Baozun Inc. Q2 FY2025 earnings call

• Vincent Qiu noted Baozun had solid quarter with BEC and BBM progress, total revenue up 7%, adjusted operating income improved. - Catherine Zhu discussed financials, including total net revenues up 6.8% to CNY 2.6 billion, e-commerce revenue up 3.4%, BBM revenue up 35.4%. - Junhua Wu highlighted BEC's revenue growth, margin expansion, service revenue growth, omnichannel initiatives with multichannel reaching 48.5% and strong performance on Douyin and RedNote. - Ken Huang shared BBM's revenue growth, Gap's merchandising, channel expansion, marketing initiatives, Hunter's offline store milestones, and inventory management improvements.

Total revenue grew by 7%. Excluding one-off expenses, adjusted operating income was CNY 59 million, up from CNY 10 million in the same period last year. E-commerce (BEC) revenue grew 3%, with adjusted operating profits rising 56% year-over-year to CNY 94 million. BEC product sales revenue grew 3.3%, supported by beauty, cosmetics, and alcohol categories. Brand Management (BBM) revenue grew 35% year-over-year, with product sales up 35.5% led by Gap. BEC product sales gross margin expanded to 12.8%, while BBM gross margin was 52%. BEC services revenue grew 3.5%, driven by digital marketing and IT/online operations. BBM's product sales totaled CNY 396 million, with strong performance from Gap.

• BEC expects growth momentum to continue with healthy pipeline of new clients. - BBM is confident in achieving full-year targets, with plans for strong marketing activities in H2 2025. - Anticipation of promising second half, especially for Double 11 with brand partners planning higher investments.

Q: Share percentage of contribution from various platforms and impact of instant retail shopping on Baozun's business.

A: Junhua Wu mentioned Tmall and JD had strong GMV growth in 618, FMCG categories testing instant retail shopping.

Q: Anticipation of BBM momentum continuation and profitability timeline.

A: Ken Huang said BBM will continue expanding stores, improving products, with aim to be breakeven in Q4.

Q: Regarding e-commerce business, impact of platforms' merchant benefits and traffic allocation.

A: Junhua Wu discussed platform rebate programs and different traffic allocation in various categories.

Q: Brand management's brand acquisition criteria and leveraging Gap/Hunter experience.

A: Vincent Qiu said criteria include energetic brands with potential, Ken Huang mentioned Gap and Hunter's infrastructure benefits new brands.

Q: Growth outlook of BEC business and RedNote program benefits.

A: Junhua Wu talked about operational efficiency progress and RedNote partnership benefits.

Q: AI application progress and Double 11 plan.

A: Junhua Wu said AI focused on internal efficiency, no clear Double 11 plan yet but confident in leveraging 618 experience.