Vipshop Holdings Ltd (VIPS) 2020 Q4 法說會逐字稿

Ladies and gentlemen, good day, everyone, and welcome to Vipshop Holdings Limited's Fourth Quarter and Full Year 2020 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2020年第四季度及全年業績電話會議。

At this point, I would like to turn the call to Ms. Jessie Fan, Vipshop's Director of Investor Relations. Please proceed.

在此，我想請唯品會投資者關係總監範潔女士致電。請繼續。

Thank you, operator. Hello, everyone, and thank you for joining Vipshop's Fourth Quarter and Full Year 2020 Earnings Conference Call.

謝謝你，接線員。大家好，感謝您參加唯品會2020年第四季度及全年業績電話會議。

Before we begin, I will read the safe harbor statement. During this conference call, we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations, assumptions, estimates and projections about Vipshop Holdings Limited and its industry.

在我們開始之前，我將閱讀安全港聲明。在本次電話會議中，我們將根據我們目前對唯品會控股有限公司及其行業的預期、假設、估計和預測，做出 1995 年《私人證券訴訟改革法案》含義內的前瞻性聲明。

All statements other than statements of historical facts we may make during this call are forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as anticipate, believe, continue, estimate, expect, intend, is or are likely to, may, plan, should, will, aim, potential or other similar expressions.

除歷史事實陳述外，我們在本次電話會議中可能做出的所有陳述均為前瞻性陳述。在某些情況下，這些前瞻性陳述可以通過諸如預期、相信、繼續、估計、期望、打算、是或可能、可能、計劃、應該、將、目標、潛力或其他類似的詞語或短語來識別表達式。

These forward-looking statements speak only as of the date hereof and are subject to change at any time. And we have no obligation to update these forward-looking statements.

這些前瞻性陳述僅代表截至本文發布之日的情況，並可能隨時更改。我們沒有義務更新這些前瞻性陳述。

Joining us on today's call are Eric Shen, our Co-Founder, Chairman and CEO; and David Cui, our CFO. At this time, I would like to turn the call over to Mr. Eric Shen.

加入我們今天電話會議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。這時我想把電話轉給Eric Shen先生。

Good morning, and good evening, everyone. Welcome, and thank you for joining our fourth quarter and full year 2020 earnings conference call.

大家早上好，晚上好。歡迎並感謝您參加我們的 2020 年第四季度和全年收益電話會議。

We finished the year of 2020 with strong financial and operational results in the fourth quarter. During the quarter, our total GMV increased by 25% year-over-year to CNY 59.3 billion from CNY 47.6 billion in the same period last year. Continuing the trend of accelerated growth, specifically, GMV for our core apparel-related categories increased even faster by 28% year-over-year, driven by the robust growth in our numbers of active customers, which increased by 37% year-over-year in the fourth quarter.

我們在第四季度以強勁的財務和運營業績結束了 2020 年。本季度，我們的總 GMV 同比增長 25%，從去年同期的 476 億元人民幣增至 593 億元人民幣。繼續保持加速增長的趨勢，特別是在我們的活躍客戶數量強勁增長的推動下，我們核心服裝相關品類的 GMV 同比增長更快，達到 28%，同比增長 37%。年第四季度。

Our new customers grew fast than total active customers during the quarter, showing that our differentiated offerings procured by our professional merchandising team are becoming more attractive to customers who did not shop with us before. We believe these strong customer acquisition trends are driven by the superior value and the convenient shopping experience we offer our customers as compared to the marketplace platform.

本季度我們的新客戶增長速度快於活躍客戶總數，這表明我們的專業採購團隊採購的差異化產品對以前未在我們這裡購物的客戶越來越有吸引力。我們相信，與市場平台相比，我們為客戶提供的卓越價值和便捷的購物體驗推動了這些強勁的客戶獲取趨勢。

The reason we are able to see continued robust growth momentum in our key operational and financial metrics is due to our focus on and expertise in the discount retail industry. We have over a decade of experience in the inventory clearance industry in China and have deep expertise in this field. We offer superior value to consumers looking for deals, particularly in apparel-related categories, while at the same time, helping brands achieve faster inventory turnover, grow their business and reach new customer segments.

我們之所以能夠在關鍵運營和財務指標上看到持續強勁的增長勢頭，是因為我們對折扣零售行業的關注和專業知識。我們在中國庫存清倉行業擁有十多年的經驗，並在該領域擁有深厚的專業知識。我們為尋求優惠的消費者提供卓越的價值，特別是在服裝相關類別中，同時幫助品牌實現更快的庫存周轉、發展業務並吸引新的客戶群。

Looking into 2021 and beyond, we are deeply devoted to continue to execute on our merchandising strategy, aiming to acquire more top brands while increasing our share in the business of our existing brand partners, which will enable us to offer more diversified, desirable product to our customers and attract new customers. In addition, we will continue to enhance our big data capabilities and the technology know-how in order to service a broader customer base, enabling customers from different age group demographics and income levels to shop with us and enjoy our product offering.

展望2021年及以後，我們將致力於繼續執行我們的營銷策略，旨在收購更多頂級品牌，同時增加我們在現有品牌合作夥伴的業務中的份額，這將使我們能夠為客戶提供更多樣化、更理想的產品。我們的客戶並吸引新客戶。此外，我們將繼續增強我們的大數據能力和技術知識，以服務更廣泛的客戶群，使不同年齡段和收入水平的客戶能夠在我們這裡購物並享受我們的產品。

At this point, let me hand over the call to our CFO, David Cui, so that he may discuss our strategy in more detail and go over our operational and financial results.

