(BZUN) 2023 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by for Baozun's First Quarter 2023 Earnings Conference Call. (Operator Instructions)

各位女士、先生們早上好，感謝大家出席寶尊2023年第一季度業績電話會議。 （操作員說明）

I would now like to turn the meeting over to your host for today's call, Ms. Wendy Sun, Senior Director of Corporate Development and Investor Relations of Baozun.

現在我想把會議交給今天的主持人，寶尊企業發展和投資者關係高級總監孫雯女士。

Thank you, operator. Hello, everyone, and thank you for joining us today. Our first quarter 2023 earnings release was distributed earlier and is available on our IR website at ir.baozun.com as well as on Globe Newswire services. We have also posted a PowerPoint presentation that accompanies our comments to the same IR website where they are available for download.

謝謝你，接線員。大家好，感謝您今天加入我們。我們的 2023 年第一季度收益報告已於早些時候發布，可在我們的 IR 網站 ir.baozun.com 以及環球通訊社服務上獲取。我們還在同一個 IR 網站上發布了一個 PowerPoint 演示文稿，其中包含我們的評論，可供下載。

On the call today from Baozun, we have Mr. Vincent Qiu, Chairman and Chief Executive Officer; Mr. Arthur Yu, Chief Financial Officer and President of Baozun e-Commerce; and Ms. Sandrine Zerbib, President of Baozun Brand Management. Mr. Qiu will review the business strategy and company highlights, followed by Mr. Yu, who will discuss the business development of Baozun e-Commerce and about our financial outlook; then by Ms. Sandrine to share more about Baozun Brand Management. They will all be available to answer your questions during the Q&A session that follows.

今天，寶尊董事長兼首席執行官邱文森先生接聽了我們的電話；寶尊電商首席財務官兼總裁於亞瑟先生；以及寶尊品牌管理總裁Sandrine Zerbib女士。邱先生將回顧業務策略和公司亮點，隨後余先生將討論寶尊電商的業務發展和我們的財務前景；接下來由Sandrine女士為大家分享更多關於寶尊品牌管理的內容。他們都將在接下來的問答環節回答您的問題。

Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking 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 to differ materially from those in the forward-looking statement.

在我們開始之前，我想提醒您，本次電話會議包含 1934 年《證券交易法》和 1995 年《美國私人證券訴訟改革法》含義內的前瞻性陳述。這些前瞻性陳述基於管理層當前的預期以及當前市場和經營狀況，並涉及涉及已知或未知風險、不確定性和其他因素的事件，所有這些因素都難以預測，其中許多因素超出了公司的控制範圍，可能導致公司的實際結果存在重大差異來自前瞻性聲明中的內容。

Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the U.S. SEC and in announcement on the website of Hong Kong Stock Exchange. The company does not undertake any obligation to update any forward-looking statements except as required under applicable law. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB.

有關這些和其他風險、不確定性或因素的更多信息包含在該公司向美國證券交易委員會提交的文件以及香港證券交易所網站上的公告中。除適用法律要求外，公司不承擔更新任何前瞻性陳述的義務。最後請注意，除非另有說明，本次電話會議中提到的所有數字均以人民幣為單位。

It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Qiu.

現在我很高興向大家介紹我們的董事長兼首席執行官邱文森先生。

Thank you, Wendy. Hello, everyone, and thank you all for your time. I'm excited about the transformation road map we have lined up for the next 3 years, all illustrated on Slide #2. The expansion of Baozun Group into 3 divisions; BEC, BBM and BZI, is aimed at creating a virtuous ecosystem in which each division brings value to the others.

謝謝你，溫迪。大家好，感謝大家抽出寶貴的時間。我對我們為未來 3 年制定的轉型路線圖感到興奮，所有這些都在幻燈片 #2 中進行了說明。寶尊集團擴張為3個事業部； BEC、BBM和BZI旨在創建一個良性生態系統，讓每個部門為其他部門帶來價值。

For instance, BEC brings cutting-edge value-added services such as DM, logistics and IT to BBM, while BBM enables BEC to have a deeper understanding of client needs leading to continuously improved technologies and operations. Meanwhile, BZI facilitates BEC and BBM in the geographic expansion of brands. The 3 divisions complement and support one another in a healthy ecosystem to provide the most comprehensive one-stop services for our clients.

例如，BEC為BBM帶來了DM、物流、IT等前沿的增值服務，而BBM則使BEC能夠更深入地了解客戶需求，從而不斷改進技術和運營。同時，BZI也有利於BEC和BBM品牌的地域擴張。三個部門相互補充、相互支持，形成一個健康的生態系統，為客戶提供最全面的一站式服務。

I want to emphasize that technology is a cornerstone of our business transformation and success. In the past 15 years, we have leveraged our technology to innovate and build-up a portfolio of integrated omnichannel fulfillment platforms. Our technology infrastructure enables our clients to unify the online and offline channels and conduct their business anytime, anywhere and/or any marketplaces.

我想強調的是，技術是我們業務轉型和成功的基石。在過去的15年裡，我們利用我們的技術進行創新並建立了一系列集成的全渠道履行平台。我們的技術基礎設施使我們的客戶能夠統一線上和線下渠道，並隨時隨地和/或在任何市場開展業務。

In recent quarters, regional service centers of BEC, supported by our customer service management system, S-ANY, have efficiently expanded to more cities and effortlessly added a wide range of services. RSCs have improved both service quality and cost efficiency for BEC. This is just one example of how technology empowers our business as we now embark on the second growth curve.

近幾個季度，BEC的區域服務中心在我們的客戶服務管理系統S-ANY的支持下，已高效擴展到更多城市，輕鬆增加了廣泛的服務範圍。 RSC 提高了 BEC 的服務質量和成本效率。這只是技術如何為我們的業務提供支持的一個例子，我們現在正踏上第二條增長曲線。

Our advances in technology and digitalization form a strong foundation to empower the next generation of retail. Consumers not prefer brands that are modified to Chinese consumers' preferences and community styles. By closely monitoring trends and offering tailor-made updates and iterations, we aim to enable new retail experiences and supply chains that are more responsive to local needs. This empowerment applies to all 3 divisions.

