Baozun (BZUN) Q4 2025 earnings call transcript

Thank you, Operator. Hello, everyone, and thank you for joining us today. Hi. Our fourth quarter 2025 earnings release was distributed earlier before this call and is available on our IR website at IR. baozun. com, as well as on PR Newswire Services. They have also posted a PowerPoint presentation that accompanies our comments to the same IR website, where they are available for your download. On the call today from Bauzun, we have Mr. Vincent Chu, Chairman and Chief Executive Officer, Ms. Catherine Zhu, Chief Financial Officer, Mr. Junhua Wu, Director and Chief Strategy Officer of Bauzun Group, and Ms. Ken Huang, Chief Executive Officer of Bauzun Brand Management. Ms. Chu will first share our business strategy and company highlights.

Ms. Chu then will discuss our financials and look, followed by Ms. Wu and Mr. Huang, who will share more about our e-commerce and brand management segment, respectively. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this conference call contains four looking statements. We lean the meaning of the U. S. Security Act of 1933 as a mandate, the U. S. Security Exchange Act of 1934 as a mandate, and the U. S. Private Security Litigation Reform Act of 1995. These forward-looking statements are based upon management current expectations and current markets and operating conditions and relates to events that involve no or no risk uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results to differ materially from those in the forward-looking statements.

Further information regarding these and other risks and certainties of factors is included in the company's filings with the U. S. Exchange Commission and its announcement notice or other documents published on the website of the Stock Exchange of Hong Kong Limited. All information provided in this call is as of the date here and is based upon assumptions that company believes to be reasonable as of this date. And the company does not undertake any obligation to update any forelooking statement except as required under applicable law.

Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in RMB. In addition, we may elect to use adjusted employees of non-general accepted accounting principles or non-GAAP in order to reduce oral confusion that may arise from our discussion about financials related to the GAAP brand. You may now turn to slide two for the executive highlights for the quarter.

It is now my pleasure to introduce our chairman and chief executive officer, Mr. Vincent Hsu. Vincent, please go ahead.

Thank you, Wendy. Hello, everyone, and thank you for joining us. I'm pleased that Baozun delivered a strong fourth quarter, closing 2025 on a high note and successfully completing our three-year strategic transformation. Over the past three years, we have rebuilt our company with focus and intention, driving consistent sequential momentum throughout 2025. In the fourth quarter, our revenue increased 6% to $3.2 billion, while non-GAAP operating profits grew 91% to $198 million. This was not just about short-term recovery. It was about fundamentally improving the quality and potential of our business. BEC has become a sustainable cash engine. Through sharper execution and continued cost rigor, BEC is now more agile and consistently profitable. We have moved from pursuing scale to focusing on value, prioritizing margin expansion and reliable cash generation, and most importantly, built alignment with BBM.

BBM, meanwhile, has reached a defining inflection point. After three years of repositioning and localization, our brand management platform achieved its first quarterly break-even in fourth quarter 25.

This milestone validates the sustainability of our model. Importantly, scale is beginning to translate into tangible operating leverage, marking the transition from turnaround to profitable growth.

Our financial profile has strengthened alongside operational progress. Margins have expanded. Profitability has improved meaningfully, and our balance sheet remains solid. In addition, our operating cash flow more than tripled to $420 million in 2025. These results validate that our business is not only growing. It is growing with better structure and healthier economics.

In summary, 2025 marks a successful completion of the initial phase of our transformation. As we enter into 2026, our focus shifts decisively from rebuilding to scaling. Our priority now is to amplify the progress to accelerate in the next three years. We will do this by expanding BEC's margin, building scale, and operating leverage in BBM, and deepening the strategic synergies between BEC and BBM.

Our ambition is clear to drive the group's non-GAAP operating profit growth to $550 million by 2028. With a stronger organization, a proven strategy, and a highly focused execution culture, we are entering this next phase with confidence and momentum. Now I will hand over the call to our team for a deeper dive into our financials and business performance.