現在，讓我將電話轉交給我們的首席財務官 David Cui，以便他可以更詳細地討論我們的戰略並審查我們的運營和財務業績。

Thanks, Eric, and hello, everyone. We are glad to have delivered another quarter with strong financial results.

謝謝埃里克，大家好。我們很高興又一個季度取得了強勁的財務業績。

In the fourth quarter of 2020, we delivered accelerated top line growth driven by the strong 37% year-over-year growth in our number of active customers. Importantly, our non-GAAP net income attributable to Vipshop shareholders also demonstrated robust growth in the quarter, increasing by 33% year-over-year to CNY 2.6 billion from CNY 1.9 billion in the prior year period. Additionally, for the trailing 12 months ended December 31, 2020, we generated a robust free cash inflow of CNY 8.3 billion, which increased significantly from CNY 2.5 billion in the prior year period.

2020 年第四季度，在活躍客戶數量同比強勁增長 37% 的推動下，我們的收入實現了加速增長。重要的是，本季度歸屬於唯品會股東的非美國通用會計準則淨利潤也表現出強勁增長，從去年同期的 19 億元人民幣同比增長 33% 至 26 億元人民幣。此外，截至 2020 年 12 月 31 日的過去 12 個月，我們產生了 83 億元人民幣的強勁自由現金流入，較上年同期的 25 億元人民幣大幅增加。

We are dedicated to offering our customers with desirable merchandise at a big discount on a daily basis, while providing them with superior logistics services and post-sales customer service as compared to marketplace platforms. As a result, our conversion rate in the fourth quarter of 2020 increased by 10% from the same period in the prior year.

我們致力於每天以大幅折扣為客戶提供理想的商品，同時為他們提供比市場平台更優質的物流服務和售後客戶服務。因此，我們 2020 年第四季度的轉化率較去年同期增長了 10%。

Going forward, we will continue to enhance our product assortment and balance our top line growth and profitability. We are confident that the healthy customer acquisition and retention trends will continue to drive our growth in the future. By continuously offering value to our customers and providing unparalleled inventory management solutions to our suppliers, we will ultimately generate sustainable long-term value for all of our shareholders.

展望未來，我們將繼續增強我們的產品種類，並平衡我們的營收增長和盈利能力。我們相信，健康的客戶獲取和保留趨勢將繼續推動我們未來的增長。通過不斷為客戶提供價值並為供應商提供無與倫比的庫存管理解決方案，我們最終將為所有股東創造可持續的長期價值。

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

現在轉向我們的季度財務亮點。在開始之前，我想澄清一下，除非另有說明，今天提供的所有財務數據均以人民幣為單位，所有百分比變化均指同比變化。

Total net revenue for the fourth quarter of 2020 increased by 22.0% year-over-year to CNY 35.8 billion from CNY 29.3 billion in the prior year period, primarily driven by the growth in the number of total active customers. Gross profit for the fourth quarter of 2020 increased by 12.1% year-over-year to CNY 7.8 billion from CNY 7.0 billion in the prior year period. Gross margin for the fourth quarter of 2020 was 21.9% as compared with 23.9% in the prior year period.

2020年第四季度的總淨收入同比增長22.0%，從上年同期的293億元人民幣增至358億元人民幣，主要受到活躍客戶總數增長的推動。2020年第四季度毛利潤同比增長12.1%，從上年同期的70億元人民幣增至78億元人民幣。2020年第四季度毛利率為21.9%，上年同期為23.9%。

Total operating expenses for the fourth quarter of 2020 were CNY 5.4 billion as compared with CNY 5.4 billion in the prior year period. As a percentage of the total net revenue, total operating expenses for the fourth quarter of 2020 decreased to 15.2% from 18.3% in the prior year period.

2020年第四季度的總運營費用為54億元人民幣，上年同期為54億元人民幣。2020年第四季度的總運營費用佔總淨收入的百分比從去年同期的18.3%下降至15.2%。

Fulfillment expenses for the fourth quarter of 2020 were CNY 2.2 billion as compared with CNY 2.1 billion in the prior year period. As a percentage of total net revenue, fulfillment expenses for the fourth quarter of 2020 decreased to 6.1% from 7.0% in the prior year period, primarily attributable to the change in fulfillment logistics arrangement.

2020年第四季度的配送費用為22億元人民幣，上年同期為21億元人民幣。2020 年第四季度的履約費用佔總淨收入的百分比從去年同期的 7.0% 下降至 6.1%，這主要是由於履約物流安排的變化。

Marketing expenses for the fourth quarter of 2020 were CNY 1.7 billion as compared with CNY 944.1 million in the prior year period. As a percentage of the total net revenue, marketing expenses for the fourth quarter of 2020 were 4.8% as compared with 3.2% in the prior year period, primarily attributable to increased investment in customer acquisition.

2020年第四季度營銷費用為17億元人民幣，上年同期為9.441億元人民幣。2020年第四季度營銷費用佔總淨收入的比例為4.8%，而上年同期為3.2%，主要歸因於獲客投資的增加。

Technology and content expenses for the fourth quarter of 2020 decreased to CNY 272.4 million from CNY 362.2 million in the prior year period. As a percentage of total net revenue, technology and content expenses for the fourth quarter of 2020 decreased to 0.8% from 1.2% in the prior year period.

2020年第四季度的技術和內容支出從去年同期的3.622億元人民幣減少至2.724億元人民幣。2020 年第四季度技術和內容支出佔總淨收入的百分比從去年同期的 1.2% 下降至 0.8%。

General and administrative expenses for the fourth quarter of 2020 were CNY 1.3 billion as compared with CNY 1.7 billion in the prior year period. As a percentage of total net revenue, general and administrative expenses for the fourth quarter of 2020 decreased to 3.5% from 5.9% in the prior year period.

