Baozun Inc (BZUN) 2024 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by for Baozun's First Quarter 2024 Earnings Conference Call. (Operator Instructions) As a reminder, today's conference call is being recorded.

各位女士、先生們早安，感謝大家出席寶尊2024年第一季業績電話會議。 （操作員說明）提醒一下，今天的電話會議正在錄音。

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

現在我將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。

Please proceed, Wendy.

請繼續，溫迪。

Thank you, operator. Hello, everyone, and thank you for joining us today. Our first quarter 2024 earnings release was distributed earlier before this call and is available on our IR website at ir.baozun.com as well as on PR Newswire services. We have also posted a PowerPoint presentation that accompanies our comments to the same IR website, which -- where they are available for download.

謝謝你，接線生。大家好，感謝您今天加入我們。我們在本次電話會議之前發布了 2024 年第一季財報，可在我們的 IR 網站 ir.baozun.com 以及美通社服務上取得。我們也在同一個 IR 網站上發布了一個 PowerPoint 演示文稿，其中附有我們的評論，可供下載。

On the call today from Baozun, we have Mr. Vincent Qiu, Chairman and Chief Executive Officer; Ms. Catherine Zhu, the Chief Financial Officer; Mr. Arthur Yu, President, Baozun E-Commerce; and Ms. Sandrine Zerbib, President of Baozun Brand Management.

今天，寶尊董事長兼執行長邱文森先生接聽了我們的電話；朱凱瑟琳女士，財務長；餘先生，寶尊電商總裁；以及寶尊品牌管理總裁Sandrine Zerbib女士。

Mr. Zhu will review the business strategy and company highlights, followed by Ms. Zhu, who will discuss our financials and outlook, and then by Mr. Yu and Ms. Zerbib to share more regarding our e-commerce and the brand management segment, respectively. They will all be available to answer your questions during the Q&A session that follows.

朱先生將回顧業務戰略和公司亮點，隨後朱女士將討論我們的財務狀況和前景，然後由餘先生和澤比布女士分享有關我們的電子商務和品牌管理部門的更多信息，分別。他們都將在接下來的問答環節回答您的問題。

Before we begin, I'd like to remind you that this conference call contains forward-looking statements, within the meaning of the U.S. Securities Act of 1933 as a mandate the U.S. Securities Exchange Act of 1934 as a mandate and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current markets and operating conditions, and relates 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 statements.

在我們開始之前，我想提醒您，本次電話會議包含前瞻性陳述，其含義屬於《1933 年美國證券法》、《1934 年美國證券交易法》和《美國私人證券訴訟》的含義。改革法案。公司的控制範圍，這可能導致公司的實際結果與前瞻性陳述中的結果有重大差異。

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 and its announcement, notice and other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this call is as of the date hereof and based upon assumptions that the company believes to be reasonable as of this date, and the company does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

有關這些及其他風險、不確定性或因素的更多信息，請參閱該公司向美國證券交易委員會提交的文件以及在香港聯合交易所有限公司網站上發布的公告、通知和其他文件。本次電話會議中提供的所有資訊均截至本新聞稿發布之日，並基於本公司認為截至該日期合理的假設，本公司不承擔更新任何前瞻性陳述的義務，除非適用法律要求。

Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. In addition, we may elect to use adjusted in place of non-general accepted accounting principles or non-GAAP in order to reduce other confusions that may arise from our discussion about financials related to the GAAP brand.

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。此外，我們可能會選擇使用調整後的會計準則來取代非公認會計原則或非公認會計準則，以減少我們討論與公認會計準則品牌相關的財務狀況時可能出現的其他混亂。

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

現在我很高興向大家介紹我們的董事長兼執行長邱文森先生。文森特，請繼續。

Thank you, Wendy. Hello, everyone, and thank you all for your time. As you may recall, our primary focus for 2024 is to continue executing our plans diligently, and sustainably. I'm pleased to share the progress and the results of our ongoing transformation journey.

謝謝你，溫迪。大家好，感謝大家抽出寶貴的時間。您可能還記得，我們​​ 2024 年的主要重點是繼續勤奮、可持續地執行我們的計劃。我很高興與大家分享我們正在進行的轉型之旅的進展和成果。

Please turn to Slide #3. In the first quarter of 2024, Baozun Group achieved a 5% year-over-year revenue growth, reaching RMB 2 billion. This growth was primarily driven by BBM's 66% year-over-year revenue increase and a better top line momentum from BEC. Additionally, our operating cash flow improved by RMB 129 million, reflecting the robustness of our business model, and operational efficiency.

請翻到投影片 #3。 2024年第一季，寶尊集團營收年增5%，達到20億元。這一成長主要得益於 BBM 66% 的年收入成長以及 BEC 更好的營收動能。此外，我們的經營現金流改善了人民幣1.29億元，反映了我們業務模式的穩健性和營運效率。

A closer look at the top line [numbers] for the quarter. For BEC, it's encouraging that the service revenue returned to growth after 6 quarters of year-over-year contraction. This is attributed to our consistent efforts in enhancing client satisfaction, building our omnichannel capabilities and extending our value proposition to our brand partners. In addition, we introduced a high-quality product sales model by entering into exclusive distribution collaborations with several brands. This exclusivity allows us to make full use of our digitalization capabilities, and the retail expertise to enable brands to build a consistent go-to-market strategy, which is comprehensive, and covers product positioning, marketing, pricing, channels and the customers' experience.

仔細看看本季的頂線[數字]。對BEC來說，令人鼓舞的是，服務收入在連續6個季度年減後恢復成長。這歸功於我們在提高客戶滿意度、建立全通路能力以及將我們的價值主張擴展到品牌合作夥伴方面的不懈努力。此外，我們也透過與多個品牌建立獨家經銷合作，引入了高品質的產品銷售模式。這種排他性使我們能夠充分利用我們的數位化能力和零售專業知識，使品牌能夠建立一致的全面進入市場策略，涵蓋產品定位、行銷、定價、通路和客戶體驗。

Along with daily sales operations, with deeper involvement and alignment in strategy and merchandising tactics, we are confident to help brands increase sales and to boost their brand equity. We are confident this model will enable BEC product sales to resume growth next quarter and gradually improve BEC's overall margin.

除了日常銷售營運外，透過更深入參與和協調策略和行銷策略，我們有信心幫助品牌增加銷售額並提高其品牌資產。我們相信這種模式將使BEC產品銷售在下個季度恢復成長並逐步提高BEC的整體利潤率。

BBM continues to make headway in transforming Gap China, focusing on China-for-China products and merchandising tactics that resonate with local customers. BBM delivered solid Q1 results in both top and the bottom lines. These efforts have had a positive market acceptance and increased Gap's growth potential for the second half of 2024.

