Vipshop Holdings Ltd (VIPS) 2022 Q1 法說會逐字稿

Ladies and gentlemen, good day, everyone, and welcome to Vipshop Holdings Limited First Quarter 2022 Earnings Conference Call.

女士們、先生們，大家好，歡迎參加唯品會控股有限公司2022年第一季度業績電話會議。

At this time, I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor Relations.

現在我想轉給唯品會投資者關係部負責人鄭洁女士。

Thank you, operator. Hello, everyone, and thank you for joining Vipshop's first quarter 2022 earnings conference call. With us today are Eric Shen, our Co-Founder, Chairman, and CEO; and David Cui, our CFO.

謝謝你，接線員。大家好，感謝大家參加唯品會2022年第一季度財報電話會議。今天與我們在一起的有我們的聯合創始人、董事長兼首席執行官 Eric Shen；以及我們的首席財務官 David Cui。

Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our Safe Harbor statements in our earnings release and the public filings with the Securities and Exchange Commission, which also applies to this call to the extent any forward-looking statements may be made.

在管理層開始準備好的發言之前，我想提醒您，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述受到以下風險和不確定性的影響：可能導致實際結果與我們當前的預期存在重大差異。潛在的風險和不確定性包括但不限於我們的收益發布中的安全港聲明以及向美國證券交易委員會提交的公開文件中概述的風險和不確定性，這些風險和不確定性也適用於本次電話會議，只要任何前瞻性陳述可能存在製成。

Please note that certain financial measures used on this call such as non-GAAP operating income, non-GAAP net income and non-GAAP net income per ADS are not presented in accordance with U.S. GAAP. Please refer to our earnings release for details relating to the reconciliations of our non-GAAP measures to GAAP measures.

請注意，本次電話會議中使用的某些財務指標，例如非 GAAP 營業收入、非 GAAP 淨利潤和非 GAAP 每份美國存託股淨利潤，並非按照美國 GAAP 列示。請參閱我們的收益發布，了解有關我們的非公認會計原則措施與公認會計原則措施的調節的詳細信息。

With that, I would now like to turn the call over to Mr. Eric Shen.

現在我想把電話轉給沉先生。

Good morning and good evening, everyone. Welcome, and thank you for joining our first quarter 2022 earnings conference call.

大家早上好，晚上好。歡迎並感謝您參加我們的 2022 年第一季度收益電話會議。

We had a slower than expected quarter due to the resurgence of COVID-19 cases in China on top of already challenging macro environment, which dampened the general customer sentiment.

由於中國的新冠肺炎 (COVID-19) 病例在本已充滿挑戰的宏觀環境下再次出現，我們的季度業績低於預期，這削弱了總體客戶信心。

Starting in March with tightened controls and city lockdowns in many places, our warehousing and the logistics capacity has been undergoing serious delays or disruptions. This has undermined our fulfillment efficiency and further discouraged consumers from spending, especially on discretionary items.

3月份開始，隨著多地管控收緊、封城，我們的倉儲和物流能力出現了嚴重的延誤或中斷。這降低了我們的履行效率，並進一步阻礙了消費者的消費，尤其是在非必需品上。

Despite great pressure on sales and consumption, we remained on track to execute on our merchandising strategy to further strengthen our competitiveness for the long-term. We are delighted to see that our proven business model enabled us to sustain a healthy level of profit and achieve resilient margins through disciplined operations.

儘管銷售和消費面臨巨大壓力，我們仍將繼續執行我們的營銷策略，以進一步增強我們的長期競爭力。我們很高興看到，經過驗證的業務模式使我們能夠維持健康的利潤水平，並通過嚴格的運營實現有彈性的利潤率。

In the first quarter, we continued to provide support for core brand, offering them more leverages to improve sales through our upgraded merchant platform. We also brought in many new and trendy brands, enriching product selections on our platform. Furthermore, we expanded our high-value customers. Our active Super VIP customer grew by 37% year-over-year and contributed about 38% of online net GMV in the first quarter.

