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What changed in Vipshop Holdings Ltd's 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of Vipshop Holdings Ltd's 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+564 added−518 removedSource: 20-F (2025-04-17) vs 20-F (2024-04-18)

Top changes in Vipshop Holdings Ltd's 2024 20-F

564 paragraphs added · 518 removed · 440 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

159 edited+51 added−23 removed622 unchanged
Biggest changeCondensed Consolidating Balance Sheets Information As of December 31, 2023 Parent Company Subsidiaries (1) Consolidated Variable Interest Entities Eliminations (2) Consolidated Total (RMB in thousands) Cash and cash equivalents 904 21,558,952 3,854,873 — 25,414,729 Restricted cash — 32,553 850,084 — 882,637 Short-term investments — 1,983,201 — — 1,983,201 Amounts due from related parties, net — 552,194 1,308 — 553,502 12 Table of Contents As of December 31, 2023 Parent Company Subsidiaries (1) Consolidated Variable Interest Entities Eliminations (2) Consolidated Total (RMB in thousands) Account and other receivables and prepayments, net 3,374 2,339,022 734,983 — 3,077,379 Amount due from group companies 384,016 10,101,232 8,700 (10,493,948 ) — Loan receivables, net — 4,437 — — 4,437 Inventories — 5,629,443 15,270 — 5,644,713 Property and equipment, net — 16,833,930 48,170 — 16,882,100 Deposits for property and equipment — 200,339 400 — 200,739 Land use rights, net — 10,132,626 — — 10,132,626 Intangible assets, net — 13 332,808 — 332,821 Investments in equity method investees — 1,078,731 1,076,830 — 2,155,561 Other investments — 2,409,996 506,193 — 2,916,189 Investment in subsidiaries and the consolidated variable interest entities 45,235,847 — — (45,235,847 ) — Other long-term assets — 147,669 — — 147,669 Goodwill — 741,922 13,291 — 755,213 Deferred tax assets, net — 684,738 279 — 685,017 Right-of-use assets, net — 545,965 8,096 — 554,061 Total assets 45,624,141 74,976,963 7,451,285 (55,729,795 ) 72,322,594 Amount due to group companies (8,661,621 ) (392,716 ) (1,439,611 ) 10,493,948 — Other liabilities (1,116 ) (32,699,564 ) (1,062,156 ) — (33,762,836 ) Total liabilities (8,662,737 ) (33,092,280 ) (2,501,767 ) 10,493,948 (33,762,836 ) Shareholders’ equity (36,961,404 ) (41,884,683 ) (4,949,518 ) 45,235,847 (38,559,758 ) As of December 31, 2022 Parent Company Subsidiaries (1) Consolidated Variable Interest Entities Eliminations (2) Consolidated Total (RMB in thousands) Cash and cash equivalents 1,624 20,231,269 1,705,760 — 21,938,653 Restricted cash — 32,045 1,132,703 — 1,164,748 Short-term investments — 1,495,170 100,734 — 1,595,904 Amounts due from related parties, net — 669,212 975 — 670,187 Account and other receivables and prepayments, net — 1,844,373 1,003,806 — 2,848,179 Amount due from group companies 376,331 5,199,040 2,016,823 (7,592,194 ) — Loan receivables, net — 882 — — 882 Inventories — 5,514,139 1,741 — 5,515,880 Property and equipment, net — 16,169,437 56,152 — 16,225,589 Deposits for property and equipment — 296,605 112 — 296,717 Land use rights, net — 7,638,506 — — 7,638,506 Intangible assets, net — 17 336,582 — 336,599 Investments in equity method investees — 1,013,567 1,149,305 — 2,162,872 Other investments — 2,391,821 268,484 — 2,660,305 Investment in subsidiaries and the consolidated variable interest entities 36,076,969 — — (36,076,969 ) — Other long-term assets — 91,762 — — 91,762 Goodwill — 741,922 13,291 — 755,213 13 Table of Contents As of December 31, 2022 Parent Company Subsidiaries (1) Consolidated Variable Interest Entities Eliminations (2) Consolidated Total (RMB in thousands) Deferred tax assets, net — 680,951 819 — 681,770 Right-of-use assets, net — 881,411 10,333 — 891,744 Total assets 36,454,924 64,892,129 7,797,620 (43,669,163 ) 65,475,510 Amount due to group companies (3,533,552 ) (2,393,154 ) (1,665,488 ) 7,592,194 — Other liabilities (169,335 ) (29,607,102 ) (1,626,030 ) — (31,402,467 ) Total liabilities (3,702,887 ) (32,000,256 ) (3,291,518 ) 7,592,194 (31,402,467 ) Shareholders’ equity (32,752,037 ) (32,891,873 ) (4,506,102 ) 36,076,969 (34,073,043 ) Notes: (1) As of December 31, 2022 and 2023, assets held by Vipshop China and its subsidiaries accounted for 33% and 37% of our total assets, respectively.
Biggest changeCondensed Consolidating Balance Sheets Information As of December 31, 2024 Parent Company Subsidiaries (1) Consolidated Variable Interest Entities Eliminations (2) Consolidated Total (RMB in thousands) Cash and cash equivalents 411 22,998,282 3,353,468 — 26,352,161 Restricted cash — 32,900 569,442 — 602,342 Short-term investments — 1,872,756 — — 1,872,756 Amounts due from related parties, net — 545,421 2,724 — 548,145 Account and other receivables and prepayments, net 3,423 2,747,428 637,357 — 3,388,208 Amount due from group companies 908,747 14,335,254 — (15,244,001 ) — Loan receivables, net — 6,878 — — 6,878 Inventories — 5,031,867 202 — 5,032,069 Property and equipment, net — 18,245,764 47,007 — 18,292,771 Deposits for property and equipment — 164,849 106 — 164,955 Land use rights, net — 10,686,400 — — 10,686,400 Intangible assets, net — 8 327,836 — 327,844 Investments in equity method investees — 1,111,998 890,045 — 2,002,043 Other investments — 2,695,838 659,651 — 3,355,489 Investment in subsidiaries and the consolidated variable interest entities 52,490,094 — — (52,490,094 ) — Other long-term assets — 434,206 — — 434,206 Goodwill — 741,922 13,291 — 755,213 Deferred tax assets, net — 678,465 2,564 — 681,029 Right-of-use assets, net — 432,497 1,120 — 433,617 Total assets 53,402,675 82,762,733 6,504,813 (67,734,095 ) 74,936,126 Amount due to group companies (13,433,091 ) (908,747 ) (902,163 ) 15,244,001 — Other liabilities (771 ) (32,484,870 ) (901,256 ) — (33,386,897 ) Total liabilities (13,433,862 ) (33,393,617 ) (1,803,419 ) 15,244,001 (33,386,897 ) Shareholders’ equity (39,968,813 ) (49,369,116 ) (4,701,394 ) 52,490,094 (41,549,229 ) 13 Table of Contents As of December 31, 2023 Parent Company Subsidiaries (1) Consolidated Variable Interest Entities Eliminations (2) Consolidated Total (RMB in thousands) Cash and cash equivalents 904 21,558,952 3,854,873 — 25,414,729 Restricted cash — 32,553 850,084 — 882,637 Short-term investments — 1,983,201 — — 1,983,201 Amounts due from related parties, net — 552,194 1,308 — 553,502 Account and other receivables and prepayments, net 3,374 2,339,022 734,983 — 3,077,379 Amount due from group companies 384,016 10,101,232 8,700 (10,493,948 ) — Loan receivables, net — 4,437 — — 4,437 Inventories — 5,629,443 15,270 — 5,644,713 Property and equipment, net — 16,833,930 48,170 — 16,882,100 Deposits for property and equipment — 200,339 400 — 200,739 Land use rights, net — 10,132,626 — — 10,132,626 Intangible assets, net — 13 332,808 — 332,821 Investments in equity method investees — 1,078,731 1,076,830 — 2,155,561 Other investments — 2,409,996 506,193 — 2,916,189 Investment in subsidiaries and the consolidated variable interest entities 45,235,847 — — (45,235,847 ) — Other long-term assets — 147,669 — — 147,669 Goodwill — 741,922 13,291 — 755,213 Deferred tax assets, net — 684,738 279 — 685,017 Right-of-use assets, net — 545,965 8,096 — 554,061 Total assets 45,624,141 74,976,963 7,451,285 (55,729,795 ) 72,322,594 Amount due to group companies (8,661,621 ) (392,716 ) (1,439,611 ) 10,493,948 — Other liabilities (1,116 ) (32,699,564 ) (1,062,156 ) — (33,762,836 ) Total liabilities (8,662,737 ) (33,092,280 ) (2,501,767 ) 10,493,948 (33,762,836 ) Shareholders’ equity (36,961,404 ) (41,884,683 ) (4,949,518 ) 45,235,847 (38,559,758 ) Notes: (1) As of December 31, 2023 and 2024, assets held by Vipshop China, Chongqing Pinwei and their subsidiaries accounted for 37% and 41% of our total assets, respectively.
Risk Factors—Risks Relating to Our Corporate Structure—Substantial uncertainties and restrictions exist with respect to the interpretation and application of PRC laws and regulations relating to online commerce and provision of internet content in China.
Risk Factors—Risks Relating to Our Corporate Structure—Substantial uncertainties and restrictions exist with respect to the interpretation and application of PRC laws and regulations relating to online commerce and provision of internet content in China.
Risk Factors—Risks Relating to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Risk Factors—Risks Relating to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
For more details, see “Item 3. Key Information—D.
For more details, see “Item 3. Key Information—D.
For more details, see “Item 3. Key Information—D.
For more details, see “Item 3. Key Information—D.
Risks Relating to Our Corporate Structure Substantial uncertainties and restrictions exist with respect to the interpretation and application of PRC laws and regulations relating to online commerce and provision of internet content in China.
Risks Relating to Our Corporate Structure Substantial uncertainties and restrictions exist with respect to the interpretation and application of PRC laws and regulations relating to online commerce and provision of internet content in China.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it was unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it was unable to inspect or investigate completely registered public accounting firms.
Although the law in this regard is unclear, we treat the consolidated variable interest entities as being owned by us for U.S. federal income tax purposes, not only because their management decisions are made by our WFOE in accordance with the contractual arrangements but also because we are entitled to substantially all of their economic benefits in accordance with the contractual arrangements, and, as a result, we have a “controlling financial interest” in the consolidated variable interest entities as defined in FASB ASC 810 so that we are considered the primary beneficiary of these consoldiated variable interest entities for accounting purposes and thus consolidate their results of operations in our consolidated financial statements under U.S.
Although the law in this regard is unclear, we treat the consolidated variable interest entities as being owned by us for U.S. federal income tax purposes, not only because their management decisions are made by our WFOE in accordance with the contractual arrangements but also because we are entitled to substantially all of their economic benefits in accordance with the contractual arrangements, and, as a result, we have a “controlling financial interest” in the consolidated variable interest entities as defined in FASB ASC 810 so that we are considered the primary beneficiary of these consolidated variable interest entities for accounting purposes and thus consolidate their results of operations in our consolidated financial statements under U.S.
Risk Factors.” Risks Relating to Our Business and Industry • If we are unable to manage our growth or execute our strategies effectively, our business and prospects may be materially and adversely affected. 17 Table of Contents • If we are unable to offer branded products at attractive prices to meet customer needs and preferences, or if our reputation for selling authentic, high-quality products suffers, we may lose customers and our business, financial condition, and results of operations may be materially and adversely affected. • Our business and results of operations may be materially and adversely affected if we are unable to maintain our customer experience or provide high-quality customer service. • Any harm to our brand or failure to maintain our reputation may materially and adversely affect our business and growth prospects. • If we fail to manage our relationships with, or otherwise fail to procure products at favorable terms from, our existing brand partners, or if we fail to attract new brand partners, our business and growth prospects may suffer. • We primarily rely on third-party delivery companies for our product order fulfillment, and if these third-party delivery companies fail to provide reliable delivery services, our business and reputation may be materially and adversely affected. • If we do not compete effectively against existing or new competitors, we may lose market share and customers. • We may suffer losses if we are unable to effectively manage our inventory. • If we are subject to higher than expected product return rate, our business, financial condition, and results of operations may be materially and adversely affected. • We may incur liability for counterfeit or unauthorized products sold or information posted on our platforms. • Our business is subject to complex and evolving laws and regulations regarding cybersecurity and data privacy.
Risk Factors.” 18 Table of Contents Risks Relating to Our Business and Industry • If we are unable to manage our growth or execute our strategies effectively, our business and prospects may be materially and adversely affected. • If we are unable to offer branded products at attractive prices to meet customer needs and preferences, or if our reputation for selling authentic, high-quality products suffers, we may lose customers and our business, financial condition, and results of operations may be materially and adversely affected. • Our business and results of operations may be materially and adversely affected if we are unable to maintain our customer experience or provide high-quality customer service. • Any harm to our brand or failure to maintain our reputation may materially and adversely affect our business and growth prospects. • If we fail to manage our relationships with, or otherwise fail to procure products at favorable terms from, our existing brand partners, or if we fail to attract new brand partners, our business and growth prospects may suffer. • We primarily rely on third-party delivery companies for our product order fulfillment, and if these third-party delivery companies fail to provide reliable delivery services, our business and reputation may be materially and adversely affected. • If we do not compete effectively against existing or new competitors, we may lose market share and customers. • We may suffer losses if we are unable to effectively manage our inventory. • If we are subject to higher than expected product return rate, our business, financial condition, and results of operations may be materially and adversely affected. • We may incur liability for counterfeit or unauthorized products sold or information posted on our platforms. • Our business is subject to complex and evolving laws and regulations regarding cybersecurity and data privacy.
As of the date of this annual report, Vipshop E-Commerce holds a value-added telecommunication business operating license for online data processing and transaction processing (operating e-commerce) services valid until December 28, 2027, which is required for providing platform access to third-party merchants for their sales of products to further develop our business; Vipshop E-Commerce also holds an Internet Culture Operation License, which is valid until May 27, 2024, for its operation of internet culture businesses.
As of the date of this annual report, Vipshop E-Commerce holds a value-added telecommunication business operating license for online data processing and transaction processing (operating e-commerce) services valid until December 28, 2027, which is required for providing platform access to third-party merchants for their sales of products to further develop our business; Vipshop E-Commerce also holds an Internet Culture Operation License, which is valid until May 27, 2027, for its operation of internet culture businesses.
If any of our brand partners fails to pay the required import tariffs, fails to obtain clearance from the customs or inspection and quarantine bureaus, or fails to meet the product labeling or other mandatory specification requirements, and sells such imported products to us, we may be subject to fines, suspension of business, and confiscation of unlawfully sold products and the proceeds from such sales, depending on the nature and gravity of such liabilities. 22 Table of Contents If our brand partners cease to provide us with favorable payment terms or return policies, our working capital needs may increase, resulting in negative impact on our cash flows from operating activities, and our operations may be materially and adversely affected.
If any of our brand partners fails to pay the required import tariffs, fails to obtain clearance from the customs or inspection and quarantine bureaus, or fails to meet the product labeling or other mandatory specification requirements, and sells such imported products to us, we may be subject to fines, suspension of business, and confiscation of unlawfully sold products and the proceeds from such sales, depending on the nature and gravity of such liabilities. 23 Table of Contents If our brand partners cease to provide us with favorable payment terms or return policies, our working capital needs may increase, resulting in negative impact on our cash flows from operating activities, and our operations may be materially and adversely affected.
We compete with others based on a number of factors, including: • ability to identify products in demand among consumers and source these products on favorable terms from brand suppliers; • focus on and expertise in apparel-related categories; • pricing advantage due to our discount retail model; • breadth and quality of product and service offerings; • comprehensive and innovative platform features; • customer service and fulfillment capabilities; and • solid reputation among consumers and brands. 23 Table of Contents Some of our current and potential competitors may have significantly greater resources, longer operating histories, larger customer bases, and greater brand recognition.
We compete with others based on a number of factors, including: • ability to identify products in demand among consumers and source these products on favorable terms from brand suppliers; • focus on and expertise in apparel-related categories; • pricing advantage due to our discount retail model; • breadth and quality of product and service offerings; • comprehensive and innovative platform features; • customer service and fulfillment capabilities; and • solid reputation among consumers and brands. 24 Table of Contents Some of our current and potential competitors may have significantly greater resources, longer operating histories, larger customer bases, and greater brand recognition.
Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from the Ministry of Commerce, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. 50 Table of Contents PRC regulations relating to the establishment of offshore holding companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.
Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from the Ministry of Commerce, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. 52 Table of Contents PRC regulations relating to the establishment of offshore holding companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.
We may also be obligated to comply with a hierarchical cybersecurity network security system that has been introduced and to implement technical protection measures and other necessary measures to address cybersecurity incidents, prevent cyber-attacks, forestall illegal and criminal activities, ensure the safe and stable operation of critical information infrastructure, and maintain data integrity, confidentiality, and availability. 28 Table of Contents On March 22, 2024, the CAC issued the Provisions on Promoting and Regulating Cross-Border Data Flows, establishing a multi-tiered approach for cross-border data provisions.
