Thank you, operator. Hello, everyone, and thank you for joining Vipshop's third quarter 2025 earnings conference call.

With us today are Eric Shen, our co-founder, Chairman, and CEO, and Mark Wang, our CFO. Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the 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 public filings with the Securities and Exchange Commission, which also apply to this call to the extent any forward-looking statements may be made. Please note that certain financial measures used on this call, such as non-GAAP operating income, non-GAAP net income attributable to Vipshop shareholders, 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.

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

Good morning and good evening, everyone. Welcome and thank you for joining our third quarter 2025 earnings conference call.

Our third quarter results demonstrated tangible progress on our path back to growth. We are pleased with the clear top-line expansion, led primarily by notable improvement in customer trend and across our core categories.

Total active customers regained year-over-year growth. SVIP membership continued to deliver double-digit growth.

In the third quarter, active SVIP customers grew by 11% year-over-year, contributing 51% of our online spending. This sustained growth was primarily driven by continuous upgrades to SVIP's exclusive product and service benefits, coupled with more targeted engagement initiatives, which effectively convert regular customers.

In terms of category performance, we saw accelerated momentum in apparel-related categories through the quarter. Our team successfully delivered a powerful blend of quality, value, and style.

This was achieved through merchandising strategy that highlights high-value brands, trending categories, and popular selling points, all of which are deeply aligned with customer priorities. Against dynamic industry backdrop, we were navigating this operational environment with agility and efficiency.

We are strategically realigned the organization for long-term success, implementing changes to strengthen our unique position as a off-price retailer for brands. We focus on reinforce the flywheel from merchandising, customer engagement, to operation.

At our core, we are a merchandising-led company. We compete through offering affordable and differentiated assortment.

We continue to enhance our leadership in deep-discount product offering, and we are deepening our category specialization to curate product offering that deliver great relevance and distinct value. We start to see new momentum in customer and sales by acting upon emergent bright spots and customer preferences.

As an example, we are rebuilding our maternal and childcare division to better integrate relevant apparel and non-apparel categories. This reshaped assortment is designed to foster cross-category growth and create lasting value for customers as they journey through different life stages.

We are bringing this level of specialization across each category in our business. In addition, we have the opportunities to scale through our differentiated product portfolio.

One is Made for VIPShop, which again delivered strong sales growth in the quarter. We are deepening our collaboration with more high-value brand partners.

The team is capitalizing on our category insights to motivate brands to allocate and create more in-season and on-trend supply at competitive price. A compelling case in point is a leading running shoe brand, which drew 50% of its September sales on our platform from Made for VIPShop after making select popular items exclusive to us.

Another case is a leading women apparel brand, which built sales momentum by customized more deep-discount, high-demand offering from its inventory fabrics. The other line of differentiate is a carefully curated portfolio of popular items, which we proactively source from both domestic and global brand partners.

We've seen strong momentum when we offer the right blend of quality, value, and style, and giving the fashion relevance, it generated wide appeal to young and middle-class customers who increasingly come back to enjoy the fun of flash sales and the treasure hunts. Beyond the merchandising is how we do better to appeal to customers.

In addition to sustaining strong mindshare with our core customer cohorts, we are actively experimenting with new marketing formats, such as influencer contents and short-form dramas. By adopting a integrated strategy across marketing, growth, and engagement, we are seeing early wins.

This approach enables a disciplined balance of cost efficiency and strategic reinvestment, improving our performance in acquiring, activating, and retaining customers. To further engage our customers along their journey, we focus on facilitating the browsing and discovering of broader range of new and existing offerings.

Our notable area of improvement is searching and recommendations. Our systemic upgrades of relevance models, algorithm, and product operations have translated into measurable gains.

In the third quarter, enhancements in our search and recommendation systems lead to a tangible increase in conversions, directly contribution to sales growth. We also continue to elevate the experience for our SVIP customers.

We want them to feel special, valued, and delighted with every visit, and we are delivering on this promise more consistently. In the third quarter, we launched a series of by-invitation private sales.