第一季度，我們繼續為核心品牌提供支持，通過升級後的商戶平台為核心品牌提供更多槓桿來提高銷售。我們還引入了許多新潮品牌，豐富了平台的產品選擇。此外，我們還擴大了高價值客戶。我們的活躍超級 VIP 客戶同比增長 37%，貢獻了第一季度在線淨 GMV 的約 38%。

With the COVID-19 outbreak developing, we have responded quickly to changing consumer demands. By leveraging our merchandising capabilities, we added a range of product offerings in non-apparel categories, including products for everyday use. This helped in part offset the soft demand in apparel categories.

隨著 COVID-19 疫情的發展，我們快速響應了不斷變化的消費者需求。通過利用我們的銷售能力，我們在非服裝類別中添加了一系列產品，包括日常使用的產品。這在一定程度上抵消了服裝類別的疲軟需求。

While we remain cautious ahead amid ongoing COVID-19 flare-ups, we are strongly committed to our strategic positioning as a discount platform for branded products. We will take this opportunity to look to create exceptional value for our brand partners and the consumers.

儘管在新冠肺炎 (COVID-19) 疫情持續爆發的情況下，我們仍保持謹慎態度，但我們堅定致力於品牌產品折扣平台的戰略定位。我們將藉此機會為我們的品牌合作夥伴和消費者創造卓越的價值。

At this point, let me hand over the call to our CFO, David Cui, who will go over our financial results.

現在，讓我將電話轉交給我們的首席財務官 David Cui，他將審查我們的財務業績。

Thanks, Eric, and hello, everyone. In the first quarter, despite soft top-line performance due to macro headwinds, our margins held up relatively well, thanks to our initiatives to manage cost and expenses with greater discipline.

謝謝埃里克，大家好。在第一季度，儘管由於宏觀不利因素導致營收表現疲軟，但由於我們採取了更嚴格的紀律來管理成本和費用，我們的利潤率保持相對較好。

Our gross margin showed resilience after we implemented a number of cost-saving measures. For example, we were able to effectively improve the margin profile of many product categories after we became more focused on shifting traffic and resources to core brands, while deprioritizing low-quality brands.

在我們實施了一系列成本節約措施後，我們的毛利率表現出了彈性。例如，當我們更加專注於將流量和資源轉移到核心品牌，同時降低低質量品牌的優先級後，我們能夠有效改善許多產品類別的利潤率。

Our non-GAAP net margin also stayed well above 5%, as we became more efficient in marketing spend. Looking ahead, we will continue to optimize operational efficiency and make every effort to deliver healthy and sustainable profitability.

我們的非 GAAP 淨利潤率也遠高於 5%，因為我們的營銷支出變得更加高效。展望未來，我們將繼續優化運營效率，全力實現健康可持續的盈利能力。

In addition, during the quarter, we had fully utilized the $500 million share buyback program that we announced last year. On March 31 this year, we announced another $1 billion share buyback program, which we may execute from time to time over a period of 24 months. This demonstrates our confidence in our business potential and our commitment to creating shareholder value for the long-term.

此外，本季度我們還充分利用了去年宣布的 5 億美元股票回購計劃。今年3月31日，我們宣布了另一項10億美元的股票回購計劃，我們可能會在24個月的時間內不時執行該計劃。這表明我們對我們的業務潛力充滿信心，並致力於為股東創造長期價值。

Now moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that our financial numbers presented below are in Renminbi, and all the percentage changes are year-over-year changes, unless otherwise noted.

現在轉向我們詳細的季度財務亮點。在開始之前，我想澄清一下，除非另有說明，下面列出的財務數據均以人民幣為單位，所有百分比變化均為同比變化。

Total net revenues for the first quarter of 2022 were RMB [25.2 billion] (corrected by company after the call) as compared with RMB 28.4 billion in the prior year period, primarily attributable to soft consumer demand for discretionary categories and adverse impact on warehouse and logistics networks caused by COVID-19 resurgence in China.

2022 年第一季度的總淨收入為人民幣 [252 億元]（公司在電話會議後修正），而上年同期為人民幣 284 億元，主要歸因於消費者對非必需品類別的需求疲軟以及對倉儲和倉儲的不利影響。 COVID-19 在中國死灰復燃造成的物流網絡。

Gross profit was RMB 5.0 billion as compared with RMB 5.6 billion in the prior year period. Gross margin increased to 19.8% from 19.7% in the prior year period.

