Ladies and gentlemen, good day everyone, and welcome to Vipshop Holdings Limited second quarter 2022 earnings conference call. At this time, I would like to turn the call to Miss Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed. Thank you, operator. Hello, everyone, and thank you for joining Vipshop second quarter 2022 earnings conference call. With us today are Eric Shen, our Co-founder, Chairman, and CEO, and David Cui, our CFO. Before we begin, I would like to remind you that a 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, and non-GAAP net income per ADS, are not presented in accordance with U.S. GAAP. Please refer to our earnings release for the reconciliation 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 second quarter 2022 earnings conference call. Our second quarter results came in better than expected, driven by improving micro conditions towards the end of the quarter, with the COVID-19 pandemic effectively under control. Supply chain and logistics efficiency largely recovered, and consumer sentiment also picked up gradually. Our top-line performance was helped by a month-on-month recovery in consumption, especially a more resilient trend in June. Even though sales were still under pressure, our bottom line increased and margins improved year-over-year, thanks to greater discipline in operations. This set of results demonstrates the resilience of our business model, as well as the strong execution and flexibility of the entire company to address external uncertainty. Notably, we are doing a good job supporting the core brand that appeals to the value of our consumers. This has translated into strong brand partnerships and improved customer loyalty. During the quarter, core brands continued to outperformance in sales momentum. Our buyers team worked more closely than ever to engage with brand partners. We helped them navigate through an uncertain environment with extensive support from customer engagement, category planning to marketing campaigns. Brand partners was pleased to use our merchant platform with new features to manage and grow their business. In turn, we secured more supply of unique and quality products at competitive price. In addition, we have been consistently refreshing our brand mix. We added more new trendy and high-end brand in both apparel and non-apparel categories, targeting different customer groups. Accordingly, we rolled out several new channels, such as Little Pink Box, VIP Trend, and VIP Luxury to support the growth of these new brands while creating a new feel of shopping for our customers. In the second quarter, we successfully turned more high-value customers into paid members. Active Super VIP customer grew by 21% year-over-year, and contributed 38% of online net GMV. They once again showed their superior repurchase value with stable repeat purchase and order size amid a still cautious sentiment. With the future recovery highly dependent on the macro development, we are strategically anchored in discount retail for the long term. We are convinced that consumers always desire for great brands, great selection at great values, especially as they become more rational in spending today. We will continue to enhance our value proposition, adapting our business as needed to best serve brand partners and the customers. At this point, let me hand over the call to our CFO, David Cui, who will go over our financial results. Thanks, Eric, and hello, everyone. During the second quarter, we delivered solid profitability on decent top-line performance that beat our prior guidance. Our initiative to focus on core brand has been working well and our gross margin increased to 20.5% from 20.1% a year ago. This was achieved as we identified many opportunities to streamline the cost structure in both apparel and non-apparel categories, and managed to improve category gross margins effectively. We also made relentless efforts to drive operational efficiency. Notably, we continued to see some leverage from marketing as we became more rational in spending on acquiring and retaining customers. As a result, our non-GAAP net income increased year-over-year to RMB 1.6 billion and non-GAAP net margin expanded by 1.5%- 6.5%. Additionally, we remain committed to our $1 billion share buyback program announced in March. We had repurchased $177.1 million of our ADS during the second quarter. Looking ahead, we remain focused on merchandising strategy and looking at ways to operate our business more efficiently. Maintaining healthy and sustainable profitability continues to be our near-term financial priority amid an uncertain environment. 