UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2023
Commission File Number: 001-37385
Baozun Inc.
No. 1-9, Lane 510, West Jiangchang Road
Shanghai 200436
The People’s Republic of China
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F x
Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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Baozun Inc. |
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By: |
/s/ Arthur Yu |
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Name: |
Arthur Yu |
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Title: |
Chief Financial Officer |
Date: August 28, 2023
Exhibit Index
Exhibit 99.1 – Press Release – Baozun Announces Second Quarter 2023 Unaudited Financial Results
Exhibit 99.2 – Announcement with The Stock Exchange of Hong Kong Limited – Interim Results Announcement for the Six Months Ended June 30, 2023
Exhibit 99.1
Baozun Announces Second Quarter 2023 Unaudited
Financial Results
SHANGHAI, China, August 28, 2023 - Baozun
Inc. (Nasdaq: BZUN and HKEX: 9991) (“Baozun”, the “Company” or the “Group”), a leading brand e-commerce
solution provider and digital commerce enabler in China, today announced its unaudited financial results for the second quarter ended
June 30, 2023.
Mr. Vincent Qiu, Chairman and Chief Executive
Officer of Baozun, stated, “I am happy to share our recent partnership with Authentic Brands Group (“Authentic”), a
leading global brand management company that owns a large portfolio of more than 50 brands, including many iconic and world-renowned lifestyle
and entertainment brands. This marks another milestone in our transformation where all three business lines will cooperate together to
deliver an extraordinary suite of services to leading global brand companies in China and other Asian markets.”
“While the macro-environment remains challenging,
each of our three business lines is making progress. Baozun E-Commerce (“BEC”) continues to benefit from business optimization
and is transitioning into its second growth curve. Baozun Brand Management (“BBM”) has put in place a new foundation for Gap
Shanghai and is accelerating its China-for-China strategy. Baozun International (“BZI”) continues to establish infrastructure
throughout Asia, focusing on delivering the maximum omni-channel reach for our brand partner. With our transformation roadmap defined,
we see a bright path for the Group.” Mr. Qiu concluded.
Mr. Arthur Yu, Chief Financial Officer of
Baozun and President of BEC, commented, “In the second quarter of 2023, BEC once again achieved better year-over-year profits and
cash flows, benefiting from our consistent efforts in enhancing value and reducing costs. We are embarking on a transition journey in
the e-commerce business to realign our people, resources, and business processes to adapt to the changing market dynamics. We have full
confidence that once this transition is successfully executed, our e-commerce business will be better positioned to drive sustainable
growth and achieve even greater success in the market.”
Second Quarter 2023 Financial Highlights
| ● | Total net revenues were RMB2,320.2 million (US$1
320.0 million), representing an increase of 9.3% compared with RMB2,122.0 million in the same quarter of last year. |
| ● | Loss from operations was RMB36.4 million (US$5.0 million), compared with RMB23.4 million in the same quarter
of last year. Operating margin was negative 1.6%, compared with negative 1.1% for the same period of 2022. |
| ● | Non-GAAP income from operations2
was RMB0.7 million (US$0.1 million), compared with RMB47.3 million in the same quarter of last year. Non-GAAP operating margin was 0.03%,
compared with 2.2% for the same period of 2022. |
1This announcement contains translations of certain Renminbi
(RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation
of RMB into US$ has been made at RMB7.2513 to US$1.00, the noon buying rate in effect on June 30,2023 as set forth in the H.10 Statistical
Release of the Federal Reserve Board.
2 Non-GAAP income (loss) from operations is a non-GAAP
financial measure, which is defined as income (loss) from operations excluding the impact of share-based compensation expenses, amortization
of intangible assets resulting from business acquisition and acquisition-related expenses.
| ● | Adjusted operating profits of E-Commerce3
was RMB60.8 million (US$8.4 million), an increase of RMB13.5 million compared with RMB47.3 million in the same quarter of last year. |
| ● | Adjusted operating losses of Brand Management3 was RMB60.1 million (US$8.3 million). |
| ● | Net loss attributable to ordinary shareholders of Baozun was RMB20.0 million (US$2.8 million), compared
with RMB77.8 million for the same period of 2022. |
| ● | Non-GAAP net loss attributable to ordinary shareholders of Baozun4
was RMB4.4 million (US$0.6 million), compared with non-GAAP net income attributable to ordinary shareholders of Baozun RMB1.3 million
for the same period of 2022. |
| ● | Basic and diluted net loss attributable to ordinary shareholders of Baozun per American Depositary Share
(“ADS5”) were both RMB0.34 (US$0.05), compared
with both RMB1.26 for the same period of 2022. |
| ● | Basic and diluted non-GAAP net loss attributable to ordinary shareholders of Baozun per ADS6
were both RMB0.07 (US$0.01), compared with Basic and diluted non-GAAP
net income attributable to ordinary shareholders of Baozun per ADS both RMB0.02 for the same period of 2022. |
| ● | Cash and cash equivalents, restricted cash, and short-term investments totaled RMB3,212.5 million (US$443.0
million), as of June 30, 2023, compared with RMB2,901.6 million as of March 31, 2023. |
Reconciliations of GAAP measures to non-GAAP measures presented above
are included at the end of this results announcement.
Adjusted operating profits/losses are included
in the Segments data of Supplemental Information.
3
Following the acquisition of Gap Shanghai, the Group updated its operating segments structure resulting in two segments,
which were (i) E-Commerce; (ii) Brand Management, for more information, please refer to Supplemental Information.
4
Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun is a non-GAAP financial measure, which is defined
as net income (loss) attributable to ordinary shareholders of Baozun excluding the impact of share-based compensation expenses, amortization
of intangible assets resulting from business acquisition, acquisition-related expenses, fair value gain on derivative liabilities, gain
on acquisition of subsidiaries, and unrealized investment loss.
5
Each ADS represents three Class A ordinary shares.
6
Basic and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS are non-GAAP financial
measures, which are respectively defined as non-GAAP net income (loss) attributable to ordinary shareholders of Baozun divided by weighted
average number of shares used in calculating basic and diluted net income (loss) per ordinary share multiplied by three, respectively.
Business Highlights
Baozun e-Commerce, or “BEC”
BEC includes our China e-commerce businesses,
such as brands’ store operations, customer services and value-added services in logistics and supply chain management, IT and
digital marketing. During the quarter, revenue from sportswear, and beauty and cosmetics delivered double digit growth.
Omni-channel expansion remains a key theme for
our brand partners. Gross Merchandise Volume (GMV)7 generated
from non-TMALL marketplaces and channels accounted for approximately 34.1% of total GMV during the quarter, compared with 24.4% for the
same period of 2022. By the end of the second quarter, approximately 46.1% of our brand partners engaged with us for store operations
of at least two channels, compared with 40.2% a year ago.
Baozun Brand Management or “BBM”
BBM engages in holistic brand management, including
strategy and tactic positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics and technology empowerment.
We aim to leverage our portfolio of technologies to forge longer and deeper relationships with brands.
In the second quarter of 2023, BBM continued to
focus on transforming Gap Shanghai – from a discount-driven approach to one that focuses on building consumer love for our brand
and products. During the quarter, we implemented our transition plans and successfully improved average unit retail and gross margin for
Gap Shanghai. Currently, BBM mainly comprises product sales revenue of Gap Shanghai, and product sales for BBM in the second quarter of
2023 totaled RMB324.2 million. Gross profit margin of product sales for BBM in the second quarter of 2023 was 51.9%.
Second Quarter 2023 Financial Results
Total net revenues were RMB2,320.2 million
(US$320.0 million), an increase of 9.3% from RMB2,122.0 million in the same quarter of last year. The increase in total net revenues was
mainly due to the incremental revenue contribution from BBM, a new line of business the Company launched in the first quarter of 2023.
Total product sales revenue was RMB930.3
million (US$128.3 million), compared with RMB693.9 million in the same quarter of last year, of which,
| ● | Product sales revenue of E-Commerce was RMB606.1 million (US$83.6 million), a decrease of 12.7% from RMB693.9 million in the
same quarter of last year. The decrease was primarily attributable to the weak performance in the appliance and electronics categories,
as well as the Company’s optimization of its product distribution model, especially in the category of electronics. |
7 GMV includes value added tax and excludes (i) shipping
charges, (ii) surcharges and other taxes, (iii) value of the goods that are returned and (iv) deposits for purchases that have not been
settled.
The following table sets forth a breakdown of product sales
revenues of E-Commerce by key categories 8 for the
periods indicated:
| |
For the three months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
% of Net Revenues | | |
RMB | | |
US$ | | |
% of Net Revenues | | |
YoY Change | |
| |
| | |
| | |
| | |
| | |
| | |
| |
| |
(In millions, except for percentage) | |
Product Sales of E-Commerce | |
| | |
| | |
| | |
| | |
| | |
| |
Appliances | |
| 362.7 | | |
| 17 | % | |
| 276.0 | | |
| 38.1 | | |
| 12 | % | |
| -24 | % |
Electronics | |
| 88.8 | | |
| 4 | % | |
| 50.3 | | |
| 6.9 | | |
| 2 | % | |
| -43 | % |
Beauty and cosmetics | |
| 80.1 | | |
| 4 | % | |
| 104.4 | | |
| 14.4 | | |
| 4 | % | |
| 30 | % |
Others | |
| 162.3 | | |
| 8 | % | |
| 175.4 | | |
| 24.2 | | |
| 8 | % | |
| 8 | % |
Total net revenues from product sales of E-Commerce | |
| 693.9 | | |
| 33 | % | |
| 606.1 | | |
| 83.6 | | |
| 26 | % | |
| -13 | % |
| ● | Product sales revenue of Brand Management was RMB324.2 million (US$44.7 million), which mainly comprised retail revenue from
Gap Shanghai business, including both offline store sales and online sales. |
Services revenue was RMB1,389.9 million (US$191.7 million),
a decrease of 2.7% from RMB1,428.1 million in the same quarter of last year. The decrease was primarily due to a revenue reduction of
RMB45.3 million from warehousing and fulfillment due to the disposal of a loss-making subsidiary during the third quarter of 2022. Excluding
the impact of disposal, services revenue increased 0.5% year over year.
The following table sets forth a breakdown of services revenue by business
models for the periods indicated:
| |
For the three months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
% of Net Revenues | | |
RMB | | |
US$ | | |
% of Net Revenues | | |
YoY Change | |
| |
| | |
| | |
| | |
| | |
| | |
| |
| |
(In millions, except for percentage) | |
Services revenue | |
| | |
| | |
| | |
| | |
| | |
| |
Online store operations | |
| 369.6 | | |
| 17 | % | |
| 388.3 | | |
| 53.6 | | |
| 17 | % | |
| 5 | % |
Warehousing and fulfillment | |
| 611.1 | | |
| 29 | % | |
| 570.5 | | |
| 78.7 | | |
| 25 | % | |
| -7 | % |
Digital marketing and IT solutions | |
| 447.4 | | |
| 21 | % | |
| 446.2 | | |
| 61.5 | | |
| 19 | % | |
| 0 | % |
Inter-segment eliminations9 | |
| - | | |
| - | | |
| (15.1 | ) | |
| (2.1 | ) | |
| -1 | % | |
| n/a | |
Total net revenues from services | |
| 1,428.1 | | |
| 67 | % | |
| 1,389.9 | | |
| 191.7 | | |
| 60 | % | |
| -3 | % |
8 Key categories refer to the categories
that accounted for no less than 10% of product sales revenues during the periods indicated.
9 The inter-segment eliminations mainly
consist of revenues from online store operations, digital marketing and IT services provided by E-Commerce to Gap, a brand under Brand
Management.
Breakdown of total net revenues of online store
operations of services by key categories 10 of services for
the periods indicated:
| |
For the three months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
% of Net
Revenues | | |
RMB | | |
US$ | | |
% of Net
Revenues | | |
YoY
Change | |
| |
| | |
| | |
| | |
| | |
| | |
| |
| |
(In millions, except for percentage) | |
Online store operations in Services revenue | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Apparel and accessories | |
| 243.5 | | |
| 11 | % | |
| 258.3 | | |
| 35.6 | | |
| 11 | % | |
| 6 | % |
- Luxury | |
| 92.9 | | |
| 4 | % | |
| 97.9 | | |
| 13.5 | | |
| 4 | % | |
| 5 | % |
- Sportswear | |
| 83.7 | | |
| 4 | % | |
| 95.0 | | |
| 13.1 | | |
| 4 | % | |
| 14 | % |
- Other apparel | |
| 66.9 | | |
| 3 | % | |
| 65.4 | | |
| 9.0 | | |
| 3 | % | |
| -2 | % |
Others | |
| 126.1 | | |
| 6 | % | |
| 130.0 | | |
| 18.0 | | |
| 6 | % | |
| 3 | % |
Inter-segment
eliminations11 | |
| - | | |
| - | | |
| (9.3 | ) | |
| (1.3 | ) | |
| -1 | % | |
| n/a | |
Total net revenues from online store operations in services | |
| 369.6 | | |
| 17 | % | |
| 379.0 | | |
| 52.3 | | |
| 16 | % | |
| 3 | % |
Total operating expenses were RMB2,356.6
million (US$325.0 million), compared with RMB2,145.4 million in the same quarter of last year. The increase in operating expense is mainly
attributing to the acquisition of Gap Shanghai. Besides operating expense from GAP Shanghai, the remaining operating expenses decreased
by RMB151.7 million, representing a 7.1% decrease compared with the same quarter of last year.
| ● | Cost of products was RMB675.1 million (US$93.1 million), compared with RMB602.2 million in the
same quarter of last year. The increase was primarily due to the incremental cost of product of RMB155.9 million related to Gap Shanghai,
a subsidiary the Company acquired in the first quarter of 2023. |
| ● | Fulfillment expenses were RMB658.7 million (US$90.8million), compared with RMB725.0 million in
the same quarter of last year. The decrease was primarily due to a reduction of RMB62.8 million in freight expenses resulting from
the Company’s divesture of a subsidiary of its warehouse and supply chain businesses in the third quarter of 2022 and additional
savings in customer services expenses resulting from the Company’s expanding use of regional service centers. |
| ● | Sales and marketing expenses were RMB706.4 million (US$97.4 million), compared with RMB668.3 million
in the same quarter of last year. The increase was mainly due to the incremental sales and marketing expenses of RMB73.1 million related
to Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023. |
| ● | Technology and content expenses were RMB129.1 million (US$17.8 million), compared with RMB112.2
million in the same quarter of last year. The increase was mainly due to the Company’s ongoing investment in technological innovation
and productization, partially offset by the Company’s cost control initiatives and efficiency improvements. |
10 Key categories refer to the categories that accounted
for no less than 10% of services revenue during the periods indicated.
