Financial Data and Key Metrics Changes - Total net revenues for Q2 2022 were RMB 24.5 billion, down from RMB 29.6 billion in the prior year period, primarily due to soft consumer demand amid changing macro conditions [17] - Gross profit decreased to RMB 5.0 billion from RMB 6.0 billion, while gross margin increased to 20.5% from 20.1% year-over-year [17] - Non-GAAP net income increased year-over-year to RMB 1.6 billion, with a non-GAAP net margin expanding by 1.5% to 6.5% [14][23] - Net income attributable to shareholders increased by 17.4% year-over-year to RMB 1.3 billion, with net margin rising to 5.2% from 3.7% [22] Business Line Data and Key Metrics Changes - Core brands continued to outperform in sales momentum, with active Super VIP customers growing by 21% year-over-year and contributing 38% of online net GMV [10] - Marketing expenses decreased significantly by 60.5% year-over-year to RMB 555.6 million, reflecting a more prudent marketing strategy [19] Market Data and Key Metrics Changes - The e-commerce sector faced challenges from March to May due to COVID-19, but trends improved in June and continued into July and August [26] - The company noted that the apparel-focused segment is sensitive to weather conditions, which could impact demand for seasonal products [27] Company Strategy and Development Direction - The company remains strategically anchored in discount retail for the long term, focusing on enhancing value propositions for brand partners and customers [11] - New channels such as Little Pink Box, VIP Trends, and VIP Luxury were launched to support the growth of new brands [9] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about recovery momentum, noting that it is highly dependent on macro developments and consumer confidence [27] - The company expects total net revenues for Q3 2022 to be between RMB 21.2 billion and RMB 22.4 billion, reflecting a year-over-year decrease of approximately 10% to 15% [24] Other Important Information - The company is committed to a USD 1 billion share buyback program, having repurchased $177.1 million of its ADS during Q2 [15] - Capital expenditures in Q2 were primarily for new Shenzhen outlets, with the amount expected to be comparable year-over-year [54] Q&A Session Summary Question: Outlook for the second half and recovery momentum - Management noted that while there was improvement in sales in July and August, uncertainty remains due to macro developments and weather conditions [26][27] Question: SVIP strategy and growth drivers - The growth of SVIP customers is driven by membership privileges and targeted marketing strategies [31] Question: Q3 guidance and margin sustainability - The conservative Q3 guidance accounts for potential COVID-19 fluctuations and consumer confidence recovery [35] - Management aims to maintain healthy profitability while being rational in marketing expenditures [36][38] Question: Inventory and manufacturing opportunities - The company is positioned to benefit from favorable inventory cycles due to excess inventories in the market [41] Question: User growth and marketing strategy - The goal is to achieve positive user growth starting from Q3, with a focus on reactivating past customers and acquiring new ones [46][60]

[Second Quarter 2022 Highlights](index=1&type=section&id=Second%20Quarter%202022%20Highlights) Vipshop's Q2 2022 net revenue decreased year-over-year, but effective cost control led to increased GAAP and non-GAAP net profits despite reduced revenue and active users | Metric | Q2 2022 | Prior Year Period | YoY Change | | :--- | :--- | :--- | :--- | | Total Net Revenue (RMB) | RMB 24.5 billion | RMB 29.6 billion | -17.2% | | GMV (RMB) | RMB 40.6 billion | RMB 48.1 billion | -15.6% | | Gross Profit (RMB) | RMB 5.0 billion | RMB 6.0 billion | -16.7% | | Net Income Attributable to Shareholders (RMB) | RMB 1.3 billion | RMB 1.1 billion | +17.4% | | Non-GAAP Net Income Attributable to Shareholders (RMB) | RMB 1.6 billion | RMB 1.5 billion | +8.4% | | Active Users | 41.7 million | 51.1 million | -18.4% | | Total Orders | 186.3 million | 221.5 million | -15.9% | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management attributes better-than-expected Q2 performance to macro environment improvements, optimizing brand portfolio, and efficient cost control, while repurchasing USD 177.1 million in ADS - Chairman and CEO Eric Shen stated that the company's business demonstrated strong execution and flexibility, updating its brand portfolio with new trendy and high-end brands, while high-value customers continued to grow and showed strong spending power[4](index=4&type=chunk) - CFO David Cui noted that the company achieved year-over-year growth in profit and overall profit margin through strict cost savings and rational spending, committing to its share repurchase program with **USD 177.1 million** in ADS repurchased this quarter[4](index=4&type=chunk) [Second Quarter 2022 Financial Results Analysis](index=2&type=section&id=Second%20Quarter%202022%20Financial%20Results%20Analysis) Despite a year-over-year revenue decline in Q2 2022, Vipshop improved operating and net profit margins through enhanced gross margin and significant reductions in operating expenses, particularly marketing [Revenue Analysis](index=2&type=section&id=REVENUES) Q2 2022 total net revenue decreased to RMB 24.5 billion due to macro challenges and weak consumer demand for non-essential goods amid recurring COVID-19 outbreaks in China | Financial Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Total Net Revenue | RMB 24.5 billion | RMB 29.6 billion | [Gross Profit Analysis](index=2&type=section&id=GROSS%20PROFIT) Q2 2022 gross profit was RMB 5.0 billion, with the gross margin increasing to 20.5% from 20.1% in the prior year period | Financial Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Gross Profit | RMB 5.0 billion | RMB 6.0 billion | | Gross Margin | 20.5% | 20.1% | [Operating Expenses Analysis](index=2&type=section&id=OPERATING%20EXPENSES) Total operating expenses decreased by 18.7% year-over-year in Q2 2022, driven by a 60.5% reduction in marketing