SHANGHAI, April 19,
2024 /PRNewswire/ --
Dear Shareholders:
On behalf of the Board of Directors and the management team of
Baozun, I express my sincere gratitude for your unwavering support.
In 2023, amidst a challenging macro environment, Baozun Group
embarked on a transformative journey, expanding into three primary
business lines: Baozun e-Commerce (BEC), Baozun Brand Management
(BBM), and Baozun International (BZI). Throughout the year, we were
steadfast in our resolve to adapt to the fast-evolving e-commerce
market and demonstrated resilience as we implemented our
transformation initiatives.
Enhancing Value Proposition:
BEC, BBM and BZI, the three business lines reinforce an
ecosystem in which each complements the other two, and all three
concurrently promote each other. This strengthened one-stop
ecosystem enables Baozun Group to offer our business partners and
clients the most comprehensive services and solutions. We believe
this strategic transformation will greatly extend our value
creation from demand all the way up to supply and improve the
matching.
Throughout 2023, BEC continued to improve its service quality
and reinforced its omni-channel capabilities. We upgraded our
content-creation and live-streaming capabilities, marked by the
launch of our "Creative Content to Commerce" studios and the
strategic acquisition of Location, a top-tier Douyin partner. These
initiatives will enable us to achieve our goal to enhance the
quality of our e-commerce business, ensuring its sustainability,
future growth and thereby consolidating our leadership within the
digital commerce industry.
BBM accomplished a significant milestone with the completion of
the acquisition of Gap Greater China in February 2023. In the short period since then,
BBM made solid progress strengthening its business foundation,
including refining product and merchandizing strategies,
re-building the supply chain infrastructure, revamping back-end
systems, and putting together a talented leadership team.
Leveraging our China-for-China strategy, technology and data-driven
approach in product and operations, BBM successfully executed Gap
China's premiumization strategy, shifting away from perpetual
discounts and increasing the gross margin of the business. We also
purchased 51% of equity interest to form a Joint Venture with
Authentic Brands Group for the relevant intellectual property of
Hunter in Greater China and
Southeast Asia, a British premium
outdoor brand, marking the second brand under our brand management
portfolio.
For BZI, we continue to establish the business infrastructure
throughout Asia. Currently, Baozun
Asia employs around 150 employees across Singapore, Malaysia, Thailand, South
Korea, the Philippines,
Hong Kong, and Taiwan. With synergy and collaboration between
our business units, we are soon introducing Hunter into
Singapore and Malaysia in Southeast Asia in 2024.
A significant financial highlight for 2023 was the optimization
of our cash-generating capabilities through process re-engineering,
cost optimization and more efficient working capital management.
Consequently, our annual operating cash flow and free cash flow
experienced double-digit year-over-year growth, reaching record
highs and significantly strengthening the financial health of the
group.
Technology Empowering Business Transformation
I would like to emphasize that technology is the cornerstone of
our business transformation and success. We firmly believe that our
advancements in technology and digitalization establish a
foundation that empowers the next generation of commerce across all
of Baozun Group's three business divisions.
Following the acquisition of Gap China, our Technology
Innovation Center swiftly simplified its complex architecture by
consolidating nearly 70 historical systems into one integrated
omni-channel operating platform, which we call Retail Operating
Platform, or ROP. The ROP's new architecture, featuring a
centralized hub, enables real-time management and utilizes a
unified online and offline inventory to enhance sales efficiency
and increase inventory turnover. ROP will serve as the
technology foundation for BBM' s future growth.
Through strategic partnerships with industry leaders, we have
deployed more AIGC technology to increase the daily operational
efficiency of over 3,000 employees. Technology-driven process
re-engineering has made our middle and back-office operations
leaner and more integrated. This has resulted in increased
efficiency and cost control. Additionally, we have made solid
progress in Business Intelligence capabilities during the year. We
can now offer instantaneous data insights that will empower our
brand partners to make well-informed and timely decisions.
Baozun's outstanding technology has been recognized in the
industry. We have been acknowledged as a Representative Vendor for
Distributed Order Management Systems in Gartner's 2024 Market
Guide. We are proud to be the only
Asian vendor selected alongside global retail service giants.
Cautious Confidence in 2024:
As we look ahead, we remain cautious about macro uncertainties.
Yet, we are confident that our on-going transformation has
strengthened our business fundamentals and our value proposition to
brand owners. Our focus this year is to continue executing our
plans diligently and patiently in a sustainable manner. With a
healthy cash flow and balance sheet, our board has approved a new
share repurchase program of $20
million, underscoring our commitment to delivering value to
our shareholders.
In closing, I want to express my sincere gratitude to our
employees, customers, partners, and stakeholders for their
unwavering support throughout this transformative journey.
Together, we will continue to innovate, adapt, and thrive in the
ever-evolving landscape of digital commerce.
Sincerely,
Vincent Wenbin Qiu
Chairman and Chief Executive Officer
Baozun Inc.
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SOURCE Baozun Inc.