2020年第四季度的管理費用為13億元人民幣，上年同期為17億元人民幣。2020 年第四季度的一般及管理費用占淨收入總額的百分比從去年同期的 5.9% 下降至 3.5%。

Our net -- our income from operations for the fourth quarter of 2020 increased by 45.9% year-over-year to CNY 2.6 billion from CNY 1.8 billion in the prior year period. Operating margin for the fourth quarter of 2020 increased to 7.2% from 6.1% in the prior year period.

2020 年第四季度我們的淨運營收入同比增長 45.9%，從上年同期的 18 億元人民幣增至 26 億元人民幣。2020 年第四季度的營業利潤率從去年同期的 6.1% 增至 7.2%。

Non-GAAP income from operations, which excluded share-based compensation expenses and amortization of intangible assets resulting from business acquisitions increased by 30.2% year-over-year to CNY 2.8 billion from CNY 2.2 billion in the prior year period. Non-GAAP operating income margin for the fourth quarter of 2020 increased to 7.9% from 7.4% in the prior year period.

非公認會計原則運營收入（不包括股權激勵費用和業務收購產生的無形資產攤銷）同比增長 30.2%，從上年同期的 22 億元人民幣增至 28 億元人民幣。2020 年第四季度的非 GAAP 營業利潤率從去年同期的 7.4% 增至 7.9%。

Our net income attributable to Vipshop's shareholders for the fourth quarter of 2020 increased by 67.7% year-over-year to CNY 2.4 billion from CNY 1.5 billion in the prior year period. Net margin attributable to Vipshop's shareholders for the fourth quarter of 2020 increased to 6.8% from 5.0% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS for the fourth quarter of 2020 increased to RMB 3.51 from RMB 2.14 in the prior year period.

2020年第四季度，歸屬於唯品會股東的淨利潤由上年同期的15億元人民幣增至24億元人民幣，同比增長67.7%。2020年第四季度唯品會股東淨利潤從去年同期的5.0%增至6.8%。2020年第四季度稀釋後歸屬於唯品會股東的每股美國存託股淨利潤從上年同期的2.14元增至3.51元。

Non-GAAP net income attributable to Vipshop's shareholders for the fourth quarter of 2020, which excluded the share-based compensation expenses, tax effect of share-based compensation expenses, impairment loss of investments, amortization of intangible assets resulting from business acquisitions, tax effect of amortization of intangible assets resulting from business acquisitions, investment gain and revaluation of investments excluding dividends, tax effect of investment gain and revaluation of investments excluding dividends, and share of loss in investment of limited partnerships that are accounted for as equity method investees, increased by 33.4% year-over-year to CNY 2.6 billion from CNY 1.9 billion in the prior year period.

2020年第四季度非美國通用會計準則歸屬於唯品會股東的淨利潤，不含股權激勵費用、股權激勵費用的稅務影響、投資減值損失、業務收購產生的無形資產攤銷、稅務影響企業收購產生的無形資產攤銷、投資收益和投資重估（不包括股息）、投資收益和投資重估（不包括股息）的稅收影響以及按權益法被投資方核算的有限合夥企業投資損失份額增加同比增長33.4%，從上年同期的19億元人民幣增至26億元人民幣。

Non-GAAP net margin attributable to Vipshop's shareholders for the fourth quarter of 2020 increased to 7.2% from 6.6% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS for the fourth quarter of 2020 increased to RMB 3.70 from RMB 2.84 in the prior year period.

2020年第四季度非美國通用會計準則歸屬於唯品會股東的淨利潤率從去年同期的6.6%增至7.2%。2020年第四季度非美國通用會計準則每股攤薄後歸屬於唯品會股東的淨利潤從上年同期的人民幣2.84元增至人民幣3.70元。

As of December 31, 2020, our company had cash and cash equivalents and restricted cash of CNY 12.8 billion and short-term investment of CNY 7.3 billion for the fourth quarter of 2020. Net cash from operating activities was CNY 7.2 billion.

截至2020年12月31日，公司2020年第四季度擁有現金及現金等價物和限制性現金128億元，短期投資73億元。經營活動產生的現金淨額為72億元人民幣。

Looking at our business outlook for the first quarter of 2021, we expect our total net revenue to be between RMB 27.2 billion and RMB 28.2 billion, representing a year-over-year growth rate of approximately 45% to 50%. This forecast reflects our current and preliminary view on the market and operational conditions, which is subject to change.

展望2021年第一季度的業務前景，我們預計淨收入總額將在人民幣272億元至人民幣282億元之間，同比增長率約為45%至50%。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. Operator?

現在，我想開始問答環節。操作員？

(Operator Instructions) Your first question comes from the line of Eddy Wang of Morgan Stanley.

（操作員說明）您的第一個問題來自摩根士丹利的Eddy Wang。

Congratulations on the very great results. So my question is on the user growth. We have seen very strong user growth to sustain in the fourth quarter, actually accelerate from third quarter. So my question is that except for the efforts you have made in terms of the customer acquisition in the third quarter, any new initiatives you have made in the fourth quarter? Can you give us some examples, especially, I think, on the brand partner side as well as -- you mentioned that on the technology side? So that's my question on the user growth.