11 The inter-segment eliminations mainly consist of revenues
from store operation services provided by E-Commerce to Gap, a brand under Brand Management.
| ● | General and administrative expenses were RMB249.5 million (US$34.4 million), compared with RMB91.7
million in the same quarter of last year. The increase was primarily due to an incremental expense of RMB117.7 million related to Brand
Management, including the expenses related to Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023, as well as
strategic investments expenses in Creative Content to Commerce business unit, brand management, overseas expansion and disposal of
a warehouse and supply chain businesses subsidiary. |
Loss from operations was RMB36.4 million
(US$5.0 million), compared with RMB23.4 million in the same quarter of last year. Operating margin was negative 1.6%, compared with negative
1.1% in the same quarter of last year.
Non-GAAP income from operations was RMB0.7
million (US$0.1 million), compared with non-GAAP income from operations RMB47.3 million in the same quarter of last year. The decrease
was mainly due to the loss generated from Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023, which has been
significantly narrowed on a comparable basis, offset by an improvement in profitability in BEC businesses. Non-GAAP operating margin was
0.03%, compared with 2.2% in the same quarter of last year.
Adjusted operating profits of E-Commerce was
RMB60.8 million (US$8.4 million), an increase of RMB13.5 million compared with RMB47.3 million in the same quarter of last year. Adjusted
operating losses of Brand Management was RMB60.1 million (US$8.3 million).
Unrealized investment loss was RMB9.3 million
(US$1.3 million), compared with RMB12.7 million unrealized investment loss in the same quarter of last year. The unrealized investment
loss of this quarter was mainly related to the decrease in the trading price of iClick Interactive Asia Group Limited, or iClick Interactive,
a public company listed on the Nasdaq Global Market that the Company invested in January 2021, and the decrease in the trading price
of Lanvin Group, a company successfully listed on the New York Stock Exchange in December 2022 that the Company invested in June 2021.
Net loss attributable to ordinary shareholders
of Baozun was RMB20.0 million (US$2.8 million), compared with RMB77.8 million in the same quarter of last year.
Basic and diluted net loss attributable to
ordinary shareholders of Baozun per ADS were both RMB0.34 (US$0.05), compared with both RMB1.26 for the same period of 2022.
Non-GAAP net loss attributable to ordinary
shareholders of Baozun Inc. was RMB4.4 million (US$0.6 million), compared with non-GAAP net income attributable to ordinary shareholders
of Baozun RMB1.3 million in the same quarter of last year.
Basic and diluted non-GAAP net loss attributable
to ordinary shareholders of Baozun per ADS were both RMB0.07 (US$0.01), compared with Basic and diluted non-GAAP net income attributable
to ordinary shareholders of Baozun per ADS both RMB0.02 for the same period of 2022.
Supplemental Information
| (a) | Description of segments |
Following the acquisition of Gap Shanghai, the Group updated its operating
segments structure resulting in two segments, which were (i) E-Commerce; (ii) Brand Management;
The following summary describes the operations in each of the Group’s
operating segment:
| (i) | E-Commerce focuses on Baozun traditional e-commerce service business and comprises two business lines, BEC (Baozun E-Commerce)
and BZI (Baozun International). |
a> BEC
includes our mainland China e-commerce businesses, such as brands’ store operations, customer services and value-added services
in logistics and supply chain management, IT and digital marketing.
b> BZI
includes our e-commerce businesses outside of mainland China, including locations such as Hong Kong, Macau, Taiwan, South East Asia and
Europe.
| (ii) | Brand Management engages in holistic brand management, encompassing strategy and tactic positioning, branding and marketing,
retail and e-commerce operations, supply chain and logistics and technology empowerment to leverage our portfolio of technologies to forge
into longer and deeper relationships with brands. |
The table below provides a summary of the Group’s reportable
segment results for the three months ended June 30, 2022 and 2023, with prior periods’ segment information retrospectively
recast to conform to current period presentation:
| |
For the three months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | |
Net revenues: | |
| | | |
| | |
E-Commerce | |
| 2,122,037 | | |
| 2,010,976 | |
Brand Management | |
| - | | |
| 324,297 | |
Inter-segment eliminations * | |
| - | | |
| (15,112 | ) |
Total consolidated net revenues | |
| 2,122,037 | | |
| 2,320,161 | |
| |
| | | |
| | |
**Adjusted Operating Profits (Losses): | |
| | | |
| | |
E-Commerce | |
| 47,257 | | |
| 60,828 | |
Brand Management | |
| - | | |
| (60,090 | ) |
Total Adjusted Operating Profits | |
| 47,257 | | |
| 738 | |
Inter-segment eliminations * | |
| - | | |
| - | |
Unallocated expenses: | |
| | | |
| | |
Share-based compensation expenses | |
| (59,822 | ) | |
| (29,264 | ) |
Amortization of intangible assets resulting from business acquisition | |
| (10,790 | ) | |
| (7,911 | ) |
Total other income (expenses) | |
| (48,169 | ) | |
| 22,337 | |
Loss before income tax | |
| (71,524 | ) | |
| (14,100 | ) |
*The inter-segment
eliminations mainly consist of revenues from services provided by E-Commerce to Brand Management.
**Adjusted
Operating Profits (Losses) represent segment profits (losses), which is income (loss) from operations from each segment without
allocating share-based compensation expenses, acquisition-related expenses and amortization of intangible assets resulting from
business acquisition.
Supplemental Information
Baozun Signs Licensing Agreement with Authentic
Brands Group and to Acquire 51% Equity Interest of Hunter IP Holdco in Greater China and Southeast Asia
Baozun Inc. (“Baozun”) and ABG Hunter
LLC, a subsidiary of Authentic Brands Group (“Authentic”), have entered into a Hunter Greater China and Southeast Asia Term
Sheet (“JV TS”), for Baozun’s acquisition of 51% equity interest in a special purpose vehicle established by ABG Hunter
LLC, which holds the relevant intellectual property of Hunter brands in Greater China and Southeast Asia (“Hunter IP Holdco”).
The JV TS does not create any legal obligations
for either party to enter into the proposed transactions. The completion of the proposed transaction under the JV TS is subject to the
conclusion and signing of definitive agreements by the respective parties and the fulfilment of customary closing conditions contained
therein.
In the meantime, an affiliate of Baozun has entered
into a license agreement with ABG Hunter LLC through which ABG Hunter LLC will grant Baozun’s affiliate the right to manufacture,
market, distribute and sell Hunter brand products in Greater China on an exclusive basis. The license agreement will be assigned by ABG
Hunter LLC to Hunter IP Holdco as licensor upon the completion of the proposed transaction under the JV TS. The initial term of the license
agreement ends on December 31, 2043.
About Authentic Brands Group
Authentic Brands Group (“Authentic”)
is a global brand development, marketing and entertainment platform, which owns a portfolio of more than 50 iconic and world-renowned
Lifestyle, Entertainment and Media brands. Headquartered in New York City, with offices around the world, Authentic connects strong brands
with best-in-class partners and a global network of operators, distributors and retailers to build long-term value in the marketplace.
Authentic’s brand portfolio includes Hunter®, Marilyn Monroe®, Elvis Presley®, Muhammad Ali®, Shaquille O’Neal®,
David Beckham®, Dr. J®, Greg Norman®, Neil Lane®, Thalia®, Sports Illustrated®, Reebok®, Brooks Brothers®,
Barneys New York®, Judith Leiber®, Ted Baker®, Vince®, Hervé Léger®, Hickey Freeman®, Frye®,
Nautica®, Juicy Couture®, Vince Camuto®, Lucky Brand®, Aéropostale®, Forever 21®, Nine West®, Eddie
Bauer®, Spyder®, Volcom®, Shark®, Tretorn®, Prince®, Airwalk®, Izod®, Jones New York®, Van Heusen®,
Hart Schaffner Marx®, Arrow® and Thomasville®.
For more information, please visit https://authentic.com.
About Hunter
With a 160-plus-year heritage, the Hunter brand
has evolved from a rubber boot to a lifestyle brand, offering an expansive footwear collection, outerwear, bags and accessories designed
for outdoor performance in both rural and urban environments. With seasonal introductions of fresh new styles and colorways inspired by
the brand’s strong DNA, Hunter has cemented its position as the "welly of choice" among outdoor enthusiasts, celebrities
and fashion trendsetters alike.
For more information, please visit https://hunterboots.com.
Conference Call
The Company will host a conference call to discuss
the earnings at 7:30 a.m. Eastern Time on Monday, August 28, 2023 (7:30 p.m. Beijing time on the same day).
Dial-in details for the earnings conference call
are as follows:
United States: |
1-888-317-6003 |
Hong Kong: |
800-963-976 |
Singapore: |
800-120-5863 |
Mainland China: |
4001-206-115 |
International: |
1-412-317-6061 |
Passcode: |
5234554 |
A replay of the conference call may be accessible
through September 4, 2023 by dialing the following numbers:
United States: |
1-877-344-7529 |
International: |
1-412-317-0088 |
Canada: |
855-669-9658 |
Replay Access Code: |
7089951 |
A live webcast of the conference call will be
available on the Investor Relations section of Baozun’s website at http://ir.baozun.com. An archived webcast will be available
through the same link following the call.
Use of Non-GAAP Financial Measures
The Company also uses certain non-GAAP financial
measures in evaluating its business. For example, the Company uses non-GAAP income (loss) from operations, non-GAAP operating margin,
non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and
non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS, as supplemental measures to review and assess
its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation,
or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.
The Company defines non-GAAP income (loss)
from operations as income (loss) from operations excluding the impact of share-based compensation expenses, amortization of
intangible assets resulting from business acquisition and acquisition-related expenses. The Company defines non-GAAP operating
margin as non-GAAP income (loss) from operations as a percentage of total net revenues. The Company defines non-GAAP net income
(loss) as net income (loss) excluding the impact of share-based compensation expenses, amortization of intangible assets resulting
from business acquisition, acquisition-related expenses, fair value gain on derivative liabilities, gain on acquisition of
subsidiaries, and unrealized investment loss. The Company defines non-GAAP net margin as non-GAAP net income (loss) as a percentage
of total net revenues. The Company defines non-GAAP net income (loss) attributable to ordinary shareholders of Baozun as
net income (loss) attributable to ordinary shareholders of Baozun excluding the impact of share-based compensation
expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, fair value gain on
derivative liabilities, gain on acquisition of subsidiaries, and unrealized investment loss. The Company defines non-GAAP net income
(loss) attributable to ordinary shareholders of Baozun per ADS as non-GAAP net income (loss) attributable to ordinary
shareholders of Baozun divided by weighted average number of shares used in calculating net income (loss) per ordinary
share multiplied by three.
The Company presents the non-GAAP financial measures
because they are used by the Company’s management to evaluate the Company’s financial and operating performance and formulate
business plans. Non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary
shareholders of Baozun and Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS reflect
the Company’s ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes
that the use of the non-GAAP financial measures facilitates investors to understand and evaluate the Company’s current operating
performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP
financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items
that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of the Company’s
core operating results and business outlook.
The non-GAAP financial measures are not defined
under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations
as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP
net income (loss) attributable to ordinary shareholders of Baozun, and non-GAAP net income (loss) attributable to ordinary shareholders
of Baozun per ADS is that they do not reflect all items of income and expense that affect the Company’s operations. Further,
the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, potentially limiting the
comparability of their financial results to the Company’s. In light of the foregoing limitations, the non-GAAP income (loss) from
operations, non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary
shareholders of Baozun and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS for
the period should not be considered in isolation from or as an alternative to income (loss) from operations, operating margin, net income
(loss), net margin, net income (loss) attributable to ordinary shareholders of Baozun and net income (loss) attributable to
ordinary shareholders of Baozun per ADS, or other financial measures prepared in accordance with U.S. GAAP.
The Company compensates for these limitations
by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when
evaluating the Company’s performance. The company encourages you to review the company’s financial information in its entirety
and not rely on a single financial measure. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP
financial measures, please see the section of the accompanying tables titled, “Reconciliations of GAAP and Non-GAAP Results.”
Safe Harbor Statements
This announcement contains forward-looking statements.
These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,”
“future,” “intends,” “plans,” “believes,” “estimates,” “confident,”
“potential,” “continues,” “ongoing,” “targets,” “guidance,” “going forward,”
“looking forward,” “outlook” or other similar expressions. Statements that are not historical facts, including
but not limited to statements about Baozun’s beliefs and expectations, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in
any forward-looking statement, including but not limited to Baozun’s filings with the United States Securities and Exchange Commission
and its announcements, notices or other documents published on the website of The Stock Exchange of Hong Kong Limited. All information
provided in this announcement is as of the date hereof and is based on assumptions that Baozun believes to be reasonable as of this date,
and Baozun undertakes no obligation to update such information, except as required under applicable law.
About Baozun Inc.
Founded in 2007, Baozun Inc. is a leader in brand
e-commerce service, brand management, and digital commerce service. It serves more than 400 brands from various industries and sectors
around the world, including East and Southeast Asia, Europe and North America.
Baozun Inc. comprises three major business lines
- Baozun e-Commerce (BEC), Baozun Brand Management (BBM) and Baozun International (BZI) and is committed to accelerating high-quality
and sustainable growth. Driven by the principle that “Technology Empowers the Future Success”, Baozun’s business lines
are devoted to empowering their clients’ business and navigating their new phase of development.