We may also be obligated to comply with a hierarchical cybersecurity network security system that has been introduced and to implement technical protection measures and other necessary measures to address cybersecurity incidents, prevent cyber-attacks, forestall illegal and criminal activities, ensure the safe and stable operation of critical information infrastructure, and maintain data integrity, confidentiality, and availability. 29 Table of Contents On March 22, 2024, the CAC issued the Provisions on Promoting and Regulating Cross-Border Data Flows, establishing a multi-tiered approach for cross-border data provisions.
Similarly, to the extent that any similar intervention, restrictions, or limitations is imposed in Hong Kong, we cannot assure you that our cash or assets located in Hong Kong will be readily available to fund operations or for other use outside of Hong Kong. 48 Table of Contents We principally rely on dividends and other distributions on equity paid by our PRC subsidiaries and payments made by the VIEs to us in accordance with the contractual arrangements to fund our cash and financing requirements, and any limitation on the ability of our PRC subsidiaries and the VIEs to make payments to us could materially and adversely affect our ability to conduct our business.
Similarly, to the extent that any similar intervention, restrictions, or limitations is imposed in Hong Kong, we cannot assure you that our cash or assets located in Hong Kong will be readily available to fund operations or for other use outside of Hong Kong. 50 Table of Contents We principally rely on dividends and other distributions on equity paid by our PRC subsidiaries and payments made by the VIEs to us in accordance with the contractual arrangements to fund our cash and financing requirements, and any limitation on the ability of our PRC subsidiaries and the VIEs to make payments to us could materially and adversely affect our ability to conduct our business.
If a more stringent foreign debt regulatory regime would be imposed, our ability to provide loans to our PRC subsidiaries or the consolidated variable interest entities may be significantly limited, and our business, financial condition, and results of operations may be adversely affected. 49 Table of Contents Under the current rules of SAFE, as of the date of this annual report, we are required to apply Renminbi funds converted from the net proceeds we received from our public offerings of equity securities within the business scopes of our PRC subsidiaries.
If a more stringent foreign debt regulatory regime would be imposed, our ability to provide loans to our PRC subsidiaries or the consolidated variable interest entities may be significantly limited, and our business, financial condition, and results of operations may be adversely affected. 51 Table of Contents Under the current rules of SAFE, as of the date of this annual report, we are required to apply Renminbi funds converted from the net proceeds we received from our public offerings of equity securities within the business scopes of our PRC subsidiaries.
Risk Factors—Risks Relating to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections” on page 43 of this annual report. • Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Risk Factors—Risks Relating to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections” on page 47 of this annual report. • Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
In all these online payment transactions, secured transmission of confidential information such as customers’ credit card numbers and personal information over public networks is essential to maintain consumer confidence. 26 Table of Contents We do not have control over the security measures of our third-party online payment vendors, and security breaches of the online payment services that we use could expose us to litigation and possible liability for failing to secure confidential customer information and could, among other things, damage our reputation and the perceived security of all of the online payment services that we use.
In all these online payment transactions, secured transmission of confidential information such as customers’ credit card numbers and personal information over public networks is essential to maintain consumer confidence. 27 Table of Contents We do not have control over the security measures of our third-party online payment vendors, and security breaches of the online payment services that we use could expose us to litigation and possible liability for failing to secure confidential customer information and could, among other things, damage our reputation and the perceived security of all of the online payment services that we use.
In particular, we face a number of challenges relating to data from transactions and other activities on our platforms, including: • protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; 27 Table of Contents • addressing concerns relating to privacy and sharing, safety, security, and other factors; and • complying with applicable laws, rules, and regulations relating to the collection, use, storage, transfer, disclosure, and security of personal information, including any requests from regulatory and government authorities relating to this data.
In particular, we face a number of challenges relating to data from transactions and other activities on our platforms, including: • protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior or improper use by our employees; 28 Table of Contents • addressing concerns relating to privacy and sharing, safety, security, and other factors; and • complying with applicable laws, rules, and regulations relating to the collection, use, storage, transfer, disclosure, and security of personal information, including any requests from regulatory and government authorities relating to this data.
Risk Factors—Risks Relating to Doing Business in China—We may be adversely affected by the complexity, uncertainties, and changes in PRC regulation of internet-related businesses and companies, including e-commerce business” on page 46 of this annual report. • The funds in our PRC subsidiaries or the VIEs in China may not be available to fund operations or for other use outside of China due to interventions in or the imposition of restrictions and limitations on the ability of our holding company, our subsidiaries, or the VIEs by the PRC government on currency conversion.
Risk Factors—Risks Relating to Doing Business in China—We may be adversely affected by the complexity, uncertainties, and changes in PRC regulation of internet-related businesses and companies, including e-commerce business” on page 49 of this annual report. • The funds in our PRC subsidiaries or the VIEs in China may not be available to fund operations or for other use outside of China due to interventions in or the imposition of restrictions and limitations on the ability of our holding company, our subsidiaries, or the VIEs by the PRC government on currency conversion.
Risk Factors—Risks Relating to Doing Business in China—The PRC government’s significant oversight and discretion over our business operations could result in a material adverse change in our operations and the value of our ADSs” on page 43 of this annual report. • The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.
Risk Factors—Risks Relating to Doing Business in China—The PRC government’s significant oversight and discretion over our business operations could result in a material adverse change in our operations and the value of our ADSs” on page 46 of this annual report. • The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.
If the PRC government finds that the structure we have adopted for our business operations does not comply with PRC laws and regulations, we could be subject to severe penalties, including shut-down of our Vipshop Online Platform” on page 38 of this annual report. • We rely on contractual arrangements with the consolidated variable interest entities and their respective shareholders for the operation of our business, which may not be as effective as direct ownership.
If the PRC government finds that the structure we have adopted for our business operations does not comply with PRC laws and regulations, we could be subject to severe penalties, including shut-down of our Vipshop Online Platform” on page 41 of this annual report. • We rely on contractual arrangements with the consolidated variable interest entities and their respective shareholders for the operation of our business, which may not be as effective as direct ownership.
Our Cayman Islands holding company, the consolidated variable interest entities, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the consolidated variable interest entities and, consequently, significantly affect the financial performance of the consolidated variable interest entities and our company as a group. 39 Table of Contents We rely on contractual arrangements with the consolidated variable interest entities and their respective shareholders for the operation of our business, which may not be as effective as direct ownership.
Our Cayman Islands holding company, the consolidated variable interest entities, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with the consolidated variable interest entities and, consequently, significantly affect the financial performance of the consolidated variable interest entities and our company as a group. 41 Table of Contents We rely on contractual arrangements with the consolidated variable interest entities and their respective shareholders for the operation of our business, which may not be as effective as direct ownership.
In addition, with respect to Cayman Islands companies, plaintiffs may face special obstacles, including but not limited to those relating to jurisdiction and standing, in attempting to assert derivative claims in United States federal or state courts. 58 Table of Contents You may also experience difficulties in enforcing judgments of the United States courts obtained against us or our directors or executive officers in mainland China or Hong Kong.
In addition, with respect to Cayman Islands companies, plaintiffs may face special obstacles, including but not limited to those relating to jurisdiction and standing, in attempting to assert derivative claims in United States federal or state courts. 60 Table of Contents You may also experience difficulties in enforcing judgments of the United States courts obtained against us or our directors or executive officers in mainland China or Hong Kong.
Risk Factors—Risks Relating to Doing Business in China—We principally rely on dividends and other distributions on equity paid by our PRC subsidiaries and payments made by the VIEs to us in accordance with the contractual arrangements to fund our cash and financing requirements, and any limitation on the ability of our PRC subsidiaries and the VIEs to make payments to us could materially and adversely affect our ability to conduct our business” on page 49 of this annual report.
Risk Factors—Risks Relating to Doing Business in China—We principally rely on dividends and other distributions on equity paid by our PRC subsidiaries and payments made by the VIEs to us in accordance with the contractual arrangements to fund our cash and financing requirements, and any limitation on the ability of our PRC subsidiaries and the VIEs to make payments to us could materially and adversely affect our ability to conduct our business” on page 52 of this annual report.
In addition, our profitability, if any, in our new product and service categories may be lower than in our long-existing categories, which may adversely affect our overall profitability and results of operations. 20 Table of Contents In addition, we seek to expand into the offline retail business that complements our online business and have for this purpose acquired control in various entities in the past years.
In addition, our profitability, if any, in our new product and service categories may be lower than in our long-existing categories, which may adversely affect our overall profitability and results of operations. 21 Table of Contents In addition, we seek to expand into the offline retail business that complements our online business and have for this purpose acquired control in various entities in the past years.
As a result, if we are unable to continue to maintain our customer experience and provide high-quality customer service, we may not be able to retain existing customers or attract new customers, which could materially and adversely affect our business, financial condition, and results of operations. 21 Table of Contents Any harm to our brand or failure to maintain our reputation may materially and adversely affect our business and growth prospects.
As a result, if we are unable to continue to maintain our customer experience and provide high-quality customer service, we may not be able to retain existing customers or attract new customers, which could materially and adversely affect our business, financial condition, and results of operations. 22 Table of Contents Any harm to our brand or failure to maintain our reputation may materially and adversely affect our business and growth prospects.
Taxation—United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.” 60 Table of Contents We are a foreign private issuer within the meaning of the rules under the U.S. Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies. Because we qualify as a foreign private issuer under the U.S.
Taxation—United States Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.” 62 Table of Contents We are a foreign private issuer within the meaning of the rules under the U.S. Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies. Because we qualify as a foreign private issuer under the U.S.
Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S.
Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. 51 Table of Contents Failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. 53 Table of Contents Failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Assuming that we are the owner of the consolidated variable interest entities for United States federal income tax purposes, and based upon our income and assets and the market price of our ADSs, we do not believe that we were a PFIC for the taxable year ended December 31, 2023 and do not anticipate becoming a PFIC in the foreseeable future.
Assuming that we are the owner of the consolidated variable interest entities for United States federal income tax purposes, and based upon our income and assets and the market price of our ADSs, we do not believe that we were a PFIC for the taxable year ended December 31, 2024 and do not anticipate becoming a PFIC in the foreseeable future.
Organizational Structure.” 38 Table of Contents In the opinion of our PRC legal counsel, Han Kun Law Offices, based on its understanding of the PRC laws, rules, and regulations, our current ownership structure, the ownership structure of our PRC subsidiaries, and the consolidated variable interest entities, each as described in this annual report, do not violate any PRC laws, rules, and regulations currently in effect, and the contractual arrangements among (a) Vipshop China, (b) Vipshop E-Commerce, and (c) shareholders of Vipshop E-Commerce as one set and the other two sets concerning the insignificant consolidated variable interest entities, each as described in this annual report, are not in violation of any PRC laws, rules, and regulations currently in effect.
Organizational Structure.” In the opinion of our PRC legal counsel, Han Kun Law Offices, based on its understanding of the PRC laws, rules, and regulations, our current ownership structure, the ownership structure of our PRC subsidiaries, and the consolidated variable interest entities, each as described in this annual report, do not violate any PRC laws, rules, and regulations currently in effect, and the contractual arrangements among (a) Vipshop China, (b) Vipshop E-Commerce, and (c) shareholders of Vipshop E-Commerce as one set and the other two sets concerning the insignificant consolidated variable interest entities, each as described in this annual report, are not in violation of any PRC laws, rules, and regulations currently in effect.
Business Overview—Regulations—Regulations Relating to Tax—Enterprise Income Tax.” Although both STA Circular 82 and STA Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the determining criteria set forth in STA Circular 82 and STA Bulletin 45 may reflect the State Taxation Administration’s general position on how the “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises, regardless of whether they are controlled by PRC enterprises or individuals.
Business Overview—Regulations—Regulations Relating to Tax-Enterprise Income Tax.” 55 Table of Contents Although both STA Circular 82 and STA Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the determining criteria set forth in STA Circular 82 and STA Bulletin 45 may reflect the State Taxation Administration’s general position on how the “de facto management body” test should be applied in determining the tax resident status of all offshore enterprises, regardless of whether they are controlled by PRC enterprises or individuals.
For more details, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The shareholders of the significant consolidated variable interest entity have potential conflict of interest with us, which may adversely affect our business” on page 40 of this annual report.
For more details, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Corporate Structure—The shareholders of the significant consolidated variable interest entity have potential conflict of interest with us, which may adversely affect our business” on page 43 of this annual report.
As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules promulgated by the SEC, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules promulgated by the SEC, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 using criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
If the Cybersecurity Review Measures, the enacted version of the draft Regulations on Network Data Security, and the Measures for Security Assessment of Cross-border Data Transfer mandate clearance of cybersecurity review and other specific actions to be taken by issuers like us, we face uncertainties as to whether we can complete these additional procedures timely, or at all, which may subject us to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of our app from the application stores, and materially and adversely affect our business and results of operations and significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline.
If the Cybersecurity Review Measures, the Regulations on Network Data Security Administration, and the Measures for Security Assessment of Cross-border Data Transfer mandate clearance of cybersecurity review and other specific actions to be taken by issuers like us, we face uncertainties as to whether we can complete these additional procedures timely, or at all, which may subject us to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of our app from the application stores, and materially and adversely affect our business and results of operations and significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline.
Risk Factors—Risks Relating to Doing Business in China—Changes in China’s economic, political or social conditions, or government policies could materially and adversely affect our business and operations” on page 42 of this annual report. • Uncertainties with respect to the PRC legal system could adversely affect us.
Risk Factors—Risks Relating to Doing Business in China—Changes in China’s economic, political or social conditions, or government policies could materially and adversely affect our business and operations” on page 46 of this annual report. • Uncertainties with respect to the PRC legal system could adversely affect us.
Risk Factors—Risks Relating to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us” on page 43 of this annual report. • A majority of our business operations are conducted in China, and we are subject to complex and evolving PRC laws and regulations.
Risk Factors—Risks Relating to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us” on page 46 of this annual report. • A majority of our business operations are conducted in China, and we are subject to complex and evolving PRC laws and regulations.
Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Due to the disparate voting powers associated with our two classes of ordinary shares, as of March 31, 2024, Mr.
Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Due to the disparate voting powers associated with our two classes of ordinary shares, as of March 31, 2025, Mr.
If we are subject to such penalties in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. 54 Table of Contents Risks Relating to Our Ordinary Shares and ADSs The market price for our ADSs has fluctuated and may be volatile.
If we are subject to such penalties in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected. 56 Table of Contents Risks Relating to Our Ordinary Shares and ADSs The market price for our ADSs has fluctuated and may be volatile.
We and our PRC resident employees who participate in the employee stock incentive plans, which we adopted in March 2011, March 2012, and July 2014, respectively, have been subject to these regulations since our company became a publicly-listed company in the United States in March 2012.
We and our PRC resident employees who participate in the employee stock incentive plans, which we adopted in March 2011, March 2012, July 2014 and August 2024, respectively, have been subject to these regulations since our company became a publicly-listed company in the United States in March 2012.
Memorandum and Articles of Association—Ordinary Shares—Voting Rights.” 57 Table of Contents There can be no assurance that the ADS holders will receive the voting materials in time to instruct the depositary to vote the Class A ordinary shares underlying their ADSs, and it is possible that the ADS holders who hold their ADSs through brokers, dealers, or other third parties, will as a result not have the opportunity to exercise a right to vote.
Memorandum and Articles of Association—Ordinary Shares—Voting Rights.” There can be no assurance that the ADS holders will receive the voting materials in time to instruct the depositary to vote the Class A ordinary shares underlying their ADSs, and it is possible that the ADS holders who hold their ADSs through brokers, dealers, or other third parties, will as a result not have the opportunity to exercise a right to vote.
For additional information about the services provided, cash flows, or transfer of other assets between our company, our subsidiaries, and the consolidated variable interest entities during the three years ended December 31, 2021, 2022, and 2023, see “Item 3.
For additional information about the services provided, cash flows, or transfer of other assets between our company, our subsidiaries, and the consolidated variable interest entities during the three years ended December 31, 2022, 2023 and 2024, see “Item 3.
Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities. For example, China enacted its amended Company Law, which will come into effect on July 1, 2024.
Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities. For example, China enacted its amended Company Law, which came into effect on July 1, 2024.
As a result, our business, financial condition, and results of operations may be materially and adversely affected. 24 Table of Contents We rely on online retail of apparel products for a significant portion of our total net revenues.
As a result, our business, financial condition, and results of operations may be materially and adversely affected. 25 Table of Contents We rely on online retail of apparel products for a significant portion of our total net revenues.
Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. In addition, our independent registered public accounting firm attested the effectiveness of our internal control and reported that our internal control over financial reporting was effective as of December 31, 2023.
Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2024. In addition, our independent registered public accounting firm attested the effectiveness of our internal control and reported that our internal control over financial reporting was effective as of December 31, 2024.
We cannot assure you that we will be able to obtain all licenses and permits required for internet-related businesses in a timely manner, or at all. 46 Table of Contents In August 2018, the Standing Committee of the National People’s Congress promulgated the E-commerce Law, which came into effect on January 1, 2019.
We cannot assure you that we will be able to obtain all licenses and permits required for internet-related businesses in a timely manner, or at all. In August 2018, the Standing Committee of the National People’s Congress promulgated the E-commerce Law, which came into effect on January 1, 2019.
If we fail to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate structure, corporate governance, and business operations could be materially and adversely affected. Our contractual arrangements with the consolidated variable interest entities may result in adverse tax consequences to us.
