Baozun Inc.

Good morning and good evening, ladies and gentlemen, and thank you for standing by for Baozhen's second quarter 2020 earnings conference call. Well, at this time, all participants are in the listen-only mode. After management's prepared remarks, there will be a question-and-answer session. As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Ms. Wendy Sun, Investor Relations Director of Baozhen. Please proceed, Wendy.

Thank you operator. Thank you everyone and thank you for joining us today. Our second quarter 2020 earnings release was distributed early today and is available on our IR website at ir.baozun.com as well as on global newsware services. On the call today from Baozun, we have Mr. Vincent Chiu, Chairman and Chief Executive Officer, Mr. Junhua Wu, Chief Growth Officer, and Mr. Robin Lu, Chief Financial Officer. Ms. Qiu will review the business operations and the company highlights, followed by Mr. Lu, who will discuss financials and guidance. They will all be available to answer your questions during the Q&A section that follows. Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the Security Exchange Act of 1934 and the U.S. Private Security Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve no or no risk, uncertainties, and other factors, all of which are difficult to predict, and many of which are beyond the company's control, which may cause the company's actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks and certainties or factors is included in the company's filing with the USICC. The company does not undertake any obligation to update any forward-looking statement except as required under applicable law. Finally, please note that unless otherwise stated, all figures mentioned during this call are in RMB. It is now my pleasure to introduce our chairman and chief executive officer, Mr. Vincent Chiu. Vincent, please go ahead.

Thank you, Wendy, and thank you all for joining us today. While many sectors in China are still navigating the challenges imposed by COVID-19, we saw a strong recovery in e-commerce in the second quarter. Consumers are increasingly adopting e-commerce as a part of their daily lives and are spending more on categories that improve their quality of life. This, in turn, is creating an even larger opportunity for the retail industry to accelerate online penetration further. And we are seeing growing needs from our brand partners for creative go-to-market strategies, tactical IT, data analysis, and marketing solutions. sophisticated and integrated omni-channel initiatives and logistic services. We believe the strength of our results reflects our unique ability to create additional value for our brand partners and speaks to the resilience of our business. I am very proud of what our team has accomplished so far in this unique environment in 2020. For the second quarter, Our GMB grew by 31% year-over-year, and more importantly, we saw a solid recovery across various categories. Revenue increased 26%, with service revenue leading the way with more than 43% rise year-over-year. We continue to make meaningful progress in engaging with new brands and optimizing our category mix. with a net addition of 11 new brands. These new brands included several luxury brands as well as a few FMCG brands, especially in the food and health categories. In addition, as a part of our high quality growth strategy, we focused on optimizing our category mix and ramping up newly added brands alongside our broader service offerings post COVID-19. This helped to improve our blended take rate for the non-distribution model during the quarter. While we are pleased to have facilitated our brand partners even greater success in the second quarter, we also noted the increasing macro and economic uncertainties amid the COVID-19 pandemic and proactively took steps to unleash additional flexibility and operating efficiency. First, We have been continuously refining our service offerings for medium-sized brands within our portfolio to leverage our technology infrastructure and improve efficiency and productivity. In 2019, we launched ROS, our Retail Operations Support System. And over the past few quarters, we have fine-tuned several office modules and demonstrate its capability to improve operating leverage and increase capacity. Recently, we set up a business unit called BOC, or Business Operations Center, which is powered by ROS and leverages shared functionalities to adapt our delivery system to serve medium-sized brands with greater efficiency. BOC allows us to seamlessly switch our operational setup from brand to brand on top of our traditional offerings of highly customizable solutions and the dedicated resources for premium brands. We believe BOC allows us to streamline, consolidate, integrate, and standardize our operations, which will help drive greater efficiency improvements through technology and a shared economy while we serve the medium-sized brands within our portfolio. Second, we saw an accelerating evolution in e-commerce strategies for the brands we serve in the domestic market. As you may recall, we formed a joint venture with a leading domestic FMCG brand in mid-2019, which has delivered remarkable results in just one year. This achievement has established a unique proven value proposition for domestic brand partners. In fact, More than half of our newly added brands in the first half of the year were domestic brands, and we are seeing even more in the pipeline. To fully take advantage of this emerging opportunity, we set up a dedicated operating center for domestic and newly established brands, which we refer to internally as The Growth Brand Operating Center, or GBO. As a leading player in a constantly evolving industry, we pride ourselves on our track record of innovation, and the launch of BOC and GBO is another milestone, demonstrating our nonstop efforts looking for new ways to support our brand partners and to stay ahead of the competition. Overall, Over the past three years, we have centralized and relentlessly strengthened our technology footprint around cloud infrastructure and AI technology. This foundation allows us to deliver and integrate digital operating platform to drive automation and enhanced intelligence for our brand partners. We believe digitalization and innovation will continue to be vital for strengthening our competitive modes. As guided by our vision, technology empowers future success. As our brand partners embrace faster digitalization and increasingly focus on e-commerce, we believe they will continue to adopt more systematic and flexible approaches to the e-commerce strategies that we are well positioned to deliver as a cutting edge leader in this space. We are confident that our strong strategic execution will continue to drive sustainable long-term growth. I will now pass the call over to Robin to go over our financials for the quarter. Thank you.