Thanks, Vincent, and hello, everyone. Now let me provide a more detailed overview of financial results for the fourth quarter and the full year of 2025. Please turn to slide number three. Bajun Group's total net revenues for the board for 2025 increased by 6% year-over-year to $3.2 billion. Of this total, e-commerce revenue grew by 2.5% to $2.6 billion, while brand management revenue rose by 24% to $664 million. Breaking down e-commerce revenue by business model, services revenue increased 3.1% year-over-year to $2 billion. This increase was driven by revenue growth in digital marketing and IT solutions, as well as strong performance in the luxury category within our online store operation services. BbM product sales revenue increased modestly by 0.5% year-over-year to $574.5 million, mainly driven by growth in health and nutrition category, which was partially offset by lower sales in appliance category as we continue to optimize category mix to prioritize profitability.

BBM product sales totaled $663.7 million, representing a 24% year-over-year growth. This growth was mainly driven by the strong performance of the GAAP brand. Please turn to slide number four. From a profitability perspective, our blended growth margin for product sales at the growth level was 36.5%, an extension of 640 beta points year-over-year. Roth profits increased by 35.9% year-over-year to 451.5 million for the quarter. Breaking this down by our key business lines, Roth's margin for e-commerce product sales extended to 18.4%, reflecting a 760 basis point improvement compared to 10.8% a year ago.

This market expansion was primarily driven by product mix optimization. Growth margin for BBM improved to 62.1%, up from 50.4% a year ago, reflecting the effectiveness of its merchandising and marketing initiatives.

Now, please turn to slide number 5 for a walkthrough of our OPEX. Sales and marketing expenses increased by 181 million to 1.2 billion. This included an increase of 136.9 million for BEC, which was mainly due to higher spending on creative content and marketing initiatives on Douyin and Randall. In line with growth in digital marketing revenue, BDM sales and marketing expenses increased by 49.6 million, which was mainly driven by the expansion of offline stores and the marketing activities during the quarter. Fulfillment cost for the quarter was reduced by 11.1% to 683.4 million, reflecting on ongoing efforts in cost optimization. Technology and content expenses decreased by 20.2% to $116.9 million as we continue to enhance tech monetization efficiency.

G&A expenses decreased slightly by 2% to $187.9 million due to the company's continued efforts to implement cost control and efficiency improvement initiatives. Turning to bottom line items, please refer to slide number 6. During the quarter, our non-GAAP income from operations was $197.7 million, an increase of 91.4% from $103.3 million in the same period of last year. BVC's adjusted non-GAAP income from operations was $195.9 million, representing 43% year-over-year increase compared with a year ago. BVM reported a non-GAAP operating income of $1.8 million, a solid milestone as we achieved the very first break-even quarter for the segment. Let us turn to a quick four-year summary. The group total revenue was $9.9 billion, an increase of 6 year of which e net revenues were billion an increase of 2 year while BBM net revenues were 1 billion an increase of 25 year Our adjusted operating income totaled $126 million, a significant improvement compared with $11 million in this year 2024.

As of December 31, 2025, our cash, cash equivalents, restricted cash, and short-term investments totaled $2.8 billion. We continue to improve working capital efficiency through back-end process optimization across inventory management, billing, and cash collection. As a result, our annual operating cash flow reached $420 million, representing a 315% year-over-year increase. Let me also briefly address a GAH item recorded during the quarter. We recognized an investment increment loss of $230 million, primarily related to previous investments in the e-commerce sector, as well as in the internal provisions for certain equity investments. While these investments had a traditional rationale at the time, today's macroeconomic environment combined with our sharpened focus on developing our brand management business make it prudent to recognize these impairments.

These adjustments reflect our commitment to maintaining a focus and a resilient business portfolio. Importantly, our remaining investments remain healthy, and we are confident in their long-term potential. Let me now pass the call over to Jun Huan to update you on B. C. , our e-commerce event.

Thank you, Catherine, and hello, everyone. I'm pleased to share we've closed 2025 with significant momentum. In the fourth quarter, we delivered 2% revenue growth and a 43% increase in non-GAAP operating profits, capping a year of progression from stabilization to accelerated performance. Throughout the year, we focused on driving sustainable, profitable growth while making strategic investments in high-opportunity areas.

Now, let me quickly walk through some of our operational highlights in the e-commerce segment for the first quarter of 2025. Please turn to slide number seven, highlighting the continued quality improvement of our distribution model. During the quarter, BEC product sales gross profit increased 70.9%, despite a largely flat top line. Notably, BEC's gross margin rose to 18.4%, setting a new record since our inception. This improvement was mainly driven by ongoing optimization of our category mix, with strong growth from the health and nutrition and beauty and cosmetics categories.