毛利潤為人民幣50億元，去年同期為人民幣56億元。毛利率從去年同期的19.7%增至19.8%。

Total operating expenses decreased by 11.0% year-over-year to RMB 3.9 billion from RMB 4.4 billion in the prior year period. As a percentage of the total net revenues, total operating expenses was 15.4%, which stayed flat as compared with the corresponding period in 2021.

總營業費用由上年同期的人民幣44億元降至人民幣39億元，同比下降11.0%。總運營費用佔總淨收入的比例為15.4%，與2021年同期持平。

Fulfillment expenses decreased by 5.5% year-over-year to RMB 1.7 billion from RMB 1.8 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses was 6.7% as compared with 6.3% in the prior year period.

履行費用同比下降 5.5%，從上年同期的人民幣 18 億元降至人民幣 17 億元。履行費用佔總淨收入的百分比為 6.7%，而去年同期為 6.3%。

Marketing expenses decreased by 41.3% year-over-year to RMB 759.3 million from RMB 1.3 billion in the prior year period, primarily attributable to more prudent marketing strategy. As a percentage of total net revenue, marketing expenses decreased to 3.0% from 4.6% in the prior year period.

營銷費用由上年同期的人民幣13億元增至人民幣7.593億元，同比下降41.3%，主要得益於更加審慎的營銷策略。營銷費用佔總淨收入的百分比從去年同期的 4.6% 下降至 3.0%。

Technology and content expenses increased to RMB 390.4 million from RMB 337.5 million in the prior year period. As a percentage of total net revenues, technology and content expenses increased to 1.5% from 1.2% in the prior year period.

技術和內容費用從去年同期的人民幣3.375億元增至人民幣3.904億元。技術和內容支出佔總淨收入的百分比從去年同期的 1.2% 上升至 1.5%。

General and administrative expenses were RMB 1.1 billion, as compared with RMB 956.7 million in the prior year period. As a percentage of total net revenue, general and administrative expenses was 4.2% as compared with 3.4% in the prior year period.

一般及行政費用為人民幣 11 億元，上年同期為人民幣 9.567 億元。一般及管理費用占淨收入總額的百分比為 4.2%，而上年同期為 3.4%。

Income from operations was RMB 1.3 billion as compared with RMB 1.5 billion in the prior year period. Operating margin was 5.1% as compared with 5.3% in the prior year period.

營業收入為人民幣13億元，上年同期為人民幣15億元。營業利潤率為 5.1%，上年同期為 5.3%。

Non-GAAP income from operations was RMB 1.5 billion, as compared with RMB 1.7 billion in the prior year period. Non-GAAP operating margin was 6.0% as compared with 6.1% in the prior year period.

非公認會計準則運營收入為人民幣 15 億元，而上年同期為人民幣 17 億元。非 GAAP 營業利潤率為 6.0%，上年同期為 6.1%。

Net income attributable to Vipshop's shareholders was RMB 1.1 billion as compared with RMB 1.5 billion in the prior year period. Net margin attributable to Vipshop's shareholders was 4.3% as compared with 5.4% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS was RMB 1.61, as compared with RMB 2.18 in the prior year period.

歸屬於唯品會股東的淨利潤為人民幣11億元，上年同期為人民幣15億元。唯品會股東淨利潤為4.3%，去年同期為5.4%。每股攤薄後歸屬於唯品會股東的淨利潤為人民幣1.61元，上年同期為人民幣2.18元。

Non-GAAP net income attributable to Vipshop's shareholders was RMB 1.4 billion as compared with RMB 1.7 billion in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders was 5.6% as compared with 6.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS was RMB 2.09 as compared with RMB 2.41 in the prior year period.

非美國通用會計準則歸屬於唯品會股東的淨利潤為人民幣14億元，上年同期為人民幣17億元。非美國通用會計準則歸屬於唯品會股東的淨利潤率為5.6%，而去年同期為6.0%。非美國通用會計準則每股稀釋美國存託股歸屬於唯品會股東的淨利潤為人民幣2.09元，上年同期為人民幣2.41元。

As of March 31, 2022, the company had cash and cash equivalents and restricted cash of RMB 14.3 billion and short-term investments of RMB 5.0 billion.

截至2022年3月31日，公司擁有現金及現金等價物及限制性現金143億元，短期投資50億元。

Looking forward to the second quarter of 2022, we expect that our total net revenue to be between RMB 22.2 billion and RMB 23.7 billion, representing a year-over-year decrease rate of approximately 25% to 20%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions, which is subject to change.