祝賀取得了非常好的成績。所以我的問題是關於用戶增長。我們看到第四季度的用戶增長非常強勁，實際上從第三季度開始加速。那麼我的問題是，除了第三季度在獲客方面做出的努力之外，第四季度你們有什麼新的舉措嗎？您能給我們舉一些例子嗎？我認為，特別是在品牌合作夥伴方面以及您提到的技術方面？這就是我關於用戶增長的問題。

Thank you, Eddy. (foreign language)

謝謝你，艾迪。（外語）

(foreign language)

（外語）

[Interpreted] Eddy, on your question on customer acquisition. Since last year's third quarter, we started to increase our marketing expenses to acquire new customers as well as retain existing customers. So we use various customer acquisition channels, including digital advertising, TV show and reality show endorsement, mobile ring pre-installation and so on. So on those fronts, in terms of marketing expenses, the pace at which we went in 4Q is very similar to what we have done in the third quarter and in previous quarters.

[解讀]Eddy，關於您關於客戶獲取的問題。從去年第三季度開始，我們開始增加營銷費用，以獲取新客戶並留住現有客戶。所以我們使用各種獲客渠道，包括數字廣告、電視節目和真人秀代言、手機環預裝等等。因此，在這些方面，就營銷費用而言，我們第四季度的進展速度與第三季度和前幾個季度的進展非常相似。

We believe that there is lots of opportunities in -- to acquire new customers in this market, particularly as we've readjusted to focus on discount retail. So we will continue to invest into customer acquisition, but we'll use the lifetime value model to evaluate the efficiency and effectiveness of how and where we're spending our marketing dollars. So we will continue to spend, but disciplined spending.

我們相信，在這個市場上有很多獲得新客戶的機會，特別是當我們重新調整以專注於折扣零售時。因此，我們將繼續投資於客戶獲取，但我們將使用終身價值模型來評估我們如何以及在何處花費營銷資金的效率和效果。因此，我們將繼續支出，但有紀律的支出。

On top of marketing, we also are much more focused on merchandising, offering our customers really good products and deep discounts on a daily basis. And on the operational side and the technology side, we're also investing to improve the conversion rate and improve the efficiency at which customers can find products that they like and that are suitable to their taste on our platform.

除了營銷之外，我們還更加註重商品推銷，每天為客戶提供真正優質的產品和大幅折扣。而在運營端和技術端，我們也在投資提高轉化率，提高效率，讓客戶可以在我們的平台上找到自己喜歡的、適合自己口味的產品。

So all around, we believe there is a flywheel effect in everything that we're doing. And as long as all these parts of the business stay intact and we continue to improve on each element, we will continue to acquire customers that will contribute to our long-term growth.

因此，我們相信我們所做的一切都存在飛輪效應。只要業務的所有這些部分保持完整，並且我們繼續改進每個要素，我們將繼續獲得有助於我們長期增長的客戶。

Your next question comes from the line of Alicia Yap of Citigroup.

您的下一個問題來自花旗集團的 Alicia Yap。

Congratulations on the strong quarter. My question is actually related to a little bit the month-over-month 4Q trend and also the first quarter guidance. So did you actually see some slowdown in December after the very strong Singles Day promotion? And as we go into first quarter, how would you describe the situation this year given the stay-in-the-city Chinese New Year period? So did that actually stimulate more spending budget on the clothing? Or did that actually have negative impact on spending willingness given people are not traveling that much and not meeting as many relative as before?

祝賀季度表現強勁。我的問題實際上與第四季度的環比趨勢以及第一季度的指導有關。那麼，在非常強勁的雙十一促銷活動之後，您是否確實看到 12 月的銷售放緩了呢？進入第一季度，考慮到春節期間的留在城市，您如何描述今年的情況？那麼這是否真的刺激了更多的服裝支出預算呢？或者，考慮到人們不再像以前那樣經常旅行、見不到那麼多親戚，這實際上對消費意願產生了負面影響嗎？

So just wondering how is this Chinese New Year given these encouragement to stay-at-the-city changes in terms of the demand? Any differences that you see this year versus the previous year? And any colors in terms of direction that you think this strong first quarter guidance could carry through to the rest of the year?

那麼，只是想知道，今年農曆新年對留在城市的鼓勵措施在需求方面有何變化？您認為今年與去年相比有什麼不同嗎？您認為這一強勁的第一季度指引可以延續到今年剩餘時間嗎？

Thank you, Alicia. (foreign language)

謝謝你，艾麗西亞。（外語）

(foreign language)

（外語）

[Interpreted] Alicia, on your question regarding the trend that we've seen. Fourth quarter is always a key season for e-commerce, particularly for us as we are predominantly apparel retailer. And we have Singles Day promotional event as well as our anniversary sales event on December 8, both of which we saw solid results and the trend of robust growth lasted into January. As compared to December, January did decelerate a little bit, but mostly due to the weather change as we stepped out of winter.

[解讀]艾麗西亞，關於你關於我們所看到的趨勢的問題。第四季度始終是電子商務的關鍵季節，特別是對於我們來說，因為我們主要是服裝零售商。我們在 12 月 8 日舉辦了雙十一促銷活動和周年紀念銷售活動，這兩項活動我們都看到了紮實的成果，並且強勁增長的趨勢一直持續到 1 月份。與 12 月相比，1 月確實有所放緩，但主要是由於我們走出冬季後天氣的變化。

So when you look at January into February, as you mentioned, as a lot of people are staying in their respective cities and not going back to their hometowns during this year's Chinese New Year, we are seeing better business results than we were originally anticipating. Particularly, as compared to previous years, where people were very much spending their time with their families rather than shopping. This year, we're seeing pretty solid results, and we believe that should be the industry-wide trend.