expenses, while fulfillment costs also declined | Expense Item | Q2 2022 (RMB) | YoY Change | % of Total Revenue | | :--- | :--- | :--- | :--- | | Total Operating Expenses | RMB 3.9 billion | -18.7% | 16.1% | | Fulfillment Expenses | RMB 1.8 billion | -13.7% | 7.2% | | Marketing Expenses | RMB 556 million | -60.5% | 2.3% | | Technology and Content Expenses | RMB 412 million | +11.3% | 1.7% | | General and Administrative Expenses | RMB 1.2 billion | +18.6% | 4.9% | [Operating Income Analysis](index=3&type=section&id=INCOME%20FROM%20OPERATIONS) Q2 2022 operating income was RMB 1.3 billion, with the operating margin increasing to 5.2%, and non-GAAP operating income also saw an improved margin | Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Operating Income | RMB 1.3 billion | RMB 1.5 billion | | Operating Margin | 5.2% | 5.0% | | Non-GAAP Operating Income | RMB 1.6 billion | RMB 1.7 billion | | Non-GAAP Operating Margin | 6.3% | 5.9% | [Net Income Analysis](index=3&type=section&id=NET%20INCOME) Q2 2022 GAAP net income attributable to shareholders increased by 17.4% to RMB 1.3 billion, with both GAAP and non-GAAP net profit margins showing improvement | Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Net Income Attributable to Shareholders | RMB 1.3 billion | RMB 1.1 billion | | Net Profit Margin | 5.2% | 3.7% | | Diluted ADS Earnings Per Share | RMB 1.97 | RMB 1.56 | | Non-GAAP Net Income Attributable to Shareholders | RMB 1.6 billion | RMB 1.5 billion | | Non-GAAP Net Profit Margin | 6.5% | 5.0% | | Non-GAAP Diluted ADS Earnings Per Share | RMB 2.45 | RMB 2.10 | [Balance Sheet and Cash Flow](index=4&type=section&id=BALANCE%20SHEET%20AND%20CASH%20FLOW) As of June 30, 2022, the company maintained a strong financial position with RMB 21.4 billion in cash and short-term investments, generating robust net cash flow from operations and free cash flow - As of June 30, 2022, the company held **RMB 17.3 billion (USD 2.6 billion)** in cash and cash equivalents and restricted cash, along with **RMB 4.1 billion (USD 615.4 million)** in short-term investments[14](index=14&type=chunk) | Cash Flow Item (RMB) | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | RMB 4.466 billion | RMB 1.996 billion | | Free Cash Flow | RMB 3.261 billion | RMB 1.338 billion | [Share Repurchase Program](index=4&type=section&id=Share%20Repurchase%20Program) The company announced a USD 1 billion, 24-month share repurchase program on March 31, 2022, having repurchased USD 177.1 million in ADS by June 30, 2022 - The company's board of directors authorized a **USD 1 billion** share repurchase program with a 24-month validity period[15](index=15&type=chunk) - As of June 30, 2022, the company had repurchased **USD 177.1 million** in ADS under this program[15](index=15&type=chunk) [Business Outlook](index=5&type=section&id=Business%20Outlook) For Q3 2022, the company anticipates total net revenue between RMB 21.2 billion and RMB 22.4 billion, representing a year-over-year decline of approximately 10% to 15% - Total net revenue for Q3 2022 is expected to be between **RMB 21.2 billion and RMB 22.4 billion**[18](index=18&type=chunk) - The projected year-over-year revenue decrease is approximately **10% to 15%**[18](index=18&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents unaudited condensed consolidated statements of income, balance sheets, and GAAP to non-GAAP reconciliations, illustrating improved net profit despite revenue decline and healthy liquidity [Unaudited Condensed Consolidated Statements of Income and Comprehensive Income](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) In Q2 2022, total net revenue was RMB 24.54 billion, with gross profit at RMB 5.02 billion, resulting in a net income attributable to Vipshop shareholders of RMB 1.28 billion, a 17.4% year-over-year increase | Item (RMB thousands) | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | Total Net Revenues | 24,535,254 | 29,607,702 | | Gross Profit | 5,024,345 | 5,956,827 | | Income from Operations | 1,268,285 | 1,470,508 | | Net Income Attributable to Vipshop Shareholders | 1,282,890 | 1,092,482 | [Unaudited Condensed Consolidated Balance Sheets](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2022, total assets were RMB 59.97 billion and total liabilities were RMB 25.81 billion, with healthy current assets and liabilities indicating strong short-term solvency and liquidity | Item (RMB thousands) | As of June 30, 2022 | As of Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | 59,969,088 | 62,287,541 | | Total Liabilities | 25,805,228 | 28,459,225 | | Total Current Assets | 30,112,927 | 32,841,945 | | Total Current Liabilities | 23,303,882 | 25,771,017 | [Reconciliations of GAAP and Non-GAAP Results](index=10&type=section&id=Reconciliations%20of%20GAAP%20and%20Non-GAAP%20Results) This table details adjustments from GAAP to non-GAAP metrics for Q2 2022, primarily including RMB 283 million in share-based compensation and RMB 50 million in investment impairment losses, leading to adjusted non-GAAP operating and net profits | Reconciliation Item (RMB thousands) | Q2 2022 | | :--- | :--- | | **Income from Operations (GAAP)** | **1,268,285** | | Add: Share-based compensation expenses | 282,799 | | **Non-GAAP Income from Operations** | **1,551,084** | | | | | **Net Income Attributable to Vipshop Shareholders (GAAP)** | **1,282,890** | | Add: Share-based compensation expenses | 282,799 | | Add: Impairment loss of investments | 50,000 | | Other adjustments | (23,280) | | **Non-GAAP Net Income Attributable to Vipshop Shareholders** | **1,592,409** |

Vipshop Holdings Limited (NYSE:VIPS) Q1 2022 Earnings Conference Call May 19, 2022 7:30 AM ET Company Participants Jessie Zheng - Head, Investor Relations Eric Shen - Co-Founder, Chairman, and Chief Executive Officer David Cui - Chief Financial Officer Conference Call Participants Thomas Chong - Jefferies Alicia Yap - Citigroup Ronald Keung - Goldman Sachs Natalie Wu - Haitong International Robin Leung - Daiwa Operator Ladies and gentlemen, good day, everyone and welcome to Vipshop Holdings Limited First Qu ...

