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Vipshop will hand over financial reports for 27 consecutive quarters of profitability.

In the early morning of August 15, Vipshop released the unaudited financial report for the second quarter of FY 2019 as of June 30. According to the report, Vipshop’s Q2 net revenue was RMB 22.7 billion (US$3.3 billion), up 9.7% year-on-year; net profit attributable to shareholders of the company was RMB 813.5 million (US$118.5 million), a year-on-year increase. 19.3%. The financial report has risen steadily, and the price of Vipshop has risen 9.27%. Yesterday, Vipshop’s share price rose 15% to close at $7.2.

However, one fact that cannot be ignored is that the market value of Vipshop has fallen from the peak of $15 billion to the current $4.792 billion in the past seven years, and the market value has evaporated by 68%. In the past two years, the financial report shows that although Vipshop’s revenue and net profit have kept rising, its revenue growth rate has been declining since Q1 2017, and the number of active users in the quarter has been stagnant and its growth potential is limited.

The Vipshop, which was established in 2008, cuts into the e-commerce field with the differentiated positioning of brand discount sales. The quality of the relatively guaranteed and price-friendly sale model has quickly embarked on its own path, but peaked in the Internet dividend. In the case of the case, Vipshop will also enter the bottleneck period.

Vipshop has also explored new products, featured, social e-commerce “cloud goods warehouse”, new retail, but all have little effect, and gradually fell behind under the impact of new models such as social e-commerce and live broadcast. Around a circle, the final Vipshop will still announce the focus back to the sale, and force down the line.

On July 10, not long ago, Vipshop announced that it would acquire a 100% stake in Shanshan Commercial Group Co., Ltd. for RMB 2.9 billion. At present, Shanshan has opened five outlets, and Vipshop has opened a number of offline stores since 2018. Vipshop’s move was interpreted as a line of weak online business growth. Explore below.

Industry sources pointed out that Vipshop will have many years of accumulation and strong supply chain advantages. Focusing on special sales and extending to the present is a feasible path. With reference to the prosperity of foreign outlets, there is a great opportunity in China, but the line The manpower, cost, and model of the operation are all challenging, and ultimately depends on the efficiency and results of the operation.

27 quarterly earnings are hard to cover growth rate

From the perspective of several key indicators, Vipshop’s 202 Q2 earnings report has risen steadily.

where,Net revenue was 22.7 billion yuan, up 9.7% from 20.7 billion yuan in the same period last year. According to the general accounting standards, the net profit was 813.5 million yuan, an increase of 19.3% over the 68.81 billion yuan in the same period last year. The number of active users was 33.1 million, an increase of 11% year-on-year, and the number of orders was 147.8 million, a year-on-year increase of 33%.

In terms of expenses, Q2 total operating expenses totaled 4.2 billion, which was divided into four parts: performance expenses, marketing expenses, technical and content expenses, general and administrative expenses, which was higher than the 3.9 billion yuan in the same period of last year.

The biggest cost is the performance fee, which is 2.2 billion yuan, accounting for more than half of the total operating expenses, and also higher than the 1.9 billion yuan in the same period last year. Performance costs accounted for 9.7% of net revenues, up from 9.1% in the same period last year.

The performance fee can be understood as the total cost required from the user’s order to the completion of the order, mainly based on logistics costs, which also verifies the high cost pressure of Vipshop’s self-built logistics from the side. Vipshop said that this involves land subsidence during the construction process and offset the relevant assets of Zhaoqing Warehouse by RMB 275.5 million. If this fee is deducted, the performance fee will account for 8.5% of the net income for the quarter.

In addition, marketing expenses are also a big expense. Vipshop has once spent a lot of money to ask Jay Chou as a spokesperson. In recent years, advertisements in various dramas and variety shows are also very dense. The marketing cost of Q2 was 877.6 million yuan, a slight decrease from the 899.6 million yuan in the same period of last year. The percentage of total revenue decreased from 4.3% in the same period last year to 3.9%.