我們在技術和數字化方面的進步為下一代零售業的發展奠定了堅實的基礎。消費者不喜歡根據中國消費者的喜好和社區風格進行修改的品牌。通過密切監控趨勢並提供量身定制的更新和迭代，我們的目標是打造更能響應當地需求的新零售體驗和供應鏈。此授權適用於所有 3 個部門。

BBM is off to a great start. Since February the 1st, we began consolidating Gap China and the initial progress is quite encouraging. In the first quarter, Gap China generated RMB 189 million in revenue and significantly narrowed its operating losses. Sandrine will provide further details about BBM and the Gap later. We fully believe that BBM is a game changer.

BBM 有了一個良好的開端。從2月1日開始，我們開始整合Gap中國，初步進展非常令人鼓舞。第一季度，Gap中國實現營收1.89億元人民幣，經營虧損大幅收窄。 Sandrine 稍後將提供有關 BBM 和 Gap 的更多詳細信息。我們完全相信 BBM 能夠改變遊戲規則。

BZI is also beginning to take shape. In February, we acquired a minority interest along with the Board seat in Branded Lifestyle Asia Limited, a leading premium fashion retailer with a strong brand portfolio that includes Blue Dog and Roots. Also in the Fung Group, its parent company, have jointly set-up a strategic technology committee to develop an enterprise-wide technology strategy and lead the digital transformation. We have already taken an exciting first step with the launch of an online store, littleground.com.sg for Singapore.

BZI也已初具規模。 2 月份，我們收購了 Branded Lifestyle Asia Limited 的少數股權和董事會席位，該公司是一家領先的高端時尚零售商，擁有包括 Blue Dog 和 Roots 在內的強大品牌組合。其母公司馮氏集團也聯合成立了戰略技術委員會，制定企業範圍的技術戰略並引領數字化轉型。我們已經邁出了令人興奮的第一步，在新加坡推出了一家在線商店，littleground.com.sg。

We are also in the process of working with Branded Lifestyle for similar solutions elsewhere in Asia. This is an important first step for bringing our battle-tested technology to the global market. Our technology is an important piece of the foundation we are putting in place to build up our presence in the growing e-commerce market in [SCA]. Overall, each of our 3 business lines is making solid progress and we are confident in our business transition.

我們還正在與 Branded Lifestyle 合作，在亞洲其他地方提供類似的解決方案。這是將我們久經考驗的技術推向全球市場的重要的第一步。我們的技術是我們為在 [SCA] 不斷增長的電子商務市場中建立影響力而奠定的重要基礎。總體而言，我們的 3 個業務線均取得了紮實的進展，我們對業務轉型充滿信心。

My priorities for the next 3 years will be maintaining an appropriate organizational and incentive structure and focusing on our technology, people and culture. I will also take the (technical difficulty) journey for BZI. Ultimately, our priority at Baozun is to achieve customer-centric, high quality and stable business growth.

我未來三年的首要任務是維持適當的組織和激勵結構，並關注我們的技術、人員和文化。我也會走BZI的（技術難度）旅程。最終，寶尊的首要任務是實現以客戶為中心、高質量、穩定的業務增長。

Let me now pass the call over to Arthur for an update on BEC and review of our financials.

現在讓我將電話轉給 Arthur，了解 BEC 的最新情況並審查我們的財務狀況。

Thank you, Vincent, and hello everyone. Let me do a quick review of the financials of the first quarter of 2023, after which I will discuss our BEC business highlights in more details.

謝謝你，文森特，大家好。讓我快速回顧一下 2023 年第一季度的財務狀況，然後我將更詳細地討論我們的 BEC 業務亮點。

Benefiting from our continuous cost optimization in recent quarters, we were able to achieve better year-over-year profit and cash flows in the first quarter of 2023, as highlighted on Slide #3. During the quarter, our net revenues declined by 5% to RMB 1.9 billion, of which product sales declined by 2% and service revenue decreased by 6% compared to the same period last year.

受益於近幾個季度持續的成本優化，我們能夠在 2023 年第一季度實現更好的同比利潤和現金流，如幻燈片#3 所示。本季度，我們的淨收入同比下降5%至人民幣19億元，其中產品銷售額同比下降2%，服務收入同比下降6%。

Please turn to Slide #4. For BEC, revenue for the quarter was still soft due to weakness in consumer confidence in China. The 3 years of pandemic hardship has caused consumers to be more cautious in increasing their spending. And it will take both time and consistent efforts of macro policies to be implemented in order to resolve a full spending recovery. We continue to prioritize value-added service in digital marketing and IT services, while reducing low quality product sales.

請翻到幻燈片#4。對於 BEC 來說，由於中國消費者信心疲弱，本季度收入仍然疲軟。三年的疫情困難讓消費者在增加支出方面更加謹慎。解決支出全面復甦問題需要時間和宏觀政策的持續努力。我們繼續優先考慮數字營銷和IT服務中的增值服務，同時減少低質量產品的銷售。

Total product sales of BEC declined by 30% during the quarter, reflecting weaker consumption in the appliance category and our commitment to reduce sales of low profit categories. Luxury continues to deliver double-digit growth and sportswear sustained a positive year-over-year growth trends. Value-added service continued to show strong resilience with total revenue from logistics, IT and digital marketing achieved year-over-year growth on a like-to-like basis.

本季度 BEC 的產品總銷售額下降了 30%，反映出家電類別的消費疲軟以及我們承諾減少低利潤類別的銷售。奢侈品繼續實現兩位數增長，運動服飾則保持了同比積極增長趨勢。增值服務繼續展現強勁韌性，物流、IT和數字營銷總收入實現同比增長。

For BBM, total product sales revenue in the first quarter was RMB 189 million, which is in line with our plan before acquisition. Given that the Gap acquisition was completed in February, the consolidated product sales of BBM for the first quarter only consisted of February and March.

