BZUN Baozun Inc

 

 

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.

 

	Baozun Inc.
	By:	/s/ Arthur Yu
	Name:	Arthur Yu
	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.

 

(b)

Segments data

 

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”).

 

 

 

 

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

 

(a)

Basis of presentation

 

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.

 

 

 

 

3.

REVENUE

 

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

 

(ii)

Contract Liability

 

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.

 

 

4.

NET LOSS PER SHARE

 

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.

 

 

5.

INCOME TAX

 

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

 

8.

SHORT-TERM LOAN

 

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.

 

9.

DIVIDEND

 

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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