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 second quarter of 2022 were RMB 24.5 billion as compared with RMB 29.6 billion in the prior year period, primarily attributable to soft consumer demand for discretionary categories amid a changing macro environment with the COVID-19 resurgence in China. Gross profit was RMB 5.0 billion as compared with RMB 6.0 billion in the prior year period. Gross margin increased to 20.5% from 20.1% in the prior year period. Total operating expenses decreased by 18.7% year-over-year to RMB 3.9 billion from RMB 4.8 billion in the prior year period. As a percentage of total net revenues, total operating expenses decreased to 16.1% from 16.4% in the prior year period. Fulfillment expenses decreased by 13.7% year-over-year to RMB 1.8 billion from RMB 2.1 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses was 7.2% as compared with 6.9% in the prior year period. Marketing expenses decreased by 60.5% year-over-year to RMB 555.6 million from RMB 1.4 billion in the prior-year period, primarily attributable to more prudent marketing strategy. As a percentage of total net revenues, marketing expenses decreased to 2.3% from 4.8% in the prior-year period. Technology and content expenses increased by 11.3% year-over-year to RMB 411.8 million from RMB 369.9 million in the prior-year period. As a percentage of total net revenues, technology and content expenses increased to 1.7% from 1.2% in the prior-year period. General and administrative expenses were RMB 1.2 billion as compared with RMB 1.0 billion in the prior-year period. As a percentage of the total net revenues, general and administrative expenses was 4.9% as compared with 3.4% in the prior year period. Income from operations was RMB 1.3 billion as compared with RMB 1.5 billion in the prior year period. Operating margin increased to 5.2% from 5.0% in the prior year period. Non-GAAP income from operations was RMB 1.6 billion as compared with RMB 1.7 billion in the prior year period. Non-GAAP operating margin increased to 6.3% from 5.9% in the prior year period. Net income attributable to Vipshop's shareholders increased by 17.4% year-over-year to RMB 1.3 billion from RMB 1.1 billion in the prior year period. Net margin attributable to Vipshop's shareholders increased to 5.2% from 3.7% in the prior year period. Net income attributable to Vipshop's shareholders per diluted ADS increased to RMB 1.97 from RMB 1.56 in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders increased by 8.4% year-over-year to RMB 1.6 billion from RMB 1.5 billion in the prior year period. Non-GAAP net margin attributable to Vipshop's shareholders increased to 6.5% from 5.0% in the prior year period. Non-GAAP net income attributable to Vipshop's shareholders per diluted ADS increased to RMB 2.45 from RMB 2.10 in the prior year period. Looking forward to the third quarter of 2022, we expect our total net revenues to be between RMB 21.2 billion and RMB 22.4 billion, representing a year-over-year decrease rate of approximately 15%-10%. 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 would now like to open the call for Q&A. Thank you, management. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Thomas Chong of Jefferies. Please go ahead. 晚上好，谢谢管理层接受我的提问。恭喜我们的收入跟盈利都比市场的预期做得好。我想问一下，就是我们现在看到七月份跟八月份，我们的收入的情况，的改善幅度，可以分享一下吗？另外的话，在一个宏观不明朗的情况下，应该怎么想下半年的一个展望。我第二个问题，是想问关于在这个竞争环境那边，我们怎么看直播带货对我们的影响。 