BBM一季度產品銷售收入總額為1.89億元人民幣，符合我們收購前的計劃。鑑於Gap收購已於2月份完成，BBM第一季度合併產品銷售額僅包括2月和3月。

Now turning to Slide #5. In this quarter, our cost of product decreased by 15% to RMB 505 million, mainly due to lower product sales of BEC, partially offset by incremental cost of RMB 82.8 million from Gap. For Gap specifically, its gross margin reached a new record of approximately 55%, representing over 1,000 basis points improvement from a year ago on a comparable basis. Overall, at the Group level, our gross margin improved by 320 basis points to 73.2% due to the acquisition of Gap Greater China.

現在轉向幻燈片 #5。本季度，我們的產品成本下降 15% 至 5.05 億元人民幣，主要是由於 BEC 產品銷量下降，部分被 Gap 增加的成本人民幣 8280 萬元所抵消。具體而言，Gap 的毛利率創下約 55% 的新紀錄，與去年同期相比提高了 1,000 個基點以上。總體而言，在集團層面，由​​於收購了Gap大中華區，我們的毛利率提高了320個基點至73.2%。

Our non-GAAP loss from operations was RMB 10 million during the quarter. At this time, we are not fully prepared to report separate cost for BBM and we plan to do so soon in the following quarters once we completed the integration. However, to provide a clearer view of the business trends for each segment, we would like to provide some direction for the profitability of BEC and BBM based on our internal management accounts.

本季度我們的非 GAAP 運營虧損為 1000 萬元人民幣。目前，我們還沒有完全準備好報告 BBM 的單獨成本，我們計劃在完成整合後在接下來的幾個季度盡快這樣做。然而，為了更清楚地了解每個細分市場的業務趨勢，我們希望根據我們的內部管理賬目為BEC和BBM的盈利能力提供一些方向。

During the quarter, BEC's non-GAAP operating income delivered triple-digit growth, reflecting our high quality growth strategy and effective cost optimization. The cost optimization efforts included ramping up regional service centers, re-engineering process, improving working capital efficiency and reforming compensation policies. In BBM, we have reduced its operating loss by more than half year-over-year on a comparable basis. Overall, our non-GAAP operating margin was negative 0.5%. Our non-GAAP net loss was RMB 7 million this quarter, a slight reduction compared with the same period of last year due to unexpected losses from Gap Greater China.

本季度，BEC 的非 GAAP 營業收入實現了三位數增長，體現了我們高質量的增長戰略和有效的成本優化。成本優化工作包括擴大區域服務中心、重新設計流程、提高營運資金效率和改革薪酬政策。在BBM，我們的營業虧損同比減少了一半以上。總體而言，我們的非 GAAP 營業利潤率為負 0.5%。本季度我們的非美國通用會計準則淨虧損為人民幣 700 萬元，與去年同期相比略有減少，原因是 Gap 大中華區的意外虧損。

Turning to Slide #6 about our cash and cash flow status. As of March 31, 2023, our cash, cash equivalents, restricted cash and short-term investments totaled RMB 2.9 billion. We continued to upgrade our back office processes to improve working capital and inventory management. As a result, our total operating cash outflow in this quarter were RMB 207 million, which is an improvement of RMB 338 million from the same period last year.

轉向幻燈片#6，了解我們的現金和現金流狀況。截至2023年3月31日，我們的現金、現金等價物、限制性現金和短期投資總計人民幣29億元。我們繼續升級後台流程，以改善營運資金和庫存管理。因此，本季度我們的經營性現金流出總額為人民幣2.07億元，比去年同期減少人民幣3.38億元。

Now let me provide some insight into our BEC business performance. This quarter, we continued to make progress in our omnichannel initiatives with 44% of our brands engaging with us on at least 2 channels. Our GMV from WeChat and JD both achieved high-double-digit growth. Moreover, we established a strategic partnership with Little Red Book or Xiaohongshu, which will allow us to acquire incremental traffic and attract new consumers in a more cost-effective way for our brand partners.

現在讓我對我們的 BEC 業務績效進行一些深入的了解。本季度，我們的全渠道計劃繼續取得進展，44% 的品牌在至少 2 個渠道上與我們互動。微信和京東的 GMV 均實現了兩位數的高增長。此外，我們與小紅書或小紅書建立了戰略合作夥伴關係，這將使我們能夠以更具成本效益的方式為我們的品牌合作夥伴獲取增量流量並吸引新消費者。

Value-added services are crucial in enhancing the user experience and creating value for brand partners. We have implemented new service offerings such as digitalization upgrade, data security enhancement, omnichannel data intelligence and AI-powered customer services. These services enable us to meet the changing needs and expectations of customers, providing a more personalized and seamless experience across all channels. We are also focusing on developing system enhancements and process re-engineering by utilizing the latest AI tools to drive efficiency improvements.

增值服務對於提升用戶體驗、為品牌合作夥伴創造價值至關重要。我們實施了數字化升級、數據安全增強、全渠道數據智能、人工智能客戶服務等新服務。這些服務使我們能夠滿足客戶不斷變化的需求和期望，在所有渠道提供更加個性化和無縫的體驗。我們還專注於利用最新的人工智能工具來開發系統增強功能和流程重新設計，以提高效率。

Our new business development for 2023 is off to a good start. Year-to-date, we have established a healthy pipeline with notable wins in the luxury, auto and FMCG sectors this quarter. This strong pipeline also provides us with greater flexibility in optimizing our resources allocation. In addition, we continue to focus on improving our key account management through [MPS] initiative partnered with Nielsen, which will improve our service quality in a sustainable way going forward.

我們2023年的新業務發展有了一個良好的開端。今年迄今為止，我們已經建立了健康的產品線，本季度在奢侈品、汽車和快速消費品領域取得了顯著的勝利。這條強大的管道還為我們優化資源分配提供了更大的靈活性。此外，我們繼續致力於通過與尼爾森合作的[MPS]計劃來改善我們的大客戶管理，這將以可持續的方式提高我們的服務質量。

We also saw an opportunity to grow beyond our traditional areas of strength to capture the growth area of content-driven live streaming e-commerce. In this quarter, we established a new business unit called [Creative Content to Commerce] to prioritize content-driven e-commerce initiatives. This new business unit is a combination of creative marketing, video content and live streaming units within Baozun. Currently, we are also building our grand live streaming studio with a total area of 4,500 square meters in our Shanghai headquarters. And we target to officially launch this studio this June during our 6/18 promotion period.

