Dear Shareholders:
We are glad to deliver another solid year, with
our Gross Merchandise Value, or GMV, increasing by 54% year over
year to RMB29.4 billion in 2018, outpacing the growth of the
e-commerce industry in China, while we accelerated our brand
acquisition to serve a broader portfolio of 185 brand partners by
the end of 2018.
Despite some uncertainties in China’s macro
environment, e-commerce is still growing at a healthy rate. In
2018, online retail sales of goods and services in China grew by
23.9% to RMB9.01 trillion, accounting for 23.6% of China’s total
retail market, according to China’s National Bureau of Statistics.
Already the largest e-commerce market in the world by far, China is
poised to become the largest retail market in the world in 2019,
edging out the United States. Online shopping is now integrated
into the daily lives of China’s consumers, and as China’s leading
brand e-commerce service provider, we believe Baozun is well
positioned to further penetrate this market and provide
best-in-class service to our brand partners.
We are committed to delivering sustainable value
to our brand partners through innovative, value-added solutions
that meet their evolving needs. In our view, Baozun is setting a
precedent for the next phase of the e-commerce revolution, where
omni-channel operations, empowered by technology and data-driven
digital marketing, work together seamlessly to significantly
improve operating efficiencies and drive returns and growth.
Let me offer thanks and congratulations to our
brand and business partners, our fantastic software engineers,
execution specialists, and our entire Baozun family, and especially
to you, our shareholders, for helping make Baozun a winner again
this year.
2018 Highlights
Our motto for the coming years is “Technology
empowers future success”. We believe our future success rests on
technological innovation, and we are increasingly devoting
resources towards expanding our technology infrastructure and
hiring the best talent in the industry to drive future growth.
Our Technology and Innovation Centers are
currently focused on three areas – a Cloud-based System Plus that
help brands set up their official brand stores and official brand
WeChat Mini Programs; a Retail Operation Support System, or ROSS,
with digital tools to improve efficiency and reduce costs; and an
upgrade of our core e-commerce systems such as Order Management
System, or OMS, and Warehouse Management System, or WMS.
Seamlessly integrated with our e-commerce
support systems, our proprietary Cloud-based System Plus enables
efficient set-up of official brand stores and comprehensive
customization to fulfill brands’ specific needs. We see growing
demand for our Cloud-based System Plus as more premium brands
leverage this sophisticated platform to establish their customized
online presence with highly-customized features, maximum speed and
efficiency.
ROSS encompasses a series of modules that
greatly increase the degree of automation and efficiency in online
store operations, which helps us improve our own operating
efficiency, reduce store maintenance costs, and enhances our
ability to serve more brand partners. We demonstrated some of our
cutting edge technologies at our third annual Global Brand Commerce
Summit in Shanghai, including proprietary tools such as VOC, or
“voice of consumers”, that helps our brand partners analyze
consumer behavior, and an AI writer that improves labor
efficiency.
We continued to upgrade OMS, one of our core
e-commerce systems, to OMS version 4.0, with improved functions to
support omni-channel synchronization, customer experience
optimization, order processing reliability and scalability, as well
as integration with our Cloud-based System Plus. OMS4.0 greatly
improves efficiencies in end-to-end e-commerce operations,
including reducing labor costs. More importantly, our updated OMS
is key to our ability to expand our cooperation with more leading
brand partners to further penetrate the brand e-commerce market and
explore other addressable markets.
Our digital marketing is a strategic, high
value-added service that deepens our cooperation with our brand
partners and serves as an effective partner acquisition channel. As
our industry increasingly recognizes our achievements, we have won
awards including the 2018 Greater China Effie Awards, the 9th Tiger
Awards and the Golden Mouse Awards, 2018 Marketing ROI Festival,
all of which are pre-eminent awards in the industry and serve to
increase our visibility in brand e-commerce and 4A level marketing,
further helping us attract brand partners.
Leveraging our industry leadership, advanced
technology infrastructure and effective digital marketing
capabilities, we have been able to accelerate customer acquisition.
We added a net of 33 brand partners last year, taking our total to
185 brand partners by the end of 2018. We continue to onboard new
brand partners, and we are confident that our long-term investments
in technology will further reinforce our long-term competitive
advantages and market leading position in China’s brand e-commerce
market.
Overall, we are glad to close the year with strong growth from
existing brands and increasing contribution from newly-added
brands, helping us grow our revenue 30% to RMB5.4 billion, of which
service revenue grew more than 52% to RMB2.9 billion in 2018.