BBM在Gap中國的轉型中不斷取得進展，專注於中國為中國的產品和與當地消費者產生共鳴的行銷策略。 BBM 第一季的營收和利潤均表現強勁。這些努力獲得了市場的積極認可，並增強了 Gap 2024 年下半年的成長潛力。

Lastly, we are proud to share another significant milestone in our technology advancement. Our Technology Innovation Center, TIC, successfully deployed over 5,000 partner offline stores for our global electronic brand giant. This involved a full set of demand chain management solution that manages online DTC, offline retail and the partner distribution network, with up-to-date digital commerce capabilities. It is fully integrated with the Baozun digital operating platform to ensure a seamless and a close loop omnichannel digital commerce experience. These are highlights that reflect the solid and constant effort Baozun team has put into effect our ongoing transformation.

最後，我們很自豪地分享我們技術進步的另一個重要里程碑。我們的技術創新中心TIC為我們的全球電子品牌巨頭成功部署了5,000多家合作線下商店。這涉及管理線上DTC、線下零售和合作夥伴分銷網絡的全套需求鏈管理解決方案，具有最新的數位商務能力。與寶尊數位化營運平台全面融合，確保無縫、閉環的全通路數位商務體驗。這些亮點，體現了寶尊團隊紮實、持續的轉型努力。

I'm also proud to welcome Catherine Zhu, our newly appointed CFO to this call. Catherine brings a wealth of experience and expertise to our senior management team. Importantly, Catherine is no stranger to Baozun, as she has worked with us for the past 4 years in various key functions. With Catherine taking on the CFO role, Catherine is now more dedicated to leading our BEC segment to accelerate its transformation and further growth in 2024.

我還很榮幸地歡迎我們新任命的財務長凱瑟琳朱 (Catherine Zhu) 參加這次電話會議。凱瑟琳為我們的高階管理團隊帶來了豐富的經驗和專業知識。重要的是，Catherine 對寶尊並不陌生，因為她在過去 4 年裡一直與我們一起在各種關鍵職能部門工作。隨著 Catherine 擔任財務官，Catherine 現在更加致力於領導我們的 BEC 部門在 2024 年加速轉型和進一步成長。

Let me now pass the call over to Catherine for a review of our financials.

現在讓我把電話轉給凱瑟琳，讓她審查我們的財務狀況。

Thanks, Vincent, and hello, everyone. I'm pleased to speak with you today in my new capacity as Baozun Group's CFO. As Vincent just mentioned, advancing our business transformation initiatives and driving growth are our top priorities for 2024. Accordingly, my primary objective will be to align our financial strategies with our broad business goals, facilitating both our transformation and progress through fiscal discipline and cost optimization.

謝謝文森特，大家好。今天，我很高興能以寶尊集團財務長的新身分與大家交談。正如文森特剛才提到的，推進業務轉型計劃和推動成長是我們2024 年的首要任務。優化促進我們的轉型和進步。

Now, let me share with you our first quarter 2024 financial results in more detail. Please turn to Slide #3. Baozun Group's total net revenues increased by 5% year-over-year to RMB 2 billion. Of this, E-Commerce revenue contributed RMB 1.7 billion, while revenue from the Brand Management segment increased to RMB 313 million.

現在，讓我更詳細地與您分享我們 2024 年第一季的財務表現。請翻到投影片 #3。寶尊集團總淨收入較去年同期成長5%至人民幣20億元。其中，電商收入貢獻人民幣17億元，品牌管理板塊收入增加至人民幣3.13億元。

Breaking down the E-Commerce revenue by business model, services revenue increased by 4% to RMB 1.2 billion during the quarter. This increase was primarily attributable to double-digit year-over-year growth in revenue from sportswear store operations as well as digital marketing and IT solutions. BEC product sales revenue decreased by 17% to RMB 395 million as we optimized certain product portfolios and pursued a high-quality distribution model. For instance, we proactively optimized our approach to several brands in fast-moving consumer goods over the past few quarters, which led to a 51% year-over-year decline in this category.

依業務模式劃分電子商務收入，本季服務收入成長 4% 至 12 億元。這一增長主要歸因於運動服裝店營運以及數位行銷和 IT 解決方案的收入同比兩位數增長。由於我們優化了部分產品組合，追求高品質的分銷模式，BEC產品銷售收入下降17%至人民幣3.95億元。例如，過去幾個季度，我們主動優化了快速消費品領域多個品牌的策略，導致該品類較去年同期下降 51%。

Please turn to Slide #4. From a profitability perspective, our gross margin for product sales in E-Commerce improved by 230 basis points to 13.8% during the quarter. Gross margin for BBM remained healthy at 53%, and our Group blended gross margin for product sales totaled 31%, an increase of 700 basis points year-over-year. This was driven by improved gross margin of BEC product sales as well as a higher contribution percentage from BBM revenues.

請翻到幻燈片#4。從獲利能力的角度來看，本季我們電子商務產品銷售的毛利率提高了 230 個基點，達到 13.8%。 BBM的毛利率維持在53%的健康水平，集團產品銷售綜合毛利率總計31%，較去年同期成長700個基點。這是由於 BEC 產品銷售毛利率的提高以及 BBM 收入貢獻率的提高所致。

Now to bottom line items, please turn to Slide #5. Our total operating expenses for the quarter was RMB 1.6 billion, an increase of 7.9% year-over-year. This increase was mainly due to additional sales and marketing spending in both BEC and BBM segments, which was in line with the increase in our digital marketing revenues and the new product launch, respectively.

現在，請轉到投影片 #5。本季我們的總營運費用為人民幣16億元，年增7.9%。這一成長主要是由於 BEC 和 BBM 領域的銷售和行銷支出增加，這分別與我們的數位行銷收入和新產品推出的成長一致。

During the quarter, our adjusted loss from operations totaled RMB 18 million. This comprised an adjusted operating profit of RMB 12 million from E-Commerce segment and the BBM operating loss of RMB 29 million. It is worth noting that BBM continued to show good momentum in reducing its operating loss with the RMB 29 million operating loss covering the month this quarter compared to RMB 35 million for the 2 month period 2023.

本季度，我們調整後的營運虧損總計人民幣 1,800 萬元。其中包括電子商務部門調整後的營業利潤人民幣 1,200 萬元，BBM 營業虧損人民幣 2,900 萬元。值得注意的是，BBM 在減少營運虧損方面持續表現出良好勢頭，本季營運虧損為 2,900 萬元人民幣，而 2023 年 2 個月的營運虧損為 3,500 萬元人民幣。

Turning to cash items on Slide #6. We improved our operating cash flow by RMB 129 million, where we had a cash outflow of RMB 208 million in the first quarter last year. The corresponding outflow in the first quarter this year has been reduced to RMB 79 million. This was attributed to our effective and targeted cash flow management strategy. Notably, the operating cash flow for E-Commerce segment in the first quarter turned positive for the first time since 2019. Also, with better utilization of financial capital and resources, our net interest income increased over 30% to RMB 9 million.

