Vipshop Holdings Ltd · NYSE:VIPS
Vipshop — Q4 2018 Earnings Presentation
26 slides from Vipshop's earnings presentation, February 2019
Slide 1: Vipshop Holdings Limited Investor Presentation
Vipshop Holdings Limited Investor Presentation February 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 and B2C market
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: Online: the future of discount retailing in China
Online: the future of discount retailing in China 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 in
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, logistic distribution, 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) 84.3% 85.2% 71.3% 76.1% 93.3% 92.3% 93.9% 93.6% 95.1% 96.6% 95.7% 96.5% 64.1% 62.4% 66.6% 67.1% 60.5 437.4 Repeat 57.8 Orders placed customers
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: Excellent merchandising
Excellent merchandising Brand selection Relationship with brands Sales management capability 1 ~ 1,700 Specialized Understanding Consumer insights 29,000+ brands Merchandising 2 of consumers Staff 3 Customized Deepening marketing brand partnership Business intelligence system Sales events optimi
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 84,524 269.8 72,912 41% 35% 74% 56,591 64% 193.1 8% 122% 40,203 130% 140.3 118.0 104.2 23,129 24,130 26,083 51.4 10,421 2013 2014 2015 2016 2017 2018 4Q17 4Q18 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) 24.2% 24.5% 24.9% 24.8% 24.9% 24.9% 24.9% 25.0% 24.9% 24.1% 24.3% 24.1% 24.4% 23.4% 23.5% 23.5% 23.2% 22.0% 21.7% 5,384 5,240 22.9% 20.2% 20.4% 20.6% 4,467 19.5% 4,009 4,044 3,860 3,694 3,631 3
Slide 19: Investment in logistics infrastructure to improve user experience
Investment in logistics infrastructure to improve user experience Fulfillment expenses (Non-GAAP)(1) (RMB in millions) 12.1%12.1% 11.4%11.2% 2,126 2,084 10.6% 10.8% 10.1% 1,876 9.8% 9.5% 9.3% 9.3% 9.3% 1,714 9.0%1,741 1,636 8.9% 1,624 1,656 8.8% 9.0% 8.8% 8.6% 8.5% 8.0% 1,418 9.0% 8.9% 8.5% 8.6% 1,2
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) 3.2% 3.0% 2.9% 2.9% 2.8% 3.0% 5.5% 2.7% 5.3%5.2% 5.4% 5.3% 5.1% 1110 2.4% 2.5% 2.4% 5.0% 4.9%4.9% 2.3% 2.3% 751 4.8% 2.3% 4.6% 1008 2.
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) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 970 914 888 799 741 728 678 673 623 595 577 560 518 501
Slide 22: Balance sheet highlights
Balance sheet highlights Balance Sheet Highlights (in RMB millions) September 30, 2018 December 31, 2018 Cash and Cash Equivalents, Restricted Cash, and Short 8,436 12,360 Term Investments Current Assets 21,100 27,326 Total Assets 36,160 43,563 Current Liabilities 18,847 25,946 Total Liabilities 19,
Slide 23: Growth Strategies
Growth Strategies
Slide 24: Our future growth strategy
Our future growth strategy Leverage social marketing channels to: 1) expand customer base; 2) increase market Enlarge customer share; 3) strengthen the Vipshop brand base Recommendation / personalization, better fulfillment service, customer care programs improvement, higher customer retention and r
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!