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August 2013
Vipshop Holdings Limited
Investor Presentation
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Disclaimer
This presentation contains forward-looking statements. These statements are made under the safe
harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-lookingstatements can be identified by terminology such as will, expects, anticipates, future, intends,
plans, believes, estimates and similar statements. Among other things, the business outlook and
quotations from management in this announcement, as well as Vipshops strategic and operational plans,
contain forward-looking statements. Vipshop may also make written or oral forward-looking statements in
its periodic reports to the U.S. Securities and Exchange Commission (SEC), in its annual report to
shareholders, in press releases and other written materials and in oral statements made by its officers,
directors or employees to third parties. Statements that are not historical facts, including statements about
Vipshops beliefs and expectations, are forward-looking statements. Forward-looking statements involveinherent risks and uncertainties. A number of factors could cause actual results to differ materially from
those contained in any forward-looking statement, including but not limited to the following: Vipshops goals
and strategies; Vipshops future business development, results of operations and financial condition; the
expected growth of the online discount retail market in China; Vipshops ability to attract customers and
brand partners and further enhance its brand recognition; Vipshops expectations regarding demand for
and market acceptance of flash sales products and services; competition in the discount retail industry;
fluctuations in general economic and business conditions in China and assumptions underlying or relatedto any of the foregoing. Further information regarding these and other risks is included in Vipshops
registration statement on Form F-1, as amended, filed with the SEC. All information provided in this
presentation is as of the date of this presentation, and Vipshop does not undertake any obligation to
update any forward-looking statement, except as required under applicable law.
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China's Leading Online DiscountRetailer for Brands
Vipshop
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No large discount retail chains or branded outlets
Massive retail opportunities in China
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Massivediscount retailopportunities
Immatureoffline
discount retailinfrastructure
Constantsupply ofexcess
inventory
Total estimated retail sales ofUS$3.8 trillion in 2013(1)
Total apparel retail sales were US$151.9bn in 2011(1) ;
apparel inventory accounts for approximately 50%oftotal apparel market(2)
Total discount retail was US$23.6bn in 2012 with a56.2% 12-15E CAGR(1)
Note:(1) Data from Frost & Sullivan report; assuming 1 US$ = 6.2301 RMB.(2) Data from BCG report The Worlds Next E -Commerce Superpower.
Hugeconsumerdemand
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Chinas huge market potential in onlinediscount retail and B2C market
Note:(1) Data from Frost & Sullivan report, assuming 1 US$ = 6.2301 RMB
(2) iResearch, assuming 1 US$ = 6.2301 RMB
2,520.0
2,952.13,325.3
3,808.3
4,356.6
4,965.0
2010 2011 2012 2013E 2014E 2015E
Chinas retail market (1)
Discount retail as % of total retail
(2011)(1)
0.5%
1.4%
China US
63.994.1
147.1192.7
232.8263.2
2010 2011 2012 2013E 2014E 2015E
(US$ in billions)
Chinas online C2C market (2)
Chinas online B2C market (1)
China discount retail sales (1)
(US$ in billions)
(US$ in billions)
(US$ in billions)
10.1 28.959.5
101.1
158.9
216.5
2010 2011 2012E 2013E 2014E 2015E
9.1 15.123.6
38.0
60.0
90.0
2010 2011 2012 2013E 2014E 2015E
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Online: the future of discount retailing in China
Top 20 retailers accountfor24% market share(1)
Consumers in China have to go onlinefor branded discount products
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Note:(1) According to Frost and Sullivan report(2) As of 2012 year end, including 1,867 Marmaxx stores and 374 HomeGoods stores in the US, from 2012 T .J.Maxxs company presentation(3) As of February 2013, including 1,091 dress-for- less stores and 108 dds DISCOUNTS stores in the US, from February 2013 Ross company investor overview
(4) As of February 2013, from Premium Outlets company website(5) As of February 2013, from Tanger Outlets company factsheet (6) From Balian Outlets Plaza company website(7) From Beijing Scitech company website
2,241 stores(2) 1,199 stores(3)
67 outlets(4) 38outlets(5)
China's offline discount retail is extremely underdeveloped
ChinaU.S.
None
Top 20 retailers accountfor7% market share(1)
24 square feet per capita(1) 2 square feet per capita(1)
3 outlets(6) 3outlets(7)
Poor offline retail infrastructurein China
Fragmented retail market inChina
Lack of large off-price retailer inChina
Underdeveloped offline outletstores in China
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China: A more attractive market opportunity
Market positioning
Brands have well establishedonline presence and capabilities
Need to pay for inventory upfront;Products can not be returned to
suppliers
Mostly focused on high-end andluxury markets
U.S.
