Ladies and gentlemen, good day everyone, and welcome to the Vipshop Holdings Limited's Third Quarter 2024 Earnings Conference C all. At this time, I would like to turn the call to Ms. Jessie Zheng, Vipshop's Head of Investor Relations. Please proceed. Thank you, Operator. Hello everyone, and thank you for joining Vipshop's Third Quarter 2024 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, 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 2024 Earnings Conference Call. Our third quarter results largely meet our expectations. Amid still cautious customer sentiment, we moved quickly to adapt our merchandising and operational priorities to external challenges and took concrete measures to find the biggest opportunities for improvement. Consistent with recent industry trends, third quarter sales decline reflects softer results in our more discretionary categories as consumers are facing growing headwinds which weigh on their discretionary spending. On the positive note, SVIP membership growth remained strong and at double digits. In the third quarter, active SVIP customers grew 11% year-over-year, resulting in 49% of our online spending. This reflects that our value proposition is well appreciated by our most valuable customers through the best combination of merchandise, value, and service. So today, we remain focused on these long-standing factors that have made us a reliable place to shop and also have been successful in driving top-line growth in the past. We are pushing them forward in a deeper way, being more relevant in merchandising portfolio, highlighting even more value throughout our assortment, and increasing customer engagement through our worry-free service. This area has been critically important to ensure we continue to differentiate our experience from others. Among the business highlights, we continue to emphasize merchandising capabilities. We believe it's the most impactful way to drive long-term growth. Our team demonstrates that they have the skill set to respond to change in customer behaviors and translate it into business results. Merchandising is in best shape. In the third quarter, we built assortment more relevant to customer lifestyles and trend-right categories. We leaned into categories with still resilient demand, and we create a better mix of apparel and non-apparel products for family shoppers. As a result, we did see strengths in categories like sports and outdoor goods and home wear despite the broad-based weakness. As we enter the promotional season, we feel good about the size and depth of our supply. We are pleased with the strong inflow of quality brand supply, especially within the deep discount inventory through much more unique product offerings. Some of our long-time brand partners achieved record sales with us through our major promotion channels like Super Brand Day and the Super Category Day. Many more brands recognize us as a partner of choice, giving the generally lower cost to serve and higher sales efficiency as well as the growing base of our hardcore customers. Within our merchandising, we are also encouraged by the momentum building in our Made-for-VIP line for customized products. In the third quarter, we worked with about 200 brand partners, adding some renowned global brands in women's wear and footwear to the line. Sales from these customized products extend a solid growth from prior quarters. With the brand partners, increasingly embraced Made-for-VIP, which have proven to be efficient to attract more quality customers and repeat orders. More than half of the Made-for-VIP sales came from SVIP and other high-value customers, and the majority of their customers actually came back from more purchases in the broader apparel categories. Turning to customers, we see spending behaviors that are still showing signs of being stretched. Against that backdrop, our team quickly adjusted to focus on providing really good value for them. We prioritized everyday low-price and time-limited offers, highlight compelling deals for our SVIP members, and provide targeted incentives for family shoppers who tend to spend on high-frequency categories. Our team is working hard to find more ways to deliver more value for our customers. We also see some early results after we upgrade SVIP privileges like private sales and special offers, which have carried on for a few quarters. Through both online access and ground events, they are clearly reinforcing the trust and loyalty for SVIP members. We are planning these events to stay better aligned with customer interests and preferences to best meet their multiple needs. As it's related to strengthening our business for the future, we continue to experiment and deploy technology in the wide range of user bases. One focus is to improve the relevancy and accuracy of search and recommendations so that customers of different intents are more likely to browse and shop across categories. The other is to leverage AI capabilities to optimize content of all kinds to help customers find and buy what they are looking for. We do see opportunities for technology to become an important driver of both growth and efficiency. Recently, we started to see some marginal strengths of customer demand. People have shown more willingness to spend, and our customers continue to shop around the holidays and seasonal momentum. While we are doing our best to get back to growth with customer spending yet to fully recover in the discretionary portfolio, we are laser-focused on the long-term strategy that are pivotal to our long-lasting success that has always been a firm position in this kind of retail for brands to bring in the best of brand partners and to create great value for customers. We are driving necessary change in a more aggressive way so that we have all the right building blocks to compete and win, and through it all, we are remaining diligent on executing the retail fundamentals our customers expect from us and respond to their consumption shift in a timely manner. This requires specialized and elaborate efforts in merchandising, standout strengths we are continuing to build on. We believe this will help us increase the appeal of our platform and ensure an engaging experience that keeps Vipshop top of mind in a very dynamic market. