Adjusted Operating Profits (Losses) (E-Commerce) | 16,913 | (40,300) | -338.3% | | Adjusted Operating Profits (Losses) (Brand Management) | - | (50,091) | N/A | | Total Adjusted Operating Profits | 16,913 | (90,391) | -634.9% | Supplemental Information [Location Acquisition](index=8&type=section&id=Location%20Acquisition) Baozun signed a non-binding Term Sheet in November 2023 to acquire a **51%** equity interest in Hangzhou Location Information Technology Co., Ltd - Baozun signed a Term Sheet to acquire **51% equity interest** in Hangzhou Location Information Technology Co., Ltd. ("Location") in November 2023[27](index=27&type=chunk) - Acquisition will be through **capital increase and equity transfer**[27](index=27&type=chunk) - Terms of the Term Sheet are **not legally binding** until definitive transaction documents are signed[27](index=27&type=chunk) Conference Call Details [Dial-in Information](index=8&type=section&id=Dial-in%20Information) Baozun hosted an earnings conference call on November 22, 2023, providing dial-in details and replay access for investors - **Conference call held on November 22, 2023**, at 6:30 a.m. Eastern Time[28](index=28&type=chunk) | Region | Dial-in Number | Passcode | | :---------------- | :---------------- | :---------------- | | United States | 1-888-317-6003 | 6234438 | | Hong Kong | 800-963-976 | 6234438 | | Singapore | 800-120-5863 | 6234438 | | Mainland China | 4001-206-115 | 6234438 | | International | 1-412-317-6061 | 6234438 | - Replay accessible through **November 29, 2023**, with **access code 3958715**[30](index=30&type=chunk)[31](index=31&type=chunk) Use of Non-GAAP Financial Measures [Non-GAAP Definitions](index=8&type=section&id=Non-GAAP%20Definitions) Non-GAAP measures exclude share-based compensation, amortization of acquisition-related intangibles, and other non-recurring or non-cash items - Non-GAAP income (loss) from operations **excludes share-based compensation**, **amortization of acquisition-related intangible assets**, and **acquisition-related expenses**[33](index=33&type=chunk) - Non-GAAP net income (loss) attributable to ordinary shareholders **excludes share-based compensation**, **amortization of acquisition-related intangible assets**, **acquisition-related expenses**, **impairment of goodwill and investments**, loss on variance from expected contingent acquisition payment, cancellation fees of repurchased ADSs and returned ADSs, fair value loss on derivative liabilities, loss on disposal of subsidiaries and investment in equity investee, and unrealized investment loss[33](index=33&type=chunk) [Rationale for Non-GAAP Measures](index=9&type=section&id=Rationale%20for%20Non-GAAP%20Measures) Non-GAAP measures help management evaluate performance and provide investors with a clearer view of core operating results - Non-GAAP measures are used by management to **evaluate financial and operating performance** and **formulate business plans**[34](index=34&type=chunk) - They **reflect ongoing business operations** for more meaningful period-to-period comparisons[34](index=34&type=chunk) - Provide useful information by **excluding expenses/gains not expected to result in future cash payments** or that are **non-recurring/not indicative of core operating results**[34](index=34&type=chunk) [Limitations of Non-GAAP Measures](index=9&type=section&id=Limitations%20of%20Non-GAAP%20Measures) Non-GAAP measures are not U.S. GAAP defined, have analytical limitations, and may not be comparable to other companies' metrics - Non-GAAP measures are **not defined under U.S. GAAP** and **should not be considered in isolation or as a substitute for GAAP financial information**[35](index=35&type=chunk)[36](index=36&type=chunk) - A key limitation is that they **do not reflect all items of income and expense affecting operations**[35](index=35&type=chunk) - **May differ from non-GAAP measures used by other companies, limiting comparability**[36](index=36&type=chunk) Safe Harbor Statements [Safe Harbor Statements](index=11&type=section&id=Safe%20Harbor%20Statements) This announcement contains forward-looking statements subject to inherent risks and uncertainties, with no obligation to update except as required by law - This announcement contains **forward-looking statements**, **identifiable by terms like "will," "expects," "anticipates," etc.