Baozun Inc.

Good morning, ladies and gentlemen, and thank you for standing by for Baozong's first quarter 2021 earnings conference call. At this time, all participants are in a 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 will now turn the meeting over to your host for today's call, Ms. Nicole Zhao, Investor Relations Manager, For Baozun, please proceed, Nicole.

Thank you, Operator. Hello, everyone, and thank you for joining us today. Our first quarter 2021 earnings release was distributed earlier today, and it's available on our IR website at ir.baozun.com, as well as on global newsletter services. On the call today from Baozun, we have Mr. Vincent Chu, Chairman and Chief Executive Officer. Mr. Arthur Yu, Chief Financial Officer, and Ms. Tracy Lee, our Vice President of Strategic Business Development. Mr. Chu will review the business operations and company highlights, followed by Mr. Yu, who will discuss financials and guidance. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this conference call contains overlooking statements within the meaning of the Security Exchange Act of 1934 and the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and the current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict, 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, uncertainties, or factors is included in the company's valuing with U.S. SEC and in the company's announcements, notice, or other documents published on the website of the Stock Exchange of Hong Kong Limited. The company does not undertake any obligation to update any forward-looking statements except as required under the applicable law. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Chu. Vincent, please go ahead.

Thank you, Nicole, and thank you all for joining us. We are pleased to announce another solid quarter of high-quality growth. Our total net revenues increased 33% year-over-year to $2 billion, and our non-GAAP income from operations more than doubled to $76 million. We added a net total of 15 brands, including luxury apparel, cosmetics, food, and health brands, as well as brands from the Fujet acquisitions. We believe these numbers reflect the quality and trust of the relationships we have developed with brand partners. And now please turn to slide three. Overall, we are on track to deliver our immediate term strategic plan. Let me provide some highlights about how we are progressing with our three key initiatives. Now please turn to slide four. For customer first to drive growth, Our luxury sector is an example in which we've made continuous progress this quarter. In addition to selling our new brand, we also provided more value-added services. This includes interactive digital marketing, IT customization, and premium warehouse and logistics services. They all have greatly improved the user experience and generated a higher profit contribution. Luxury has become a significant profit contributor, accounting for 15% of GMB in apparel and accessories category and growing over 50% year-over-year. In addition, we enhanced our leading position in luxury and strengthened our consulting and brand insight capabilities through the acquisition of Fujet and strategic alliance with Fuxing Fashion Group. In late April and early May, the core Fujia team made a visit to Europe and generated a number of promising business leads. Overall, we remain optimistic that the luxury sector will be one of our key growth drivers in the year ahead. On our omnichannel strategies, we are helping brand partners to obtain incremental sales and customers from a variety of emerging channels. This quarter, we integrated additional SaaS functions in our Tencent mini program packages and helped several sportswear brands run their Douyin platform. We also tested new PDD stores for certain brands in apparel and accessories. and FMCG categories. Additionally, we made great progress working more closely with JD. Our efforts translated into tremendous progress, and we accumulated extensive know-how in setting the right go-to-market strategies for each platform. During the quarter, 90 more channels accounted for 35% of total GMB. a meaningful increase from 25% for the full year of 2020. More encouragingly, based on our initial assessment, consumer overlap for our multi-platform stores is less than 10%. This indicates that we are successfully helping our brand partners incrementally expand their businesses. It also shows that we have great potential to further expand our addressable market. On the cost structure optimization front, tech-driven business process, re-engineering, and business model innovation continue to show results. Operating efficiency metrics, unit fulfillment costs, and sales and marketing costs per GMB have all improved compared with a year ago. This is also true for technology and the content spending. Our centralized integrated operating platform, BOC, has helped over a dozen brands drive significant cost savings over the past six months. At the same time, our ROS infrastructure supports our BOCs through process re-engineering. As an example, ROS includes integrated functions for one-stop content design, which help us standardize workflow, improve teamwork, enhance data accuracy, and improve communication efficiency. On average, brands have been able to reduce their operating costs by over 10%. We have expanded this service package to a broader apparel and accessory category. and we anticipate that this will be an important driver for operating efficiency and cost saving going forward. In addition, our remote service centers in Nantong and Hefei are both on track and started trial operations in March. We believe that after they both ramp up, there will be meaningful cost savings from the second half of 2021. Now let's turn to slide number five. Technology has constantly helped us to widen our competitive advantage. We launched significant upgrades to our IT infrastructure to support and adapt for evolving omnichannel strategies. For example, we integrated into over 20 platforms, including Tmall, Tencent, MiniPrograms, Douyin, JD, and Pinduoduo. Pre-integration helps our brand partners launch on these platforms quickly, literally on a plug-and-play basis. We keep enhancing our raw services to help brands deploy differentiated strategies across multiple platforms. This sustainably improves efficiency and reduces our brand partners' working capital. our efforts in technology innovation will never stop. In addition to promoting greater cost efficiency, we are also developing an innovative top-line growth engine for our brand partners. Recently, we launched a series of data-driven toolkits to optimize brand sales. Internally, we call this SEMA, or Selling Machine. By mining extensive data sets, and leveraging machine learning capabilities, SAMR maximizes conversion rates and overall shopping experiences. It does this by recommending products and assortment planning and display strategy. On the front end, SAMR is currently in beta testing and effectively improving traffic utilization. We have identified a few key brands for which we plan to deploy our sum-up toolkits across Tmall and Tencent mini programs. We expect broader deployment in the coming quarters. In relation to digital marketing, we are also making progress on our content marketing, live streaming, and data services. During the quarter, we expanded our live streaming studio to 2,000 square meters and established a dedicated studio for Douyin live streaming workforce. We are happy to see that a few brand partners have achieved top ranking events with high ROI on the Douyin platform. Meanwhile, we completed several equity investments in the digital marketing arena. This included a top 10 Tmall MCM, a fast-growing Douyin MCN with data and news feed analytics, and a content marketing partner. We believe these equity investments will enhance our digital marketing flexibility across different ecosystems. This will reinforce our value proposition by facilitating the digital marketing success of our brand partners. On the warehouse and logistics side, we expanded capacity in apparel and accessories, beauty and cosmetics categories. By the end of 2020, our infrastructure capacity had grown to 640,000 square meters, including specially designed warehouse for the luxury sector where demand is ramping up sharply. We also focused on providing more customized services, for example, We launched a comprehensive B2B business, as well as more budget-friendly service offerings. We always approach everything with a customer-first mindset and will continue to launch differentiated services based on the needs of our brand partners. Meanwhile, we will actively look for opportunities to enhance our logistics capabilities through strategic alliance with third parties. Now on slide 6, early this May, we published our first Environmental, Social and Governance, or ESG, report. It reflects our commitment to long-term sustainable development. We view ESG as a commitment to our shareholder-stakeholder communities and was rated BBB by MSCI in 2020. This is a top ranking in the e-commerce industry. We believe good governance is important to sustain commercial success in the long run. We appreciate the participation of many of our shareholders in our survey while we were preparing this report. We will strive to set new benchmarks in the brand e-commerce service industry as well. Meanwhile, we deepened our investments in human resources and look forward to enabling our people to exceed their potential and develop their careers together with Baozong. Overall, we are optimistic about the e-commerce sector continuing to create new opportunities. We will keep innovating to capture them and drive growth drive growth both organically and through selective M&A. We believe we are well on track to achieving sustainable and profitable long-term growth. I will now pass the call over to Arthur to go over our financials. Thank you. Okay, thank you, Vincent.