Thanks management for taking my questions and congratulations on a very solid set of results with top and bottom line beating market expectations. When we come into the second half, given the global macro headwinds that we are facing right now, how should we think about the second half outlook as well as the recovery momentum in July and August? My second question is relating to competition. How should we think about the competitive threat from live streaming, online shopping from the short-form video side? Thank you. 好，我来回答一下。第一个就是，大家也知道在三四五月的时候是疫情严重，那么我们说的整个——导致整个电商的生意都不好。但其实在六月份呢基本有复苏，那么七月份我们看到它的复苏会比六月份还要好一些，那么八月份也差不多。那么总体而言呢，我们看到整个宏观的环境，那么虽然说不能跟去年比，但是总体而言呢，我们也看在慢慢在好转。那么，但是呢，就是说在电商而言呢，就是我们要看那个天气，就是比如说我们讲的这今年，尤其在Q4时间，我们要看是不是天气冷得比较快，或者说比较冷。所以说这个呢，其实天气的情况跟我们电商还是蛮有关系的。但是总体我们看到整个经济在复苏，那么可能比…… 但是比去年的整个购买力啊，消费意愿还是会有折扣的。那么第二个是问直播。直播呢，其实我们看到直播，那么做得也不错。但是呢，总体而言呢，对我们的影响不会太大啊，因为直播也已经搞了大概两年多，都比较旺的两年多了嘛。那么直播我们看到可能在标品方面，那么它做得比在穿戴方面做得好很多。那么我们呢反过来，我们其实是在穿戴方面比较强。那么标品方面呢，我们相对而言不强。所以说总体而言呢，我们看啊，我们也一路上在监测，每个月也看数据，那么发现其实我们讲目前的直播的那个生意量啊各方面，其实也基本相对稳定嘛。所以说我们看也没有给我们造成很大的威胁。 Turning to our first question. Understandably, we have seen from March to May the whole e-commerce sector has been very hard hit by the COVID-19. We have seen the year over year trend- Having been improving into June and also July and August. We have a better June promotion than expected, and the sales in July continue to show some slight month-on-month recovery, and in August, that momentum continued. But on the other hand, there is still some uncertainty regarding the recovery momentum. It's highly dependent on the macro developments, especially, you know, as well as the weather conditions. Actually, the e-commerce industry is very especially as we are apparel focused, we are very sensitive to the weather conditions, and unfavorable weather may delay the demand for autumn and winter clothing. Also, with the new COVID-19 flare-ups, consumers are still cautious about spending, and the whole macro backdrop is not comparable to what we had seen for last year, so there is still some uncertainty ahead. Turning to your second question, live streaming competition from live streaming, there is no big change in the competitive landscape, and we think competition is actually leveling off. You know, live streaming has been there for over two years, and they are doing fine, especially in standardized items, which they are performing much better than apparel categories. But we are more specialized in apparel categories, which is still a very sophisticated segment, and difficult for, you know, live streaming platforms to absorb all the market share. We have been monitoring data of the live streaming platforms, and we think their traffic and business momentum has been relatively stable. Thank you. Thank you for the question. We will now take the next question from Jialong Shi of Credit Suisse. Please proceed with your question. 谢谢管理层接受我的提问。首先恭喜还不错的业绩，然后我这里这边有两个问题想先问一下我们SVIP这边的策略，然后我们这个增长的主要动力是什么？因为看到我们这个季度虽然有疫情，但是SVIP这边执行得还不错。然后我的第二个问题是关于，就是最近天气特别热嘛，我们应该怎么考虑，这个对我们，对唯品会这边的影响，就是从用户的行为角度，还有我们的拿产品的策略上会有什么样的影响？然后我自己很快翻译一下。 Thanks management for taking my question. My first question is about our SVIP strategy. Have seen that the growth has been quite good, even during the COVID emergence. So just want to check what's the key driver of the growth. And my second question is related to the recent cold weather impact on our strategy, both in consumer behavior and also merchandising. Thank you. 第一个问题是问那个 SVIP。 SVIP. 增长策略。 对，SVIP呢，其实我们公司还是蛮关注的。目前的我们的生意占我们大概38%左右，那么我们相信以后还会更高啊，那么我们其实是希望用这种，那种顾客忠诚计划，那么我们希望绑定这些用户，尽量的多在唯品会买，那么我们会给他一些便，那个便利，政策的便利，那个体验的便利，包括那个购物的优惠啊，或者一些专属的那个销售。所以说呢，我们想用各种方法来吸引他们成为我们的最忠实的顾客，而且呢，或者说在各个平台的选择中啊，他们可能优先选择我们，所以说我们会不遗余力地发展这个SVIP，那么我们包括我们，我们相信以后可能会根据用各种各样的开通，或者说把我们很多的高价值用户再把他转成VIP，用各种方法来不断提升我们的SVIP的占比。那么另外呢，我们也提升SVIP的UP，那么另外呢，也提升我们整个SVIP在唯品会的整，整盘生意的占比。那么第二点是问，就是那个现在天气热怎么看。 用户行为和我们的拿货策略方面有什么 对，那个我们货品呢，因为我们也做好准备，因为马上在九月份，在九月份呢开始进入秋天，所以说我们其实也准备了大量的货，那么我们也有做好，比如说在八月份，那么可能在八月底可能会有一波，就是说假设要天气冷，要上秋装，那么我们有这种叫秋上新活动，那么因为我们接的是供应商的海量库存嘛，所以说我们其实倒不担心说，哦，我今天如果万一反应不快，或者天气骤变，那么我们其实跟不上。所以说我们也做好准备，那么包括我们也会跟合作伙伴一起去研究，那么包括比如说今天冬天的羽绒服到底要怎么备货，什么品牌，备什么样的价格段，那么其实，或者说多少的量，那么包括它的那种轻款、薄款、厚款等等，其实我们其实也一起会跟一些品牌参与到那个整体的这些方案中去。