Exhibit 99.1 Vipshop Reports Unaudited First Quarter 2022 Financial Results Conference Call to Be Held at 7:30 A.M. U.S. Eastern Time on May 19, 2022 Guangzhou, China, May 19, 2022 – Vipshop Holdings Limited (NYSE: VIPS), a leading online discount retailer for brands in China ("Vipshop" or the "Company"), today announced its unaudited financial results for the quarter ended March 31, 2022. First Quarter 2022 Highlights • Total net revenues for the first quarter of 2022 were RMB25.2 billion (US$4.0 billion), ...

[PART I](index=5&type=section&id=PART%20I) [ITEM 3. KEY INFORMATION](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details Vipshop's holding company structure, its reliance on contractual arrangements with consolidated affiliated entities (VIEs) in China, and the associated risks, alongside selected consolidated financial data and a comprehensive breakdown of risk factors [Holding Company Structure and China Operations](index=6&type=section&id=Holding%20Company%20Structure%20and%20China%20Operations) Vipshop Holdings Limited operates in China through PRC subsidiaries and consolidated affiliated entities (VIEs) due to foreign investment restrictions, facing risks from its VIE structure, PRC government oversight, and potential delisting under the U.S. HFCAA - Vipshop operates in China through a VIE structure to comply with PRC laws restricting foreign investment in internet-related businesses, with revenues from these consolidated affiliated entities being **3.9%**, **2.3%**, and **2.6%** of total net revenues in 2019, 2020, and 2021, respectively[14](index=14&type=chunk) - The company faces risks from the Holding Foreign Companies Accountable Act (HFCA Act), as its auditor is located in a jurisdiction where the PCAOB cannot conduct inspections, potentially leading to the prohibition of its ADSs from trading in the U.S. as early as 2024[20](index=20&type=chunk)[179](index=179&type=chunk) - The ability to transfer funds from PRC subsidiaries to the holding company is restricted, with total restricted net assets subject to statutory reserves and other limitations amounting to **RMB 12.15 billion (US$1.91 billion)** as of December 31, 2021[24](index=24&type=chunk) [Financial Information Relating to Our Consolidated Affiliated Entities](index=11&type=section&id=Financial%20Information%20Relating%20to%20Our%20Consolidated%20Affiliated%20Entities) This section provides condensed consolidating financial schedules for the parent company, its subsidiaries, and its consolidated affiliated entities (VIEs) for the fiscal years 2019, 2020, and 2021 Condensed Consolidating Income Statement Data for FY 2021 (RMB in thousands) | | Parent Company | Subsidiaries | Consolidated Affiliated Entities | Eliminations | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net revenues** | — | 114,813,941 | 7,424,952 | (5,179,215) | 117,059,678 | | **Net income** | 4,681,073 | 4,307,382 | 390,703 | (4,686,284) | 4,692,874 | Condensed Consolidating Balance Sheet Data as of Dec 31, 2021 (RMB in thousands) | | Parent Company | Subsidiaries | Consolidated Affiliated Entities | Eliminations | Consolidated Total | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total assets** | 32,716,936 | 56,891,065 | 8,026,874 | (35,347,334) | 62,287,541 | | **Total liabilities** | (84,038) | (31,058,536) | (3,759,653) | 6,443,002 | (28,459,225) | [Selected Consolidated Financial Data](index=15&type=section&id=Selected%20Consolidated%20Financial%20Data) The company presents selected consolidated financial data for the five years ended December 31, 2021, showing revenue growth, profitability, and asset increases Selected Consolidated Statements of Income Data (RMB in thousands) | Indicator | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **Total net revenues** | 92,994,418 | 101,858,489 | 117,059,678 | | **Gross profit** | 20,680,228 | 21,285,308 | 23,106,557 | | **Income from operations** | 4,773,374 | 5,860,086 | 5,582,422 | | **Net income attributable to our shareholders** | 4,016,832 | 5,906,957 | 4,681,073 | Selected Consolidated Balance Sheets Data (RMB in thousands) | Indicator | As of Dec 31, 2020 | As of Dec 31, 2021 | | :--- | :--- | :--- | | **Total assets** | 58,940,814 | 62,287,541 | | **Total liabilities** | 29,555,025 | 28,459,225 | | **Total shareholders' equity** | 29,385,789 | 33,828,316 | [D. Risk Factors](index=18&type=section&id=D.%20Risk%20Factors) This section outlines significant risks to the company's business, covering operations, corporate structure, conducting business in China, and risks related to its securities - Key business risks include the inability to manage growth, failure to offer products at attractive prices, competition from other e-commerce platforms, potential harm to the brand's reputation, and the adverse effects of the COVID-19 pandemic on consumer spending and logistics[43](index=43&type=chunk)[49](index=49&type=chunk)[61](index=61&type=chunk) - The company's reliance on a VIE structure is a major risk, as PRC government interpretation of laws on foreign investment could deem the structure non-compliant, leading to severe penalties, and the enforceability of contractual arrangements is not as effective as direct ownership[44](index=44&type=chunk)[46](index=46&type=chunk)[151](index=151&type=chunk) - Significant risks of operating in China include changes in economic and political conditions, an uncertain legal system, and significant government oversight, with the inability of the PCAOB to inspect the company's auditor potentially leading to delisting from U.S. exchanges under the HFCAA[47](index=47&type=chunk) - The dual-class voting structure gives co-founder, chairman, and CEO Mr. Eric Ya Shen considerable influence, holding approximately **57.9%** of the aggregate voting power as of March 31, 2022, which limits the ability of other