On May 19, vipshop released its financial report for the first quarter of 2022. The financial report data showed that the total net revenue of vipshop in the first quarter of 2022 was 25.24 billion yuan (unless otherwise specified below, the amount unit is RMB), which was 28.4 billion yuan in the same period last year. The net profit attributable to vipshop shareholders was 1.1 billion yuan, compared with 1.55 billion yuan in the same period last year. Under non US GAAP, the net profit attributable to vipshop shareholders was 1.42 billion yuan, compared with 1.71 billion yuan in the same period last year.
This is the 38th consecutive quarterly profit of vipshop. However, its first quarter performance was also significantly affected by the epidemic, with both revenue and net profit declining. The company mentioned in the financial report that “in the first quarter, consumers’ demand for non essential consumer goods was weak, and the epidemic also had an adverse impact on supply chain systems such as warehousing and logistics networks”. In addition, it is worth mentioning that in 2022, the number of Q1 vipshop super V active users increased by 37% year-on-year, accounting for 38% of the online net Gmv in the first quarter.
Shen Ya, chairman and CEO of vipshop, said on the earnings conference call that the platform hopes to increase the proportion of non clothing standard products to deal with the daily shopping characteristics of consumers, especially during the epidemic. However, he also admitted on the teleconference that the situation was not so optimistic due to the continuation of the epidemic.
q1 marketing investment decreased by 41.3% year on year
pay more attention to the innovation and retention of high-value users
In the first quarter of 2022, vipshop’s total net revenue decreased by 11.3% year-on-year. This is mainly due to the decrease in the number of active users, orders and Gmv on the platform. According to the financial report, the number of active users of the platform in the first quarter was 42.2 million, compared with 45.8 million in the same period last year. The total order volume in the first quarter was 166.4 million, compared with 175.5 million in the same period last year. Gmv in the first quarter was 42.6 billion yuan, compared with 46.1 billion yuan in the same period last year.
These changes are inseparable from the impact of the overall environment. In the financial report, the company pointed out that in the first quarter, consumers’ demand for non essential consumer goods was weak, and the epidemic also had an adverse impact on supply chain systems such as warehousing and logistics networks.
In addition, the decrease of active users and trading volume is also related to the decrease of marketing investment. According to the financial report data, the overall operating expenditure in the first quarter was 3.9 billion yuan, compared with 4.4 billion yuan in the same period last year, a year-on-year decrease of 11.0%. The main reduction is the marketing expenses. Specifically, the marketing expenses of vipshop in the first quarter were 759.3 million yuan, compared with 1.3 billion yuan in the same period last year, a year-on-year decrease of 41.3%. The proportion of marketing expenses in total net revenue also decreased from 4.6% in the first quarter of last year to 3.0% in the same period of this year. The company said in its financial report that this was mainly due to “more cautious marketing strategy”. Shen Ya also said on the teleconference that “we controlled some unnecessary releases during the epidemic”.
During this period, vipshop will pay more attention to the innovation and retention of high-value users. According to the financial report, the number of Q1 super V active users of vipshop in 2022 increased by 37% year-on-year, accounting for 38% of the online net Gmv in the first quarter. Vipshop said that super V users have the characteristics of high repurchase rate, high purchasing power and high retention rate. It is understood that super VIP can enjoy many membership rights and value-added services, such as a maximum discount of 9.5% for selected brands, unlimited free mail for self owned goods, etc. Since this year, in order to stimulate the growth of high-value users, vipshop has also provided more time limited preferential rights for super VIPs.
Cui Dawei, chief financial officer of vipshop, said on a conference call that the company adopted stricter cost and expense management measures in the first quarter and will continue to optimize operational efficiency in the future.
Mo daiqing, director and senior analyst of online retail department of ECOSOC e-commerce research center, told shell finance reporters that vipshop remained profitable despite a decline in revenue. “During the Spring Festival holiday in the first quarter, the logistics’ shut down ‘. Unlike the’ 618 ‘in the second quarter, there was a’ double 11 ‘in the fourth quarter. In addition, the epidemic affected Shanghai, Shenzhen, Hangzhou and other cities, and the consumption intensity was greatly weakened. Therefore, the financial report performance of vipshop can be regarded as a normal performance.”
Zhuang Shuai, founder of Bailian consulting, also said that “it is not good in terms of growth, but qualified in terms of gross profit margin and profit”. According to the financial report, the gross profit of vipshop in the first quarter of 2022 was 5 billion yuan, compared with 5.6 billion yuan in the same period last year. The gross profit margin in the first quarter was 19.8%, compared with 19.7% in the same period last year.
expected Q2 revenue to decline by about 25% to 20% year on year
plans to increase the proportion of non clothing wear standards on the platform
Since this year, vipshop has increased the supply of non clothing products such as daily necessities on the platform. At the same time, “constantly improve the matrix of household appliances and home textile products”. The financial report mentioned that this measure partially offset the downturn in non essential demand. Shen Ya said on the conference call that he hopes to continue to improve the proportion of standard products on the platform.
“This is related to consumer demand factors, seasonal factors and epidemic factors. Originally, our platform was dominated by wearing products, with wearing products accounting for 70% and standard products accounting for 30%. Recently, we found that our consumers also have a strong demand for standard products in the shopping process. In addition, users’ demand for standard products in summer and people’s demand for daily necessities during the epidemic will also increase.” Shen Ya said.
Shen Ya also said that vipshop does not need too many SKUs in the supply of standard products, but hopes to make the standard products more distinctive and cost-effective, “mainly to improve users’ ARPU (average value per user)”.
Mo daiqing said, “under the influence of the epidemic, consumers will pay attention to cost performance, and many are price sensitive consumers, so special sales still have advantages. At present, many e-commerce are building a new growth curve, vipshop is no exception, and it is an opportunity for it to expand non clothing and wear standards”.
According to Zhuang Shuai, standard products (fast-moving products) are mainly based on the demand changes caused by the normalization of epidemic prevention and control, “However, vipshop is very difficult to increase the proportion of standard products. In addition to the problems of organization, process and talents, it also needs to have a cycle of understanding of the industry, procurement system and brand merchants. At present, the competition of standard products is very fierce. There are online competition from jd.com, taoshuaikuai, wechat applet e-commerce / video Number e-commerce, offline competition from supermarkets, convenience stores, etc., and the operation cost of e-commerce is very high and the profit margin is not high. This is also true Why does JD want to increase new department store categories and open platforms. “
The impact of the epidemic on the industry continues. In terms of future performance outlook, vipshop expects that the total net revenue in the second quarter of 2022 will be between 22.2 billion yuan and 23.7 billion yuan, down about 25% to 20% year-on-year. “The epidemic has affected the supply chain and the performance of orders, as well as the confidence of consumers. The overall situation in May, June and the second half of this year will not be particularly optimistic.” Shen Ya said. However, he also expressed confidence in the company’s profit level. “Although the business is worse now, the company’s own profit is relatively stable. Unnecessary investment will also be reduced during the epidemic.”
According to the financial report, as of March 31, 2021, vipshop had cash, cash equivalents and restricted cash of 14.3 billion yuan and short-term investment of 5 billion yuan. The free cash flow for the twelve months ended March 31, 2022 was 2.6 billion yuan. Following the $500 million repurchase plan last year, vipshop announced on March 31 that the company would repurchase no more than $1 billion of American Depositary Shares or class a ordinary shares in the next 24 months. The company expects to use the existing cash balance to fund the repurchase.