SVIP customers was granted exclusive access to the curated selection of major brands at deep discount, which delivered a powerful sense of value and successfully boosted membership loyalty. Lastly, we expect technology to play a strong role to tap into the potential of growth and efficiency.

We are clear on the path to accelerate AI application across our business. Our immediately focus is on deploying AI agent to enhance key areas, including search and recommendations, customer service, external marketing, and business analytics.

We expect these innovations to create more engaging customer experience, empower brand with advanced tools, improve marketing efficiency, and generate actionable business insights. As an example, we are seeing good adoption of our Try It On AI feature.

Customers really enjoy using it to virtually try on clothes, save looks, and share with friends before buying. We also gained traction with AI ads, as a growing share of campaigns now leverage AI to upgrade marketing creatives and media placements, boosting customer acquisition efficiency.

We are encouraged by the momentum in our business. Our operations are better aligned, and our teams are collaboration at new levels to unlock synergies.

We continue to adapt to stay ahead of market trends and customer expectations. The entire organization is leaning into the opportunities ahead of us.

We have great confidence in our long-term roadmap for sustainable, profitable growth. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Thanks, Eric, and hello, everyone. I am pleased to report a set of healthy financial results for the third quarter.

Total net revenues turned to growth and exceeded expectations, along with solid earnings expansion. This performance validates our disciplined model that balance growth investment with value creation, upholding our long-stated goal of achieving high-quality growth.

Our strategic yet prudent growth investment focus on value-driven opportunities in merchandising expansion, especially into the differentiated portfolio, consumer-facing marketing, better engagement with customers, as well as AI-centered technology advancements throughout our operations, all aligned with our long-term roadmap for success. We make sure everything we do to be powering our virtual flywheel within the business that translate into sustainable and profitable growth.

As Eric stated, we are seeing the benefits of recent strategic changes. We are engaged by the progress made so far and expect to see the impact of our initiatives build into the rest of the year and beyond.

We have great confidence in our long-term outlook and our capabilities to delivering value for all stakeholders. Again, I would like to reaffirm our commitments to shareholder returns in 2025, which is no less than 75% of the RMB9 billion full-year 2024 non-GAAP net income.

Far this year, we are firmly on track with the pact, have returned a total of over US$730 million to shareholders through a combination of dividend payments and share buybacks. Now moving to our detailed quarterly financial highlights.

Before I get started, I would like to clarify that all financial numbers presented below are in RMB and all the percentage changes are year-over-year changes unless otherwise noted. Total net revenues for the third quarter of 2025 increased by 3.4% year-over-year to RMB21.4 billion from RMB20.7 billion in the prior-year period.

Gross profit was RMB4.9 billion compared with RMB5.0 billion in the prior-year period. Gross margin was 23.0% compared with 24.0% in the prior-year period.

Total operating expenses were RMB3.9 billion compared with RMB3.8 billion in the prior-year period. As a percentage of total net revenues, total operating expenses were 18.5% compared with 18.2% in the prior-year period.

Fulfillment expenses were RMB1.9 billion compared with RMB1.7 billion in the prior-year period. As a percentage of total net revenues, fulfillment expenses were 8.7% compared with 8.4% in the prior-year period.

Marketing expenses were RMB667.2 million compared with RMB617.8 million in the prior-year period. As a percentage of total net revenues, marketing expenses were 3.1% compared with 3.0% in the prior-year period.

Technology and content expenses were RMB438.6 million compared with RMB454.2 million in the prior-year period. As a percentage of total net revenues, technology and content expenses were 2.1% compared with 2.2% in the prior-year period.

General and administrative expenses were RMB984.6 million compared with RMB957.8 million in the prior-year period. As a percentage of total net revenues, general and administrative expenses were 4.6%, which remained stable as compared with that in the prior-year period.

Income from operations was RMB1.26 billion compared with RMB1.33 billion in the prior-year period. Operating margin was 5.9% compared with 6.4% in the prior-year period.

Non-GAAP income from operations was RMB1.6 billion compared with RMB1.7 billion in the prior-year period. Non-GAAP operating margin was 7.5% compared with 8.2% in the prior-year period.