我們還看到了超越傳統優勢領域的機會，以佔領內容驅動的直播電子商務的增長領域。本季度，我們成立了一個名為“創意內容到商業”的新業務部門，以優先考慮內容驅動的電子商務計劃。這個新的業務部門是寶尊內部創意營銷、視頻內容和直播部門的組合。目前，我們還在上海總部建設了總面積達4500平方米的大型直播間。我們的目標是在今年六月的 6/18 促銷期間正式推出這個工作室。

Now let me turn the call over to Sandrine to talk about BBM.

現在讓我把電話轉給 Sandrine，談談 BBM。

Thank you, Vincent and Arthur, and thank you all for joining us today. It is my great pleasure to speak with you.

謝謝文森特和阿瑟，也感謝大家今天加入我們。我很高興與您交談。

Please follow us to Slide #7. As a holistic and well-rounded partner for global brands, BBM aims to unlock their business potential in China by utilizing our technologies and insights to deliver the best seamless omnichannel experience. We integrate the digital and physical at scale and we bridge demand and supply with fast supply chain adjustments through our digital intelligence. Our focus is on growing a portfolio of mid-end and premium consumer lifestyle brands under BBM. We've been very selective in narrowing down to a possible few lifestyle brands, limiting ourselves to only 1 or 2 additional brands in 2023. Obviously, our focus this year is on Gap.

請跟隨我們觀看幻燈片 #7。作為全球品牌全面、全面的合作夥伴，BBM 旨在利用我們的技術和洞察力釋放他們在中國的業務潛力，提供最佳的無縫全渠道體驗。我們大規模整合數字和物理，並通過數字智能快速調整供應鏈來彌合需求和供應。我們的重點是發展 BBM 旗下的中端和高端消費生活方式品牌組合。我們非常有選擇性地縮小了可能的幾個生活方式品牌的範圍，到 2023 年將自己限制為僅增加 1 或 2 個品牌。顯然，我們今年的重點是 Gap。

Please turn to Slide #8. In 2023, we are prioritizing the smooth post-acquisition transition of Gap China, refining product and merchandising strategies, building supply chain infrastructures, enhancing back-end systems and developing the right talent pool. First of all, we are committed to accelerating our transformation from a discount-driven approach to one that focuses on building consumer desire for our brand and products. While this initiative may have some negative impact on price-sensitive customers in the short-term, we believe it is necessary for the brand's long-term positioning.

請翻到幻燈片 #8。 2023年，我們的首要任務是實現Gap中國收購後的平穩過渡，完善產品和營銷策略，建設供應鏈基礎設施，增強後端系統並培養合適的人才庫。首先，我們致力於加速從折扣驅動方式向專注於建立消費者對我們品牌和產品需求的方式的轉變。雖然這一舉措短期內可能會對價格敏感的客戶產生一些負面影響，但我們認為這對於品牌的長期定位是必要的。

Another priority is our China-for-China product and communication. It is critical for us to interpret the DNA of the Gap brand in a way relevant to China rather than simply copying and replicating Gap globally. We've put together a design team with a new [Art] Director. We base our designs on more data insights and execute with a much shorter supply chain cycle. The results will start showing in fall and will be fully released in late winter. This will give us the first meaningful and measurable product impact.

另一個優先事項是我們針對中國的產品和溝通。對我們來說，以適合中國的方式詮釋Gap品牌的DNA，而不是簡單地在全球範圍內復制和復制Gap，這一點至關重要。我們組建了一個設計團隊和一位新的[藝術]總監。我們的設計基於更多的數據洞察，並以更短的供應鏈週期執行。結果將於秋季開始顯示，並於冬末全面發布。這將為我們帶來第一個有意義且可衡量的產品影響。

In terms of communication, we've started with upgrading our store design and we're working hand-in-hand with Gap to create a new store along with a new approach to visual merchandising. In addition, we are upgrading the supply chain to react quickly to new data and consumer demand. We have identified close to 30 new local manufacturers to fully meet our projected production needs. And except for global IP styles, we aim for 100% local production. We will continue to seek more factories with fast replenishment capability, while ensuring the same quality and lower prices compared to Gap global sourcing.

在溝通方面，我們已經開始升級商店設計，並與 Gap 攜手創建一家新商店，並採用新的視覺營銷方法。此外，我們正在升級供應鏈，以對新數據和消費者需求做出快速反應。我們已經確定了近 30 家新的本地製造商，以完全滿足我們預計的生產需求。除了全球IP風格外，我們的目標是100%本地製作。我們將繼續尋求更多具有快速補貨能力的工廠，同時保證與Gap全球採購相同的質量和更低的價格。

Now in addition, we've taken a series of quick actions on store efficiency, including changing existing store visual with a focus on mix and match storytelling, strictly controlling discounts and enhancing sales advisor training. Thanks to these actions, our blended gross margin reached approximately 55%, an improvement of over 1,000 basis points from a year ago. This is in our view a major achievement as gross margin increase is key to Gap China's success.

此外，現在我們還採取了一系列提高商店效率的快速行動，包括改變現有的商店視覺效果，重點是混搭故事講述、嚴格控制折扣以及加強銷售顧問培訓。通過這些行動，我們的綜合毛利率達到約55%，比一年前提高了1,000多個基點。我們認為這是一項重大成就，因為毛利率的提高是 Gap 中國成功的關鍵。

Overall, we generated total revenue of RMB 189 million, a decrease of 30% year-on-year on a comparable basis. And there are actually 2 factors that impacted this comparison. First factor is the timing of Chinese New Year, which is normally a peak season for retail. Chinese New Year was in February last year, but in January this year. And the second factor is the different starting points of offline. 86 stores were closed before we took over, which is equivalent to a decline of 40% year-over-year. Therefore, despite our strong comp store growth, our overall sales decreased.

