Vipshop Transcript: Double 11 achieves double-digit growth,

Here is a summary of the Vipshop third quarter conference call for 2023, regarding the interpretation of the financial report for the same period. For more details, please refer to the article "Vipshop: Don't be misled by rumors, there is gold in the details" at 《Vipshop: Don't be misled by Poor Guidance,Golds lying in Details》.

1. Key points from management's statement:

The clothing category achieved a YoY GMV growth of 16% in the third quarter.

As of the end of the third quarter, active SVIP members increased by 17% YoY and contributed approximately 45% of the GMV.

In the third quarter, we repurchased $13.4 million worth of ADS, and we continue to execute the remaining $1 billion repurchase plan. Since April 2021, we have repurchased a total of $2 billion.

2. Analyst Q&A:

Q: Progress and outlook for the fourth quarter?

October had average performance due to hot weather, but November saw double-digit growth compared to the previous year due to the temperature drop and the Singles' Day event.

Q: Outlook for 2024 and industry competition?

The goal for 2024 is to increase gross profit and net profit, while also focusing on user growth and implementing effective methods to achieve faster user growth. The main focus in 2024 is stable and sustainable growth.

Q: The gross profit margin reached a new high in the third quarter. What are the reasons and sustainability?

There have been no changes in the supplier charging model, which is burdensome but has not resulted in price increases. The higher gross profit margin is mainly due to cautious coupon distribution, as the business scale remains relatively stable regardless of whether coupons are offered or not.

There may not be much room for improvement in gross profit margin in the future, but there is potential for improvement in net profit margin, mainly due to the scale effect brought by growth. However, the potential may not be as significant as this year. Net profit in the fourth quarter is usually the highest, and next year we will continue to reduce costs and increase efficiency, with market investments being accurately accounted for.

Q: The pace of share repurchases slowed down in the third quarter. How do you manage the repurchase pace?

We are steadily executing the repurchase plan, and there is still $551 million in repurchase authorization remaining. We are committed to repurchasing shares to provide stable returns to shareholders based on long-term confidence. The repurchase method is flexible and multiple factors are considered.

Q: Outlook for 2024, various operating indicators, and the market environment next year?

The market potential is not fully tapped yet, and we will continue to attract new customers while retaining existing ones. The key is to maintain differentiated products and competitive prices, as well as exclusive/supplied products. We will focus on both marketing and product offerings.

The current customer base is less than 100 million, which is far from sufficient. Vipshop will strengthen marketing, improve customer experience and service, and strive to offer high-quality products at affordable prices with excellent service quality.

Q: What's next after the repurchase authorization is used up?

Currently, there is an authorization of $500 million available until March 2025. The board of directors supports share repurchases because it is cost-effective. If the authorization is used up, we can apply for more at any time, and the consensus is generally positive.

Q: The gross profit margin is already high. If it cannot be increased, can it be maintained?

It is not possible to increase brand deductions. The gross profit margin in 2024 should be similar to the good performance in 2023. There is room for improvement in net profit margin.

Q: Explanation of SVIP user situation? SVIP growth is currently at 6.7 million users, contributing 45% of online GMV. The performance of user ARPU and other aspects are all good.

Risk disclosure and statement for this article: Dolphin Research Disclaimer and General Disclosure