shareholders to influence corporate matters[48](index=48&type=chunk)[251](index=251&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=64&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of Vipshop's business, detailing its history, corporate structure, business model, integrated online and offline platforms, brand partner relationships, logistics, marketing, technology infrastructure, and the complex regulatory landscape in China [A. History and Development of the Company](index=64&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Vipshop Holdings Limited, a Cayman Islands holding company, was established in August 2010 to facilitate foreign investment into its operations, which began in China in 2008, conducting business through PRC subsidiaries and consolidated affiliated entities (VIEs) to comply with Chinese regulations - The company was founded in August 2008, with the Cayman Islands holding company, Vipshop Holdings Limited, incorporated in August 2010 to facilitate foreign investment[259](index=259&type=chunk) - Due to PRC restrictions on foreign ownership of internet businesses, the company's online platform is operated by its consolidated affiliated entities (VIEs), primarily Vipshop E-Commerce, which holds the necessary licenses[261](index=261&type=chunk) [B. Business Overview](index=66&type=section&id=B.%20Business%20Overview) Vipshop operates as a leading online discount retailer in China, utilizing a "flash sales" model, with **RMB 191.5 billion** GMV and **93.9 million** active customers in 2021, supported by an integrated online and offline platform and strategic logistics partnerships Key Operating Metrics (2019-2021) | Metric | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **GMV (RMB in billions)** | 148.2 | 165.0 | 191.5 | | **Active Customers (in millions)** | 69.0 | 83.9 | 93.9 | | **Total Orders (in millions)** | 566.3 | 692.4 | 786.6 | | **Brand Partners** | 18,000+ | 21,000+ | 25,000+ | - The company's business model is centered on "flash sales," offering curated, popular branded products at deep discounts for limited periods[265](index=265&type=chunk)[268](index=268&type=chunk) - Operations are supported by an integrated online platform (Vipshop App, vip.com, WeChat Mini-Program) and offline initiatives, including the acquired Shan Shan Outlets, with the online platform generating **93%** of the company's GMV in 2021[271](index=271&type=chunk)[277](index=277&type=chunk)[281](index=281&type=chunk) - In November 2019, the company terminated its in-house delivery service and entered a strategic cooperation with SF Holding to optimize logistics efficiency and reduce fulfillment expenses[67](index=67&type=chunk)[305](index=305&type=chunk) [C. Organizational Structure](index=101&type=section&id=C.%20Organizational%20Structure) Vipshop Holdings Limited, a Cayman Islands holding company, controls its PRC operating entities through a series of contractual arrangements (VIE structure) to comply with PRC restrictions on foreign ownership in the internet sector - The company utilizes a VIE structure, with key operating licenses held by Guangzhou Vipshop E-Commerce Co., Ltd., which is owned **66.7%** by Eric Ya Shen and **33.3%** by Arthur Xiaobo Hong[457](index=457&type=chunk)[464](index=464&type=chunk) - Control over the VIEs is maintained through a set of contractual arrangements, including Equity Interest Pledge Agreements, Exclusive Option Agreements, Powers of Attorney, and Exclusive Business Cooperation Agreements[460](index=460&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk) - In 2021, the company's directly owned subsidiaries contributed approximately **97.4%** of total consolidated net revenues, excluding intercompany service fees from the VIEs[462](index=462&type=chunk) [D. Property, Plants and Equipment](index=105&type=section&id=D.%20Property,%20Plants%20and%20Equipment) As of December 31, 2021, Vipshop's primary property includes its new headquarters in Guangzhou, approximately **3.3 million** square meters of owned warehouse space, and **1.1 million** square meters of retail property for Shan Shan Outlets Property Summary as of Dec 31, 2021 (in square meters) | Property Type | Owned | Leased | | :--- | :--- | :--- | | **Office Space** | 190,550 | 16,489 | | **Logistics Centers** | 3,303,357 | 56,648 | | **Shan Shan Outlets** | 1,102,035 | 8,025 | | **Other Offline Retail** | — | 439,362 | [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=106&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section provides management's discussion and analysis of Vipshop's financial performance, covering results of operations, segment performance, liquidity, capital resources, and critical accounting estimates [A. Operating Results](index=106&type=section&id=A.%20Operating%20Results) In fiscal year 2021, Vipshop's total net revenues increased by **14.9%** to **RMB 117.1 billion**, driven by a rise in active customers to **93.9 million**, though net income attributable to shareholders fell to **RMB 4.7 billion** due to a lower gross margin and increased operating expenses Key Performance Indicators (2020 vs. 2021) | Metric | 2020 | 2021 | | :--- | :--- | :--- | | **Total Net Revenues (RMB B)** | 101.86 | 117.06 | | **Active Customers (M)** | 83.9 | 93.9 | | **Total Orders (M)** | 692.4 | 786.6 | | **Net Income (RMB B)** | 5.92 | 4.69 | - The increase in 2021 net revenues was primarily driven by growth in the number of active customers and total orders[515](index=515&type=chunk) - Gross margin decreased from **20.9%** in 2020 to **19.7%** in 2021, mainly due to a strategy of reinvesting in customer experience and changes in product portfolio[518](index=518&type=chunk) - Operating expenses as a percentage of total net revenues decreased from **15.9%** in 2020 to **15.7%** in 2021[488](index=488&type=chunk) [B. Liquidity