Thank you, operator. Hello everyone, and thank you for joining Vipshop Fourth Quarter and the Full Year 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 applies 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's 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 fourth quarter and full year 2025 earnings conference call.

This year has been defined by strategic realignment, operating resilience, and a firm commitment to high-quality growth in a dynamic market. While we entered 2025 facing a muted consumer environment, I'm pleased to report that the agility of our off-price retail model has allowed us to stabilize our top-line performance and continue to deliver robust profitability for the full year.

Our fourth quarter results came in slightly below our expectations. This was primarily due to a deceleration in December sales as customer activity slowed.

We attributed it to the weak winter apparel demand alongside delayed holiday shopping due to a later Spring Festival. While we saw short-term pressure this quarter, our long-term roadmap remains unchanged.

We continue to make solid progress that reinforced our flywheels from merchandising, customer engagement to operations. In 2025, we implemented a strategic reorganization of our merchandising and customer engagement teams to enhance agility and long-term competitiveness.

By enabling faster decision-making and breaking down internal silos, we have unlocked a strong foundation for long-term growth. Throughout the year, our merchandising strategy centered on three pillars: enhancing customer relevance, building differentiation, and deepening category expertise.

Advancing these capabilities has fundamentally allowed us to consistently and effectively align high-value brand supply with evolving customer demand. We are building a stronger, more connected portfolio of branded products.

Last year, our merchandising team further deepened our supply network. This enabled us to acquire more quality, deep-discount inventory, driving steady sales growth across our most valued brands.

Leveraging data-driven insights, we are proactively shaping a resilient assortment that wins in growth categories while keeping our supply chains responsive to shifts in customer needs. We are seeing encouraging early signals of cross-sell from apparel into related categories, like mother and baby, childcare, and lifestyle.

We will remain focused on refining these synergies to better serve our customers' diverse needs. Our Made for VIP line has become a key driver of differentiation, with sales in this exclusive categories grew by over 40% to account for 5% of online apparel sales in 2025.

Having successfully built this foundations of scale, we are now in the position to evolve our approach for the next stage of growth. We are streamlining our exclusive products to build a clear identity and drive mindshare.

When customers see an exclusive tag, they should instantly recognize a promise of high value and reliability. This is how we transfer the line into competitive differentiations: reliable purity, on-trend selection, and exceptional value.

Our opportunistic buying practice is another key differentiator, allowing us to select a portfolio of high-demand item from top global and domestic partners. This delivers a compelling value proposition based in quality, price, and style.

Combined with dynamic flash sale and treasure hunt experience, it drives wild customer apparel pulls, excitement, and encourage repeat visits. We are moving faster to lock in more exclusive, low-priced inventory to attract high-value shoppers and deepen the discovery drive vibe of our platform.

To enhance customer experience, one team now manages the entire journey, from initial brand and acquisitions to value-driven growth and lifelong engagement. We have enhanced our capabilities to target and engage users efficiently, which serves as a core foundation of our full lifecycle customer strategy.

Early progress is promising, and we are focus on the sustainable runway ahead to build a more seamless, cross-category experience that maximizes lifetime value. The Super VIP program remains the cornerstone of our growth.

Active SVIP members sustained double-digit growth for the fourth quarter. For the full year 2025, active SVIPs grew by 11% to 9.8 million, contributing 52% of our online spending.

Through exclusive upgrades, such as private sales and family benefits, SVIPs consistently demonstrate significantly higher retention and repeat purchase than those of regular customers. Their sustained loyalty and spending power provide a reliable revenue stream and increase our apparel to brand partners seeking high-quality customer access.

Turning to the operations, we have enhanced our capabilities to better sync merchandise with customer intent, delivering measurable results. We implemented multi-objective optimization in our searching engine, directly improving conversion rate.

We also prioritized diversity and freshness in our recommendation engine, which has enriched the discovery and drive high browsing frequency and return visits. Look ahead, we are exploring generative search and recommendations to enable more dynamic, interactive, and rich discovery experience.

