Baozun Inc.

Good morning, ladies and gentlemen, and thank you for standing by for Balsam's third quarter 2023 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, Senior Director of Corporate Development and Investor Relations at Balsam. Please proceed, Wendy.

Thank you, operator. Hello, everyone, and thank you for joining us today. Our third quarter 2023 earnings release was distributed earlier before this call and is available on our IR website at ir.baozhen.com as well as on Global Newswire Services. We have also posted a PowerPoint presentation that accompanies our comments to the same IR website 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 President of Baozhen E-commerce, and Ms. Sandrine Zerbe, President of Baozhen Brand Management. Ms. Chiu will review the business strategy and company highlights, followed by Ms. Yu, who will discuss the business development of Baozhen E-commerce and about our financial then by Ms. Zervik to share more about Boston Brand Management. 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 U.S. Security Act of 1933 as a mandate, the U.S. Security Exchange Act of 1934 as a mandate, and the U.S. Private Security Litigation Reform Act of 1995. These forward-looking statements are upon management's current expectations and current market and operating conditions and relate to events that involve no or no 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 certainties or factors is included in the company's filings with the U.S. Security Exchange Commission and its announcement. Notice all other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this card is as of today here and is based on assumptions that companies believe to be reasonable as of this date. and 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. In addition, when we elect to use adjusted in place of non-general accounting principles or non-GAAP in order to reduce oral confusion, that arise from our discussions about financial related to the GAAP brand. It is now my pleasure to introduce our chairman and chief executive officer, Mr. Vincent Chu. Vincent, go ahead, please.

Thank you, Wendy. Hello, everyone, and thank you all for your time. I'm happy to share with you today several key highlights from the third quarter that demonstrate solid progress in our transformation. Our total revenue grew by 5% year-over-year to $1.8 billion, driven by incremental BBM contributions. DEC's revenue met our expectations, driven by growth in the apparel category with a 26% year-over-year increase in sportswear. In addition, we further improved our operating cash flow, even after accounting for cash outflow from BBM. This marks the first third quarter since our IPO where the company has achieved positive operating cash flow. BBM is executing well on its transformation of GAAP China and has shown solid progress towards premiumization. During the quarter, BBM's growth margin of 56% continues to outpace our initial forecast. We also opened five new stores, garnering impressive consumer feedback and high sales per square meter. On my visit to the flagship store in Guangzhou, I was highly impressed with the new gap. Competing with a large array of quality apparel brands in one of China's top 10 shopping malls, our store stood out, with notably higher brand energy and overall vibe. Furthermore, following the acquisition of Gap China, our technology innovation center quickly simplified its complex architecture by consolidating nearly 70 historical systems into one modern, integrated, omni-channel operating platform, namely the Retail Operating Platform, or ROP. architecture featuring a centralized hub instead of a traditional ERP achieves more real-time management and utilizes one pool of inventory to increase sales efficiency and the inventory turnover. This establishes a solid foundation for GAP's continuous digital transformation. In the next phase, our goal is to create an intelligent end-to-end value chain management system offering advanced CRM and data capabilities that will significantly enhance inventory of planning and private domain autonomy. In addition, we have made solid progress in business intelligence capabilities. Earlier this year, we identified an increase in demand for instantaneous data insights, which empowers brands in making well-informed decisions. This is vital given the rapidly changing dynamics within the e-commerce industry. During this year's W11 event, we introduced a suite of real-time intelligence and virtualization tools. I'm proud that in such a short span of just a few months, our BI capabilities have evolved to become a leading force in the industry. Lastly, we are very excited to announce a planned 51% equity acquisition of Location, a top tier Douyin partner specializing in apparel and accessories. We are pleased about Combining Location's exceptional expertise in daily live streaming with our leadership in creative content, compelling portfolio of brand partners, and profound e-commerce operating experiences. The synergy solicitifies our leadership in Douyin ecosystem and expands on our success in other major brand e-commerce platforms. This marks a significant milestone in our strategic transformation. Let me now pass the call over to Arthur for a review of our financials and update on our e-commerce businesses.