展望2022年第二季度，我們預計淨收入總額將在人民幣222億元至人民幣237億元之間，同比下降約25%至20%。請注意，該預測反映了我們對市場和運營狀況的當前初步看法，可能會發生變化。

With that, I would now like to open the call to Q&A.

現在，我想開始問答環節。

(Operator Instructions) Our first question is from Thomas Chong with Jefferies.

（操作員說明）我們的第一個問題來自 Jefferies 的 Thomas Chong。

My first question is about the second quarter guidance. Can management comment about the impact of pandemic to our business performance in April and so far in the month of May? And my second question is about the second half business momentum. Can management comment about the recovery momentum that we should expect as well as the margin outlook for the year?

我的第一個問題是關於第二季度的指導。管理層能否評論一下疫情對我們四月份和五月份迄今為止的業務表現的影響？我的第二個問題是關於下半年的業務勢頭。管理層能否評論一下我們應該預期的複蘇勢頭以及今年的利潤率前景？

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The guidance for the second quarter actually reflects our current look for the uncertainties from the ongoing and potential restrictions to control the COVID outbreak as well as the general weak consumer sentiment. Our business has actually been quite normal until in the middle of March when the Omicron outbreak had significantly impacted our business. Our warehousing and logistics capacity was disrupted or delayed and the whole supply chain faced a lot of problems. Some of our warehouses were closed down and logistics got delayed and also suppliers also had a restraint in terms of shipping and handling parcels.

第二季度的指引實際上反映了我們目前對控制新冠疫情爆發的持續和潛在限制以及普遍疲弱的消費者信心所帶來的不確定性的看法。我們的業務實際上一直很正常，直到 3 月中旬 Omicron 疫情對我們的業務產生了重大影響。我們的倉儲和物流能力受到干擾或延誤，整個供應鏈面臨很多問題。我們的一些倉庫被關閉，物流延遲，供應商在運輸和處理包裹方面也受到限制。

Entering into April, we -- and until now May, we actually had been facing continued pressure. I think till today, we still have over 1 million orders that cannot be delivered because of various reasons, including suppliers based actually in restricted regions and that actually undermined the fulfillment efficiency. So we expect for May and June, we haven't seen clear signs of recovery. And we actually don't expect that the COVID impact will disappear very soon.

進入四月份，我們——直到現在五月份，我們實際上一直面臨著持續的壓力。我想直到今天，我們還有超過100萬個訂單因為各種原因無法交付，其中包括供應商實際上位於限制區域，這實際上降低了履行效率。因此，我們預計 5 月和 6 月，我們還沒有看到明顯的複蘇跡象。事實上，我們並不認為新冠疫情的影響會很快消失。

Especially, we have seen other places like Beijing face restrictions or controls and also consumer sentiment, consumer confidence has not come back. And we also will see that the latest NBS data point to a very sluggish performance for discretionary items, including apparel. So generally speaking, we don't feel very optimistic for the momentum for the second half, but we don't expect it will be significantly worse as well.

特別是，我們看到北京等其他地方面臨限製或控制，消費者情緒、消費者信心也沒有恢復。我們還將看到，國家統計局的最新數據顯示，包括服裝在內的非必需品的表現非常低迷。所以總體來說，我們對下半年的勢頭不是很樂觀，但我們預計下半年的情況也不會明顯惡化。

On the margin side, I think we are pretty confident in maintaining a healthy level of profit and margins. While we face a lot of challenges and uncertainties, we also maintain a very high level of discipline in our operations. We managed our cost and expenses much more carefully. We scaled back a lot of low ROI spending. So we are pretty confident that we will deliver healthy and sustainable profitability for this year.

在利潤方面，我認為我們對保持健康的利潤和利潤水平非常有信心。儘管我們面臨許多挑戰和不確定性，但我們在運營中也保持著非常高的紀律。我們更加仔細地管理成本和開支。我們削減了大量低投資回報率的支出。因此，我們非常有信心今年將實現健康且可持續的盈利能力。

Our next question is from Alicia Yap with Citigroup.

