Vipshop Holdings Limited

Ladies and gentlemen, good day, everyone, and welcome to the VIP Shop Holdings Limited's third quarter 2024 earnings conference call. At this time, I would like to turn the call to Ms. Jessie Zhang, VIP Shop's head of investor relations. Please proceed.

Thank you, operator. Hello, everyone, and thank you for joining VIP Shop's third quarter 2024 earnings conference call. With us today are Eric Shen, our co-founder, chairman, and CEO, and Mark Wang, 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 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 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 third quarter 2024 earnings conference call. Our third quarter results largely meet our expectations aimed at still coaching the customer segment. We moved quickly to adapt our merchandising and operation priorities to external challenges and took concrete measures to find the biggest opportunities for improvement. Consistent with recent industry trends, third-quarter sales decline reflect softer results in our more discretionary categories, as consumers are facing a glowing headwind, which reads on their discretionary spend. On the positive note, SBIP membership growth remains strong and at double digits. In the third quarter, active SVIP customers grew 11% year-over-year, resulting in 49% of our online spending. This reflects that our value proposition is well appreciated by our most valuable customers through the best combination of merchandise, value, and service. So today, We remain focused on these long-standing factors that have made us a reliable place to shop and also have been successful in driving top-line growth in the past. We are pushing them forward in a deeper way, being more relevant in merchandising portfolio, highlighting even more values throughout our assortment. and increasing customer engagement through our worry-free service. This area has been critically important to ensure we continue to differentiate our experience from others. Among the business highlights, we continue to emphasize merchandising capabilities. We believe it's the most impactful way to drive long-term growth. Our team demonstrate that they have the skill set to respond to change in customer behaviors and translate it into business results. Merchandising is a better shape. In the third quarter, we built assortment more relevant to customer lifestyles and trend-right categories. We leaned into categories with still resilient demand. and we create a better mix of appello and non-appello products for family shoppers. As a result, we did see strength in categories like sports and outdoor goods and homeware, despite the broad basic weaknesses. As we enter the promotional season, we feel good about the size and depth of our supply. We are pleased with the strong inflow of quality brand supply. especially within the deep discount inventory. Through much more unique product offerings, some of our long-time brand partners achieved record sales with us through our major promotion channels like Super Brand Day and Super Category Day. Many more brands recognize us as a partner of choice, giving the generally lower cost to serve and higher sales efficiency as well as a glowing base of our hardcore customers. Within our merchandising, we are also encouraged by the momentum building in our Made for VIP line for customized products. In the third quarter, we worked with about 200 brand partners, adding some renowned global brands in women's wear and footwear to the line. sales from these customized products extend in solid growth from previous quarters. We see brand partners increasingly increase MFVIP, which have proven to be efficient to attract more quality customers and repeat orders. More than half of the MFVIP sales came from SVIP and other high-value customers. and the majority of their customers actually came back from more purchases in the broader apparel categories. Turning to customers, we see spending behaviors that are still showing signs of being stretched. Against that backdrop, our team quickly adjusted to focus on providing really good value for them. We prioritized everyday low price and time limit offers, highlight compelling deals for our SVIP members, and provide target incentives for family shoppers who trend to spend on high-frequency categories. Our team is working hard to find more ways to deliver more value for our customers. We also see some early results after we upgrade SVIP privileges, like provide sales and special offers, which have carried on for a few quarters. Through both online access and ground events, they clearly reinforce the trust and loyalty of SVIP members. We are planning these events to stay better aligned with customer interests problems to best meet their multiple needs. As it related to strengthening our business for the future, we continue to experiment and deploy technology in the wide range of user base. One focus is to improve the relevancy and accuracy of search and recommendations so that custom of the different intent are more likely to browse and shop across categories. The other is to leverage AI capabilities to optimize content of all kinds to help customers find and buy what they are looking for. We do see opportunities for technology to become an important drive of both growth and efficiency. Recently, we start to see some marginal strengths of customers, marginal strengths of customer demand. People have shown more willingness to spend, and our customers continue to shop along the holidays and seasonal momentum. While we are doing our best to get back to growth, with customer spending yet to fully recover in the discrete portfolio, we are laser-focused on the long-term strategy that that are pivotal to our long-lasting success that has always been a firm position in this kind of retail for brands to bring in the best of brand partners and to create great value for customers. We are driving necessary change in the more aggressive way so that we have all the right building blocks to compete and win. And through it all, we remain delighted on expanding We remain diligent on executing the retail fundamentals our customers expect from us and respond to their consumption shift in a timely manner. This requires specialized and elaborate efforts in merchandise. Standout strengths will continue to build on. We believe this will help us increase the apparel of our platform and ensure an engaging experience that keeps VIP shop top of mind in the very dynamic market. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.