If we fail to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate structure, corporate governance, and business operations could be materially and adversely affected. 43 Table of Contents Our contractual arrangements with the consolidated variable interest entities may result in adverse tax consequences to us.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, financial condition, results of operations, reputation, and the trading price of our listed securities. 45 Table of Contents We may be adversely affected by the complexity, uncertainties, and changes in PRC regulation of internet-related businesses and companies, including e-commerce business.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, financial condition, results of operations, reputation, and the trading price of our listed securities. We may be adversely affected by the complexity, uncertainties, and changes in PRC regulation of internet-related businesses and companies, including e-commerce business.
The Cybersecurity Review Measures and the draft Regulations on Network Data Security remain unclear on whether the requirements will be applicable to companies that are already listed in the United States, such as us.
The Cybersecurity Review Measures and the Regulations on Network Data Security Administration remain unclear on whether the requirements will be applicable to companies that are already listed in the United States, such as us.
We cannot predict the impact of the Cybersecurity Review Measures and the draft Regulations on Network Data Security, if any, at this stage, and we will closely monitor and assess any development in the rule-making process.
We cannot predict the impact of the Cybersecurity Review Measures and the Regulations on Network Data Security Administration, if any, at this stage, and we will closely monitor and assess any development in the rule-making process.
See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” It is often difficult to register, maintain, and enforce intellectual property rights in China. Statutory laws and regulations are subject to judicial interpretation and enforcement and may not be applied consistently due to the lack of clear guidance on statutory interpretation.
See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” 31 Table of Contents It is often difficult to register, maintain, and enforce intellectual property rights in China. Statutory laws and regulations are subject to judicial interpretation and enforcement and may not be applied consistently due to the lack of clear guidance on statutory interpretation.
As a result, our contractual arrangements with the consolidated variable interest entities may result in adverse tax consequences to us. 41 Table of Contents If our PRC subsidiaries and the consolidated variable interest entities fail to obtain and maintain the requisite assets, licenses, and approvals required under PRC laws, our business, financial condition, and results of operations may be materially and adversely affected.
As a result, our contractual arrangements with the consolidated variable interest entities may result in adverse tax consequences to us. If our PRC subsidiaries and the consolidated variable interest entities fail to obtain and maintain the requisite assets, licenses, and approvals required under PRC laws, our business, financial condition, and results of operations may be materially and adversely affected.
Among our directors and executive officers, Martin Chi Ping Lau, Jacky Yu Xu, Xing Liu, and Nanyan Zheng habitually reside in Hong Kong while the other directors and executive officers all habitually reside in mainland China.
Among our directors and executive officers, Arthur Xiaobo Hong, Martin Chi Ping Lau, Jacky Yu Xu, Xing Liu, and Nanyan Zheng habitually reside in Hong Kong while the other directors and executive officers all habitually reside in mainland China.
Risk Factors—Risks Relating to Doing Business in China—The approval of, filing with, and other administrative requirements of, the CSRC or other PRC government authorities may be required in connection with our future overseas offerings or future issuance of securities abroad under the PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing” on page 44 of this annual report. 19 Table of Contents • We may be adversely affected by the complexity, uncertainties, and changes in PRC regulation of internet-related businesses and companies, including e-commerce business.
Risk Factors—Risks Relating to Doing Business in China—The approval of, filing with, and other administrative requirements of, the CSRC or other PRC government authorities may be required in connection with our future overseas offerings or future issuance of securities abroad under the PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing” on page 48 of this annual report. • We may be adversely affected by the complexity, uncertainties, and changes in PRC regulation of internet-related businesses and companies, including e-commerce business.
Any possible enforcement against such collateral could materially affect the influence of Mr. Eric Ya Shen over important corporate matters or the trading price of our ADSs. Substantial future sales or perceived potential sales of our ADSs, ordinary shares, or other equity securities in the public market could cause the price of our ADSs to decline.
Any possible enforcement against such collateral could materially affect the influence of Mr. Eric Ya Shen over important corporate matters or the trading price of our ADSs. 57 Table of Contents Substantial future sales or perceived potential sales of our ADSs, ordinary shares, or other equity securities in the public market could cause the price of our ADSs to decline.
If the consolidated variable interest entities and their respective shareholders fail to perform their obligations under these contractual arrangements, we may have to resort to arbitration or litigation to enforce our rights, which may be time-consuming, unpredictable, expensive, and damaging to our operations and reputation” on page 40 of this annual report. 18 Table of Contents • The shareholders of the significant consolidated variable interest entity have potential conflict of interest with us, which may adversely affect our business.
If the consolidated variable interest entities and their respective shareholders fail to perform their obligations under these contractual arrangements, we may have to resort to arbitration or litigation to enforce our rights, which may be time-consuming, unpredictable, expensive, and damaging to our operations and reputation” on page 43 of this annual report. 19 Table of Contents • The shareholders of the significant consolidated variable interest entity have potential conflict of interest with us, which may adversely affect our business.
The cost and duration of integrating newly acquired businesses could also materially exceed our expectations. Any such negative developments could materially and adversely affect our business, financial condition, and results of operations. Any interruption in the operation of our logistics hubs or data centers for an extended period may materially and adversely affect our business.
The cost and duration of integrating newly acquired businesses could also materially exceed our expectations. Any such negative developments could materially and adversely affect our business, financial condition, and results of operations. 35 Table of Contents Any interruption in the operation of our logistics hubs or data centers for an extended period may materially and adversely affect our business.
As a result, our business, financial condition, and results of operations may be materially and adversely affected. 36 Table of Contents If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.
As a result, our business, financial condition, and results of operations may be materially and adversely affected. If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.
The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may not necessarily work in our favor. 42 Table of Contents Uncertainties with respect to the PRC legal system could adversely affect us.
The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may not necessarily work in our favor. Uncertainties with respect to the PRC legal system could adversely affect us.
As of December 31, 2021, 2022, and 2023, we worked with over 25,000, 27,000, and 29,000 brand partners, respectively, via our Vipshop Online Platform. We cannot assure you that measures we have adopted in the course of sourcing such products to ensure their authenticity or authorization and to minimize potential liability of infringing third parties’ rights will be effective.
As of December 31, 2022, 2023 and 2024, we worked with over 27,000, 29,000 and 30,000 brand partners, respectively, via our Vipshop Online Platform. We cannot assure you that measures we have adopted in the course of sourcing such products to ensure their authenticity or authorization and to minimize potential liability of infringing third parties’ rights will be effective.
For the year ended December 31, 2021, 2022, and 2023, our subsidiaries did not make any payment to the consolidated variable interest entities for transfer of property and equipment.
For the year ended December 31, 2022, 2023 and 2024, our subsidiaries did not make any payment to the consolidated variable interest entities for transfer of property and equipment.
The draft decision also proposed enhance the punishment against personal information infringement by referencing to the punishment under the applicable laws, including the one under the Personal Information Protection Law. Fluctuations in exchange rates may materially and adversely affect our results of operations and the value of your investment.
The draft decision also proposed enhance the punishment against personal information infringement by referencing to the punishment under the applicable laws, including the one under the Personal Information Protection Law. 49 Table of Contents Fluctuations in exchange rates may materially and adversely affect our results of operations and the value of your investment.
As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. We may be the subject of unfavorable allegations made by short sellers in the future.
As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions. 58 Table of Contents We may be the subject of unfavorable allegations made by short sellers in the future.
Eric Ya Shen beneficially owned approximately 63.1% of the aggregate voting power of our company. As a result, Mr. Eric Ya Shen has considerable influence over matters such as electing directors and approving material mergers, acquisitions, or other business combination transactions, and he may take actions that are not in the best interest of us or our other shareholders.
Eric Ya Shen beneficially owned approximately 64.5% of the aggregate voting power of our company. As a result, Mr. Eric Ya Shen has considerable influence over matters such as electing directors and approving material mergers, acquisitions, or other business combination transactions, and he may take actions that are not in the best interest of us or our other shareholders.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. 47 Table of Contents All of our total net revenues and most of our expenses are denominated in Renminbi.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. All of our total net revenues and most of our expenses are denominated in Renminbi.
Our logistics network, currently consisting of both regional logistics hubs and local distribution centers, is essential to our business operations. We plan to complete construction of certain logistics centers, and to maintain our logistics network to accommodate increasing volumes of customer orders, enhance customer experience, and provide sufficient coverage across China.
Our logistics network, currently consisting of both regional logistics hubs and local distribution centers, is essential to our business operations. We plan to maintain our logistics network to accommodate increasing volumes of customer orders, enhance customer experience, and provide sufficient coverage across China.
Any such future occurrences could damage our reputation and result in a material decrease in our revenue. We did not have any material system failure in 2023. 25 Table of Contents Additionally, we intend to continue using our available cash and financing options to upgrade and improve our IT systems and cybersecurity to support our business growth.
Any such future occurrences could damage our reputation and result in a material decrease in our revenue. We did not have any material system failure in 2024. 26 Table of Contents Additionally, we intend to continue using our available cash and financing options to upgrade and improve our IT systems and cybersecurity to support our business growth.
For the year ended December 31, 2021, 2022, and 2023, no assets other than cash were transferred between our Cayman Islands holding company and a subsidiary, a VIE, or its subsidiary, and no subsidiary or VIE paid dividends or made other distributions to its holding company, except for the dividend of RMB14.98 billion paid by Vipshop (China) Co., Ltd., our PRC subsidiary, to its holding company in Hong Kong, Vipshop International Holdings Limited, in 2022.
For the year ended December 31, 2022, 2023 and 2024, no assets other than cash were transferred between our Cayman Islands holding company and a subsidiary, a VIE, or its subsidiary, and no subsidiary or VIE paid dividends or made other distributions to its holding company, except for the dividend of RMB14.98 billion, nil and RMB10.00 billion paid by Vipshop (China) Co., Ltd., our PRC subsidiary, to its holding company in Hong Kong, Vipshop International Holdings Limited, in 2022, 2023 and 2024.
With respect to loans that we may provide to the PRC subsidiaries, (i) if the PRC subsidiaries adopt the traditional foreign exchange administration mechanism, the outstanding amount of the loans should not exceed the difference between the total investment and the registered capital of the PRC subsidiaries; and (ii) if the PRC subsidiaries adopt the mechanism as provided in the Notice of the People’s Bank of China on Matters concerning the Macro-prudential Management of Full-covered Cross-border Financing issued by the People’s Bank of China on January 12, 2017, or PBOC Notice No. 9, and apply the latest macro-prudential adjustment parameter adopted by the People’s Bank of China and SAFE on July 20, 2023, the outstanding amount of the loans should not exceed 300% of the net asset of the relevant PRC subsidiary.
With respect to loans that we may provide to the PRC subsidiaries, (i) if the PRC subsidiaries adopt the traditional foreign exchange administration mechanism, the outstanding amount of the loans should not exceed the difference between the total investment and the registered capital of the PRC subsidiaries; and (ii) if the PRC subsidiaries adopt the mechanism as provided in the Notice of the People’s Bank of China on Matters concerning the Macro-prudential Management of Full-covered Cross-border Financing issued by the People’s Bank of China on January 12, 2017, or PBOC Notice No. 9, and apply the latest macro-prudential adjustment parameter adopted by the People’s Bank of China and SAFE on January 13, 2025, the outstanding amount of the loans should not exceed 350% of the net asset of the relevant PRC subsidiary.
Our product return rate increased during 2021 to 2023 due to the increased sales contribution from apparel products, which tend to carry a higher return rate as compared with standardized products, as well as the popularity of our Super VIP Membership program that offers free shipping and free return for its paid members.
Our product return rate increased during 2022 to 2024 due to the increased sales contribution from apparel products, which tend to carry a higher return rate as compared with standardized products, as well as the popularity of our Super VIP Membership program that offers free shipping and free return for its paid members.
Our ADSs may decline in value or become worthless if we are unable to maintain the rights over the assets of the consolidated variable interest entities to which our WFOEs are entitled pursuant to the contractual arrangements, which contributed 2.6%, 1.1%, and 0.3% of our revenues in 2021, 2022, and 2023, respectively.
Our ADSs may decline in value or become worthless if we are unable to maintain the rights over the assets of the consolidated variable interest entities to which our WFOEs are entitled pursuant to the contractual arrangements, which contributed 1.1%, 0.3% and 0.3% of our revenues in 2022, 2023 and 2024, respectively.
As of December 31, 2021, 2022, and 2023, we worked with over 25,000, 27,000, and 29,000 brand partners, respectively. We depend significantly on our ability to source products from brand partners on favorable pricing terms, typically at a substantial discount to the original sales price.
As of December 31, 2022, 2023 and 2024, we worked with over 27,000, 29,000 and 30,000 brand partners, respectively. We depend significantly on our ability to source products from brand partners on favorable pricing terms, typically at a substantial discount to the original sales price.
Meanwhile, foreign investors are prohibited from investing in companies engaged in internet audio-video programs businesses and internet culture businesses (except for music). We are a Cayman Islands company, and our PRC subsidiary Vipshop (China) Co., Ltd., or Vipshop China, is a WFOE under the PRC law.
Meanwhile, foreign investors are prohibited from investing in companies engaged in internet audio-video programs businesses and internet culture businesses (except for music). 40 Table of Contents We are a Cayman Islands company, and our PRC subsidiary Vipshop (China) Co., Ltd., or Vipshop China, is a WFOE under the PRC law.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment” on page 44 of this annual report. • The PRC government may exert more control over offerings conducted overseas by and/or foreign investment in our company, which could result in a material change in our operations and/or the value of our securities.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment” on page 47 of this annual report. 20 Table of Contents • The PRC government may exert more control over offerings conducted overseas by and/or foreign investment in our company, which could result in a material change in our operations and/or the value of our securities.
These short attacks have, in the past, led to selling of shares in the market. 56 Table of Contents Public companies listed in the United States that have substantially all of their operations in China have been the subject of short selling.
These short attacks have, in the past, led to selling of shares in the market. Public companies listed in the United States that have substantially all of their operations in China have been the subject of short selling.
Moreover, in August 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which came into effect in November 2021 and further details the general rules and principles on personal information processing and further increases the potential liability of personal information processor. See “Item 4. Information on the Company—B.
Moreover, in August 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which came into effect in November 2021 and further details the general rules and principles on personal information processing and further increases the potential liability of personal information processor.
Business Overview—Regulations—Regulations Relating to Internet Privacy” and “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Information Security” for more details. In December 2021, the CAC, together with other authorities, jointly promulgated the Cybersecurity Review Measures, which came into effect on February 15, 2022 and replaces its predecessor regulation.
Business Overview—Regulations—Regulations Relating to Information Security” for more details. In December 2021, the CAC, together with other authorities, jointly promulgated the Cybersecurity Review Measures, which came into effect on February 15, 2022 and replaces its predecessor regulation.
Revenues contributed by the consolidated variable interest entities accounted for 2.6%, 1.1%, and 0.3% of our total net revenues in 2021, 2022, and 2023, respectively.
Revenues contributed by the consolidated variable interest entities accounted for 1.1%, 0.3% and 0.3% of our total net revenues in 2022, 2023 and 2024, respectively.
The most recent negative list, issued on December 27, 2021 and effective on January 1, 2022, stipulates that any PRC domestic enterprise engaging in prohibited industries under the negative list must obtain the consent of the competent PRC authorities for overseas listing, and the foreign investors cannot participate in the operation and management of such enterprise, and the shareholding percentage of the foreign investors in such enterprise must be subject to the administrative provisions relating to foreign investment in the securities of PRC domestic companies.
The most recent negative list, issued on September 6, 2024 and effective on November 1, 2024, stipulates that any PRC domestic enterprise engaging in prohibited industries under the negative list must obtain the consent of the competent PRC authorities for overseas listing, and the foreign investors cannot participate in the operation and management of such enterprise, and the shareholding percentage of the foreign investors in such enterprise must be subject to the administrative provisions relating to foreign investment in the securities of PRC domestic companies.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeAccording to the Overseas Offering and Listing Measures, an overseas offering and listing of securities by a PRC domestic company under any of the following circumstances is prohibited: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations, and the state rules; (ii) the proposed securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the PRC domestic company proposing to conduct the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property, or undermining the order of the socialist market economy during the past three years; (iv) the PRC domestic company proposing to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has been made thereof; or (v) there are material ownership disputes over equity held by the PRC domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller. 90 Table of Contents Furthermore, the Overseas Offering and Listing Measures also provide that (i) where a PRC domestic company seeks to indirectly offer and list securities in overseas markets, the issuer should designate a major PRC domestic operating entity, which should, as the domestic responsible entity, fulfill the filing procedures with the CSRC; (ii) a filing relating to an initial public offering and listing must be made with the CSRC within three business days after the application is submitted overseas; (iii) a filing relating to subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed securities must be made with the CSRC within three business days after the offering is completed; (iv) a filing relating to subsequent securities offerings and listings of an issuer in overseas markets other than where it has offered and listed must be made pursuant to provisions as stipulated for initial public offerings and listings.
