2021-08-19 18:06Financial Data and Key Metrics Changes - Total GMV increased by 23% year-over-year to CNY 15.7 billion, with distribution GMV rising by 5% to CNY 1.1 billion and non-distribution GMV increasing by 25% to CNY 14.6 billion [20] - Total net revenues increased by 7% to CNY 2.3 billion, with product sales revenues up by 5% and service revenues up by 9% [21] - Non-GAAP net income attributable to ordinary shareholders totaled CNY 161 million, an increase of 3% year-over-year, with basic and diluted non-GAAP EPS at CNY 2.04 and CNY 2.01 respectively [24][25] Business Line Data and Key Metrics Changes - Electronics and FMCG categories grew over 100% year-over-year, while the luxury sector showed high double-digit growth [20] - Apparel and accessories category declined by 23% year-over-year due to the impact of the Better Cotton Initiative (BCI) [21] - Non-Tmall channels accounted for 32% of total GMV, an increase from 25% in the same period last year [10] Market Data and Key Metrics Changes - The luxury and premium sector continued to be a key growth driver, with strong growth momentum and high margin profiles [10] - The impact of BCI on international sportswear brands has been larger and longer than initially expected, affecting outbound orders of logistics services which declined by 29% year-over-year [9] Company Strategy and Development Direction - The company is focused on enhancing its omni-channel strategy and penetrating the luxury sector, with plans to onboard more brand partners in these areas [10][11] - Strategic investments in logistics and warehouse capacities are aimed at improving competitiveness and value proposition [12][13] - The company is also integrating technology into operations to improve service quality and reduce operational costs, with a goal of making e-commerce operations more digitalized and standardized [16][17] Management's Comments on Operating Environment and Future Outlook - Management anticipates ongoing headwinds from BCI in the second half of the year but remains confident in the long-term growth potential of the e-commerce market [18] - The company is actively evaluating market dynamics and may adjust its strategic mid-term plan accordingly [18] - Management highlighted the potential boost from the upcoming Winter Olympics and the importance of preparing for major promotional events like 11.11 [31] Other Important Information - The company has authorized a share repurchase program allowing for the repurchase of up to US$125 million worth of shares [25] - The company has a healthy cash position of CNY 4.5 billion, which will be used cautiously for operations and investments [25][66] Q&A Session Summary Question: Consumer sentiment recovery from BCI issue - Management noted that while the BCI continues to negatively impact the fashion and sports category, there are signs of improvement expected in the later part of the next quarter [28][29] Question: Update on potential synergy with Cainiao - Management highlighted that the partnership with Cainiao will provide better economies of scale and synergies between their logistics services [36] Question: GMV composition and brand contributions - Management provided details on GMV contributions from various categories, with electronics at 25%, FMCG at 20%, and apparel at 35%, which is declining due to BCI [40][41] Question: Impact of regulatory changes on digital marketing - Management stated that they are prepared for new regulations regarding consumer data protection and do not expect significant changes in digital marketing expenses from brand partners [48][49] Question: Category growth outlook for Q3 and Q4 - Management expressed confidence in maintaining good growth rates in GMV despite the BCI impact, driven by a strong pipeline in their omni-channel strategy [70]