所以说我们其实电商是最希望，就是说今年的天气要冷，那么对电商来讲是个很好的事情。 Okay, on the first question relaed to SVIP, we have been focusing on growing our SVIP customers for several quarters and, you know, they now contributed around 38% of our online net GMV, and we expect this contribution to be higher in the coming quarters. We have a number of SVIP membership privileges to offer to them to incentivize them to our high value customers into SVIPs. For example, we have extra 5% benefits, we have super VIP sales day on the 28 of every month and also super VIP membership stores. Now we increasingly focus on creating a different shopping experiences for them, offering them best sellers, brands and categories on a time limited basis so that they can really feel they are constantly seeking out values on our platform. We also have a wide variety of cross-platform, you know, programs to incentivize more high value customers into SVIPs. We are pretty confident that SVIPs in terms of their customer base and engagement as well as GMV contribution will be growing going forward. On the second question related to our merchandising strategy, in response to the recent extremely hot weather conditions, actually we have plenty of time from our brand partners for autumn and winter clothing. For example, by the end of August, we are going to launch our campaigns for autumn apparels. If the weather conditions is favorable enough, because we don't have a problem with the availability of the product supply from our brand partners, because we have been highly engaged with them as to how we should prepare for the coming seasons. For example, we have been working with down jacket brands for the winter clothing to stock as many SKUs as possible, just in case the weather gets colder before we expect. That's how we work with our brand partners. We don't have a problem for the inventory supply from the best of our brand partners. Thank you for the question. Next question will come from the line of Alicia Yap from Citi. Please go ahead. 管理层晚上好，谢谢接受我的提问，也恭喜强劲的业绩。有两个问题，第一个就是想跟进一下三季度的这个指引，就是因为二季度我们的业绩就比想象中好蛮多，然后管理层也说七月份、八月份都会比六月份好。就想说，我们这个给出的这个指引就是掉10到15%的话，会不会是有一点保守呢？然后另外第二个问题就是这个利润率，因为这个季度其实提升不少，就是想问一下，在这个基础上还有改善的空间吗？还是说这个二季度的这个利润率是未来几个季度我们可以考虑的。 Thanks for taking my questions. Congrats on the strong results. I have two questions. The first one is, it seems like your 3Q guidance is a bit conservative considering what you have been for your second quarter, and also seems like you also been seeing improving trend in July and August. And then second question is on margin. This quarter margin actually improves quite a lot. Are there any further room to improve or the 2Q level will actually set as the new base for the future quarters? Thank you. 我回答第一个问题，就是说我们对Q3的预期那个是负10到负15嘛。那么我们其实也考虑到，因为以后的就是说确实有反复性啊，比如说疫情的反复性，那么包括用消费者的信心其实没回升。那么另外呢，尤其是在九月份到底冷不冷，所以说我们其实对这些其实没有足够的把握啊，所以说我们觉得还是相对保守一点好一些啊，那么但是我们自己也会努力去做。那么第二点问题我开个头，就是后面让David再跟大家讲一讲，就是因为Q2呢我们有缩减了，因为是疫情期嘛，我们缩减了一些市场费用，那么对于我们来讲呢，大家看到利润也不错，那么我们其实在整体在公司的利润把握上，我们其实还是那个已经积累了足够的经验。那么所以说呢，我们其实在未来的时间，我们还会去继续去拓展用户啊，但是呢我们会健康地去拓展用户，我们希望是未来我们又能获取把用户的增长重新把它翻正，那么我们又能有足够的利润来交出这个作业。 Yeah。 Okay, our Q3 guidance of negative 10%-15%, actually it takes into account a number of factors. For example, we expect there will be some back and forth in COVID-19 cases, and also it takes time for consumer confidence to gradually recover. Lastly, we are not quite sure about the weather conditions in July, whether it's going to be cold enough for us to launch the autumn marketing campaign for autumn clothing. We'd better be a little bit conservative, but we will try our best to achieve the top line performance. On the margins, I'll start with a few points and David will add some details later. We did scale back some of our marketing expenses in the second quarter, and that turned into a very good profitability. For the long term, for the coming quarters, our goal is still trying to bring customers back to a positive growth trajectory. We'll spend as needed, and we'll take opportunities whenever we can to acquire customers, but we'll continue to be quite rational. At the same time, we are