and Capital Resources](index=117&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of December 31, 2021, Vipshop held **RMB 17.17 billion** in cash, cash equivalents, and restricted cash, with net cash from operating activities at **RMB 6.74 billion**, and material cash requirements including operating leases, debt obligations, and investment commitments Summary of Cash Flows (RMB in thousands) | Cash Flow Activity | 2020 | 2021 | | :--- | :--- | :--- | | **Net cash from operating activities** | 11,820,444 | 6,744,644 | | **Net cash used in investing activities** | (6,695,043) | (2,326,489) | | **Net cash used in financing activities** | (20,839) | (58,788) | - The company's cash, cash equivalents, and restricted cash increased to **RMB 17.17 billion (US$2.69 billion)** as of December 31, 2021[541](index=541&type=chunk) - Capital expenditures for property, equipment, and land use rights amounted to **RMB 3.58 billion (US$561.6 million)** in 2021, primarily for the construction and expansion of warehouses and logistics infrastructure[559](index=559&type=chunk) Contractual Obligations as of Dec 31, 2021 (RMB in thousands) | Obligation Type | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | **Operating lease obligations** | 1,488,103 | 297,498 | 571,175 | 182,767 | 436,663 | | **Short-term debt obligations** | 2,125,124 | 2,125,124 | — | — | — | | **Capital expenditures commitment** | 765,700 | 618,704 | 140,329 | 6,667 | — | [E. Critical Accounting Estimates](index=123&type=section&id=E.%20Critical%20Accounting%20Estimates) The company's critical accounting estimates involve significant judgment and assumptions in areas such as revenue recognition, inventory write-downs, valuation of goodwill and assets from business acquisitions, and income tax calculations - Revenue from online sales is recognized when goods are accepted by customers, with a one-day change in the estimated in-transit period impacting 2021 total net revenues by approximately **RMB 492.8 million (US$77.3 million)**[585](index=585&type=chunk) - Inventory is valued at the lower of cost or net realizable value, with inventory write-downs being approximately **0.5%**, **0.7%**, and **0.04%** of the cost of sales for 2019, 2020, and 2021, respectively[588](index=588&type=chunk) - Other critical estimates include the valuation of goodwill and acquired assets in business combinations, and the assessment of deferred tax assets and liabilities, which requires estimating future financial performance[589](index=589&type=chunk)[591](index=591&type=chunk)[592](index=592&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=126&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation practices, and workforce, including biographical information for key directors and executive officers, stock incentive plans, employee numbers, and share ownership highlighting co-founder voting control [A. Directors and Senior Management](index=126&type=section&id=A.%20Directors%20and%20Senior%20Management) The company is led by co-founder Eric Ya Shen, who serves as Chairman and CEO, and co-founder Arthur Xiaobo Hong, who is Vice Chairman and COO, with a board including representatives from major shareholder Tencent and independent directors - The leadership team is headed by co-founders Eric Ya Shen (Chairman & CEO) and Arthur Xiaobo Hong (Vice Chairman & COO)[596](index=596&type=chunk)[598](index=598&type=chunk)[599](index=599&type=chunk) - The board of directors consists of ten members, including Martin Chi Ping Lau, President of Tencent, and several independent directors[596](index=596&type=chunk)[597](index=597&type=chunk)[600](index=600&type=chunk) [B. Compensation](index=129&type=section&id=B.%20Compensation) For the fiscal year 2021, Vipshop paid an aggregate of **RMB 12.7 million (US$2.0 million)** in cash to its executive officers and **RMB 2.6 million (US$0.4 million)** to its non-executive directors, utilizing three stock incentive plans to attract and retain talent - In FY2021, aggregate cash compensation was **RMB 12.7 million** for executive officers and **RMB 2.6 million** for non-executive directors[617](index=617&type=chunk) - The company has three active stock incentive plans: the 2011 Plan, 2012 Plan, and 2014 Plan, which allow for the granting of options, restricted shares, and other awards[618](index=618&type=chunk)[627](index=627&type=chunk)[636](index=636&type=chunk) [C. Board Practices](index=134&type=section&id=C.%20Board%20Practices) The board of directors consists of ten members and has established three primary committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee, each composed of independent directors and adhering to NYSE and SEC requirements - The board has three committees: Audit, Compensation, and Nominating and Corporate Governance, each with its own charter and composed of independent directors[648](index=648&type=chunk) - The Audit Committee is chaired by Ms. Kathleen Chien, who qualifies as an "audit committee financial expert"[649](index=649&type=chunk) [D. Employees](index=136&type=section&id=D.%20Employees) As of December 31, 2021, Vipshop had **8,013** full-time employees, a decrease from **20,442** in 2019, reflecting initiatives to streamline operations and outsource certain functions, with the largest groups in products and technology support, merchandising, and warehouse management Full-Time Employees by Function as of Dec 31, 2021 | Function | Number of Employees | | :--- | :--- | | **Merchandising** | 1,223 | | **Products and technology support** | 1,655 | | **Warehouse management** | 1,166 | | **Offline stores** | 1,168 | | **Shan Shan Outlets** | 1,275 | | **Administration and management** | 820 | | **Other** | 706 | | **Total** | **8,013** | [E. Share Ownership](index=136&type=section&id=E.