Vipshop Holdings Ltd · NYSE:VIPS
Vipshop — Q3 2019 Earnings Presentation
26 slides from Vipshop's earnings presentation, November 2019
Slide 1: Vipshop Holdings Limited Investor Presentation
Vipshop Holdings Limited Investor Presentation November 2019
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “fu
Slide 3: Vipshop: China's Leading Online Discount Retailer for Brands
Vipshop China's Leading Online Discount Retailer for Brands 3
Slide 4: China's huge market potential in online discount retail
China’s huge market potential in online discount retail and B2C market China’s Online Shopping Market(1) China’s Online B2C Market (1) (RMB in billions) (RMB in billions) 7,214 5,906 4,650 10,800 3,660 2,594 9,100 768 1,263 1,980 7,500 6,100 2013 2014 2015 2016 2017e 2018e 2019e 2020e 4,700 China’s
Slide 5: Massive potential in China's discount retail market
Massive potential in China’s discount retail market China's offline discount retail is extremely underdeveloped U.S. China 24 square feet per capita(1) 2 square feet per capita(1) Poor offline retail infrastructure in China Top 20 retailers account Top 20 retailers account Fragmented retail market i
Slide 6: China: A more attractive market opportunity
China: A more attractive market opportunity U.S. China Mostly focused on high-end and luxury Broad universe of popular brands for mass Market positioning markets market Discount / outlet retail channels saturated for Offline channels Lack of well-developed discount / outlet mass market merchandise;
Slide 7: A unique player in China's e-Commerce landscape
A unique player in China’s e-Commerce landscape Large scalable platforms Marketplace General B2C Online discount retailer Partner with popular and well-known brands by selling their excess inventory at discounted prices Core competency in merchandising, logistics, and customer service 7
Slide 8: Highly engaged and loyal customer base
Highly engaged and loyal customer base High and stable rate of orders from Rapid increase of repeat customers(2) repeat customers (in millions) (in millions) 85.3% 86.9% 71.3% 76.1% 93.3% 92.3% 93.9% 93.6% 95.1% 96.6% 95.9% 96.8% 64.1% 62.4% 66.6% 67.1% 60.5 437.4 Repeat 57.8 customers Orders placed
Slide 9: Preferred discount channel for popular brands
Preferred discount channel for popular brands Brand partners growth over time(1) Clear industry leader(2) 17,097 Fast inventory monetization 2010 – 2018 growth by 42x 13,336 Minimal brand dilution 10,778 One-stop solution for brands 8,505 4,287 7,110 Professional team with deep brand knowl
Slide 10: Operational Expertise
Operational Expertise
Slide 11: Core competency in merchandising
Core competency in merchandising Brand selection Deep brand relationships Sales management capability 1 1,300+ Understanding 31,000+ brands Professional Merchandisers 2 of consumers Consumer insights 3 Deepening Customized marketing brand Business partnership intelligence system Sales events opt
Slide 12: Flash sale requires differentiated logistics system
Flash sale requires differentiated logistics system Additional capabilities on top of traditional B2C e-Commerce(1) Flash sale Traditional B2C e-Commerce Market positioning Short Long Sales process Fast Slow No. of SKUs handled Large Moderate Volume of throughput Large Small Reverse logistics Large
Slide 13: Highly customized and seamlessly integrated IT system for flash sales
Highly customized and seamlessly integrated IT system for flash sales Traf fic 12a m 10a 12p Time m m 12a m Support huge traffic spikes during peak hours Expanding and cross-regional warehouse management system CRM system Big data and business intelligence Merchant platform 13
Slide 14: High entry barriers in China's online discount retail
High entry barriers 1 Economies of Scale 2 First Mover Advantage Vipshop has established a dominant leadership position in China’s online discount retail market 3 Business Model 4 Operational Expertise 14
Slide 15: Visionary management team with strong execution
Visionary management team with strong execution Eric Ya Shen Arthur Xiaobo Hong Donghao Yang Co-Founder, Chairman, CEO Co-Founder, Vice Chairman, COO Chief Financial Officer 20+ years of experience in 15+ years of experience in 14+ years of experience in consumer electronic products consumer electro
Slide 16: Financial Highlights
Financial Highlights
Slide 17: Solid growth
Solid growth Total orders (1) Total net revenue (in millions) (RMB in millions) 31% 16% 437.4 24% 29% 40% 335.0 84,524 72,912 269.8 41% 74% 56,591 33% 10% 64% 193.1 122% 40,203 130% 118.0 127.6 23,129 95.7 17,832 19,613 51.4 10,421 2013 2014 2015 2016 2017 2018 3Q18 3Q19 2013 2014 2015 2016 2017 201
Slide 18: Steady gross profit margin expansion
SteadySteady gross profit margingrowth expansion Quarterly gross profit and gross margin (RMB in millions) 24.9% 24.9% 24.9% 25.0% 24.9% 24.1% 24.3% 24.1% 24.4% 23.5% 23.2% 22.4% 22.9% 22.0% 5,240 5,384 21.6% 20.4% 20.2% 19.5% 21.7% 5,089 4,467 20.6% 20.4% 4,234 4,009 4,356 3,860 4,044 3,694 3,631 3
Slide 19: Operating leverage in fulfillment expenses
Operating leverage in fulfillment expenses Fulfillment expenses (Non-GAAP)(1) (RMB in millions) 10.8% 2,161 2,126 9.8% 2,084 9.5% 9.3% 9.3% 9.5% 9.0% 8.9% 9.0% 9.3% 8.8% 1,876 8.5% 8.5% 8.0% 8.6% 1,741 1,742 7.9% 1,636 8.9% 1,624 8.8% 1,714 9.0% 1,656 8.6% 8.2% 1,548 1,418 1,257 1,142 1,072 1,016 78
Slide 20: Operating leverage due to the economy of scale
Operating leverage due to the economy of scale Marketing expenses (Non-GAAP)(1) General and administrative expenses (Non-GAAP)(1) (RMB in millions) (RMB in millions) 3.0% 3.0% 2.7% 2.9% 5.4% 2.7% 5.3% 2.5% 2.4% 3.0% 5.1% 1110 2.4% 2.5% 4.9%4.9% 2.3% 751 2.7% 2.3% 4.8%4.5% 1008 2.2%2.2%2.2% 2.2% 4.3%
Slide 21: Sustainable net margin attributable to shareholders
Sustainable net margin attributable to shareholders Net margin attributable to shareholders (Non-GAAP)(1) (RMB in millions) 1Q132Q133Q134Q131Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q19 1,203 1,063 970 914 888 799 816 741 678 728 673 623 595 560 577 518
Slide 22: Balance sheet highlights
Balance sheet highlights Balance Sheet Highlights (in RMB millions) June 30, 2019 September 30, 2019 Cash and Cash Equivalents, Restricted Cash, and Short 8,071 6,690 Term Investments Current Assets 19,985 17,993 Total Assets 39,233 42,383 Current Liabilities 18,706 19,476 Total Liabilities 19,933 2
Slide 23: Growth Strategies
Growth Strategies
Slide 24: Our future growth strategy
Our future growth strategy Leverage merchandising capability to: 1) expand customer base; 2) increase market Enlarge customer share; 3) strengthen the Vipshop brand base Recommendation / personalization, reliable fulfillment service, Super VIP loyalty program, higher customer retention and repeat pu
Slide 25: Key investment highlights
Key investment highlights 1 Strong industry growth fundamentals 2 Market leadership position 3 Highly engaged and loyal customer base 4 Superior operational expertise 5 Strong management team consistently delivering superior results 25
Slide 26: Thank You!
THANK YOU!