confident that we can maintain healthy and sustainable profitability because we have been very good at managing our costs and expenses. We have a proven track record to provide the financial stability. David. In the first half of this year, we have been focusing on the improvement of our operational efficiencies. We have been very disciplined in our spending. Our goal for the second half is still to maintain a quality business scale, and while improving the operational efficiencies, and we have to balance our profitability and the growth. We will potentially looking into opportunities to acquire new customers. That means that we could increase our marketing expenditures, but we have to be really disciplined in that initiative. Having said all this, we are confident that our profitability or net margin will at least remain stable for the second half. Thank you for the question. Oh, next question comes from the line of Tian Hou of T.H. Capital. Please go ahead. 有个问题要给沈总。我看现在呢，这个外贸不是很好，那么在美国这边一些零售的订单已经都很高了，比如说沃尔玛呀，Target呀，都说了这个问题。那么再看中国的出口订单也在下滑。往年呢，以往的经验呢，是说如果外贸很弱的时候，国内库存积压的时候，这个很好的一件事情。那么沈总这方面能不能给大家一些您的看法，就是在second half，这个中国的经济有一些问题，外贸出口不景气，库存这个build up的时候，那我们的机会在哪里？怎么样去把握这些机会？ It's related to the inventory build up overseas and also in China, we saw the orders also decline. It looks like that the inventory among manufacturers are going to build up. In the past that we have is really good at it to help those manufacturers to get rid of inventory. It's a good opportunity for us. I would like to have Eric Shen to give us some color in the second half how Li & Fung is going to capture such opportunity like what you did before. 那个我谈一下我的观点，因为我们主力是合作，像比如说国内的品牌，那么包括国际的一些品牌，那么国际的品牌有进口，有一些呢，就是说他们直接已经在工厂生产了。那么据我们看到的情况，其实这个呢，就是目前看到的情况跟出口整体的环境影响不大的，因为他们可能是两套体系，那么有些等于是专门做国内市场，所以说其实跟出口的没关系，只是工厂它有可能是同一个工厂。那么我们自己看到，其实中国目前的整个库存的积压还是蛮厉害的。那么有两个观点，一个呢就是说，因为在疫情期间，就是说尤其在三四五月的时候，疫情期间很多店关门，那么我们说的那个大家呢，就是说整个库存积压很大。那么另外呢，有一种说法呢，就是有些品牌呢，其实在他们在疫情期间，就是lockdown以后，他有的就不做货，不下单，但是呢，他们现在又要开始行动，因为他知道要追下半年乃至明年。那么所以说整体我们据我们的观察，其实我们手里目前能供给我们的货的库存量其实还是大大存在的，那么甚至都超过去年的水平。所以说我们其实不担心。那么再加上呢，我们其实不管是库存是怎么情况，因为我们也跟很多品牌是有专门的叫专供定制，那这些呢，是我们讲的是长期有保证的。那么所以说其实我们讲的就是今年下半年的货品的供给，我们是足够的。那么另外我们整体就回答你刚刚那个问题，其实市场上的库存确实蛮多，还不是说我们一家能消化掉的。 Let me share a few of my observations here. The first, you know, we work with a lot of primary domestic brands and also some of the international brands, but that's not quite relevant to the export environment, because they rely on imports and we've seen some productions kicked off, you know, in the recent months. Second on the inventory, there are a few things about inventory today. First is because of the COVID-19, there are a lot of many offline stores are struggling. Inventory is definitely building up. Second, since there were had been a lot of lockdowns in the past months, some of the brands may have scaled back some of their productions. Things are getting better now, so they're starting to pick up momentum in terms of placing orders. Generally speaking, I think we potentially should benefit from a favorable inventory cycle, because we do see excess inventories nowadays, and the amount of which has actually exceeded the level we have seen for last year. In addition to securing the supply of the unique and quality supply from our brand partners, remember we also have the Made for Vipshop line, which is quite stable, and it's a long-term channel for us. We think we don't have a problem with the inventory, and we have the ability to secure the best supply from our brand partners. Thank you for the questions. Our next questions comes from Eddie Wang of Morgan Stanley. Please proceed. 沈总、David总、Jessie，感谢接受我的提问。我也是两个问题吧。第一个就是说，沈总前面分享了，就是说这个七八月份和六月份的趋势是跟国家统计局说的这个线上服饰销售的这个趋势也是比较相同的。但是呢，就是说我们看到国家统计局数据在六月份、七月份其实是一个正的增长，在线上服饰，但我们可能还是销售会有一个下降吧。这个主要是因为就是说是基数的原因嘛，就是对我们公司来说。那这个问题就是说我们预期什么时候能看到，就是说我们的收入能够重新回到一个正向增长的这样一个趋势。第二个可能就跟紧跟的一个小问题，就是说这个是跟我们计划，就是说用户重新正增长是密切相关的嘛，因为看到好像，这个如果算GMV per customer或者是sales per customer，其实都已经是在一个正的增长了。那接下去如果这部分没有一个很大的jump的话，那基本上就是要看用户什么时候能够重新回到新增，然后就是正增长，然后才能drive整个我们的收入往上涨嘛。对，我就这两个问题，然后我自己先翻译一下吧。 