%20Share%20Ownership) As of March 31, 2022, co-founder and CEO Eric Ya Shen beneficially owned **12.9%** of total ordinary shares, representing **57.9%** of the aggregate voting power due to the dual-class structure, with other major shareholders including Tencent, JD.com, and Harris Associates L.P Principal Shareholders as of March 31, 2022 | Shareholder | Beneficial Ownership % | Voting Power % | | :--- | :--- | :--- | | **Eric Ya Shen** | 12.9% | 57.9% | | **Arthur Xiaobo Hong** | 7.6% | N/A | | **Tencent Mobility Limited** | 9.8% | N/A | | **JD Entities** | 6.5% | N/A | | **Harris Associates L.P.** | 5.9% | N/A | [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=140&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's transactions with related parties, including contractual arrangements with its VIEs controlled by co-founders, business cooperation agreements with major shareholders Tencent and JD.com, and purchases of goods from director- or major shareholder-controlled companies - The company maintains contractual arrangements with its VIEs, which are owned by co-founders Eric Ya Shen and Arthur Xiaobo Hong[674](index=674&type=chunk) - Vipshop has strategic cooperation agreements with major shareholders Tencent and JD.com, granting it traffic-driving entry points on their respective platforms, such as Weixin Wallet and the JD.com mobile app[675](index=675&type=chunk)[676](index=676&type=chunk) - In 2021, the company purchased **RMB 303.5 million (US$47.6 million)** in products from companies controlled by its directors or major shareholders[677](index=677&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=141&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms the consolidated financial statements are appended, notes no material adverse legal proceedings, and states Vipshop's policy of not paying cash dividends in the foreseeable future, intending to retain earnings for business expansion - The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business[681](index=681&type=chunk) - Vipshop has no present plan to pay cash dividends and intends to retain future earnings to operate and expand the business[682](index=682&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=142&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides details on the company's corporate governance and legal framework, outlining its dual-class share structure, material contracts, exchange controls, and a detailed analysis of taxation in the Cayman Islands, PRC, and for U.S. investors, including the significant risk of being classified as a Passive Foreign Investment Company (PFIC) - The company has a dual-class share structure where each Class A ordinary share has one vote, while each Class B ordinary share has ten votes, with Class B shares convertible into Class A shares, but not vice-versa[690](index=690&type=chunk)[692](index=692&type=chunk) - The company is subject to PRC foreign exchange controls, which may limit its ability to transfer funds out of China, including for dividend payments[747](index=747&type=chunk) - There is a risk that the company could be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, which could result in adverse tax consequences for U.S. investors, with the determination depending on factors like the market price of its ADSs and the composition of its assets and income[252](index=252&type=chunk)[762](index=762&type=chunk)[764](index=764&type=chunk) [PART II](index=161&type=section&id=PART%20II) [ITEM 15. CONTROLS AND PROCEDURES](index=162&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2021, a conclusion attested to by the independent registered public accounting firm, Deloitte Touche Tohmatsu - As of December 31, 2021, management concluded that the company's disclosure controls and procedures were effective[797](index=797&type=chunk) - Management assessed the internal control over financial reporting and concluded it was effective as of December 31, 2021, with this assessment attested to by the independent auditor, Deloitte Touche Tohmatsu[800](index=800&type=chunk)[801](index=801&type=chunk)[802](index=802&type=chunk) [ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](index=164&type=section&id=ITEM%2016E.%20PURCHASES%20OF%20EQUITY%20SECURITIES%20BY%20THE%20ISSUER%20AND%20AFFILIATED%20PURCHASERS) The company has been actively repurchasing its shares, fully utilizing a **US$500 million** program authorized in March 2021, and subsequently authorizing an additional **US$1 billion** share repurchase program on March 31, 2022 - A **US$500 million** share repurchase program authorized in March 2021 was fully utilized as of the report date[811](index=811&type=chunk) - On March 31, 2022, the board authorized a new 24-month share repurchase program for up to **US$1 billion**[812](index=812&type=chunk) [PART III](index=164&type=section&id=PART%20III) [ITEM 18. FINANCIAL STATEMENTS](index=165&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section contains the complete audited consolidated financial statements for Vipshop Holdings Limited for the fiscal years ended December 31, 2019, 2020, and 2021, prepared in accordance with U.S. GAAP, including the unqualified opinion from Deloitte Touche Tohmatsu and detailed notes - The independent auditor, Deloitte Touche Tohmatsu, issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting as of December 31, 2021[823](index=823&type=chunk)[824](index=824&type=chunk) - The critical audit matter identified by the auditor was the estimation of inventory write-downs, which involves significant management judgment regarding factors like inventory aging, historical trends, and forecasted demand[828](index=828&type=chunk)[830](index=830&type=chunk) [Consolidated Balance Sheets](index=174&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2021, Vipshop's total assets were **RMB 62.29 billion**, with total liabilities decreasing to **RMB 28.46 billion** and