轉向投影片 #6 上的現金項目。我們的營運現金流改善了人民幣1.29億元，而去年第一季我們的現金流出人民幣2.08億元。今年第一季相應流出已減少至人民幣7,900萬元。這歸功於我們有效且有針對性的現金流管理策略。值得注意的是，第一季電商板塊經營現金流自2019年以來首次轉正。

As of March 31, 2024, we maintained a continuously steady balance in cash and cash equivalents, restricted cash and short-term investments, totaling RMB 2.9 billion. In January 2024, our Board approved a new share repurchase program of USD 20 million over the next 12 months. I'm pleased to report that in April, the company repurchased approximately 845,000 ADS with USD 2.1 million through the open market on this program, reflecting our confidence in the company.

截至2024年3月31日，我們的現金及現金等價物、限制性現金及短期投資餘額合計人民幣29億元，維持持續穩定的餘額。 2024 年 1 月，我們的董事會批准了未來 12 個月內 2,000 萬美元的新股票回購計畫。我很高興地向您報告，4月份，公司透過該計劃透過公開市場以210萬美元回購了約845,000股ADS，體現了我們對公司的信心。

Lastly, on Slide #7, we have been successful in promoting ESG and integrating sustainability into our core business operations. We prioritize energy efficiency and waste minimization in our warehouse and logistics parts. Moreover, we advocate for sustainable lifestyles among our employees, brand partners, consumers and other stakeholders, fostering a green e-commerce ecosystem. Thanks to this unwavering commitment, we reduced our 2023 carbon emissions by 28% compared to our 2021 benchmark. I'm also proud to share that CDP raised our ESG rating from C to B this a, powerful testament to our sustainability efforts.

最後，在幻燈片#7 中，我們成功地促進了 ESG 並將永續發展融入我們的核心業務營運中。我們在倉庫和物流部分優先考慮能源效率和廢棄物最小化。此外，我們倡導員工、品牌合作夥伴、消費者和其他利害關係人永續的生活方式，培養綠色電子商務生態系統。由於這項堅定不移的承諾，我們 2023 年的碳排放量比 2021 年的基準減少了 28%。我還很自豪地與大家分享，CDP 將我們的 ESG 評級從 C 提升至 B，這是對我們永續發展努力的有力證明。

Thank you for your attention. Let me now pass the call over to Arthur to update you on BEC, our E-Commerce business.

感謝您的關注。現在讓我將電話轉接給 Arthur，向您介紹我們的電子商務業務 BEC 的最新情況。

Thanks, Vincent and Catherine, and, hello, everyone. Now, let's take a look at the BEC business in quarter 1 of 2024. Please turn to Slide #8. The year of 2024 has started off with many challenges and opportunities for the BEC business. Our strategic goal is to drive customer-centric, high-quality and sustainable business growth, and we plan to deliver this goal through 3 key strategic enablers. Number one, enhancing customer satisfaction; number two, building a high-quality product sales business; and number three, expanding into new business areas by utilizing our core capabilities.

謝謝文森和凱瑟琳，大家好。現在，讓我們來看看2024年第一季的BEC業務。 2024年伊始，BEC業務面臨許多挑戰與機會。我們的策略目標是推動以客戶為中心、高品質和永續的業務成長，我們計劃透過 3 個關鍵策略推動因素來實現這一目標。第一，提高客戶滿意度；第二，打造優質產品銷售業務；第三，運用我們的核心能力拓展新的業務領域。

In the first quarter of 2024, we have made solid progress in each area. Our first strategic enabler focuses on improving service quality to further enhance client satisfaction. Since 2021, we have collaborated with Nielsen to build an NPS, net promoter score system, to systematically gather feedback from our clients. Over the past 2 years, we have seen an increase in our overall NPS and the score has improved from 8.07 to 8.23. And this indicates that an increased number of clients are now willing to recommend our services, likely leading to organic growth through positive word-of-mouth.

2024年第一季度，我們在各個領域都取得了紮實的進展。我們的第一個策略推動者專注於提高服務品質，以進一步提高客戶滿意度。自 2021 年以來，我們與尼爾森合作建立了 NPS（淨推薦值評分系統），以系統化收集客戶的回饋。在過去 2 年裡，我們的整體 NPS 有所提高，分數從 8.07 提高到 8.23。這表明越來越多的客戶現在願意推薦我們的服務，這可能會透過積極的口碑帶來有機成長。

The improvement in our NPS score is largely due to our consistent efforts in maintaining high standard in delivering services, particularly our comprehensive digital commerce capabilities across multi-category channels and the entire value chain. In quarter 1, we continued to perform strongly, and gained market share in key categories such as apparel, sport and outdoor and travel and hotel. Our omni-channel capability is one of Baozun's core advantages and a focus for development in 2024.

NPS得分的提升很大程度上得益於我們在提供服務方面的持續努力，特別是我們在多品類管道和整個價值鏈上的綜合數位商務能力。第一季度，我們繼續表現強勁，在服裝、運動戶外、旅遊酒店等關鍵品類上獲得了市場份額。全通路能力是寶尊的核心優勢之一，也是2024年的發展重點。

During the quarter, we not only continued to open stores on the traditional marketplace platforms such as Tmall, JD and vip.com, but also opened over 20 new stores on emerging platforms like Douyin, Poizon and RED, helping brands generate revenue through these new channels. Additionally, we are continuously expanding our value chain, and innovating our service models. We have become the e-commerce logistics service partner for multi-brands under [VIS] Corporation, helping them customize automated e-commerce order fulfillment centers, supporting nationwide multi-warehouse shipping and improving logistics service capabilities.

本季，我們不僅繼續在天貓、京東、唯品會等傳統電商平台開店，還在抖音、毒藥、小紅書等新興平台新開了20多家新店，幫助品牌透過這些新店創造收入。渠道。此外，我們不斷拓展價值鏈，創新服務模式。我們成為[VIS]公司旗下多品牌電商物流服務合作夥伴，協助其客製化自動化電商訂單履行中心，支援全國多倉出貨，提升物流服務能力。

We have also formed a strategic alliance with China Resources Vanguard to explore new retail models, leveraging our long-term cooperation experience with Walmart. Based on our outstanding performance, we received multiple service provider awards in quarter 1; and this includes Tmall's 6-star service provider, JD.com's (inaudible) award, Tencent's Smart Retail Qianyu service provider, and Douyin's 2023 High Potential Luxury Service Provider award. These awards validate our progress in omni-channel channel capabilities, and continue to give us strategic advantages over our competitors.

