VIPShop reaps rewards from apparel focus
Chinese discount retailer VIPShop Holdings achieved an 11 per cent boost in active customers in the second quarter and a 33-per-cent increase in orders.
The online company now boasts 33.1 million active customers who collectively lodged 147.8 million orders in the three months to June 30.
Net revenue for the quarter increased by 9.7 per cent year on year to RMB22.7 billion (US$3.3 billion). GMV rose by 11 per cent to RMB35.1 billion and gross profit by 25.9 per cent to RMB5.1 billion (US$741.3 million), with net profit attributable to shareholders up 19.3 per cent to RMB813.5 million (US$118.5 million).
Chairman and CEO Eric Shen said VIPShop’s decision to refocus on discount apparel had resulted in “substantial improvement in our financial results and key operating metrics”.
“We remain committed to executing on our merchandising strategy and further expanding our market share in China’s discount apparel sector. We are confident that we can continue to deliver steady profitability improvement in the future,” Shen said in a statement.
He added that the strategic acquisition of Shan Shan Outlets would further enhance VIPShop’s ecosystem and allow it to explore opportunities in online-and-offline integration.
Donghao Yang, CFO, said the company will continue to focus on its merchandising strategy, particularly in apparel–related categories, in which the GMV grew by 19 per cent year on year.
“The focus on the high-margin apparel category has and will enable us to deliver continuous improvement in our gross margin and overall profitability. Going forward, we will continue to closely monitor the return on investment from all our businesses, especially that of our investment in offline stores. We aim to achieve balanced top- and bottom-line growth and are committed to delivering long-term, sustainable shareholder return,” he said.