This is Vipshop’s 27th consecutive quarter of profitability, but its prospects are not worry-free.

In the past two years, the financial report data shows that from Q1 to 2019 in 2017, the growth rate of Vipshop’s revenue continued to drop from 31.1% to 7.3%. In 2019, Q2 rebounded slightly to 9.7%, but it has not broken through. Number of digits.

Vipshop will reduce revenue and year-on-year growth in the past two years / Burning Finance

In terms of net profit, it started to decline in Q1 in 2017. The year-on-year growth rate also declined for three consecutive quarters from 2017 Q1, and even negative growth. Then it gradually climbed and experienced large fluctuations.

This is related to the adjustment of Vipshop’s development strategy. From the end of 2016 to 2017, Vipshop has tried a number of businesses, but it has been slow. In Q18 and Q19, Q1’s net profit increased by a large margin, which is also the market verification that Vipshop will return the focus to the sale.

Vipshop’s net profit and year-on-year growth rate in the past two years / Burning Finance

In addition, the number of active users of Vipshop in the quarter has been around 30 million, and the number of orders has remained at around 100 million. Starting from Q4 in 2018, Vipshop will announce the release of GMV (the total number of websites), but it also shows a downward trend. In the last three quarters, it was 41.8 billion yuan, 33.8 billion yuan and 35.1 billion yuan respectively.

Vipshop’s quarterly active users and orders change, Cartography / Burning Finance

Revenue growth slowed down, quarterly active users and orders increased, and Vipshop’s business entered a bottleneck period.

New retail expert Bao Yuezhong said that the entire e-commerce industry has passed the fast-growing dividend period. At the same time, a number of innovative models have emerged in the market, such as the rapid development of social sharing fission, and the only products. The startup model similar to the company’s love inventory, good clothes library has also completed the B round of financing, Ali, Jingdong, etc. are also through the live broadcast and other modes to find ways to solve the current slowdown in corporate development.

“The retail industry has gone through several stages. In recent years, content retailing and community retailing are relatively fast, as well as live and small video delivery. But Vipshop will not be too eye-catching in these aspects. The performance, gradually falling behind, may face challenges in the future.” Bao Yuezhong analysis.

Return to sale after trial and error

Vipshop has become the darling of capital due to high growth. In 2013 and 2014, its revenue growth rate was as high as 145.1% and 122.4%, but it was all the way down.

In 2008, Vipshop was established in Guangzhou. Founder Shen Ya rented a 1,200-square-meter office in Guangzhou’s first LOFT complex. The reason is: “We have to deal with well-known brands, too shabby people are willing to do business with you.”

When many brands are facing huge inventory pressure, Vipshop will purchase eachThe big-name brand’s stocks are mainly limited to special sales, and the turnover has increased rapidly. On March 23, 2012, Vipshop successfully landed on the New York Stock Exchange, and once again called Alibaba and Jingdong, the three giants of e-commerce.

In the early days, Vipshop will indeed harvest a large number of fans by means of special sales. “The quality of the brand’s clothes is guaranteed, cost-effective, and can be returned free of charge. After the order is placed, the time and place of pick-up can still be modified, which greatly facilitates the office workers.” User Xiao Guo told the Finance. However, she also pointed out that the clothing on the Vipshop is indeed a lot of discounts for the past seasons, and the big brands are not enough.

As the demand for clear inventory of major brands decreased, the growth rate of Vipshop’s revenue decreased from 74% to 74% in 2015 and fell to 40.8% in 2016. At the end of 2017, Vipshop and Tencent and JD.com reached a strategic cooperation agreement. Tencent and JD.com invested only 863 million U.S. dollars in cash, accounting for 7% and 5.5%. After Tencent’s investment, the proportion increased to 7.8%. .