Net income attributable to Vipshop shareholders increased by 16.8% year-over-year to RMB1.2 billion from RMB1.0 billion in the prior-year period. Net margin attributable to Vipshop shareholders increased to 5.7% from 5.1% in the prior-year period.

Net income attributable to Vipshop shareholders per diluted ADS increased to RMB2.42 from RMB1.97 in the prior-year period. Non-GAAP net income attributable to Vipshop shareholders increased by 14.6% year-over-year to RMB1.5 billion from RMB1.3 billion in the prior-year period.

Non-GAAP net margin attributable to Vipshop shareholders increased to 7.0% from 6.3% in the prior-year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS increased to RMB2.98 from RMB2.47 in the prior-year period.

As of September 30, 2025, the company had cash and cash equivalents and restricted cash of RMB25.1 billion and short-term investments of RMB5.9 billion. Looking forward to the fourth quarter of 2025, we expect our total net revenues to be between RMB33.2 billion and RMB34.9 billion, representing a year-over-year increase of approximately 0% to 5%.

Please note that this forecast reflects our current and preliminary view of the market and our operational conditions, which is subject to change. With that, I would now like to open the call to Q&A.

晚上好，谢谢管理层接受我的提问。我的问题是关于整个板块的一个发展的。因为我们最近看到了电商行业的话，就是大家都是在做这个即时零售，然后也看到了就是友商的DAU都在一个非常高速的一个增长的一个态势。所以想问一下我们是怎么去看即时零售对我们这个板块后续的这个竞争格局的一个发展？这个第一个问题。第二个问题还是想问一下就是我们现在就是Q4来看，10月、11月份现在GMV每个月的情况是怎么样？然后我们是怎么去看明年的一个展望？Thanks management for taking my questions. My first question is about the online shopping competitive landscape.

Can management comments about the latest trend, as well as the potential impact coming from quick commerce? My second question is about the monthly GMV momentum quarter-to-date.

How's the performance we are seeing in October and November? How we should think about the 2026 outlook?

Thank you.

好，我来回答两个问题。第一个就关于即时零售，其实我们公司因为主力的品类是服装嘛，所以说我们不是像这种标品啊、食品啊这种就是我们说的要快速送达的，那么我们其实没有计划要进入即时零售啊。那么但是现在呢确实即时零售那个就是说确实大家很多商很多家都在攻这个即时零售，那么对我们来讲呢其实我们还是继续把自己的事情干好。另外呢在一些我们可以提速的方面我们做了一些，比如说做了一些标品我们做次日达，那么包括一些商品入仓也是为了跟顾客更快啊，包括物流轨迹的优化等等啊，就是能做到提速尽量提速。那么别的呢我们就没有那个要跟那个加入整个即时零售的大军。我们认为自己做服装的话，大家其实不在乎说非要说15分钟到还是45分钟到，那么我们说还是继续把我们的品牌特卖的优势跟价值发挥好就可以。那么第二个第二个回答就是对2 是问对Q4的预计还是对26的预计？10、11月。我们因为10月份现在已经是11月的将近下旬了，所以说我们看到整体的10月、11月的趋势都还可以，那么包括我们其实整个公司在做双11促销的时候其实整体都还不错，所以说我们其实对Q4的整体的预估我们还是偏正面吧，包括我们对Q4我们发了是0到正5的增长吧，那么大概是这个区间。有没有问26年？26年呢我们觉得我们其实认为整体的市场空间还是有啊，包括消费呢我认为也不会太好，也不会太差，那么基本持处于稳定吧，所以说我们认为我们还是继续坚持我们的高质量发展，那么在业绩增长方面我们要继续增，另外呢就是在利润方面我们还是要继续要稳，所以说总体我们认为26年我们还是做一个稳健的一个增长策略吧。

First in response to your question on quick e-commerce, I think we are definitely not going into quick e-commerce. We are looking at what appeals to customers that are attracted to quick e-commerce.

Convenience is something that matters, but that matters more in grocery shopping, food delivery, and some household essentials that are not real spending advance, etc. and not in apparel-related categories, which consumers typically do not care so much about fast delivery.