我們的下一個問題來自花旗集團的 Alicia Yap。

I have a question related to the expansion into the non-apparel products. So can management elaborate a little bit more detail on the various kinds of the products on this category? And can you remind us, is this a strategy -- strategic change or the strategic business model shift or is this just a temporary approach so that we can navigate through the soft demand for the apparel business?

我有一個有關擴展到非服裝產品的問題。那麼管理層能否詳細介紹一下該類別的各種產品？您能否提醒我們，這是一種戰略——戰略變革或戰略業務模式轉變，還是這只是一種臨時方法，以便我們能夠應對服裝業務的疲軟需求？

And then second question is, any color in terms of what are some of the current inventory level for the apparel brand is? Can we get any kind of like leverage? Or is it just because consumption is so weak, so even though there's a lot of inventory that we can do some promotion discount, but there's still lack of the demand? So any color you can share would be good.

第二個問題是，任何顏色的服裝品牌目前的庫存水平是多少？我們可以獲得任何類似的槓桿嗎？還是只是因為消費太弱，所以雖然庫存很多，可以做一些促銷折扣，但需求還是不足？所以你能分享的任何顏色都會很好。

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First, on standardized products. Actually, I think as a company, we still focus on apparel category. Currently, we still have 70% GMV from apparel and the rest 30% from standardized products. Standardized products are very good complement to our overall platform. They can help us to cater to a diverse range of customer needs, which actually various depending on season and a lot of other factors. For example, in summer, typically customers would like to buy a lot of standardized products in addition to summer clothing. And also, we approach standardized products very carefully. For example, we want to make sure we have the unique supply from top brand and with a very competitive pricing. We try to meet customer needs, especially when they shop for clothing, they will have something else to choose from to provide them with a one-stop shopping experience. So this is our overall strategy on standardized products.

第一，在標準化產品上。其實我覺得作為一家公司，我們還是專注於服裝品類。目前，我們仍有70%的GMV來自服裝，其餘30%來自標準化產品。標準化產品是對我們整體平台的很好補充。它們可以幫助我們滿足各種客戶需求，這些需求實際上因季節和許多其他因素而異。例如，在夏季，除了夏季服裝之外，顧客通常還想購買很多標準化產品。而且，我們非常謹慎地對待標準化產品。例如，我們希望確保我們擁有頂級品牌的獨特供應和非常有競爭力的價格。我們盡力滿足客戶的需求，特別是當他們購買服裝時，他們會有其他的選擇，為他們提供一站式的購物體驗。所以這就是我們標準化產品的總體策略。

And given the COVID-19 outbreak, I think we are proactively adding our non-apparel product offering, especially including our products for everyday use to meet customer needs. This is in line with our overall strategy to set on standardized products. We will gradually improve the contribution from these standardized products to improve the overall customer experience on our platform and also to improve their overall ARPU.

鑑於新冠肺炎 (COVID-19) 疫情的爆發，我認為我們正在積極增加非服裝產品供應，特別是包括日常使用的產品，以滿足客戶需求。這符合我們標準化產品的總體戰略。我們將逐步提高這些標準化產品的貢獻，以改善我們平台上的整體客戶體驗，並提高他們的整體 ARPU。

And on brand inventory, apparently, a lot of our brand partners are very hard hit by the COVID flare up. They faced a lot of store disclosures and they have a lot of supply. But generally speaking, I think we have the ability to secure a lot of quality inventory from brands and help them to sell through these inventories very efficiently. But at the same time, some of the brand partners are also facing continued pressure, especially when they are based in restricted regions, including Shanghai.

在品牌庫存方面，顯然，我們的許多品牌合作夥伴都受到了新冠疫情的嚴重打擊。他們面臨著大量的商店信息披露，而且他們有大量的供應。但總的來說，我認為我們有能力從品牌那裡獲得大量優質庫存，並幫助他們非常有效地銷售這些庫存。但與此同時，一些品牌合作夥伴也面臨著持續的壓力，特別是當他們的總部位於上海等受限制地區時。

So this is a positive to our online business. I think although the -- generally speaking, the market is in a downturn, but it's not that bad. As long as we can help a brand to sell through their inventory, I think we will be providing a valuable proposition for them.

所以這對我們的在線業務來說是積極的。我認為，雖然總體來說，市場處於低迷狀態，但情況並沒有那麼糟糕。只要我們能夠幫助品牌通過庫存進行銷售，我認為我們將為他們提供有價值的建議。

Can I have a quick follow-up on the margins for the standardized product given the mix. How should we think about the total gross margin trends going forward or in the near-term?