Biggest changeAccording to the Overseas Offering and Listing Measures, an overseas offering and listing of securities by a PRC domestic company under any of the following circumstances is prohibited: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations, and the state rules; (ii) the proposed securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the PRC domestic company proposing to conduct the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property, or undermining the order of the socialist market economy during the past three years; (iv) the PRC domestic company proposing to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has been made thereof; or (v) there are material ownership disputes over equity held by the PRC domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
Such measures also define foreign investments as direct or indirect investments by foreign investors in China, including (i) investments in new onshore projects or establishment of wholly foreign owned onshore enterprises or joint ventures with other investors; (ii) acquiring equity or assets of onshore companies by merger and acquisition; and (iii) onshore investments by and through any other means.
Such measures also define foreign investments as direct or indirect investments by foreign investors in China, including (i) investments in new onshore projects or establishment of wholly foreign owned onshore enterprises or joint ventures with other investors; (ii) acquiring equity or assets of onshore companies by merger and acquisition; and (iii) onshore investments by and through any other means.
Foreign investments in certain key areas with national security concerns, such as important transport services, important cultural products and services, important information technology and internet products and services, important financial services, and key technologies, which results in the acquisition of de facto control of the invested companies, must be filed with the working mechanism office prior to the implementation of such investments.
Foreign investments in certain key areas with national security concerns, such as important transport services, important cultural products and services, important information technology and internet products and services, important financial services, and key technologies, which results in the acquisition of de facto control of the invested companies, must be filed with the working mechanism office prior to the implementation of such investments.
Failure to make such filing may subject the foreign investor to rectification within a prescribed period, and the foreign investor will be negatively recorded in the national credit information system, which would then subject such investor to joint punishment as provided by the rules.
Failure to make such filing may subject the foreign investor to rectification within a prescribed period, and the foreign investor will be negatively recorded in the national credit information system, which would then subject such investor to joint punishment as provided by the rules.
Internet audio-video program service providers must immediately remove the audio-video programs violating laws and regulations, keep the records, report to the authorities, and implement other regulatory requirements. 77 Table of Contents The Categories of the Internet Audio-video Program Services (for Trial Implementation) promulgated by the National Radio and Television Administration on March 17, 2010 and amended on March 10, 2017, classify internet audio-video programs into four categories: (I) Category I, internet audio-video program service in the form of radio station or television station; (II) Category II, internet audio-video program service, including (a) re-broadcasting service of current political audio-video news programs; (b) hosting, interviewing, reporting, and commenting service of arts, entertainment, technology, finance and economics, sports, education, and other specialized audio-video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports, education, and other specialized audio-video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service of audio-video programs such as films, television dramas, and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education, and other specialized audio-video programs; and (g) live audio-video broadcasting service of cultural activities of common social organizations, sport events, or other organization activities; (III) Category III, internet audio-video program service, including (a) aggregating service of online audio-video content, and (b) re-broadcasting service of the audio-video programs uploaded by internet users; and (IV) Category IV, internet audio-video program service, including (a) re-broadcasting service of the radio or television program channels; (b) re-broadcasting service of internet audio-video program channels; and (c) re-broadcasting service of online live audio- video program.
Internet audio-video program service providers must immediately remove the audio-video programs violating laws and regulations, keep the records, report to the authorities, and implement other regulatory requirements. 79 Table of Contents The Categories of the Internet Audio-video Program Services (for Trial Implementation) promulgated by the National Radio and Television Administration on March 17, 2010 and amended on March 10, 2017, classify internet audio-video programs into four categories: (I) Category I, internet audio-video program service in the form of radio station or television station; (II) Category II, internet audio-video program service, including (a) re-broadcasting service of current political audio-video news programs; (b) hosting, interviewing, reporting, and commenting service of arts, entertainment, technology, finance and economics, sports, education, and other specialized audio-video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports, education, and other specialized audio-video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service of audio-video programs such as films, television dramas, and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education, and other specialized audio-video programs; and (g) live audio-video broadcasting service of cultural activities of common social organizations, sport events, or other organization activities; (III) Category III, internet audio-video program service, including (a) aggregating service of online audio-video content, and (b) re-broadcasting service of the audio-video programs uploaded by internet users; and (IV) Category IV, internet audio-video program service, including (a) re-broadcasting service of the radio or television program channels; (b) re-broadcasting service of internet audio-video program channels; and (c) re-broadcasting service of online live audio- video program.
Based on the these measures, data processors must apply for the security assessment of data cross-border transfer to the national cyberspace administration through the provincial cyberspace administration in the place where they operate if they provide data outside China under any of the following circumstances: (i) outbound transfer of important data by a data processor; (ii) outbound transfer of personal information by a critical information infrastructure operator or a personal information processor who has processed the personal information of more than one million people; (iii) outbound transfer of personal information by a personal information processor who has made outbound transfers of the personal information of 100,000 people cumulatively or the sensitive personal information of 10,000 people cumulatively since January 1 of the previous year; and (iv) other circumstances where an application for the security assessment of an outbound data transfer is required as prescribed by the national cyberspace administration authority. 81 Table of Contents On March 22, 2024, the CAC issued the Provisions on Promoting and Regulating Cross-Border Data Flows, establishing a multi-tiered approach for cross-border data provisions.
Based on the these measures, data processors must apply for the security assessment of data cross-border transfer to the national cyberspace administration through the provincial cyberspace administration in the place where they operate if they provide data outside China under any of the following circumstances: (i) outbound transfer of important data by a data processor; (ii) outbound transfer of personal information by a critical information infrastructure operator or a personal information processor who has processed the personal information of more than one million people; (iii) outbound transfer of personal information by a personal information processor who has made outbound transfers of the personal information of 100,000 people cumulatively or the sensitive personal information of 10,000 people cumulatively since January 1 of the previous year; and (iv) other circumstances where an application for the security assessment of an outbound data transfer is required as prescribed by the national cyberspace administration authority. 83 Table of Contents On March 22, 2024, the CAC issued the Provisions on Promoting and Regulating Cross-Border Data Flows, establishing a multi-tiered approach for cross-border data provisions.
If such investor fails to or refuses to undertake such rectification, it would be ordered to dispose of the equity or assets and to take any other necessary measures so as to restore to the status before the implementation of the investment and to erase the impact to national security. 74 Table of Contents Regulations Relating to Foreign Investments in Value-added Telecommunications Businesses Pursuant to the Provisions on Administration of Foreign-invested Telecommunications Enterprises which were promulgated by the State Council on December 11, 2001, and amended on September 10, 2008, February 6, 2016, and March 29, 2022, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50%.
If such investor fails to or refuses to undertake such rectification, it would be ordered to dispose of the equity or assets and to take any other necessary measures so as to restore to the status before the implementation of the investment and to erase the impact to national security. 76 Table of Contents Regulations Relating to Foreign Investments in Value-added Telecommunications Businesses Pursuant to the Provisions on Administration of Foreign-invested Telecommunications Enterprises which were promulgated by the State Council on December 11, 2001, and amended on September 10, 2008, February 6, 2016, and March 29, 2022, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50%.
The foreign exchange proceeds received by such individuals from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas-listed companies must be remitted into the bank accounts in China opened by the PRC agents before distribution to such individuals. 98 Table of Contents Under the Circular of the State Taxation Administration on Issues Concerning Individual Income Tax in Relation to Equity Incentives promulgated and became effective on August 24, 2009 and amended on April 18, 2011 by the State Taxation Administration, listed companies and their domestic organizations will, according to the individual income tax calculation methods for “wage and salary income” and stock option income, lawfully withhold and pay individual income tax on such income.
The foreign exchange proceeds received by such individuals from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas-listed companies must be remitted into the bank accounts in China opened by the PRC agents before distribution to such individuals. 101 Table of Contents Under the Circular of the State Taxation Administration on Issues Concerning Individual Income Tax in Relation to Equity Incentives promulgated and became effective on August 24, 2009 and amended on April 18, 2011 by the State Taxation Administration, listed companies and their domestic organizations will, according to the individual income tax calculation methods for “wage and salary income” and stock option income, lawfully withhold and pay individual income tax on such income.
Once a potential brand is identified, we conduct due diligence reviews on its qualifications, including whether it holds the proper business operation licenses, safety, sanitary and quality certifications, trademark registration certificates, and license agreements in relation to the branded products.
Once a potential brand partner is identified, we conduct due diligence reviews on its qualifications, including whether it holds the proper business operation licenses, safety, sanitary and quality certifications, trademark registration certificates, and license agreements in relation to the branded products.
An internet content provider is also required to properly keep the user personal information, and in case of any leak or likely leak of the user personal information, the internet content provider must take immediate remedial measures and, in severe circumstances, to make an immediate report to the telecommunication regulatory authority. 82 Table of Contents In addition, the Decision on Strengthening Network Information Protection, which was promulgated by the Standing Committee of the National People’s Congress on December 28, 2012, provides that electronic information that is able to identify personal identities of citizens or is concerned with personal privacy of citizens is protected by law and should not be unlawfully obtained or provided.
An internet content provider is also required to properly keep the user personal information, and in case of any leak or likely leak of the user personal information, the internet content provider must take immediate remedial measures and, in severe circumstances, to make an immediate report to the telecommunication regulatory authority. 84 Table of Contents In addition, the Decision on Strengthening Network Information Protection, which was promulgated by the Standing Committee of the National People’s Congress on December 28, 2012, provides that electronic information that is able to identify personal identities of citizens or is concerned with personal privacy of citizens is protected by law and should not be unlawfully obtained or provided.
Our Product and Service Offerings Product Categories We offer a broad spectrum of products ranging from womenswear, menswear, sportswear, shoes and bags, accessories, baby and children products, skincare and cosmetics, home goods and other lifestyle products, and supermarket products from desirable domestic and international brands.
Our Product and Service Offerings Product Categories We offer a broad spectrum of products ranging from womenswear, menswear, sportswear and sporting goods, shoes and bags, accessories, baby and children products, skincare and cosmetics, home goods and other lifestyle products, and supermarket products from desirable domestic and international brands.
If any PRC resident shareholder of the special purpose vehicle fails to make the required registration or to update the previously filed registration, the PRC subsidiaries of the special purpose vehicle may be prohibited from distributing their profits or the proceeds from any capital reduction, share transfer, or liquidation to the special purpose vehicle, and the special purpose vehicle may also be prohibited from making additional capital contribution into its PRC subsidiaries. 97 Table of Contents Foreign Debt On January 5, 2023, the NDRC promulgated the Administrative Measures for Examination and Registration of Medium- and Long-term Foreign Debts of Enterprises, which came into effect on February 10, 2023.
If any PRC resident shareholder of the special purpose vehicle fails to make the required registration or to update the previously filed registration, the PRC subsidiaries of the special purpose vehicle may be prohibited from distributing their profits or the proceeds from any capital reduction, share transfer, or liquidation to the special purpose vehicle, and the special purpose vehicle may also be prohibited from making additional capital contribution into its PRC subsidiaries. 100 Table of Contents Foreign Debt On January 5, 2023, the NDRC promulgated the Administrative Measures for Examination and Registration of Medium- and Long-term Foreign Debts of Enterprises, which came into effect on February 10, 2023.
We believe that we compete primarily on the basis of: • ability to identify products in demand among consumers and source these products on favorable terms from brands; • focus on and expertise in apparel-related categories; • pricing advantage due to our discount retail model; • breadth and quality of product and service offerings; • comprehensive and innovative platform features; • customer service and fulfillment capabilities; and • solid reputation among consumers and brands. 72 Table of Contents We believe that our early-mover advantage and leading market position help us compete effectively against our competitors.
We believe that we compete primarily on the basis of: • ability to identify products in demand among consumers and source these products on favorable terms from brands; • focus on and expertise in apparel-related categories; • pricing advantage due to our discount retail model; • breadth and quality of product and service offerings; • comprehensive and innovative platform features; • customer service and fulfillment capabilities; and • solid reputation among consumers and brands. 74 Table of Contents We believe that our early-mover advantage and leading market position help us compete effectively against our competitors.
Along with the growth of our mobile active customers and mobile service offerings, Vipshop China formed Guangzhou Pinwei Software Co., Ltd. in 2012 as a research and development center to focus on our mobile product and solutions. 61 Table of Contents To support our regional business expansion, Vipshop China established a number of wholly-owned PRC subsidiaries that focus on warehousing services, retail business, product procurement, as well as software development and information technology support over the years since 2011.
Along with the growth of our mobile active customers and mobile service offerings, Vipshop China formed Guangzhou Pinwei Software Co., Ltd. in 2012 as a research and development center to focus on our mobile product and solutions. 63 Table of Contents To support our regional business expansion, Vipshop China established a number of wholly-owned PRC subsidiaries that focus on warehousing services, retail business, product procurement, as well as software development and information technology support over the years since 2011.
Application providers should not, for any reason, force users to consent to personal information processing, or refuse users to use the basic functions and services on the reason that users do not agree to provide unnecessary personal information. 83 Table of Contents On May 8, 2017, the Supreme People’s Court and the Supreme People’s Procuratorate issued the Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens’ Personal Information, which became effective on June 1, 2017.
Application providers should not, for any reason, force users to consent to personal information processing, or refuse users to use the basic functions and services on the reason that users do not agree to provide unnecessary personal information. 85 Table of Contents On May 8, 2017, the Supreme People’s Court and the Supreme People’s Procuratorate issued the Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens’ Personal Information, which became effective on June 1, 2017.
The offending entities could be ordered to correct, or to suspend or terminate the provision of services, and face confiscation of illegal income, fines, or other penalties. 84 Table of Contents On February 6, 2023, the Ministry of Industry and Information Technology promulgated the Circular of the Ministry of Industry and Information Technology on Further Improving Mobile Internet Application Service Capabilities, which reiterates the principles of legality, justification, and necessity.
The offending entities could be ordered to correct, or to suspend or terminate the provision of services, and face confiscation of illegal income, fines, or other penalties. 86 Table of Contents On February 6, 2023, the Ministry of Industry and Information Technology promulgated the Circular of the Ministry of Industry and Information Technology on Further Improving Mobile Internet Application Service Capabilities, which reiterates the principles of legality, justification, and necessity.
The 2021 Negative List further provides that foreign investors are allowed to hold more than 50% equity interests in a value-added telecommunications service provider engaging in e-commerce, domestic multiparty communication, storage-and-forward, and call center businesses, while foreign investors are still prohibited from holding more than 50% of equity interest in a provider of other subcategories of value-added telecommunications services.
The 2024 Negative List further provides that foreign investors are allowed to hold more than 50% equity interests in a value-added telecommunications service provider engaging in e-commerce, domestic multiparty communication, storage-and-forward, and call center businesses, while foreign investors are still prohibited from holding more than 50% of equity interest in a provider of other subcategories of value-added telecommunications services.
Moreover, some of our offline stores are making efforts to utilize private domain traffic by operating their own WeChat groups and provide direct marketing to consumers. 69 Table of Contents Technology Technology Infrastructure Our technological capabilities play an important role in the success of our business, and enable us to enhance operating efficiency and site scalability.
Moreover, some of our offline stores are making efforts to utilize private domain traffic by operating their own WeChat groups and provide direct marketing to consumers. 71 Table of Contents Technology Technology Infrastructure Our technological capabilities play an important role in the success of our business, and enable us to enhance operating efficiency and site scalability.
Furthermore, our business intelligence system is built with our proprietary cloud computing infrastructure, providing insights for many aspects of our business operations and site functionalities. 70 Table of Contents Safety and Scalability We have developed disaster tolerant systems for our key business modules, which include real-time data mirroring, daily data back-up, and system redundancy solutions.
Furthermore, our business intelligence system is built with our proprietary cloud computing infrastructure, providing insights for many aspects of our business operations and site functionalities. 72 Table of Contents Safety and Scalability We have developed disaster tolerant systems for our key business modules, which include real-time data mirroring, daily data back-up, and system redundancy solutions.
We also unveiled the first edition of the Global Buyer Manifesto, highlighting the merchandising teams’ commitment to core principles like focusing on sourcing top-quality products, meticulously selecting brands, maintaining strict quality standards, and offering competitive pricing to ensure a worry-free shopping experience to users; collaborating with brands to provide great deals; encouraging eco-friendly consumer behavior by advocating environmental protection and sustainable practices. 65 Table of Contents Leveraging the industry expertise of our merchandising team and our proprietary consumer insights, we carefully select prospective brand partners and work with those that offer high-quality or premium products that are desirable among consumers in China, and that are willing to provide competitive prices and favorable payment and product return terms.
We also unveiled our Global Buyer Manifesto, highlighting the merchandising teams’ commitment to core principles like focusing on sourcing top-quality products, meticulously selecting brands, maintaining strict quality standards, and offering competitive pricing to ensure a worry-free shopping experience to users; collaborating with brands to provide great deals; encouraging eco-friendly consumer behavior by advocating environmental protection and sustainable practices. 67 Table of Contents Leveraging the industry expertise of our merchandising team and our proprietary consumer insights, we carefully select prospective brand partners and work with those that offer high-quality or premium products that are desirable among consumers in China, and that are willing to provide competitive prices and favorable payment and product return terms.
In October 2021, Sichuan VipFubon Consumer Finance Co., Ltd., a company engaging in consumer finance business, was established by Fubon Bank (China) Co., Ltd., Xtep (China) Co., Ltd. and us.
In October 2021, Sichuan VipFubon Consumer Finance Co., Ltd., or VipFubon, a company engaging in consumer finance business, was established by Fubon Bank (China) Co., Ltd., Xtep (China) Co., Ltd. and us.
