Baozun Inc.

Good morning, ladies and gentlemen, and thank you for standing by for Baozun's second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there'll 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, Senior Director of Corporate Development and Investor Relations of Baozun Please proceed, Wendy.

Thank you, operator. Hello, everyone, and thank you for joining us today. Our second quarter 2022 earnings release was distributed earlier 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 site, where they are available for 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 the 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 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 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 forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the company's filings with the US SEC any announcement on the website of Hong Kong Stock Exchange. The company does not take any obligation to update any forelooking statement except as required and applicable law. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB and the comparations are on year-over-year basis. It is now my pleasure to introduce our chairman and chief executive officer, Mr. Vincent Chiu. Vincent, please go ahead.

Thank you, Wendy. Hello, everyone, and thank you all for joining us. As you know, in April and May 2022, there was a strict COVID lockdown in many key cities of China, including Shanghai, where Bosnia is headquartered. In the face of COVID-related logistics interruptions, our team quickly mobilized infrastructures to minimize disruptions and maintain operations. Overall, as shown on slide number two, our total net revenue declined by 8% year over year, while services revenues increased by 7%, demonstrating once again our resiliency to macro uncertainties. The pandemic has accelerated the need to cope with drastic interruptions and the urgency of digital transformation across a wide range of brands that we serve. Please turn to slide number three. The failing trend in the rapid convergence between online and offline, or OMO, Baozhen's omnichannel solution enable OMO by integrating brand partners' resources including digitized avatars of brick and mortar stores, mobilized sales associates, and shared inventories. That has become the lifeline of e-commerce during the strict COVID lockdown. We also benefited from the deployment of our intelligent customer service management system, SAMI, which can support remote execution and enhance quality. With Sani, our staff can log in to the system from anywhere, and the system will keep monitoring real-time data of customer service behavior across channels. With our seamless integrated technology, we are pleased that Boson has become a brand de facto aid and relief when it comes to overcoming uncertainties and challenges like COVID lockdowns. And as always, we kept developing additional services. For instance, we updated, upgraded digital content and enabled more virtual reality functions for one leading sportswear brand and also launched short radio services leveraging our multi-regional service centers network. All these efforts helped enrich consumer experience and empower many of our brand partners to success during the 618 campaign. Now please turn to slide number four to share more about our progress on business development. During the quarter, luxury and the premium brands continue to surge forward. And we also added more subcategories, including outdoor cosmetics and fast-moving consumer goods, thereby enhancing our diversification. Overall, we added a net of 10 new brand partners in the second quarter. And the total number of brand partners for store operations increased to 355. While we prioritized the new partnerships, we inspire existing partners to launch more channels. By the end of the second quarter, we operated approximately 40% of our brand partners in omnichannel approach, compared with about 33% a year ago, making a milestone in our omnichannel vision. This August, Our capabilities and track record helped us gain greater recognition in the Tencent Mini Program e-commerce ecosystems. We were honored to be accredited by Tencent as a partner of excellent category for e-commerce operator and independent service vendor, or ISV, for Tencent Cloud Mall, an outstanding category for business development partner, which with this recognition, we became the only service partner that is top listed in both Alibaba Tmall and Tencent Mini program e-commerce ecosystems. We're now further collaborating with Tencent on several initiatives such as in-traffic acquisition and the smart new retail. Next, our momentum towards our vision of technology empowers the future success. We are seeing strong demand from our clients for technologies and solutions to manage not only retail but also distribution network. For example, our big successful project with leading electronics giant continue to expand. During the quarter, we completed a nationwide integration in mini program and JD Daojia for all of its over 3,000 stores, enabling us to generate license revenue in recurrent stream. We're now in next phase of incorporating Tmall and Meituan Dianping to this digital platform to fully integrate business flows from factories to stores and to consumers. Another example is one we were recently secured, a world-leading sports equipment retailer to co-build its digital operating platform. Thus far, we have established a business pipeline with over a dozen of brand partners in technology integration. We believe as brand partners elevate the efforts in digital transformation, technology remains the backbone of our widening competitive advantages. Now move on to our progress in logistics and supply chain businesses. Despite the disruptions in some areas during the COVID lockdown, we not only were able to uphold operations at our own warehouses, but also guided our brand partners to quickly transit from a centralized warehouse into a great management system. We further deepened our cooperation with Chinao to leverage its established infrastructure and network. During the quarter, we started to manage Chinao's warehouse in the apparel category, got some business referrals in luxury and the premium sector, and launched more RFID-based solutions for some of our key sportswear brands. Multiplied by these early synergies, we will appraise the existing alliance to further streamline and advance additional strategic objectives. Enduring all the external uncertainties, we were able to demonstrate our resiliency and accountability. Meanwhile, we are executing our midterm plan with discipline and strategically investing in our business transformation. to expand our total addressable market. For example, please turn to slide number five. In brand management, we see a natural move to expand upstream in the value chain, leveraging our digitalization capabilities, a growing penetration of e-commerce and the marketing insights. Brand management enhance value proposition from end-to-end solutions, which will also in turn enhance our strategic thinking and cultivate a brand-oriented service philosophy. Since last year, we initiated our brand management efforts via multiple approaches, including strategic alliance through minority investment and self-incubation. We have assembled a diverse and attractive portfolio of seven brands to start with, covering two major categories of apparel and accessories, and health and beauty. We are happy to report that we have empowered these brands to a mass of total GMB of approximately 80 million in the first half of 2022. This translated to a year-over-year growth rate of over 50%, strongly performing the general retail industry. Finally, on ESG and the sustainable growth, turn to slide number six. We issued our second annual ESG report this May and launched an additional set of green initiatives, including the introduction of carbon neutrality white paper in June. We are committed to reduce 50% of carbon emission by 2030, compared to the 2021 baseline, and the carbon neutrality by 2050. This quarter, we kicked off our public welfare initiatives by co-launching a used shoe cycling program with one leading national sportswear brand. As a leader in e-commerce services, we will always bear in mind to operate responsibly, accountably, and sustainably We look forward to expanding with our brand partners to mutual successes. I will now pass the call over to Arthur to go over our financials. Thank you.