Anyway, we've made progress with that convenience as part of our worry-free value proposition to customers. I think, for example, there are a few notable things.

One is the delivery matrix. Next delivery has been rolled out for certain standardized categories products in some cities.

Second is accelerating the delivery of apparel products in some key cities. Lastly, the logistics trajectories are actually optimized for customer returns or warehouses, etc.

These efforts are still focused on driving a refined supply chain management to support business growth as well as operating efficiency. Second, in terms of the recent GMV sales trend, if we look at October and November to date, actually we are seeing a decent growth momentum.

The entire Double 11 promotional period, we actually recorded a decent year-over-year growth. We are reasonably positive on the business performance of the fourth quarter, which we guided 0% to 5% revenue growth.

For 2026, we do see there are opportunities in off-price retail for brands. On the other hand, we do expect consumer sentiment tend to normalize a bit more.

We will still have reasonable expectations for growth. We are pursuing a roadmap for a balanced growth and profitability.

That's the roadmap for our long-term success. That is simply high-quality development.

Thank you.

Hi. Good evening, management.

Can you hear me okay?

Yes,

we can.

Okay. Thanks for taking my questions.

两个问题，谢谢管理层接受我的提问。第一个问题是想管理层说一下，就是仔细说一下我们最近这个团队，就是商品，这个merchandise团队变动的一个重组的情况。然后这个变动是怎么帮助到比如说最新这个季度的这个业绩？然后这个变动主要是为了改善对客户的一些喜好做更好的预测呢？还是说提升了我们跟就供应商这边的这个关系，然后确保公司能够拿到更多的这种比如说SVIP会员喜欢的商品？然后我们怎么预期这些变动将来更进一步地帮助到公司后续的一些业绩的发展？然后第二个问题是能否请管理层说一下我们最近VIPSHOP就是唯品会这边人工智能，怎么引用人工智能帮助到比如说我们就是SVIP会员的一些增长？然后人工智能这边是不是也可以用来针对流失的用户，然后并能能够把他们吸引回到我们的平台？我自己翻译一下。So thanks for taking my questions. The first question is can management elaborate the details changes and the restructuring of your merchandising team?

How do these changes help the latest quarter performance? Are these mainly on improving your predictions of the customer preference, or is it for improving your relationship on securing better merchandise that fits to your super VIP members?

How do you anticipate the changes to further help the financial performance? Second question is can you also elaborate how AI have been helping VIP in terms of your financial growth?

Can AI helps to target the churn user and also attract them back to VIP platform? Thank you.

那个我们那个关于这个组织结构调整，那么我们其实是让组织更扁平，那么我们创始人亲自继续下场管得更多，那么另外呢最重要是促进了部门之间的紧密合作。那么包括我们其实也找更多专业的人，那么包括比如说原来做得不好的那个比如说有些部门的人，那么我们也换换啊。那么我们自己觉得其实经过组织的调整跟大家的合力，每个部门都发挥了一些作用，还不是一个部门发挥作用，包括商务，那么包括我们调整了组织，那么更专业，那么包括可能有些更关联的品类，那么能协同。那么另外呢大家更努力地去搞好货，那么包括我们的运营跟那个我们的流量分配可能更高效，大家更协作，那么包括我们的客户获取跟留存，包括SVIP，那么也都发挥了它们的作用。所以说整体而言呢其实整体是团队叫renew一下吧，那么我们说还不是靠单个部门啊。但是我们希望就是说整体组织调整后包括不断地迭代，那么大家的这种叫配合更紧密，而且呢大家为一个目标共同努力，我相信在未来的话应该会还会继续发挥作用。所以说我们说我们也希望看到像这种变化，那么我们讲的持续给我们带来一些活力。那么第二个呢就是刚刚问AI这边啊。AI这边呢我们其实看那个在AI方面给电商带来其实不少的变化啊，有很多很多，包括我们说的就就是一个简单的换后面的模特或者背景啊，其实我们说的促进了消费者的认同和转化，给我们带来效率。包括呢我们在广告方面，因为我们在外面精准获客，那么广告的素材如何更精准或者更有效，其实带来很多变化。那么包括我们现在也在研究就如何在会员的流失、留存，包括SVIP的流失、留存方面，其实用AI智能体也应该能做很多事情。那么所以说包括一些正常的AI在我们公司里的降本增效的作用啊，所以说我们其实看到AI真正给我们带来的效果还刚刚开始，那么未来的话我们也会不断地去挖掘，力争让让我们这个公司通过AI的AI的帮助能能进一步地提高我们的效能，那么找到一些原来我们解决不了的问题用AI来解决，那么更好地驱动包括顾客转化，包括我们说的那个让顾客喜欢我们，或者顾客的留存、黏性增加等等等等，我们认为还能做的事情还有很多很多。