Record-filing and Registration of Foreign Trade Operators Pursuant to the then effective PRC Foreign Trade Law promulgated by the Standing Committee of the National People’s Congress on May 12, 1994 and amended on April 6, 2004 and November 7, 2016, and the Measures for Record-filing and Registration of Foreign Trade Business Operators promulgated by the Ministry of Commerce on June 25, 2004 and most recently amended on May 10, 2021, foreign trade business operators engaging in import or export of goods must go through record-filing and registration formalities with the Ministry of Commerce or authorities entrusted by the Ministry of Commerce, unless otherwise stipulated by laws, administrative regulations, and the Ministry of Commerce.
Record-filing and Registration of Foreign Trade Operators Pursuant to the then effective PRC Foreign Trade Law promulgated by the Standing Committee of the National People’s Congress on May 12, 1994 and amended on April 6, 2004, November 7, 2016 and December 30, 2022, and the Measures for Record-filing and Registration of Foreign Trade Business Operators promulgated by the Ministry of Commerce on June 25, 2004 and most recently amended on May 10, 2021, foreign trade business operators engaging in import or export of goods must go through record-filing and registration formalities with the Ministry of Commerce or authorities entrusted by the Ministry of Commerce, unless otherwise stipulated by laws, administrative regulations, and the Ministry of Commerce.
Record-filing for Operation of Medical Devices Pursuant to the Regulations on Supervision and Administration of Medical Devices which were issued by the State Council in 2000 and further amended in March 2014, May 2017, and February 2021, medical devices are divided into three types based on their risk levels.
Record-filing for Operation of Medical Devices Pursuant to the Regulations on Supervision and Administration of Medical Devices which were issued by the State Council in 2000 and further amended in March 2014, May 2017, February 2021, and December 2024, medical devices are divided into three types based on their risk levels.
Additionally, we can continue to sell any excess inventory through our offline stores. 66 Table of Contents We have implemented an inventory management system to manage the information relating to our procurement plan, quality control upon receipt, stock maintenance, stock deliveries, sales invoicing, and sales recording.
Additionally, we can continue to sell any excess inventory through our offline stores. 68 Table of Contents We have implemented an inventory management system to manage the information relating to our procurement plan, quality control upon receipt, stock maintenance, stock deliveries, sales invoicing, and sales recording.
All of our total online orders are collected through online payment services, of which WeChat Pay was used to process a significant portion of our total orders, and our Vipshop Payment service was used to process a meaningful portion of our total orders. 67 Table of Contents Fulfillment We have established a logistics network and warehousing capacity with nationwide coverage.
All of our total online orders are collected through online payment services, of which WeChat Pay was used to process a significant portion of our total orders, and our Vipshop Payment service was used to process a meaningful portion of our total orders. 69 Table of Contents Fulfillment We have established a logistics network and warehousing capacity with nationwide coverage.
We regularly monitor and review the delivery companies’ service quality and their compliance with our contractual terms. 68 Table of Contents Return and Exchange Policy We currently offer our customers the right to return or exchange products purchased from our Vipshop Online Platform within seven days of receipt.
We regularly monitor and review the delivery companies’ service quality and their compliance with our contractual terms. 70 Table of Contents Return and Exchange Policy We currently offer our customers the right to return or exchange products purchased from our Vipshop Online Platform within seven days of receipt.
Record-filing by Third-party Platform Providers for Online Food Trading On July 13, 2016, the China Food and Drug Administration promulgated the Measures for Investigation and Handling of Illegal Acts Involving Online Food Safety, which were further amended by the SAMR on April 2, 2021, pursuant to which a third-party platform provider for online food trading in China must file a record with the competent office of the SAMR at the provincial level and obtain a filing number.
Record-filing by Third-party Platform Providers for Online Food Trading On July 13, 2016, the China Food and Drug Administration promulgated the Measures for Investigation and Handling of Illegal Acts Involving Online Food Safety, which were further amended by the SAMR on April 2, 2021 and on March 18, 2025, pursuant to which a third-party platform provider for online food trading in China must file a record with the competent office of the SAMR at the provincial level and obtain a filing number.
As of the date of this annual report, the equity holding structures of each of the consolidated variable interest entities are as follows: • Eric Ya Shen and Chan Huang hold 66.7% and 33.3% of Vipshop E-Commerce, respectively; • Eric Ya Shen and Chan Huang hold 99.2% and 0.8% of Vipshop Information, respectively; and • Eric Ya Shen and Arthur Xiaobo Hong hold 65% and 35% of Pin Jun Tong, respectively.
As of the date of this annual report, the equity holding structures of each of the consolidated variable interest entities are as follows: • Eric Ya Shen and Chan Huang hold 66.7% and 33.3% of Vipshop E-Commerce, respectively; 106 Table of Contents • Eric Ya Shen and Chan Huang hold 99.2% and 0.8% of Vipshop Information, respectively; and • Eric Ya Shen and Arthur Xiaobo Hong hold 65% and 35% of Pin Jun Tong, respectively.
Through our fifteen years of dedicated operations in discount retail, we have grown to be an expert in the industry and established a large and growing base of loyal customers and brand partners.
Through our sixteen years of dedicated operations in discount retail, we have grown to be an expert in the industry and established a large and growing base of loyal customers and brand partners.
For details of our strategic acquisitions of Shan Shan Outlets, see “—Strategic Investments and Acquisitions.” In 2023, most of our sales were generated through our Vipshop Online Platform and the sales through these offline outlets and stores were immaterial to our business.
For details of our strategic acquisitions of Shan Shan Outlets, see “—Strategic Investments and Acquisitions.” In 2024, most of our sales were generated through our Vipshop Online Platform and the sales through these offline outlets and stores were immaterial to our business.
Pursuant to the 2021 Negative List, if a domestic company engaging in the prohibited business stipulated in the 2021 Negative List seeks an overseas offering and listing, it must obtain the approval from the competent governmental authorities.
Pursuant to the 2024 Negative List, if a domestic company engaging in the prohibited business stipulated in the 2024 Negative List seeks an overseas offering and listing, it must obtain the approval from the competent governmental authorities.
This agreement will remain in full force and effect for a term of ten years from the date of execution, and may be extended for a period to be determined by the applicable WFOE. 104 Table of Contents Powers of Attorney . Each shareholder of the consolidated variable interest entity has signed an irrevocable power of attorney.
This agreement will remain in full force and effect for a term of ten years from the date of execution, and may be extended for a period to be determined by the applicable WFOE. Powers of Attorney . Each shareholder of the consolidated variable interest entity has signed an irrevocable power of attorney.
Organizational Structure Corporate Structure The following diagram illustrates our corporate structure, including our principal subsidiaries and the principal consolidated variable interest entity as of the date of this annual report: 102 Table of Contents Notes: (1) Subsidiaries primarily engaged in product procurement business. (2) Vipshop E-Commerce is a consolidated variable interest entity that primarily engages in e-commerce platform operation.
Organizational Structure Corporate Structure The following diagram illustrates our corporate structure, including our principal subsidiaries and the principal consolidated variable interest entity as of the date of this annual report: Notes: (1) Subsidiaries primarily engaged in product procurement business. (2) Vipshop E-Commerce is a consolidated variable interest entity that primarily engages in e-commerce platform operation.
(5) Subsidiaries primarily engaged in retail businesses and warehousing services in the cities of Zhaoqing, Jianyang, Tianjin, and the regions around them. (6) Subsidiaries primarily engaged in software development and information technology support. Foreign ownership of internet-based businesses is subject to significant restrictions under current PRC laws and regulations.
(5) Subsidiaries primarily engaged in retail businesses and warehousing services in the cities of Zhaoqing, Jianyang, Tianjin, and the regions around them. (6) Subsidiaries primarily engaged in software development and information technology support. 105 Table of Contents Foreign ownership of internet-based businesses is subject to significant restrictions under current PRC laws and regulations.
Risk Factors—Risks Relating to Our Corporate Structure.” 103 Table of Contents Contractual Arrangements Relating to the Consolidated Variable Interest Entities The following is a summary of the material provisions of the agreements for our three sets of contractual arrangements, each among our applicable WFOE, the applicable consolidated variable interest entity, and the shareholders of the applicable consolidated variable interest entity.
Risk Factors—Risks Relating to Our Corporate Structure.” Contractual Arrangements Relating to the Consolidated Variable Interest Entities The following is a summary of the material provisions of the agreements for our three sets of contractual arrangements, each among our applicable WFOE, the applicable consolidated variable interest entity, and the shareholders of the applicable consolidated variable interest entity.
As of the date of this annual report, Fubon Bank (China) Co., Ltd., Xtep (China) Co., Ltd. and we hold 25.0%, 25.1%, and 49.9% of the equity interests in Sichuan VipFubon Consumer Finance Co., Ltd., respectively. We have made capital contribution totaling RMB249.5 million in and have significant influence over the company. Investment in Guofu Life Insurance Co., Ltd.
As of the date of this annual report, Fubon Bank (China) Co., Ltd., Xtep (China) Co., Ltd. and we hold 25.0%, 25.1%, and 49.9% of the equity interests in Sichuan VipFubon Consumer Finance Co., Ltd., respectively. We have made capital contribution totaling RMB249.5 million in and have significant influence over the company.
For the year ended December 31, 2023, GMV generated by our Vipshop App users accounted for approximately 90% of our total online GMV.
For the year ended December 31, 2024, GMV generated by our Vipshop App users accounted for approximately 90% of our total online GMV.
In addition, according to the 2021 Negative List, foreign-invested enterprises are not allowed to engage in the internet audio-video program services.
In addition, according to the 2024 Negative List, foreign-invested enterprises are not allowed to engage in the internet audio-video program services.
In 2021, 2022, and 2023, we processed approximately 786.6 million, 739.5 million, and 812.3 million customer orders, respectively. Since 2013, we have been implementing innovative solutions to further enhance our logistics efficiency. The “just-in-time” method allows some of our suppliers to not load inventories to our warehouses before the products are put up for sale.
In 2022, 2023 and 2024, we processed approximately 739.5 million, 812.3 million and 757.5 million customer orders, respectively. Since 2013, we have been implementing innovative solutions to further enhance our logistics efficiency. The “just-in-time” method allows some of our suppliers to not load inventories to our warehouses before the products are put up for sale.
As of December 31, 2021, 2022, and 2023, our holding company and our subsidiaries accounted for an aggregate of 90.8%, 91.2%, and 89.7%, respectively, of our consolidated total assets (excluding assets attributable to transactions with the consolidated variable interest entities). For a detailed description of the regulatory environment that necessitates the adoption of our corporate structure, see “Item 4.
As of December 31, 2022, 2023 and 2024, our holding company and our subsidiaries accounted for an aggregate of 91.2%, 89.7% and 91.3%, respectively, of our consolidated total assets (excluding assets attributable to transactions with the consolidated variable interest entities). For a detailed description of the regulatory environment that necessitates the adoption of our corporate structure, see “Item 4.
The applicable WFOE may terminate this agreement at any time by giving 30 days’ prior written notice. Generally, the applicable consolidated variable interest entity has no right to terminate this agreement unless the applicable WFOE commits gross negligence or fraud. Loan Agreements .
The applicable WFOE may terminate this agreement at any time by giving 30 days’ prior written notice. Generally, the applicable consolidated variable interest entity has no right to terminate this agreement unless the applicable WFOE commits gross negligence or fraud. 107 Table of Contents Loan Agreements .
Brand Selection and Procurement Brand Selection We have implemented a strict and methodical brand selection process. Our merchandising team, which consisted of over 1,100 members as of December 31, 2023, is responsible for identifying potential qualified brands based on our selection guidelines.
Brand Selection and Procurement Brand Selection We have implemented a strict and methodical brand selection process. Our merchandising team, which consisted of over 1,000 members as of December 31, 2024, is responsible for identifying potential qualified brands based on our selection guidelines.
With our dedicated operations in the discount retail industry and through our continuous innovations to stimulate customers’ excitement in their shopping experience, we have accumulated a large number of active customers and repeat customers. The total number of our active customers was 92.6 million, 84.1 million, and 87.4 million in 2021, 2022, and 2023, respectively.
With our dedicated operations in the discount retail industry and through our continuous innovations to stimulate customers’ excitement in their shopping experience, we have accumulated a large number of active customers and repeat customers. The total number of our active customers was 84.1 million, 87.4 million and 84.7 million in 2022, 2023 and 2024, respectively.
We also had 6.7 million and 7.6 million active Super VIP customers in 2022 and 2023, respectively. 62 Table of Contents We built our highly scalable and customized e-commerce infrastructure to serve the needs of flash sales and business innovations and to become more intelligent and efficient with every order.
We also had 7.6 million and 8.8 million active Super VIP customers in 2023 and 2024, respectively. 64 Table of Contents We built our highly scalable and customized e-commerce infrastructure to serve the needs of flash sales and business innovations and to become more intelligent and efficient with every order.
Pursuant to an Arrangement Between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
Pursuant to an Arrangement Between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
The SAMR issued the Notice on Anti-monopoly Enforcement Authorization on December 28, 2018, which grants authorizations to the SAMR’s provincial branches for anti-monopoly enforcement within their respective jurisdictions, and further issued the Anti-monopoly Compliance Guideline for Operators on September 11, 2020 for establishing an anti-monopoly compliance management system and preventing anti-monopoly compliance risks.
The SAMR issued the Notice on Anti-monopoly Enforcement Authorization on December 28, 2018, which grants authorizations to the SAMR’s provincial branches for anti-monopoly enforcement within their respective jurisdictions, and further issued the Anti-monopoly Compliance Guideline for Operators on September 11, 2020, which was amended on April 25, 2024, for establishing an anti-monopoly compliance management system and preventing anti-monopoly compliance risks.
As of December 31, 2023, we mainly rely on the following six principal subsidiaries of Vipshop China for our business operations: • Vipshop (Jianyang) E-Commerce Co., Ltd.; • Vipshop (Zhaoqing) E-Commerce Co., Ltd.; • Vipshop (Tianjin) E-Commerce Co., Ltd.; • Chongqing Vipshop E-Commerce Co., Ltd.; • Guangzhou Pinwei Software Co., Ltd.; and • Vipshop (Guangzhou) Software Co., Ltd.
As of December 31, 2024, we mainly rely on Chongqing Pinwei. and the following five principal subsidiaries of Vipshop China for our business operations: • Vipshop (Jianyang) E-Commerce Co., Ltd.; • Vipshop (Zhaoqing) E-Commerce Co., Ltd.; • Vipshop (Tianjin) E-Commerce Co., Ltd.; • Guangzhou Pinwei Software Co., Ltd.; and • Vipshop (Guangzhou) Software Co., Ltd.
As of December 31, 2021, 2022, and 2023, we worked with over 25,000, 27,000, and 29,000 brand partners, respectively. None of the brands accounted for more than 3% of our total revenues in 2021, 2022, or 2023.
As of December 31, 2022, 2023 and 2024, we worked with over 27,000, 29,000 and 30,000 brand partners, respectively. None of the brands accounted for more than 3% of our total revenues in 2022, 2023 or 2024.
In the years ended December 31, 2021, 2022, and 2023, our subsidiaries contributed in aggregate approximately 97.4%, 98.9%, and 99.7%, respectively, of our total consolidated net revenues, excluding revenues derived from the consolidated variable interest entities.
In the years ended December 31, 2022, 2023 and 2024, our subsidiaries contributed in aggregate approximately 98.9%, 99.7% and 99.7%, respectively, of our total consolidated net revenues, excluding revenues derived from the consolidated variable interest entities.
Risk Factors—Risks Relating to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.” 105 Table of Contents D. Property, Plants and Equipment We are headquartered in Guangzhou.
Risk Factors—Risks Relating to Doing Business in China—Uncertainties with respect to the PRC legal system could adversely affect us.” D. Property, Plants and Equipment We are headquartered in Guangzhou.
An employer is required to strictly control the number of dispatched laborers, which should not exceed 10% of the total number of its labor force. C.
An employer is required to strictly control the number of dispatched laborers, which should not exceed 10% of the total number of its labor force. 104 Table of Contents C.
Dividend Distribution The principal regulations governing distribution of dividends of the foreign-invested enterprises include the PRC Foreign Investment Law, the Implementing Regulation of the Foreign Investment Law, and the PRC Company Law which was issued on December 29, 1993 and most recently amended on October 26, 2018.
Dividend Distribution The principal regulations governing distribution of dividends of the foreign-invested enterprises include the PRC Foreign Investment Law, the Implementing Regulation of the Foreign Investment Law, and the PRC Company Law which was issued on December 29, 1993 and most recently amended on December 29, 2023.
Moreover, in July 2022, we bagged the titles of China’s Best Employer of the Year and China’s Most Sustainable Employer of the Year in the selection by Forbes China and Russell Reynolds Associates, a global search and leadership advisory firm. 71 Table of Contents In 2022, we established a three-tiered governance structure that includes our board of directors, an ESG committee under the board of directors, consisting of Mr.
Moreover, we bagged the titles of China’s Best Employer of the Year and China’s Most Sustainable Employer of the Year in 2022, and the Most Popular Employer Among Employees in 2024, in the selection by Forbes China and Russell Reynolds Associates, a global search and leadership advisory firm. 73 Table of Contents In 2022, we established a three-tiered governance structure that includes our board of directors, an ESG committee under the board of directors, consisting of Mr.