我們也與華潤萬家結成策略聯盟，運用與沃爾瑪的長期合作經驗，探索新零售模式。基於我們的出色表現，我們在第一季度獲得了多個服務提供者獎項；其中包括天貓六星級服務商、京東（聽不清楚）獎、騰訊智慧零售千魚服務商、抖音2023年高潛力奢侈品服務商獎。這些獎項驗證了我們在全通路通路能力方面的進步，並持續賦予我們相對於競爭對手的策略優勢。

Our second strategic enabler is to build a high-quality product sales business, which we address by focusing on 2 aspects; optimizing existing distribution business, and introducing high-quality distribution partnerships. For existing distribution businesses, we have nearly completed the optimization of financially underperforming operations this quarter. At the same time, we have enhanced our governance and talent management by establishing a distribution business committee to ensure the quality of the business continues to improve in the future.

我們的第二個策略推動力是建立高品質的產品銷售業務，我們透過專注於兩個方面來解決這個問題；優化現有分銷業務，引進優質分銷合作夥伴。對於現有的分銷業務，本季我們幾乎完成了對財務表現不佳的業務的最佳化。同時，我們透過成立分銷業務委員會加強治理和人才管理，確保未來業務品質持續提升。

To introduce new high-quality product sales businesses, we continue to expand using an exclusive distribution model for medium-sized global brands. In quarter 1, we initiated several collaborations in lifestyle and small appliance categories. In February, we become the exclusive distribution partner for the Canadian fashion brand ALDO and are currently working on repositioning the brand in the Chinese market.

為了引進新的高品質產品銷售業務，我們繼續採用針對中型全球品牌的獨家分銷模式進行擴展。第一季度，我們在生活風格和小家電品類發起了多項合作。今年2月，我們成為加拿大時尚品牌ALDO的獨家經銷合作夥伴，目前正致力於該品牌在中國市場的重新定位。

We also initiated an exclusive distribution collaboration with the renewed American high-end home appliance brand (inaudible). We are also working with NUXE, a French cosmetic and beauty brand as their exclusive distributor for its China launch with comprehensive online and offline growth plans. Compared to traditional distributors, Baozun possess digital-enabled distribution capabilities, efficiently integrating online and offline operations, and leveraging digital technologies to drive omnichannel business growth.

我們也與煥然一新的美國高端家電品牌（聽不清楚）發起獨家經銷合作。我們也與法國化妝品和美容品牌 NUXE 合作，作為其在中國推出的獨家經銷商，並制定全面的線上和線下成長計畫。與傳統分銷商相比，寶尊擁有數位化分銷能力，高效整合線上線下運營，利用數位技術驅動全通路業務成長。

The third enabler is expanding into new business areas by creating new -- and creating new business models by utilizing Baozun's core capability in data and technology. For instance, we have deployed our technology to help brand partners advance distributor digital transformation and enhance comprehensive omnichannel retail capabilities. We have also expanded our customer service from a client by client basis to service cooperation with e-commerce platforms. Additionally, our self-incubated brand continues to achieve high double-digit sales growth in quarter 1, transitioning from initial incubation to rapid expansion.

第三個推動力是利用寶尊在數據和技術方面的核心能力，透過創造新的業務模式來拓展新的業務領域。例如，我們部署技術幫助品牌合作夥伴推動經銷商數位轉型，提升綜合全通路零售能力。我們也將客戶服務從逐個客戶擴展到與電子商務平台的服務合作。此外，我們的自孵化品牌在第一季繼續實現兩位數的高銷售額成長，從最初的孵化過渡到快速擴張。

While growing the top line is our priority this year. Protecting the bottom line is also important to us. We are actively promoting lean projects within BEC to further reduce costs. Additionally, we are expanding the use of AIGC tools to more employees and business scenarios to enhance operational efficiency.

增加收入是我們今年的首要任務。保護底線對我們也很重要。我們在BEC內部積極推動精益項目，進一步降低成本。此外，我們正在將AIGC工具的使用擴展到更多的員工和業務場景，以提高營運效率。

In summary, we achieved solid results in quarter 1 and are on track with our annual plan. Our goal for BEC is to become the preferred digital commerce partner for our global clients. To achieve this goal, we will continue to focus on our strategic enablers, ensuring robust business growth while further enhancing our digital and omnichannel capabilities. We will share more progress with you in the future.

總而言之，我們在第一季取得了紮實的成果，並且正在按照我們的年度計劃進行。我們 BEC 的目標是成為全球客戶首選的數位商務合作夥伴。為了實現這一目標，我們將繼續專注於策略推動因素，確保業務強勁成長，同時進一步增強我們的數位化和全通路能力。未來我們將與您分享更多進展。

Now let me pass on to Sandrine for her updates on BBM.

現在讓我向 Sandrine 轉達她關於 BBM 的最新消息。

Thank you, Arthur. Thank you team, and thank you all. It is my great pleasure to speak with you. Please turn to Slide #9. We are pleased to report top line growth and continuous bottom line improvements for BBM in the first quarter of 2024. While there is a timing impact, as we had 2 months in reporting in the same period of last year versus the full quarter this time for the 66% revenue growth.

謝謝你，亞瑟。謝謝團隊，也謝謝大家。我很高興與您交談。請翻到幻燈片#9。我們很高興地報告 2024 年第一季 BBM 的營收成長和持續獲利改善。

We achieved strong sales during the Chinese New Year period, supported by a series of new product releases, targeted promotions and effective marketing campaigns. Leveraging on our efforts in strategic pricing, supply chain and inventory management, we continue to maintain effective discount control, while achieving healthy inventory turnover improvements. During the quarter, the gross margin for BBM remained healthy at 53% post-royalties, and our inventory turnover days improved by 20 days to 140 compared to the same period last year.

在一系列新品發布、針對性促銷和有效行銷活動的支持下，我們在農曆新年期間取得了強勁的銷售業績。憑藉我們在策略定價、供應鏈和庫存管理方面的努力，我們繼續保持有效的折扣控制，同時實現庫存週轉率的健康改善。本季度，BBM 扣除特許權使用費後的毛利率保持在 53% 的健康水平，庫存週轉天數比去年同期提高了 20 天，達到 140 天。

We further improved operational efficiency, reducing our operating loss to RMB 29 million for this quarter, which covers 3 months compared to RMB 35 million over 2 months last year. Our China-for-China strategy continues to evolve with promising developments. We are introducing specialized products, tailored to specific target audiences and channels, ensuring that our offering meet local consumer needs and preferences.

我們進一步提高了營運效率，本季三個月的營運虧損從去年兩個月的 3,500 萬元減少到了 2,900 萬元。我們的「中國為中國」戰略不斷發展，並取得了可喜的發展。我們正在推出針對特定目標受眾和管道量身定制的專業產品，確保我們的產品滿足當地消費者的需求和偏好。

For example, we recently intensified our efforts for segmented products in the kids and baby and womenswear categories. We noted a significant rebound in our kids and baby stores, marked by improvements in customer awareness and a distinctive brand image, which solidified a positive brand perception. In our current demographic, the combination of kid's and baby and women's wear accounts for less than 50% of sales, presenting opportunities for further growth.

