Vipshop reports soaring revenue in third quarter

Vipshop Holdings is devoted to creating sustainable value for global brands and shareholders, and bringing real benefits to customers, said Shen Ya, chairman and CEO of the leading Chinese online flash sale operator based in Guangzhou, Guangdong province.

That intention is shown in the company's latest unaudited financial report for the third quarter ending on Sept 30.

Issued on Wednesday, the report shows that Vipshop's total net revenue reached 8.67 billion yuan ($1.34 billion) at the end of the quarter, an increase of 63 percent from the same period a year earlier. It was also the company's 12th consecutive profitable quarter.

The net income attributable to the company's shareholders reached 317 million yuan, an increase of 90 percent. Its income from operations was more than three times that of last year, reaching 436 million yuan, and the gross profit increased by 63 percent to 2.16 billion yuan.

With flash sales welcomed by an increasing number of people, the company added 5.4 million new active consumers in the third quarter, bringing the total number to 14.6 million.

Such progress should be attributed to Vipshop's nonstop efforts to enrich its high-quality brands and overseas selections, as well as to upgrade its logistics effectiveness and improve customers' shopping experience, the company said.

Following the development of the Belt and Road initiative, Vipshop's plan for its cross-border business will be to establish branches and professional buyer groups in nine countries and regions to spot the hottest and most popular goods.

The company has also invested greatly in logistics technologies and warehouses. "By the end of the third quarter, Vipshop owned 1.6 million square meters of warehouses, and its in-house and invested couriers handled over 80 percent of the total orders," said Yang Donghao, chief financial officer of the company.

Vipshop is also improving its "last one kilometer" delivery service by using a more precise GPS system and diverse mobile payment technologies to help enhance customer experiences. In addition, the company's sales revenue generated from mobile devices rose to 79 percent in the third quarter, with year-on-year growth of 24 percent.

During this year's Singles Day, an online shopping day in China on Nov 11, the company received more than 4 million orders, most of which were in such sectors as maternity and baby care, cosmetics, home textiles, household electric appliances and food.

"Looking to the future, we are fully confident about having more orders, attracting more active customers and optimizing logistics capabilities," Yang said.

Vipshop forecast that its net revenue would reach 12 billion yuan to 12.5 billion yuan in the fourth quarter of this year.

The company's robust growth momentum has also encouraged many agencies and investment banks to give a buy rating on its stock.

Goldman Sachs, for example, thought the potential inclusion of Vipshop into the MSCI indices would be positive for the company's stock price. It was also optimistic about the company's sales revenue and profit margin in the fiscal year 2016.

The largest Japanese securities company Nomura also predicted that Vipshop's price-earnings ratio would increase by 21 times in 2016 and currently it is the best buy-in time.

haonan@chinadaily.com.cn

(China Daily 11/21/2015 page8)