Our first quarter twenty twenty five earnings release was distributed earlier before this call. And is available on our IR website at ir.baozun.com as well as on PR Newswire services They have also posted a PowerPoint presentation that accompanies our comments to the same IR website, where they are available for your download. The call today from Baozun, have Mr. Vincent Qu, Chairman and Chief Executive Officer Ms. Catherine Zhu, Chief Financial Officer Mr. Junhua Wu, Director and Chief Strategy Officer of Baozun Group and Mr. Ken Huang, Chief Executive Officer of Baozun Brand Management. Ms. Qiu will first share our business strategy and company highlights. Ms. Zhu will then discuss our financials. Followed by Ms. Wu and Mr. Huang, who will share more about our e commerce and brand management segment. Respectively. They will all be available to answer your questions during the Q and A session that follows. Before we begin, I would like to remind you that this conference call contains forward looking statements within the meaning of The U. S. Securities Act of 1933 as amended, The U. S. Securities Exchange Act of 1934 as a mandate and The U. S. Private Securities Litigation Reform Act of 1995.

These forward looking statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known [indiscernible] uncertainties and other factors all of which are difficult to predict and many of which are beyond the company's control, which because the company's actual results to differ materially from those in the forward looking statements. Further information regarding these and other risks uncertainties or factors is included in the company's filings with the U. S. Securities and Exchange Commission and its announcement notice or other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this call is as of the date hereof, and is based on assumptions that the company believes to be reasonable as of this date. And the company does not undertake any obligation update any forward looking statements except as required under applicable law. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB. In addition, we may elect to use adjusted in place of non general accepted accounting principles or non GAAP in order to reduce oral confusion that may arise from our discussions about financials related to the Gap brand.

It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Vincent Chu. Vincent, please go ahead.

You, Wendy. Hello, everyone, and thank you all for your time.

I'm pleased to report that Baozun continues to execute our strategic transformation with constant quarterly progress. Revenue streams are now more diversified and our operational excellence continues to strengthen across the businesses. Baozun Group achieved 4% year over year revenue growth. BEC sustained a stable top line while BBM accelerated its strong momentum with 23% year over year sales growth. BEC is making strides in quality development and the value generation for our brand partners. Our ongoing progress in omni channel and content creation initiatives is transforming customer engagement. And the shopping experience. We also improved the quality of our product sales model achieving both healthy top line growth and the gross margin expansion. In addition, we are leveraging technology and AI applications to build leaner, and efficient organization. These innovations set a clear path for margin expansion for BEC and foster a culture of excellence. Within BBN, post GAAP Hunter are performing ahead of expectations. Our efforts to localize teams, products, merchandising plans for Gap are yielding strong results. As Gap China continues to innovate and grow, we remain committed in delivering exceptional value to customers. Meanwhile, Hunter expanded the product offering category achieved strong sales growth and received widespread recognition.

To capitalize on this momentum, and further strengthen Honda's footprint, We will open three new stores simultaneously this May in Beijing, Shanghai and Guangzhou and Hangzhou sorry.

Overall, we closed the quarter with a constant positioning to accelerate our transformation through 2025. Notably, 2025 marks Baozun's eighteenth anniversary symbolic and strategic milestone. I'm proud of how far we've come. In China tradition, 2018 signifies a time of renewed vigor maturity, ambition.

We view this milestone as a reflection of our transformation into an innovation lab platform focusing on long term value creation. Now, I will turn the call over to our team for a deeper look. Into our financials and business performance.

Thanks, Nathan, and hello, everyone. Now let me provide a more detailed overview of financial results for the first quarter of twenty twenty five. Please turn to Slide number three. Baozun Group's total net revenues for first quarter of twenty twenty five increased by 4.3% year over year to RMB2.1 billion, Of this total, e commerce revenue grew slightly by 1.4% to RMB1.7 billion, while brand management revenue rose by 23% to RMB 3,000,000. Breaking down e commerce revenue by business model, services revenue remained flat at RMB1.3 billion. DEC product sales revenue increased 7.3% year over year to RMB423 million, driven by strong performance in new categories. DDM product sales totaled million representing a 23% year over year growth This growth was mainly driven by the strong performance of the Gap brand with both online and offline channels delivering healthy gains Please turn to Slide number four. From a profitability perspective, our blended gross margin for product sales at the group level was 320.4%, Gross profit increased by 18.9% year over year to million for the quarter. Breaking this down by our key business lines, gross margin for e commerce product sales expanded to 15% a 130 basis point improvement compared to 13.7% a year ago.