例如，我們最近加大了童裝、女裝品類細分產品的力度。我們注意到我們的兒童和嬰兒用品商店出現顯著反彈，其特點是客戶意識的提高和獨特的品牌形象，從而鞏固了積極的品牌認知。在我們目前的人口統計中，童裝、嬰兒裝和女裝佔銷售額的比例不到 50%，這提供了進一步成長的機會。

To capitalize on this momentum, we are strategically rolling out new children's wear stores and we will continue to launch segmented product offerings throughout the year to better meet the needs of our targeted demographic. We are also introducing new women designers and further enhancing product quality to better cater to the young mom generation. Additionally, our functional product segment, such as UV jackets and cooling products are performing well and are expected to gain further traction as we move into the warmer months.

為了利用這一勢頭，我們正在策略性地推出新的童裝店，並將在全年繼續推出細分產品，以更好地滿足目標人群的需求。我們還引入新的女性設計師，進一步提高產品質量，以更好地迎合年輕媽媽一代。此外，我們的功能性產品領域（例如防紫外線外套和冷卻產品）表現良好，預計隨著進入溫暖月份，將獲得進一步的吸引力。

Our collaboration with selected IPs, such as [A.8] and Talos, resonated well with our target audience. Along with our social media campaigns on Weibo and Little Red Book, our brand visibility has been significantly boosted. While there has been some traffic contraction in the fashion apparel segment in recent months, the new stores we opened during this period still demonstrated higher productivity levels. Leveraging on our proven new opening philosophy, we plan to expand our physical presence throughout the rest of 2024 to offset the organic decrease in our store count over the past few quarters.

我們與選定的 IP（例如 [A.8] 和 Talos）的合作與我們的目標受眾產生了良好的共鳴。隨著我們在微博和小紅書上的社交媒體活動，我們的品牌知名度得到了顯著提升。儘管近幾個月時尚服飾領域的客流量有所收縮，但我們在此期間開設的新店仍表現出較高的生產力水平。憑藉我們經過驗證的新開業理念，我們計劃在 2024 年剩餘時間內擴大實體店規模，以抵消過去幾季門市數量的自然減少。

We're happy to have gained strong market acceptance from the industry community, including potential IP collaborations, landlords and potential franchisee partners. With this established ecosystem and partnerships, we are encouraged by the positive momentum in brand equity. We plan to open up to new 5 stores in the second quarter of 2024, while focusing on optimizing store performance and enhancing the customer experience. Additionally, we will leverage a rapid deployment strategy by opening pop-up shops in strategic locations to gauge consumer interest and test market viability.

我們很高興獲得了業界的強烈市場認可，包括潛在的智慧財產權合作、業主和潛在的特許經營合作夥伴。憑藉這個已建立的生態系統和合作夥伴關係，我們對品牌資產的積極勢頭感到鼓舞。我們計劃在 2024 年第二季新開 5 家門市，同時專注於優化門市業績並增強顧客體驗。此外，我們將利用快速部署策略，在策略地點開設快閃店，以衡量消費者的興趣並測試市場活力。

By executing these initiatives simultaneously, we aim to strengthen our presence, tap into new markets, and capitalize on emerging growth opportunities. Looking ahead to the rest of 2024, we are exercising caution due to the observed slower recovery in consumption sentiments. While it may take more time for this sentiment to improve, we remain committed to executing our strategic plans and driving BBM top line growth in 2024.

透過同時執行這些舉措，我們的目標是加強我們的影響力，開拓新市場，並利用新興的成長機會。展望 2024 年剩餘時間，由於觀察到消費情緒復甦較慢，我們保持謹慎態度。儘管這種情緒可能需要更多時間才能改善，但我們仍致力於執行我們的策略計劃並在 2024 年推動 BBM 營收成長。

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

我們準備好的演講到此結束。謝謝。接線員，我們現在準備開始問答環節。

(Operator Instructions) The first question comes from Alicia Yap with Citigroup.

（操作員說明）第一個問題來自花旗集團的 Alicia Yap。

Congrats on the solid quarter. I have 2 questions first. So, I think during first quarter, based on the NPS data, there seems to be faster growth pace of the online shopping with a deepened online penetration rate in essence on some of the offline retail, maybe given the aggressive pricing discount from the online marketplace. So, just wondering how about to view this trend as your opportunity? And then on the other hand, I'm wondering if the Gap offline store are seeing, some of the demand actually shifting to the online purchase as we see for the general broad market trend.

恭喜季度業績穩定。我首先有兩個問題。因此，我認為，根據 NPS 數據，第一季度，線上購物的成長速度似乎更快，一些離線零售本質上線上滲透率加深，這可能是考慮到線上市場的大幅定價折扣。那麼，只是想知道如何將這一趨勢視為您的機會？另一方面，我想知道 Gap 線下商店是否看到，正如我們看到的整體市場趨勢一樣，一些需求實際上正在轉向線上購買。

Second question is related to Gap. Just wondering if management can provide an update on the overall growth rate target for this year? And also any of the update on the performance of the newly acquired brands like the Hunter?

第二個問題與Gap有關。只是想知道管理層是否可以提供今年整體成長率目標的最新資訊？新收購的品牌（如 Hunter）的業績有何更新？

Hi Alicia, it's Arthur here. Thank you for the question. I will take the first part of your question, and then I will hand over to Sandrine for the Gap related question. I think you are right in terms of the online penetration. It seems to increase but not necessarily at the expense of offline retail, because from our observation, some successful brands has started to adapt the omnichannel strategy by fully utilizing the different customer base from each of the platform. Some brands even try to develop some unique product for some special online platform, try to utilizing their consumer base, and that leads to a higher penetration for the online but not necessarily at the expense of cannibalization of the offline market. So that's number one.

嗨，艾莉西亞，我是亞瑟。感謝你的提問。我將回答您問題的第一部分，然後我將與 Gap 相關的問題交給 Sandrine。我認為您就在線滲透率而言是正確的。它似乎在增加，但不一定以犧牲線下零售為代價，因為根據我們的觀察，一些成功的品牌已經開始透過充分利用每個平台的不同客戶群來調整全通路策略。一些品牌甚至嘗試為一些特殊的線上平台開發一些獨特的產品，嘗試利用他們的消費者基礎，這會導致在線上更高的滲透率，但不一定以蠶食線下市場為代價。所以這是第一。

The second thing we have seen is, from some successful brands, what they do is Online-Merging-Offline, i.e. OMO strategy, trying to utilize and use the technology and data to create a solution to integrate the online and offline shopping scenario. And that is actually helping to generate organic traffic into both online and offline to drive the incremental sales. So that's our observation for your first part of the question. Sandrine?

