Vipshop released its 2021 financial report, data continued to decline

Vipshop released its 2021 financial report, data continued to decline, in 2021, Vipshop full-year active users grew 12% year-on-year to 93.9 million compared to 2020, the e-commerce industry traffic ceiling is also affecting Vipshop, Vipshop released its 2021 financial report, data continued to decline.

Vipshop released its 2021 financial results, and the data continued to decline.1

Before the U.S. stock market on February 23, Vipshop announced its fourth quarter and full-year financial results for last year.

The data show that Vipshop's revenue in the fourth quarter of last year was 34.1 billion yuan, down 5% year-on-year, up 37% sequentially, and net profit was 1.423 billion yuan, down more than 40% year-on-year.

For the full year of 2021, Vipshop's revenue totaled $117.1 billion, up 15 percent year-over-year.

The fourth quarter is supposed to be the peak season for e-commerce sales, and revenue growth is predictable, but what is more noteworthy is that the year-on-year increases in Vipshop's order numbers, GMV, and number of active users have been declining for many consecutive months, and in the fourth quarter, they turned from growth to decline, with the number of orders declining by 5 percent year-on-year to 217 million yuan, the GMV dropping by 4 percent year-on-year to 57 billion yuan, and the number of active users decreasing by more than 7% to 49.2 million.

Such obvious weakness is in stark contrast to 2020, so even though Vipshop voluntarily lowered its revenue guidance at the end of last year, its stock took a short dive after the earnings report was released, dropping more than 10 percent at one point.

In fact, from the first half of 2021, Vipshop's performance has entered a period of weakness, GMV, the growth rate of the number of users have slowed down, perceived this change in the capital market has long indicated their attitude, to the end of March, Vipshop's share price will be " a stumble ", the current share price is only about one-fifth of what it was.

Figure: Vipshop stock price trend

In general, the reason for Vipshop's downward turn in business conditions stems from both the limitations of its own positioning and the intensification of external competition and diversification of diversification of diversification of diversification of diversification of diversification of diversification of diversification of diversification.

From the internal operation strategy, Vipshop as a vertical class of e-commerce, mainly focusing on apparel big brand "sale", destined to play a "supporting role" in the giant game fate, with the e-commerce giants on the various segments of the track continue to increase, Vipshop's living space has also been squeezed step by step.

For example, Jingdong, which originally focused on 3C digital and electrical appliances, has already reached cooperation with many big brands such as LV, Bulgari and DIOR, and with the self-management model that has already made a big impact, it may form a diversion to the Vipshop platform.

From the external environment, the demographic dividend is gradually disappearing, the flow of the top, Taobao, Jingdong are investing heavily in pulling new promotional activities, Vipshop is no exception. Since last year, Vipshop has sponsored or implanted a number of hot variety shows and TV series such as "Ride the Waves of the Sisters" and "Thirty Only", and its marketing expenses have stabilized at more than 1 billion yuan, much higher than the previous year's expenses of single digits, and its marketing expenses in the fourth quarter remained at 1.1 billion yuan.

However, the investment has not been proportional to the gains, as the number of quarterly active users did not increase much, and the number of users declined in the first and third quarters of last year, before rebounding in the fourth quarter.

In addition, to bring more direct impact to Vipshop also live, grass and other new ways to bring goods, attracting traffic, especially after the appearance of live broadcasting in various e-commerce platforms, the head anchor directly connected to the brand and the consumer, eliminating a lot of intermediary links, but also allows the anchors to have the bargaining power, and the Vipshop's "sale" model is also roughly with the brand to reach a cooperation to reduce the `sale price of some goods, and live can give you the opportunity to buy the goods, but not to buy them. Vipshop's "sale" model is also roughly a cooperation with brands to reduce the `selling price of some goods, and live broadcasting can bring consumers a sense of freshness and more fun. The advantage of Vipshop is slowly being hidden in the dark.

For the first quarter of this year, Vipshop is expected to report revenue of 27-28.4 billion yuan, down 0-5 percent year-on-year, which suggests that the downward trend in user numbers and GMV is likely to remain unchanged.

Compared with other vertical e-commerce players who are gradually getting out of the game amidst the giants, Vipshop, which has been profitable for more than 30 consecutive quarters, has proved its strength.

But in the external environment is more and more " volume " of the case, the only product will perhaps also need to make some changes, you can try a new sales model, or to make their core strengths more obvious, after all, even Ali have to turn around and learn from Jingdong's self-management model.

Survival is not easy, and walk and cherish.