**[38](index=38&type=chunk) - **Forward-looking statements involve inherent risks and uncertainties**, which could cause actual results to differ materially[38](index=38&type=chunk) - Baozun undertakes **no obligation to update this information**, except as required by applicable law[38](index=38&type=chunk) About Baozun Inc. [About Baozun Inc.](index=11&type=section&id=About%20Baozun%20Inc.) Founded in 2007, Baozun Inc. is a leading brand e-commerce and management service provider, serving over **400 brands** globally through three business lines - Founded in 2007, Baozun Inc. is a **leader in brand e-commerce service, brand management, and digital commerce service**[39](index=39&type=chunk) - Serves **over 400 brands globally** across various industries[39](index=39&type=chunk) - Comprises **three major business lines: Baozun e-Commerce (BEC), Baozun Brand Management (BBM), and Baozun International (BZI)**[39](index=39&type=chunk) Unaudited Condensed Consolidated Financial Statements [Unaudited Condensed Consolidated Balance Sheets](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **RMB9,999.7 million**, while total liabilities also decreased, with notable changes in accounts receivable and inventories | Metric | Dec 31, 2022 (RMB thousand) | Sep 30, 2023 (RMB thousand) | Sep 30, 2023 (US$ thousand) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Assets | 10,122,470 | 9,999,674 | 1,370,572 | | Total Liabilities | 4,446,132 | 4,153,471 | 569,286 | | Total Shareholders' Equity | 4,238,256 | 4,285,408 | 587,362 | | Cash and cash equivalents | 2,144,020 | 2,157,961 | 295,773 | | Short-term investments | 895,425 | 718,655 | 98,500 | | Accounts receivable, net | 2,292,678 | 1,664,731 | 228,170 | | Inventories | 942,997 | 1,130,888 | 155,001 | | Operating lease right-of-use assets | 847,047 | 1,087,413 | 149,042 | [Unaudited Condensed Consolidated Statements of Comprehensive Income](index=14&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Total net revenues increased to **RMB1,823.6 million**, but loss from operations significantly widened, while net loss improved to **RMB129.6 million** | Metric | Q3 2022 (RMB thousand) | Q3 2023 (RMB thousand) | Q3 2023 (US$ thousand) | | :----------------------------------- | :---------------------- | :---------------------- | :---------------------- | | Total Net Revenues | 1,741,272 | 1,823,642 | 249,951 | | Product Sales | 497,098 | 707,855 | 97,020 | | Services | 1,244,174 | 1,115,787 | 152,931 | | Total Operating Expenses | (1,767,528) | (1,959,354) | (268,552) | | Loss from Operations | (26,256) | (135,712) | (18,601) | | Net Loss | (156,981) | (129,599) | (17,765) | | Net Loss Attributable to Ordinary Shareholders | (168,858) | (126,433) | (17,331) | [Reconciliations of GAAP and Non-GAAP Results](index=16&type=section&id=Reconciliations%20of%20GAAP%20and%20Non-GAAP%20Results) Reconciliation details adjustments from GAAP to non-GAAP measures, primarily adding back share-based compensation and acquisition-related expenses to reduce reported losses | Metric | Q3 2022 (RMB thousand) | Q3 2023 (RMB thousand) | Q3 2023 (US$ thousand) | | :----------------------------------- | :---------------------- | :---------------------- | :---------------------- | | Loss from operations (GAAP) | (26,256) | (135,712) | (18,601) | | Add: Share-based compensation expenses | 33,829 | 29,415 | 4,032 | | Add: Amortization of intangible assets | 9,340 | 7,911 | 1,084 | | Add: Acquisition-related expenses | - | 7,995 | 1,096 | | Non-GAAP income (loss) from operations | 16,913 | (90,391) | (12,389) | | Net loss attributable to ordinary shareholders (GAAP) | (168,858) | (126,433) | (17,331) | | Non-GAAP net loss attributable to ordinary shareholders | (13,146) | (76,354) | (10,467) | - Key adjustments for non-GAAP measures include **adding back share-based compensation expenses**, **amortization of intangible assets from business acquisition**, and **acquisition-related expenses**[50](index=50&type=chunk)