After that, Tencent provided WeChat wallet entrance for Vipshop, Vipshop flagship store provided access to the homepage of Jingdong APP, but even with the diversion of the two, the number of active users of Vipshop was only in the same period of last year. There was a small rebound in the next three quarters, after which the number of users was stagnant for a long time.

In this process, Vipshop has also undergone a series of explorations.

In October 2016, Internet third-party payment was hot, Vipshop will acquire Zhejiang Beifu Technology Co., Ltd., obtain a third-party payment license, launch Vipshop Finance, and successively launched “Victory Flower” and “Vipper” And “Wei Aibao”, the main shopping phase, easy to cash out, similar to Jingdong white strips, flower gardens.

In the strategic plan of Vipshop in 2017, e-commerce, finance, and logistics are called troikas.

According to the 2017 financial report of Vipshop, the net income of Internet finance business was RMB 250 million, and the provision for bad debts was RMB 120 million. Vipshop said that in the process of providing credit services for financial products, accounts receivable and other receivables and prepayments continued to increase, resulting in a higher risk of bad debts. The Internet finance business that Vipshop has announced to split is not disclosed in subsequent earnings reports.

Also in 2017, Vipshop will try to tear off the sale label, from “a website that specializes in special sales” to “global selection, genuine sale”; the company has also tried to enter the new retail sector, October 2017 Vipshop will open the first Pinjun Life Fresh Community Store in Guangzhou, and then it will stop shortly after opening to the eighth store. In 2018, Vipshop will transform social e-commerce and launch the “Cloud Goods Warehouse” distribution platform in WeChat.

It is worth noting that in the third horoscope logistics, Vipshop will imitate Jingdong self-built product logistics. As of the end of 2018, the storage space of Vipshop has reached 3 million square meters.The 1.9 million square meters are owned by the company.

Vipshop’s cost ratios / fuel economy

From the perspective of total operating expenses in the past two years, the maximum cost has been the performance fee, which accounts for about half of the total expenditure.

The financial report shows that the performance fee rate (performance fee/total revenue) in the past two years is basically around 9%. According to media reports, the return rate of Vipshop will be about 30%, which also increases the performance fee. In contrast, JD.com, which is also a self-built logistics system, has a compliance rate of 6% in the just-released 2019 Q2 financial report.

In the case of a smaller revenue than Jingdong, the performance fee rate is higher than that of Jingdong. To some extent, logistics has become a drag on the performance of Vipshop. In addition, the continuous investment in performance costs did not result in a substantial increase in the number of orders.

In the view of Zhuang Shuai, founder of Bailian Consulting, it is not necessary for Vipshop to build its own logistics. “Vipshop will not have many electronic products like Jingdong. It needs to ensure safety and experience from the construction of logistics, and the customer price is high enough. The price of the customers who sell clothes is low, and their own procurement, warehousing and logistics system models are very heavy. It may not be better than Jingdong, SF, and Shentong,” he said.

After various explorations, Vipshop finally announced in mid-2018 that the strategy was adjusted to return to the sale and do what he was good at.

This strategy has also begun to pay off. Yang Dazhao, chief financial officer of Vipshop, once said: “In the first quarter of 2019, it achieved strong financial results, due to the emphasis on clothing categories, the transition of low-margin products to market platforms, and Concerns about the discount retail model, Vipshop will begin to improve its profitability.”

Can the line save the Vipshop?

After returning to the sale, Vipshop also launched an offline layout.

The data shows that from the fourth quarter of 2018, Vipshop will try to lay out direct stores. Beginning in March and April of 2019, the Vipshop line under the store opened intensively, and entered the shopping malls of second-tier cities such as Shenyang, Changchun, Guiyang and Hangzhou. The products mainly include clothing, shoes and accessories, sports and outdoor.

Vipshop will tell the Finance and Economics: “The offline store business is the company’s innovative project, and individual stores have begun trial operation, and are still in the experimental exploration stage.”

In addition to the self-operated offline stores, Vipshop has used nearly half of its cash assets to acquire Shanshan Commercial.

July 10, Vipshop