總體而言，我們實現總收入人民幣1.89億元，按可比口徑同比下降30%。實際上有兩個因素影響了這種比較。第一個因素是農曆新年的時間，這通常是零售旺季。去年農曆新年是2月，今年是1月。第二個因素是線下的起點不同。我們接手之前關閉了86家門店，相當於同比下降了40%。因此，儘管我們的同店增長強勁，但我們的整體銷售額卻下降了。

For the remainder of 2023, our overall operating strategy remains unchanged, focused on products and margins, uplift brand image, product and consumer integrated marketing, fast response supply chain and enhanced omnichannel digitalization and customer experience. With these objectives in mind, we have set our store opening plans according to our product cycle. We plan to open about 10 new stores in first-tier cities, covering flagship, adult stores and kids and baby store formats with an upgraded store concept and customer experience by the end of 2023.

2023年剩餘時間，我們的整體運營策略保持不變，專注於產品和利潤、提升品牌形象、產品和消費者整合營銷、快速響應供應鏈以及增強的全渠道數字化和客戶體驗。考慮到這些目標，我們根據產品週期制定了開店計劃。我們計劃到2023年底在一線城市開設約10家新店，涵蓋旗艦店、成人店和嬰童店業態，併升級門店理念和客戶體驗。

Lastly, organizational competency and IT transformation are the 2 foundations that will enable our strategy. We've taken quick actions to build up the talent pool for Gap and future BBM operations. Over the past 60 days, we were able to quickly identify and hire critical positions, included but not limited to, Head of Design and Dedicated Kids and Baby Designer Lead, Head of Supply Chain, new CHRO and new CFO. All of our new hires are local industry experts with vast experience in both well-known leading MNCs and local apparel companies. We have also significantly reduced costs in logistics, marketing and store maintenance. We believe this will accelerate our business transformation and organizational efficiency.

最後，組織能力和 IT 轉型是實現我們戰略的兩個基礎。我們已迅速採取行動，為 Gap 和未來 BBM 運營建立人才庫。在過去的 60 天裡，我們能夠快速識別和聘用關鍵職位，包括但不限於設計主管和專門的兒童和嬰兒設計師主管、供應鍊主管、新的首席人力資源官和新的首席財務官。我們所有的新員工都是當地行業專家，在知名領先跨國公司和當地服裝公司擁有豐富的經驗。我們還顯著降低了物流、營銷和商店維護成本。我們相信這將加速我們的業務轉型和組織效率。

Now regarding IT transformation, we are making solid progress in transforming the former Gap China siloed, inefficient and outdated system into a fully integrated, flexible and modern architecture. With the help of Baozun technology, we have already completed the overall design for the integrated system transformation of Gap China and we aim to have the new systems in place by Q4 2023.

現在在IT轉型方面，我們正在紮實推進，將原Gap中國各自為政、低效、落後的系統轉變為完全集成、靈活的現代化架構。在寶尊科技的幫助下，我們已經完成了Gap中國集成系統改造的總體設計，我們的目標是在2023年第四季度讓新系統到位。

This system transformation will improve our business operation capability and efficiencies across multiple areas, including merchandising, planning, operations, design, production, fast and responsive supply chain, omnichannel inventory management, retail experience enhancements and business intelligence analytics. All of these improvements will be powered by optimized business processes and rules from market-leading practices. Overall, although there remains quite some way to go in our transformation, we have established a good first step for BBM and we are firmly determined to accelerate the necessary changes in our first year to set-up a solid foundation for our future growth.

此次系統轉型將提高我們在多個領域的業務運營能力和效率，包括銷售、規劃、運營、設計、生產、快速響應的供應鏈、全渠道庫存管理、零售體驗增強和商業智能分析。所有這些改進都將由市場領先實踐的優化業務流程和規則提供支持。總體而言，雖然我們的轉型還有很長的路要走，但我們已經為BBM邁出了良好的第一步，我們堅定地決心在第一年加快必要的變革，為我們未來的發展奠定堅實的基礎。

With all this being said, I shall now hand over the call back to Arthur.

話雖如此，我現在將把電話轉回給亞瑟。

Thank you, Sandrine. In summary, we are excited about our transformation road map, which focuses on becoming a technology-driven omnichannel e-commerce player. With BEC, we will continue execution of our customer first, high quality growth strategy. And the early progress in BBM reflects our team's high quality execution and agility. We have also taken first steps in BZI, which validates a natural opportunity for us to replicate our China e-commerce success overseas.

謝謝你，桑德琳。總之，我們對我們的轉型路線圖感到興奮，該路線圖的重點是成為技術驅動的全渠道電子商務參與者。通過BEC，我們將繼續執行客戶至上的高質量增長戰略。 BBM 的早期進展體現了我們團隊的高質量執行力和敏捷性。我們還在 BZI 邁出了第一步，這為我們提供了在海外複製中國電子商務成功的天然機會。

That concludes our prepared remarks. Thank you, operator. We are now ready to begin the Q&A session.

我們準備好的發言到此結束。謝謝你，接線員。我們現在準備開始問答環節。

(Operator Instructions) We're now going to proceed with our first question. And the question is coming from the line of Alicia Yap from Citi.

（操作員說明）我們現在要繼續回答第一個問題。這個問題來自花旗銀行的 Alicia Yap。

I have 2 quick ones. One is that can management share with us how are you seeing the consumption demand in April and May? And any qualitative expectation on the upcoming June 18 events? And then what have been the brands' merchants' attitude so far towards the June 18 promotion? And then second is that if management can elaborate your near-term priorities? And would you also plan to explore more acquisitions and investment in other brands if opportunity occurs?

我有2個快的。一是管理層能否跟我們分享一下您對4月和5月的消費需求有何看法？對即將到來的 6 月 18 日活動有何定性預期？那麼到目前為止，品牌商家對於6月18日的促銷活動持什麼態度呢？其次是管理層是否可以詳細說明您的近期優先事項？如果有機會，您是否還計劃探索更多收購和​​投資其他品牌的機會？

I will take the first question about the 6/18 and maybe Sandrine can add a little bit more on the investments of the BBM. First of all, in terms of April and May, we definitely see an improving trend year-over-year. As I mentioned, the luxury, the sports and apparel starts to show the signs of recovery. And for us, our Gap brand has also shown a steady recovery and a positive trend in terms of April and May.