First on the recent organizational changes, it's simply that we've realigned the entire organization for long-term development. Actually, it's not a one-department change.

It's across the entire organization among different teams, including merchandising, customer, operations, and technology, etc. I think the major purpose of this organization changes to infuse more agility and efficiency into our business model, especially our founders, two founders, actually are much more hands-on on daily operations, the teams can make quick decisions and turn these decisions into actions.

Also, we've replaced some of the senior leaders of the major merchandising teams with new talents. Basically, we've refreshed the entire organization, and we make consistent upgrades so that teams can collaborate at new levels to unlock synergies.

For example, on the merchandising side, as we mentioned on the call, for some of the divisions, we are trying to build a reshaped assortment, including apparel and non-apparel categories, to foster cross-category purchases. On customer engagement, we've actually adopt integrated approach from marketing, growth, and engagement so that we can become more efficient to attract and activate and retain customers through a series of adjustments.

Also, on the technology side, we focus on building the teams into the next phase of technology advancement, etc. We are implementing all these changes so that we can always stay ahead of market trends and customer expectations.

On the second question about AI, definitely, we are trying to accelerate AI application across our business. Just a simple AI application can be very vital to driving business growth and efficiency.

For example, we've added a lot of visualized model background to facilitate customer experience in virtually try on clothes and making better choices, etc. Actually, AI has brought benefits to conversion that directly contributing to sales growth.

Also, we've made a lot of efforts on AI advertising. A growing share of our marketing campaigns actually leverage AI-generated content to upgrade marketing creatives and media placement.

This has actually boosted customer acquisition efficiency. Of course, we are also experimenting with AI agents to be used in solving problems like customer churn out or how to keep customers longer on our platform, how to improve their customer experience with our platform.

We do believe AI has a lot of potential in driving efficiency as well as supporting our long-term growth.

管理层晚上好，我这边有两个问题。第一个问题是关于运营方面的，那我们注意到公司这个季度这个净盈利这边有了比较好的改善，但是营业利润这边，包括营业利润率还是有一定的下滑。那管理层之前提过，就是预期说这个如果营收、GMV回到增长以后，应该会有一些规模经济的效应。那我这样请教下管理层，就接下来管理层期待说大概什么时间，要透过什么样的努力，可能随着这个营收增长，我们的这个营业利润、营业利润率能够回到正增长的轨道？第二个问题是关于这个最近有新闻提到公司有在考虑这个香港上市的事情，那我不知道管理层能不能就这件事情稍微分享一下想法，或是任何能够分享的东西？那我这边翻译一下。Thank you, management, for taking my question. I have two questions.

The first question is about the operation. We noticed the company delivered decent net profit growth in the third quarter.

However, the operating profit and operating margins still deliver some decline year-on-year. Now management mentioned before that the increasing GMV and the revenue should help economy scale and the margin recovery.

We want to know when and through what effort the management expect that the operating margin and operating profit can return to positive year-on-year growth. The second question is about the recent news talking about the company's thinking about Hong Kong listing.

We wonder anything the management can share on this front. Thank you very much.

Hello, I'm Mark. Thanks for your question.

Your first question is regarding our gross margin, and actually our gross profit margin declined in the third quarter, and it reflects our efforts to provide more customer incentives, and especially for SVIP and other high-value customers on the standardized products to maximize sales and revenue growth. For the longer term, we expect the gross profit margin to be comparable to the level in 2024 and largely stable around 23%, depending on the change of product mix from quarter to quarter.