Thank you for taking my question. My first question is related to the revenue growth, when should we expect that our revenue growth will turn toward a positive quarter again in the following quarters? And the second question is that it will be mainly driven by the user growth for the revenue growth turning into a positive quarter. Thank you. 那个我回答一下，就是刚刚问的就是应该就是说Q3的预估吧，对吧？一方面呢是说零售，那个就是说整体的零售是有复苏，但我们担心是哪一点呢？就是说因为疫情的原因导致我们在今年Q2的用户锐减嘛。那么比如说我们去年的Q2是100个人买东西，那么今年的Q2我们其实只有83个人买东西。那么其实用户在滚动买的嘛，等于它的，就是说83个人买，他加上他的季度复购，那流到今年的Q3就会少。所以说其实我们讲的，其实我们有担心，就是用户的数的，因为疫情的原因导致Q2会有一个坑，所以我们要抓紧把这个坑要迈过去。所以说是这方面的考虑，加上我前面讲的那个三方面的，有疫情，有那个天气，还有那个经济消费低迷的这三个因素，所以说我们做保守打算啊。那么另外呢，我们其实目标是争取要在Q3啊尽快实现用户回正，因为我们这个坑，Q2的坑有点大，那么我们争取在Q3回正。那么另外呢，我们整体而言，我们这些用户的APP啊各方面其实都在一个良性的，包括我们的SVIP啊等等啊，都是良性。所以说我们其实在Q3努力把用户回正，我们后面这个整体的这些，那个整体的用户在滚动啊，包括Q4啊，其实这些就比较顺畅。 On the question of whether it's our rev GMV or revenue growth will be driven by customer growth in the coming quarters. Yes. I think our goal is to try to bring our customers to positive growth starting from the third quarter. Because, you know, in the second quarter, we've seen a drastic decline in the customers, and we've seen fewer customers shopping our platform because of the COVID-19 impact, mostly related to the factor that people cannot move around as freely as before. For example, last year there were 100 people shopping on our platform. In the second quarter this year, it was 83 people. Because it's on a rolling basis, so entering into the third quarter, we may face additional pressure on customer base. That's why we will spend as needed to bring our customers to positive growth, starting from this quarter. Thank you for the questions. We are now take the next question from Wei Xiong of UBS. Please proceed. 管理层晚上好，谢谢接受我的提问，也恭喜这个季度强劲的业绩。那我也有两个follow up的问题，因为刚刚咱们就谈到说希望三季度能尽快地实现用户的回正，那就想请教一下，那相应的咱们在用户获取的策略，包括营销费用上的安排会具体怎么进行？那第二个也想请教一下，因为咱们也谈到三季度的预期，其实是基于现在宏观的不确定性，希望更保守一些。那么到了四季度，有这个年中大促，同时又有去年的这个低基数，那咱们是不是在四季度更有机会看到，比较强劲的业绩反弹？那我这两个问题我也自己翻译一下。 Thank you management for taking my questions, and I have two follow up questions. First is we just talked about, we want to see the user growth returning to positive territory starting from the third quarter. Just want to ask what's the marketing strategy, user acquisition strategy and marketing expense planned around this goal? My second question is, given that our third quarter guidance has more conservatism built in based on the macro uncertainty, do we see a bigger chance to see a very strong result rebound in the fourth quarter, given the year-end promotion as well as the low base last year? Thank you. 好，我来回答这两个问题。第一个就是关于用户的，就是我Q3如何把用户争取回正。那么比如说我们现在也在外面大幅地获新客，因为新客呢，我们在Q2的时候停了一段时间，或者说有些疫情的地方我们就不获了，那么现在又在大幅地获。另外呢，就是像我们的流失的老客，我们要把他唤醒啊，那么这是比如说像去年的，那么今年Q1的。那么还有呢，就是像我们刚刚讲的那个，那个一百个人到八十三个人，这十七个人他是因为疫情原因没来，那么我们也要把他获回来。所以说我们其实用好几种方法，那么那个新客就是我们继续用原来的什么预装啊，那个应用市场啊，包括精准投放。那么对老客的话，我们其实还是用精准召回，我们召回他，给他送coupon啊等等啊，那么在外面精准找到他，给他送coupon啊等等，希望他再回来买。他只要回来买了以后，我们就可能不断地再激活他。那么所以说这是我们目前Q3的方法。第二个问题就是说，对，第二个问题就是说，就是如果Q3我们的用户增长能回正，那么我们其实对第四季度是很有信心的，因为用户已经回来了，那么我们而且呢，Q4季度又是我们最旺的时间，那么包括我们其实现在的整体的那个货品结构啊，价格优势啊，包括我们的特卖价值啊，其实等于比原来其实做得都越来越好。所以说我们相信如果用户回来了，我们其实Q4乃至明年我们其实都不用太担心。 Okay. In terms of our customer acquisition strategy, we are trying to increase spending in acquiring new customers from the third quarter, because, you know, in the past several quarters, because of the COVID restrictions, we have more or less stopped new customer acquisition in certain geographies. Now we are trying to restart our investing in these regions. Our strategy continues to be pre-installation app store and targeted marketing for new customers. At the same time, we're trying to pull back the old customers who used to shop with us in the past year or in the first quarter. We're trying to reactivate this group of old customers by leveraging targeted marketing. We're trying to bring back the 17% of the customers who were unable to shop with us because of the various COVID restrictions. Second, in terms of our in terms of we are. Actually, in terms of the Q4 outlook, we are actually quite confident if under the condition that if we can turn our