Vipshop Holdings Limited

Ladies and gentlemen, everyone, and welcome to VIP Shop Holdings Limited Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, I would like to turn the call to Ms. Jessie Zhang, VIP Shop Head of Investor Relations.

Please proceed. Thank you, Operator. Hello, everyone, and thank you for joining VIP Shop Fourth Quarter and Full Year 2022 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 the 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 filings with the Securities and Exchange Commission, which also applies to this court to the extent any forward-looking statements may be made. Please note that certain financial measures used on this court, such as non-GAAP operating income, non-GAAP net income, and non-GAAP net income for ADS, are not presented in accordance with U.S. GAAP. please refer to our earnings release for details relating to the reconciliations of our non-GAAP mayors to GAAP mayors. 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 full year 2022 earnings conference call. In the fourth quarter, we once again demonstrated strong earnings power amid a tropic backdrop. The top-line recovery was impacted by the short-term disruption on economic activities from the surge of COVID-19 infections nationwide. Apparel-related GMV fared better than expected, slightly down year over year. as we actively worked out merchandising selection to satisfy seasonal demand. Customer trends continued to recover year over year. The desire to spend remained healthily with customer visits clearly picking up, and the active Super VIP customers increased by 13%, accounting for 42% of our online spending. Overall, we accomplished quality development in 2022, delivering record-level net income at RMB 6.8 billion while navigating through an extremely challenging year. Our business fundamentals have been stronger after we incrementally experienced an enhancement on merchandising operations and technologies. On merchandising, we now have an upgrade portfolio of brands and products offering that reinforce the value proposition of our platform. With hundreds of brands at the core of our business, new trendy and high-end brands and a lot more selections, integration styles bring a new look to our platform. For the full year of 2022, co-brands had positive growth on VIP Shop with greater contributions to Total GMV. Apparel-related GMV outperformed non-apparel categories. The Made for VIP Shop customized line developed into a more selective collection that enjoyed higher conventions than general merchandise. Operationally, we are more efficient in deploying resources to best support brand partners, launching innovative channels to build sales momentum, and increasing customer engagement in a cost-effective way. That's how we managed to grow the base of quality customers with 6.7 million SVIP members repeatedly shopping with us last year. Technologies become more instrumental in every aspect of our business. For example, our fully upgraded merchant platform enables brand partners to engage in a more measurable way through data analytics. such as offering customers insensitive and generation-style leads. Our strong execution in 2022 gives us confidence as we look ahead for the post-pandemic opportunities. We are set to take advantage of our plentiful inventories. Our professional buyer team continues to be a great advantage as they work more effectively with brand partners. Though uncertainties still remain following China's reopening, we did see some recovery in spending on apparel and other discretionary items since the beginning of this year. There are opportunities for us to attract new customs and capture more customs fans. We believe we are now in a healthier position than before to achieve both growth and profitability and continue delivering value to our shareholders. At this point, let me hand over the call to our CFO, David Tsui, who will go over our financial results.