第二個我們看到的是，從一些成功的品牌身上，他們做的是Online-Merging-Offline，即OMO策略，試圖利用和利用技術和數據來打造一個融合線上線下購物場景的解決方案。這實際上有助於產生線上和線下的自然流量，從而推動增量銷售。這就是我們對你問題第一部分的觀察。桑德琳？

Yes. Thank you, Arthur, and thank you, Alicia, for your question. So first, you asked if this was something we were observing, also this potential shift for Gap. In fact, it is true that we see overall that the traffic offline is decreasing, and it's decreasing faster than the traffic online. Having said this, as Arthur mentioned, it doesn't mean any form of cannibalization.

是的。謝謝你，亞瑟，謝謝你，艾莉西亞，提出問題。首先，你問這是否是我們正在觀察的事情，以及 Gap 的潛在轉變。事實上，我們確實看到，線下的流量總體上是在減少，而且比線上的流量減少得更快。話雖如此，正如亞瑟所提到的那樣，這並不意味著任何形式的蠶食。

Now, concerning your second question, about the growth perspective for all of 2024 for Gap. We plan BBM to have and Gap to have double-digit growth for the whole year, partly because we see the new stores that we are opening, performing actually better than the existing portfolio and also partly because we plan to continue our store opening with a little bit more than -- more than 50 stores to be open in the rest of the year or in the total year, I should say, because we already opened 2 in Q1, and we will have 5 open in Q2 and the rest in Q3 and 4. So -- now, the last part of your question was about Hunter. And I'm pleased to say that Hunter is very well on track, both in terms of sales and operating results.

現在，關於你的第二個問題，關於 Gap 2024 年全年的成長前景。我們計劃 BBM 和 Gap 全年實現兩位數增長，部分原因是我們看到我們正在開設的新店實際上比現有的產品組合表現更好，部分原因是我們計劃繼續以我應該說，今年剩餘時間或全年將有50 多家商店開業，因為我們已經在第一季度開設了2 家，第二季度將開設5 家，其餘的將在第三季度開業4. 所以——現在，你問題的最後一部分是關於亨特的。我很高興地說，亨特在銷售和營運業績方面都走上了正軌。

The next question comes from Colin Shan with CITIC Securities.

下一個問題來自中信證券的單峰。

I've 2 questions. The first is about BEC. In this year, most e-commerce platforms keep emphasizing on price competition/power. And as a brand partner, how does Baozun balance brand's pricing system and pricing competitiveness?

我有 2 個問題。第一個是關於BEC。今年以來，大部分電商平台持續強調價格競爭/實力。而作為品牌合作夥伴，寶尊如何平衡品牌的定價體系與定價競爭力？

And my second question is about BBM. And also in this year, did the management find that there are different consumption trends and characteristics between Gap's online and offline performance and what is your future layout of Gap's offline and online business? For example, will there be like different product lines or pricing strategy between online and offline?

我的第二個問題是關於 BBM 的。還有今年管理階層有沒有發現Gap的線上線下表現存在不同的消費趨勢與特色？例如，線上和線下是否會有不同的產品線或定價策略？

Okay. Thank you, Colin. I will take the BEC part, and then Sandrine can comment on the BBM. I think you are right. The e-commerce platform are more and more putting emphasis on the price kind of the competitiveness. But at the same time, that's not the only tool a brand has to enhance their brand positioning. So, for example, a lot of our clients spend money and effort to build the brand awareness, increasing the brand equity in order to protect their pricing structure and some of our clients even follow a full price strategy with very limited discount.

好的。謝謝你，科林。我會參加BEC部分，然後Sandrine可以對BBM發表評論。我想你是對的。電商平台越來越注重價格類的競爭力。但同時，這並不是品牌提升品牌定位的唯一工具。例如，我們的許多客戶花費金錢和精力來建立品牌知名度，增加品牌資產，以保護他們的定價結構，我們的一些客戶甚至遵循折扣非常有限的全價策略。

That actually drives a better model for the brands to have a sustainable growth because they can use additional margin to support the brand building in the longer term. And then our -- a lot of our advice to our brand partner to balance the short- term and long term, so that's the first one.

這實際上為品牌提供了一個更好的可持續成長模式，因為他們可以利用額外的利潤來支持長期的品牌建立。然後我們向我們的品牌合作夥伴提出了許多平衡短期和長期的建議，所以這是第一個。

Secondly, we see many brands are focused on the new product introduction, which is a key to keep the freshness of a brand apparent to the consumer. As you know, the Chinese consumer is very -- looking forward to the new things coming up. So with that, a lot of brands is trying to capture the new trend of the consumer. And also, the marketing is becoming more dynamic, including the short video, the live streaming, a lot of the digital format type of marketing starts to building a different kind of the way the brands are promoting themselves.

其次，我們看到許多品牌都注重新產品的推出，這是維持品牌新鮮度的關鍵。如您所知，中國消費者非常期待新事物的出現。因此，許多品牌都在努力捕捉消費者的新趨勢。而且，行銷也變得更加活躍，包括短影片、直播、許多數位格式類型的行銷開始建立一種不同的品牌宣傳方式。

With that, all in all, I think the price is one of the tools to drive the brand forward for the sales, but to balance the longer term and short term, how to build a brand is also important. Sandrine?

總而言之，我認為價格是推動品牌銷售的工具之一，但要平衡長期和短期，如何建立品牌也很重要。桑德琳？

Yes, thank you Arthur, and thank you, Colin. So, to answer your question, yes, there are different consumption trends online and offline that we also observed with Gap. As we said earlier, generally speaking, we see a lot of caution from consumers who do not spend lavishly. And this translates differently online and offline. I would say that in both cases, to some extent, it's value for money. But offline, we have more of a focus on value, and online, more of a focus on money. So what we can see is that, generally speaking, the average price, the UPT, the margin is higher offline than online, but the frequency of purchase is probably more cautious than it used to be.

是的，謝謝你亞瑟，也謝謝你，柯林。所以，回答你的問題，是的，我們在 Gap 中也觀察到了線上和線下不同的消費趨勢。正如我們之前所說，一般來說，我們看到那些不花錢的消費者非常謹慎。這在線上和線下的翻譯是不同的。我想說，在這兩種情況下，在某種程度上，它都是物有所值的。但線下，我們更關注價值，而線上，我們更關注金錢。所以我們可以看到的是，整體來說，線下的均價、UPT、利潤率比線上要高，但是購買的頻率恐怕比以前更加謹慎了。

So, people are looking for very high-quality products, and they are looking for what they see as value in the products we offer offline versus online, we see a trend towards, obviously, more looking for good price and good deals. And this has led us to increase the proportion of special online products for the online part of our business in order to maintain our topline without letting go on the control of discounts.