customer into the growth trajectory in the third quarter, because as long as we bring new customers in, we are going to see some upside in the fourth quarter performance, because that's going to be the peak season for us. In the past several quarters, we have been able to take the economic downturns as opportunities to optimize our merchandising portfolio and increase the customer mindshare for discount retail among our customers. We are pretty confident we'll see some upside in the fourth quarter if everything you know goes on well. Thank you for the question. Yeah. Sorry, please continue. Oh, yeah. I just add something here. When we implementing all this marketing initiatives in the third quarter and the quarter after, we will not sacrifice our profitability. We will be really careful when we launch all this program. We will try to do much better job as compared to what we did in the past and to ensure the ROI on all these programs is good. Thank you. We have our next question from the line of Andre Chang from JPMorgan. Please ask your question. 沈总、David Cui、Jessie，谢谢接受我的提问。那我这边有两个问题，第一个是关于这个季节性对于咱们产品类结构，还有这个毛利率的影响。那因为过往的话，咱们二季度因为大促嘛，所以服饰比重都特别高，服饰又是高毛利，所以会拉动二季度的毛利相对第三季度会高嘛。那我不知道说今年因为疫情跟消费环境影响，这个二季度的服饰比重是不是相对没那么高？那倒回来想的话，是不是就是说那咱们进入三季度，其实这个毛利率季节性的这个下滑可能也不会如往年来得一样多。这是第一个问题。第二个问题的话，是我注意到咱们这个CapEx其实还是下得挺猛的，就虽然在这个营销费用减少很多，但CapEx还是年对年加了一倍。那我不知道说这是不是纯粹是因为这个Shan Shan Outlets这边还在扩，那在这个环境之下的话，公司接下来的想法是延续这样子的这个资本支出策略吗？还是会有些相应这个环境的调整。 So let me translate my two questions. The first question is about the seasonal impact on the gross margin and the product mix. Historically the, you know, second quarter is the peak season for apparel sales, which lead to higher gross margin. This year, is there any change of the mix? And also does that mean the gross margin seasonal decline into third quarter will be milder than usual? Second question is about the CapEx, which seems to be doubling in second quarter. What's the driver and are we still going to invest at this pace in the current macro environment? Thanks. 对，那么刚刚问的，就Q2的毛利跟Q3的毛利相比嘛。Q2是因为有促销，会有比较大的促销，大家可能觉得Q2的毛利会低一些，但是服装卖得多呢，可能又把它拉平。那么Q3呢，可能考虑没促销，或者说Q3可能衣服会少一些等等。那我现在是这么看，我们其实今年整个公司做了一些蛮大的调整，尤其在前端掌控毛利方面，我们是有一些心得，包括尤其是杜绝了原来说做活动、做促销、自己贴钱贴券，我们其实现在自己很少用公司的钱、公司的券来补贴做促销，所以这样的话呢，我们整体毛利就相对健康，这是第一点。第二点呢，就是说我们其实也发现了在市场投放中有一些不经济的，虽然说我们其实是对靠谱的市场投放，我们是积极去投放，去获客，但是有些不经济的我们会杜绝。那么第三点呢，其实我们今年在整个公司的整个流程、链路治理上面，包括节约方面，比如说今天顾客的退货，我们如何更好更快地把它处理掉，或者说自己不受这种损失，因为我们的退货会有很多残次等等，我们其实在这些链条上面，我们也做了很大改进，也收到很多成效。所以说总体我们在这些，比如说我们说的要在毛利方面，我们等于是今年我们自己有比较好的把握。所以说不管未来是促销季，或者说衣服卖得多、卖得少，其实我们认为对我们未来的毛利的稳定性影响不大。 Okay. On gross margin, we think seasonality actually does not impact our gross margin that much. In the second quarter gross margin tends to be lower because of the promotion and because, you know, apparel sales, apparel demand was relatively weak. In the third quarter, there are not so many promotions and we may sell less apparel. We've, I just want to try to share that we actually have taken many, cost saving initiatives this year to try to stabilize and improve our gross margin. For example, we have stopped delivering coupons at the cost of our own benefits. We are trying to be prudent in giving additional coupons to customers. We're trying to, you know, engage our brand partners to do that at some time. Second, we have stopped investing in those channels which proves not to be that economical, so that is part of our cost saving initiatives as well. Lastly, we have taken a lot of measures to try to optimize the cost structure, the process, dealing related to our gross margin. For example, we are trying to handle customer returns in a better way without sacrificing our benefits. These initiatives are proved to be very effective, and we are quite confident that we will maintain a relatively stable gross margin going forward. The capital expenditure in the quarter is largely for Shanshan Outlets, so we will add three new outlets in this year. A lot of the times that the payments for the land use rights are upfront and the cash outflow is not necessarily in line with you know the opening of the outlets. If we look at the CapEx for Shans han Outlets year-over-year, the amount should be quite comparable. This particular quarter maybe appears a lot more, but over the years it should be quite comparable. Thank you for the questions. Our next question comes from Natalie Wu of Haitong International. Please go ahead. 