Vipshop Holdings Limited

Ladies and gentlemen, good day, everyone, and welcome to VIP Shop Holdings Limited Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, I would like to turn the call to Ms. Jessie Zheng, VIP Shop's Head of Investor Relations. Please proceed.

Thank you, operator. Hello, everyone, and thank you for joining VIP Shop's Fourth Quarter and Full Year 2021 Earnings Conference Call. With us today are Eric Shen, our co-founder, chairman, and CEO, and David Tsui, our CFO. Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our Safe Harbor Statements in our earnings release and public filing with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be made. Please note that certain financial measures used on this call such as non-GAAP operating income, non-GAAP net income, and non-GAAP net income per ADS are not presented in accordance with U.S. GAAP. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP merits to GAAP merits. With that, I would now like to turn the call over to Mr. Eric Shen.

Good morning and good evening, everyone. Welcome and thank you for joining our fourth quarter and the full year 2021 earnings conference call. We are delighted with our solid business performance in 2021, despite a slow fourth quarter impact by the challenging external environment. For the full year, total active customers increased by 12% year over year to 93.9 million. GNV rose by 16% to RMB 191.5 billion. Notably, SuperVIP active customers grew by 50% to 6 million and contributed 36% of online net GNV. Driven by steadily growth in both customer base and average revenue per customer, Our total revenue for the year increased by 15% year-over-year to RMB 117.1 billion. Non-GAAP net income for the year exceeded RMB 6 billion and the net margin remained about 5%. Our solid operational and financial performance was led by continuous business upgrades based on our strategic position and as a discount platform for branded products at exceptional value. To further enhance our core competence, during the second half of 2021, we focused more on core brands and high-value customers to further strengthen our value proposition with them. Among many things, We rely and upgrade various channels on our platform to better empower brand partners and enhance shopping experience for customers. We are encouraged by the business synergy generated from the initiative. For example, multiple brands recorded their highest single-day GMV in recent years during the Super Brand Day and today's Top Brand Sales event. Many more brands came to us, providing our customers with more unique and price-competitive products. We are pleased to see that the contribution from core brands for the past year significantly improved from a year ago, with their GMV growing faster than the overall GMV on our platform. Through their deepened relationship with our brand partners, we were able to better cooperate with core brands on made-for-VIP shop products. In addition, to address the needs of younger customers, we also consistently added new and trendy brands to our platform. As we brought in more quality brands and products, we were better positioned to leverage integrated operations to improve customer thickness and output. In particular, super VIP member outperformed in most all operation metrics. They have a very high retention rate with their annual output at around eight times than that of non-SVIP customers. We expect this paid membership program to cover more high-value customers on our platform. Looking into 2022 and beyond, we will firmly execute on our merchandising strategy to secure an increasing share of quality products from carefully selected brand partners. To achieve this, we will keep allocating more resources to accelerate the growth of the core brands, differentiate our offering further through made-for-VIP products, and introduce more popular and high-end brands. In addition, we will continue to optimize our operations. We will improve the effectiveness of customer acquisition through personalized recommendations, enrich the shopping experience, and inspect target marketing for new and existing customers. We expect these efforts to collectively drive the quality and sustainable growth of our customers and revenue for the long term while consistently delivering daily and health profits. At this point, let me hand over the call to our CFO, David Cui, who will go over our financial results.