For more information, please visit http://ir.baozun.com.
For investor and media inquiries, please contact:
Baozun Inc.
Ms. Wendy Sun
Email: ir@baozun.com
Baozun Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
As of |
|
|
|
December 31,
2022 |
|
|
June 30,
2023 |
|
|
June 30,
2023 |
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
2,144,020 |
|
|
|
1,689,337 |
|
|
|
232,970 |
|
Restricted cash |
|
|
101,704 |
|
|
|
59,374 |
|
|
|
8,188 |
|
Short-term investments |
|
|
895,425 |
|
|
|
1,463,784 |
|
|
|
201,865 |
|
Accounts receivable, net |
|
|
2,292,678 |
|
|
|
1,825,671 |
|
|
|
251,771 |
|
Inventories |
|
|
942,997 |
|
|
|
1,018,088 |
|
|
|
140,401 |
|
Advances to suppliers |
|
|
372,612 |
|
|
|
289,935 |
|
|
|
39,984 |
|
Prepayments and other current assets |
|
|
554,415 |
|
|
|
610,596 |
|
|
|
84,205 |
|
Amounts due from related parties |
|
|
93,270 |
|
|
|
85,390 |
|
|
|
11,776 |
|
Total current assets |
|
|
7,397,121 |
|
|
|
7,042,175 |
|
|
|
971,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Investments in equity investees |
|
|
269,693 |
|
|
|
303,505 |
|
|
|
41,855 |
|
Property and equipment, net |
|
|
694,446 |
|
|
|
846,327 |
|
|
|
116,714 |
|
Intangible assets, net |
|
|
310,724 |
|
|
|
310,581 |
|
|
|
42,831 |
|
Land use right, net |
|
|
39,490 |
|
|
|
38,977 |
|
|
|
5,375 |
|
Operating lease right-of-use assets |
|
|
847,047 |
|
|
|
1,122,118 |
|
|
|
154,747 |
|
Goodwill |
|
|
336,326 |
|
|
|
346,914 |
|
|
|
47,842 |
|
Other non-current assets |
|
|
65,114 |
|
|
|
66,901 |
|
|
|
9,226 |
|
Deferred tax assets |
|
|
162,509 |
|
|
|
203,267 |
|
|
|
28,032 |
|
Total non-current assets |
|
|
2,725,349 |
|
|
|
3,238,590 |
|
|
|
446,622 |
|
Total assets |
|
|
10,122,470 |
|
|
|
10,280,765 |
|
|
|
1,417,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term loan |
|
|
1,016,071 |
|
|
|
1,123,468 |
|
|
|
154,933 |
|
Accounts payable |
|
|
474,732 |
|
|
|
427,272 |
|
|
|
58,924 |
|
Notes payable |
|
|
487,837 |
|
|
|
248,541 |
|
|
|
34,275 |
|
Income tax payables |
|
|
46,828 |
|
|
|
26,152 |
|
|
|
3,607 |
|
Accrued expenses and other current liabilities |
|
|
1,025,540 |
|
|
|
1,096,165 |
|
|
|
151,167 |
|
Derivative liabilities |
|
|
364,758 |
|
|
|
358,670 |
|
|
|
49,463 |
|
Amounts due to related parties |
|
|
30,434 |
|
|
|
22,886 |
|
|
|
3,156 |
|
Current operating lease liabilities |
|
|
235,445 |
|
|
|
306,925 |
|
|
|
42,327 |
|
Total current liabilities |
|
|
3,681,645 |
|
|
|
3,610,079 |
|
|
|
497,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
28,082 |
|
|
|
28,367 |
|
|
|
3,912 |
|
Long-term operating lease liabilities |
|
|
673,955 |
|
|
|
878,912 |
|
|
|
121,208 |
|
Other non-current liabilities |
|
|
62,450 |
|
|
|
105,052 |
|
|
|
14,487 |
|
Total non-current liabilities |
|
|
764,487 |
|
|
|
1,012,331 |
|
|
|
139,607 |
|
Total liabilities |
|
|
4,446,132 |
|
|
|
4,622,410 |
|
|
|
637,459 |
|
Baozun Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
|
|
As of |
|
|
|
December 31,
2022 |
|
|
June 30,
2023 |
|
|
June 30,
2023 |
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
Redeemable non-controlling interests |
|
|
1,438,082 |
|
|
|
1,455,254 |
|
|
|
200,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baozun Inc. shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares (US$0.0001 par value; 470,000,000 shares authorized, 163,100,873 and 164,682,392 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively) |
|
|
116 |
|
|
|
93 |
|
|
|
13 |
|
Class B ordinary shares (US$0.0001 par value; 30,000,000 shares authorized, 13,300,738 shares issued and outstanding as of December 31, 2022and June 30, 2023, respectively) |
|
|
8 |
|
|
|
8 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
5,129,103 |
|
|
|
4,336,480 |
|
|
|
598,028 |
|
Treasury shares |
|
|
(832,578 |
) |
|
|
- |
|
|
|
- |
|
Accumulated deficit |
|
|
(228,165 |
) |
|
|
(331,740 |
) |
|
|
(45,749 |
) |
Accumulated other comprehensive income |
|
|
15,678 |
|
|
|
47,404 |
|
|
|
6,537 |
|
Total Baozun Inc. shareholders' equity |
|
|
4,084,162 |
|
|
|
4,052,245 |
|
|
|
558,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
154,094 |
|
|
|
150,856 |
|
|
|
20,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders’ equity |
|
|
4,238,256 |
|
|
|
4,203,101 |
|
|
|
579,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities, redeemable non-controlling interests and Shareholders’ equity |
|
|
10,122,470 |
|
|
|
10,280,765 |
|
|
|
1,417,782 |
|
Baozun Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
(In thousands, except for share and per share
data and per ADS data)
| |
For the three months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
US$ | |
Net revenues | |
| | | |
| | | |
| | |
Product sales(1) | |
| 693,901 | | |
| 930,256 | | |
| 128,288 | |
Services | |
| 1,428,136 | | |
| 1,389,905 | | |
| 191,677 | |
Total net revenues | |
| 2,122,037 | | |
| 2,320,161 | | |
| 319,965 | |
| |
| | | |
| | | |
| | |
Operating expenses (2) | |
| | | |
| | | |
| | |
Cost of products | |
| (602,189 | ) | |
| (675,050 | ) | |
| (93,094 | ) |
Fulfillment(3) | |
| (725,030 | ) | |
| (658,652 | ) | |
| (90,832 | ) |
Sales and marketing (3) | |
| (668,331 | ) | |
| (706,440 | ) | |
| (97,423 | ) |
Technology and content(3) | |
| (112,226 | ) | |
| (129,142 | ) | |
| (17,809 | ) |
General and administrative(3) | |
| (91,704 | ) | |
| (249,503 | ) | |
| (34,408 | ) |
Other operating income, net | |
| 54,088 | | |
| 62,189 | | |
| 8,576 | |
Total operating expenses | |
| (2,145,392 | ) | |
| (2,356,598 | ) | |
| (324,990 | ) |
Loss from operations | |
| (23,355 | ) | |
| (36,437 | ) | |
| (5,025 | ) |
Other income (expenses) | |
| | | |
| | | |
| | |
Interest income | |
| 7,335 | | |
| 20,286 | | |
| 2,797 | |
Interest expense | |
| (13,806 | ) | |
| (9,763 | ) | |
| (1,346 | ) |
Unrealized investment loss | |
| (12,657 | ) | |
| (9,305 | ) | |
| (1,283 | ) |
Gain on acquisition of subsidiaries | |
| - | | |
| 3,251 | | |
| 448 | |
Fair value gain on derivative liabilities | |
| - | | |
| 24,515 | | |
| 3,381 | |
Exchange loss | |
| (29,041 | ) | |
| (6,647 | ) | |
| (917 | ) |
Loss before income tax | |
| (71,524 | ) | |
| (14,100 | ) | |
| (1,945 | ) |
Income tax expense (4) | |
| (3,659 | ) | |
| (2,350 | ) | |
| (324 | ) |
Share of income in equity method investment, net of tax of nil | |
| 3,795 | | |
| 4,432 | | |
| 611 | |
Net loss | |
| (71,388 | ) | |
| (12,018 | ) | |
| (1,658 | ) |
Net loss attributable to noncontrolling interests | |
| 3,819 | | |
| 4,268 | | |
| 589 | |
Net income attributable to redeemable noncontrolling interests | |
| (10,190 | ) | |
| (12,278 | ) | |
| (1,693 | ) |
Net loss attributable to ordinary shareholders
of Baozun Inc. | |
| (77,759 | ) | |
| (20,028 | ) | |
| (2,762 | ) |
| |
| | | |
| | | |
| | |
Net loss per share attributable to ordinary shareholders of Baozun Inc.: | |
| | | |
| | | |
| | |
Basic | |
| (0.42 | ) | |
| (0.11 | ) | |
| (0.02 | ) |
Diluted | |
| (0.42 | ) | |
| (0.11 | ) | |
| (0.02 | ) |
Net loss per ADS attributable to ordinary shareholders of Baozun Inc.: | |
| | | |
| | | |
| | |
Basic | |
| (1.26 | ) | |
| (0.34 | ) | |
| (0.05 | ) |
Diluted | |
| (1.26 | ) | |
| (0.34 | ) | |
| (0.05 | ) |
Weighted average shares used in calculating net loss per ordinary share | |
| | | |
| | | |
| | |
Basic | |
| 184,746,649 | | |
| 177,967,788 | | |
| 177,967,788 | |
Diluted | |
| 184,746,649 | | |
| 177,967,788 | | |
| 177,967,788 | |
| |
| | | |
| | | |
| | |
Net loss | |
| (71,388 | ) | |
| (12,018 | ) | |
| (1,658 | ) |
Other comprehensive income, net of tax of nil: | |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| 80,396 | | |
| 39,523 | | |
| 5,450 | |
Comprehensive income | |
| 9,008 | | |
| 27,505 | | |
| 3,792 | |
| (1) | Including product sales from E-Commerce and Brand Management of RMB606.1 million and RMB324.2 million for the three months period
ended June 30, 2023, respectively, compared with product sales from e-Commerce of RMB693.9 million for the three months period ended
June 30, 2022. |
| (2) | Share-based compensation expenses are allocated in operating expenses items as follows: |
| |
For the three months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
US$ | |
Fulfillment | |
| 6,979 | | |
| 1,713 | | |
| 236 | |
Sales and marketing | |
| 26,204 | | |
| 10,456 | | |
| 1,442 | |
Technology and content | |
| 10,223 | | |
| 3,512 | | |
| 484 | |
General and administrative | |
| 16,416 | | |
| 13,583 | | |
| 1,874 | |
| |
| 59,822 | | |
| 29,264 | | |
| 4,036 | |
(3) Including amortization of intangible assets resulting from
business acquisition, which amounted to RMB10.8 million and RMB7.9 million for the three months period ended June 30, 2022 and 2023,
respectively.
(4) Including income tax benefits of RMB2.2 million and RMB1.5
million related to the reversal of deferred tax liabilities, which was recognized on business acquisition for the three months period
ended June 30, 2022 and 2023, respectively.
Baozun Inc.
Reconciliations of GAAP and Non-GAAP Results
(in thousands, except for share and per ADS
data)
| |
For the three months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
US$ | |
Loss from operations | |
| (23,355 | ) | |
| (36,437 | ) | |
| (5,025 | ) |
Add: Share-based
compensation expenses | |
| 59,822 | | |
| 29,264 | | |
| 4,036 | |
Amortization of intangible assets resulting from business acquisition | |
| 10,790 | | |
| 7,911 | | |
| 1,091 | |
Non-GAAP income from operations | |
| 47,257 | | |
| 738 | | |
| 102 | |
| |
| | | |
| | | |
| | |
Net loss | |
| (71,388 | ) | |
| (12,018 | ) | |
| (1,658 | ) |
Add: Share-based
compensation expenses | |
| 59,822 | | |
| 29,264 | | |
| 4,036 | |
Amortization of intangible assets resulting from business acquisition | |
| 10,790 | | |
| 7,911 | | |
| 1,091 | |
Unrealized investment loss | |
| 12,657 | | |
| 9,305 | | |
| 1,283 | |
Less: Tax
effect of amortization of intangible assets resulting from business acquisition | |
| (2,201 | ) | |
| (1,507 | ) | |
| (208 | ) |
Gain on acquisition of subsidiaries | |
| - | | |
| (3,251 | ) | |
| (448 | ) |
Fair value gain on derivative liabilities | |
| - | | |
| (24,515 | ) | |
| (3,381 | ) |
Non-GAAP net income | |
| 9,680 | | |
| 5,189 | | |
| 715 | |
| |
| | | |
| | | |
| | |
Net loss attributable to ordinary shareholders of Baozun Inc. | |
| (77,759 | ) | |
| (20,028 | ) | |
| (2,762 | ) |
Add: Share-based
compensation expenses | |
| 59,822 | | |
| 29,264 | | |
| 4,036 | |
Amortization of intangible assets resulting from business acquisition | |
| 8,200 | | |
| 5,991 | | |
| 826 | |
Unrealized investment loss | |
| 12,657 | | |
| 9,305 | | |
| 1,283 | |
Less: Tax
effect of amortization of intangible assets resulting from business acquisition | |
| (1,662 | ) | |
| (1,127 | ) | |
| (155 | ) |
Gain on acquisition of subsidiaries | |
| - | | |
| (3,272 | ) | |
| (451 | ) |
Fair value gain on derivative liabilities | |
| - | | |
| (24,515 | ) | |
| (3,381 | ) |
Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. | |
| 1,258 | | |
| (4,382 | ) | |
| (604 | ) |
| |
| | | |
| | | |
| | |
Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS: | |
| | | |
| | | |
| | |
Basic | |
| 0.02 | | |
| (0.07 | ) | |
| (0.01 | ) |
Diluted | |
| 0.02 | | |
| (0.07 | ) | |
| (0.01 | ) |
Weighted average shares used in calculating net income (loss) per ordinary share | |
| | | |
| | | |
| | |
Basic | |
| 184,746,649 | | |
| 177,967,788 | | |
| 177,967,788 | |
Diluted | |
| 187,862,651 | | |
| 177,967,788 | | |
| 177,967,788 | |
Exhibit 99.2
Hong
Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement,
make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising
from or in reliance upon the whole or any part of the contents of this announcement.
