Baozun Inc.

Good morning, ladies and gentlemen. Thank you for standing by for Bowson's third quarter 2021 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. As a reminder, today's conference has been recorded. I will now turn the meeting over to host for today's call, Ms. Wendy Sun, Investor Relations Director of Bowson. Please proceed, Wendy.

Thank you, Operator. Thank you, everyone, and thank you for joining us today. Our sub-quarter 2021 earnings release was distributed earlier today and is available on our IR website at ir.baozhen.com as well as on Global Newsware Services. They have also posted a PowerPoint presentation that accompanies our comments to the same IR website where they are available from download. This presentation is also available on our webcast, where we will move on the slides in synchronization with our remarks. On the call today from Baozhen, we have Mr. Vincent Chu, Chairman and Chief Executive Officer, Mr. Arthur Yu, our Chief Financial Officer, and Ms. Tracy Lee, our Vice President of Strategic Business Development. Ms. 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 section that follows. Before we begin, I would like to remind you that this conference call contains forward-looking statements relating 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 known or unknown 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 thirties or factors is included in the company's filing with the USACC and in announcement on the website of Hong Kong Stock Exchange. The company does not undertake any obligation to update any forward-looking statement except as required and 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. Good morning and evening, everyone. Thank you all for joining us. Today we are hosting our earnings call for the first time from our new headquarters, where most of the Boson family has finally come together under one roof. Ever since I founded Baozhen back in 2007, our business expanded so rapidly that we ended up being spread across multiple offices for many years until now. We call our new home Baozhen New One, symbolizing the start of a new journey, and we believe being physically together will greatly enhance our people's sense of belonging, collaboration, and productivity. As many of you already know, China's e-commerce has recently experienced a variety of headwinds, including weak macro environment, consumer sentiment drops, as well as new policies and the requirements issued by the government. Despite all these short-term challenges, we were able to grow our revenues and deliver a non-gap operating profit of $2 million after a one-off adjustment. I'm confident with the great resilience and the sustainability of our business. We believe, given e-commerce is rooted in daily life, as headwinds slowly pass, consumer sentiment will eventually improve, and various regulatory changes to the e-commerce environment will bring upon the next phase of long-term sustainable growth. Changes and temporary challenges bring opportunities, especially for those who can identify them to be the first mover to adapt and innovate. Let me share with you some of the opportunities we are seeing. Now please turn to slide number three. We continue to see the trend of consumption upgrade, especially in the luxury and the premium sector. We believe the nature of such growth is structural with consumption upgrade driven by rising disposal income and demand for quality lifestyle of the younger generation. The increased online penetration of luxury has also made luxury goods more accessible, and we have laid out a healthy pipeline from global luxury brand partners for next year. During the quarter, we onboarded seven luxury brands, and we are forecasting GME from luxury to keep double-digit growth momentum in the next few quarters. In addition, with increasing demand for premium warehousing and logistics services, we commissioned one more brand new luxury dedicated warehouse to better support our brands. For sportswear, despite the lingering impact from the Better Card Initiative, we have witnessed a modest recovery trend. Long-term wise, as the government aims to further promote sports and physical exercises in the 14th five-year plan, We believe sportswear category will likely see better growth. Many leading international sportswear brands view China as one of the most critical and strategic target markets. And some are even accelerating its localization efforts as a brand of China. In addition, we have identified what we believe to be structural growth opportunity for some sub-verticals, such as outdoor sportswear, and adventure sports, which will likely to be the incremental drivers. Moving on to our omnichannel progress. First, an increasing number of brand partners are accelerating the deployment of omnichannel strategy. And in this quarter alone, we added 54 stores for non-T-MOS channels. Of these newly opened stores, over one-third our JD source. We are glad to see our GMB generated on JD nearly tripled from a year ago, accounting for roughly 10% of our total GMB. In addition, we continue to make programs in 10 mini programs for private domain, as well as O2O initiatives. More importantly, the recurring revenue stream of