Some of our signature sales events include Super Product Category Day, Super Brand Day, and Today’s Top Brands. 63 Table of Contents We leverage a variety of channels to better organize our product offerings and help customers discover their desired products.
Some of our signature sales events include Super Product Category Day, Super Brand Day, and Today’s Top Brands. 65 Table of Contents We leverage a variety of channels to better organize our branded products and help customers discover their desired items.
In order to facilitate foreign investment in our company, our founders incorporated Vipshop Holdings Limited, an offshore holding company in Cayman Islands, in August 2010. In October 2010, Vipshop Holdings Limited established Vipshop International Holdings Limited, a wholly-owned subsidiary, in Hong Kong. Subsequently, Vipshop International Holdings Limited established a wholly-owned PRC subsidiary, Vipshop China, in January 2011.
In order to facilitate foreign investment in our company, our founders incorporated Vipshop Holdings Limited, an offshore holding company in Cayman Islands, in August 2010. In October 2010, Vipshop Holdings Limited established Vipshop International Holdings Limited, a wholly-owned subsidiary, in Hong Kong.
The term of protection for copyrighted software is 50 years. 94 Table of Contents In addition, the Regulations on the Protection of Rights to Information Network Communication, which were promulgated by the State Council on May 18, 2006 and amended on January 30, 2013, provide specific rules on fair use, statutory license, and a safe harbor for use of copyrights and copyright management technology and specify the liabilities of various entities for violations, including copyright holders, libraries, and internet service providers.
In addition, the Regulations on the Protection of Rights to Information Network Communication, which were promulgated by the State Council on May 18, 2006 and amended on January 30, 2013, provide specific rules on fair use, statutory license, and a safe harbor for use of copyrights and copyright management technology and specify the liabilities of various entities for violations, including copyright holders, libraries, and internet service providers.
As of December 31, 2023, we had diverse product offerings from a cumulative of approximately 46,000 domestic and international brands, including apparel, accessories, and standardized products.
As of December 31, 2024, we had diverse product offerings from a cumulative of approximately 47,000 domestic and international brands, including apparel, accessories, and standardized products.
On December 27, 2021, the Ministry of Commerce and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), or the 2021 Negative List, which became effective on January 1, 2022 and replaced the previous version of the Special Administrative Measures (Negative List) for Foreign Investment Access. 73 Table of Contents On March 15, 2019, the National People’s Congress approved the PRC Foreign Investment Law, which came into effect on January 1, 2020 and replaced three then existing laws on foreign investments in China, namely, the PRC Sino-foreign Equity Joint Venture Enterprise Law, the PRC Sino-foreign Cooperative Joint Venture Enterprise Law, and the PRC Wholly Foreign-invested Enterprise Law.
On September 6, 2024, the Ministry of Commerce and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version), or the 2024 Negative List, which became effective on November 1, 2024 and replaced the previous version of the Special Administrative Measures (Negative List) for Foreign Investment Access. 75 Table of Contents On March 15, 2019, the National People’s Congress approved the PRC Foreign Investment Law, which came into effect on January 1, 2020 and replaced three then existing laws on foreign investments in China, namely, the PRC Sino-foreign Equity Joint Venture Enterprise Law, the PRC Sino-foreign Cooperative Joint Venture Enterprise Law, and the PRC Wholly Foreign-invested Enterprise Law.
Regulations Relating to Information Security The Decision Regarding the Safeguarding of Internet Security, enacted by the Standing Committee of the National People’s Congress on December 28, 2000, and amended with immediate effect on August 27, 2009, specifies that certain types of acts conducted through the internet are subject to criminal liabilities if such acts constitute criminal offense, including but not limited to: (i) gaining improper entry into a computer information system relating to state affairs, national defense, or cutting-edge science and technology; (ii) disseminating harmful information, inciting secession, or sabotaging national unity; (iii) stealing or leaking state secrets, intelligence, or military secrets; (iv) undermining the commercial goodwill and product reputation of other people; or (v) infringing intellectual property rights of other people.
Any mobile application sponsor that fails to complete the record-filing formalities should not engage in internet information services through mobile apps. 81 Table of Contents Regulations Relating to Information Security The Decision Regarding the Safeguarding of Internet Security, enacted by the Standing Committee of the National People’s Congress on December 28, 2000, and amended with immediate effect on August 27, 2009, specifies that certain types of acts conducted through the internet are subject to criminal liabilities if such acts constitute criminal offense, including but not limited to: (i) gaining improper entry into a computer information system relating to state affairs, national defense, or cutting-edge science and technology; (ii) disseminating harmful information, inciting secession, or sabotaging national unity; (iii) stealing or leaking state secrets, intelligence, or military secrets; (iv) undermining the commercial goodwill and product reputation of other people; or (v) infringing intellectual property rights of other people.
As of December 31, 2023, we had over 2,100 customer service personnel, including independent contractors. With a specialized team dedicated to effectively tackling customer concerns, we strive to align closely with customer expectations and sentiments.
As of December 31, 2024, we had over 1,500 customer service personnel, including independent contractors. With a specialized team dedicated to effectively tackling customer concerns, we strive to align closely with customer expectations and sentiments.
As a testament to our sustainable business practices, we maintained “A” rating in MSCI ESG Rating from July 2021 to November 2022, and elevated our rating to “AA” in October 2023, marking our company as a leader among over 300 companies in the consumer discretionary industry.
As a testament to our sustainable business practices, our MSCI ESG Rating was elevated to “A” in July 2021, and further elevated to “AA” in October 2023, marking our company as a leader among over 300 companies in the consumer discretionary industry.
On March 15, 2024, the State Counsil promulgated the Implementing Regulations of the Consumer Rights and Interests Protection Law, which will come into effect on July 1, 2024.
On March 15, 2024, the State Council promulgated the Implementing Regulations of the Consumer Rights and Interests Protection Law, which came into effect on July 1, 2024.
In August 2023, we published our 2022 ESG report. As outlined in the report, we define our ESG strategy with the goal of “co-creation of a new sustainable life” to explore a path of sustainable development across five core areas: New Sustainable Choices, Happy Consumption, Proactive Inclusivity, Beautiful Society, and Dependable Compliance.
We define our ESG strategy with the goal of “co-creation of a new sustainable life” to explore a path of sustainable development across five core areas: New Sustainable Choices, Happy Consumption, Proactive Inclusivity, Beautiful Society, and Dependable Compliance.
The Administrative Measures for Food Operating Permit requires an enterprise engaging in food operating business to obtain a Food Operating Permit.
The Administrative Measures for Food Operation Licensing and Filing requires an enterprise engaging in food operating business to obtain a Food Operating Permit.
In particular, business operators are prohibited from any of the following unfair activities: (i) committing acts of confusion; (ii) seeking transaction opportunities or competitive advantages by bribing entities or individuals with property or by any other means; (iii) conducting commercial promotions for the performance, function, quality, sales status, user evaluation, honor received concerning its products in a false or misleading manner; (iv) infringing trade secrets; (v) premium campaign in contravention to the Anti-unfair Competition Law; and (vi) fabricating or disseminating false or misleading information to undermine the goodwill or commodity reputation of any competitors.
In particular, business operators are prohibited from any of the following unfair activities: (i) committing acts of confusion; (ii) seeking transaction opportunities or competitive advantages by bribing entities or individuals with property or by any other means; (iii) conducting commercial promotions for the performance, function, quality, sales status, user evaluation, honor received concerning its products in a false or misleading manner; (iv) infringing trade secrets; (v) premium campaign in contravention to the Anti-unfair Competition Law; and (vi) fabricating or disseminating false or misleading information to undermine the goodwill or commodity reputation of any competitors. 95 Table of Contents On October 29, 2020, the SAMR issued the Interim Provisions on Regulating Promotional Activities, which came into effect on December 1, 2020.
During the year 2021, 2022, and 2023, we made further investment of RMB149.2 million, RMB553.7 million, and nil to acquire additional shares from the existing shareholders of subsidiaries of Shan Shan Outlets. Investment in Sichuan VipFubon Consumer Finance Co., Ltd.
In 2022, 2023 and 2024, we made further investment of RMB553.7 million, nil and RMB512.0 million to acquire additional shares from the existing shareholders of subsidiaries of Shan Shan Outlets. Investment in Sichuan VipFubon Consumer Finance Co., Ltd.
In 2021, 2022, and 2023, we sourced 93%, 93%, and 92% of our GMV from our Vipshop Online Platform, respectively. Our Brand Partners Since our inception in August 2008, we have attracted a broad and diverse group of brand partners. Our brand partners primarily include brand owners, and, to a lesser extent, brand distributors and resellers.
In 2022, 2023 and 2024, we sourced 97%, 97% and 96% of our net revenues from our Vipshop Online Platform, respectively. Our Brand Partners Since our inception in August 2008, we have attracted a broad and diverse group of brand partners. Our brand partners primarily include brand owners, and, to a lesser extent, brand distributors and resellers.
Regulations Relating to Leasing Pursuant to the Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the Land Use Right of the State-owned Land in the Urban Areas promulgated by the State Council on May 19, 1990 and most recently amended on November 29, 2020, the lease of the allocated land use rights and of the buildings or houses erected on such land should be subject to the approval of the real estate administration department.
Otherwise, it will be held jointly liable with the network user for the extended damages. 90 Table of Contents Regulations Relating to Leasing Pursuant to the Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the Land Use Right of the State-owned Land in the Urban Areas promulgated by the State Council on May 19, 1990 and most recently amended on November 29, 2020, the lease of the allocated land use rights and of the buildings or houses erected on such land should be subject to the approval of the real estate administration department.
Furthermore, according to the Measures for the Administration and Supervision of Online Sales of Medical Devices, which were promulgated by the China Food and Drug Administration on December 20, 2017 and became effective on March 1, 2018, enterprises engaged in online sales of medical devices must be medical device operation enterprises that have obtained medical device operation licenses or record-filings and must fill in the table of information of online sales of medical devices and file the information with the competent food and drug administration.
Pursuant to the Regulations on Supervision and Administration of Medical Devices and the Measures on the Supervision and Administration of the Business Operations of Medical Devices, any entities that engage in the business operation of Type II medical devices must file a record with the local department responsible for the drug supervision and administration. 78 Table of Contents Furthermore, according to the Measures for the Administration and Supervision of Online Sales of Medical Devices, which were promulgated by the China Food and Drug Administration on December 20, 2017 and became effective on March 1, 2018, enterprises engaged in online sales of medical devices must be medical device operation enterprises that have obtained medical device operation licenses or record-filings and must fill in the table of information of online sales of medical devices and file the information with the competent food and drug administration.
The total number of our repeat customers was 76.5 million, 71.8 million, and 74.9 million in 2021, 2022, and 2023, respectively, representing 82.5%, 85.4%, and 85.8%, respectively, of the total number of active customers during the same periods.
The total number of our repeat customers was 71.8 million, 74.9 million and 72.8 million in 2022, 2023 and 2024, respectively, representing 85.4%, 85.8% and 86.0%, respectively, of the total number of active customers during the same periods.
This review process helps ensure that we maintain a portfolio of brands with high standards and good reputation that can meet our customers’ expectations. We generally enter into agreements with our brand partners based on our standard form and seek to build long-term relationships with them.
This review process helps ensure that we maintain a portfolio of brands with high standards and good reputation that can meet our customers’ expectations. We seek to build long-term relationships with qualified brand partners.
In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which was further revised in 2018 and 2019, specifies that the administration by SAFE or its local branches over direct investment by foreign investors in China should be conducted by way of registration and banks should process foreign exchange business relating to the direct investment in China based on the registration information provided by SAFE and its branches.
In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which was further revised in 2018 and 2019, specifies that the administration by SAFE or its local branches over direct investment by foreign investors in China should be conducted by way of registration and banks should process foreign exchange business relating to the direct investment in China based on the registration information provided by SAFE and its branches. 99 Table of Contents On January 26, 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, which came into effect on the same day.
Pursuant to the Administrative Provisions of the Customs of the People’s Republic of China on Record-filing of Customs Declaration Entities, in order to conduct customs declaration business in China, customs declaration entities must go through the record-filing formalities with the Customs in accordance with such provisions and the record-filing of customs declaration entities will remain valid permanently unless revoked. 78 Table of Contents Record-filing with the Immigration Inspection and Quarantine Agency Pursuant to the Law on Import and Export Commodity Inspection promulgated by the Standing Committee of the National People’s Congress on February 21, 1989 and most recently amended on April 29, 2021, and the Implementing Regulations of the Law on Import and Export Commodity Inspection promulgated by the State Council on August 31, 2005 and most recently amended on March 29, 2022, the consignees or the consignors of imported and exported commodities may complete declaration formalities for inspection on its own or entrust a declaration agent enterprise to complete declaration formalities for inspection and must complete filing formalities with the immigration inspection and quarantine agency in accordance with the law.
Record-filing with the Immigration Inspection and Quarantine Agency Pursuant to the Law on Import and Export Commodity Inspection promulgated by the Standing Committee of the National People’s Congress on February 21, 1989 and most recently amended on April 29, 2021, and the Implementing Regulations of the Law on Import and Export Commodity Inspection promulgated by the State Council on August 31, 2005 and most recently amended on March 29, 2022, the consignees or the consignors of imported and exported commodities may complete declaration formalities for inspection on its own or entrust a declaration agent enterprise to complete declaration formalities for inspection and must complete filing formalities with the immigration inspection and quarantine agency in accordance with the law.
The officials from the CSRC have also confirmed that for the PRC domestic companies that seek to list overseas with variable interest entity structure, the CSRC will solicit opinions from the regulatory authorities and complete the filing procedures for the overseas offering and listing of PRC domestic companies with variable interest entity structure which duly meet the compliance requirements.
The officials from the CSRC have also confirmed that for the PRC domestic companies that seek to list overseas with variable interest entity structure, the CSRC will solicit opinions from the regulatory authorities and complete the filing procedures for the overseas offering and listing of PRC domestic companies with variable interest entity structure which duly meet the compliance requirements. 92 Table of Contents The Overseas Offering and Listing Measures also set forth certain regulatory red lines for overseas offerings and listings by PRC domestic enterprises.
The Provisions on the Threshold of Filings for Undertaking Concentrations, issued by the State Council on January 22, 2024, set forth the latest filing threshold for concentration of undertaking, which is, during the previous fiscal year, (i) the total global turnover of all operators participating in the transaction exceeds RMB12 billion in the preceding fiscal year and at least two of these operators each has a turnover of more than RMB800 million within China in the preceding fiscal year, or (ii) the total turnover within China of all the operators participating in the concentration exceeds RMB4 billion in the preceding fiscal year, and at least two of these operators each has a turnover of more than RMB800 million within China in the preceding fiscal year.
The Provisions on the Threshold of Filings for Undertaking Concentrations, issued by the State Council on January 22, 2024, set forth the latest filing threshold for concentration of undertaking, which is, during the previous fiscal year, (i) the total global turnover of all operators participating in the transaction exceeds RMB12 billion in the preceding fiscal year and at least two of these operators each has a turnover of more than RMB800 million within China in the preceding fiscal year, or (ii) the total turnover within China of all the operators participating in the concentration exceeds RMB4 billion in the preceding fiscal year, and at least two of these operators each has a turnover of more than RMB800 million within China in the preceding fiscal year. 94 Table of Contents On February 7, 2021, the Anti-monopoly Committee of the State Council promulgated the Anti-monopoly Guidelines for the Platform Economy Sector, aiming to improve anti-monopoly administration on online platforms.
Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. 100 Table of Contents Issues concerning the withholding of enterprise income tax of the China-sourced income, which refers to income obtained from sources within China by non-PRC resident enterprises that (a) do not have an establishment or place of business in China or (b) have an establishment or place of business in China, but the income is not effectively connected with the establishment or place of business in China, should be subject to STA Circular 37.
Issues concerning the withholding of enterprise income tax of the China-sourced income, which refers to income obtained from sources within China by non-PRC resident enterprises that (a) do not have an establishment or place of business in China or (b) have an establishment or place of business in China, but the income is not effectively connected with the establishment or place of business in China, should be subject to STA Circular 37.
As of December 31, 2023, we had been granted 287 patents and submitted 954 patent applications in China, owned 2,187 registered trademarks in China and 125 registered trademarks outside China, 242 copyrights (including copyrights to 210 software products in China that we develop relating to various aspects of our operations), and 30 registered domain names that are material to our business, including vip.com and vipshop.com.
As of December 31, 2024, we had been granted 370 patents and submitted 1,054 patent applications in China, owned 2,264 registered trademarks in China and 103 registered trademarks outside China, 266 copyrights (including copyrights to 235 software products in China that we develop relating to various aspects of our operations), and 30 registered domain names that are material to our business, including vip.com and vipshop.com.
On August 17, 2021, the SAMR issued the Provisions on Preventing Online Unfair Competition (Draft for Public Comments), which prohibit business operators from using data, algorithms, and other technical means to commit traffic hijacking, interference, malicious incompatibility, and other improprieties to influence user choices or hinder or damage the normal operation of network products or services offered by other business operators.