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results. Okay. Thanks, Eric. And hello, everyone. In the third quarter, we maintained disciplined financial management throughout the organization that delivered solid profitability against a weak top-line performance. Gross margin of 24.0% was driven by a small benefit from the increased contribution from the higher margin of apparel categories, as well as other revenues on a year-over-year basis. This was more than offset by the deteriorating impact of lower revenue and continued investment in our team. As a result, on the bottom line, non-GAAP net margin attributable to Vipshop's shareholders came in at 6.3%, which was lower year-over-year, but within our expected range. Thanks to our team's meticulous efforts to identify efficiency opportunities. Looking at a still challenging environment, we are laser focused on a long-term roadmap to bring the business back into positive territory. We continue to invest in our merchandising capabilities, delve deeper category by category to add quality and value that best satisfies customer needs while reallocating resources to maximize impact on customer mind share and engagement, and we are always capable of moving these initiatives with a clear picture of their financial implications. We believe we are more integrated in operations now to create a better balance of our focus on sales and profitability. Turning to capital allocation, our priorities have remained consistent. In addition to prudently investing in our own business and projects that meet our strategic and financial criteria, we look to support our shareholder return and build on our track record of consistency. In the first nine months of 2024, we have repurchased a total of nearly $500 million, with $55.3 million left in the existing $1 billion share repurchase program. Also, we have a new two-year buyback program of up to $1 billion in place. And as a reminder, for 2025, we plan to commit no less than 75% of our full-year non-GAAP net income attributable to Vipshop shareholders through discretionary share repurchase and dividend distributions. 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 trends, unless otherwise noted. Total net revenue for the third quarter of 2024 was RMB 20.7 billion, compared with RMB 22.8 billion in the prior year period. Gross profit was RMB 5.0 billion, compared with RMB 5.4 billion in the prior year period. Gross margin increased to 24.0% from 23.6% in the prior year period. Total operating expenses decreased by 6.1% year-over-year to RMB 3.8 billion from RMB 4.0 billion in the prior year period. As a percentage of total net revenues, total operating expenses was 18.2%, compared with 17.6% in the prior year period. Fulfillment expenses decreased by 2.0% year-over-year to RMB 1.7 billion from RMB 1.8 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses was 8.4%, compared with 7.8% in the prior year period. Marketing expenses decreased by 7.7% year-over-year to RMB 617.8 million from RMB 669.6 million in the prior year period. As a percentage of total net revenues, marketing expenses were 3.0%, compared with 2.9% in the prior year period. Technology and content expenses increased by 4.3% year-over-year to RMB 454.2 million from RMB 435.3 million in the prior year period. As a percentage of total net revenues, technology and content expenses were 2.2%, compared with 1.9% in the prior year period. General and administrative expenses decreased by 15.3% year-over-year to RMB 957.8 million from RMB 1.1 billion in the prior year period. As a percentage of total net revenues, general and administrative expenses decreased to 4.6% from 5.0% in the prior year period. Income from operations was RMB 1.3 billion, compared with RMB 1.5 billion in the prior year period. Operating margin was 6.4%, compared with 6.7% in the prior year period. Non-GAAP income from operations was RMB 1.7 billion, compared with RMB 2.1 billion in the prior year period. Non-GAAP operating margin was 8.2%, compared with 9.1% in the prior year period. Net income attributable to Vipshop shareholders was RMB 1.0 billion, compared with RMB 1.2 billion in the prior year period. Net margin attributable to Vipshop shareholders was 5.1%, compared with 5.3% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS was RMB 1.97, compared with RMB 2.19 in the prior year period. Non-GAAP net income attributable to Vipshop shareholders was RMB 1.3 billion, compared with RMB 1.8 billion in the prior year period. Non-GAAP net margin attributable to Vipshop shareholders was 6.3%, compared with 8.1% in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS was RMB 2.47, compared with RMB 3.33 in the prior year period. As of September 13, 2024, the company had cash and cash equivalents and restricted cash of RMB 22.5 billion and short-term investments of RMB 1.6 billion. Looking forward to the fourth quarter of 2024, we expected our total net revenues to be between RMB 31.2 billion and RMB 32.9 billion, representing a year-over-year decrease of approximately 10% 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 would now like to open the call to Q&A. Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please kindly translate your question in Chinese if you are bilingual. Thank you. We are now going to proceed with our first question. The questions come from the line of Thomas Chong from Jefferies. Your question. [Foreign language] Thanks, Management, for taking my question. My question is about the recent consumer sentiment after recent government supportive measures. Can Management share about the monthly GMV trend in Q4, as well as our expectation on 2025 outlook from the perspective of GMV and margin? Given our solid margin profile seen in Q3, in particular 24% of the GP margin, how should we think about the outlook in 2025? And when should we expect our GMV back to a positive year-on-year growth trend? Thank you. [Foreign language] Okay. First of all, the recent business trend. Quarter to date, I think we have been into the quarter for over 50 days, and October was really good, but that was apparently because of the much earlier Double 11 promotion, which led to some front-load of consumption. And if we add October and November to date, we are still within the guidance. In terms of consumer sentiment, of course, the government-sponsored trade-in programs launched toward the end of September do give us some boost to our certain categories in electronics and home appliances. But since we are primarily focused on apparel categories, we are not a very key beneficiary of such programs. And overall, sentiment may have bottomed out following the recent stimulus package, but still, it's a rather rational environment to us. We are still seeing customers still showing signs of being stressed. They're making trade-offs in family budgets, looking for value, focusing on essentials, and delaying purchases until the need of the moment, so we haven't seen a very meaningful recovery in consumer sentiment as compared to prior quarters, and lastly, on 2025 outlook, we do believe, we think it's pretty unpredictable. We are going to plan our business cautiously. It depends on a number of factors, whether macro is going to have better recovery, whether consumer confidence is going to pick up, and there are a lot of uncertainties, so we think probably the trend we are seeing in Q4 would be brought forward into a part of 2025, but we are doing our best to get back to growth, especially in terms of GMV, as compared to a small decline for GMV in 2024, and on margins, I think there are not too much to worry about. We are focused on growing profit dollars. I think in terms of absolute dollar amount and also on the margin side, we should be able to maintain relatively stable levels. And on cost and expenses, we are going to continue to be very disciplined. And there could be some changes as to certain cost and expenses structure, but it should be not big swings from what we had done for 2024. That's all. Thank you. We are now going to proceed with our next question. The questions come from the line of Alicia Yap from Citigroup. Please ask your question. Hi, good evening [Foreign language]. So my question is just to follow up on overall the Singles' Day performance and also the 4Q guidance. So just wondering during the Singles' Day period, that 30-plus days, is that you actually able to achieve a positive growth during the Singles' Day period? And then in terms of your guidance, is that conservative because you want to not too sure about how the December trend, so that's why you're providing that 5%-10% decline because the visibility in December are not sure? And then also on the return rate, so if you can compare the return rate for this Singles' Day versus last year's Singles' Day and versus this year June 18th. Thank you. [Foreign language] [Foreign language] [Foreign language] Okay. First of all, as to W-11 performance, I think most of the platforms are comparing it on a full cycle basis. Basically, we did 28 days of promotions as compared to roughly 20 days last year. And if on this full cycle basis, we are doing very well. We are also doing very well with GMV over 20% growth for sure. And also customer and revenue metrics are exceeding our expectations. But if we look at it on an apples-to-apples basis, just comparing the 20 days of the promotional campaigns, actually it's just in line with our expectations. We think Q4 is still a challenging quarter, and we give our guidance on a relatively conservative basis. And one factor is also about whether we do have a very high base of, especially in last Q4, we had actually extended a period of cold waves, which benefited our business unexpectedly. This year apparently is not going to be as cold as last year. So we baked this weather factor into our Q4 guidance as well. That's why we think Q4 is going to be a little bit challenging. Lastly, on return rate, because we have a very stable return policy and also services for like five to six years, and our return rate has been driven, in our case, mostly structural factors like apparel contribution and SVIP contribution, etc. Basically, a return rate during the W-11 is actually trending in line with our expectation, just adding two percentage points in terms of return rate, not like in the case of other platforms who had a sudden change in their return policy, which led to extremely high return rates. Thank you. You're welcome. We are now going to proceed with our next question. The questions come from the line of Ronald Keung from Goldman Sachs. Please ask your question. [Foreign language] Thank you, Shen. Just two questions. One is your gross margins reached record high in third quarter. Last year, fourth quarter, gross margins were even higher. How should we think about the apparel mix, which usually is good for gross margin and the outlook for gross margins for 4Q? Second is your net profit decline was wider than operating profit, and that seemingly a 30% increase in tax expenses. Is that related to how transfer of cash onshore to offshore to financial returns? How should we think about this income line outlook? Thank you. [Foreign language] So in terms of our GP margin outlook, I think for Q3 we had 24%, which was driven by a small benefit from apparel contribution and also higher other revenue. But looking into Q4, as you know, we continue to invest to grow, so especially given the current competitive environment. If we see an opportunity to invest a portion of our current profit margin to gain sustainable growth in dollars, we would do that. So for GP margin in Q4, we expect it to be marginally lower than Q3, but it should be well within the range of 23%. Okay. Okay. Thanks for your question. And regarding the first question, you talked about the gross margin. Let me give you some supplementary comments. For the third quarter, the gross margin expansion was primarily driven by the following reasons. The first one is the higher margin apparel categories, which had a higher contribution