因此，當你看一月到二月時，正如你提到的，由於今年農曆新年期間很多人都留在各自的城市，沒有回到家鄉，我們看到的業務結果比我們最初預期的要好。特別是，與前幾年相比，人們更多地花時間與家人在一起，而不是購物。今年，我們看到了相當紮實的成果，我們相信這應該是全行業的趨勢。

Looking ahead, we believe that the structural changes of people shopping more online and more people learning to shop online that was resulted from the COVID-19 pandemic will continue into 2021 and beyond. And therefore, we continue to believe that there's a lot of opportunities for us to continue to grow and gain customers as with the rest of the e-commerce peers into 2021 and beyond.

展望未來，我們認為，因 COVID-19 大流行而導致的人們更多地在網上購物以及更多人學習網上購物的結構性變化將持續到 2021 年及以後。因此，我們仍然相信，在 2021 年及以後，與其他電子商務同行一樣，我們有很多機會繼續發展並贏得客戶。

Your next question comes from the line of Ronald Keung of Goldman Sachs.

你的下一個問題來自高盛的羅納德·姜（Ronald Keung）。

I think my question kind of following on the growth in the apparel market. Basically, we see very strong growth and you've shared your GMV growth for apparel, in particular, was 28%. It seems like this is a lot faster than the overall apparel market. And therefore, I think, are we kind of benefiting from the increased supply of discounted apparel over the past, say, 1 year or 2 years, be it kind of the buildup of inventory, increased demand of brands and clearing the inventory? And so how have we seen that in our market share, say, in discounted apparel? And as this kind of inventory cycle maybe lapse later this year, how do we see -- or how do we tap into the ongoing growth of the business, say, maybe private labels or other drivers?

我認為我的問題有點與服裝市場的增長有關。基本上，我們看到了非常強勁的增長，您分享了服裝的 GMV 增長，尤其是 28%。看起來這比整個服裝市場要快得多。因此，我認為，過去一年或兩年，我們是否從折扣服裝供應的增加中受益，無論是庫存的積累、品牌需求的增加還是庫存的清理？那麼，我們如何看待我們的市場份額（例如折扣服裝）的市場份額呢？由於這種庫存週期可能會在今年晚些時候結束，我們如何看待——或者我們如何利用業務的持續增長，比如自有品牌或其他驅動因素？

Thank you, Ronald. (foreign language)

謝謝你，羅納德。（外語）

(foreign language)

（外語）

[Interpreted] Ronald, we've been in the discount retail business for over a decade, and there has not been a shortage of off-price inventory in the market. Of course, the pandemic did result in a bit of a tailwind. I'm surprised by this since apparel is a very nonstandardized category and there are thousands of apparel brands, and they're constantly making new seasons of products and launching new products. So there will always be inventory or excess inventory in the apparel market as it's almost impossible to predict exactly how much to make for each FTE. And so that's on the existing inventory market.

【解說】Ronald，我們從事折扣零售業務已經有十多年了，市場上從來不缺乏特價庫存。當然，大流行確實帶來了一些順風。我對此感到驚訝，因為服裝是一個非常非標準化的類別，有數千個服裝品牌，並且他們不斷推出新季節的產品並推出新產品。因此，服裝市場上總會存在庫存或過剩庫存，因為幾乎不可能準確預測每個 FTE 的收入。這就是現有庫存市場的情況。

On top of that, we are also more actively investing and looking into made-for-Vipshop products. These products are what our suppliers, especially the top suppliers are making and designing, especially for the Vipshop platform. And so far, the contribution has already reached double digits. And in the future, we will continue to collaborate with more top suppliers and increase the contribution from these made-for-Vipshop products. These products will ensure that we will always have supply and supply that is attractive to our consumer base.

除此之外，我們還更加積極地投資和研究專為唯品會打造的產品。這些產品是我們的供應商，特別是頂級供應商正在製造和設計的，特別是針對唯品會平台的。而到目前為止，貢獻已經達到了兩位數。未來，我們將繼續與更多頂級供應商合作，加大唯品會產品的貢獻。這些產品將確保我們始終擁有對我們的消費者群有吸引力的供應和供應。

Going forward, we will continue to look into enhancing our merchandising capability on both the made-for-Vipshop front as well as the existing off-price market in order to bring the best products to our customers as well as serve more suppliers and help to grow their business.

展望未來，我們將繼續致力於提升唯品會專區及現有折扣市場的營銷能力，為客戶帶來最好的產品，服務更多的供應商，幫助發展他們的業務。

Your next question comes from the line of Thomas Chong of Jefferies.

你的下一個問題來自 Jefferies 的 Thomas Chong。

Can you comment about the trend in marketing expenses as well as the margin outlook for this year?

您能否評論一下今年營銷費用的趨勢以及利潤前景？

Thank you, Thomas. (foreign language)

謝謝你，托馬斯。（外語）

(foreign language)

（外語）

[Interpreted] Thomas, on your question on user growth and the marketing expenses as well as how it leads to the margin outlook in 2021 and beyond. As we continue to grow more customers and gain customers and accelerating customer growth, we are spending a little more on marketing into the second half of 2020. And we believe that trend should be similar in 2021 and beyond. However, that is given that there is an approximately 300 million potential customers that will be interested in discount retail and could become Vipshop's customers. So from that perspective, we believe that there's still a lot of opportunity in the market. And we're still very small as compared to the potential opportunity in this market. So growth will be our top priority.