In addition, our efforts to expand into non-standard categories and are beginning to show results. Apparel delivered strong contribution across sales, gross margin, and profitability during the quarter. Turning to slide number eight, our services revenue grew 3% year-over-year in the fourth quarter, led primarily by strong performance of DM and IT solutions, which increased 19%. We gained market share in key categories such as luxury, sports, and outdoor. Our omnichannel capability remains one of the Baozun's core advantages and a focus of developing on going forward. During the quarter, we received 41 awards in Tmall ecosystem, including the prestigious 2025 Tmall ecosystem excellence in service award. On Douyin, we were once again certified as a Douyin e-commerce diamond service partner, the platform's highest tier of accreditation.

Together, these recognitions affirm our sustained leadership and execution strengths across major platforms. We also continue to focus on strengthening our bottom line. Across the organization, we are implementing a series of lean initiatives designed to streamline processes, reduce costs, and enhance efficiency. Furthermore, we are expanding the use of artificial intelligence tools across a wide range of employees and business scenarios to enhance productivity. These efforts have significantly improved our profitability, with BEC's non-GAAP operating income increased 43% year-over-year to $196 million in the fourth quarter of 2025.

Overall, we are pleased with our performance in the final quarter of the strategic transformation, a period that solidified our shift toward the sustainable and profitable operations. Moving forward, we will continue to deepen client engagement and stickiness, innovate our service models, and enhance operational efficiency. For 2026, our priorities are clear. Deliver the numbers, deliver the strategy, and deliver the talent.

Delivering the numbers means maintaining our focus on profitable growth and ensuring that our operational progress continues to translate into strong financial performance. On strategy, we are advancing three key initiatives.

First, we will expand our apparel distribution business, leveraging the synergy between BEC and BBM to unlock the new growth opportunities and strengthen our brand ecosystem. Second, we will further enhance our digital marketing and traffic acquisition capabilities, helping brand partners capture demand more efficiently across an increasingly complex omni-channel landscape.

Third, we will deepen technology empowerment, accelerating the deployment of AI and digital tools to improve operational efficiency and elevate our service capabilities. Finally, delivering the talent remains essential. We will continue strengthening our leadership bench and reinforcing a strong execution culture. With the right people and the capabilities in place, we are well positioned to scale the business and deliver sustainable growth in the years ahead. Now our pastor can find an update on BBM.

Thank you, team, and hello everyone. Please turn to slide number 9 for BBM's performance in the fourth quarter of 2025. The fourth quarter marks a defining milestone for BBM as we delivered our first break-even quarter. This result reflects our structural improvements across merchandising, marketing, store productivity, and networking expansion. In Q4, BBM revenue grew by 24% year-over-year to $664 million, supported by a double-digit same-store sales growth and continued contributions from new store openings. Gross margin improved by 170 base points from a year ago to 52.1%, leading to a 28 increase in gross profits. Moreover, inventory turnover efficiency improved, reducing our inventory turnover days by 16% to 114 days. Merchandising was the core growth driver for the quarter.

We entered the winter season with a well-balanced assortment architecture. Reinforcing Gap's iconic categories, sweatshirts, denim, and the knitwear, while sharpening segmentation across channels and consumer groups. Our partnership with the Forbidden City has maintained a strong sales rule in Q4. More recently, we launched a new IP collaboration with the Peking Opera, showing our ability to blend the Chinese culture's storytelling with Gap's global DNA in a commercially effective manner.

Since introducing Tsing Chen Yi as our brand ambassador on September 15th, we have collaborated closely to create authentic, engaging content that connects with our audience. We also launched seasonal products and limited styling collections aligned with the key moments in the retail calendar. These ambassador-driven initiatives have boosted social buzz, leading to higher consumer engagement, increased brand visibility, and a strong brand voice. Offline expansion continues to be a strategic priority for us. In the fourth quarter, we opened seven new stores for a total of 29 new gift stores in 2025, bringing our total store count to 164 by the year end. Our new stores continue to outperform older locations, driven by better site selection and enhanced visual merchandising.