year-over-year. The second one is we have many cost-saving initiatives to improve gross margin, including optimized merchandising portfolio, well-managed customer incentive, and so on. The third is higher contribution from higher margin other revenues. That's because the other revenues, we also put some of the like Shan Shan Outlets revenue, which is recognized as net revenue approach. That means we recognize the net rental income for the Shan Shan Outlets income. So that means the gross margin is higher, which was booked in the other revenues. Okay. That is the main reasons for the gross revenue higher than before. For your second question, that's a very good question. Just regarding the effective tax rate, non-GAAP expenses, just to mention that we distribute some of the dividends from the entities in the mainland China to the entities in Hong Kong. Okay. The reason is that we need to do the share buyback, just what we mentioned before. Okay. This quarter, we remitted around RMB 3.5 billion. So that means we have RMB 175 million withholding income tax expenses. Okay. So exclude the factor, I mean the withholding income tax expenses, the ETR would have been around 17%-18%. I think for the long term, exclude the withholding income tax impact, the ETR could be still around 17%-18%. Thank you. Thank you, Eric Shen and Mark. We are now going to proceed with our next question. The questions come from the line of Roger Duan from Barclays. Please ask your question. [Foreign language] I'm going to address myself. Thank you, management, for taking my question. I have two questions. First, for third quarter, can management share in terms of different product categories? Do we see any difference in terms of performance? Because it looks like apparel has grown in terms of GMV contribution in third quarter. And my second question is on SVIP users. Can management share whether we have seen any changes in consumer behavior during the quarter in terms of shopping frequency or average bucket size? Thank you. [Foreign language] Okay. First, on Q3, category-wise, we see apparel have a small decline in terms of GMV, while standardized items had a bigger decline, but it's not worsening as compared to prior quarters. Still, it's because of the competition on price advantage by other platforms. With that, we are making a serious adjustment, and especially we are giving out some limited and targeted incentives, for example, for family shoppers to increase their chance of doing shopping across different categories, especially in daily essentials. We are seeing some early results from that, and we hope that we would gradually narrow the loss from standardized items. On SVIP, we are seeing a very solid momentum. We had 7.5 million active Super VIP customers in Q3, which accounted for roughly 49% of our online spending. In terms of customer base, that was 11% growth year-over-year. And apparently, new SVIP customers for the quarter. It takes time for them to ramp up their frequency and therefore ARPU. So they have, to some extent, diluted effect on the whole SVIP base. But if we look at the same cohort, for example, the two-year SVIP customers, we see their performance actually relatively stable. We do see a small decline in ARPU, but that was primarily driven by less frequency, and average ticket size remained relatively stable. Apart from that, we actually don't see any additional loss of consumer health as to SVIP customers. We are now going to proceed with our next question. The question comes from the line of Jialong Shi from Nomura. Please ask your question. [Foreign language] So I have two follow-up questions. The first question is about the decline in the spending for SVIP member, just try to get more color from management. What were the possible reasons for the decline in the spending for average spending for the SVIP member? The second question is about the trade-in subsidies funded by the government. Just wondering if any of Vipshop's business have benefited or will likely be benefited from this trade-in subsidy scheme? Thank you. [Foreign language] So for SVIP customers, we do realize that they have a small decline in frequency even for the same cohort of customers. We are making a lot of efforts to increase engagement with SVIP customers. For example, we are planning to lower the bar for SVIP customers in terms of membership privileges, for renewal, and for new customers who first become SVIP member for the first time. And we are also planning to cover the additional 5% of discount to more brands and merchants. We are launching a lot of online and also ground events such as private sales and special offers to reinforce the trust and the loyalty from our SVIP customers. And I think the essence of this SVIP enhancement program is intended to, one, is to increase their retention and also repeat orders. And second is to find more opportunities for cross-category purchases, especially for family shoppers, because most of the SVIP customers actually do have very strong trust and loyalty in Vipshop. And if we provide a great combination of product value and service, they wouldn't hesitate to shop with us more often. And that's for SVIP customers. And for trade-in programs, for offline outlets, actually the primary business is still on apparel categories. So we barely benefit from the trade-in program. And for online business, we expect there should be a few million, a few hundred million, ranging from RMB 400 million-RMB 500 million additional sales from trade-in programs. This is not meaningful enough to drive our GMV or revenue. It could be that our platform is still more recognized by customers as a great place to shop for apparel and accessories instead of electronics and home appliances. Having said that, we are moving where we are trying to cooperate with the government departments to see whether they would be willing to extend the trade-in programs to other categories. Of course, it hasn't expanded to apparel categories for now, but we do see opportunities. If the trade-in program extends to additional categories, we should be benefiting from that.