Baozun Inc.

Good morning, ladies and gentlemen, and thank you for standing by for the Baozun's fourth quarter and full year 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 call is being recorded. I will now turn the meeting over to your host for today's call, Ms. Wendy Sun, Investor Relations Director of Baozun. Please proceed, Wendy.

Thank you, operator. Hello, everyone, and thank you for joining us today. Our fourth quarter and full year 2021 earnings release was distributed early today and is available on our IR website at ir.baozhen.com, as well as on Global Newswire Services. They have also posted a PowerPoint presentation that accompanies our comments to the same IR website where they are available for your download. On the call today from Baozhen, we have Mr. Vincent Chiu, Chairman and Chief Executive Officer, Mr. Arthur 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 financial details. 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 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 relates to events that involve known or unknown risks, 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 forelooking statements. Further information regarding these and other risks and certainties or factors is included in the company's filings with the US SEC and in announcements on the website of Hong Kong Stock Exchange. The company does not undertake any obligation to update any forward-looking statements except as the 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 Chu. Vincent, please go ahead.

Thank you, Wendy. Good morning and evening, everyone. Thank you all for joining us. This fourth quarter, despite persistent e-commerce headwinds, I'm pleased that Baozhen's business remained resilient and our team continued to make steady progress on strategic objectives. During the quarter, China's total retail sales growth decelerated to 3% year-over-year, And the erratic COVID pandemic that caused the weak consumption sentiments and constrictive government policies persist for China's e-commerce. Yet, resiliently, as demonstrated on slide number three, this fourth quarter, we grew GMB 14% year over year, driven by strong volume in electronics, FMCG, and luxury categories. as well as breakthrough in beauty and cosmetics. We also grew our omnichannel business with JD Modern Dublin and the mini program expanding 70% year-over-year. We see an accelerated momentum in Douyin as we helped our brand partners generate 187 million GMB in the fourth quarter. which is more than the cumulative amount generated in the first three quarters of the year. Overall, non-TMOD channels expanded 400 basis points year over year to 26% of total GMB. Anticipating a new era e-commerce where the market focuses on consumers' lifetime value generation, we are leading the way to help brand partners accelerate their digital transformation, as displayed on slide number four. Take our luxury business group as an example. With deep understanding of brand value proposition and unique insights, we pioneered new innovations to fine-tune consumer experience and promote user engagement. During the quarter, we launched personalized and interactive VIP customer service for a few brands, which can engage consumers with one-on-one interactive video communications to enhance conversion and ARPU. We also incorporated Metaverse enabling functions in merchandising, live streaming, and interactive marketing, and incorporated Metaverse incorporated, participated in the first wave of non-fungible token champions on Tmall Luxury Pavilion during this year's Double 11 campaign. In total, we opened 20 new luxury stores in 2021 and expect to open another dozen in the first half of 2022. Our inventive technology coupled with differentiated brand value proposition drives our success. This quarter, we quickly adapted to the personal identity information regulations and enabled another smooth W11. For the first time, we were able to supply over 330 brands on wider omnichannel approach during the annual mega campaign. While offering sweeping real-time intelligence services to help our brand partners make better business decisions, We also launched a digital transformation program for one prominent electronics brand partners in developing its nationwide distribution network management. While our technology and innovation empowers business operations, our progress in productization and monetization has driven a doubling of IT revenue to $39 million during the quarter. In addition, This year we strategically combined our mini program engaging emerging innovation center with our digital marketing department to newly form the digital marketing group, ODMG. This digital marketing group greatly enhances our capability to offer the most comprehensive solutions for private domains to lay out customer assets and integrate effective marketing in an omnichannel approach. As DMG currently accounts for approximately 10% of total GMB, we believe the integration meaningfully enhances our value proposition and will drive stronger revenue penetration going forward. Meanwhile, we continue to make upgrades to our digitized, central, and integrated operating platforms and middle office for better process re-engineering and automation. therefore enhance operating efficiency and flexibility. Please turn to slide number five. In less than a year, we have successfully scaled up our regional services centers in Nantong and Hefei to more than 1,400 employees, and we plan to build additional regional centers in Chengdu and Xi'an in 2022 to further optimize employee allocation. Our service anywhere, or Sani, continue to ramp up as we have seen great uptake with over 400 brand stores deploying by the end of 2021. With Sani's powerful business intelligence capability, we also upgraded traditional customer service KPI systems for a master KPI system to incorporate more comprehensive operating metrics such as customer satisfaction and the reaction duration to help brand partners achieve higher brand recognition. We are glad that even under this comprehensive master KPI system, we are able to achieve further upgrade in its rating system by one key international sportswear brand. Our immediate term strategic plan centers around the customer service. Please turn to slide number six. Early this year, we engaged with Nielsen to conduct a comprehensive Net Promoter Score, or NPS, survey to gather feedback from our brand partners. To our knowledge, this pioneering survey is actually the first ever in China's e-commerce industry, and we are delighted of achieving a very positive NPS result of greater than 8.5 out of 10. This further validates that our value added services such as technology and the premium warehouse and the logistic services have become well recognized by industry and our brand partners as a core differentiated competitive advantage. Adding to the excellent NPS survey result, we also received numerous other recognitions from our broader stakeholders. as displayed on slide number seven. In a way, 2021 is a year full of recognition for Baozhen, and we are honored to earn such high praise from brand partners, employees, industry leaders, as well as ESG communities. We aspire to keep building on top of these achievements and are keen to foster a culture that drives innovations and business efficiency to empower our brand partners. Now on slide number eight, advancing forward with these ambitions, we have completely streamlined the company into four major groups, namely the e-commerce group, ECG, the logistics and supply chain group, LSG, the technology and the innovation center, TIC, and the digital marketing group, DMG. With the company being leaner, flatter, and more focused, We are crafting mechanisms that inspire the use of incentives to encourage innovation and the broader employee ownership access. We are also developing talent program, including management training and universities collaborations to further enhance sustainability. In conclusion, despite the macro uncertainties, we continue to see acceleration in omnichannel development and we are quickly helping brand partners elevate their comprehensive and interactive user engagement to promote brand value. Built on our excellent enabling capability and strong business development, I'm glad to see our new business pipeline expanded threefold from a year ago. Moreover, with our proven industry leadership and a sound cash position, we emphasize high-quality growth and superior unit economies while continuing to optimize resource allocation. We are poised to bring best-in-class services and innovative solutions to our brand partners and march further on our medium-term strategic plans to drive business growth and sustainable value creation. I will now pass the call over to Arthur to go over our financials. Thank you.