Vipshop released its 2021 financial results, and the data continued to decline2

On the evening of February 23, branded bargain e-commerce Vipshop released its fourth quarter 2021 and full-year financial results.2021, Vipshop's annual number of active users grew 12% year-on-year compared to 2020 to 93.9 million, and its annual revenue grew 15% year-on-year to reach 117.1 billion yuan.

But quarter by quarter, the e-commerce industry traffic ceiling is also affecting Vipshop: Vipshop 2021 the first three quarters of the number of orders, platform transaction turnover, the number of active users and other indicators, year-on-year growth did not have to decline. In the fourth quarter, the company's number of orders fell 5% year-on-year to 217 million, the platform transaction turnover fell 4% year-on-year to 57 billion yuan, and the number of active users decreased by more than 7% year-on-year to 49.2 million.

From the earnings data, it can be seen that the competition in the e-commerce industry has entered the era of stock competition, when the flow of integrated e-commerce platforms such as Ali, Pinduoduo and others are becoming more and more centralized, and new e-commerce companies such as Jitterbug and Faster are on the rise, which has resulted in a further squeeze on the survival environment of vertical e-commerce companies like Vipshop.

It is worth noting that Vipshop also invested money in 2021 to pull in new promotions as Taobao, Pinduoduo, and Jingdong. Vipshop has sponsored or implanted a number of smash hit variety shows and TV series such as "Sister Riding the Waves" and "Thirty Only", and its marketing expenses have stabilized at more than 1 billion yuan in a single quarter, and its marketing expenses in the fourth quarter were still 1.1 billion yuan, much higher than the marketing expenses of 2020, which were less than 1 billion yuan per quarter.

But the difficulty of pulling new promotional activities has increased, and behind its investment in marketing expenses, indicators such as active users did not grow significantly year-on-year. Vipshop 2021 quarterly active users did not increase significantly, the number of active users in the third quarter of 43.9 million is basically the same as the previous year, the number of active users in the fourth quarter of the year-on-year decrease of more than 7% to 49.2 million.

At the same time, live e-commerce, content e-commerce grass and other new models of bandwagon, but also on the impact of Vipshop. Especially after the live broadcast appeared in various e-commerce platforms, the head anchor directly connected to the brand and consumers, so that the anchors also have a relatively strong bargaining power on the brand, which has a certain degree of homogenization with Vipshop and the brand to reach a cooperation to reduce the sale price of some of the goods "sale" mode, and compared to the traditional graphic e-commerce, the live broadcast can bring a sense of freshness and more fun to the consumers. This will bring a sense of freshness and more fun, which to a certain extent erodes the advantages of Vipshop.

In this case, Vipshop has positioned itself to tap into the high-value, high-activity member users and seek opportunities in "small and beautiful" vertical e-commerce. Vipshop continues to improve its channel capacity and supply side, for example, in response to the trend of national trend consumption, Vipshop strengthens the operation of national brands; in response to the pursuit of healthy life and technological experience of young users, Vipshop continues to enrich the SKUs of smart home appliances, health care and dietary categories to bring more choices to consumers.

The financial data shows that in 2021, Vipshop's core SVIP active users (i.e., paid members) increased by 50% year-on-year, and their online net transaction value accounted for 36%. the annual contribution rate of SVIP users to the platform reached about 8 times that of non-SVIPs, and they are characterized by a high rate of repurchase, high purchasing power, and a high retention rate. Vipshop said that it will promote the paid membership system to cover more high-value consumers in the future.

In order to attract users to become paid members, in August 2021, Vipshop joined forces with nine platforms, including Tencent Video, QQ Music, Meituan, Dingtong Grocery, Yaduo Group, etc., to launch the Vipshop Super VIP "Buy 1 Get 9" membership month, with membership benefits covering various areas such as audio-visual, food and beverage, and travel. With Jingdong to promote the sense of access to paid membership, using the same path, vigorously promote the conversion of users.

But for the future of Vipshop expectations are still very cautious. Its annual report released in the first quarter of this year's performance guidance shows that in the first quarter of 2021, Vipshop expects revenue of 27 billion to 28.4 billion yuan, down 0% to 5% year-on-year. From this, it can be speculated that its core data, such as the number of users and platform turnover, will probably continue the weak state of the fourth quarter of 2021.

However, compared with other vertical e-commerce players in the giant killing gradually out of the game, has realized more than 30 consecutive quarters of profit Vipshop, it also shows the ability to operate vertical e-commerce. However, in the era of e-commerce stock operation, change has been inevitable for Vipshop, when Ali is going to learn from Jingdong's self-management model, Vipshop should also try a new sales model, so that their core strengths are more obvious.