因此，人們正在尋找非常高品質的產品，他們正在尋找他們認為我們在線下提供的產品與線上產品相比的價值，我們看到一種明顯的趨勢，即更多地尋求優惠的價格和優惠。這導致我們增加了線上業務部分的特殊線上產品的比例，以在不放鬆折扣控制的情況下維持我們的營收。

So, overall, we manage with this to have lower ticket price for consumers online, but keep our good margin. I think this covers the question of Colin on BBM.

因此，總的來說，我們設法為線上消費者提供更低的票價，但保持良好的利潤。我認為這涵蓋了科林在 BBM 上的問題。

Thank you Arthur and Sandrine for your answers. I have no other questions.

謝謝亞瑟和桑德琳的回答。我沒有其他問題了。

The next question is from the line of [Wang Zhihao] from CICC.

下一個問題來自中金公司的[王志浩]。

My question is about Brand Management business. Could you please share the sales performance of Gap recently, especially during the shopping festival? Also for the overall Brand Management business, are there plans to incorporate more brands this year?

我的問題是關於品牌管理業務。能否請您分享一下最近Gap的銷售表現，尤其是購物節期間的表現？另外，對於整體品牌管理業務，今年是否計劃納入更多品牌？

Yes, thank you for your question. So, as we said, we see -- we had the very good performance during Chinese New Year. The rest of the quarter has been slower, with increasing caution from consumers, which we see particularly in the offline part of our business. As I was trying to explain earlier, there is higher caution that leads consumers to look for value in what they purchase.

是的，謝謝你的提問。所以，正如我們所說，我們看到——我們在農曆新年期間表現得非常出色。本季剩餘時間的成長速度較慢，消費者越來越謹慎，這一點尤其體現在我們業務的線下部分。正如我之前試圖解釋的那樣，更謹慎的態度導致消費者在購買的商品中尋找價值。

And the second part of your question was -- sorry, I missed it. What was the second part of your question?

你問題的第二部分是——抱歉，我錯過了。你問題的第二部分是什麼？

Yes, yes. My second question is about -- are there any plans to include more...

是的是的。我的第二個問題是——是否有計劃包括更多…

Yes, yes, yes. Okay. Yes, I understand. We are being -- we obviously look at many, many brands. I cannot guarantee that there will be new brands incorporated this year because we are exercising extreme caution in the way we select the brands, both in terms of which segment they belong to, which category they belong to and our analysis on their potential in China, particularly in this period of relatively low consumption sentiment.

對對對。好的。是的我明白。顯然，我們正在關注很多很多品牌。我不能保證今年會有新品牌加入，因為我們在選擇品牌的方式上非常謹慎，無論是它們屬於哪個細分市場、屬於哪個類別，還是我們對它們在中國的潛力的分析，尤其是在當前消費情緒相對低迷的時期。

Yes. Some more words to say. This is Vincent. For the potential new brands, actually, right now we have a quite strong pipeline for both BEC and BBM business. And also, right now, we have a lot of different ways to work with a new brand. We can work with the brand for the pure e-commerce service or we can take some exclusivity on distribution -- distributorship, and we can also do some M&A or license. So, we have a lot of different ways working with them. So -- but talking about the M&A, we will be very selective and careful, just like what Sandrine just mentioned. Yes, but right now, we have a lot of different ways working with them. So, that is a key message. Yes. Thank you.

是的。還有幾句話要說。這是文森特.對於潛在的新品牌，實際上，目前我們在BEC和BBM業務方面都有相當強大的管道。而且，現在我們有很多不同的方式與新品牌合作。我們可以與品牌合作進行純電子商務服務，也可以採取一些獨家分銷權——分銷權，我們也可以進行一些併購或授權。因此，我們有很多不同的方式與他們合作。所以，但談到併購，我們會非常有選擇性和謹慎，就像桑德琳剛才提到的那樣。是的，但現在我們有很多不同的方式與他們合作。所以，這是一個關鍵訊息。是的。謝謝。

The next question comes from Sophie Huang with CMBI.

下一個問題來自 CMBI 的 Sophie Huang。

Well, my question is about the live streaming e-commerce update. After acquisition of Hangzhou Location and our investment in [company], has there been any big change on brand's engagement or GMV performance and any positive change or challenges you can share? In the long run, how do you think about the revenue or GMV scale from live stream e-commerce?

嗯，我的問題是關於直播電商的更新。收購杭州店以及投資【公司】後，品牌參與度或GMV表現有什麼大的變化嗎？從長遠來看，您如何看待直播電商的收入或GMV規模？

Yes. Thank you, Sophie. I think, first of all, our integration with Hong Kong Hangzhou Location is well on track. And with the capability of Location plus the client relationship and tools from Baozun, we have already won a number of new deals and the teams are very busy every day working until midnight in order to fulfill the new deals, so that's a good sign.

是的。謝謝你，蘇菲。我認為，首先，我們與香港杭州基地的整合進展順利。而且憑藉Location的能力加上寶尊的客戶關係和工具，我們已經贏得了一些新訂單，而且團隊每天都非常忙碌，為了完成新訂單而工作到深夜，所以這是一個好兆頭。

Our goal to the acquire the Location is focused on building our omnichannel capability. So that said, with the overall trend brand is moving into omnichannel, both the traditional e-commerce channel like Tmall and JD are important, but also, the new live streaming channel like Douyin and Little Red Book and Kuaishou are becoming more and more important. So the acquisition of Location gave us that capability to make sure we can offer that one-stop solution to our brand partners.

我們獲得該位置的目標是專注於建立我們的全通路能力。所以說，隨著整體潮流品牌向全通路邁進，天貓、京東等傳統電商管道固然重要，但抖音、小紅書、快手等新興直播管道也變得越來越重要。因此，收購 Location 使我們有能力確保我們能夠為我們的品牌合作夥伴提供一站式解決方案。

In terms of the GMV performance, if we look at the live streaming related GMV we generate, we actually have a high double-digit growth for this year, but the overall size is small -- is still a small proportion within the overall GMV. But we can see that not the quantity of what we are looking for, it is the quality of our service and the breadth of our offering, which makes Baozun different, and that's the reason why we put a lot of investment and effort on building the Location business into the wider Baozun ecosystem.

從GMV表現來看，如果我們看一下我們產生的直播相關的GMV，我們今年實際上有兩位數的高增長，但總體規模很小——在整體GMV中所佔的比例仍然很小。但我們可以看到，讓寶尊與眾不同的不是我們所追求的數量，而是我們的服務品質和我們提供的產品的廣度，這也是我們投入大量投資和精力來打造寶尊的原因。業務融入更廣泛的寶尊生態系統。

(Operator Instructions) The next question comes from Thomas Chong Jefferies.

