2019-05-31 01:48Financial 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]