[解讀] Thomas，關於您關於用戶增長和營銷費用以及它如何影響 2021 年及以後利潤前景的問題。隨著我們不斷發展更多客戶並贏得客戶並加速客戶增長，我們將在 2020 年下半年增加一些營銷支出。我們認為 2021 年及以後的趨勢應該類似。然而，考慮到大約有3億潛在客戶會對折扣零售感興趣並可能成為唯品會的客戶。因此從這個角度來看，我們認為市場上仍然存在很多機會。與這個市場的潛在機會相比，我們仍然很小。因此，增長將是我們的首要任務。

However, we have always been very focused on the balance between our top line growth as well as our margin profile. Our bottom line will continue to be very solid. As we've mentioned previously, we are maintaining our non-GAAP net margin at a mid- single-digit range, and we'll try to grow top line as fast as possible on top of that. So going forward, we will continue to balance the 2 but strive to grow users, grow healthy users that could contribute to our long-term growth sustainability.

然而，我們一直非常注重營收增長和利潤率之間的平衡。我們的底線將繼續非常穩固。正如我們之前提到的，我們將非 GAAP 淨利潤率維持在中等個位數範圍，並在此基礎上努力盡快增長營收。因此，展望未來，我們將繼續平衡兩者，但努力增加用戶，增加健康的用戶，這有助於我們的長期增長可持續性。

Your next question comes from the line of Joyce Ju of Bank of America.

您的下一個問題來自美國銀行的 Joyce Ju。

(foreign language) Yes. I will translate my question. Basically, I'm asking for the strategic focus for the management team for this year. Back to 2019, the company has been focused on the merchandising strategy and also the efficiency improvement. And for the last year, the focus was on the recovery from the COVID. Just want to know for this year what's the new driver or any new initiatives we should expect?

（外語）是的。我會翻譯我的問題。基本上，我是在詢問管理團隊今年的戰略重點。回顧2019年，公司重點關注商品策略和效率提升。去年，重點是從新冠疫情中恢復過來。只是想知道今年的新驅動力或我們應該期待的新舉措是什麼？

(foreign language)

（外語）

[Interpreted] Joyce, looking into 2021 and beyond, we will continue to pursue healthy and fast growth. By healthy growth, meaning that we will acquire high-quality customers who will contribute to our long-term growth and profitability. We believe that compared to our current size, there is a lot of opportunity and potential to continue to grow. And at the same time, we will continue to maintain a sustainable healthy net margin profile. As we continue to grow fast, the operating leverage will come out even more and improve our profitability as well. So that will continue to be our top priority into 2021 and beyond.

【解讀】喬伊斯，展望2021年及未來，我們將繼續追求健康快速增長。健康增長意味著我們將獲得優質客戶，這些客戶將為我們的長期增長和盈利做出貢獻。我們相信，與我們目前的規模相比，還有很多繼續增長的機會和潛力。與此同時，我們將繼續保持可持續健康的淨利潤率。隨著我們繼續快速增長，經營槓桿將進一步顯現，盈利能力也會提高。因此，這將繼續是我們 2021 年及以後的首要任務。

Your next question comes from the line of Natalie Wu of Haitong International.

您的下一個問題來自海通國際的Natalie Wu。

(foreign language) I will translate myself. Thanks for taking my question and congratulations on a very solid result. My question is regarding the off-line contribution, just wondering how much of the GMV and revenue contribution comes from off-line in the fourth quarter? And what's management expectation for 2021? And also maybe if there's mid- to longer-term expectation for that?

（外語）我自己翻譯。感謝您提出我的問題，並祝賀取得了非常好的結果。我的問題是關於線下貢獻，只是想知道第四季度的GMV和收入貢獻有多少來自線下？管理層對 2021 年有何預期？也許對此有中長期預期？

(foreign language)

（外語）

[Interpreted] Natalie, on your question regarding off-line strategies. On the off-line side, we have 3 different businesses. One is Shan Shan Outlets. Its GMV is around 5% contribution, and this business is very profitable. So we'll continue to grow that at a healthy pace. And our own 1P off-line stores. We have 2 models. One is called Vipshop and the other is called Vipmaxx, and they are quite different in terms of pricing targets. One of these businesses is still slightly loss making, while the other is almost breakeven. And the total GMV contribution of these two 1P off-line stores is still quite small today, slightly over 1% contribution.

[解讀]Natalie，關於你關於線下策略的問題。線下方面，我們有3個不同的業務。一是杉杉奧特萊斯。它的GMV貢獻在5%左右，這個業務非常賺錢。因此，我們將繼續以健康的速度增長。還有我們自己的1P線下店鋪。我們有 2 個型號。一個叫唯品會，另一個叫Vipmaxx，它們在定價目標上有很大不同。其中一項業務仍略有虧損，而另一項業務則幾乎盈虧平衡。而這兩家1P線下店今天的總GMV貢獻仍然很小，貢獻略高於1%。

We will continue to explore how to grow these off-line stores and explore the online to off-line strategy and how to make these stores more digitized. But all of these stores will focus on discount retail. So we are serving our core customers and core suppliers through our off-line channel as well. And we're exploring for new ways to create value for our members and customers.

我們將繼續探索如何發展這些線下商店，探索線上到線下的策略以及如何使這些商店更加數字化。但所有這些商店都將專注於折扣零售。因此，我們也通過線下渠道為我們的核心客戶和核心供應商提供服務。我們正在探索為我們的會員和客戶創造價值的新方法。

Currently, our off-line stores are also more actively exploring WeChat group and how to utilize the traffic and the customers potentially buying more within the WeChat ecosystem. Currently, around 1/3 of the GMV contribution of Vipshop and Vipmaxx are coming from the more digitized revenues such as WeChat group, and we will continue to explore how to bring up the profitability as well as grow these businesses more healthily going forward.