Lastly, we have made great strides in deploying AI across our business to drive tangible value. With advanced AI applications in searching and recommendations, customer service, and marketing, we are enhance the customer experience and empowering our brand partners, laying a strong foundation for deeper company-wide integration.

Notably, our AI-powered customer service effectively automates routine interactions, improving the overall speed and relevance of customer support. The system now manages the majority of product inquires and generates personalized recommendations, with an automated resolutions rate approaching 90%.

AI-generated content is now widely used in marketing, driving efficiency and effectiveness. Taking our own campaign for example, by leveraging AIGC to automate creatives and placements, we have reduced production costs while optimized customer acquisition efficiency.

Furthermore, we have used AIGC to generate summaries of customer reviews and product portfolio, helping brand partners boost their sales effectiveness. With its full-scale launch, our AI virtual try-on feature has proven to be an effective driver of customer engagement.

Initial data confirms its impact on loyalty, showing that engaged customers have a high rate of repeat visits. Our next phase is a fundamentally integration of AI, moving beyond standalone workflows to embed it within our core operations, making it primarily driver of growth and business-wide efficiency.

As we looking back on 2025, we have become a more agile, customer-centric, and technology-driven organization. We enhance our leadership in the off-price sector as an indispensable gateway for brands navigating China's shifting consumption landscape.

As value shopping become a structural trend, we are uniquely positioned to capture high-value customers and expand our share of wallet through merchandising and supply chain reliability. While the macro environment remains dynamic, our focused strategy and disciplined execution giving us great confidence in delivering sustainable profitability growth in 2026 and beyond.

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. We concluded 2025 with resilient performance, underpinned by solid profitability in a dynamic market.

This financial strength stems from our disciplined approach to investing, ensuring every dollar we deploy advance our core business and builds lasting momentum. Over the past year, we focused on enabling the business with agility, ensuring our investments in merchandising, consumer engagements, and operational upgrades, as well as AI enhancements, directly strengthen our business core.

This discipline has translate into quality earnings and is building the foundation for durable competitive advantages. As Eric emphasized, we have seen tangible progress, which has repositioned us for sustained momentum.

Our focus remains on stewarding our capital to support this business priorities, ensuring we have both the flexibility and financial foundation to execute our long-term growth strategy. Turning to capital returns, I'm pleased to confirm that we delivered on our 2025 commitment, returning a total of US$944 million to shareholders through dividends and share repurchase.

For 2026, we are maintaining this momentum. Consistent with our prior years' policy, we intend to distribute no less than 75% of our full-year 2025 non-GAAP net income attributable to Vipshop's shareholders.

This will be executed through an increased annual dividend of approximately US$300 million, as well as the continuation of our share repurchase program. This actions reflect our confidence in the company's cash-generating capability and our steadfast commitment to shareholder value creation.

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

Total net revenues for the fourth quarter of 2025 were RMB32.5 billion, compared with RMB33.2 billion in the prior-year period. Gross profit was RMB7.4 billion, compared with RMB7.6 billion in the prior-year period.

Gross margin was 22.9%, compared with 23.0% in the prior-year period. Total operating expenses decreased by 3.7% year-over-year to RMB4.9 billion from RMB5.1 billion in the prior-year period.

As a percentage of total net revenues, total operating expenses decreased to 15.0% from 15.2% in the prior-year period. Fulfillment expenses decreased by 1.0% year-over-year to RMB2.4 billion from RMB2.5 billion in the prior-year period.

As a percentage of total net revenues, fulfillment expenses was 7.5%, compared with 7.4% in the prior-year period. Marketing expenses decreased by 6.1% year-over-year to RMB873.7 million from RMB930.3 million in the prior-year period.

As a percentage of total net revenues, marketing expenses decreased to 2.7% from 2.8% in the prior-year period. Technology and content expenses decreased by 9.3% year-over-year to RMB425.5 million from RMB469.2 million in the prior-year period.