This margin expansion primarily driven by product mix diversification, Gross margin for BBM was 51.6%, compared with 53.1% a year ago, The decrease was mainly due to product offering adjustments and optimization of commercial plans for the GAAP brand, Now turning to bottom line items. Please refer to slide number five. During the quarter, our adjusted loss from operations totaled million, This included an adjusted operating loss of $46,000,000 from e commerce segment. A decline of $858,000,000 from the same period last year. The decline was mainly due to low seasonality for e commerce retail in Q1 as well as personnel adjustments and the strategic investment initiative to transform and realign with our operational tactics.

We incurred approximately RMB18 million in restructure costs related to human resource reform in the quarter. BGM's adjusted operating loss totaled RMB21.0 million, an improvement of 28% from the same period last year. Lastly, please turn to slide number six. We published our 2024 sustainability report highlighting tangible progress across environmental, social and governance metrics in April. We achieved 36% reduction in Scope one-two carbon emissions versus our base year 2021, and we are on track with our commitment to reduce by 50% by 02/1930 These initiatives demonstrate our commitment to building sustainable and responsible business. Let me now pass the call over to Junghua to update you on the SEC on e commerce business.

Thanks, Catherine, and hello, everyone. Since resuming full active duties in March, I'm pleased to report that BEC is now firmly aligned with our commitment to profitability and sustainable growth. In Q1 twenty twenty five, we made meaningful progress across key strategic priorities revitalizing e commerce, enhancing our value proposition, expanding omnichannel capabilities and driving technology led efficiency and These early achievements align closely with the objectives of our 2025 annual operating plan. Which emphasize integrated business management, profit focused execution and a leaner more agile organizational model. Now let me quickly walk through some of our operational highlights in the e commerce segment for the first quarter of twenty twenty five. BEC revenue totaled 1,700,000,000.0 largely flat compared to the same period last year, However, our strategic investment in enhancing distribution capabilities is beginning to yield compelling results. Please turn to Slide number seven. In Q1, BEC's product sales grew by 7%. Driven by standout category performance in Home and Furniture, Alcohol and Health and Nutrition, Gross profit margin also improved by 130 basis points to 15%, supported by breakthroughs in new categories and renewed terms with several existing brand partners. Turning to BEC service perspective as shown on Slide eight.

While BEC service revenue remained flat, we made structural mix change aimed at quality enhancement. Revenues from online store operations grew by 12% year over year. Driven by strong performance in the luxury and apparel categories as well as continued progress in omni channel initiatives. Notably, we achieved strong double digit revenue growth on JDN Douyin, and triple digit growth on Rationale for the quarter, Recently, Baozun was nominated as part of the first batch of REVP partners. Uniquely among traditional Tmall partners. In the Contraction segment, revenue from warehouse and logistics as well as digital marketing and IT each declined by a middle single digit year over year. The decline in warehouse and logistics revenue was mainly due reduced volume from several key clients in the Sportwear segment, While we anticipate the challenges to persist with certain clients, we have proactively focused on expanding our B2B business and business development in emerging segments such as outdoor and FMCG category within our warehouse operations. In our digital marketing business, we prioritized value added marketing while optimizing passive performance marketing to enhancing profitability and capital allocation efficiency. As content becomes increasingly critical to success in e commerce, we are committed to innovating in content creation capabilities to stay ahead of the curve.

Recently, our content creation efforts were recognized in the Alibaba Ecosystem Conference where we received awards for top performance team in Taobao operations. And top data driven investment team as well as the Alibaba Future Business Award. Q1 twenty twenty five demonstrates BEC's focus and precise execution. E commerce is regaining momentum. Distribution is scaling profitability. Omnichannel platforms are advancing. And technology investments are driving measurable efficiencies. These results validate our annual plan's profit centric framework with solid execution and a clear strategic mandate BEC is poised to deliver lasting value throughout 2025 and beyond. Now I'll pass the call to Ken for an update on Baozun brand management.

