Vipshop Holdings Limited

Ladies and gentlemen, good day, everyone, and welcome to VIP Shop Holdings Limited Second Quarter 2023 Earnings Conference Call. At this time, I'd like to turn the call over to Ms. Jessie Zheng, VIP Shop Head of Investor Relations. Please proceed.

Thank you, Operator. Hello, everyone, and thank you for joining VIP Shop Second Quarter 2023 Earnings Conference Call. With us today are Eric Shen, our co-founder, chairman, and CEO, and Mark Wong, our CFO. Before management begins their prepared remarks, I would like to remind you that discussion today will contain forward-looking statements made under the safe harbor provisions of the US 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 statement in our earnings release and public filings 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 US GAAP. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP measures to GAAP measures. 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 second quarter 2023 earnings conference call. We delivered strong second quarter results on the top line with profitability well ahead of expectations. Our value proposition in discount retail is resonating with brand partners and custom leads by the well-executed merchandising strategy, which has been the key to drive the growth. The second quarter performance continued to be fueled by apparel category, which delivered over 30% GMV growth, reflecting broad-based strengths. At the time, when consumers are making more regional decisions based on value for money, customers are coming back more and shopping with us more often. Paid membership growth remained robust. By the end of the second quarter, active Super VIP members increased by 23%, contributing to about 44% of our online spending. We are also pleased with the build-out of merchandising capabilities and the optimizations of business processes throughout our organization. They have helped drive great efficiency. Profitability hit another new record high in the second quarter. More people look to us for value. More partners want to work with us to target their desired customers. This provides new levels for us to capture great mindshare. In everything we do, we put the customer at the center. We hope that discount retail for branded products is the one that VIP Shop stands for. And when people feel like buying clothes online, VIP Shop is the first place to go. With that in mind, we are committed to enhancing our core competence to offer a rich and diverse selection of great value, as well as worry-free custom service and experience. On merchandising, we have secured much more quality supply from co-brands. We are consistently adding new brands, more popular products, and a range of trendy categories. More high-end international brands become available. Our ability to present new, fresh, and fashionable items the one our customers long expect from us, has meaningfully improved. As a long-standing discount retailer, we were able to provide great pricing across every category, giving our best-in-class service to brand partners. But it's far beyond that. Differentiate merchandising is also pivotal to create value for customers. We are doing so through unique and the customized offerings, which have better conversions. And there's a lot more we can do with the made for VIP shop line. Our buyers team continue to deepen that knowledge and expertise. They have put in place a set of rules and the process making it more efficient for brand partners to increase the quality supply at a competitive pricing to cater for customer needs. We are moving steadily towards our goal to help every customer find what they need on our platform. On service commitment, we keep listening to our customers, analyze and understand their Involving needs, we are determined to deliver a worry-free experience by leveraging our merchandising, customer service, and the supply chain capabilities. For example, we are enhancing our merchandising efforts to make sure that everything is reliable sources, every product is of guaranteed quality. and every step along the value chain is properly monitored. We want every customer to feel that the experience of shopping with us is worry-free enough to prioritize their spending here. Then we keep looking at where we can deepen engagement with our customers, personalize the experience channel efficiency and the quality custom flows and the top priorities. We have been deep mining customer and product insights to improve accuracy and the prediction in personalized recommendations. We have also made several upgrades to our APP to increase the efficient of different channels. Engagement with SVIP customers has been quite encouraging. Penetrations into different cohorts of spending has improved year over year. As we navigate the external changes, we believe that our business model is structurally sound. The discipline and the dedication inherent in our day-to-day execution allow us to stand firm as a unique player in e-commerce. As long as we continue to optimize our merchandise portfolio, putting the custom at the center of every decision we make, we will attract quality customers and benefit from deeper custom loyalty and engagement. that will result in sustainable revenue and earning growth for the long term. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.