total shareholders' equity increasing to **RMB 33.83 billion** Consolidated Balance Sheet Summary (RMB in thousands) | | As of Dec 31, 2020 | As of Dec 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | 31,172,982 | 32,841,945 | | **Total assets** | 58,940,814 | 62,287,541 | | **Total current liabilities** | 26,568,948 | 25,771,017 | | **Total liabilities** | 29,555,025 | 28,459,225 | | **Total shareholders' equity** | 29,385,789 | 33,828,316 | [Consolidated Statements of Income and Comprehensive Income](index=177&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the year ended December 31, 2021, total net revenues were **RMB 117.06 billion**, with gross profit rising to **RMB 23.11 billion**, but net income attributable to shareholders decreased to **RMB 4.68 billion** due to increased operating expenses Consolidated Income Statement Summary (RMB in thousands) | | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **Total net revenues** | 92,994,418 | 101,858,489 | 117,059,678 | | **Gross profit** | 20,680,228 | 21,285,308 | 23,106,557 | | **Income from operations** | 4,773,374 | 5,860,086 | 5,582,422 | | **Net income attributable to shareholders** | 4,016,832 | 5,906,957 | 4,681,073 | [Consolidated Statements of Cash Flows](index=182&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the year ended December 31, 2021, net cash generated from operating activities was **RMB 6.74 billion**, with net cash used in investing activities at **RMB 2.33 billion**, and the company's cash, cash equivalents, and restricted cash increasing to **RMB 17.17 billion** Consolidated Cash Flow Summary (RMB in thousands) | | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | 12,290,183 | 11,820,444 | 6,744,644 | | **Net cash used in investing activities** | (8,240,560) | (6,695,043) | (2,326,489) | | **Net cash used in financing activities** | (6,256,700) | (20,839) | (58,788) | | **Cash, cash equivalents and restricted cash at end of year** | 7,719,285 | 12,811,321 | 17,171,269 |

Financial Data and Key Metrics Changes - Total revenue for 2021 increased by 15% year-over-year to RMB117.1 billion, driven by steady growth in both customer base and average revenue per customer [5][11][21] - Net income attributable to shareholders decreased to RMB4.7 billion from RMB5.9 billion in the prior year, with a net margin of 4.0% compared to 5.8% [22][23] - Non-GAAP net income for the year was RMB6.0 billion, down from RMB6.3 billion in the prior year, with a non-GAAP net margin of 5.1% [23][24] Business Line Data and Key Metrics Changes - Active customers increased by 12% year-over-year to 93.9 million, with super VIP active customers growing by 50% to 6 million, contributing 36% of online net GMV [4][5][21] - Average revenue per user (ARPU) for super VIP members is approximately 8 times that of non-super VIP customers, indicating a strong performance in this segment [8][48] Market Data and Key Metrics Changes - Total net revenue for Q4 2021 was RMB34.1 billion, a decrease from RMB35.8 billion in the prior year, attributed to softer consumer demand for discretionary categories [13] - Gross profit for Q4 2021 was RMB6.7 billion, with a gross margin of 19.7%, down from 21.9% in the prior year [14][21] Company Strategy and Development Direction - The company plans to focus on core brands and high-value customers to enhance its value proposition and improve customer stickiness [6][9] - Future strategies include optimizing operations, personalizing recommendations, and targeting marketing efforts to drive sustainable growth [9][12] Management Comments on Operating Environment and Future Outlook - Management noted that consumer sentiment was weak in Q4 2021 but showed slight improvement in Q1 2022, with expectations for stable growth throughout the year [28][29] - The impact of macroeconomic conditions and competition remains uncertain, but management believes that effective merchandising will attract customers [30][31] Other Important Information - The company had cash and cash equivalents of RMB17.2 billion and short-term investments of RMB5.4 billion as of December 31, 2021 [20] - Management is considering options for shareholder returns, including share buybacks and dividends, as part of their capital allocation strategy [42] Q&A Session Summary Question: Consumer sentiment and recovery momentum - Management observed weak consumer sentiment in Q4 2021, with slight improvement in Q1 2022, but remains cautious about predicting recovery due to ongoing uncertainties [28][29] Question: Inventory status related to Winter Olympics - Management indicated no significant buildup of inventory related to Winter Olympics merchandise, and they do not anticipate benefiting from excess inventory [35] Question: User acquisition strategy - The company is focusing on acquiring quality users efficiently, using a balanced approach to marketing spend while improving retention of existing customers [36][46] Question: Gross margin trends - Management acknowledged that Q4 2021 gross margins were impacted by promotions and weather conditions, but they expect to return to more normal levels in the future [41] Question: Plans for shareholder rewards - The board is evaluating options for shareholder returns, including share buybacks and dividends, based on the company's healthy profitability [42]

Vipshop Holdings Limited (NYSE:VIPS) Q3 2021 Results Conference Call November 18, 2021 7:30 AM ET Company Participants Jessie Zheng - Director of Investor Relations Eric Shen - Chairman and Chief Executive Officer David Cui - Chief Financial Officer Conference Call Participants Thomas Chong - Jefferies Guohan Wang - Daiwa Feitong Zhang - CICC Joyce Ju - Bank of America Natalie Wu - Haitong International Operator Ladies and gentlemen, good day, everyone, and welcome to Vipshop Holdings Limited Third Quarter ...