目前，我們的線下門店也在更積極地探索微信群，以及如何利用微信生態中的流量和潛在客戶進行更多購買。目前，唯品會和唯品會的GMV貢獻有1/3左右來自於微信群等數字化程度較高的收入，我們將繼續探索如何提高盈利能力，讓這些業務未來更加健康地發展。

Your next question comes from the line of Jerry Liu of UBS.

你的下一個問題來自瑞銀集團（UBS）的傑里·劉（Jerry Liu）。

(foreign language) My question is related to the earlier comments about live streaming and short video. Just wondering if the main purpose here is to use these channels as a way to acquire customers or are we seeing some opportunities to maybe operate through some of these streaming and video platforms? Especially, when we look at WeChat, we've been operating on WeChat for a while, but maybe there are some new opportunities in recent times?

（外語）我的問題與之前關於直播和短視頻的評論有關。只是想知道這裡的主要目的是否是使用這些渠道作為獲取客戶的一種方式，或者我們是否看到了一些通過這些流媒體和視頻平台進行運營的機會？尤其是我們看微信，我們在微信上運營已經有一段時間了，但是最近一段時間也許有一些新的機會？

(foreign language)

（外語）

[Interpreted] Thank you, Jerry. On your question regarding live streaming and short video. We do believe that live streaming app and short video apps are where a lot of our customers are spending a lot of time. And we are and have been actively investing and exploring customer acquisition methods in these newer channels. However, we do think that the results are not up to our expectations. And therefore, we still have more room to improve how we're targeting the content as well as how we are acquiring customers in these newer formats.

[翻譯]謝謝你，傑瑞。關於你關於直播和短視頻的問題。我們確實相信直播應用程序和短視頻應用程序是我們的許多客戶花費大量時間的地方。我們一直在積極投資和探索這些新渠道的客戶獲取方法。然而，我們確實認為結果沒有達到我們的預期。因此，我們仍有更大的空間來改進我們定位內容的方式以及如何以這些新格式獲取客戶。

On our own Vipshop app, the live streaming customers would be 100% our own. However, for example, like in the mini stores, about half of these customers would come to our app afterwards, whereas the other half would retain and remain shopping with us and maybe going forward in the mini stores. So we will continue to work with these various channels in order to improve the efficiencies, and we will continue to look at the ways to best invest into customer acquisition in the live streaming and short video apps.

在我們自己的唯品會應用程序上，直播客戶將100%是我們自己的。然而，例如，就像在迷你商店中一樣，大約一半的客戶隨後會來到我們的應用程序，而另一半將保留並繼續與我們一起購物，並可能繼續在迷你商店中購物。因此，我們將繼續與這些不同的渠道合作，以提高效率，並且我們將繼續尋找在直播和短視頻應用程序中最好地投資於客戶獲取的方法。

Your next question comes from the line of Feitong Zhang of CICC.

你的下一個問題來自中金公司張飛桐。

Congratulations on the robust results. It's a follow-up question. As Shen-zong mentioned, the Vipshop product. How are the Vipshop products as a special addition will impact our business? Can we have better price or better profitability or the special addition helps us to gain more consumers? Any elaboration on that would be very helpful. And do you have any target for the Vipshop product?

祝賀取得了穩健的結果。這是一個後續問題。正如神宗提到的，唯品會產品。唯品會產品作為一個特殊的補充會對我們的業務產生什麼影響？我們能否有更好的價格或更好的盈利能力，或者特殊的添加可以幫助我們贏得更多的消費者？對此的任何詳細說明都會非常有幫助。唯品會產品有什麼目標嗎？

Thank you, Feitong. (foreign language)

謝謝你，飛通。（外語）

(foreign language)

（外語）

[Interpreted] Feitong, regarding your question on made-for-Vipshop products and how it's different and how it will impact Vipshop as a platform. The take rate or the gross margin for the made-for-Vipshop products are actually the same as other products for a given brand. However, when we go work with brands on made-for-Vipshop products, we ask for more value, meaning the prices that they offer should be similar to other products that they're giving us on a consignment basis and their natural off-price products.

【解讀】飛通，關於你提到的唯品會定制產品以及它的不同之處以及對唯品會平台的影響。為唯品會定制的產品的轉化率或毛利率實際上與特定品牌的其他產品相同。然而，當我們與品牌合作開發唯品會產品時，我們會要求更多的價值，這意味著他們提供的價格應該與他們寄售給我們的其他產品相似，並且自然有折扣。產品。

And we also give additional traffic support to these made-for-Vipshop products as these products are more differentiated and should result in better conversion rates for customers as well as help us acquire new customers because these products could only be found on our own platform. And going forward, we will continue to look into ways to best invest into the made-for-Vipshop products.

我們還為這些專為唯品會打造的產品提供額外的流量支持，因為這些產品更具差異化，應該會為客戶帶來更好的轉化率，並幫助我們獲得新客戶，因為這些產品只能在我們自己的平台上找到。展望未來，我們將繼續尋找對唯品會產品進行最佳投資的方法。

Your next question comes from the line of Veronica Shen of China Renaissance.

你的下一個問題來自華興資本的沉韻。

(foreign language) My question is regarding the ARPU. Well, I remember the management mentioned that the ARPU from new users is relatively low. So could you please provide us some color about the trend of ARPU from new users who joined Vipshop since the second quarter of last year. And have you ever seen their spending on our platform increase since they have joined us for more than half year? And how should we look at the ARPU going forward considering the new user mix?