Thank you, Tim, and thank you all. Please turn to slide number nine for additional insights into BBM. I'm happy that we carried our strong momentum into Q1. Achieving 23% year on year sales growth an acceleration from 70% in the previous quarter. Total BPM revenue for the quarter was $387,000,000 driven by improvements across key operating metrics. Including same store sales growth, traffic growth and the conversion rate. Overall, our same store sales growth improved to 5% for quarter. As discussed in our previous call, our strategic priorities moving forward are clearly defined Channels, merchandising and marketing. In the first quarter, we achieved the growth in both online and offline channels. Even amidst ongoing macroeconomic challenges. Throughout 2024, we conducted a comprehensive store network optimization and collaborated with key strategic partners to tap into emerging markets. In the first quarter, we closed another four stores. Our optimized offline network has achieved healthier productivity. With double digit growth in sales per square meter. Compared to a year ago. More encouraging stores opened in second half of twenty twenty four have achieved higher efficiency. Year to date, we have scaled an opening pipeline of more than 40 new stores with about 10 set to officially open in the second quarter.

Our merchandising strategy remains closely attuned to market dynamics. In the first quarter, we focused on responsive product planning and the comparing pricing strategy. All of which have strengthened customer engagement. Hence traffic and conversion. We also leveraged the data analytics to identify and target high potential customer segments in emerging markets. Pairing our product offerings to meet their specific needs Our marketing initiatives in Q1 further deepened Gap's brand of resonance through localized storytelling. A standout example was our collaboration with the Forbidden City during Chinese Spring Festival. Which showcased our ability to blend the China's rich culture heritage with Gap's brand DNA. Emphasizing comfort safety and quality. By the end of first quarter, the Forbidden City collaboration had generated total sales of 10,000,000 and also recorded at the highest sell through rate for NAIPA collaborations in our history during the same period. Building more local culture relevancy is one of our key strategies in China. Will continue to explore and engage in more collaborations with Chinese culture IPs to enhance our market influence. In January, we kicked off our community engagement trial. [indiscernible] at our flagship store in Shanghai. This initiative is designed to create memorable experience for families and children who are fostering a positive brand image.

We also amplified our reach by leveraging social media platforms and influencers to better connect with younger audience. Our brand name bear campaign deepened emotional connections with consumers. Contributing kids and baby to be the highest growing sector during the quarter. We plan to expand such community engagement initiatives to other cities in the coming quarters. Overall, gross margin for BBM grew 20% with the blended gross margin remaining healthier at 52% for the quarter. Operationally, we made continuous progress in efficiency enhancement. Our adjusted operating loss narrowed by 28% year over year to RMB21 million. Thanks to disciplined cost management and better unit economics. Looking ahead, BBM's partnership with Gap Inc. Continues to strive fueled by our local expertise and strong execution. Double digit top line growth in Clearview for 2025. We are in a strong position to further unlock new avenues for growth and improve profitability as we keep scaling. That concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q and A session.

Thank you. We will now begin the question and answer session. And our first question will come from Alicia Yap with Citigroup. Please go ahead, ma'am. Hi, good morning.

So good evening management. Thanks for taking my questions. I have couple of questions here. One is that just if management can give us update in terms of what your expectation for this year 06/18? And then any preliminary result that we can see from just the past like one week or so? On the promotion? And then across your different e commerce platform, how do you think is actually trending, which platforms is generating or getting more traction? And then second question is that I know we've been working on the IT and also logistics service. Wondering any of the have we actually able to get more brands actually onboarding to use our IT services and also the logistics services? Thank you.

Okay. Thank you, Alicia for the This is Jinhua. So let me address your first question about the campaign of 6.8. So this 6.18 is the longest campaign by far. So it started from the May 13, to the June 20. So it's about a thirty seven days campaign. So if you're talking about the some kind of difference between this six eighteen with the others, is they provide a lot of instant discount at day one. And without giving a lot of threshold discounts, they provide some lower tiers with a sliding scale starting from two hundred minuteus 20 to five thousand minuteus 500. So as you can see that this is only about like eight days after May 13. So I can only share you with the first wave result. So as far as we're concerned and we observed from our number, so the first wave came really well. A lot of brands, they keep ramping up their presale stage and their existing transactions convert rate is really pretty well. And in terms of the cancel rate, now the current data suggests that we have a single mid digit lower down than the last year. So which means a better result.