Discount / outlet retail channelssaturated for mass marketmerchandise; full price retailers are
establishing own outlets
Broad universe of popular brandsfor mass market
Limited upfront deposit;Most products can be returned to
suppliers
Brands have largely rely on thirdparty platforms to build online
presence
China
Lack of well-developed discount /outlet retail channel
Offline channels
Online channels
Working capitalrequirement
Broader and underpenetrated addressable market
Better business modelConclusion
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A unique player in Chinas e-Commerce landscape
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Online discount retailerMarket place General B2C
Partner with popular and well-known brands by selling their excess inventory at discount prices
Core competency in merchandising, logistic distribution and customer service
Large scalable platforms
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Rapid increase of new activecustomers
Rapid increase of repeatcustomers
High and stable rate of orders fromrepeat customers
( in thousands) ( in thousands)( in thousands)
Highly engaged and loyal customer base
255
1,330
3,312
725
1,488
2010 2011 2012 2Q12 2Q13
New active customers
804
6,681
20,457
4,256
10,149
927
7,269
21,919
4,664
11,020
86.7%91.9% 93.3% 91.3% 92.1%
2010 2011 2012 2Q12 2Q13
Orders placed by repeat customers
Total orders
Orders placed by repeat customers
155
903
2,625
1,054
2,619
276
1,491
4,110
1,462
3,490
56.2%60.6%
63.9%
72.1%75.0%
2010 2011 2012 2Q12 2Q13
Repeat customers
Total active customers
Repeat customer as % of total customer
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Preferred discount channel for popular brands
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One-stop solution for brands
Professional team with deep brandknowledge
Fast inventory monetization
Minimal brand dilution
Clear industry leader(2)Brand partners growth over time(1)
411
1,075
2,760
3,557
2010 2011 2012 1H13
20101H13growth by 8.7x
Product categories
Children
Cosmetics
Home goods
FootwearSportswear
AccessoriesHandbags
Apparel
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Note:(1) Number of our brand partners is a cumulative number since 2009, which includes primarily brand owners, and to a lesser extent, brand distributors and resellers.(2) As measured by total revenues in 2011, the number of registered members as of December 31, 2012 and the number of monthly unique visitors in December 2012, according to the Frost & SullivanReport.
Shoppers are loyal and so are our brand partnersSubstantially all of our brand partners have returned to pursue additional sales opportunities with us
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Operational expertise
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Relationshipwith brands
Understandingof consumers
Businessintelligence
system
Over 300Specialized
MerchandisingStaff
Excellent merchandising
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Brandselection
Salesmanagement
capability
Consumerinsights
Customizedmarketing
Sales eventsoptimization
Over 6,000brands
Deepeningbrand
partnership
1
2
3
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Flash sale requires differentiated logisticssystem
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Additional capabilities on top of traditional B2C e-Commerce (1)
Sales cycle Short Long
Traditional B2C e-Commerce
Volume of throughput Large Small
Note:(1) Comparison on per same-size warehouse basis.
Vipshop has successfully established customized and sophisticated logistics and warehousesystems to cater to flash sale needs
Sales process
No. of SKUs handled
Fast
Large
Slow
Moderate
Reverse logistics Large Small
Snapshot of our warehouses
Flash sale
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Highly customized and seamlessly integratedIT system for flash sales
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Support huge traffic spikes during peak hours
CRM system
Expanding and cross-regional warehousemanagement system
Data platform and BI
Time
Traffi
c
12am 10am 12pm 12am
Merchant platform
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High entry barriers
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First Mover Advantage
Business model
Operational expertise
Economies of scale1
2
3
4
Vipshop is well
positioned inChinas onlinediscount retail
market
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Visionary management team with strongexecution
Donghao YangChief Financial Officer
12+ years experience in financePreviously CFO of SynutraInternational Inc (NASDAQ:SYUT) and Tyson Foods (NYSE:TSN) Greater ChinaMBA from the Harvard BusinessSchool
Maggie Hung
Senior VP, Merchandising20+ years experience inmerchandise retailPreviously VP of Grand PacificMall and GM of Grand OceanDepartment Store in NanjingBachelors degree from Ling TungUniversity
Yizhi Tang
Senior VP, Logistics10+ years experience in logisticsindustryPreviously logistics departmenthead of Tesco in northern China,and Senior Director of logisticsdepartment of Dangdang.com(NYSE: DANG)Masters degree from Sun Yat-SenUniversity
Eric Ya ShenCo-Founder, Chairman, CEO
18+ years experience in consumerelectronic products distributionPreviously Chairman of GuangzhouNEM Import and Export Co., Ltd.EMBA from Cheung Kong GraduateSchool of Business
Xian Feng CaiVP & GM, Shanghai Branch
19+ years experience in retailindustryPreviously GM of IGA DistributionPTY LTDBachelors degree from Universityof Melbourne
Mr. Daniel Kao
Chief Technology Officer