（外語）我的問題是關於ARPU 的。嗯，我記得管理層提到過，新用戶的ARPU比較低。那麼您能否給我們介紹一下去年第二季度以來唯品會新用戶ARPU的變化趨勢呢？加入我們半年多以來，您是否看到他們在我們平台上的支出有所增加？考慮到新的用戶組合，我們應該如何看待未來的 ARPU？

(foreign language)

（外語）

[Interpreted] Veronica, the ARPU for new customers usually doubles in year 2 from our historical numbers. And from the customers that we've acquired in the past few quarters, we continue to see solid retention and solid ARPU growth on a quarterly basis. So we are quite confident about the long-term sustainability and healthy contribution from these newer customers.

[解釋] Veronica，新客戶的 ARPU 通常在第二年比我們的歷史數字翻倍。從我們過去幾個季度獲得的客戶來看，我們繼續看到穩定的保留率和每季度的穩定 ARPU 增長。因此，我們對這些新客戶的長期可持續性和健康貢獻充滿信心。

And the reason that ARPU is seen decline year-over-year in 2020 versus 2019 is because we are acquiring a lot more new customers and old customers who have not shopped with us for a while. And therefore, by adding them to the mix, the ARPU for these customers is usually lower, driving down the average ARPU for the total customer pool.

與 2019 年相比，2020 年 ARPU 同比下降的原因是我們獲得了更多新客戶和已經有一段時間沒有在我們這裡購物的老客戶。因此，通過將它們添加到組合中，這些客戶的 ARPU 通常會較低，從而降低整個客戶群的平均 ARPU。

Additionally, we've also made changes to the free shipping method, lowering the free shipping from RMB 288 to RMB 88, which has impacted the short-term ARPU of some of our super VIPs as well as customers who are still getting used to these newer adjustments as they are shopping more frequently, but not enough to cover the slight decrease in the ticket size.

此外，我們還對包郵方式進行了調整，將包郵價格從288元降低到88元，這對我們一些超級VIP以及仍在習慣這些服務的客戶的短期ARPU造成了影響。隨著他們購物更加頻繁而進行了新的調整，但不足以彌補門票金額的輕微下降。

From historical trends, we're confident that all of these issues will continue to go away as the comp becomes more apples to apples, and these high-quality new customers will buy more in the future as well as these existing super VIPs and old customers are already buying more frequently. So we will continue to see better trends into 2021 and beyond on the ARPU side.

從歷史趨勢來看，我們相信，隨著競爭更加激烈，所有這些問題都將繼續消失，這些高質量的新客戶以及現有的超級 VIP 和老客戶將在未來購買更多產品已經更頻繁地購買了。因此，我們將在 2021 年及以後繼續看到 ARPU 方面更好的趨勢。

Your last question comes from the line of Han Joon Kim of Macquarie.

你的最後一個問題來自麥格理的 Han Joon Kim。

I've noticed that your other revenues have been growing a bit faster than the product revenues, and I presume this is advertising revenue. So should we assume that the tighter relationship that we have with brands is helping them put more advertising on to that platform? And as our kind of user growth continues, should we continue to see kind of other revenues grow at a faster clip than product revenue? Is that the way to think about the outlook?

我注意到你們的其他收入增長速度比產品收入快一些，我認為這是廣告收入。那麼，我們是否應該假設我們與品牌之間更緊密的關係正在幫助他們在該平台上投放更多廣告？隨著我們的用戶增長繼續，我們是否應該繼續看到其他收入以比產品收入更快的速度增長？這是思考前景的方式嗎？

Other revenues represent our off-line revenues -- from -- off-line revenue and advertising revenues. And our off-line, it only represents a very small portion of total revenues, right? So it doesn't change that much, right?

其他收入代表我們的線下收入——來自線下收入和廣告收入。而我們的線下，只佔總收入的很小一部分，對吧？所以變化不大，對吧？

Yes. So on the other revenues line, it grew slightly faster for a few reasons. I will give the breakdown. In the fourth quarter, third-party marketplace contribution is around 14%. Compared to last year, that came down a little bit. But the advertising is growing slightly faster. This is due to us being more focused on the primary first-line business and not as focused in the marketplace. And therefore, the commission rate has decreased as contribution of GMV from third-party platforms has decreased slightly to around 5% in the fourth quarter.

是的。因此，在其他收入方面，由於一些原因，其增長速度略快。我將給出細分。第四季度，第三方市場貢獻約為14%。與去年相比，略有下降。但廣告增長速度稍快一些。這是因為我們更專注於主要的一線業務，而不是市場。因此，隨著第四季度第三方平台GMV貢獻小幅下降至5%左右，佣金率有所下降。

The increase is primarily due to contribution actually from Shan Shan Outlets, as in last year's fourth quarter, it only contributed to around 7% of other revenues but in the fourth quarter of this year, Shan Shan Outlets contributed to around 13% of other revenues.

這一增長主要是由於杉杉奧特萊斯的實際貢獻，去年第四季度杉杉奧特萊斯僅佔其他收入的7%左右，但今年第四季度杉杉奧特萊斯貢獻了約13%的其他收入。

I see there are no further questions. I will now hand the call back to the management for the closing remarks.

我看到沒有其他問題了。我現在將把電話轉交給管理層以供結束語。

Thank you for taking the time to join us, and we look forward to speaking with you next quarter. Thanks.

感謝您抽出時間加入我們，我們期待下個季度與您交談。謝謝。

Thank you all.

謝謝你們。

Thank you.

謝謝。

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

女士們、先生們，今天的電話會議到此結束。感謝您的參與。你們現在可以斷開連接了。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]