（操作員說明）下一個問題來自 Thomas Chong Jefferies。

I have 2 questions. The first one is, could management share some recent consumer segment and expectation outlook for different categories like apparel, FMCG, electronics? And my second question is, could management share some color on the 618 shopping festival, the consumer assessment for BEC.

我有 2 個問題。第一個是，管理階層能否分享一些近期的消費群體以及對服裝、快速消費品、電子產品等不同類別的預期前景？我的第二個問題是，管理階層能否分享一些關於618購物節的色彩，也就是消費者對BEC的評價。

Okay. Thank you for the question. Consumer confidence has still not recovered to the pre-COVID level. We track the consumer confidence index. And so far, in the first 3 to 4 months of this year, it's constantly below 90 mark. And that number before COVID is above 110, which means the consumer confidence are still not recovered. But on the other hand, we see the trend of some of the categories are doing pretty well. So, for example, in apparel, we see the sports and outdoor, those 2 categories are doing pretty well. And in the luxury, we have seen, the jewelry is doing pretty well. And also the JD platform is doing better on luxury than Tmall.

好的。感謝你的提問。消費者信心仍未恢復至新冠疫情前的水準。我們追蹤消費者信心指數。到目前為止，今年前3到4個月，它一直低於90大關。而在新冠疫情之前，這個數字已經超過了110，這意味著消費者信心仍未恢復。但另一方面，我們看到一些品類的趨勢表現還不錯。例如，在服裝領域，我們看到運動和戶外這兩個類別表現得相當不錯。我們已經看到，在奢侈品領域，珠寶的表現相當不錯。而且京東平台在奢侈品方面的表現也比天貓好。

For FMCG and consumer electronics, it's a mix. We see some brands are doing well, and some are not doing that well. The ones doing well all have some good new product introduction and also the local brands are doing -- are performing better than the global brands in general. Yes.

對於快速消費品和消費性電子產品來說，這是一個混合體。我們看到有些品牌做得很好，有些則做得不好。表現好的品牌都推出了一些不錯的新產品，而且本土品牌的表現總體上比全球品牌要好。是的。

The next question is from Alicia Yap with Citigroup.

下一個問題來自花旗集團的 Alicia Yap。

I have 2 quick follow-up questions. One is that I noticed digital marketing and IT solutions revenue actually grew quite well on the year-over-year basis this quarter. Is that mainly due to low base? Or is it contributed by newly added brands? Or is that because of the strong demand in general? And then second question on the -- within the online stores revenue, the luxury category on the year-over-year basis, it looks a little bit weaker. So, just wondering, is that within your expectation? Or do you think that could be driven by some of the consumption shift away from luxury?

我有 2 個快速跟進問題。一是我注意到本季數位行銷和 IT 解決方案收入實際上比去年同期成長得相當不錯。主要是因為基數低嗎？還是新加入的品牌貢獻的？還是因為整體需求強勁？然後是關於在線商店收入的第二個問題，奢侈品類別與去年同期相比，看起來有點疲軟。所以，只是想知道，這在你的預期之內嗎？或者您認為這可能是由奢侈品消費的某些轉變所推動的？

Okay. Thank you, Alicia. The first one, the digital marketing and IT, it's not related to the low base, so that's to start with. What we have seen is, the online traffic is becoming more and more -- it's becoming more and more expensive. And the different ways of doing advertising online is becoming more and more complex. Therefore, brands needs to increase the investment to generate the same traffic compared with the past.

好的。謝謝你，艾莉西亞。第一個是數位行銷和IT，它與低基數無關，所以這是一開始。我們看到的是，線上流量變得越來越多——它變得越來越貴。網路廣告的不同方式正變得越來越複雜。因此，品牌需要加大投入才能產生與過去相同的流量。

So that requires brands to invest more in the digital marketing. And also, the content is becoming more important. So many of our brands are willing to invest on content to drive a better customer kind of -- the conversation from an online perspective, and some of the content, the brands are using China-for-China strategy. So, for example, in the past, some of the content are being made in Europe and in the U.S. had headquarters.

因此，這就需要品牌在數位行銷上投入更多。而且，內容也變得越來越重要。我們的許多品牌都願意在內容上進行投資，以吸引更好的客戶——從線上角度進行對話，以及一些內容，這些品牌正在使用中國為中國的策略。例如，在過去，有些內容是在歐洲製作的，而總部在美國。

Now increasingly, with Baozun offering high-quality live streaming center in Shanghai, we have actually managed to acquire those business, which used to be done in the headquarter. So those are on the digital marketing.

現在越來越多的寶尊在上海提供了高品質的直播中心，我們實際上已經成功地收購了那些原來在總部做的業務。這些都是關於數位行銷的。

On IT, it's more our IT capability is helping the brand to increase the long-term capability and with the topline growth, a slowdown from the brands. The brands are spending money on transforming their internal processes and systems and the digital is becoming a key for most of our clients. So that's why they start to spend more on IT. So, those are on digital marketing and IT.

在IT方面，更多的是我們的IT能力正在幫助品牌提高長期能力，隨著營收的成長，品牌的成長放緩。這些品牌正在花錢改造其內部流程和系統，數位化正在成為我們大多數客戶的關鍵。這就是他們開始在 IT 上投入更多資金的原因。這些是關於數位行銷和 IT 的。

In relation to your question on luxury, I think it's a mixed result for the luxury brand. Overall, the sector is slowing down a little bit because of the consumer confidence and also the consumption, people are spending less frequent on the luxury products. On the other hand, some brands are increasing their penetration on e-commerce, because in the past, some of the e-commerce -- some of the luxury brands that have low penetration online business, mainly focus on offline.

關於你關於奢侈品的問題，我認為對於奢侈品牌來說，結果好壞參半。總體而言，由於消費者信心增強以及人們在奢侈品上的支出減少，該行業正在略有放緩。另一方面，一些品牌正在加大對電商的滲透，因為過去一些電商——一些線上滲透率較低的奢侈品牌，主要集中在線下。

With those brands start to move some of their business online, we still see the luxury has opportunity for Baozun to capture. Okay, Alicia?

隨著這些品牌開始將部分業務轉移到線上，我們仍然看到奢侈品有機會被寶尊抓住。好吧，艾莉西亞？

Thank you, Arthur. Yes. Thank you, Arthur. Thank you.

謝謝你，亞瑟。是的。謝謝你，亞瑟。謝謝。

Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Wendy Sun for closing remarks.

謝謝。我們的問答環節到此結束。我想將會議轉回給孫溫迪致閉幕詞。

Thank you, operator. On behalf of the Baozun management team, we would like to thank you again 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，接線生。我們謹代表寶尊管理團隊再次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。

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

謝謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。