As a percentage of total net revenues, technology and content expenses decreased to 1.3% from 1.4% in the prior-year period. General and administrative expenses decreased by 5.2% year-over-year to RMB1.1 billion from RMB1.2 billion in the prior-year period.

As a percentage of total net revenues, general and administrative expenses decreased to 3.5% from 3.6% in the prior-year period. Income from operations increased by 1.7% year-over-year to RMB2.90 billion from RMB2.85 billion in the prior-year period.

Operating margin increased to 8.9% from 8.6% in the prior-year period. Non-GAAP income from operations was RMB3.2 billion, compared with RMB3.4 billion in the prior-year period.

Non-GAAP operating margin was 10.0%, compared with 10.2% in the prior-year period. Net income attributable to Vipshop's shareholders increased by 5.8% year-over-year to RMB2.6 billion from RMB2.4 billion in the prior-year period.

Net margin attributable to Vipshop's shareholders increased to 8.0% from 7.4% in the prior-year period. Net income attributable to Vipshop's shareholders per diluted ADS increased to RMB5.12 from RMB4.69 in the prior-year period.

Non-GAAP net income attributable to Vipshop's shareholders was RMB2.9 billion, compared with RMB3.0 billion in the prior-year period. Non-GAAP net margin attributable to Vipshop's shareholders was 8.8%, compared with 9.0% in the prior-year period.

Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS was RMB5.66, compared with RMB5.70 in the prior-year period. As of December 31st, 2025, we had cash and cash equivalents and restricted cash of RMB24.1 billion, and short-term investments of RMB5.8 billion.

Now, I will briefly walk through the highlights of our full-year results. Total net revenues were RMB105.9 billion, compared with RMB108.4 billion in the prior year.

Gross profit was RMB24.5 billion, compared with RMB25.5 billion in the prior year. Gross margin was 23.1%, compared with 23.5% in the prior year.

Income from operations was RMB8.1 billion, compared with RMB9.2 billion in the prior year. Operating margin was 7.7%, compared with 8.5% in the prior year.

Non-GAAP income from operations was RMB9.9 billion, compared with RMB10.7 billion in the prior year. Non-GAAP operating margin was 9.3%, compared with 9.9% in the prior year.

Net income attributable to Vipshop's shareholders was RMB7.2 billion, compared with RMB7.7 billion in the prior year. Net margin attributable to Vipshop's shareholders was 6.8%, compared with 7.1% in the prior year.

Net income attributable to Vipshop's shareholders per diluted ADS was RMB14.15, compared with RMB14.35 in the prior year. Non-GAAP net income attributable to Vipshop's shareholders was RMB8.7 billion, compared with RMB9.0 billion in the prior year.

Non-GAAP net margin attributable to Vipshop's shareholders was 8.3%, which remained stable as compared with that in the prior-year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS increased to RMB17.08, compared with RMB16.75 in the prior year.

Looking forward, in the first quarter of 2026, we expect our total net revenues to be between RMB26.3 billion and RMB27.6 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 operational conditions, which is subject to change.

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

Hey, 谢谢沈总、Mark、Jessie。那我第一个想问一下这个春节的 seasonality 是不是也有，因为看到我们这个 1Q 的这个 guidance 还是有一定的加速，所以想听一下我们觉得这个需求在年初到现在以来是怎样，然后这个春节的这个时间点的因素有没有影响到我们看到业务的比上季度快？然后第二就想问一下我们这个对 2026 年的这个 margin 应该怎么思考？就觉得这个 2025 年基本上就是利润有所下降的，那在我们对 2026 年的毛利和成本的一个思路来讲，觉得这个利润率是不是大概会稳定下来，或者有新的一些投入点？然后应该怎么去想这个 2026 年的这个利润的一个预期？谢谢。 嗯，那个要他用用中英文吗？

Hi

Ronald, would you please translate your question into English, please? Maybe I'll just translate the question first, and then let Eric respond to the question.