Vipshop released its 2021 financial results, with data continuing to decline3

On February 23rd, Beijing time, bargain e-commerce company Vipshop (vip.com, NYSE: VIPS) disclosed its unaudited financial results for the fourth quarter of 2021 and the full year. Total revenue for the full year of 2021 increased 14.9% year-over-year (from the same period last year) to 117.1 billion yuan, driven by growth in the number of active users. Non-GAAP net income for 2021 was $6.0 billion, down 4.76% year-over-year.

Of this, total revenue for the fourth quarter of last year was $34.1 billion, down 4.75% year-over-year, in line with market expectations. Non-GAAP fourth-quarter net profit was 1.8 billion yuan, down 30.77% year-on-year.

Shen Ya, Chairman and Chief Executive Officer of Vipshop, said, "Over the past year, we have strategically focused on our core brands and high-value customers, enhanced our business synergies, and focused on reinforcing our positioning and value as a leading brand discount retailer. Looking ahead, we will firmly execute our good goods strategy, continue to deepen brand partnerships, improve customer acquisition efficiency, and continue to use good goods to attract users to keep visiting and shopping, and realize high-quality, sustainable long-term growth."

Vipshop achieved solid growth in its overall business in 2021, specifically, GMV for the full year 2021 grew 16% year-on-year to 191.5 billion yuan. Total orders for the year grew 14% year-over-year to 787 million. The number of active customers for the year grew 12% year-over-year to 93.9 million.

Among them, Vipshop's core SVIP users excelled in operational metrics. The number of core SVIP active users increased by 50% year-on-year, and their online net transaction value accounted for 36%. the annual ARPU of SVIP users reached about 8 times that of non-SVIP.

Shen Ya said in an evening conference call that SVIP currently contributes 36 percent of sales, and will continue to promote more mid-tier users to become SVIPs and spend more in the future. Because of its relatively high degree of discount and return rate, SVIP to Vipshop may bring a little lower gross profit, but the overall contribution is many times the ordinary users, so theoretically there is still a better return.

In terms of a single quarter, Vipshop saw an overall slowdown in business performance in the fourth quarter of last year. Specifically, gross margin was 19.7% in the fourth quarter, compared to 21.9% in the same period in 2020. GMV for the fourth quarter was 57 billion yuan, down 3.88% year-over-year. The number of active customers in the fourth quarter was 49.2 million, down 7.17% year-over-year. Total orders for the fourth quarter were 217 million, down 4.41% year-over-year.

In response to the business performance in the fourth quarter of last year, Shenya analyzed the call, saying that the overall performance in the fourth quarter was weaker, with the weather as well as the ongoing epidemic. "Our main category is clothes, and seasonal factors are still quite critical to Vipshop. q4 gross margin declined to 19.7%, mainly due to doing a lot of promotions and subsidies, but because the weather was not very cold, the returns were not high, and the gross margin performance in Q4 will not be the norm this year."

For the update of the user growth strategy, Shen Ya said on the call that last year Vipshop made some adjustments to the cost of acquiring users, no longer spending money indiscriminately, but investing in acquiring high-quality users. Strictly with LTV (total life cycle value) adjustments to measure the cost of various channels of customer acquisition and payback month, if some new customers payback time is a little long to give up, but also cut some of the old customer retention on the issuance of coupons, as well as advertising and other costs. Including when doing branding, such as in the TV series, all kinds of short videos have established a complete model.

Shen Ya said, "We hope to continue the user growth strategy in the fourth quarter of last year, this year, but also vigorously acquire new customers as well as vigorously ensure that the retention of old customers, and vigorously invest in the user above." In addition, in the standard business, Shen Ya also put forward new expectations: "Normal online shoppers in addition to clothes, but also will buy a lot of life in the standard, so this year, Vipshop will increase the power to solve the online shopping category will do some adjustments, I hope to make the advantage in the standard."

And for the impact of the rise of the live broadcast industry, Shen Ya said, "Live broadcasts just started to really affect the 'shelf e-commerce' like us, but in the long run, live broadcasts on our impact is actually not big, basically has been in the stabilization of a stage. "

For the business outlook, Vipshop expects total revenue in the first quarter of 2022 to be between 27 billion yuan and 28.4 billion yuan, with a year-on-year decline rate of about 5% to 0%.

Shen Ya said on the call that it's harder to predict a full year now. The continuation of the epidemic coupled with the user's consumer confidence and enthusiasm are more difficult to see. Overall we think 2022 will be relatively stable, there will not be any particularly big ups and downs.

As of the close of trading on February 23, Vipshop was down 9.96% to $8.86 pre-market. That's a 74.41% drop in the last 250 days.