The return rate is also relatively lower than last year, which is also a better result. But as far as we still have about 50% of the shipments still ongoing. So maybe we can share the data later on after the next wave or someday in the June. So in the categories differentiation, we look forward to see of course, the first one is home appliance category. Consumer electronics category is ramping up very well because of the subsidiaries from the government. And also luxury category and the fashion apparel category also very catching up. So we can see that the home appliance category and fashion luxury category is leading six eighteen by far. And second thing is about the IT services and logistics services. So for the IT part, so you can see that our revenue growth has a little bit decline year over year because the cadence of IT services is very different. From the regular store like our flagship store operations. So they have to just find a new client and based on different kind of the solution they provide. The revenue contribution period and cadence is very different. But a lot more brands, they are focusing on the new one stock solution, leverage their online inventory with their offline inventory especially with their offline flagship stores.

So more and more brands, they are exploring the possibility with Baozun's IT team. To think about a one stop solution. So we have a strong confidence that in the coming Q3 and Q4, we can catch up the revenue growth. For the logistics service traction, so we can say that right now, as you might know that we're focusing on several key clients. As like the report just said. We focus on several key clients and their business is remaining flat. So Some of them are declining. So as we keep supporting those clients, So we need to just keep supporting them and increase the quality of the services and also have a new development of new B2B and some kind of the return reverse warehousing and logistics services as a complement. Hope that makes sense to you. The next question will come from JY Yin with Citi. Please go ahead. Good evening, management. You for taking my question. Congratulations on this quarter's strong performance. My first question is regarding the BBM sector. Is there any updates for the GAAP operation strategy And how does the company plan to balance scale expansion with profitability? And is Baozun considering acquiring more new brands That's my first question.

My second question is concerns recent collaboration between RedNote and Tmall. What is Baozun strategy and have companies seeing brands allocate more resource to Red Note? Thank you.

Okay. This is Ken. I will the first question about the strategy of GAP. I think from 2025, our strategy is quite clear in [indiscernible] are further enhancing the GAAP's DAA We are trying to enhance our key GAAP categories including Gap denim, Gap Tacky, Gap sweatshirt and the kids and baby. Category. And in the same time, we want to be more balanced between the local assortments and global products. To bring more value to our Chinese customers. And for marketing, we are creating more local culture relevance, including the IP collaboration with the Forbidden City we just did. And we will continue to this year. And starting from last month, we also launched a series of rental campaigns with key KOLs delivering our connections with our customers through music and dance. And the third one about channel. I think for online channels, we are expanding all channels and our advantage is our faster response to every platform. And we are further improving our supply chain for our online exclusive products. And for offline, we are partnering with a number of strategic partners in different regions for us to further expanding our local stores in emerging market. So in terms of balancing our scale and profits, I think we are continue looking for the increase of scale.

As we mentioned, we will keep a double digit increase this year. We target to open 50 stores, new stores this year. So with the increased scale, it will help us to balance our back office cost and in the end to breakeven. So we want to keep this momentum quarter by quarter deliver solid results. And in the end to reach a breakeven point in the last quarter. But of course, we are when we are balancing the scale and profit, we are also considering our brand. So we are still continuing investing in our brand marketing. But yes, it's really challenge, in the it's really a challenge, but in the same time, I think are confident. By working with Gabinx team together for the branding. Part.

Thank you.

I think the second question regarding the later replica and Tmall, also whether the company's plans for acquiring new brands are not just yet? Maybe you can say something about the brand more, more Yes, sure.

Yes, yes. I believe that you're asking about the Red CAT initiative. So let me explain that to you, use it before and after kind of scenario. So before the RadCat initiative, we used to spend a lot of marketing spending on retinal for seeding for new arrivals and for driving some keys for consumers can really just get a lot of content on retinal before they drop in transaction. So like ten years ago, when a consumer made their decision for purchasing, they used to go open and PDP and then reading a lot of reviews of the product and they make the decision. And now they are using Retino for UGC content platform to getting a lot of information from different angle and then make a place of transaction on the Tmall, JD or wherever they are familiar to. But the Redcat project is directly provided way to just link directly from the content or a different link or different heat or different forwarding from RedNotes directly to Tmall transaction PDP page. You can seamlessly experience that kind of things. So the RED project to us is more related to performance marketing part. So for now, in the 06/18 campaign, several of our brand partners already reallocated some of their online performance marketing budget from the in Tmall search performance marketing budget to the Redcat project.