我能否快速跟進考慮到組合的標準化產品的利潤。我們應該如何看待未來或近期的總毛利率趨勢？

For the standardized items, we carefully choose what products that we will carry. Generally, we will not accept the product that's with very low margin. So overall, the impact of the margin is not that bad. And also, the apparel product still represents 70% of our total carrying. So we are committed to the overall gross margin stability.

對於標準化項目，我們會仔細選擇我們將攜帶的產品。一般來說，我們不會接受利潤很低的產品。所以總體來說，利潤率的影響並沒有那麼糟糕。而且，服裝產品仍然占我們總庫存的 70%。所以我們致力於整體毛利率的穩定。

Our next question comes from Ronald Keung with Goldman Sachs.

我們的下一個問題來自高盛的 Ronald Keung。

(foreign language)

（外語）

My first question is on your second quarter revenue guidance, whether that assumes a similar growth rate for May and June of what we've seen in the April run rates and some expectations on June 16 for us. Any expectations on that that we're assuming some of the stronger growth better into the month of June and some of the cancellation rates that we are seeing?

我的第一個問題是關於第二季度收入指導，是否假設 5 月和 6 月的增長率與我們在 4 月運行率中看到的增長率以及 6 月 16 日的一些預期類似。對此我們是否有任何預期，即我們假設 6 月份會出現一些更強勁的增長，以及我們看到的一些取消率？

Second is on free cash flow, we've seen a reduction of that. So I want to hear what were the reasons behind? And besides the buyback program that we've been launched, want to hear any dividend policies that -- any updates on any of those, any potential and also for Hong Kong listing?

其次是自由現金流，我們看到自由現金流有所減少。所以我想听聽背後的原因是什麼？除了我們已經啟動的回購計劃外，還想听聽任何股息政策——其中任何一項的最新情況、任何潛力以及香港上市的情況嗎？

(foreign language)

（外語）

The second quarter guidance actually already factored in the April and the May run rate. I think it's the latter half of May. And we -- from our observation, we have had similar downside trend as we saw in April and we expect June will continue this momentum for sure. It's going to be down on a year-over-year basis. And coupled with COVID-19 cases with related restrictions and controls are still going on and the consumption sentiment has not come back yet. So that's creating the reality for this quarter to date. So our second quarter guidance is just a reflection of that reality.

第二季度指導實際上已經考慮了 4 月和 5 月的運行率。我認為是五月下旬。根據我們的觀察，我們出現了與 4 月份類似的下行趨勢，我們預計 6 月份肯定會繼續這種勢頭。它將逐年下降。再加上COVID-19病例以及相關的限制和控制仍在繼續，消費情緒尚未恢復。這就是本季度迄今為止的現實。因此，我們第二季度的指導只是這一現實的反映。

In terms of cancellation rate, absolutely, actually from the middle of March, we've seen a cancellation of orders going up due to logistics delay. And the cancellation rate actually went up 6 percentage points year-over-year and it has caused very significant losses to us. And we see increasing cancellation of orders from customers actually has dampened the general sentiment to the e-commerce sector. I think we for sure hope that with the restrictions gradually lifted, we expect cancellation rates to normalize over time.

就取消率而言，絕對的，實際上從三月中旬開始，我們已經看到由於物流延誤而取消的訂單在增加。而取消率實際上同比上升了6個百分點，給我們造成了非常大的損失。我們看到越來越多的客戶取消訂單實際上削弱了電子商務行業的整體情緒。我認為我們肯定希望隨著限制的逐步取消，我們預計取消率會隨著時間的推移而正常化。

We have been profitable for consequent -- over like 38 quarters. So we are confident that we will continue to making profit even though we encountered a difficult time and softer business. So in general, the cash -- free cash flow should mirror our profitability. In Q1, our operating cash flow turned negative because we made a lot of payments to suppliers and for other miscellaneous expenses. So the decrease in accrued expenses and accounts payable is the main reason for the negative cash flow. In the long run, the cash flow should mirror our profitability.