For instance, our new image stores at Dongguan Ming International Trade City and Shanghai CenturyLink Mall have delivered strong results. The improving store experience and the outfit-based presentation have driven a double-digit gain in sales productivity. These early performance indicators are highly encouraging and reinforce our confidence in our store expansion strategy. As a result, we are accelerating our store opening efforts to build on this momentum, and currently plan to open 50 stores in 2026 through a hybrid model that combines direct and partnership stores in line with our asset light approach. With these initiatives in place, we are confident We are interested in sustaining double-digit year-over-year revenue growth and achieving operating break-even for Gap on an annual basis in 2026.

Turning to Hunter, the brand continued to strengthen its premium positioning in Q4. Elevated store presentation and curated lifestyle storytelling are resonating with urban consumers seeking both function and fashion. In the fourth quarter, we launched five new hunter locations and entered our national footprint into high-potential Tier 2 cities, including Nanjing, Qingdao, Shenyang, and Taiyun. We concluded 2025 with a portfolio of 177 stores under the BBM umbrella. This expanded physical network sets a solid foundation to enhance supply chain efficiency in the future.

In summary, Q4 2025 represents a structured action point for BBM. We achieved our first break-even quarter. This validates our strategy, strengthens partner trust, and sets the stage for long-term double-digit growth. The direction is clear. BBM is well positioned to become an increasingly meaningful growth engine for Bowson Group. That concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session.

Okay, thank you. This is Junhua. So let me address your first two questions regarding AI implementation in Baozun. So the first one is about the AI agent. So we have already leveraged a lot of AI agent technology from the beginning of last year. So most focus on our bottom line. In terms of like the digital assets creating and uploading products, digital assets onto different platforms, saving a lot of operating people in terms of doing repeatable kind of works, we have already leveraged a lot of AI agents. So AI agent technology is more focused on driving our efficiency internally, more focused on the bottom line. In terms of the top line, we haven't having any very clear definition about the scenario in business case about how do we leverage AI technology, increasing our top line.

About the AI agent, you know, there is a agentic platform and technology is very new in this industry. So we realized that in terms of that agentic kind of the technology, right now it's more focused on the GEO, generative search engine optimization. So there is amount, you know, your DAU amount, the shopper APPs is close to approximately about 850 million. And among them, the DAU of 300 million is on AI and all those apps in terms of the large scale mode and AI agent APPs. So this is transforming the consumer behavior and reallocate the traffic structure. So we are, you know, closely focused on the trend of different big platforms and attracting all those changes of the traffic allocation, and we can share you more in the future, reporters.

The third one is regarding the business outlook. Yes, we just talked about the 2028, you know, operating profit goal. That goes to 550 million is our plan target. The main driver for this is that we are, firstly, it's our strategy. We're turning the e-commerce business into a, you know, BEC plus BBM plus synergy model. And you can see, firstly, BBM is improving its profitability, especially GAAP. It's getting more and more profitable in the coming years. And in the meantime, because we leverage the experience in this kind of apparel industry from BBM, we then add more brands into BEC with a franchise model. So this also expands our margin greatly. So, combined by this, both, you know, BBM's growth and also margin expansion of BEC, you know, so we can see this result in 2028.

But it's not the end of our, you know, acceleration. I think in the coming years, even beyond 2028, we can see a more, you know, clear sign of this, you know, improvement of our profitability.

Thank you.

Okay, thank you. This is Junhua. Let me address the first two questions. And the first one I will elaborate from the BEC perspective, and Ken can just, you know, feedback some. And your sentiment kind of the forecast align with the third question from the BBM perspective. So yes, we did have a very strong finish on the Chinese New Year campaign and the Queen's Day campaign on March 3rd. So this is definitely very strong. And we had a late Chinese New Year this year. So from the online digital e-commerce growing, that was very promising. And we see the momentum of each category growing a lot. And the platforms are still compensating a lot of kind of coupons to the end consumers to increase the overall GMV growth.

And the efficiency of the traffic quality is increasing. So yes, we believe that we had a very good, strong start, and the future quarters will be very promising from the BEC perspective. And the second one is also related to the AI in terms of the GEO and how the GEO really changing the consumer behaviors. Just like I mentioned that GEO is changing the consumer behavior. It's changing from the DAU of 850 DAU shoppers from different APPs to 300 million from different kind of apps like Doubao, Yuanbao, and Qianwen. Those kind of the generated kind of AI large-scale mode. So consumers started to asking questions, you know, for their daily life, during their daily life, and those kind of the GEO can smoothly push a lot of information along with some kind of the reference with the brand-oriented writing information, such as a shopping link or such as a very emotional linkage from the brand's perspective with the content, with short video clips, or with a very comprehensive information.