Under
our weighted voting rights structure, our share capital comprises Class A
ordinary shares and Class B ordinary shares. Each Class A
ordinary share entitles the holder to exercise one vote, and each Class B
ordinary share entitles the holder to exercise ten votes, respectively, on any resolution tabled at our general meetings, except as may
otherwise be required by law or by the Rules Governing the Listing
of Securities on The Stock Exchange of Hong Kong Limited or provided for in our memorandum and articles of association. Shareholders
and prospective investors should be aware of the potential risks of investing in a company with a weighted voting rights structure. Our
American depositary shares, each representing three of our Class A
ordinary shares, are listed on the Nasdaq Global Select Market in the United States under the symbol BZUN.
Baozun Inc.
寶尊電商有限公司*
(A company controlled
through weighted voting rights and incorporated in the Cayman Islands with limited liability)
(Stock Code:
9991)
INTERIM RESULTS
ANNOUNCEMENT
FOR THE SIX MONTHS
ENDED JUNE 30, 2023
INTERIM RESULTS
The
board (the “Board”) of directors (the “Directors”) of Baozun Inc. (“Baozun”
or the “Company”) hereby announces the unaudited condensed consolidated results of the Company and its subsidiaries
(the “Group”, “we” or “our”) for the six months ended June 30, 2023 (the
“Reporting Period”), together with the comparative figures for the corresponding period in 2022. These unaudited condensed
consolidated results have been prepared under generally accepted accounting principles in the United States (the “U.S. GAAP”)
and have been reviewed by the audit committee of the Company (the “Audit Committee”).
FINANCIAL
SUMMARY
| • | Total
net revenues were RMB4,208.0 million (US$580.3 million) for the Reporting Period, an increase
of 2.5% year-over-year. |
| • | Loss
from operations was RMB77.1 million (US$10.6 million) for the Reporting Period, compared
with RMB64.5 million in the same period of last year. Operating margin was negative 1.8%,
compared with negative 1.6% in the same period of last year. |
| • | Non-GAAP
loss from operations2 was RMB8.9 million (US$1.2 million) for the Reporting Period,
compared with non-GAAP income from operations2 of RMB51.9 million in the same
period of last year. Non-GAAP operating margin was negative 0.2%, compared with positive
1.3% in the same period of last year. |
| • | Adjusted
operating profits of E-Commerce3 was RMB86.1 million (US$11.9 million), an increase
of RMB34.2 million compared with RMB51.9 million in the same quarter of last year. |
| • | Adjusted
operating losses of Brand Management3 was RMB95.0 million (US$13.1 million). |
| • | Net
loss attributable to ordinary shareholders of Baozun Inc. was RMB103.6 million (US$14.3 million)
for the Reporting Period, compared with RMB200.2 million in the same period of last year. |
| • | Non-GAAP
net loss attributable to ordinary shareholders of Baozun Inc.4 was RMB17.5 million
(US$2.4 million) for the Reporting Period, compared with non-GAAP net income attributable
to ordinary shareholders of Baozun Inc.4 of RMB2.4 million in the same period
of last year. |
| • | Basic
and diluted net loss attributable to ordinary shareholders of Baozun Inc. per American Depositary
Share (“ADS5”) were both RMB1.75 (US$0.24) for the Reporting Period,
compared with both RMB3.15 for the same period of 2022. |
| • | Basic and diluted non-GAAP net loss attributable to
ordinary shareholders of Baozun Inc. per ADS6 were both RMB0.30 (US$0.04) for the Reporting Period, compared with basic
and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS6 of both RMB0.04 for the
same period of 2022. |
| • | Cash,
cash equivalents, restricted cash and short-term investments totaled RMB3,212.5 million (US$443.0
million) as of June 30, 2023, compared with RMB3,141.1 million as of December 31,
2022. |
| 1 | This
announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$)
at a specified rate solely for the convenience of the reader. Unless otherwise noted, the
translation of RMB into US$ has been made at RMB7.2513 to US$1.00 for the financial figures
in relation to the Reporting Period, RMB6.8972 to US$1.00 for the financial figures in relation
to the year ended December 31, 2022, and RMB6.6981 to US$1.00 for the financial figures
in relation to the six months ended June 30, 2022, being the noon buying rate in effect
on June 30, 2023, December 30, 2022 and June 30, 2022, respectively, as set
forth in the H.10 Statistical Release of the Federal Reserve Board. |
| 2 | Non-GAAP
income (loss) from operations is a non-GAAP financial measure, which is defined as income
(loss) from operations excluding share-based compensation expenses, acquisition related expenses and amortization of intangible
assets resulting from business acquisition. |
| 3 | Following the acquisition of Gap
Shanghai, the Group updated its operating segments structure resulting in two segments, which were (i) E-Commerce; (ii) Brand
Management. Adjusted operating profits (losses) represent segment profits (losses), which is income (loss) from operations from each
segment without allocating share-based compensation expenses, acquisition-related expenses and amortization of intangible assets
resulting from business acquisition. |
| 4 | Non-GAAP
net income (loss) attributable to ordinary shareholders of Baozun Inc. is a non-GAAP financial
measure, which is defined as net income (loss) attributable to ordinary shareholders of Baozun
Inc. excluding share-based compensation expenses, amortization of intangible assets resulting
from business acquisition, gain on acquisition of subsidiaries, fair value gain on derivative
liabilities and unrealized investment loss. |
| 5 | Each
ADS represents three Class A ordinary shares. |
| 6 | Basic
and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc.
per ADS are non-GAAP financial measures, which are defined as non-GAAP net income (loss)
attributable to ordinary shareholders of Baozun Inc. divided by weighted average number of
shares used in calculating basic and diluted net income per ordinary share multiplied by
three, respectively. |
BAOZUN
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEET
(All amounts
in thousands, except share and per share data)
| |
As of | |
| |
December 31,
2022 | | |
June 30,
2023 | | |
June 30,
2023 | |
| |
RMB | | |
RMB | | |
US$ (Note 1) | |
ASSETS | |
| | |
| | |
| |
Current assets: | |
| | | |
| | | |
| | |
Cash
and cash equivalents | |
| 2,144,020 | | |
| 1,689,337 | | |
| 232,970 | |
Restricted cash | |
| 101,704 | | |
| 59,374 | | |
| 8,188 | |
Short-term investments | |
| 895,425 | | |
| 1,463,784 | | |
| 201,865 | |
Accounts receivable,
net of allowance for credit losses of RMB120,495 and RMB124,952 as of December 31, 2022 and June 30,2023, respectively | |
| 2,292,678 | | |
| 1,825,671 | | |
| 251,771 | |
Inventories | |
| 942,997 | | |
| 1,018,088 | | |
| 140,401 | |
Advances to suppliers | |
| 372,612 | | |
| 289,935 | | |
| 39,984 | |
Prepayments and
other current assets | |
| 554,415 | | |
| 610,596 | | |
| 84,205 | |
Amounts
due from related parties | |
| 93,270 | | |
| 85,390 | | |
| 11,776 | |
| |
| | | |
| | | |
| | |
Total
current assets | |
| 7,397,121 | | |
| 7,042,175 | | |
| 971,160 | |
| |
| | | |
| | | |
| | |
Non-current
assets: | |
| | | |
| | | |
| | |
Investments in
equity investees | |
| 269,693 | | |
| 303,505 | | |
| 41,855 | |
Property and
equipment, net | |
| 694,446 | | |
| 846,327 | | |
| 116,714 | |
Intangible assets,
net | |
| 310,724 | | |
| 310,581 | | |
| 42,831 | |
Land use right,
net | |
| 39,490 | | |
| 38,977 | | |
| 5,375 | |
Operating lease
right-of-use assets | |
| 847,047 | | |
| 1,122,118 | | |
| 154,747 | |
Goodwill | |
| 336,326 | | |
| 346,914 | | |
| 47,842 | |
Other non-current
assets | |
| 65,114 | | |
| 66,901 | | |
| 9,226 | |
Deferred
tax assets | |
| 162,509 | | |
| 203,267 | | |
| 28,032 | |
| |
| | | |
| | | |
| | |
Total
non-current assets | |
| 2,725,349 | | |
| 3,238,590 | | |
| 446,622 | |
| |
| | | |
| | | |
| | |
TOTAL
ASSETS | |
| 10,122,470 | | |
| 10,280,765 | | |
| 1,417,782 | |
| |
As of | |
| |
December 31,
2022 | | |
June 30,
2023 | | |
June 30,
2023 | |
| |
RMB | | |
RMB | | |
US$ (Note 1) | |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term loan |
|
|
1,016,071 |
|
|
|
1,123,468 |
|
|
|
154,933 |
|
Accounts payable |
|
|
474,732 |
|
|
|
427,272 |
|
|
|
58,924 |
|
Notes payable |
|
|
487,837 |
|
|
|
248,541 |
|
|
|
34,275 |
|
Income tax payables |
|
|
46,828 |
|
|
|
26,152 |
|
|
|
3,607 |
|
Accrued expenses and other current liabilities |
|
|
1,025,540 |
|
|
|
1,096,165 |
|
|
|
151,167 |
|
Derivative liabilities |
|
|
364,758 |
|
|
|
358,670 |
|
|
|
49,463 |
|
Amounts due to related parties |
|
|
30,434 |
|
|
|
22,886 |
|
|
|
3,156 |
|
Current operating
lease liabilities |
|
|
235,445 |
|
|
|
306,925 |
|
|
|
42,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
3,681,645 |
|
|
|
3,610,079 |
|
|
|
497,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities |
|
|
28,082 |
|
|
|
28,367 |
|
|
|
3,912 |
|
Long-term operating lease liabilities |
|
|
673,955 |
|
|
|
878,912 |
|
|
|
121,208 |
|
Other non-current
liabilities |
|
|
62,450 |
|
|
|
105,052 |
|
|
|
14,487 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
non-current liabilities |
|
|
764,487 |
|
|
|
1,012,331 |
|
|
|
139,607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
|
4,446,132 |
|
|
|
4,622,410 |
|
|
|
637,459 |
|
BAOZUN INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEET
(All amounts
in thousands, except for share and per share data)
| |
As of | |
| |
December 31,
2022 | | |
June 30,
2023 | | |
June 30,
2023 | |
| |
RMB | | |
RMB | | |
US$ (Note 1) | |
Redeemable non-controlling
interests | |
| 1,438,082 | | |
| 1,455,254 | | |
| 200,689 | |
| |
| | | |
| | | |
| | |
Baozun Inc. shareholders’
equity: | |
| | | |
| | | |
| | |
Class A ordinary shares (US$0.0001 par value; 470,000,000
shares authorized, 163,100,873 and 164,682,392 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively) | |
| 116 | | |
| 93 | | |
| 13 | |
Class B ordinary shares (US$0.0001 par value; 30,000,000
shares authorized, 13,300,738 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively) | |
| 8 | | |
| 8 | | |
| 1 | |
Additional paid-in capital | |
| 5,129,103 | | |
| 4,336,480 | | |
| 598,028 | |
Treasury shares (32,353,269 and
nil shares as of December 31, 2022 and June 30, 2023, respectively) | |
| (832,578 | ) | |
| – | | |
| – | |
Accumulated deficit | |
| (228,165 | ) | |
| (331,740 | ) | |
| (45,749 | ) |
Accumulated other
comprehensive income | |
| 15,678 | | |
| 47,404 | | |
| 6,537 | |
| |
| | | |
| | | |
| | |
Total
Baozun Inc. shareholders’ equity | |
| 4,084,162 | | |
| 4,052,245 | | |
| 558,830 | |
| |
| | | |
| | | |
| | |
Non-controlling
interests | |
| 154,094 | | |
| 150,856 | | |
| 20,804 | |
| |
| | | |
| | | |
| | |
Total
Shareholders’ equity | |
| 4,238,256 | | |
| 4,203,101 | | |
| 579,634 | |
| |
| | | |
| | | |
| | |
TOTAL
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY | |
| 10,122,470 | | |
| 10,280,765 | | |
| 1,417,782 | |
BAOZUN INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(All amounts in thousands,
except for share and per share data)
| |
For the
six months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
US$ | |
| |
| | |
| | |
(Note 1) | |
Net revenues | |
| | | |
| | | |
| | |
Product
sales | |
| 1,374,741 | | |
| 1,596,325 | | |
| 220,144 | |
Services
(including related party revenues of RMB65,835 and RMB57,371 for the six months ended June 30, 2022 and 2023, respectively) | |
| 2,731,454 | | |
| 2,611,632 | | |
| 360,161 | |
Total net revenues | |
| 4,106,195 | | |
| 4,207,957 | | |
| 580,305 | |
| |
| | | |
| | | |
| | |
Operating expenses: | |
| | | |
| | | |
| | |
Cost of products | |
| (1,197,863 | ) | |
| (1,180,137 | ) | |
| (162,748 | ) |
Fulfillment | |
| (1,354,415 | ) | |
| (1,226,281 | ) | |
| (169,112 | ) |
Sales and marketing | |
| (1,284,236 | ) | |
| (1,299,127 | ) | |
| (179,158 | ) |
Technology and content | |
| (217,507 | ) | |
| (244,033 | ) | |
| (33,654 | ) |
General and administrative | |
| (182,278 | ) | |
| (412,730 | ) | |
| (56,918 | ) |
Other
operating income, net | |
| 65,579 | | |
| 77,285 | | |
| 10,657 | |
Total operating expenses | |
| (4,170,720 | ) | |
| (4,285,023 | ) | |
| (590,933 | ) |
| |
| | | |
| | | |
| | |
Loss from operations | |
| (64,525 | ) | |
| (77,066 | ) | |
| (10,628 | ) |
| |
| | | |
| | | |
| | |
Other income (expenses): | |
| | | |
| | | |
| | |
Interest income | |
| 16,258 | | |
| 38,139 | | |
| 5,260 | |
Interest expense | |
| (33,546 | ) | |
| (20,718 | ) | |
| (2,857 | ) |
Unrealized investment
loss | |
| (94,645 | ) | |
| (51,874 | ) | |
| (7,154 | ) |
Gain on acquisition
of subsidiaries | |
| – | | |
| 3,251 | | |
| 448 | |
Gain on repurchase
of 1.625% convertible senior notes due 2024 | |
| 7,907 | | |
| – | | |
| – | |
Exchange loss | |
| (25,026 | ) | |
| (7,992 | ) | |
| (1,102 | ) |
Fair
value gain on derivative liabilities | |
| – | | |
| 24,515 | | |
| 3,381 | |
Loss before income tax and share of income
in equity method investment | |
| (193,577 | ) | |
| (91,745 | ) | |
| (12,652 | ) |
Income tax expense | |
| (6,621 | ) | |
| (4,105 | ) | |
| (566 | ) |
Share
of income in equity method investment | |
| 3,256 | | |
| 4,656 | | |
| 642 | |
Net loss | |
| (196,942 | ) | |
| (91,194 | ) | |
| (12,576 | ) |
| |
For
the six months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
US$ | |
| |
| | |
| | |
(Note 1) | |
Net
loss attributable to non-controlling interests | |
| 6,877 | | |
| 4,791 | | |
| 661 | |
Net
income attributable to redeemable non-controlling interests | |
| (10,098 | ) | |
| (17,172 | ) | |
| (2,368 | ) |
Net
loss attributable to ordinary shareholders of Baozun Inc. | |
| (200,163 | ) | |
| (103,575 | ) | |
| (14,283 | ) |
| |
| | | |
| | | |
| | |
Net
loss per share attributable to ordinary shareholders of Baozun Inc.: | |
| | | |
| | | |
| | |
Basic | |
| (1.05 | ) | |
| (0.58 | ) | |
| (0.08 | ) |
Diluted | |
| (1.05 | ) | |
| (0.58 | ) | |
| (0.08 | ) |
Net
loss per American depositary shares (“ADS”) attributable to ordinary shareholders of Baozun Inc.: | |
| | | |
| | | |
| | |
Basic | |
| (3.15 | ) | |
| (1.75 | ) | |
| (0.24 | ) |
Diluted | |
| (3.15 | ) | |
| (1.75 | ) | |
| (0.24 | ) |
BAOZUN INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT
OF COMPREHENSIVE INCOME
(All amounts in thousands,
except for share and per share data)
| |
For the six months
ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | | |
US$ | |
| |
| | |
| | |
(Note 1) | |
Net
loss | |
| (196,942 | ) | |
| (91,194 | ) | |
| (12,576 | ) |
Other
comprehensive income, net of tax of nil: | |
| | | |
| | | |
| | |
Foreign
currency translation adjustment | |
| 74,393 | | |
| 31,726 | | |
| 4,375 | |
Comprehensive
loss | |
| (122,549 | ) | |
| (59,468 | ) | |
| (8,201 | ) |
| |
| | | |
| | | |
| | |
Total
comprehensive loss attributable to non-controlling interests | |
| 6,877 | | |
| 4,791 | | |
| 661 | |
Total
comprehensive income attributable to redeemable non-controlling interests | |
| (10,098 | ) | |
| (17,172 | ) | |
| (2,368 | ) |
Total
comprehensive loss attributable to ordinary shareholders of Baozun Inc. | |
| (125,770 | ) | |
| (71,849 | ) | |
| (9,908 | ) |
BAOZUN INC.