我將回答關於 6/18 的第一個問題，也許 Sandrine 可以補充一點關於 BBM 的投資。首先，就四月和五月而言，我們確實看到了同比改善的趨勢。正如我所提到的，奢侈品、運動和服裝開始顯示出複甦的跡象。而對於我們來說，我們的 Gap 品牌在 4 月和 5 月也呈現出穩步復甦和積極的趨勢。

In terms of the 6/18, I would say, for the upcoming 6/18, it is probably one of the most prepared 6/18 from the platform and from the brand, because this is the first 6/18 promotion after 3 years COVID pandemic and both the platform and brands put a lot of efforts into it.

就6/18而言，我想說，對於即將到來的6/18，這可能是平台和品牌準備最充分的6/18之一，因為這是時隔3年之後的第一次6/18促銷新冠疫情，平台和品牌都付出了很多努力。

From a platform point of view, Tmall, JD, Douyin, they all launched new initiatives to attract customers and to incentivize the brands to use their platform. And from a brand point of view, they will start to -- they will start very early to prepare the merchandising and also the new initiative, how can they attract the new customer. And Baozun is in the process to help them during the last 2, 3 weeks to launch those plans. And we have seen some good early signs in terms of our plan starts to make some impact in terms of the upcoming 6/18. So the attitude is positive, but there are still uncertainties in terms of how strong the customer confidence is because the overall macro environment has still not recovered to our expectation. So we would say, it's cautiously positive at this moment.

從平台角度來看，天貓、京東、抖音都推出了新舉措來吸引消費者並激勵品牌使用其平台。從品牌的角度來看，他們將很早就開始準備商品推銷和新舉措，如何吸引新客戶。寶尊正在過去的兩三週內幫助他們啟動這些計劃。我們已經看到一些良好的早期跡象，我們的計劃開始對即將到來的 6/18 產生一些影響。所以態度是積極的，但客戶信心有多強仍然存在不確定性，因為整體宏觀環境仍未恢復到我們的預期。所以我們會說，目前它是謹慎積極的。

In terms of the near-term management priority, I think as Vincent has laid out, so in this year, we have put our Baozun Group into BEC, BBM and BZI, the 3 business units. And myself and Sandrine and Vincent himself will each take the role in terms of driving the strategy for each of the business unit with our own priority and our own plan. And now we are focused on execution to make sure we actually deliver our plan to achieve the overall Group plan for this year.

從近期的管理重點來看，我覺得正如Vincent所佈局的那樣，所以今年我們把我們的寶尊集團劃分為BEC、BBM和BZI這三個業務單元。我、桑德琳和文森特本人將各自發揮作用，按照我們自己的優先事項和計劃推動每個業務部門的戰略。現在我們的重點是執行，以確保我們真正交付我們的計劃，以實現今年集團的整體計劃。

On the investment, maybe Sandrine, can you add a few sentence?

關於投資，也許Sandrine，您能補充幾句話嗎？

Just a few words to say that, obviously, in the mid to long-term, we want to grow portfolio of mid-end and premium consumer lifestyle brands under BBM. And therefore, we have actually looked at many brands in order to be able to be extremely selective and to really narrow down to very few potential candidates for this portfolio, particularly for this year, we want to really limit ourselves to 1, max-max 2 new brands for the portfolio, because this year obviously our focus is on Gap and our total priority is a smooth post-acquisition transition of Gap China.

簡而言之，顯然，從中長期來看，我們希望擴大 BBM 旗下中端和高端消費生活方式品牌的投資組合。因此，我們實際上已經研究了許多品牌，以便能夠非常有選擇性，並真正縮小到該產品組合的極少數潛在候選者，特別是今年，我們希望真正將自己限制在 1，最大-最大投資組合中有 2 個新品牌，因為今年顯然我們的重點是 Gap，而我們的首要任務是實現 Gap 中國收購後的平穩過渡。

And on that one, we also have an internal process to evaluate each of the opportunities with a lot of care and a lot of the details. So we will only do the acquisition when the good opportunity appears.

在這方面，我們還有一個內部流程來非常仔細地評估每個機會，並考慮很多細節。所以只有當好的機會出現時我們才會進行收購。

We are now going to proceed with our next question. And the question is coming from the line of [Colin Chan] from CITIC. We're now going to proceed with our next question. The next question is coming from the line of Thomas Chong from Jefferies.

我們現在要繼續討論下一個問題。這個問題來自中信銀行的[Colin Chan]。我們現在要繼續下一個問題。下一個問題來自 Jefferies 的 Thomas Chong。

My first question is a follow-up on the 6/18 campaign. So as we see more -- the online shopping market is undergoing a more competition. So how should we think about the impact on us? And my second question is that, as you've seen the consumer sentiment is gradually recovering. So how should we think about the second half performance for the discretionary like apparel, cosmetics, durables, like electronics and as well as the luxury category? Should we see a pick-up in the second half?

我的第一個問題是 6/18 活動的後續問題。正如我們所看到的，在線購物市場正在經歷更加激烈的競爭。那麼我們應該如何看待它對我們的影響呢？我的第二個問題是，正如你所看到的，消費者信心正在逐漸恢復。那麼，我們應該如何看待服裝、化妝品、耐用品、電子產品以及奢侈品類別等非必需品的下半年表現？我們應該在下半場看到回升嗎？

I think the competition of the platform is actually a good news for Baozun, because through the competition, the platform becomes a commodity in some way. So at this moment, a lot of features which is available to Tmall will become available to Douyin and something Douyin is good at, Tmall is trying to replicate. So in that way, the platform is becoming a marketplace and the brand is doing the business through those marketplace with the need to differentiate themselves by the brand themselves.

我覺得平台的競爭對於寶尊來說其實是一個好消息，因為通過競爭，平台在某種程度上變成了一種商品。所以目前天貓可以提供的很多功能都將提供給抖音，而抖音擅長的東西，天貓正在嘗試複製。因此，通過這種方式，該平台正在成為一個市場，而品牌則通過這些市場開展業務，需要通過品牌本身來實現差異化。

For that they need Baozun who understands the different characters of the platform. And also, we can help the brand to define a strategy specific for them to be successful in an omnichannel environment. So that's the strategy Baozun has laid out a number of years ago to pursue the omnichannel strategy. So our back-end system can support us to manage the different channels and the knowledge we accumulated in terms of how to operate in each channel will play a big growth in helping brands going forward. So that's #1.