store operations marketing from our mini programs systems continue to grow their stake. Of the emerging channels, we have made quite some breakthrough for Douyin. We are happy to be the first to be at the forefront of action helping our brand partners to explore and expand into such the emerging channel with over two dozen of brands partners piloting there. Our unique insight in brand value appropriation and merchandise in this regard has been instrumental in delivering strong sales on some of our trial programs. In the first nine months of 2021, we helped our brands to generate over $100 million in GMB, with extremely successful cases for one fast fashion brand and one FMCG brand. The trend has been encouraging month over month. As in October alone, our brand partners generated over 70 million GMB. It is worth noting that in some of our end-to-end services, we have managed to hit a take rate of over 20%, indicating attractive economics potential for us on Douyin. Although some emerging channels are still in early phase, exploring optimum monetization models, we're happy to see our initial channel investments already start to bear fruits. Just a rough reference, in the third quarter, our revenue contribution from non-TMO platforms, along with the associated back-end services, has continued to increase to more than 20%. Now please turn to slide number four. On the technology front, We further upgraded our core e-commerce infrastructure to be more omni-channel oriented. Following the government's new policies regarding data privacy, we also upgraded our system for personal identity information protection to ensure brand partners are compliant with the latest laws and regulations. Such upgrades applied to our order management system, warehouse and logistics management system, and CRM. ensure smooth order fulfillment, and stronger user engagement. To drive business operating efficiency and flexibility, we keep making further upgrades to enable our digitalized, centralized, and integrated operating platforms and the middle office. Ross now has a multi-level authorization system helping our brand partners manage distributed networks. And we launched Service Anywhere, or Sani, an intelligent customer service management system to unify workflow dispatching, training, and resource management. We believe Sani is both unique and disruptive within the e-commerce industry, and we have seen great uptake by over 300 brand stores deploying since its launch and in just one month's time frame. Lastly, our remote service centers in Nantong and Hefei are ramping up smoothly, with over 1,000 employees moved over. These regional service centers and planning are highly complementary, allowing us to obtain better service quality, gaining greater operational efficiency while lowering operating costs. such initiative to save over 20 million in operating costs in 2022. In addition, we received a 30% equity interest investment from China Network into Baotong. Our warehousing and logistics are. At the beginning of the year when we formulated our medium term plan, we set objectives that Baotong needs to be disruptive game, and that is needed to expand business scope to be wider and deeper, while also innovating its supply chain practices. We considered several leading players in the industry to be our strategic partner, each with its own advantages and characteristics. Ultimately, we concluded that Baotong and Chania are the most complementary in terms of capabilities and assets. The combination elevates the partnership competitive advantage in the sports, outdoor, luxury, and cosmetics industry. We believe such strategic alliance will lead to substantial cost optimization and greater synergistic business opportunities. In summary, we witnessed a number of short-term headwinds, and we anticipate further changes as the industry adapts and evolves. As part of our corporate vision, we have always believed that technology empowers success and committed to delivering quality through developing our people. One quick example is our advanced preparations for the Year's Double 11 Festival, where we have facilitated more than 40 brand partners to rank number one in order value in their specific product categories during the mega campaign. Throughout the year, we have made considerable investment in enhancing our platform, enriching our technological capabilities, and as well as establishing a special force full of talents. We believe Baldwin has the most comprehensive, reliable, and powerful set of infrastructure empowering our business partners. We are more confident in our competitive landscape, and as a leader of brand e-commerce partner, We are well-placed to navigate through these changes, adapt to the new environment, and capitalize our opportunities. At the same time, we continue to promote sustainable Belgian ecosystem for the longer term. And I'm happy to point out that this September MSCI, in recognition of our comprehensive ESG initiatives, upgraded Baozhen's ESG rating to NA, as demonstrated on slide number five. We are very proud of our team's resilience through the quarter and are confident in the future. I will now pass the call over to Arthur to go through our financials. Thank you.