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2022 and 2023
(Unless
otherwise stated, all amounts in thousands, except for share and per share data)
1. | ORGANIZATION AND PRINCIPAL ACTIVITIES |
Baozun Inc. (the “Company”)
was incorporated under the laws of Cayman Islands on December 17, 2013. The Company, its subsidiaries and its VIEs (collectively
referred to as the “Group”) are principally engaged to provide its customers with end-to-end E-commerce solutions
including the sales of apparel, home and electronic products, online store design and setup, visual merchandising and marketing, online
store operations, customer services, warehousing and order fulfillment.
As of June 30,
2023, the Company’s major subsidiaries and VIE are as follows:
| |
Date
of Incorporation/ Acquisition | |
Place of
incorporation | |
Legal
ownership | |
Subsidiaries: | |
| |
| |
| |
Baozun
Hong Kong Holding Limited | |
10-Jan-14 | |
HK | |
| 100 | % |
Shanghai Baozun E-commerce Limited (“Shanghai
Baozun”) | |
11-Nov-03 | |
PRC | |
| 100 | % |
Shanghai
Bodao E-commerce Limited | |
30-Mar-10 | |
PRC | |
| 100 | % |
Shanghai
Yingsai Advertisement Limited | |
30-Mar-10 | |
PRC | |
| 100 | % |
Baozun
Hongkong Limited | |
11-Sep-13 | |
HK | |
| 100 | % |
Shanghai
Fengbo E-commerce Limited | |
29-Dec-11 | |
PRC | |
| 100 | % |
Baozun
Hongkong Investment Limited | |
21-July-15 | |
HK | |
| 100 | % |
Baotong
Inc. | |
19-Jun-19 | |
Cayman | |
| 70 | % |
Baotong
Hong Kong Holding Limited | |
5-May-16 | |
HK | |
| 70 | % |
Baotong
E-logistics Technology (Suzhou) Limited | |
27-Mar-17 | |
PRC | |
| 70 | % |
Baozun
Brand Management Limited | |
07-Oct-22 | |
Hong Kong | |
| 100 | % |
White
Horse Hongkong Holding Limited | |
08-Oct-22 | |
Hong Kong | |
| 100 | % |
Gap
(Shanghai) Commercial Co., Ltd. | |
31-Jan-23 | |
PRC | |
| 100 | % |
| |
| |
| |
| | |
VIE: | |
| |
| |
| | |
Shanghai
Zunyi Business Consulting Ltd. | |
31-Dec-10 | |
PRC | |
| N/A | |
2. | SUMMARY OF SIGNIFICANT ACCOUNGTING POLICIES |
The unaudited condensed
consolidated financial statements of the Company are prepared and presented in accordance with the rules and regulations of the
Security and Exchange Commission and accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with U.S.
GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the accompanying unaudited condensed consolidated
financial statements should be read in conjunction with the financial statements, accounting policies and notes thereto included in the
Company’s audited consolidated financial statements for the year ended December 31, 2022. The results of operations for the
six months ended June 30, 2023 are not necessarily indicative of the results for the full years.
In the opinion of the
management, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for
a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to
make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared
using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended
December 31, 2022. The financial statements as of December 31, 2022 presented in the unaudited condensed consolidated financial
statements is derived from the audited consolidated financial statements for the year ended December 31, 2022.
| (b) | Basis of consolidation |
The condensed consolidated
financial statements include the financial statements of the Company, its subsidiaries and the VIE. All transactions and balances among
the Company, its subsidiaries and the VIE have been eliminated upon consolidation.
A consolidated subsidiary
is an entity in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to: appoint
or remove the majority of the members of the board of directors; cast a majority of votes at the meeting of the board of directors; or
govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.
U.S. GAAP provides guidance
on the identification of VIE and financial reporting for entities over which control is achieved through means other than voting interests.
The Group evaluates each of its interests in an entity to determine whether or not the investee is a VIE and, if so, whether the Group
is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group
(1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives
the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the
VIE.
For the six months
ended June 30,2022 and 2023, substantially all of the Group’s revenues were generated in the PRC. The disaggregated revenues
by types and the timing of transfer of goods or services were as follows:
| (i) | Disaggregation of revenues |
| |
For
the six months
ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | |
Product
sales | |
| 1,374,741 | | |
| 1,596,325 | |
| |
| | | |
| | |
Services | |
| | | |
| | |
–
online store operations, digital marketing, customer service, warehousing and fulfillment and IT maintenance service which revenues
are recognized over time | |
| 2,697,961 | | |
| 2,552,541 | |
–
one-time online store design and setup services which revenues are recognized at point of time | |
| 33,493 | | |
| 59,091 | |
Total
revenues | |
| 4,106,195 | | |
| 4,207,957 | |
The movement of the
advances from customers for the six months ended June 30, 2023 were as follows:
| |
Advances
from Customers | |
Opening Balance as of January 1, 2023 | |
| 120,858 | |
Net increase | |
| 58,138 | |
Ending Balance as of June 30,
2023 | |
| 178,996 | |
Revenues amounted
to RMB63,677 and RMB120,858 were recognized in the six months ended June 30, 2022 and 2023 respectively, that were included in the
balance of advance from customers at the beginning of the respective period.
Basic and diluted net loss per share for
each of the years presented are calculated as follows:
| |
For
the six months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | |
Numerator: | |
| | | |
| | |
Net loss | |
| (196,942 | ) | |
| (91,194 | ) |
Net loss attributable
to non-controlling interests | |
| 6,877 | | |
| 4,791 | |
Net
income attributable to redeemable non-controlling interests | |
| (10,098 | ) | |
| (17,172 | ) |
Net loss attributable
to ordinary shareholders of Baozun Inc. | |
| (200,163 | ) | |
| (103,575 | ) |
| |
| | | |
| | |
Net loss per share attributable to ordinary
shareholders of Baozun Inc. | |
| | | |
| | |
Basic | |
| (1.05 | ) | |
| (0.58 | ) |
Diluted | |
| (1.05 | ) | |
| (0.58 | ) |
| |
| | | |
| | |
Net
loss per ADS (1 ADS represents 3 Class A ordinary shares) attributable to ordinary shareholders of Baozun Inc. | |
| | | |
| | |
Basic | |
| (3.15 | ) | |
| (1.75 | ) |
Diluted | |
| (3.15 | ) | |
| (1.75 | ) |
| |
| | | |
| | |
Shares (Denominator): | |
| | | |
| | |
Weighted average number of ordinary shares | |
| | | |
| | |
Basic | |
| 190,413,332 | | |
| 177,380,516 | |
Diluted | |
| 190,413,332 | | |
| 177,380,516 | |
During the six months
ended June 30,2022 and 2023, the Group had 3,688,816 and 1,848,490 outstanding restricted share units respectively, which were excluded
from the computation of diluted earnings per share as their effects would have been anti-dilutive.
Under the current laws
of the Cayman Islands, the Company incorporated in the Cayman Islands is not subject to tax on income or capital gain. Additionally,
the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.
Under the Hong Kong
Inland Revenue Ordinance, for the Company’s subsidiaries incorporated in Hong Kong, the profits tax rate for the first HK $2 million
of profits is 8.25%, while profits above that amount is subject to the tax rate of 16.5%.
Under the Law of the
People’s Republic of China on Enterprise Income Tax (“EIT Law”), the Group’s subsidiaries and VIE domiciled
in the PRC are subject to 25% statutory rate. According to Guoshuihan 2009 No. 203, if an entity is certified as a “High and
New Technology Enterprise” (“HNTE”), it is entitled to a preferential income tax rate of 15%. The VIE obtained
the certificate of HNTE in 2017 and renewed the certificate in 2020, therefore, it is eligible for a preferential tax rate of 15% since
2017 with a valid term of three years from the year of entitlement or renewal. Other five subsidiaries of the Group obtained the HNTE
certificate starting from 2018 and renewed the certification subsequently, thus applied 15% tax rate with a valid term of three years
from the year of entitlement or renewal.
The current and deferred
portion of income tax expenses included in the condensed consolidated statements of operations, which were substantially attributable
to the Group’s PRC subsidiaries are as follows:
| |
For
the six months ended June 30, | |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | |
Current tax | |
| 11,283 | | |
| 48,152 | |
Deferred tax | |
| (4,662 | ) | |
| (44,047 | ) |
Income tax expense | |
| 6,621 | | |
| 4,105 | |
| 6. | ACCOUNT RECEIVABLE, NET |
Accounts receivable, net, consists of the
following:
| |
As
of | |
| |
December 31,
2022 | | |
June 30,
2023 | |
| |
RMB | | |
RMB | |
Accounts receivable | |
| 2,413,173 | | |
| 1,950,623 | |
Allowance for credit losses: | |
| | | |
| | |
Balance at beginning
of the period | |
| (118,724 | ) | |
| (120,495 | ) |
Additions | |
| (1,494 | ) | |
| (416 | ) |
Exchange loss | |
| (7,921 | ) | |
| (4,904 | ) |
Write-offs | |
| 7,644 | | |
| 863 | |
Balance at end of the period | |
| (120,495 | ) | |
| (124,952 | ) |
Accounts receivable, net | |
| 2,292,678 | | |
| 1,825,671 | |
An aging analysis based of accounts receivable
on the relevant invoice dates is as follows:
| |
As
of | |
| |
December 31,
2022 | | |
June 30,
2023 | |
| |
RMB | | |
RMB | |
0-3 months | |
| 1,969,791 | | |
| 1,660,818 | |
3-6 months | |
| 154,792 | | |
| 66,555 | |
6-12 months | |
| 53,365 | | |
| 28,803 | |
Over 1 year | |
| 235,225 | | |
| 194,447 | |
Accounts receivable, gross | |
| 2,413,173 | | |
| 1,950,623 | |
| 7. | AGING ANALYSIS
FOR ACCOUNTS AND NOTES PAYABLE |
Accounts and notes payable consist of the
following:
| |
As
of | |
| |
December 31,
| | |
June 30,
| |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | |
Accounts payable | |
| 474,732 | | |
| 427,272 | |
Notes payable | |
| 487,837 | | |
| 248,541 | |
An aging analysis of accounts payable based
on the relevant invoice dates is as follows:
| |
As of | |
| |
December 31,
2022 | | |
June 30,
2023 | |
| |
RMB | | |
RMB | |
0-12 months | |
| 474,732 | | |
| 427,272 | |
Over 1 year | |
| – | | |
| – | |
Accounts payable, gross | |
| 474,732 | | |
| 427,272 | |
An aging analysis of notes payable based
on the relevant issuance dates is as follows:
| |
As
of | |
| |
December 31,
2022 | | |
June 30,
2023 | |
| |
RMB | | |
RMB | |
0-12 months | |
| 487,837 | | |
| 248,541 | |
Over 1 year | |
| – | | |
| – | |
Accounts payable, gross | |
| 487,837 | | |
| 248,541 | |
The
short-term loan as of December 31, 2022 and June 30, 2023 were as follows:
| |
As of | |
| |
December 31,
| | |
June 30,
| |
| |
2022 | | |
2023 | |
| |
RMB | | |
RMB | |
Short- term loan | |
| | | |
| | |
Short-term
bank borrowings | |
| 1,016,071 | | |
| 1,123,468 | |
Short-term bank borrowings
The Group entered into
one-year credit facilities with several Chinese commercial banks that provide revolving line of credit for the Group. Under such credit
facilities, the Group can borrow up to RMB3,329,012 for the year ended December 31, 2022 and RMB4,200,000 for the six months ended
June 30, 2023, which can only be used to maintain daily operation.
