On August 28th, Baozun E-commerce announced its Q2 2024 performance. According to the financial report, the company achieved a revenue of 2.4 billion yuan in the second quarter of 2024, a year-on-year increase of 3%; Under non GAAP accounting standards, the operating profit was approximately 10.04 million yuan, achieving a significant year-on-year increase.
Qiu Wenbin, founder of Baozun E-commerce and chairman and CEO of Baozun Group, said, "In the second quarter, the e-commerce business revenue experienced its first growth after ten consecutive quarters of decline, demonstrating the company's effective layout in e-commerce services and distribution business. With the improvement of e-commerce business and the continuous progress of brand management business, the company will continue to be committed to strategic transformation to drive future growth
E-commerce business revenue returns to normal
In the second quarter of 2024, Baozun E-commerce's e-commerce business achieved a revenue of 2.1 billion yuan, a year-on-year increase of 6%, returning to normal for the first time in nearly two and a half years. Among them, the online store operation revenue and digital marketing and technology service revenue of the sportswear category achieved double-digit growth.
Meanwhile, Baozun E-commerce steadily expanded its new business in the second quarter of 2024, partnering with over 30 new brands. The renewal situation of old customers remains stable, with an overall renewal rate of over 95% in the first half of the year.
From an omnichannel perspective, Baozun E-commerce has completed the acquisition of Loke Xun, as well as the project migration and integration of mid to back-end capabilities at the business level. During the reporting period, the Tiktok channel accounted for more than 5% of the total revenue of e-commerce business, and the revenue of Xiaohongshu channel showed a high triple digit growth. In addition, by the end of the second quarter, about 45.8% of brand partners had cooperated with Baozun E-commerce in at least two channels in store operation, and the growth of Tiktok channel was particularly prominent.
In addition, to further reduce costs and increase efficiency, Baozun E-commerce has implemented Six Sigma training, developed a comprehensive lean operation management system, and promoted the application of generative artificial intelligence tools at the business level. According to the financial report, through continuous integration and optimization of internal business processes, Baozun E-commerce is expected to complete over 100 lean projects with a financial contribution of over 20 million yuan by 2024.
It is worth noting that since the beginning of the year, Baoshan E-commerce has cumulatively paid about 4.9 million US dollars for public market share repurchases. Regarding this, Qiu Wenbin said, "This demonstrates our confidence in the company's development prospects
Baozun E-commerce's performance in the second quarter of 2024 is stable, with positive growth in e-commerce business revenue. With the improvement of e-commerce industry trends and the promotion of strategic transformation, the company is expected to achieve higher growth in the future. "Zhang Yi, CEO of iMedia Consulting, told Securities Daily reporters that Baozun E-commerce actively expands new businesses, cooperates with multiple new brands, consolidates the foundation of old customers, and lays a solid foundation for long-term development. Overall, the development prospects of Baozun e-commerce are promising, but it is necessary to continue to pay attention to market changes and the effectiveness of strategic adjustments.
The Gap brand under its umbrella is steadily expanding
In terms of brand management business, Baozun E-commerce has two brands, Gap and Hunter. In the second quarter of 2024, Baozun's e-commerce brand management business achieved a revenue of 290 million yuan, and benefited from the implementation of comprehensive cost optimization measures to further reduce expenses, the gross profit margin of Baozun's brand management business reached 52.3%, and the operating losses under non GAAP further narrowed, achieving a year-on-year improvement of 17%.
In terms of Gap China brand, during the reporting period, Gap China continued to expand its stores, and currently has a total of 126 stores. In addition to opening new stores in first tier cities such as Shanghai and Guangzhou, we will further expand into new first and second tier cities such as Changsha, Xi'an, Shenyang, and Guiyang. Meanwhile, Gap China plans to open over 50 new stores throughout 2024, with an expected increase of approximately 5% in floor area compared to the end of last year.
Baozun E-commerce stated that based on insights gained from customer flow and consumer feedback, Gap China continues to optimize its new store location strategy, focusing on "high-quality" community locations and high customer flow areas frequently visited by core consumer groups, and increasing the average area of new stores to 500 square meters to 600 square meters to optimize space utilization and improve store efficiency.
In addition, Gap China has recently strengthened its close interaction with Gap Inc., striving to better utilize the rising trend and global resource advantages of the Gap brand in product development, supply chain management, product sales strategy, and marketing.
Both parties recognize the long-term potential and positive prospects of high-quality leisure style in the Chinese market. Through close cooperation, Baozun will find a win-win balance between localization and brand globalization themes for Gap, "said Baozun E-commerce.
An industry analyst told Securities Daily reporters that through the professional management and digital transformation of Baozun E-commerce, Gap China's operational efficiency has significantly improved, and its brand influence is gradually recovering. In the future, with the deepening implementation of product localization and multi-channel strategy, Gap China is expected to shine again in the domestic market. However, in the face of fierce competition, Gap China needs to continue innovation and precise positioning to win more consumer favor.