16 + years experience with leadinge-commerce and Internetcompanies in the US and ChinaPreviously director of site operationand quality engineering at eBay IncBachelors degree in computerscience from Iowa State University
Arthur Xiaobo HongCo-Founder, Vice Chairman, COO
12+ years experience inconsumer electronic productsdistributionPreviously Chairman of SocieteEurope Pacifique Distribution
Alex JiangSenior VP, Business Intelligence &
Customer Relationship Management
(CRM)
20+ years of experience in Chinasretail sectorPreviously VP of Dangdang.com(NYSE: DANG) and Founder / Directorof E-elephant Consulting CompanyLimitedBachelors degree from Chongqing
Business School
Xiaohui MaVP, Online Marketing
10+ years experience in marketingand mediaPreviously editor-in-chief of SINABachelors degree fromCommunication University of China
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Financial highlights
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Phenomenal growth
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Total net revenues
(US$ in millions)
Total orders
(in thousands)
927
7,269
21,919
4,664
11,020
2010 2011 2012 2Q12 2Q13
684.1%
201.5%
136.3%
32.6
227.1
692.1
135.3
351.3
2010 2011 2012 2Q12 2Q13
597.1%
204.7%
159.7%
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Steady margin expansion
Quarterly gross profit and gross margin
(US$ in millions )
Strong and defensible margins: Brands often sign exclusive deals to minimize brand dilution (>800exclusive brands) Brands only liquidating excess inventory (limited quantity = inability to price shop) Brands want to efficiently monetize excess inventory and have little price sensitivity
4.9 7.410.0
21.0 21.4
29.634.8
68.772.8
82.6
17.0%18.3%
19.0%20.0%
21.2%21.8% 22.3%
22.9% 23.4% 23.5%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Gross profit Gross margin
C i i i l i i
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Continuous investment in logisticsinfrastructure to drive long term growth
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(US$ in millions)
Fulfilment expenses (Non-GAAP) 1
Note:
(1) All numbers are shown on a non-GAAP basis and excludes the impact from share-based compensation expenses
6.0
8.411.4
19.416.8
20.5 21.6
37.3 37.6
42.6
20.9% 20.7%21.7%
18.4%16.6%
15.1%13.9% 12.5%
12.1% 12.1%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Fulfilment expenses (non-GAAP) Fulfilment as % of total net revenues
T d ti l d
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Tremendous operating leverage andhistorically low marketing expenses
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Note:(1) All numbers are shown on a non-GAAP basis and excludes the impact from share-based compensation expenses
(US$ in millions)
General and administrative expenses (Non-GAAP) (1)
(US$ in millions)
Marketing expenses (Non-GAAP) (1)
1.72.3
4.6
6.65.8
6.67.3
12.4
13.0
15.0
5.7% 5.7%
8.7%
6.2% 5.8%4.9% 4.7% 4.1% 4.2% 4.3%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Marketing expenses (non-GAAP)
Marketing as % of total net revenues
1.0
2.93.7 4.2 3.9
4.3 4.6
6.57.0
8.9
3.6%
7.2% 7.1%
4.0% 3.9%3.2% 2.9%
2.2% 2.3% 2.5%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
G&A expenses (non-GAAP)
G&A as % total net revenues
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Note:(1) All numbers are shown on a non-GAAP basis and excludes the impact from share-based compensation expenses
(4.2)
(7.1)
(10.8) (11.2)
(6.5)
(4.2)
0.6
8.19.0
11.8
-14.6%
-17.6%
-20.6%
-10.6%
-6.4%
-3.1%
0.4%
2.7% 2.9%3.4%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Net income/loss (non-GAAP) Net margin (non-GAAP)
Net margin (Non-GAAP) (1)
(US$ in millions)
Net margin improvement
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(in $ thousands) December 31, 2012June 30, 2013(Unaudited)
Cash and Cash Equivalents and Held-to-MaturitySecurities
210,570 384,530
Current Assets 381,952 533,712
Total Assets 398,917 552,317
Current Liabilities 316,334 356,265
Total Liabilities 316,334 356,265
Total Stockholders Equity 82,583 196,052
Current Ratio 1.2 1.5
Balance Sheet Highlights
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Growth strategies
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Our future growth strategy
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Expand warehouse capacities to accommodate increasingcustomer demand
Greater penetration in additional cities
Greater penetration in Northern, Eastern, Southwestern andCentral China
Geographical expansion
Leverage social media and word-of-mouth to achieve better
marketing ROI, attract more customers and strengthen theVipshop brand
Recommendation/personalization, better fulfillment service,improve customer care programs, better customer retentionand repeat purchase rate
Better brand portfolio, increase sales per brand, purchase perorder
Enlarge customer base
Improve shoppingexperience
Enhance the quantity andquality of offers
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Major profitability drivers
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Word-of-mouth ROI maximization
Cost control
IncreasedOperating leverage
Stronger negotiationpower
Better pricing
Gross margin
Fulfillmentexpense
Marketingexpense
G&Aexpense
Distribution centersbuild out Capacity utilization ramp up
Profitability
1
2
3
4
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Key investment highlights
Market leadership position
Strong industry growth fundamentals1
Highly engaged and loyal customer base
Superior operational expertise
2
3
4
Strong management team5
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Thank you!