As of December 31,
2022, the Group had drawn short-term bank borrowings from the credit facilities in the amount of RMB1,016,071. Credit facilities in the
amounts of RMB8,664 and RMB400,873 were used to issue the letters of guarantee with an aggregate amount of RMB17,342 and notes payable
with an aggregate amount of RMB487,837, respectively. As such, RMB1,903,404 of the credit facilities was available for future borrowing
at the end of 2022. The credit facilities will expire during 2023.
As of June 30,
2023, the Group had drawn short-term bank borrowings from the credit facilities in the amount of RMB1,123,468. Credit facilities in the
amounts of RMB74,860 and RMB238,541 were used to issue the letters of guarantee with an aggregate amount of RMB75,437 and notes payable
with an aggregate amount of RMB248,541, respectively. As such, RMB2,763,131 of the credit facilities was available for future borrowing
at the end of 2023. The credit facilities will expire during 2023.
The Board did not recommend the distribution of any interim dividend for the six-month period ended June 30, 2022 and 2023.
MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS OVERVIEW
We are a leader and pioneer in
the brand e-commerce service industry and a digital commerce enabler in China. We empower a broad and diverse range of brands to grow
and succeed by leveraging our end-to-end e-commerce service capabilities, omni-channel expertise, and technology-driven solutions.
Recognizing the growing convergence
of online and offline commerce, we view this trend to be a significant opportunity. Adhering to our vision of “Technology Empowers
Future Success”, our advanced technology and operating platforms serve as a unified and robust foundation that supports our expanded
range of services and markets. In 2023, we expanded our businesses into three business lines – Baozun E-commerce (BEC), Baozun
Brand Management (BBM) and Baozun International (BZI).
Baozun e-Commerce includes our
China e-commerce businesses, such as brands’ store operations, customer services and value-added services in logistics and supply
chain management, IT, and digital marketing. Baozun Brand Management engages in holistic brand management, including strategy and
tactic positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics, and technology empowerment.
We aim to leverage our portfolio of technologies to establish longer and deeper relationships with brands. Baozun International is a
long-term opportunity that we will patiently invest in and explore. We have a distinct advantage to replicate our China e-Commerce success.
Baozun International will empower brands with local market insights and critical e-commerce infrastructure, serving local consumers through
a wide product selection and differentiated customer experience.
The expansion of Baozun group
into three business lines – BEC, BBM and BZI, is aimed at creating a virtuous ecosystem in which each division brings value to
the others. Our 16 years of expertise and technological advancements in the e-commerce industry have allowed us to rapidly increase our
scale and establish deeper relationships with brand partners. Our strategy capitalizes on virtuous cycles and synergies across our business
lines.
Baozun E-Commerce (BEC)
Baozun e-Commerce includes our
China e-commerce businesses, such as brands’ store operations, customer services and value-added services in logistics and supply
chain management, IT, and digital marketing. We empower a broad and diverse range of brands to grow and succeed by leveraging our
end-to-end e-commerce service capabilities, omni-channel expertise, and technology-driven solutions.
Our competitive advantages have
enabled us to achieve rapid growth in our brand partnerships. We collaborate with global leaders in their respective verticals, including
brands like Philips, Nike, and Microsoft. Our ability to help brand partners navigate the challenges arising from the macroeconomy, by
leveraging our efficient e-commerce operational capabilities and effective omni-channel solutions, demonstrates the value of our services.
With our deep understanding of
the needs of various brands, we are able to offer value propositions that set us apart from other market players.
| • | Multi-category, multi-brand capabilities:
Our capabilities extend across multiple categories and brands of different types, scales,
and stages of development. We possess in-depth industry-specific domain knowledge that spans
the entire e-commerce value chain. |
| • | Full-scope services: We provide integrated
one-stop solutions to address all core aspects of e-commerce operations, including IT solutions,
online store operations, digital marketing, customer service, and warehousing and fulfilment.
Our ability to provide one-stop e-commerce solutions is backed by our proprietary and robust
technology stack, including our Cloud-based System that enables efficient setup of official
brand stores and official marketplace stores, ROSS that facilitates smooth and efficient
online store operations; big data analytics and AI capabilities that drive our efficient
and effective digital marketing solutions; customer relationship management, or CRM, that
supports attentive real-time pre-sale and post-sale customer services and engagement; and
order management system, or OMS, and warehouse management system, or WMS, that enable integrated
and reliable multi-category warehousing and fulfillment services. We remain committed to
invest in new technologies and infrastructure to provide innovative and reliable solutions
to our brand partners. |
| • | Omni-channel coverage: We help brand
partners adapt to and thrive in China’s complex e-commerce ecosystem and evolving e-commerce
landscape. We enable brands to integrate online and offline operations. We help brand partners
formulate and implement coherent e-commerce strategies, which require holistic performance
analysis across channels and balanced tactics for different platforms. |
Based on the different needs
of our brand partners, we operate under three business models: the distribution model, the service fee model, and the consignment model.
We generate product sales revenues primarily through selling the products that we purchase from our brand partners and/ or their authorized
distributors to consumers under the distribution model, and derive services revenues primarily through charging brand partners and other
customers fees under the service fee model and the consignment model.
Our Business Models and
Solutions
Through our integrated brand
e-commerce capabilities, we provide end-to-end brand e-commerce solutions that cater to our brand partners’ unique needs. We leverage
our brand partners’ resources and seamlessly integrate with their back-end systems to enable data analytics for the entire transaction
value chain, making our services a crucial part of our brand partners’ e-commerce functions.
Our e-commerce capabilities encompass
every aspect of the e-commerce value chain, including online store operations, customer service, IT solutions, digital marketing,
warehousing, and fulfillment. Depending on each brand partner’s specific needs and the characteristics of its product category,
our brand partners utilize one or a blend of our solutions under one or a combination of our business models: the distribution model,
the service fee model, and the consignment model.
Operational Highlights
of BEC For the Six Months Ended June 30, 2023
During the first six months that
ended on June 30, 2023, benefiting from a gradual consumption recovery throughout the period, beauty and cosmetics, and food and
health products categories delivered double-digit growth.
Omni-channel expansion remains
a key theme for our brand partners. Gross Merchandise Volume (GMV) generated from non-TMALL marketplaces and channels accounted for approximately
40.7% of total GMV during the period, compared with 31.0% for the same period of 2022. By the end of the second quarter, approximately
46.1% of our brand partners engaged with us for store operations of at least two channels, compared with 40.2% a year ago.
Baozun Brand Management (BBM)
Baozun Brand Management engages
in holistic brand management and serves as an all-rounded partner for global brands to further unlock their business potential in China,
through strategy and tactic positioning, branding and marketing, retail and e-commerce operations, supply chain and logistics, and technology
empowerment. We aim to leverage our portfolio of technologies to establish longer and deeper relationships with brands. BBM targets the
mid-end and premium consumer lifestyle brands segment.
Our first key acquisition was
that of GAP Greater China business. In November 2022, we entered into a share purchase agreement with The Gap, Inc. and Gap
(UK Holdings) Limited. Concurrently, BBM and The Gap, Inc. established a series of business arrangements, through which The Gap, Inc.
grants us the right to manufacture, market, distribute, and sell Gap products in Greater China with local creation capabilities on an
exclusive basis.
Our technologies and insights
enable us to forge a sustainable, symbiotic relationship between physical retail and online commerce. We aim to deliver the best-in-class,
seamless omnichannel experience by integrating the digital and the physical at scale, and to excel where few have done so in retail.
We are evolving to become a successful brand management company of iconic brands through a combination of transformative acquisitions
and the consistent growth of our brands in China across all channels.
GAP overview
GAP is one of the world’s
most recognized lifestyle brands, uplifting and inspiring consumers since 1969. The brand creates iconic style, which builds on its heritage
grounded in denim and khakis and comes alive at the intersection of the classic and the new. GAP is an authority on modern American style.
GAP represents a good example
for BBM to build its business model and achieve the target of integrating digital technology, retail, and brands. Our current priorities
include ensuring a smooth post-acquisition transition, refining products and merchandizing strategies, building supply chain infrastructures,
and upgrading back-end systems, including talents and technologies, to pursue our technology-empowered, China-for-China, and digitalized
modern new retail model.
During the first six months of
2023, Gap (Shanghai) Commercial Co., Ltd. (“Gap Shanghai”) achieved revenue of RMB513.4 million. By the end of
June 30, 2023, we had 121 offline stores. While GAP stores are mainly located in first- and second-tier cities in China, the brand
continues to open stores in cities with potential across China and within the region. We are planning to open up to 10 new stores this
year and continue to optimize the store structure and location.
Product Management
China-for-China product is our
core priority. It is critical for us to interpret the DNA of the GAP brand in a way that’s relevant for China. Our designs lean
heavily on data-driven insights and are executed with a much shorter supply chain cycle. For example, we quickly tested a limited higher-priced
product capsule in collaboration with one of China’s rising stars in street fashion in February 2023. This test offered an
excellent opportunity to practice our integrated marketing, and we are glad to win the attention of younger audience.
Retail Management
With a consumer-centric and retail-oriented
strategy, we have successfully improved our competitiveness, store efficiency, and responsiveness to the ever-changing market. During
the Reporting Period, we continued to optimize our retail management capabilities.
For example, we established a
retail-oriented mindset and appraisal system. We emphasized retail efficiency in our brand culture and values, and established a consumer-oriented
retail management appraisal system to measure performance according to retail operating data. Additionally, we require our stores to
strictly follow our retail policies. To enhance store competitiveness and profitability, we thoroughly examine our store opening plans
and ensure compliance with our retail policies. We commit to maintaining a consistent store image across our nationwide network and to
the standardization of product display equipment and POP materials, which highlight quarterly marketing themes. During the Reporting
Period, we continued to upgrade our store layouts in line with our latest store image.
Supply Chain Management
Effective supply chain management
plays an important role in achieving sustainable growth. As such, we pay attention to product innovation, quality control, and the responsiveness
and cost- effectiveness of our supply chain. During the period, we strived to enhance our supply chain capabilities to meet consumer
demands. We have identified over 30 new local manufacturers to satisfy our projected production needs. Except for global IP styles, we
aim for 100% local production. We will continue to develop strategies that can enhance the operational efficiency of our supply chain
and unlock gross margin opportunities. We believe improving our supply chain efficiencies and working capital management through the
effective use of our overall infrastructure will allow us to control costs better and provide superior service to our customers.
Talent
We believe that the talent, commitment,
and passion of our teams will always be key to our competitive edge. We offer a unique fashion proposition, defined by creativity, innovation,
design, and quality. We successfully filled critical positions in a short timeframe. Our new hires are local industry experts with vast
experience in both well-known leading multinational corporations and local apparel companies. We believe this will accelerate our business
transformation and enhance organizational efficiency.
Baozun International (BZI)
Baozun International (BZI) is
a long-term opportunity that we will patiently invest in and explore. We have a distinct advantage to replicate our China e-commerce
success. BZI will empower brands with local market insights and critical e-commerce infrastructure, in turn serving local consumers through
wide product selection and differentiated customer experience.
Despite the uncertainties and
complexities in the global macro environment, we remain firmly committed to our globalization strategy. We work with brand partners to
co-develop “Glocalization”. Glocalization is a term combining “global” and “local” and refers to
our philosophy that while we pursue global opportunities, we will rely on local expertise and resources.
We plan to build an ecosystem
around our technology and businesses, consisting of consumers, brands, retailers, third-party service providers, strategic alliance partners,
and other businesses. BZI offers brands across several countries and regions a localized experience within the country in which they
operate. In addition, BZI manages localized storefronts in different countries, making cross-border commerce easier for brands. These
tailored experiences are designed to increase brand partners’ confidence in new markets and enhance consumer conversion, enabling
brand partners to enter these new geographies with ease.
BZI’s First Step
Starting with Southeast Asia,
we aim to serve brands and consumers around the world through both a localized and an e-commerce experience. We have set up operation
offices in 6 regions, including Hong Kong, Taiwan, Singapore, Malaysia, the Philippines, and France by the end of June 2023. At
the same time, we recruit top and experienced talents locally. We aim to empower brand partners with our strong e-commerce operational
capabilities, customized vertical-specific solutions, and localized services to better serve the digitalization needs overseas.
In February 2023, we acquired
a minority interest along with a board seat in Branded Lifestyle Asia Limited. Meanwhile, we and Fung Group have jointly set up a strategic
technology committee to develop an enterprise-wide technology strategy and lead the digital transformation. We have already taken an
exciting first step with the launch of an online store, littleground.com.sg, for Singapore. We are also in the process of working with
Branded Lifestyle for similar solutions elsewhere in Asia. Our technology is an important piece of the foundation we are putting in place
to build our presence in the growing e-commerce market in SEA.
