Vipshop Holdings Limited

Ladies and gentlemen, good day, everyone, and welcome to the VIP Shop Holdings Limited Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, I'd 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 2024 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 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 relief and public filings with the Securities and Exchange Commission, which also applies to this call to the expense that 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 attributable to VIP shop shareholders, 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 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 fourth quarter and full year 2024 earnings conference call. We delivered a set of results well above our expectations in the fourth quarter to finish a challenging year, while consumers still spend cautiously in these central categories. Our team has proactively driven changes to address growth priorities with a focus on retail fundamentally and strong execution. At the category level, we saw some strength in apparel, which turned into positive growth in the first quarter of a high base. Our team moved swiftly to include more unique, off-price seasonal offerings that meet custom needs, especially in sportswear and outdoor products. For the full year, apparel categories were up 2% from a year ago, accounting for 75% of our total GMV. the highest level in our history that helped us once again across RMB 200 billion in total annual sales. Our non-apparel business also clearly narrowed its loss of sales in the fourth quarter, driven in part by the outperformance in home appearance and digital products as we capture growth opportunities from the government trade-in programs. On the custom front, Super VIP memberships extended its double-digit growth, which is a strong validation of our team's commitment to delivering a differentiated experience. In the fourth quarter, active Super VIP increased by 50% from a year ago and accounted for 51% of our online spending. On an annual basis, We had a total of 8.8 million active SVIP members who contributed 49% of our online spending last year. We are encouraged by this initial improvement after we identified key near-term actions in each area and moved with urgency. In merchandising, we are getting shaped on brand and product portfolio to stay highly relevant to customer needs Value is on the full display through a serious operational adjustment and target incentives that help our customers shop for holidays and seasonal promotions. And we are engaging more with family shoppers with a more balanced assortment of apparel and non-apparel products to drive in sentimental growth in frequency and multi-category purchases. With these changes, we are better positioned going into 2025. Importantly, we remain very committed to our long-term strategy in discount retail for brands, and we dedicate our efforts to the long-standing factors that have been successful in driving quality growth. That includes our unique business model, A merchandising approach with no compromise on quality and authenticity. A strong focus on values that include low price and compelling views and suits of the service that highlights reliability. All these are put together through a differentiated strategy. More specifically, the business highlights We continue to invest in our merchandising capabilities to become even more reliable destinations for our customers. Following three years' initial enhancement program, our team has been reshaped, developed new expertise and mastered how to work in more impactful ways. We brought in over 1,500 new brands last year, including officially partners with many high-profile global brands. We built deeper relationships with several hundred co-brands, secured great in-demand value for money offerings throughout the year, and managed our product portfolio on a great level of breadth and depth. Most recently, our team has started to dive deeper, category by category, to seek opportunities by further expanding in the brand supply that we expect customers to truly feel the terrier hunting excitement. Another area of focus has been adding more unique supply to make our differentiated product offering even better and bigger. The made-for-VIP line did become a meaningfully driver for more than 200 brands who have joined the program last year. We saw persistent strength in sales all year long, benefiting from quality custom and repeat orders, as well as clearly better conventions and compared to the general merchandising within the same brand categories and price range. with some brands up to 20% of their sales on our platform came from made-for-VIP last year. Turning to customers, they remain largely pressured but were willing to spend when they find the right balance of quality products and a compelling price. Our SVIP customers are clearly more resilient and have a strong response to promotions and subsidies because of the real value we provide for them. In addition, they find it enticing to get even better deals through the provided sales and special offers. We are happy to see that SVIPs continue to spend much more and more frequently than the regular custom, and the vast majority of them have renewed their memberships with us. Given how fast things are changing, it is all the more important to put technology to work to drive growth and efficiency. We have made relentless efforts to optimize search and recommendations. which starts to incrementally improve customer experience and the conventions. In addition, we are using the last general AI model to help our team work in the more productivity way, enable them to serve brand partners and the customer with greater efficiency. We have made initial attempts and applications case such as shopper guide, marketing contents, customer service, and analyze tools for brand partners. Despite ongoing uncertainty, we are confident in a long-term development of our business, giving the continuity of our strategy, the merchandising strengths we are building upon, and the growth initiatives we are taking in merchandise expansion and deepened engagement with different companies customer cohorts. Most importantly, we have infused more flexibility into our business to compete and win in an environment where customers are focused on value. We are confident in our ability to move beyond the current situations and return to sustainable and profitable growth in the long term. At this point, Let me hand over the call to our CFO, Mark Wang, to go over our financial results.