Regarding the marketing expenses, we also increased a little bit the marketing expenses to attract more customers, and we think that in the future, those merchandising capabilities, and also the AI technology application, and also the marketing expenses will also the main trigger for our GMV's growth. For your second question, actually we have been closely followed the change for the capital market, and if there is any progress, we will update markets.

Thank you.

好的，谢谢管理层接受我的提问。我这边有两个问题想请教。第一个是这个季度咱们在用户数和收入方面都已经转正了，那就想请问一下下个季度是不是能够继续看到这种环比上增速的改善？然后我们目前在用户方面的投入计划跟这个运营重点是怎么样的？怎么应该我们应该怎么去想这个明年用户数跟收入方面这个增速的水平？第二个问题是咱们刚刚提到就是今年的股东回报还是会按照之前的承诺来完成，那就想请教一下咱们对明年的这个股东回报计划有什么初步的想法吗？那我也可以自己翻译一下。Thank you, management, for taking my question. Firstly, we've seen the active customer number and revenue growth have turned positive this quarter.

Should we expect continued sequential improvement in the fourth quarter? What are our investment plan and the operational focus for the users and for customers at the moment?

How should we think about the user growth and revenue growth for next year? Secondly, just wondering what are our latest thoughts on the shareholder return program for next year?

Thank you.

好，我回答第一个问题啊。就是关于用户的增长，我们其实是在比如说今年的Q4，我们希望是业绩继续0到5，那么然后呢我们希望是用户增长要高于Q3啊，而且我们以后是要求包括在未来的Q 未来的2026年，我们希望也是用户是稳健增长，因为用户的稳健增长才有业绩的稳健增长。而且呢这些都属于叫高质量的，而不是说用户要少了以后，那个我们说的其实看不到未来。所以说我们其实公司里在关于用户稳健增长上面我们也断地投入，包括不断地获那个想办法获取新客，各种渠道不断地拓展再去获新客，包括如何让老客那个少流失，包括让老客更好地体验品牌特卖回来，包括让我们的SVIP享受更多惊喜回来，所以说我们其实也大量的方法在想，就是要保证我们说的26年的乃至未来的客户，我们一定要长期稳健增长，而不是要掉啊，如果用户掉的话呢其实业绩就会掉。所以说这是我回答的第一个问题。第二个问题让那个Mark来回答。

Let me first translate our response to your question on customer and revenue growth for 2026 and beyond. I think for the longer term, we always stay focused on achieving steady growth in customer, revenue, and earnings.

We believe the sustainable and profitable revenue growth model should be driven by high-quality growth in customers as well as ARPU. For the near term, we do expect customer growth will accelerate, for example, in Q4 as compared to Q3 in terms of year-over-year growth.

For 2026, we continue to believe that revenue growth should be driven by growth in customer number and in addition to ARPU. We've made a lot of efforts in driving customer growth, and we've experimenting with a lot of new ways, whether it's marketing formats or channel investment, etc.

All these efforts are oriented to acquire high-quality new customers, activate dormant or inactive customers, as well as continue to expand our SVIP high-value customer base. We do have confidence that for the long term, we can drive the top-line growth on the basis of both customer growth and ARPU expansion.

For the second question regarding the total return to shareholder, our return to growth demonstrate our disciplined capabilities to manage business to achieve balanced growth. We are more confident that we can achieve relatively stable and healthy profit and cash flow levels.

For the past, we have returned over $3.4 billion to shareholders since April 2021 in the form of buyback and dividend. For 2025, we are on track with our commitment to returning no less than 75% of the full-year 2024 non-GAAP net income to shareholders.

As of the date we published the third quarter results, we have returned a total of over $730 million through dividends and buyback. For the next year, actually we will continue to invest in our business to grow and improving profit and generate cash to support our dividend payment and buyback.

We will evaluate appropriate level next year. Thank you.

Thank you, management.

Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team.

We look forward to speaking with you next quarter.