PROSPECTS
2023 is shaping up to be a transformative
year for Baozun. Our ongoing strategic expansion into three business lines is gradually paving the way for our second phase of growth.
Throughout the past 16 years, we have successfully capitalized on two pivotal opportunities: e-commerce and China’s burgeoning
consumer market. Looking ahead, we will uphold our e-commerce capabilities with high-quality development and seek out more opportunities
and innovations.
BEC
As the e-commerce market matures,
we are committed to establishing a more sustainable, customer-centric, and high-quality business. We view the next 12 to 18 months as
a transition period for our e-Commerce business. During the transition period, we will emphasize quality of our distribution business,
promote innovation of service business, integrate and improve emerging channel service capabilities and broaden our efforts to further
reduce costs and improve efficiency.
BBM
Capitalizing on the competitive
advantages of GAP, we will further expand our presence across China in the lifestyle market. We are able to leverage our scale and brand
strength through a unique strategy to refresh and extend the reach of GAP China. We will continue to optimize profitability and enhance
store efficiency, which will include upgrading more stores to the new store image, improving data analysis capabilities to formulate
more accurate ordering guidance, responding to ever-changing market demands and preferences, and enhancing inventory controls.
We are confident that BBM is
just beginning to tap into its potential for growth in China. We recognize the immense market opportunity that lies within China’s
e-commerce and retail industry, and we are determined to strengthen our presence in this market. We aim to optimize our brand mix by
seeking opportunities involving premium international brands that can complement and enhance BBM’s ability to meet the needs of
each consumer. We believe the attractiveness of BBM’s playbook will continue to create strategic opportunities to bring additional
brands onto our platform across an increasingly diversified range of categories.
BZI
Our future success and our core
strategy encompass our capability to expand into more regions, enhance our ecosystem and partner programs, offer more sales channels
that connect brand partners with their specific target audience, develop new solutions to extend our services, hire, retain, and motivate
qualified personnel, and build with a focus on maximizing long-term value.
Technology is the key to the
achievement of the “glocalization” strategy. To support the glocalization initiatives of our e-commerce businesses, we plan
to continue developing critical capabilities and infrastructure, including OMS, WMS, CRM, etc. in order to drive differentiated
and superior experience for our brand partners in key strategic markets.
FINANCIAL REVIEW
Revenue
The Group’s revenue principally derives from
product sales and services. The following table sets out the breakdown of revenue during the indicated periods:
| |
Six months ended June 30, | |
| |
| |
2023 | |
| 2022 | |
| Growth | |
Net
Revenues | |
RMB’000 | |
| % | |
| RMB’000 | |
| % | |
| Rate
% | |
Product sales | |
1,596,325 | |
| 37.9 | % |
| 1,374,741 | |
| 33.5 | % |
| 16.1 | % |
Services | |
2,611,632 | |
| 62.1 | % |
| 2,731,454 | |
| 66.5 | % |
| -4.4 | % |
| |
| |
| | |
| | |
| | |
| | |
Total | |
4,207,957 | |
| 100.0 | % |
| 4,106,195 | |
| 100.0 | % |
| 2.5 | % |
For the Reporting Period, the
total net revenues of the Group were approximately RMB4,208.0 million (US$580.3 million) (June 30, 2022: RMB4,106.2 million), representing
an increase of approximately 2.5% as compared with the same period in 2022, mainly due to the incremental revenue contribution from BBM,
a new business line the Company launched in the first quarter of 2023.
Revenue from product sales
The increase in the revenue from
product sales during the Reporting Period as compared with the same period last year was mainly due to the incremental contribution from
product sales of BBM, which mainly comprised retail revenue from Gap Shanghai business, including both offline store sales and online
sales; and partially offset by the decline from BEC as the weak performance in the appliance and electronics categories, as well as the
Company’s optimization of its product distribution model, especially in the category of electronics. Product sales including product
sales from E-Commerce and Brand Management of RMB1,083.1 million and RMB513.2 million for the six months period ended June 30, 2023,
respectively, compared with product sales from e-Commerce of RMB1,374.7 million for the six months period ended June 30, 2022.
Revenue from services
The decrease in revenue from
services during the Reporting Period as compared with the same period last year was mainly due to a revenue reduction of RMB102.2 million
from warehousing and fulfillment due to the disposal of a loss-making subsidiary during the same period in 2022. Excluding the impact
of disposal, service revenue decreased 0.7% year over year, basically remaining stable.
Cost of Products
Cost of products is incurred
under the distribution model. Cost of products consists of the purchase price of products and inbound shipping charges, as well as inventory
write-downs. Our cost of products was RMB1,180.1 million for the Reporting Period (US$162.7 million) (June 30, 2022: RMB1,197.9
million). The decrease in cost of products during the Reporting Period as compared to the same period last year was mainly attributable
to the decline in product sales of BEC, partially offset by the incremental cost of product from BBM.
Fulfillment Expenses
Our fulfillment expenses primarily
consist of (i) expenses charged by third-party couriers for dispatching and delivering products to consumers, (ii) expenses
incurred in operating our fulfillment and customer service center, including personnel cost and expenses attributable to buying, receiving,
inspecting and warehousing inventories, retrieval, packaging and preparing customer orders for shipment, and store operations, (iii) rental
expenses of leased warehouses, and (iv) packaging material costs. The fulfilment expenses decreased by 9.5% from RMB1,354.4 million
(US$202.2 million) for the six months ended June 30, 2022 to RMB1,226.3 million (US$169.1 million) for the Reporting Period. The
decrease was primarily due to a reduction of RMB136.2 million in freight expenses resulting from the Company’s divesture of a subsidiary
of its warehouse and supply chain businesses in the same period in 2022 and additional savings in customer services expenses resulting
from the Company’s expanding use of regional service centers.
Sales and Marketing Expenses
Our sales and marketing expenses
primarily consist of payroll, bonus and benefits of sales and marketing staff, advertising costs, service fees paid to marketplaces,
agency fees and costs for promotional materials. The sales and marketing expenses increased by 1.2% from RMB1,284.2 million (US$191.7
million) for the six months ended June 30, 2022 to RMB1,299.1 million (US$179.2 million) for the Reporting Period, primarily attributable
to the incremental sales and marketing expenses related to Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023.
Technology and Content Expenses
Our technology and content expenses
consist primarily of payroll and related expenses for employees in our technology and system department, technology infrastructure expenses,
costs associated with the computers, storage and telecommunications infrastructure for internal use and other costs, such as editorial
content costs. The technology and content expenses increased by 12.2% from RMB217.5 million (US$32.5 million) for the six months ended
June 30, 2022 to RMB244.0 million (US$33.7 million) for the Reporting Period, primarily due to the Company’s ongoing investment
in technological innovation and productization, partially offset by the Company’s cost control initiatives and efficiency improvements.
General and Administrative Expenses
Our general and administrative
expenses consist primarily of payroll and related expenses for our management and other employees involved in general corporate functions,
office rentals, depreciation and amortization expenses relating to property and equipment used in general and administrative functions,
provision for allowance for doubtful accounts, professional service and consulting fees and other expenses incurred in connection with
general corporate purposes. The general and administrative expenses increased by 126.4% from RMB182.3 million (US$27.2 million) for the
six months ended June 30, 2022 to RMB412.7 million (US$56.9 million) for the Reporting Period. The increase was primarily due to
an incremental expense of RMB177.4 million related to Brand Management, including the expenses related to Gap Shanghai, a subsidiary
the Company acquired in the first quarter of 2023, as well as strategic investments expenses in Creative Content to Commerce business
unit, brand management and overseas expansion and disposal of a warehouse and supply chain businesses subsidiary.
Other Operating Income, Net
Our other operating income mainly
consists of cash subsidies received by the subsidiaries of the Group in the People’s Republic of China (the “PRC”)
from local governments as incentives for conducting business in certain local districts. The other operating income increased by 17.9%
from RMB65.6 million (US$9.8 million) for the six months ended June 30, 2022 to RMB77.3 million (US$10.7 million) for the Reporting
Period, primarily attributable to the incremental other operating income of RMB8.4 million related to Gap Shanghai, a subsidiary the
Company acquired in the first quarter of 2023.
Other Income (Expenses)
The other income (expenses),
net, consist of net interest expenses or income, unrealized investment losses, gain on acquisition of subsidiaries, gain on repurchase
of 1.625% convertible senior notes due 2024, fair value gain on derivative liabilities and exchange losses. For the Reporting Period,
other expenses (net) were approximately RMB14.7 million (US$2.0 million), representing a decrease of approximately 88.6% from approximately
RMB129.1 million (US$19.3 million) for the six months ended June 30, 2022. This decrease was primarily driven by a lower unrealized
investment loss in both iClick Interactive Asia Group Limited, a public company listed on the Nasdaq Global Market that the Company invested
in January 2021; the gain in the fair value on derivative liabilities in connection with the equity interest of Baotong Inc., issued
to Cainiao Smart Logistics Investment Limited; as well as the increase in the net interest income.
Income Tax Expense
For the Reporting Period, our
income tax expense was RMB4.1 million (US$0.6 million) as compared to RMB6.6 million (US$1.0 million) for the six months ended June 30,
2022.
Net Loss
As a result of the above factors,
net loss of approximately RMB91.2 million (US$12.6 million) for the Reporting Period was recorded, compared to a net loss of RMB196.9
million (US$29.4 million) for the six months ended June 30, 2022.
Current Assets
As of June 30, 2023, the
current assets of the Group were approximately RMB7,042.2 million (US$971.2 million), representing a decrease of 4.8% as compared with
approximately RMB7,397.1 million (US$1,072.5 million) as of December 31, 2022. As of June 30, 2023, the current ratio (current
assets divided by current liabilities) of the Group was approximately 2.0 times (December 31, 2022: approximately 2.0 times).
Accounts Receivables, net of Allowance for Credit
Losses
Our accounts receivables represent
receivables from customers. The accounts receivables (net of allowance of credit loss) decreased 20.4% from RMB2,292.7 million (US$332.4
million) as of December 31, 2022 to RMB1,825.7 million (US$251.8 million) as of June 30, 2023.
Accounts Payables
Our accounts payables represent
payables to suppliers. As of June 30, 2023, accounts payables amounted to approximately RMB427.3 million (US$58.9 million), representing
a decrease of approximately 10.0% as compared with approximately RMB474.7 million (US$68.8 million) as of December 31, 2022.
Accrued Expenses and Other Current Liabilities
Other current liabilities primarily
consist of logistics expenses accruals, salary and welfare payable as well as marketing expenses accruals.
As of June 30, 2023, accrued
expenses and other current liabilities amounted to approximately RMB1,096.2 million (US$151.2 million), representing an increase of approximately
6.9% as compared with approximately RMB1,025.5 million (US$148.7 million) as of December 31, 2022, primarily due to the incremental
accrual expenses related to Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations
primarily through cash generated from operating activities, proceeds from our public offerings and private placements, short-term bank
borrowings.
Cash and Cash Equivalents
Our cash and cash equivalents
generally consist of bank deposits denominated in RMB, USD and HKD. Bank deposits carry interest at market rates which range from 0.025%
to 5.01% per annum. Our cash and cash equivalents, restricted cash and short-term investment amounted to approximately RMB1,689.3 million
(US$233.0 million), RMB59.4 million (US$8.2 million), and RMB1,463.8 million (US$201.9 million) as of June 30, 2023 (December 31,
2022: RMB2,144.0 million (US$310.9 million), RMB101.7 million (US$14.7 million), and RMB895.4 million (US$129.8 million). The increase
in cash position was mainly due to the improvement of capital management efficiency.
Short-term Loan
As of June 30, 2023, we
had short-term loan of approximately RMB1,123.5 million (US$154.9 million) (December 31, 2022: RMB1,016.1 million).
For the Reporting Period, the
effective interest rates of the Group’s short-term bank borrowings ranged from 3.0% to 3.4% (December 31, 2022: 3.1% to 4.1%).
Pledge of Assets
As of June 30, 2023, no assets of the Group were
pledged or charged.
Gearing Ratio
The calculation of gearing ratio
is based on total debt at the end of the period divided by total equity for the period and multiplied by 100.0%. The gearing ratio as
of December 31, 2022 and June 30, 2023 were both 1.1 times.
Contingent Liabilities and Commitments
As of June 30, 2023, the Group did not have any
contingent liabilities or commitments.
Concentration of Credit Risks
Financial instruments that potentially
subject the Group to significant concentrations of credit risk primarily consist of cash and cash equivalents, restricted cash, accounts
receivable, short-term investments, amounts due from related parties and long-term time deposits.
We had cash and cash equivalents
of RMB1,689.3 million (US$233.0 million) and RMB2,144.0 million (US$310.9 million), restricted cash of RMB59.4 million (US$8.2 million)
and RMB101.7 million (US$14.7 million), short-term investments of RMB1,463.8 million (US$201.9 million) and RMB895.4 million (US$129.8
million) as of June 30, 2023 and December 31, 2022, respectively. All of the Group’s cash and cash equivalents, restricted
cash, short-term investments and long-term time deposits were held by major financial institutions located in the PRC, Hong Kong, Japan
and Taiwan which management believes are of high credit quality.
We had accounts receivables,
net of allowance for credit losses, of RMB1,825.7 million (US$251.8 million) and RMB2,292.7 million (US$332.4 million) and amounts due
from related parties of RMB85.4 million (US$11.8 million) and RMB93.3 million (US$13.5 million) as of June 30, 2023 and December 31,
2022, respectively. Accounts receivable and amounts due from related parties are typically unsecured and are derived from revenues earned
from customers in the PRC. The risk with respect to accounts receivable is mitigated by credit evaluations the Group performs on its
customers and its ongoing monitoring process of outstanding balances.
Foreign Exchange Risk
The Group’s business is
primarily conducted in PRC and almost all of its revenues are denominated in Renminbi. The conversion of Renminbi into foreign currencies,
including U.S. dollars, is based on rates set by the PBOC. The Renminbi has fluctuated against the U.S. dollars, at times significantly
and unpredictably. During the Reporting Period, the Group had not deployed any financial instrument for hedging its exposures towards
foreign currency risk. The Group will continue to keep track of the foreign exchange risk and take prudent measures to mitigate exchange
risk, and take appropriate action where necessary.