Non-GAAP income from operations totaled RMB433.2 million in 2018,
an increase of 37% from 2017, and non-GAAP net income attributable
to ordinary shareholders of Baozun Inc. was RMB346.2 million,
representing basic and diluted non-GAAP earnings per ADS of RMB6.11
and RMB5.79, respectively, compared with RMB4.95 and RMB4.55,
respectively, for 2017.
Key Strategies for 2019
Our proven success and reputation have attracted
many brands to come to us. With our improved operating
efficiencies, we now have the capacity to serve more of these
brands. I’m excited to say that our pipeline has never been
stronger, and we will proactively extend our brand portfolio to
achieve more balanced and sustainable growth. To execute our growth
strategy, we reorganized our business structure during the first
quarter of 2019 to add focus on e-commerce, supply chain logistics,
and technology innovation:
E-commerce group: A reorganized structure and precision
segmentation
We reorganized our business structure to focus
on apparel, cosmetics, FMCG, and mother and baby categories, which
we believe have strong growth potential going forward.
In the future, we will emphasize the quality of
our GMV by selecting brand categories with higher margin
contributions to further strengthen our position as a market
leader.
Logistics and supply chain group
We continued to expand our warehouse capacity in
2018 to address increasing demand from our brand partners. We also
expanded our cooperation with third parties to broaden our
logistics network, leveraging their resources to better serve our
partners. We upgraded our WMS to version 4.0, which closely tracks
flow of goods to ensure accurate and timely delivery of products
and inventory, and is fully integrated with our core e-commerce
systems, Cloud-based System Plus, and third-party couriers to
support omni-channel synchronization.
During the 2018 Singles Day, we began using
customized picking robots in some of our warehouses to improve
efficiency and increase fulfillment speed. We plan to further
strengthen our value-added services to our brand partners, such as
automated storage, intelligent sorting and retrieval, and highly
efficient packing and delivery allocation. We also plan to expand
our cooperation network with third parties to leverage their
resources so that we can serve more customers and optimize our
warehouse utilization.
Technology and Innovation Center
Technology is the DNA of our business, and one
of our competitive advantages. Since the launch of our Technology
and Innovation Center in 2017, we have established a talented team
of over 800 IT engineers in Beijing, Shanghai and Chengdu. We
expect to harvest some of the innovations in the coming year while
we will also continue to optimize our product offerings, pipeline,
and monetization strategies. We are looking to improve the
experience of our brand partners and customers and achieve
breakthroughs in innovation.
We remain committed to being one of China’s best
employers while seeking to attract the best talent as we build our
team. We remain excited about the market’s opportunities and expect
to have a tremendous 2019, with your help and support.
Thank you again for your support of Baozun.
Sincerely,Vincent Wenbin QiuChairman and Chief
Executive OfficerBaozun Inc.
Safe Harbor Statements
This news release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates,"
\"future," "intends," "plans," "believes," "estimates," "target,"
"going forward," "outlook" and similar statements. For example, our
statement about our expectations for Company performance in the
first quarter and fiscal year 2019 is a forward-looking statement
and is inherently uncertain. Such statements are based upon
management's current expectations and current market and operating
conditions, and relate to events that involve known or unknown
risks, uncertainties and other factors, all of which are difficult
to predict and many of which are beyond the Company's control,
which may cause the Company's actual results, performance or
achievements to differ materially from those in the forward-looking
statements. For example, the level of consumer economic activity in
China could impact our sales results in unpredicted ways. Further
information regarding these and other risks, uncertainties or
factors is included in the Company's filings with the U.S.
Securities and Exchange Commission. The Company does not undertake
any obligation to update any forward-looking statement as a result
of new information, future events or otherwise, except as required
under law.
About Baozun Inc.
Baozun is the leading brand e-commerce service partner that
helps brands execute their e-commerce strategies in China by
selling their goods directly to customers online or by providing
services to assist with their e-commerce operations. The Company's
integrated end-to-end brand e-commerce capabilities encompass all
aspects of the e-commerce value chain, covering IT solutions, store
operations, digital marketing, customer services, warehousing and
fulfillment.
For more information, please visit http://ir.baozun.com
For investor and media inquiries, please contact:
Baozun Inc.Ms. Wendy Sunir@baozun.com
ChristensenIn ChinaMr. Christian ArnellPhone:
+86-10-5900-1548E-mail: carnell@christensenir.com
In U.S.Ms. Linda BergkampPhone: +1-480-614-3004Email:
lbergkamp@ChristensenIR.com
Baozun (NASDAQ:BZUN)
Historical Stock Chart
From Sep 2024 to Oct 2024
Baozun (NASDAQ:BZUN)
Historical Stock Chart
From Oct 2023 to Oct 2024