So we can foresee that the change of consumer behavior is slightly changed from the instance shopping category to different categories. So in terms of the instance shopping category, so the AI agent is becoming very promising. You can easily order a bubble tea, for example, from the AI GEO systems, but from different categories, it's still not in the business scenario. So we are closely tracking all those technology, you know, upgrades and make sure that we can share more in the future quarters.

And in terms of the bottom line, so we definitely input a lot of efforts in the AI agent to increase our efficiency, especially those repeatable kind of systems. So those proprietary AI tools, so we're not partnered with any other leading AI firms for now. We still use some kind of the public services with our in-house engineering team to do a lot of Belgian customizations for our leading partners. Thank you.

This is Ken. For the first question about the CNY consumer sentiment, for GAP, we also see a high increase in February and January in both months. The increase rate year to year is over 30 percent for GAP. So for GAP actually we continued our 20 to 30 increase rate in the last quarter and this quarter. For the third question, the growth expectation for GAP.

First, I think for 2026 We will continue to keep the growth rates. In 2025 our growth rate is more than 20%, so we will keep this around 20% increase in 2026 by both same-store increase and new openings. We plan to open more than 50 stores, and we will also expand our e-commerce sales scale. For the long-term vision of Gap Business, in 2027 and 2028, we plan to accelerate our growth rates from 20% to 30%. So we'll be 25% to 30% in the next two years in the top line. And we will also try to improve our operating profit from breakeven to 150 base points increase per year. And the main growth driver for GAAP in the next three years, I think we're coming from three areas.

One is the same-store sales increase, driven by our product improvements, our visual merchandising, our store new images, which will, in the end, improve our in-store traffic and commercial rates. And the second is the scale expansion. both offline and online. For example, offline we are also planning to open re-enter some markets such as Hong Kong and Macau. And the third one is the supply chain efficiency. With the scale increase, we expect to gain our efficiency in our cost management and also in the expenses. That's all. Thank you.

Here's Vincent. We have some more things to say about the AI, because AI, you know, application right now is one of the core strategy of the Baozun as corporate. So our goal is quite clear. We want to make the AI utilization and also application as the best practices for both e-commerce and also apparel industry. So we'll be the best-practiced AI for these two areas. So not only for the sales side, but also the supply side for BBM, and also, of course, for the efficiency improvements. So it's quite important for us, and we're confident we'll be in a leading position in utilizing AI capabilities.

Okay, so this is Junhua. Let me address the first question. So those policies really don't really affect our detail operations and day-to-day, because the government has, you know, signed up the direction about setting up a different sliding scale in terms of different kind of the policies. And none of them has really changed the allocation of the marketing fee of our existing brand partner. Because after the pandemic, so all our brand partners are being very careful and very cautious about spending money, especially into the marketing spending allocation and the others. So we want to help the brand partner to leverage all those money wisely and to drive a higher ROI as before. So in terms of that, so we are really within the range of all those policies.

And in terms of the cutthroat competition in the career industry, so Baozun is taking the lead of providing logistics and career services. So we have already leveraged a lot of kind of the pricing efficiency and cost efficiency for so many years. So that doesn't really just affect our day-to-day operations. So in terms of the brand repositioning between different platforms, so indeed the brands are, you know, either diversifying view different kind of the strategy for different brands. Because for some kind of the leading live stream brand, to focus on GME growth or treat those platforms as a content creation platform and let those traffic exceed it to all those traditional transaction platforms is different strategies from different kinds of categories.

So most, sometimes the categories of the brands, they choose to drive G&E from both categories, both platforms. And some of the brands, they treat the live stream platform as a content creation center and let them exceed all those content, building the emotion linkage to the traditional kind of the transactional platforms. So we are helping all those different brands in different categories to diversify their strategy across different platforms. So there is no unified strategy in general in terms of that question. Thank you.