SIGNIFICANT INVESTMENT HELD, MATERIAL ACQUISITIONS
AND DISPOSALS
References are made to the announcements
of the Company dated November 8, 2022 and February 1, 2023. Completion of the acquisition of Gap (Shanghai) Commercial Co., Ltd.
took place on January 31, 2023. The Company will endeavor to complete the acquisition of Gap Taiwan Limited.
Save as disclosed above, there
were no significant investments, acquisitions and disposals of subsidiaries, associates or joint ventures during the Reporting Period.
FUTURE PLANS FOR MATERIAL INVESTMENTS AND CAPITAL
ASSETS
The Company and ABG Hunter LLC,
a subsidiary of Authentic Brands Group, a global brand development, marketing and entert ainment platform, have entered into a non-legally
binding term sheet (“JV TS”), for the Company’s acquisition of 51% equity interest in a special purpose vehicle
established by ABG Hunter LLC, which holds the relevant intellectual property of Hunter brands in Greater China and Southeast Asia. The
completion of the proposed transaction under the JV TS is still subject to the conclusion and signing of definitive agreements by the
respective parties and the fulfilment of customary closing conditions contained therein.
Other than disclosed in this
announcement, the Group had no future plan for material investments or capital assets during the Reporting Period. However, the Group
will continue to identify new opportunities for business development.
EMPLOYEES AND REMUNERATION POLICY
As of June 30, 2023, the
Group had 8,181 full-time employees, compared with 7,588 as of December 31, 2022. The increase in full-time employees was mainly
due to Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023. Our success depends on our ability to attract, retain
and motivate qualified personnel. Our senior management team consists of members that possess overseas or top-tier educational backgrounds,
strong IT capabilities, deep industry knowledge and working experience with brand partners. In addition, our brand management team comprises
personnel who connect well culturally with brands. We have developed a corporate culture that encourages teamwork, effectiveness, self-development
and commitment to providing our brand partners with superior services. We typically remunerate our employees with cash compensation and
benefits, we may also grant our employees with share options and restricted share units according to our share incentive plans. We usually
enter into standard labor contracts with our employees. We also enter into standard confidentiality and non-compete agreements with our
senior management. The non-compete restricted period typically expires two years after the termination of employment, and we agree to
compensate the employee with a certain percentage of his or her pre-departure salary during the restricted period.
We have established comprehensive
training programs, including orientation programs and on- the-job training, to enhance performance and service quality. Our orientation
programs cover such topics as our corporate culture, business ethics, e-commerce workflows and services. Our on-the- job training includes
training of business English and business presentation, management training camp for junior managers and customer service agent career
development programs. In 2014, we set up a special dedicated training facility, Baozun College, to further strengthen our internal training
programs.
SUBSEQUENT EVENTS
As of August 2023, Baozun have entered into a non-legally binding term sheet with Authentic Brands Group, for more details, please view
the section of FUTURE PLANS FOR MATERIAL INVESTMENTS AND CAPITAL ASSETS.
Save as disclosed above, there
was no other event that has taken place subsequent to June 30, 2023 and up to the date of this announcement that may have a material
impact on the Group’s operating and financial performance.
COMPLIANCE WITH THE CORPORATE
GOVERNANCE CODE
We aim to achieve high standards
of corporate governance which are crucial to our development and safeguard the interests of our shareholders. The Group has adopted the
code provisions in Part 2 of the Corporate Governance Code (the “CG Code”) as set out in Appendix 14 to the Rules Governing
the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Hong Kong
Stock Exchange”) as its own code of corporate governance.
Save for the deviation for reasons
set out below, during the Reporting Period, the Group has complied with the CG Code.
Pursuant to code provision C.2.1
of the CG Code, the responsibilities between the chairman and the chief executive officer should be segregated and should not be performed
by the same individual. However, we do not have a separate chairman and chief executive officer and Mr. Vincent Wenbin Qiu is performing
these two roles. Mr. Qiu is responsible for the overall management, operation and strategic development of our Group and has been
instrumental to our growth and business operation as founder of the Group. Taking into account the continuation of management and the
implementation of our business strategies, the Directors (including our independent Directors) consider that vesting the roles of the
chairman and the chief executive officer in the same person would allow the Company to be more effective and efficient in developing
business strategies and executing business plans. The existing arrangements are beneficial to the business prospect and management of
our Group and are in the interests of our Company and our shareholders as a whole. The balance of power and authority is ensured by the
operation of the senior management and our Board, both of which comprises experienced and high-calibre individuals. The Board will regularly
review the effectiveness of this structure to ensure that it is appropriate to the Group’s circumstances.
COMPLIANCE WITH MODEL CODE FOR SECURITIES TRANSACTIONS
The Company has adopted the model
code for securities transactions by directors of listed issuers (the “Model Code”) as set out in Appendix 10 to the
Listing Rules as a code of conduct for securities transactions by the Directors during the Reporting Period.
Upon specific enquiry, all Directors
confirmed that they have complied with the Model Code during the Reporting Period.
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES
OF THE COMPANY
Neither the Company nor any of
its subsidiaries purchased, sold or redeemed any of the Company’s listed securities during the Reporting Period.
REVIEW OF INTERIM RESULTS
The Company has established an
audit committee (the “Audit Committee”) in compliance with the Listing Rules. The Audit Committee has reviewed the
unaudited interim financial results for the Reporting Period and considers that the unaudited interim financial results are in compliance
with the relevant accounting standards, rules and regulations and appropriate disclosures have been duly made.
In addition, the Company’s
independent auditor, Deloitte Touche Tohmatsu, has reviewed our unaudited condensed consolidated financial statements for the Reporting
Period in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the
Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants.
INTERIM DIVIDEND
The Board has resolved not to
recommend the distribution of an interim dividend for the Reporting Period (2022: Nil).
NON-GAAP FINANCIAL MEASURES
In evaluating our business, we
consider and use non-GAAP income (loss) from operations, non- GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary
shareholders of Baozun Inc., and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, as supplemental
measures to review and assess our operating performance. The presentation of these non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. Non-GAAP
income (loss) from operations is income (loss) from operations excluding the impact of share-based compensation expenses, amortization
of intangible assets resulting from business acquisition, acquisition-related expenses. Non-GAAP net income (loss) is net income (loss)
excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related
expenses, fair value gain on derivative liabilities, gain on acquisition of subsidiaries, and unrealized investment loss. Non-GAAP net
income (loss) attributable to ordinary shareholders of Baozun Inc. is net income (loss) attributable to ordinary shareholders of Baozun
Inc. excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition,
acquisition- related expenses, fair value gain on derivative liabilities, gain on acquisition of subsidiaries, and unrealized investment
loss. Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS is non-GAAP net income (loss) attributable
to ordinary shareholders of Baozun Inc. divided by weighted average number of shares used in calculating net income (loss) per ordinary
share multiplied by three, as each ADS represents three of our Class A ordinary shares.
We present the non-GAAP financial
measures because they are also used by our management to evaluate our operating performance and formulate business plans. Non-GAAP income
(loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and
non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS enable our management to assess our operating
results without considering the impact of share-based compensation expenses and amortization of intangible assets resulting from business
acquisition. Such items are non-cash expenses that are not directly related to our business operations. Share-based compensation expenses
represent non-cash expenses associated with share options and restricted share units we grant under share incentive plans. Amortization
of intangible assets resulting from business acquisition represents non-cash expenses associated with intangible assets acquired through
one-off business acquisition. Unrealized investment loss represents non-cash expenses associated with the change in fair value of the
equity investment. We believe that, by excluding such non-cash items, the non-GAAP financial measures help identify the trends underlying
our core operating results that could otherwise be distorted. As such, we believe that the non-GAAP financial measures facilitate investors’
assessment of our operating performance, enhance the overall understanding of our past performance and future prospects and allow for
greater visibility with respect to key metrics used by our management in their financial and operational decision-making.
The non-GAAP financial measures
are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations
as analytical tools. One of the key limitations of using non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP
net income (loss) attributable to ordinary shareholders of Baozun Inc. and non-GAAP net income (loss) attributable to ordinary shareholders
of Baozun Inc. per ADS is that they do not reflect all items of income (loss) and expense that affect our operations. Share-based compensation
expenses and amortization of intangible assets resulting from business acquisition and unrealized investment loss have been and may continue
to be incurred in our business and are not reflected in the presentation of non-GAAP income (loss) from operations, non-GAAP net income
(loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and non-GAAP net income (loss) attributable to
ordinary shareholders of Baozun Inc. per ADS. Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies,
including peer companies, and therefore their comparability may be limited. In light of the foregoing limitations, the non-GAAP income
(loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and
non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS for the period should not be considered in isolation
from or as an alternative to income (loss) from operations, net income (loss), net income (loss) attributable to ordinary shareholders
of Baozun Inc., net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, or other financial measures prepared
in accordance with U.S. GAAP.
We compensate for these limitations
by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, which should be considered when evaluating
our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.
A reconciliation of these non-GAAP
financial measures to the nearest U.S. GAAP performance measures is provided below:
Baozun Inc.
Reconciliations of GAAP and
Non-GAAP Results
(in thousands, except for share
and per ADS data)
| |
For the six months
ended June 30, | |
| |
2022 | | |
2023
| |
| |
RMB | | |
RMB | | |
US$ | |
Loss from operations | |
| (64,525 | ) | |
| (77,066 | ) | |
| (10,628 | ) |
Add: Share-based
compensation expenses | |
| 94,862 | | |
| 49,367 | | |
| 6,807 | |
Amortization of intangible assets resulting
from business acquisition | |
| 21,580 | | |
| 16,053 | | |
| 2,214 | |
Acquisition-related expenses | |
| – | | |
| 2,709 | | |
| 374 | |
| |
| | | |
| | | |
| | |
Non-GAAP income (loss) from
operations | |
| 51,917 | | |
| (8,937 | ) | |
| (1,233 | ) |
| |
| | | |
| | | |
| | |
Net loss | |
| (196,942 | ) | |
| (91,194 | ) | |
| (12,576 | ) |
Add: Share-based
compensation expenses | |
| 94,862 | | |
| 49,367 | | |
| 6,807 | |
Amortization of intangible assets resulting
from business acquisition | |
| 21,580 | | |
| 16,053 | | |
| 2,214 | |
Unrealized investment loss | |
| 94,645 | | |
| 51,874 | | |
| 7,154 | |
Acquisition-related expenses | |
| – | | |
| 2,709 | | |
| 374 | |
Less: Tax
effect of amortization of intangible assets resulting from business acquisition | |
| (4,402 | ) | |
| (3,072 | ) | |
| (424 | ) |
Gain
on acquisition of subsidiaries | |
| – | | |
| (3,251 | ) | |
| (448 | ) |
Fair
value gain on derivative liabilities | |
| – | | |
| (24,515 | ) | |
| (3,381 | ) |
| |
| | | |
| | | |
| | |
Non-GAAP net income (loss) | |
| 9,743 | | |
| (2,029 | ) | |
| (280 | ) |
| |
| | | |
| | | |
| | |
Net loss attributable to ordinary shareholders of Baozun Inc. | |
| (200,163 | ) | |
| (103,575 | ) | |
| (14,284 | ) |
Add: Share-based
compensation expenses | |
| 94,862 | | |
| 49,367 | | |
| 6,807 | |
Amortization of intangible assets resulting from business acquisition | |
| 16,400 | | |
| 12,224 | | |
| 1,686 | |
Unrealized investment loss | |
| 94,645 | | |
| 51,874 | | |
| 7,154 | |
Acquisition-related expenses | |
| – | | |
| 2,709 | | |
| 374 | |
Less: Tax
effect of amortization of intangible assets resulting from business acquisition | |
| (3,324 | ) | |
| (2,315 | ) | |
| (319 | ) |
Gain
on acquisition of subsidiaries | |
| – | | |
| (3,272 | ) | |
| (451 | ) |
Fair
value gain on derivative liabilities | |
| – | | |
| (24,515 | ) | |
| (3,381 | ) |
| |
| | | |
| | | |
| | |
Non-GAAP net income (loss) attributable to
ordinary shareholders of Baozun Inc. | |
| 2,420 | | |
| (17,503 | ) | |
| (2,414 | ) |
| |
| | | |
| | | |
| | |
Non-GAAP
net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS: | |
| | | |
| | | |
| | |
Basic | |
| 0.04 | | |
| (0.30 | ) | |
| (0.04 | ) |
Diluted | |
| 0.04 | | |
| (0.30 | ) | |
| (0.04 | ) |
Weighted average shares used in calculating net income (loss) per
ordinary share | |
| | | |
| | | |
| | |
Basic | |
| 190,413,332 | | |
| 177,380,516 | | |
| 177,380,516 | |
Diluted | |
| 192,760,523 | | |
| 177,380,516 | | |
| 177,380,516 | |
PUBLICATION OF INTERIM RESULTS
AND 2023 INTERIM REPORT
This announcement is published
on the websites of the Company (http://ir.baozun.com) and the Hong Kong Stock Exchange (http://www.hkexnews.hk).
The 2023 interim report will be dispatched to the Company’s shareholders and will be made available on the websites of the Company
and the Hong Kong Stock Exchange as and when appropriate.
|
By
order of the Board |
|
Baozun
Inc. |
|
Mr. Vincent
Wenbin Qiu |
|
Chairman |
Hong Kong, August 28, 2023
As
of the date of this announcement, our Board of Directors comprises Mr. Vincent Wenbin Qiu as the chairman, Mr. Junhua Wu, Mr. Satoshi
Okada and Ms. Yang Liu as Directors, and Mr. Yiu Pong Chan, Mr. Steve Hsien-Chieng Hsia and Mr. Benjamin Changqing
Ye as independent Directors.
* for
identification purposes only
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