Caixin News, February 29th - Last night (28th), Vipshop submitted its performance reports for the fourth quarter and full year of 2023.
According to Vipshop's performance in the fourth quarter of 2023, GMV (total commodity trading volume) increased by 21.9% year-on-year from 54.4 billion yuan in the same period of 2022 to 66.4 billion yuan; Net income increased by 9.2% year-on-year to 34.7 billion yuan (4.9 billion US dollars).
In terms of net profit, Vipshop increased by 32.2% year-on-year from 2.2 billion yuan in 2022 to 3 billion yuan. It is worth mentioning that this is the first time Vipshop has made a profit since the fourth quarter of 2012, and it has been profitable for 45 consecutive quarters.
Affected by the financial report, Vipshop closed at $19.53, up 12.63%, with a total market value of $10.591 billion.
From the full year of 2023, Vipshop achieved a net revenue of 112.9 billion yuan, a year-on-year increase of 9.4%; The net profit attributable to shareholders for the whole year was 8.1 billion yuan, a year-on-year increase of 28.9%; Meanwhile, the annual GMV exceeded 200 billion yuan for the first time, reaching 208 billion yuan, a year-on-year increase of 18.7%.
Vipshop Chairman and CEO Shen Ya stated that the company achieved better than expected performance in 2023, mainly due to the successful execution of sales strategies and the seizing of value based expenditure opportunities. He specifically mentioned that the clothing category is a key factor driving company growth, performing better than the industry average.
Faced with Alibaba, JD, Pinduoduo, Tiktok, Kwai and other platforms, Vipshop can survive in the shadow of these integrated e-commerce giants, and live a relatively healthy life, relying on its low-cost brand to attract SVIP (super member users).
According to data released by Vipshop, the number of active users on the platform reached 87.4 million in 2023, of which 7.6 million were Super VIP (SVIP) active users. Although Super VIP users account for less than 10% of the total active users, they contribute 45% of online consumption.
In addition, based on data from the past few years, the proportion of consumption provided by super VIPs has been continuously increasing, with the total consumption contributed by super VIPs accounting for 41% of the total transaction volume in 2022. JD.com once stated that the average annual consumption of PLUS members is 10 times that of non members, while Alibaba's 88VIP contributes over a trillion yuan in GMV.
At the financial report conference call that day, Shen Ya stated that acquiring customers is one of Vipshop's key priorities for 2024.
"There is still room for Vipshop in terms of customer acquisition. The overall customer growth in 2023 has not met the ideal expectations. This year, we will continue to explore how to adhere to the brand's special sale positioning and continue to expand users." Shen Ya said on the conference call that Vipshop plans to continue to launch in 2024, including precision marketing on Tiktok and some other media. In addition, we will expand some platforms that have less cooperation in the past but have a large number of users, such as Xiaohongshu, B Station, etc. In addition, pre installed mobile phones are also one of the channels.
Regarding the current hot topic of consumption downgrade, Shen Ya stated that the current average customer price is relatively stable, and even in Q4, the average customer price is higher than in previous years. This may be due to the colder winter this year and strong demand from users for thick clothes.
In 2023, Vipshop's return rate has increased, and Shen Ya responded that the main reason for this is the continuous increase in the proportion of sales of wearable products on the platform, which has a higher return rate. In addition, the concept of e-commerce as a "fitting room" is being elevated, which has an overall impact on the e-commerce industry. In addition, Shen Ya stated that the mentality of "saving money" will also have an impact in the context of consumption downgrades.
Not only Vipshop, but in recent years, e-commerce companies such as Pinduoduo, Taobao, and JD.com have been offering low prices to cater to changes in the consumer end.
Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, said in an interview with reporters that facing the strategic emphasis of major platforms on "low prices", Vipshop also faces challenges in the future.
In his opinion, the buyout and self operation model of many discounted products on the platform requires high capital requirements and storage costs. Secondly, there is significant sustained sales pressure on the products, which often leads to stockouts. In addition, in the face of increasingly fierce competition from e-commerce platforms and super anchors such as Pinduoduo, Tiktok e-commerce, video number e-commerce, Xiaohongshu e-commerce, if you want to expand the scale, you need to increase marketing investment to further increase costs.
At present, the more vertical Vipshop has launched multiple promotional activities around low prices, including the 618 Mid year Special Sale Festival, the 11.11 Special Sale Carnival, the Annual Special Sale Conference, etc., offering lower discount discounts to attract consumers.
Shen Ya believes that Vipshop's strategy of focusing on brand discount retail has paid off, making significant progress in product expansion and cost-effectiveness awareness, which has played an important role in improving customer loyalty and achieving double-digit growth in active Super VIP members. "Looking ahead, we believe that our sustainable business model will lead us to achieve longer-term growth."