Baozun Inc.

Good morning, ladies and gentlemen, and thank you for standing by for Bausen's second quarter 2021 earnings conference call. 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 will now turn the meeting over to your host for today's call, Wendy Sun, Investor Relations Director of Bausen. Please proceed, Wendy.

Thank you, operator. Hello, everyone, and thank you for joining us today. Our second quarter 2021 earnings release was distributed earlier today and is available on our website at ir.baozhen.com, as well as on global news services. We also posted a PowerPoint presentation that accompanies our comments to the same IR website. On the call today from Baozhen, we have Mr. Vincent Chiu, Chairman and Chief Executive Officer, Mr. Astro Yu, Chief Financial Officer, and Ms. Tracy Lee, our Vice President of Strategic Business Development. Ms. Chiu 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 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. Foreign Security Litigation Reform Act of 1995. These forward statements are based upon management current expectations and current market and operating conditions and relates to events that involve known or unknown risks, uncertainties, and other factors. 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, facilities, or factors is included in the company's filings with the US SEC and in announcements on the website of Hong Kong Exchange. The company does not undertake any obligation to update any forward-looking statements except as required in 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, Wendy, and thank you all for joining us. We are satisfied with the progress in achieving our strategic operational goal in the second quarter. Despite sitting on a high base of last year, where the second quarter was the first big promotional event quarter coming out of COVID in China, we were able to deliver a solid GMA growth of 23% year-over-year. In particular, backed by our comprehensive infrastructure and the service offerings, We made a significant inroads in innovating and executing our omnichannel strategy, further penetrating into the luxury sector, which I will further expand on the next slide. However, as we first alluded to in the first quarter results, the Better Quality Initiative, or BCI, has negatively impacted the growth of the apparel and accessories category, especially for international sportswear brands. The impact continued into the second quarter and is now both larger and longer than we initially expected. As an indication of the impact, the total outbound orders of our logistics services declined by 29% year-over-year for the quarter. Total net revenues increased by 7%. The non-GAAP net income for the quarter rose by 4% year-over-year. with the additional impact of our increasing investments for the future growth. Moving on to slide number three. During the quarter, we saw demand flourish for private domain and non-traditional channels. Non-TIMO channels accounted for 32% of photo GMB, an increase of 7% from 25% in the same period last year. As we execute our omnichannel strategy, we are able to help our brand partners generate incremental sales and the customers from a variety of emerging channels. The luxury and the premium sector continue to be one of our key growth drivers, demonstrating both strong growth, momentum, and a high emergence profile. Following our acquisition of Fujet, we visited the headquarters of several European luxury and premium brands. We received very positive feedback regarding the broad awareness of substantial abilities in China's e-commerce market. During the quarter, we onboarded seven brand partners in luxury and the premium sector, and we have laid out a very strong pipeline. We observed that the addition to Tmall stores, the brands are also planning flexible stores across other e-commerce channels. We believe this will be a significant driver over the coming years. Now let's move to our M&A progress. Operationally, we continue to make structural improvements to our business as we make strategic investments to enhance our competitiveness and value proposition. We believe these structural improvements will position us well to deliver long-term growth by providing our clients with better end-to-end e-commerce solutions. Now please turn to slide four. During the quarter, on the warehouse and the logistics front, we made two strategic investments. Bao Liantong enlarges our premium warehouse capacities and allows us to extend our verticals coverage while BIDA enriches us with integrated logistics and delivery resources to achieve meaningful regional cost advantage in Suzhou. Following the end of the quarter, we also announced our potential strategic partnership with China along with its equity investments in our logistics service subsidiary. Our logistics business group has long been well recognized in the industry as one of the leading providers in highly customized and premium logistics services. Now, with expanded capacity and more comprehensive service capabilities, we believe our full chain solutions will continue to drive brand value and generate business leads and financial returns. During the quarter, we were particularly pleased to onboard a leading domestic sportswear brand as our customer for warehouse and logistics services. We believe this could potentially be an entry point for additional brand owners to work with us for their e-commerce operations. Moving on to slide number five. In addition, on top of the investments and partnerships made to bolster our logistic capabilities, during the quarter we also acquired eFashion, an e-commerce solution provider that is focused on bringing international fashion brands to China. This will allow us to further penetrate the branded fashion sector, extending our leadership position. There is also profound progress in integrating our investments from previous quarters we have started to offer our e-commerce solutions to Busan fashion group brands and we'll begin exploring the general development of special offer products later this year with iClick the business development progress is well on track we co-launched a comprehensive package for our brand partners in cosmetics earlier this month and we will also become this brand's operating partner, operations partner for its mini-programs. We anticipate more breakthroughs for the FMCG categories in the 10-cent mini-programming ecosystem later this year. Regarding Foodjet, as I mentioned earlier, we have successfully, jointly acquired new brand partners and built up business leads during the quarter. On top of luxury and the premium sector, Fujet is also actively participating in our business development progress in a broader apparel category. We are pleased with our substantial progress in extracting value from our various acquisitions and the strategic alliance this year. These new partners have joined the Boson family with a rich portfolio of brand partners, on the various forms of business cooperation. As our business scope has now been very much enriched, we will no longer disclose our number of brand partners going forward. As such, Metric currently only captures brands in store operations, hence it's no longer appropriate to evaluate our full business potential going forward. Turning to page six, I want to give an update on our business process re-engineering. As technology empowers future success, we continue integrating technology into our operations and the service models for our brand partners. We have had some solid results from our year-long trials with several proof of concepts and the prototypes in BOC, our business operation centers. In the first quarter, we applied such model broader in our fashion apparel business unit And after comprehensive review and evaluation, we now have decided it's time to replicate such model company-wide. As part of the transformation of our business, we started to build a technology-powered middle office to further improve our service quality and reduce operational costs. We are integrating our technology infrastructure and the management applications into our daily operations. And our ultimate goal is to make our e-commerce operations more digitalized, standardized, and systematic. We believe such initiatives will drive up our economies of scale in the long run. And it promotes resource integration, efficiency improvements, and the competitiveness enhancements. Backed by our comprehensive middle office, our regional service centers, or RSC, in Nantou and Hefei are operational. We have moved about 1,000 employees to these RSCs and the initial trial have generated over 20% in efficiency and accuracy improvements. We are migrating more business units and functions to these regional service centers over the next 12 months and believe such initiative will become an effective driver for margin expansion next year. Lastly, we continue to invest in our people and organizational structure. We truly believe that people are the greatest asset of an organization, and as such, we have strategically grown our management team, in particular to support the broadening of our omnichannel services. We have also enhanced our compensation policies, HR training system, and employee coaching. This enables us to attract and retain the best talents in the industry and ensure that our people grow together with the company. The upcoming new headquarters move is on track and we believe the expansion of upgrades of our working environment will support our growing team, boost efficiency and nurture a culture of cutting-edge innovation. Overall, the second quarter has certainly been a very busy quarter for us, but rest assured we will continue to work tirelessly to further enhance and grow our business. While we anticipate ongoing headwinds from BCI in the second half of this year, online shopping increasingly pervades people's daily life. Therefore, we believe the comprehensive suite of e-commerce solutions that we deploy is key to continuously improve the shopping experience for customers. Ever-changing e-commerce dynamics are presenting us with both challenges and opportunities. We are actively evaluating the market and we will review our priorities and make change of our strategic middle term plan accordingly. Ultimately, we believe that by focusing on our core business proposition, empowering our brand partners to connect with consumers at far greater convenience, We are and will continue to be the partner of choice for all our existing and future brand partners. I will now pass the call over to Arthur to go over the financials. Thank you.