After completing its three-year strategic transformation, Baozun Inc. (09991, BZUN.US) has entered a new developmental phase, marked by sustained healthy growth in its core e-commerce operations and a significant milestone as its brand management segment, including the GAP brand, reached its first profitable quarter. According to the company's fourth-quarter and full-year 2025 financial results, total revenue increased by 6% year-over-year to RMB 3.2 billion in Q4, driven by simultaneous growth in both e-commerce and brand management revenues. Alongside this expansion, profitability improved significantly: under non-GAAP measures, operating profit for the e-commerce business rose 43%, while the brand management business achieved a major milestone with GAP turning profitable for the first time in a quarter.
For the full year 2025, Baozun's total revenue grew 6% to RMB 9.9 billion. Non-GAAP operating profit reached RMB 130 million, and non-GAAP net profit attributable to shareholders returned to profitability. Full-year operating cash flow surged over 300% to RMB 420 million.
The strategic transformation, initiated in 2023, was aimed at optimizing the efficiency of the core e-commerce business while strategically developing brand management as a second growth driver. The latest financial report reflects the substantial progress made during this period.
The e-commerce segment has become Baozun's cash engine. In Q4, the gross margin for product sales reached a record high of 18.4%, supported by optimized category mix, including a focus on health, nutrition, and beauty brands, along with expansion into non-standard categories like apparel. Service revenue within the e-commerce segment increased 3.1% year-over-year to RMB 2.0 billion, benefiting from growth in digital marketing and IT solutions. Baozun's omnichannel capabilities continued to earn recognition from platforms such as Tmall and Douyin. Through a focus on high-quality growth and lean operations, the e-commerce business significantly strengthened its profit base, resulting in a 43% increase in non-GAAP operating profit to RMB 196 million in Q4.
The brand management business achieved a landmark breakthrough as the three-year transformation concluded. Q4 revenue for this segment rose 24% year-over-year to RMB 664 million, driven by double-digit same-store sales growth and contributions from new store openings. Gross profit increased 28%, with the gross margin improving by 1.7 percentage points to 52.1%. Notably, the GAP brand achieved its first quarterly operating profit, indicating that the brand management business has passed a structural inflection point, providing a replicable model for future growth.
GAP's turnaround was supported by coordinated efforts across merchandise, marketing, store efficiency, and channel expansion. In Q4, the brand emphasized iconic categories such as sweatshirts, denim, and knitwear, with precise segmentation based on channel and customer demographics. A co-branded collection with the "Forbidden City's New Arrivals" initiative continued to achieve strong sell-through at full price. Since appointing a brand ambassador last September, GAP has deepened its collaboration with Cheng Yi, launching seasonal products and style campaigns around key retail periods to enhance brand visibility and social engagement. During the quarter, GAP opened seven new stores, bringing the total number of new stores for the year to 29. By year-end, GAP had 164 stores in China, with new locations outperforming existing ones due to improved site selection and visual merchandising.
These initiatives also led to improved inventory turnover efficiency, with days of inventory outstanding reduced by 16% year-over-year to 114 days in Q4, reflecting enhanced inventory control and supply chain coordination. Meanwhile, the Hunter brand continued to strengthen its positioning by upgrading store aesthetics and curating lifestyle narratives, attracting urban consumers seeking both functionality and style. Five new Hunter stores were opened in high-potential second-tier cities including Nanjing, Qingdao, Shenyang, and Taiyuan, expanding regional presence.
With the strategic transformation complete, Baozun is poised for enhanced long-term investment value as it enters 2026. Strengthened synergies between the e-commerce and brand management segments are expected to bolster the company's competitive edge and growth certainty.
The e-commerce business is evolving into a more comprehensive operator, as evidenced by its performance in 2025. Baozun gained market share in core categories such as luxury goods and sports/outdoor apparel while strategically expanding into non-standard categories. In Q4, the company received 41 awards within the Tmall ecosystem, including the "2025 Tmall Ecosystem Excellence Service Award," and its subsidiary, Baozun Lokexun, was again recognized as a "Douyin E-commerce Diamond Service Provider," underscoring its robust omnichannel capabilities.
Moving forward, Baozun will focus on enhancing digital delivery, strategic execution, and talent development to drive orderly growth in e-commerce. Key priorities include strengthening non-standard category distribution, digital marketing, and traffic acquisition capabilities, alongside increased deployment of AI and smart digital tools.
Having successfully navigated the inflection point, the brand management business is expected to enter a "scale realization phase" in 2026, with accelerated operating leverage. By the end of 2025, the segment operated 177 stores. GAP plans to open 50 new stores in 2026, leveraging both direct and partnership models to fuel rapid growth. A recent collaboration with "Chinese Opera" further demonstrated GAP's ability to integrate local cultural narratives with its global brand story. Beyond scale, Baozun aims to achieve full-year operating breakeven for the GAP brand in 2026.
With the three-year transformation successfully concluded, Baozun has established a dual-driver structure supported by e-commerce and brand management, transitioning fully from strategic investment to value realization. For investors, this renewal translates into higher profit certainty, stronger growth visibility, and increasing long-term value as growth expectations materialize.