為此，他們需要了解平台不同特徵的寶尊。此外，我們還可以幫助品牌制定特定的策略，以便他們在全渠道環境中取得成功。這就是寶尊多年前製定的全渠道戰略。所以我們的後端系統可以支持我們管理不同的渠道，而我們在每個渠道如何運營方面積累的知識將在幫助品牌前進方面發揮巨大的作用。所以這是#1。

And #2, I think ways the platform becomes a commodity in some way, the value-added service offered from Baozun becomes very unique to support the brand. So for example, IT, digital marketing, logistics and warehouse, they all improve the brand capability to serve their customer better through the upgrading of the capability. So in recent quarters, we have seen the value-added service start to see a big pipeline and we are confident that will help us to drive the revenue growth into the future.

第二，我認為平台在某種程度上成為一種商品，寶尊提供的增值服務變得非常獨特，可以支持該品牌。那麼比如說IT、數字營銷、物流、倉儲，他們都是通過能力的升級來提升品牌能力，更好的服務客戶。因此，在最近幾個季度，我們看到增值服務開始出現大量管道，我們有信心這將幫助我們推動未來的收入增長。

Your second question in terms of the customer sentiment, as I mentioned, it's definitely gradually recovered for the apparels and for the cosmetic to some extent. But durables like the electronics and the other categories, I think we probably need to wait and see. And I would say, 6/18 is a good place to test how much the consumer confidence will come back and what the spending kind of pattern will be looked like for the whole year.

你的第二個問題是關於顧客情緒，正如我提到的，服裝和化妝品在某種程度上肯定正在逐漸恢復。但像電子產品和其他類別的耐用品，我認為我們可能需要觀望。我想說，6/18 是測試消費者信心恢復程度以及全年消費模式的好時機。

We are now going to proceed with our next question. And the question is coming from the line of Colin Chan from CITIC.

我們現在要繼續討論下一個問題。這個問題是來自中信集團的Colin Chan。

I'm Colin Chan, CITIC Securities. I have 2 questions. The first is that I noticed that in Q1 the non-Tmall GMV share rise to 49% with a significant increase year-over-year and quarter-over-quarter. So I'm curious about the driver of the change? And what's your expectation of the GMV distribution in different channels in the next few quarters? And a follow-up question to that, facing the structural changes of e-commerce channels, do you observe any changes about the standard and criteria when a brand choose to cooperate with their partners?

我是中信證券的陳科林。我有 2 個問題。首先，我注意到第一季度非天貓GMV佔比上升至49%，同比和環比都有顯著增長。所以我很好奇這一變化的驅動因素是什麼？您對未來幾個季度不同渠道的GMV分佈有何預期？隨之而來的問題是，面對電商渠道的結構性變化，您是否觀察到品牌選擇與合作夥伴合作的標準和準則有什麼變化？

So Colin, the first one, I think is very simple that it's the omnichannel strategy we have been pursuing over the last 2 to 3 years and start to show the fruits in terms of -- we now have a Tmall percentage become only half and non-Tmall become half. We think this is a healthy foundation for us to drive the omnichannel strategy going forward. This is also what the brand is trying to pursue at this moment in time.

所以科林，第一個，我認為非常簡單，這是我們在過去 2 到 3 年裡一直在追求的全渠道戰略，並開始顯示出成果 - 我們現在天貓的比例變成了一半，而且不是-天貓變成一半。我們認為這是我們推動全渠道戰略向前發展的良好基礎。這也是品牌此時此刻所努力追求的。

But what I would say, the Tmall and non-Tmall is not something to say the non-Tmall growth is higher, the better. It's actually Tmall has its very unique advantage in terms of providing the certainties and providing very good quality customers from the Tmall kind of the consumer group. Our recommendation to the brand is to choose the best platform for the best product which are suitable for their own business model and for their own strategy. So that's the way we will help the brands to design a strategy to be successful in this new environment post-COVID in terms of e-commerce.

但我想說的是，天貓和非天貓並不是說非天貓增長越高越好。其實天貓有它非常獨特的優勢，在提供確定性方面，以及從天貓這類消費群體中提供非常優質的客戶。我們對品牌的建議是選擇適合自己商業模式、適合自己策略的最好平台、最好的產品。因此，我們將通過這種方式幫助品牌設計戰略，以便在新冠疫情后的電子商務新環境中取得成功。

Your second question in terms of the overall environment and also on what they're looking at the e-commerce service provider, it's actually the -- a lot of the brands we're talking to recently, they put a lot of emphasis on the value-added service we can provide to the brand. With the AI and also the competition, a lot of the very basic activities can be replicated very easily, either by machine or by Baozun competitors. But what we have, the unique strength from Baozun is our capability to provide the insight and our kind of help to help the brands to design a strategy to be successful. So those activities is what Baozun will add a great value.

你的第二個問題是關於整體環境以及他們對電子商務服務提供商的看法，實際上是——我們最近交談的很多品牌，他們非常重視我們可以為品牌提供增值服務。有了人工智能和競爭，很多非常基本的活動都可以很容易地被機器或寶尊競爭對手複製。但我們所擁有的，寶尊的獨特優勢是我們有能力提供洞察力和幫助，幫助品牌設計成功的策略。所以那些活動是寶尊會增加很大的價值的。

And in terms of the IT solution, the digital marketing and also the logistics and the warehouse, they are also very sought after at this moment, as I mentioned earlier. So overall, I think for a service provider like Baozun, the current competition and the intensified kind of the competition from all the channels is actually a good news for us.

正如我之前提到的，在IT解決方案、數字營銷以及物流和倉庫方面，它們目前也很受歡迎。所以總的來說，我認為對於像寶尊這樣的服務提供商來說，當前的競爭以及來自所有渠道的競爭的加劇實際上對我們來說是一個好消息。

We are now going to proceed with our next question. And the question is coming from the line of Sophia Tan from Credit Suisse.