The first question is about the quarter-to-date business performance, whether the seasonality and especially a late Spring Festival has impacted the business performance, and have we seen any recovery in the business? Based on the guidance, it seems like we are accelerating revenue growth a little bit.

The second question is about the margin outlook for 2026. Because we have seen that margins for 2025 seemed to be under a little bit pressure in terms of GP margin and NP margin, whether we have new investments for 2026 and how do we think about gross margin, costs and expenses, and NP margin, whether we can stabilize our margin profile.

那个我回答第一个问题，就是关于那个对 Q1 的预估。那么我们其实在去年的 Q4 碰到了暖冬的问题，可能行业内确实去年的这个冬天那么因为天气的原因，其实衣服卖得确实不好，那么大家那个对衣服的购物欲望比较弱。那么我们说在今年的 Q1 我们看到整体情况有好转，那么包括那个虽然说我们现在春节的时候有时间错位的问题，那么我们比如说如果看 1-2 月相加，那么总体我们看到增长还是不错的，所以说我们其实对今年还是有信心。关于对 Q1 我们也给了 0-5% 的增长的预期，所以我们自己认为整体还不错。那么第二个点就是问关于利润的净利率的问题啊。我们自己因为我们知道我们可能就是在目前这种情况下，我们其实要做稳健经营，所以说我们其实管理层对我们自己 2026 年的预估，我们认为我们的净利率还是要保持，那么最起码保持去年的水平，甚至要做得更好一些。 On the first question regarding the Q1 guidance, let's take a look at the Q4 first.

I think our online sales actually took a hit in Q4, especially in December. It was way too warm in China in most regions for people to buy winter clothes, and since Chinese New Year's late this year, nobody was actually in a rush to shop for the holiday.

Because of that, apparel didn't sell nearly as well as our other categories. As we heading to the first quarter, Q1, actually we have seen consumer activity has clearly picked up, largely driven by New Year shopping.

If we look at January and February combined, actually we did see a nice recovery in our core business. This has kept us firm on track with our guidance of a 0% to 5% top-line growth, and we are confident that we can deliver that growth for Q1 and for the rest of the year.

Second on margins, I think our business philosophy has been very consistent. We remain focused on high-quality growth.

In fact, a sustainable, profitable growth for the business, especially in a dynamic macro environment today. We expect margins will be stable, and we will make every effort to outperform in terms of margins for 2026 and beyond.

谢谢。

Hello, good evening. Thank you.

沈总，晚上好，谢谢接受我的提问。我有两个问题，我先用中文问吧。第一个问题是关于这个用户的这个增长。我记得之前管理层其实有就是曾经表示过，就是那个我们希望看到用户会回去，这个增长的趋势是可以持续的。但不知道说我们管理层对 2026 年用户增长有什么预期吗？然后对于整个用户需求的话呢，我们是怎样看待这个服装跟这个非标品这边的这个需求？然后第二个问题呢，我是想问关于 AI 的。不知道我这个想法对不对啊，就是说完全是否认为，比如说我们唯品会这个尾货的这个服饰其实是比较能够抵制这个 AI 的冲击啊？因为感觉上就款式很多嘛，然后感觉上 AI 是比较不容易取代的这个从一个 agentic 这个 commerce 这个 booking 的情况下。然后也不知道说我们会不会就是投入更多的这个资源去线下，比如说像杉杉奥莱这个这块。好，我这边自己翻译一下。So thanks for taking my questions. I have two questions.

First is that related to the user growth. I think management previously commented that we're hopeful to see the user growth momentum to sustain.

Just wondering if management could share with us what is your expectation for the user growth for 2026. Then regarding the demand, how are you seeing the demand for the apparels versus the non-apparel growth?

Second question is related to AI. Just wondering does management believe the overstocked business model that we have for Vipshop, would that be actually more resilient against this agentic commerce?

With that, will VIP actually invest more resources into growing the offline business such as the Shanshan Outlet? Thank you.