好，谢谢。谢谢管理层接受我的提问。那我两个小问题啊，第一个的话是关于咱们刚刚说的用户增长翻正，想确认一下这个说的是同比的活跃购买用户数量吗？然后如果是的话，那就是三季度，我算一下，咱们是需要增加两点二的million，就220万的一个活跃购买用户。如果按照就是之前的一个用户获取成本的话，一两百块一个用户，如果没有提到的话，那这个对应的是两个到四个亿的一个增长的一个营销预算。就不知道这个东西怎么跟咱们说的这个三季度这个利润率还能够保持一个比较好的一个水平，这个对应起来。这是第一个。然后第二个的话，想了解一下，这个就是刚刚提到的疫情的时候的一个行业库存的情况下的一个问题啊，就想请教一下，这个时候咱们拿货的价格，是不是会有可能会拿到更好的一个价格的一个货啊，议价权是不是提升，就会比较显著。我就这两个小问题。 Let me translate myself briefly. Thank you for taking my question. I have two questions. The first one is regarding the previously mentioned user growth turning positive. We just want to clarify if this refers to the year-on-year growth of the active customer number in the third quarter. And if yes, that actually translates to 2.2 million active users. If the cost of user addition is kept constant, which also translates to RMB 200 million-RMB 400 million in terms of the additional sales and marketing expenses. Just wondering how does that align with the margin, a stable margin profile as you just mentioned previously. Second one is regarding the bargaining power. Just wondering during the current situation given that the suppliers affected from COVID have been witnessing an intensified issue for inventory stock. Just curious does that help enhance your bargaining power and get a more favorable offer? Thank you. Okay. First, on the customer acquisition cost, it's not a simple math. It doesn't mean that adding 2 million customers we will have to spend RMB 200 million-RMB 400 million every quarter. We may have to spend a little bit more on acquiring new customers. Reacquiring old customers, especially the active customers in the past quarter, it is not that expensive. It's much lower than RMB 100 per customer. We don't have to spend that much. We can ensure you that our marketing spend as a percentage of total revenue is not going to be higher than what we have seen for the same period of last year. We are going to leverage a combination of great brands, great selections and great prices, and as well as better personalized recommendation to achieve our goal of positive customer growth. Second, on the inventory, we have plenty of inventory as I've mentioned just now. We work very closely with our brand partners on securing the best supply of unique and quality products, and most of them are still on the consignment model. If we are, you know, buying out supplies, we probably have to, you know, we probably have a much higher bargaining power, but because it's on consignment model and, we don't have to, you know, increase the percentage we take from brands. It is still within the normal range. Actually, we want to give certain support for the core brands, and we may. We can afford to decrease the take rate a little bit to make sure that they can grow faster on our platform with a stronger supply of unique and quality product offerings. Because core brands can really help deliver value to our customers and increase consumer mindshare for Vipshop as a discount platform. That's how we work with our brand suppliers. We can support them and create a win-win situation for both parties. Thank you very much. Just to add. Oh, sorry. Please go on, David Cui. Yes. Just to add clarity to your first question regarding the customer acquisition. A large portion of the customer addition should come from the calling back of the existing registered, I would call inactive registered customers. The cost for calling back those people is relatively small. Yeah. Thank you very much. Due to the time constraint, that concludes today's question and answer session. At this time, I'll turn the conference back to Ms. Jessie Zheng for our closing remark. Thank you for taking the time to join us today. If you have any questions or follow-ups, please don't hesitate to contact us. We look forward to speaking with you next quarter.