Financial Data and Key Metrics Changes - Baozun Group reported a 9% increase in net revenues, reaching RMB2.3 billion during Q2 2023, with product sales up 34% and service revenue down 3% year-over-year [17][18] - Total gross profit increased by 8% to RMB1.6 billion, while total cost of products rose by 12% to RMB675 million [18][20] - Adjusted income from operations was RMB0.7 million, with E-Commerce adjusted operating income growing by 29% to RMB61 million [19][20] Business Line Data and Key Metrics Changes - The E-Commerce segment showed improved profitability and operating cash flows, driven by business optimization and cost reduction efforts [17][18] - Baozun Brand Management (BBM) saw a reduction in operating loss for Gap China by nearly half year-over-year, with a total revenue of RMB324 million, down 26% due to store closures [19][33] - BBM achieved a blended gross margin of 52%, indicating strong operational performance despite a decrease in store count [32][33] Market Data and Key Metrics Changes - Consumer sentiment showed recovery during the 618 promotion, but faced challenges in July, with a slight recovery in August [43][44] - Non-Tmall channels contributed 34% of overall GMV in Q2, with 47% of clients using multiple channels [48] Company Strategy and Development Direction - The company is expanding into three business lines: Baozun E-Commerce, Baozun Brand Management, and Baozun International, creating a one-stop ecosystem [9][11] - Focus on higher business quality and transitioning E-Commerce into a second growth curve, while BBM is accelerating its China-for-China product offerings [11][12] - Plans to enhance capabilities in omnichannel services and invest in technology to improve operational efficiency [27][28] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging macro environment in China to persist but remains optimistic about achieving key objectives for each business line [11][12] - The company is confident in its ability to adapt to changing market dynamics and drive sustainable growth through strategic initiatives [29] Other Important Information - The strategic partnership with Authentic Brands Group (ABG) includes a joint venture to co-own Hunter's intellectual property in Greater China and Southeast Asia [11][36] - The company is focusing on building a portfolio of premium consumer lifestyle brands with a data-driven approach [31][36] Q&A Session Summary Question: Update on consumption sentiment for July and August - Management noted a positive recovery trend during Q2, but July saw a slowdown, with some recovery in August, particularly in luxury and travel-related products [43][44] Question: Update on store traffic for Gap China - Same-store growth for Q2 was 11%, increasing to over 30% in August, indicating improved traffic and conversion rates [45] Question: Growth outlook for non-Tmall channels - Non-Tmall channels represented 34% of overall GMV in Q2, with an increasing trend in clients seeking omnichannel strategies [48] Question: Rationale behind the Hunter acquisition - Hunter fits the company's portfolio philosophy as a premium lifestyle brand with strong online sales potential, and the acquisition allows for co-ownership of the brand [56][57]

2Q 2023 Earnings Presentation Disclaimer This presentation does not constitute an offer to sell or issue or solicitation of an offer to buy or acquire securities of Baozun Inc. (the “Company”) in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This presentation does notcontain all relevant information relating tothe Company orits securities, particularly with respectt ...

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Baozun Inc. (NASDAQ:BZUN) Q1 2023 Earnings Conference Call May 25, 2023 7:30 AM ET Company Participants Wendy Sun - Senior Director, Corporate Development & Investor Relations Vincent Qiu - Chairman & Chief Executive Officer Arthur Yu - Chief Financial Officer Sandrine Zerbib - President of Brand Management Conference Call Participants Alicia Yap - Citi Sophia Tan - Credit Suisse Operator Good morning, ladies and gentlemen, and thank you for standing by for Baozun's First Quarter 2023 Earnings Conference Ca ...