Vipshop Holdings Limited (NYSE:VIPS) Q2 2019 Earnings Conference Call - Final Transcript

Aug 15, 2019 • 08:00 am ET


Vipshop Holdings Limited (NYSE:VIPS) Q2 2019 Earnings Conference Call - Final Transcript


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Jessie Fan

Thank you, operator. Hello everyone and thank you for joining Vipshop's Second Quarter 2019 Earnings Conference Call. 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. All statements other than statements of historical fact 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. 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.

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

Eric Ya Shen

Good morning and good evening, everyone. Welcome and thank you for joining our second quarter 2019 earnings conference call. We delivered strong operational and financial results for the second quarter of 2019. During the quarter, our total active customers continued to grow at a healthy pace, increasing by 11% year-over-year. Since we refocused on discount retail, the stickiness of both our existing and new customers has improved.

We are thrilled to see our existing customers becoming a lot more active, while at the same time, new customer repeat purchase rate in the quarter after the first purchase has increased. These successes are the result of our focus on merchandising. Since we refocused on discount apparel and our profit, we have seen substantial improvement in our financial results and key operating metrics, proving our strategy is very effective.

We remain committed to executing on our merchandising strategy and further expanding our market share in the discount apparel sector in China. We are confident that we can continue to deliver steadily profit improvement in the future, which will generate sustainable, long-term shareholder return.

We strive to be the one-stop discount retail platform for our suppliers, solving all their inventory management issues in the off-price segment within our ecosystem. We have over a decade of experience in online discount retail, and we believe in this age and time, online and offline are closely linked. Shoppers will increasingly demand Omni-channel shopping experiences. Given that, we began to enter the offline discount retail segment this year, and our acquisition of Shan Shan Outlets is an important part of our new retail strategy.

Shan Shan Outlets is a profitable business with healthy operating cash flow. Importantly, they have a top-notch management team with a decade of experience in managing and operating outlets in China, whom will stay with Vipshop after the acquisition. Strategically, we will continue to focus on our online business, while our offline strategy, including