在接下來的 38 個季度裡，我們一直保持盈利。因此，我們有信心，即使我們遇到困難時期和業務疲軟，我們仍將繼續盈利。因此，總的來說，現金——自由現金流應該反映我們的盈利能力。第一季度，我們的經營現金流轉為負值，因為我們向供應商支付了大量款項以及其他雜項費用。因此，預提費用和應付賬款的減少是現金流為負的主要原因。從長遠來看，現金流應該反映我們的盈利能力。

And then in terms of the Hong Kong listing, so that is still on our radar. Our board and the management team are still evaluating the options. And we still got some time to execute the plan and execute the Hong Kong listing plan. The dividends, so we -- currently, we don't have a plan to pay out dividends, but we are committed to our share buyback program.

然後就香港上市而言，這仍然在我們的關注範圍內。我們的董事會和管理團隊仍在評估這些選擇。而且我們還有一些時間來執行計劃，執行香港上市計劃。股息，所以我們目前沒有支付股息的計劃，但我們致力於我們的股票回購計劃。

Our next question is from Natalie Wu with Haitong International.

我們的下一個問題來自海通國際的 Natalie Wu。

(foreign language)

（外語）

So my question is regarded with the product mix shift. Since you have mentioned that you decided to shift the product mix towards the standardized goods in the upcoming future. Just wondering, can you give us more color about exactly which categories of the standardize products you are referring to? Because back in 2018 and '19, you've also tried some category expansion. So just wondering if there is a difference compared with last round of standardized product shift. Also, how should we differentiate ourselves from other general e-commerce platforms if we shift the way to standardized products?

所以我的問題是關於產品組合的轉變。正如您提到的，您決定在不久的將來將產品組合轉向標準化產品。只是想知道，您能否詳細說明您所指的標準化產品的具體類別？因為早在 2018 年和 19 年，你們也嘗試過一些品類擴張。所以只是想知道與上一輪標準化產品轉變相比是否有差異。另外，如果轉向標準化產品，我們應該如何與其他通用電商平台區分開來？

(foreign language)

（外語）

In terms of our strategy on standardized products, actually all the categories are already on our platform, including beauty products, home goods, kitchenware, life and grocery and healthcare products, et cetera. These non-sized products are standardized items we are looking at. We will manage the product offerings very carefully in each category, not necessarily as many as SKUs as you see on other platforms. We want to make sure that we can have very quality supply from brands, and sometimes, it may be unique supply from the top brands. And there has to be very competitive pricing and a very reasonable gross margin. So we will approach standardized items very carefully.

從我們的標準化產品策略來看，實際上所有的品類都已經在我們的平台上，包括美容產品、家居用品、廚具、生活雜貨和保健品等等。這些無尺寸產品是我們正在尋找的標準化產品。我們將非常仔細地管理每個類別的產品供應，不一定像您在其他平台上看到的那樣多的 SKU。我們希望確保我們能夠從品牌那裡獲得非常優質的供應，有時，它可能是來自頂級品牌的獨特供應。而且必須有非常有競爭力的定價和非常合理的毛利率。因此，我們將非常謹慎地處理標準化項目。

Currently, we have 30% from standardized items. Our goal is to gradually improve the contribution to, let's say, 33% over time, an increase of 10% on a current basis. And standardized items are not going to be a drag on the overall gross margin and it actually improves ARPU from our customers. So over the time, we think we will have a more balanced customer experience for our platform.

目前，我們有30%來自標準化項目。我們的目標是隨著時間的推移逐步提高貢獻率，比如說在目前的基礎上增加 10%，達到 33%。標準化產品不會拖累整體毛利率，而且實際上會提高客戶的 ARPU。因此，隨著時間的推移，我們認為我們的平台將擁有更加平衡的客戶體驗。

Our next question comes [Robin Long] with Daiwa.

我們的下一個問題來自 Daiwa 的 [Robin Long]。

This is Robin asking on behalf of John Choi. This quarter, the gross margin is slightly higher than our expectation. Is it because of the change in the category mix? And as I remember the SVIP, the members, they carry lower margins, but the mix this quarter is also higher. So I wonder what is the reason that this quarter we see a more better than expected gross margin? And also, the trend in the second half if the SVIP continues to increase the mix. Are we going to see any impact on the gross margin? And the second question is, could management comment on the user growth trend in the second half?