Financial Data and Key Metrics Changes - Total net revenue for Q2 2021 reached RMB29.6 billion, a year-over-year increase of 22.8% from RMB24.1 billion in Q2 2020 [8][9] - Non-GAAP net income attributable to shareholders increased by 11.3% year-over-year to RMB1.5 billion [8][14] - Gross profit for Q2 2021 increased by 20.6% year-over-year to RMB6.0 billion, with a gross margin of 20.1% compared to 20.5% in Q2 2020 [9][10] - Net income attributable to shareholders for Q2 2021 was RMB1.1 billion, down from RMB1.5 billion in the same period last year, resulting in a net margin of 3.7% compared to 6.4% [13][14] Business Line Data and Key Metrics Changes - The number of active users grew by 32% year-over-year to 51.1 million, contributing to a total GMV increase of 25% year-on-year to RMB48.1 billion [4][5] - Cumulative Super VIP membership increased by nearly 50% year-over-year, contributing about one-third of total GMV in Q2 2021 [5][6] Market Data and Key Metrics Changes - The company noted a weaker macro environment affecting consumer sentiment, partially due to natural disasters and COVID-19 resurgence [20][21] - The apparel industry is experiencing a light season, impacting sales, particularly in Q3 [20][21] Company Strategy and Development Direction - The company remains committed to its merchandising strategy, focusing on creating value for customers and enhancing operational synergies [6][7] - Vipshop aims to solidify its leading position in China's discount retail market by increasing the breadth and depth of its merchandising portfolio [6][7] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model despite challenges, highlighting the strong growth in active users and Super VIP memberships [21][30] - The outlook for Q3 is cautious due to a tough comparison with the previous year and a traditionally light season for apparel [20][21] - For Q4, management expects a peak season with larger ticket sizes and promotional events, contingent on the containment of COVID-19 [20][21] Other Important Information - The company repurchased approximately US$301 million of its ADS as part of a US$500 million share repurchase program, reflecting confidence in its business model [8] - As of June 30, 2021, the company had cash and cash equivalents of RMB16.5 billion and short-term investments of RMB3.6 billion [14] Q&A Session Summary Question: Competitive landscape and impact of short video platforms - Management noted that while short video platforms attract customer attention, the most important factors remain merchandising, pricing, and brand advantages [19] Question: Q3 guidance and pandemic impact - Management acknowledged weaker consumer sentiment and challenges from the pandemic, but expressed optimism for Q4 as a peak season [20][21] Question: Monthly sales breakdown and apparel demand - Management indicated that June sales were weaker due to extended promotional events, and noted a slower trend in apparel demand in July and August [25][26] Question: User growth and ARPU in Q3 guidance - Management expects user growth to remain strong, with ARPU decline moderating in the future as new customers ramp up spending [30] Question: Marketing spending and strategy - Management plans to maintain stable marketing expenditure as a percentage of revenue while focusing on user acquisition and retention [29] Question: Outlook for the second half of the year - Management is optimistic about stable growth in the discount sale segment, with a focus on maintaining profitability [34][38] Question: New initiatives and user engagement improvements - Management highlighted enhancements in Super VIP membership incentives and improvements in customer service and user experience [41][43] Question: Regulation impacts - Management views recent regulatory developments positively, expecting them to create a more open market and enhance opportunities for partnerships with brands [47]

Vipshop Holdings Limited (NYSE:VIPS) Q1 2021 Results Conference Call May 19, 2021 7:30 AM ET Company Participants Jessie Fan - Director of Investor Relations Eric Shen - Chairman and Chief Executive Officer David Cui - Chief Financial Officer Conference Call Participants Eddy Wang - Morgan Stanley Joyce Ju - Bank of America Natalie Wu - Haitong International Tian Hou - TH Capital Ashley Xu - Credit Suisse Feitong Zhang - CICC Charlie Shen - China Renaissance Operator Ladies and gentlemen, thank you for stan ...