[Management View]
Vipshop Holdings Limited reported total net revenues of RMB26.3 billion for Q1 2025, with a gross profit of RMB6.1 billion and a gross margin of 23.2%. The company is focused on strategic priorities such as expanding SVIP membership benefits, enhancing AI-driven customer experiences, and investing in exclusive merchandise offerings.

[Outlook]
Management expects total net revenues for Q2 2025 to be between RMB25.5 billion and RMB26.9 billion, reflecting a year-over-year decrease of approximately 5% to 0%. They anticipate regaining growth in the second half of 2025 and maintaining comparable net margins for the full year.

[Financial Performance]
Vipshop experienced a year-over-year decrease in total net revenues from RMB27.6 billion to RMB26.3 billion. Operating margin decreased from 10.0% to 8.7%, and net margin from 8.4% to 7.4%. Despite these declines, the company maintains healthy cash reserves and continues its shareholder return program.

[Q&A Highlights]
Question 1: What is the recent consumer sentiment and monthly GMV trend in Q2? How should we think about the revenue and earnings outlook for 2025?
Answer: Consumer sentiment has shown signs of improvement, with better sales momentum in April. Management expects to regain growth in the second half of 2025, maintaining comparable net margins as in 2024.

Question 2: How does the tariff impact Vipshop, and is there a view on a potential secondary listing in Hong Kong?
Answer: Vipshop has limited exposure to tariffs and is working with apparel companies to access domestic markets. The company is evaluating the option of a Hong Kong listing internally.

Question 3: What is the strategy to drive SVIP growth, and what is the competitive landscape amid macro uncertainty?
Answer: Vipshop aims to achieve double-digit growth for SVIP customers by offering exclusive off-price product offerings. The company remains focused on discount retail for brands to compete in the hypercompetitive e-commerce environment.

Question 4: What are the latest trends in shopping frequency and ARPU for SVIP members, and does management maintain capital return guidance?
Answer: SVIP ARPU has seen a small decline due to new customers, but cross-category purchase potential remains strong. Management maintains its commitment to return no less than 75% of non-GAAP FY2024 net income to shareholders.

Question 5: What is the impact of the trading program and REIT initiative on Vipshop's strategy?
Answer: The trading program is expected to contribute around 1% of total GMV, with minimal financial impact. The REIT initiative aims to extend the outlet business efficiently through strategic capital raising.

Question 6: How should we think about marketing spend and margin profile for the year?
Answer: Marketing spend is measured and expected to remain within 3% of total revenue. Vipshop focuses on merchandise value and services to drive customer growth, ensuring marketing spend does not pressure margins.

[Sentiment Analysis]
Analysts expressed cautious optimism about Vipshop's strategic initiatives and growth outlook. Management maintained a confident tone regarding SVIP growth and strategic investments.

[Quarterly Comparison]
| Metric | Q1 2025 | Q1 2024 |
|--------|---------|---------|
| Total Net Revenues | RMB26.3 billion | RMB27.6 billion |
| Gross Profit | RMB6.1 billion | RMB6.5 billion |
| Gross Margin | 23.2% | 23.7% |
| Operating Margin | 8.7% | 10.0% |
| Net Margin | 7.4% | 8.4% |

[Risks and Concerns]
Vipshop faces challenges from macroeconomic headwinds, tariff impacts, and competitive pressures in the e-commerce industry. The company is leveraging domestic supply opportunities and strategic investments to mitigate these risks.

[Final Takeaway]
Vipshop Holdings Limited navigates a challenging discretionary spending environment with strategic focus on SVIP membership growth and AI-driven customer experience enhancements. Despite declines in revenue and margins, the company maintains healthy cash reserves and continues its shareholder return program. Management is confident in regaining growth in the second half of 2025, supported by strategic investments and disciplined operations.