我們現在要繼續討論下一個問題。這個問題來自瑞士信貸銀行的 Sophia Tan。

I have one question on behalf of Ashley in terms of our BBM business line. It actually has been several months post our acquisition, so can you please share with us the major surprise or the challenges that we have [countered] so far? And whether this brings some challenges to -- changes to our previous guidance for the operating results, financial outlook or any execution timeline?

我代表 Ashley 有一個關於我們 BBM 業務線的問題。實際上我們收購已經過去幾個月了，所以您能與我們分享一下迄今為止我們所遇到的重大驚喜或挑戰嗎？這是否會給我們之前的經營業績、財務前景或任何執行時間表的指導帶來一些挑戰？

I think the biggest surprise is actually a positive surprise, which is the fact that we were able to improve our gross margin much faster than we had expected. And this is due to the fact that, in fact, the consumers have accepted a higher price points and less discounts much faster, particularly offline, but much faster than we had anticipated. And this is actually a very important positive surprise for us, because obviously, it drives all the rest of the P&L. So a very positive surprise that we believe that all in all will enable us to over-achieve our year in terms of gross margin, even if, obviously, with upcoming 6/18 and 11/11, we will not necessarily keep exactly the same level of gross margin as we've experienced in this first quarter. So that's for the surprise.

我認為最大的驚喜實際上是一個積極的驚喜，即我們的毛利率提高速度比我們預期的要快得多。這是因為，事實上，消費者接受更高的價格點和更少的折扣的速度要快得多，尤其是線下，但比我們預期的要快得多。這對我們來說實際上是一個非常重要的積極驚喜，因為顯然，它推動了損益表的所有其他部分。因此，我們相信，總而言之，這將使我們在毛利率方面超額實現今年的目標，這是一個非常積極的驚喜，即使顯然，在即將到來的 6/18 和 11/11 中，我們不一定會保持完全相同我們在第一季度經歷的毛利率水平。所以這就是驚喜。

And then for the challenges, I think I see 2 challenges. The first one is obviously the speed of recovery of overall market recovery and consumer sentiment recovery because this will determine how fast we can indeed push ourselves and the recovery and the transformation of Gap obviously. And the other challenge is to make sure that in terms of execution, we continue to work hard to really put all the bits and pieces together, because today, we had this first good surprise without having all the bits and pieces yet together. In fact, the new products are not yet here. The new marketing is not yet here. The new store concept that we are working on is not yet here. So you can see that we have a very ambitious plan to work on for the remainder of the year. And we need to continue to work hard to get all these bits and pieces together to really push the results to the maximum.

然後對於挑戰，我認為我看到了兩個挑戰。第一個顯然是整體市場復甦和消費者信心復甦的速度，因為這將決定我們能夠以多快的速度推動自己以及Gap的複蘇和轉型。另一個挑戰是確保在執行方面，我們繼續努力工作，真正將所有的細節整合在一起，因為今天，我們在尚未將所有的細節整合在一起的情況下，得到了第一個驚喜。事實上，新產品還沒有到來。新的營銷方式還沒有到來。我們正在研究的新商店概念還沒有出現。所以你可以看到我們有一個非常雄心勃勃的計劃要在今年剩下的時間裡進行。我們需要繼續努力，將所有這些零碎的東西整合在一起，真正將成果發揮到最大。

(Operator Instructions) We are now going to proceed with our next question. And the question is coming from the line of Sophie Huang from CMBI.

（操作員說明）我們現在將繼續討論下一個問題。這個問題來自招銀國際的Sophie Huang。

Just a follow-up question regarding to BBM. We're just wondering, what customer feedback have you had with your discount reduction strategy? Do you mind share more color on this recent sales performance of online and offline stores? How do you think about the consolidation impact on different channels, I mean, online and offline sales?

只是關於 BBM 的後續問題。我們只是想知道，您對折扣減少策略有什麼客戶反饋？您介意分享一下最近線上和線下商店的銷售表現嗎？您如何看待整合對不同渠道（即線上和線下銷售）的影響？

In fact, as I just said, we had a relatively good surprise in terms of acceptance of the reduction of discounts, which enabled us to improve our gross margin faster than we had anticipated, but this was actually faster offline than online. This acceptance of reduced discounts, we expect to take a little bit more time online than offline, which is also due to the fact that we need to wait for obviously certain activities in marketing, but also in product.

事實上，正如我剛才所說，我們在接受折扣減少方面有一個比較好的驚喜，這使得我們毛利率的提升速度比我們預期的要快，但這實際上是線下比線上更快。這種接受減少折扣的方式，我們預計在線上會比線下花費更多的時間，這也是因為我們需要等待明顯的營銷活動以及產品活動。

As we said, we now work from products that were ordered before we took over the company. And therefore, all what we plan to do in terms of differentiating products for different channels online has not been yet implemented because we don't have the products to differentiate yet. So we think that this will be very important to accelerate this acceptance online, which has already good signs and positive signs from the offline side of things.

正如我們所說，我們現在使用的是我們接管公司之前訂購的產品。因此，我們計劃為不同在線渠道提供差異化產品的計劃尚未實施，因為我們還沒有差異化的產品。因此，我們認為這對於加速線上的接受度非常重要，線下方面已經有了良好的跡象和積極的跡象。

In terms of omnichannel management, we're still underway of putting together the new systems. And the new systems will be -- that will enable really integrated online and offline inventory management will only be available in the end in the last quarter of this year.

在全渠道管理方面，我們仍在整合新系統。新系統將實現真正集成的線上和線下庫存管理，最終將在今年最後一個季度推出。

We have no further questions at this time. I'll now hand the call back to Wendy Sun for closing remarks.

目前我們沒有進一步的問題。現在我將把電話轉回給 Wendy Sun，讓其致閉幕詞。

Thank you, operator. In closing, on behalf of the Baozun management team, we would like to thank you for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call.

謝謝你，接線員。最後，我們謹代表寶尊管理團隊感謝您參加今天的電話會議。如果您需要任何進一步的信息，請隨時與我們聯繫。感謝您今天加入我們。通話就此結束。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開線路。謝謝。