On May 6, 2024, the SAMR issued the Interim Provisions on Anti-Unfair Competition on the Internet, which prohibit business operators from using data, algorithms, and other technical means to commit traffic hijacking, interference, malicious incompatibility, and other improprieties to influence user choices or hinder or damage the normal operation of network products or services offered by other business operators.
Together, they form a reliable technology platform that optimizes customer experiences and supports efficient business operations. The front-end modules, which refer to modules supporting the user-interfaces of our platform, mainly include product display, member account management, category browsing, product searches, online shopping cart, order processing functions, payment, chatbots, and customer support functions.
The front-end modules, which refer to modules supporting the user-interfaces of our platform, mainly include product display, member account management, category browsing, product searches, online shopping cart, order processing functions, payment, chatbots, and customer support functions.
Record-filing of a Customs Declaration Entity Pursuant to the Administrative Provisions of the Customs of the People’s Republic of China on the Registration of Customs Declaration Entities promulgated by the General Administration of Customs on March 13, 2014 and most recently amended on May 29, 2018, in completing customs declaration formalities, any customs declaration entity must go through the application registration formalities with the Customs in accordance with the provisions, unless otherwise required by the laws, administrative regulations or rules of the Customs.
However, the Measures for Record-filing and Registration of Foreign Trade Business Operators promulgated by the Ministry of Commerce have not been revised and the record-filing and registration requirements for foreign trade business operators thereunder have not been canceled. 80 Table of Contents Record-filing of a Customs Declaration Entity Pursuant to the Administrative Provisions of the Customs of the People’s Republic of China on the Registration of Customs Declaration Entities promulgated by the General Administration of Customs on March 13, 2014 and most recently amended on May 29, 2018, in completing customs declaration formalities, any customs declaration entity must go through the application registration formalities with the Customs in accordance with the provisions, unless otherwise required by the laws, administrative regulations or rules of the Customs.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

84 edited+13 added−19 removed83 unchanged
Biggest changeFor the Year Ended December 31, 2021 2022 2023 RMB RMB RMB US$ (in thousands) Product revenues 111,256,902 97,250,078 105,613,485 14,875,348 Other revenues 5,802,776 5,902,411 7,242,535 1,020,090 Total net revenues 117,059,678 103,152,489 112,856,020 15,895,438 Cost of revenues (1) (93,953,121 ) (81,536,409 ) (87,135,128 ) (12,272,726 ) Gross profit 23,106,557 21,616,080 25,720,892 3,622,712 Operating Expenses (2) —Fulfillment expenses (3) (7,652,504 ) (7,247,210 ) (8,262,004 ) (1,163,679 ) —Marketing expenses (5,089,213 ) (2,831,316 ) (3,242,215 ) (456,656 ) —Technology and content expenses (1,517,307 ) (1,605,422 ) (1,767,530 ) (248,951 ) —General and administrative expenses (4,189,690 ) (4,459,518 ) (4,146,568 ) (584,032 ) Total operating expenses (18,448,714 ) (16,143,466 ) (17,418,317 ) (2,453,318 ) Other operating income 924,579 724,832 801,560 112,897 Income from operations 5,582,422 6,197,446 9,104,135 1,282,291 Impairment loss of investments (414,780 ) (93,904 ) (19,105 ) (2,691 ) Interest expense (14,461 ) (24,258 ) (22,932 ) (3,230 ) Interest income 671,461 764,018 780,292 109,902 Exchange (loss)/gain (37,052 ) 687,871 162,666 22,911 Investment gain and revaluation of investments 85,685 546,031 (18,054 ) (2,543 ) Income before income taxes and share of income/(loss) of equity method investees 5,873,275 8,077,204 9,987,002 1,406,640 Income tax expenses (1,222,704 ) (1,758,810 ) (1,866,004 ) (262,821 ) Share of income/(loss) of equity method investees 42,303 (6,559 ) 80,301 11,310 Net income 4,692,874 6,311,835 8,201,299 1,155,129 Net income attributable to non-controlling interests (11,801 ) (13,019 ) (84,675 ) (11,926 ) Net income attributable to our shareholders 4,681,073 6,298,816 8,116,624 1,143,203 Notes: (1) Excludes shipping and handling expenses, and includes changes of inventory write-down which amounted to RMB35.3 million, RMB130.7 million, and RMB(681.2) million (US$(95.9) million) in the years ended December 31, 2021, 2022, and 2023, respectively.
Biggest changeFor the Year Ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Product revenues 97,250,078 105,613,485 100,734,550 13,800,577 Other revenues 5,902,411 7,242,535 7,686,282 1,053,016 Total net revenues 103,152,489 112,856,020 108,420,832 14,853,593 Cost of revenues (1) (81,536,409 ) (87,135,128 ) (82,951,178 ) (11,364,265 ) Gross profit 21,616,080 25,720,892 25,469,654 3,489,328 Operating Expenses (2) —Fulfillment expenses (3) (7,247,210 ) (8,262,004 ) (8,346,864 ) (1,143,516 ) —Marketing expenses (2,831,316 ) (3,242,215 ) (2,979,654 ) (408,211 ) —Technology and content expenses (1,605,422 ) (1,767,530 ) (1,892,434 ) (259,262 ) —General and administrative expenses (4,459,518 ) (4,146,568 ) (3,992,657 ) (546,992 ) Total operating expenses (16,143,466 ) (17,418,317 ) (17,211,609 ) (2,357,981 ) Other operating income 724,832 801,560 915,208 125,383 Income from operations 6,197,446 9,104,135 9,173,253 1,256,730 Impairment loss of investments (93,904 ) (19,105 ) (61,246 ) (8,391 ) Interest expense (24,258 ) (22,932 ) (57,676 ) (7,902 ) Interest income 764,018 780,292 809,792 110,941 Exchange gain/(loss) 687,871 162,666 (24,813 ) (3,399 ) Investment gain and revaluation of investments 546,031 (18,054 ) 148,170 20,299 Income before income taxes and share of income/(loss) of equity method investees 8,077,204 9,987,002 9,987,480 1,368,278 Income tax expenses (1,758,810 ) (1,866,004 ) (2,315,515 ) (317,224 ) Share of (loss)/income of equity method investees (6,559 ) 80,301 166,980 22,876 Net income 6,311,835 8,201,299 7,838,945 1,073,930 Net income attributable to non-controlling interests (13,019 ) (84,675 ) (99,010 ) (13,564 ) Net income attributable to our shareholders 6,298,816 8,116,624 7,739,935 1,060,366 Notes: (1) Excludes shipping and handling expenses. 112 Table of Contents (2) Include share-based compensation expenses as set forth below: For the Year Ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Fulfillment expenses (74,063 ) (77,926 ) (84,079 ) (11,519 ) Marketing expenses (14,630 ) (33,379 ) (31,215 ) (4,276 ) Technology and content expenses (242,714 ) (330,197 ) (382,308 ) (52,376 ) General and administrative expenses (876,174 ) (1,068,304 ) (1,040,138 ) (142,498 ) Total (1,207,581 ) (1,509,806 ) (1,537,740 ) (210,669 ) (3) Include shipping and handling expenses, which amounted to RMB5.06 billion, RMB5.84 billion and RMB5.82 billion (US$797.7 million) in the years ended December 31, 2022, 2023 and 2024, respectively. 113 Table of Contents Segment Information The following table sets forth our segment operating results for the years ended December 31, 2022, 2023 and 2024.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2024 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2025 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Our capital expenditures were primarily for the expansion of Shan Shan Outlets, acquisition of land use rights, construction of office building and warehouses, and other infrastructure from 2020 through 2023. We expect our capital expenditures to decrease for the year 2024. Holding Company Structure Vipshop Holdings Limited is a holding company with no material operations of its own.
Our capital expenditures were primarily for the expansion of Shan Shan Outlets, acquisition of land use rights, construction of office building and warehouses, and other infrastructure from 2020 through 2024. We expect our capital expenditures to decrease for the year 2025. Holding Company Structure Vipshop Holdings Limited is a holding company with no material operations of its own.
We provided a valuation allowance for the deferred tax assets relating to the future benefit of net operating loss carry forwards and other deferred tax assets of certain subsidiaries as of December 31, 2021, 2022, and 2023, respectively, as our management is not able to conclude that the future realization of some of such net operating loss carry forwards is more likely than not.
We provided a valuation allowance for the deferred tax assets relating to the future benefit of net operating loss carry forwards and other deferred tax assets of certain subsidiaries as of December 31, 2022, 2023 and 2024, respectively, as our management is not able to conclude that the future realization of some of such net operating loss carry forwards is more likely than not.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging, or research and development services with us. The following table sets forth our minimum contractual obligations as of December 31, 2023.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging, or research and development services with us. The following table sets forth our minimum contractual obligations as of December 31, 2024.
While the above indicates our material cash requirements as of December 31, 2023, the actual amounts we are eventually required to pay may be different in the event that any agreements are renegotiated, cancelled or terminated. C. Research and Development, Patents and Licenses, etc.
While the above indicates our material cash requirements as of December 31, 2024, the actual amounts we are eventually required to pay may be different in the event that any agreements are renegotiated, cancelled or terminated. C. Research and Development, Patents and Licenses, etc.
This subsidiary is entitled to enjoy a preferential enterprise income tax policy of “exemption for the first two years and 50% deduction of income tax (i.e., entitled to a favorable tax rate at 12.5%) for the subsequent three years” from the first profit making year. The first profit making year for this subsidiary was 2021.
This subsidiary is entitled to enjoy a preferential enterprise income tax policy of “exemption for the first two years and 50% deduction of income tax (i.e., entitled to a favorable tax rate at 12.5%) for the subsequent three years” from the first profit making year.
For additional information about the services provided, cash flows or transfer of other assets between our company, our subsidiaries and the consolidated variable interest entities during the three years ended December 31, 2021, 2022, and 2023, see “Item 3.
For additional information about the services provided, cash flows or transfer of other assets between our company, our subsidiaries and the consolidated variable interest entities during the three years ended December 31, 2022, 2023 and 2024, see “Item 3.
Material Cash Requirements Other than the ordinary cash requirements for our operations, our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include our operating lease obligations, capital expenditure commitments, purchase of services, debt obligations, and cash requirements for potential investments.
Material Cash Requirements Other than the ordinary cash requirements for our operations, our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our operating lease obligations, capital expenditure commitments, purchase of services, debt obligations, and cash requirements for potential investments.
We reduce product revenues by an estimate of expected customer merchandise returns, which is calculated based on historical return patterns and recorded as a refund liability included in accrued expenses and other current liabilities. The estimated refund liability contributed 0.3%, 0.3%, and 0.4% of the net revenues for the years ended December 31, 2021, 2022, and 2023, respectively.
We reduce product revenues by an estimate of expected customer merchandise returns, which is calculated based on historical return patterns and recorded as a refund liability included in accrued expenses and other current liabilities. The estimated refund liability contributed 0.3%, 0.4% and 0.5% of the net revenues for the years ended December 31, 2022, 2023 and 2024, respectively.
Three of our significant PRC subsidiaries benefit from a preferential tax rate of 15% by either qualifying as a high and new technology enterprise or as an encouraged enterprise in the western regions in an industry sector encouraged by the PRC government.
Four of our significant PRC subsidiaries benefit from a preferential tax rate of 15% by either qualifying as a high and new technology enterprise or as an encouraged enterprise in the western regions in an industry sector encouraged by the PRC government.
Unfavorable changes in any of these general factors could affect the demand for products we sell and could materially and adversely affect our results of operations. Our results of operations are also affected by the regulations and industry policies relating to the online retail market. Substantially all of our revenues and workforce are concentrated in China.
Unfavorable changes in any of these general factors could affect the demand for products we sell and could materially and adversely affect our results of operations. Our results of operations are also affected by the regulations and industry policies relating to the online retail market. 109 Table of Contents Substantially all of our revenues and workforce are concentrated in China.
In 2023, we fulfilled over 812.3 million customer orders, as compared to over 739.5 million customer orders in 2022. Our fulfillment expenses as a percentage of our total net revenues increased from 7.0% in 2022 to 7.3% in 2023, primarily due to the increase of sales return and exchange rate. 112 Table of Contents Marketing expenses .
In 2023, we fulfilled over 812.3 million customer orders, as compared to over 739.5 million customer orders in 2022. Our fulfillment expenses as a percentage of our total net revenues increased from 7.0% in 2022 to 7.3% in 2023, primarily due to the increase of sales return and exchange rate. Marketing expenses .
The amount of our investment in and contribution to the private equity funds may be subject to adjustments in the event of commitment reduction or capital calls by the general partnership of these private equity funds. 119 Table of Contents We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives.
The amount of our investment in and contribution to the private equity funds may be subject to adjustments in the event of commitment reduction or capital calls by the general partnership of these private equity funds. We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives.
For the year ended December 31, 2021, 2022, and 2023, Vipshop Holdings Limited did not extend any intercompany loans to its subsidiaries, and our subsidiaries did not provide any repayment of intercompany loans to Vipshop Holdings Limited. For the year ended December 31, 2021, 2022, and 2023, our subsidiaries did not extend any intercompany loans to Vipshop Holdings Limited.
For the year ended December 31, 2022, 2023 and 2024, Vipshop Holdings Limited did not extend any intercompany loans to its subsidiaries, and our subsidiaries did not provide any repayment of intercompany loans to Vipshop Holdings Limited. For the year ended December 31, 2022, 2023 and 2024, our subsidiaries did not extend any intercompany loans to Vipshop Holdings Limited.
For the year ended December 31, 2021, 2022, and 2023, our subsidiaries did not make any payment to the consolidated variable interest entities for transfer of property and equipment.
For the year ended December 31, 2022, 2023 and 2024, our subsidiaries did not make any payment to the consolidated variable interest entities for transfer of property and equipment.
The seasonal trends that we have experienced in the past may not apply to, or be indicative of, our future operating results. 108 Table of Contents Taxation Cayman Islands We are incorporated in the Cayman Islands. Under the current law of the Cayman Islands, we are not subject to income or capital gains tax in the Cayman Islands.
The seasonal trends that we have experienced in the past may not apply to, or be indicative of, our future operating results. Taxation Cayman Islands We are incorporated in the Cayman Islands. Under the current law of the Cayman Islands, we are not subject to income or capital gains tax in the Cayman Islands.
For the year ended December 31, 2021, 2022, and 2023, no assets other than cash were transferred between our Cayman Islands holding company and a subsidiary, a VIE, or its subsidiary, and no subsidiary or VIE paid dividends or made other distributions to its holding company, except for the dividend of RMB14.98 billion paid by Vipshop (China) Co., Ltd., our PRC subsidiary, to its holding company in Hong Kong, Vipshop International Holdings Limited, in 2022.
For the year ended December 31, 2022, 2023 and 2024, no assets other than cash were transferred between our Cayman Islands holding company and a subsidiary, a VIE, or its subsidiary, and no subsidiary or VIE paid dividends or made other distributions to its holding company, except for the dividend of RMB14.98 billion, nil and RMB10.00 billion paid by Vipshop (China) Co., Ltd., our PRC subsidiary, to its holding company in Hong Kong, Vipshop International Holdings Limited, in 2022, 2023 and 2024.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. 106 Table of Contents This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. As of December 31, 2023, we had not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any unconsolidated third parties.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. 123 Table of Contents As of December 31, 2024, we had not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any unconsolidated third parties.
For the year ended December 31, 2021, 2022, and 2023, our subsidiaries did not extend any intercompany loans to the consolidated variable interest entities, and the consolidated variable interest entities did not provide any repayment of intercompany loans to our subsidiaries. 116 Table of Contents For the year ended December 31, 2021, 2022, and 2023, an aggregate amount of RMB3.81 billion, RMB2.02 billion, and RMB1.26 billion was provided by the consolidated variable interest entities to our subsidiaries in the form of intercompany loans, respectively, and an aggregate amount of RMB3.74 billion, RMB2.01 billion, and RMB3.26 billion was provided by our subsidiaries to the consolidated variable interest entities in the form of repayment of intercompany loans, respectively.
For the year ended December 31, 2022, 2023 and 2024, our subsidiaries did not extend any intercompany loans to the consolidated variable interest entities, and the consolidated variable interest entities did not provide any repayment of intercompany loans to our subsidiaries. 120 Table of Contents For the year ended December 31, 2022, 2023 and 2024, an aggregate amount of RMB2.02 billion, RMB1.26 billion and RMB1.88 billion was provided by the consolidated variable interest entities to our subsidiaries in the form of intercompany loans, respectively, and an aggregate amount of RMB2.01 billion, RMB3.26 billion and RMB1.89 billion was provided by our subsidiaries to the consolidated variable interest entities in the form of repayment of intercompany loans, respectively.
Our technology and content expenses consist primarily of the compensation and benefits of our IT staff, telecommunications expenses, and expenses incurred in creating content for our sales events on our platform, including model fees and professional photography expenses. We incurred RMB1.52 billion, RMB1.61 billion, and RMB1.77 billion (US$249.0 million) in technology and content expenses in 2021, 2022, and 2023, respectively.
Our technology and content expenses consist primarily of the compensation and benefits of our IT staff, telecommunications expenses, and expenses incurred in creating content for our sales events on our platform, including model fees and professional photography expenses. We incurred RMB1.61 billion, RMB1.77 billion and RMB1.89 billion (US$259.3 million) in technology and content expenses in 2022, 2023 and 2024, respectively.