Here's Vincent. I will talk about the BBM strategy. I think the strategy is quite consistent with, you know, the past years. The only change is about the level of our confidence. We think we are much more confident right now than before that, you know, the transformation is already there. We can see the results. So we build a three years model, and we believe in the coming three years BBM will grow, you know, will enter into acceleration phase.

You know, we're quite excited about that. And talking about the, so for, especially for Gap, the biggest brands, we will see a very good, you know, trend. And also the improvements for the capabilities are also promising. For the premium brands like Hunter and others, I think the most important thing for us is to build the capability on merchandising and also marketing.

So they will be also growing quite fast, but building capability is more important. Talking about the BD of the new brands, I think now a lot more brands come to us trying to work with us. It's a good sign. And right now, not only BBM can work with the brands in a very deep relationship, and also BEC also have the capability to do more franchise business with brands. So in this case, that's why we think the coming three years will be an acceleration phase. Thank you for that.

Sorry, the first one is about the overlook of the business growth in the future three years or 2026.2026 for the group outlook. The group outlook, okay. Yeah, maybe I try to say something and maybe Catherine you can say more about that because it's expectation. Yeah, I think firstly, you know, we are trying to make a positive year in terms of net income to ordinary shareholders. Wendy, sure. So, yeah, it is quite, you know, exciting goal to achieve because that means, you know, we have more to contribute to our shareholders and investors. Yeah. To achieve that, of course, we need to make all the aspects of our operation better than before. Our margin expansion needs to be, you know, improved as well.

So in this case, we're not only to trade our customer or employee better, and also give more return to our investors.

In terms of numbers, can we share anything? Yes, okay.

Thank you for your question. I think the management are quite confident, and for the coming 2026, we think it's quite promising. We are doing a lot of initiatives, including like the EC part and also brand management segment. So regarding the revenue, we are expecting a certain number of increase and like a BAC segment, we split into two segments. We are expecting single digits increase, and for medium part, we are expecting like a very good number to come. And regarding the non-GAAP operating profits, we are also expecting like a doubled number compared with 2025. And so we are expecting this. We are doing all kinds of initiatives like that mentioned in the call. So I think the management are quite confident about that.

And also, we see her again. Talking about the AI, you know, right now, although it is still an initial phase, you know, for the industry to adopt the results, the development of the AI, but, you know, we are seeing this change very fast. So, for us, we need to keep us very active and agile to keep our pace up to this development. So, for us, you know, along with the investment into IT and the internal process improvement, every year we put resources there. And this year, starting from this year, we have more initiatives from the corporate level. You know, we have, you know, several very interesting and important initiatives, but doesn't require a lot of investments.

So, you know, I think talents will be more important than investments. So that's why we're so confident that we'll be the best practice for not only e-commerce, but also apparel industry in China. We'll be the most advanced utilization of AI capabilities. Thank you.

Yeah, let me first, you know, address some, you know, about the international business. And right now, for the priority, of course, you know, BBM and BEC are contributing the major share of our business and also growth. So these two are very important. So we talked, that's why we talked more about these two sections. So BZI, I think, you know, recently we have a very solid progress, but still is a minor contribution to the whole company and the growth. We are quite solid in, you know, outside the business, outside of China. Hunters already in Southeast Asia and making progress. We have several major e-commerce projects improving, you know, and to be profitable in the region as well.

We I think we have a lot of opportunities in Korea and also South Korea and also several very big projects is going on in Hong Kong and Taiwan. We are seeing this improving with a promising future, and we are confident that the growth of the international business will be solid, But we are not expecting a big contribution from, you know, international business yet in the coming two years.

BBM new brands. Yeah, I think you just talked about the new brands of BBM as well. Right now, I think we are in a very good situation because, you know, we are having a quite big base of brands from D. C. So when, you know, there's opportunity emerges in the market, we'll be the first one, you know, to have the opportunity to work with them. Recently, we see a lot, yeah.

They trust us, and we have such a solid track record for BBM in the past two years. So, you know, people just want to work with us. But for us, I think we know what we need to have. So at least we will not have a lot more brands in the future. But definitely in the coming three years, I think we will have new brands, you know, carefully selected, you know, better profitable brands to add to our portfolio.

Thank you, operator. On behalf of the Baozun management team, we'd like to thank you again for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us again. This concludes the call. Thank you. Thank you.