好，我来先回答第一个问题。就是我们自己对用户增长是非常关注的，因为是有用户增长才会有业绩增长。那么我们原先预计比如说

Q4 的用户是正增长，但是确实也是因为 Q4 的这个购物需求急剧下降，所以导致用户增长也不如预期。但是呢，我们希望到了 2026 年，那么我们会走到一个正常的轨道。那么我们相信在 2026 年我们也要做到用户是正增长，而且呢增长还要越来越多，越来越好，那这样才对我们的销售业绩有保证。那么因为比如说我们现在尤其是每年的退居率也会增加，所以其实用户的增长还要更高于我们的业绩增长，那么才会有确保我们的那个每年的那个财报的业绩有正增长。那么另外呢对整体的用户的购买趋势，那么包括整体现在的消费情况，那么用户确实是认为很有价值才买，所以说也更激发我们说要给用户创造价值。如果是做服装，做折扣服装，那么让用户觉得它真的是超值。那么另外呢在标品方面我们也要做些改进，因为我们今年也调整了一些标品的政策，我们也希望那个用户来到我们唯品会这里也能买到一些比较好的标品，那么所以说我们总体货品的调整、政策的调整也就是为了促进用户买来买得更多，粘性更强，那么有一个长期健康的用户增长。那么第二点就是回答关于那个 AI 的问题。AI 呢我们自己认为现在 AI 确实风起云涌，那么未来我们自己认为可能购物的入口啊，包括那个 AI 的推荐啊，其实会对电商有一些影响，但这需要点时间。那么但是我们自己也认为不管 AI 怎么样吧，就是说如果我们在货品方面我们牢牢能把握住这种库存、这种多样性、低折扣的有价值的货品，那么就是说我们也不会掉队掉得太厉害。那么另外呢就是线上其实还是持续在卷嘛，那么我们自己认为比如说像杉杉奥莱，那么像这种实体的门店啊，那么包括有用户体验、用户的购物时间在的，像这种确实能抵御 AI 的那个入侵。那么包括我们其实在未来也要把杉杉奥莱可能要做得更大的，那么包括门店有健康的增长，那么而且销售要做得更强，那么我们说的覆盖更多城市，那么所以说这是我们对杉杉奥莱未来的发展的想法。

On the first question about customer growth, customer growth is definitely our top priority. That's actually the foundation for sales growth and ultimate profitability.

In Q4, we had thought we should have maintained the customer growth momentum, but due to a unexpected slowdown in consumer activity, actually customer growth is a little bit under pressure. We expect customer to regrow for 2026, and ideally we wish to see customer growth is actually faster than sales growth to offset the impact of a slightly rising return rate.

We are definitely going to make every effort to bring customer back to growth track in 2026. On the second question regarding category preferences, consumers are still generally speaking still cautious and selective and value conscious, but they continue to shop across different categories, including discretionary categories.

They just need strong reasons to do so. That's why we focus so much on providing the best value across the shopping carts, including apparel and non-apparel categories.

We are making changes in both categories, especially in standard categories to drive repeat business for our most valuable customers, including SVIP and high-value customers, to increase their cross-category purchases for family shopping. Lastly, on AI, definitely AI is fundamentally transforming many industries, including the e-commerce industry.

For an off-price retailer like Vipshop, we are definitely adapting to this trend to remain competitive. We believe fundamentally our business model relies on merchandising, on how well we can secure quality deep-discount inventory, how well we can provide a best value for customers.

We think as long as we make a difference in merchandising and supply chain reliability, we will not be left behind. Of course, the online business is a hyper-competitive business.

That's why we are constantly looking for opportunities offline, especially with the outlet business, which proved to be a good business model in terms of stable revenue streams and profitability. We are actually expanding our presence for Shanshan Outlets, which are doing great in terms of sales and profit contribution.

We expect a measured pace of extension into more cities and regions and geographies. We expect to see continued strong growth in terms of sales, revenue, and profit from Shanshan business.

We expect with a strong offline presence, we will be able to offset any potential challenge from AI. 谢谢。

Thank you for taking 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.