So we can directly just invest driving traffic on Red Node from all the seeds or the content and getting the transaction done. Compared with the ROI for now, the ROI is relatively higher than the one on the Tmall Insight performance marketing results. Because this is very new, the Red Hat initiative only just opened for two weeks and we have only several brands for trying that kind of the initiative, and we will get back to you with a more detailed result after we have a significant awareness and balancing all those kind of ROIs in a stable way. Yes, hope that makes sense to you.

Okay. This is Vincent. I'm making some comments for your third part of the questions. Which is a new brand acquisition plan for the I think it is the brand management part of our business. BBM actually our strategy is the portfolio strategy, which means that we will do multiple brands and trying to build up the synergy in different brands. So that is the strategy. So far, we have two brands already. First one is Gap, second one is Hunter. Both doing quite well. And for other new brands, they can be either onboard for BBM platform or it is majorly distribution model, it can be also onboard our BEC platform. So we have full platforms for the new brands to onboard. And sometimes you can imagine that BEC and the BDM will meet in the middle.

So that gives the potential brands more opportunities to work either more focused on products, development or channel development. So we always have a quite strong pipeline. For BEC and also BBM. But recently given the macroeconomic situation, we are quite careful and cautious in onboarding new brands. But we are seeing more and more synergies between brands and it's the brands in Visa and BBM and also between. BBM and BEC. Yes, hope that answers your question. Thank you.

Thank you.

Very clear. The next question will come from Chris Cowell with Hightower Securities. Please go ahead. Thank you, management for taking my question.

I have two questions.

The first question is about apparel and sports.

And I think these two categories are performing very well this quarter compared to the overall week market consumption sentiment. Could you please share the key drivers behind it? And how should we think about the future trends of these two categories? And my second question is about BBM sector. As 06/18 campaign approach how should we think about the potential opportunity of integration of the BBM sector and BEC sector during the 06/18 campaign. You. These are my two questions.

Okay. Chris, the first question this is Junhua. The first question is regarding the apparel and sportwear category. So this is for me. So yes, indeed, the apparel, especially sportswear and luxury apparel category, they are the key in the battlefield across different tasks. Especially as far as you might know that JD, there's been restructured and hire some kind of key players in charge of their apparel category, which used to work for Tmall. So apparel and sportswear and luxury, they are rat racing in a very heavy way. Especially in those big campaigns like six eighteen, been spending a lot of providing coupons and instant discounts in this category. So yes, as far as the momentum, currently for apparel and sportswear industry, everybody is catching up. Some of the leading brands, are ramping up. So they've been spending a lot of drivers in differentiating different consumers. They spend a lot of investment into segregate different kind of consumers by different tiers like they set up the apparel into trend setters, quality chasers, pragmatic consumers and price sensitive consumers. So based on the consumer study, so we've been spending a lot of time finding the right assortment, leveraging the right message using the right marketing approach way to send a group of assortment to right group of consumers to make the right transaction.

So for apparel, sports wear and luxury category, so more and more resources are spending into the day to day operations based on data bank they provide, based on historical data based on a lot of merchandising and assortment collections, we can work with our brand partners. So we look forward to foreseeing this category have a better momentum in this 06/18 and maybe across this year.

Okay. And for the second question, for the synergies between BPM and the BEC, think we mentioned that the synergies we are having from the beginning because for BBM, our brands, both our brands, GeppenHunter, we are working very closely with BEC for GP service, DP service, logistics service, IT service, digital marketing service. It's not just for six eighteen, it's for our day to day work. And especially mentioning to the six eighteen, I think the advantage is we have more for BBM, we have more all channels information in advance and the resources management. So we can anticipate what we should respond to each platform. And the BBM as a platform that can produce products itself, we are our advantage is to make our supply chain more responsive, faster response to the different platforms' needs. So I think this is a major advantage between BPM and the BEC when we are facing a fast changing platform strategies. Hope we answered your question.

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Please go ahead.

Okay. Thank you, operator. On behalf of the Baozun management team, we would like to thank you for your participation in today's call. You require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.