這是 Robin 代表 John Choi 提出的問題。本季度毛利率略高於我們的預期。是因為品類結構的變化嗎？我記得 SVIP 會員的利潤率較低，但本季度的組合也較高。所以我想知道本季度我們看到毛利率好於預期的原因是什麼？而且，下半年的趨勢是SVIP繼續增加組合。我們會看到對毛利率的影響嗎？第二個問題是，管理層能否評論下半年的用戶增長趨勢？

(foreign language)

（外語）

So this year, we have taken many cost saving measures to improve our margin. That includes the selection of the products and the brands carried on our platforms. For example, we were able to improve the margin profile of many categories after we shifted our resources to the core brands that we selected and deprioritized some of the non-core brands. So that helps improve our margin.

所以今年我們採取了很多節省成本的措施來提高我們的利潤率。這包括我們平台上的產品和品牌的選擇。例如，在我們將資源轉移到我們選擇的核心品牌並降低一些非核心品牌的優先級後，我們能夠改善許多類別的利潤狀況。這有助於提高我們的利潤率。

For the coming quarters, we will continue to be disciplined and make sure that we have a healthy margin and eventually achieve a healthy bottom line and net margin. And on the category mix, the apparels are still representing 70% of our total GMV, right, and then supplemented by the standardized products. And as we talked about it earlier, for the standardized products, we also carefully choose what to carry to make sure that our overall gross margin will remain stable and potentially we could improve the gross margin also.

在未來幾個季度，我們將繼續遵守紀律，確保我們擁有健康的利潤率，並最終實現健康的利潤和淨利潤。在品類組合上，服裝仍然占我們總GMV的70%，對吧，然後以標準化產品為補充。正如我們之前談到的，對於標準化產品，我們也會仔細選擇要攜帶的產品，以確保我們的整體毛利率保持穩定，並且我們也有可能提高毛利率。

In terms of the impact of the Super VIP and we know the Super VIP has slightly lower gross margin because of the benefits we provided to the group. But since they spend more, they spend a lot much more and then their frequencies, their ARPU are much higher, so overall, it's just a matter of time when they can contribute positively to the overall gross margin. So it is kind of a balance. And then -- but in summary, we are committed to the overall improvement of the gross margin.

就超級VIP的影響而言，我們知道超級VIP的毛利率略低，因為我們為集團提供了福利。但由於他們花費更多，花費更多，然後他們的頻率、ARPU 更高，所以總的來說，他們能為整體毛利率做出積極貢獻只是時間問題。所以這是一種平衡。然後 - 但總而言之，我們致力於毛利率的整體提高。

(foreign language)

（外語）

In terms of customer growth for the second half, I think our customer growth has been relatively in line with our overall business performance and given that our ARPU has actually been quite stable over time. But we will evaluate our marketing spend from time to time, especially given the many uncertainties going on, we are apparently facing a much less favorable customer acquisition environment. So instead of just throwing money away, we will focus on acquiring high-quality customers. We don't want to invest too much on low ROI customers and we will evaluate their lifetime value very carefully to ensure that they will be a valuable customer to our platform. So we are committed to customer growth. And we believe that for the quarters ahead we will maintain a relatively stable customer base.

就下半年的客戶增長而言，我認為我們的客戶增長與我們的整體業務表現相對一致，並且考慮到我們的 ARPU 實際上一直相當穩定。但我們會不時評估我們的營銷支出，特別是考慮到存在的許多不確定性，我們顯然面臨著一個不太有利的客戶獲取環境。所以我們不會只花錢，而是專注於獲取優質客戶。我們不想在低投資回報率客戶上投入太多，我們將非常仔細地評估他們的終身價值，以確保他們成為我們平台的有價值的客戶。因此，我們致力於客戶增長。我們相信，未來幾個季度我們將保持相對穩定的客戶群。

Due to time constraints, that concludes today's question and answer session. At this time, I will turn the conference back to Jessie for any closing remarks.

由於時間關係，今天的問答環節到此結束。此時，我將把會議轉回由 Jessie 進行閉幕致辭。

Thank you for taking the time to join us today. If you have any questions or follow-up, please don't hesitate to contact our team. We look forward to speaking with you next quarter.

感謝您今天抽出時間加入我們。如果您有任何疑問或後續事宜，請隨時聯繫我們的團隊。我們期待下個季度與您交談。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。