Financing Activities Net cash used in financing activities amounted to RMB6.15 billion (US$865.6 million) in 2023, primarily consisting of RMB5.11 billion (US$719.3 million) of repurchase of ordinary shares and RMB3.36 billion (US$472.7 million) of repayment to bank and other borrowings, partially offset by RMB2.09 billion (US$294.9 million) of proceeds from bank borrowings and other borrowings and RMB285.5 million (US$40.2 million) of capital contributions from non-controlling interests shareholders.
Net cash used in financing activities amounted to RMB6.15 billion (US$865.6 million) in 2023, primarily consisting of RMB5.11 billion (US$719.3 million) of repurchase of ordinary shares and RMB3.36 billion (US$472.7 million) of repayment to bank and other borrowings, partially offset by RMB2.09 billion (US$294.9 million) of proceeds from bank borrowings and other borrowings and RMB285.5 million (US$40.2 million) of capital contributions from non-controlling interests shareholders. 122 Table of Contents Net cash used in financing activities amounted to RMB5.57 billion in 2022, primarily consisting of (i) RMB4.59 billion of proceeds from bank borrowings and other borrowings, offset by RMB4.05 billion of repayment to bank and other borrowings, (ii) RMB6.26 billion of repurchase of ordinary shares, and (iii) RMB185.2 million of capital contributions from non-controlling interests shareholders.
We set aside amounts of RMB87.1 million, RMB133.6 million, and RMB150.1 million (US$21.1 million) from current year’s net income to the general reserve during the years ended December 31, 2021, 2022, and 2023, respectively.
We set aside amounts of RMB133.6 million, RMB150.1 million and RMB193.5 million (US$26.5 million) from current year’s net income to the general reserve during the years ended December 31, 2022, 2023 and 2024, respectively.
The following table sets forth the key factors that directly affect our net revenues for the periods indicated: For the Year Ended December 31, 2021 2022 2023 Total net revenues (RMB in thousands) 117,059,678 103,152,489 112,856,020 Active customers (in millions) 92.6 84.1 87.4 Total orders (in millions) 786.6 739.5 812.3 Average orders per active customer 8.4 8.7 9.3 GMV (RMB in billions) 191.5 175.2 208.0 107 Table of Contents Cost of Revenues Our cost of revenues consists primarily of cost of merchandise sold and inventory write-down.
The following table sets forth the key factors that directly affect our net revenues for the periods indicated: For the Year Ended December 31, 2022 2023 2024 Total net revenues (RMB in thousands) 103,152,489 112,856,020 108,420,832 Active customers (in millions) 84.1 87.4 84.7 Total orders (in millions) 739.5 812.3 757.5 Average orders per active customer 8.7 9.3 8.9 GMV (RMB in billions) 175.2 208.0 209.3 Cost of Revenues Our cost of revenues consists primarily of cost of merchandise sold and inventory write-down.
A one-day change in the estimated goods in-transit period would result in an increase or decrease of approximately RMB492.8 million, RMB469.7 million, RMB436.2 million (US$61.4 million) to our total net revenues in the years ended December 31, 2021, 2022, and 2023, respectively.
A one-day change in the estimated goods in-transit period would result in an increase or decrease of approximately RMB469.7 million, RMB436.2 million and RMB560.1 million (US$76.1 million) to our total net revenues in the years ended December 31, 2022, 2023 and 2024, respectively.
We recorded net income attributable to non-controlling interests of RMB84.7 million (US$11.9 million) in 2023, as compared to net income attributable to non-controlling interests of RMB13.0 million in 2022, which was primarily due to the increase in net income attributable to non-controlling shareholders of Shan Shan Outlets. Comparison of 2022 and 2021 Net Revenues .
We recorded net income attributable to non-controlling interests of RMB99.0 million (US$13.6 million) in 2024, as compared to net income attributable to non-controlling interests of RMB84.7 million in 2023, which was primarily due to the increase in net income attributable to non-controlling shareholders of Shan Shan Outlets. Comparison of 2023 and 2022 Net Revenues .
One of our significant PRC subsidiaries, Vipshop (Guangzhou) Software Co., Ltd., was classified as a “software enterprise” by the local software industry association, which remained valid for one year and needs to be renewed every year.
One of our significant PRC subsidiaries, Vipshop (Guangzhou) Software Co., Ltd., is currently classified as a “software enterprise” by the local software industry association, which remains valid for one year and will be renewed every year.
Operating Activities Net cash from operating activities amounted to RMB14.41 billion (US$2.03 billion) in 2023, which was primarily attributable to a net income of RMB8.20 billion (US$1.16 billion), adjusted for certain non-cash expenses consisting primarily of (i) share-based compensation expenses of RMB1.51 billion (US$212.7 million), (ii) depreciation of property and equipment of RMB1.30 billion (US$183.0 million), attributable to increases in warehouse and outlets, (iii) amortization of land use rights of RMB217.3 million (US$30.6 million) due to the increase of land use rights, and (iv) impairment of long-lived assets of RMB156.2 million (US$22.0 million) due to impairment of operating lease right-of-use assets of city outlets, partially offset by changes of inventory write-down of RMB(681.2) million (US$(95.9) million) due to the more strict purchase strategy, the recovering of online sales and decreased inventories with long aging.
Net cash from operating activities amounted to RMB14.41 billion (US$2.03 billion) in 2023, which was primarily attributable to a net income of RMB8.20 billion (US$1.16 billion), adjusted for certain non-cash expenses consisting primarily of (i) share-based compensation expenses of RMB1.51 billion (US$212.7 million), (ii) depreciation of property and equipment of RMB1.30 billion (US$183.0 million), attributable to increases in warehouse and outlets, (iii) amortization of land use rights of RMB217.3 million (US$30.6 million) due to the increase of land use rights, and (iv) impairment of long-lived assets of RMB156.2 million (US$22.0 million) due to impairment of operating lease right-of-use assets of city outlets.
Out of the foregoing capital expenditures, we paid RMB846.2 million, RMB671.8 million, and RMB3.06 billion (US$431.5 million) in the years ended December 31, 2021, 2022, and 2023, respectively, to acquire the land use rights of certain land located in China.
Out of the foregoing capital expenditures, we paid RMB671.8 million, RMB3.06 billion and RMB839.3 million (US$115.0 million) in the years ended December 31, 2022, 2023 and 2024, respectively, to acquire the land use rights of certain land located in China.
Technology and content expenses primarily consist of the compensation and benefits of our IT staff, telecommunications expenses, and expenses incurred in creating content for our sales events on our platform, including model fees and professional photography expenses.
Technology and content expenses primarily consist of the compensation and benefits of our IT staff, depreciation of IT equipment’s, telecommunications expenses, and expenses incurred in creating content for our sales events on our platform.
Our business and results of operations have been normalized since the beginning of 2023. As of December 31, 2023, we had cash and cash equivalents and restricted cash of RMB26.30 billion (US$3.70 billion) and short-term investments of RMB1.98 billion (US$279.3 million).
Our business and results of operations have been normalized since the beginning of 2023. As of December 31, 2024, we had cash and cash equivalents and restricted cash of RMB26.95 billion (US$3.69 billion) and short-term investments of RMB1.87 billion (US$256.6 million).
We do not anticipate any significant increase to our liability for unrecognized tax benefit within the next 12 months. We will classify interest and penalties relating to income tax matters, if any, in income tax expense.
As of December 31, 2022, 2023 and 2024, we did not have any unrecognized tax benefits. We do not anticipate any significant increase to our liability for unrecognized tax benefit within the next 12 months. We will classify interest and penalties relating to income tax matters, if any, in income tax expense.
As of December 31, 2023, we had been granted 287 patents and submitted 954 patent applications in China, owned 2,187 registered trademarks in China and 125 registered trademarks outside China, 242 copyrights (including copyrights to 210 software products in China that we develop relating to various aspects of our operations), and 30 registered domain names that are material to our business, including vip.com and vipshop.com. 121 Table of Contents D.
As of December 31, 2024, we had been granted 370 patents and submitted 1,054 patent applications in China, owned 2,264 registered trademarks in China and 103 registered trademarks outside China, 266 copyrights (including copyrights to 235 software products in China that we develop relating to various aspects of our operations), and 30 registered domain names that are material to our business, including vip.com and vipshop.com. 125 Table of Contents D.
Our net income in 2021, 2022, and 2023 reflected non-cash share-based compensation expenses in an aggregate amount of RMB1,010.0 million, RMB1,207.6 million, and RMB1,509.8 million (US$212.7 million), respectively.
Our net income in 2022, 2023 and 2024 reflected share-based compensation expenses in an aggregate amount of RMB1,207.6 million, RMB1,509.8 million and RMB1,537.7 million (US$210.7 million), respectively.
The amount of tax loss carry forwards of our certain subsidiaries was RMB1.69 billion, RMB2.16 billion, and RMB2.20 billion (US$310.0 million) as of December 31, 2021, 2022, and 2023, respectively.
The amount of tax loss carry forwards of our certain subsidiaries was RMB2.16 billion, RMB2.20 billion and RMB2.22 billion (US$304.5 million) as of December 31, 2022, 2023 and 2024, respectively.
Taxation—People’s Republic of China Taxation.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.
Information on the Company—B. Business Overview—Regulation—Regulations Relating to Tax” and “Item 10. Additional Information—E. Taxation—People’s Republic of China Taxation.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.
We recorded net income attributable to non-controlling interests of RMB13.0 million in 2022, as compared to net income attributable to non-controlling interests of RMB11.8 million in 2021, which was primarily due to the increase in net income attributable to non-controlling shareholders of Shan Shan Outlets. 114 Table of Contents B.
We recorded net income attributable to non-controlling interests of RMB84.7 million (US$11.9 million) in 2023, as compared to net income attributable to non-controlling interests of RMB13.0 million in 2022, which was primarily due to the increase in net income attributable to non-controlling shareholders of Shan Shan Outlets. 118 Table of Contents B.
As of December 31, 2021, 2022, and 2023, we had value-added tax recoverable of approximately RMB745.5 million, RMB668.2 million, and RMB409.5 million (US$57.7 million), respectively.
As of December 31, 2022, 2023 and 2024, we had value-added tax recoverable of approximately RMB668.2 million, RMB409.5 million and RMB687.3 million (US$94.2 million), respectively.
Together, they form a reliable technology platform that optimizes customer experiences and supports efficient business operations. The front-end modules, which refer to modules supporting the user-interfaces of our platform, mainly include product display, member account management, category browsing, product searches, online shopping cart, order processing functions, payment, chatbots, and customer support functions.
The front-end modules, which refer to modules supporting the user-interfaces of our platform, mainly include product display, member account management, category browsing, product searches, online shopping cart, order processing functions, payment, chatbots, and customer support functions.
Liquidity and Capital Resources As of December 31, 2022 and 2023, we had RMB23.10 billion and RMB26.30 billion (US$3.70 billion), respectively, in cash, cash equivalents, and restricted cash. We had short-term investments with an aggregate outstanding amount of RMB1.98 billion (US$279.3 million) as of December 31, 2023.
Liquidity and Capital Resources As of December 31, 2023 and 2024, we had RMB26.30 billion and RMB26.95 billion (US$3.69 billion), respectively, in cash, cash equivalents, and restricted cash. We had short-term investments with an aggregate outstanding amount of RMB1.87 billion (US$256.6 million) as of December 31, 2024.
Write-downs are recorded in cost of revenues in the consolidated statements of income and comprehensive income. 122 Table of Contents Inventory write-down is estimated based on significant management estimates and assumptions used to determine the write-down percentages that are applied to different aging groups and the assessed condition of the merchandise within each category.
Inventory write-down is estimated based on significant management estimates and assumptions used to determine the write-down percentages that are applied to different aging groups and the assessed condition of the merchandise within each category.
Seasonality Our results of operations are subject to seasonal fluctuations, reflecting a combination of seasonal fluctuations in internet usage, traditional retail seasonality patterns, and seasonal buying patterns in certain categories such as apparel.
We expect our general and administrative expenses to remain relatively stable in the foreseeable future. Seasonality Our results of operations are subject to seasonal fluctuations, reflecting a combination of seasonal fluctuations in internet usage, traditional retail seasonality patterns, and seasonal buying patterns in certain categories such as apparel.
The adjustment for changes in operating assets and liabilities primarily reflected (i) a decrease in accounts payable of RMB1.94 billion, primarily due to the acceleration in settlement with supplier along with the more prudent procurement strategy, (ii) a decrease in inventories of RMB917.4 million due to our efforts in improving our inventory management, (iii) an increase in advances from customers and accrued expenses and other current liabilities of RMB533.9 million, primarily due to the growth in our business. 117 Table of Contents Investing Activities Net cash used in investing activities amounted to RMB5.16 billion (US$726.8 million) in 2023, primarily consisting of (i) RMB5.23 billion (US$736.7 million) capital expenditure relating to our construction and expansion of Shan Shan Outlets, land use rights, office buildings, as well as purchases of office and other operating equipment and IT software, (ii) RMB3.96 billion (US$557.6 million) used for purchase of short-term investments, partially offset by RMB3.57 billion (US$502.2 million) from redemption of short-term investments upon maturities, (iii) RMB347.1 million (US$48.9 million) from government subsidies received for land use rights, (iv) RMB282.5 million (US$39.8 million) paid for investment in equity method investments and other investments, primarily consisting of investment in private equity funds and other equity method investees, (v) RMB199.0 million (US$28.0 million) of proceeds from disposal of property and equipment and land use rights, and (vi) RMB156.4 million (US$22.0 million) from other investing activities.
Net cash used in investing activities amounted to RMB5.16 billion (US$726.8 million) in 2023, primarily consisting of (i) RMB5.23 billion (US$736.7 million) capital expenditure relating to our construction and expansion of Shan Shan Outlets, land use rights, office buildings, as well as purchases of office and other operating equipment and IT software, (ii) RMB3.96 billion (US$557.6 million) used for purchase of short-term investments, partially offset by RMB3.57 billion (US$502.2 million) from redemption of short-term investments upon maturities, (iii) RMB347.1 million (US$48.9 million) from government subsidies received for land use rights, (iv) RMB282.5 million (US$39.8 million) paid for investment in equity method investments and other investments, primarily consisting of investment in private equity funds and other equity method investees, (v) RMB199.0 million (US$28.0 million) of proceeds from disposal of property and equipment and land use rights, and (vi) RMB156.4 million (US$22.0 million) from other investing activities.
In determining the write-down percentages on inventories, the Company takes into considerations of factors, such as the inventories’ aging, historical trends, forecasted demands, expected selling prices, and future promotional events.
In determining the write-down percentages on inventories, the Company takes into considerations of factors, such as the inventories’ aging, historical trends, forecasted demands, expected selling prices, and future promotional events. 126 Table of Contents Income tax We are subject to income taxes in PRC and other jurisdictions.
Our fulfillment services utilize regional logistics hubs and rely on high-quality delivery service providers with national coverage. We expect our fulfillment expenses as a percentage of our total net revenues to remain stable in the foreseeable future as we believe our fulfillment infrastructure has already achieved a suitable level. Marketing expenses .
Our fulfillment services utilize regional logistics hubs and rely on high-quality delivery service providers with national coverage. We expect our fulfillment expenses as a percentage of our total net revenues to increase slightly in the foreseeable future due to continuous increase in sales return rate. Marketing expenses .
Our operating lease obligations primarily consist of the commitments under the lease agreements that expire at various dates from January 2024 through July 2038 for our office spaces, outlets, offline stores, employee department, and certain equipment.
Our operating lease obligations primarily consist of the commitments under the lease agreements that expire at various dates from January 2025 through July 2038 for our office spaces, outlets, offline stores, employee department, and certain equipment. Our debt obligations primarily consist of the principal amount and cash interests in connection with banks and other loans from a third party.
In 2021, 2022, and 2023, we fulfilled approximately 786.6 million, 739.5 million, and 812.3 million customer orders, respectively, and we generated total net revenues of RMB117.06 billion, RMB103.15 billion, and RMB112.86 billion (US$15.90 billion), respectively. In 2021, 2022, and 2023, we generated net income of RMB4.69 billion, RMB6.31 billion, and RMB8.20 billion (US$1.16 billion), respectively.
In 2022, 2023 and 2024, we fulfilled approximately 739.5 million, 812.3 million and 757.5 million customer orders, respectively, and we generated total net revenues of RMB103.15 billion, RMB112.86 billion and RMB108.42 billion (US$14.9 billion), respectively. In 2022, 2023 and 2024, we generated net income of RMB6.31 billion, RMB8.20 billion and RMB7.84 billion (US$1.07 billion), respectively.
The following table sets forth the components of our operating expenses both in absolute amount and as a percentage of total net revenues for the periods indicated: For the Year Ended December 31, 2021 2022 2023 RMB’000 % RMB’000 % RMB’000 US$’000 % Fulfillment expenses 7,652,504 6.5 7,247,210 7.0 8,262,004 1,163,679 7.3 Marketing expenses 5,089,213 4.3 2,831,316 2.7 3,242,215 456,656 2.9 Technology and content expenses 1,517,307 1.3 1,605,422 1.6 1,767,530 248,951 1.6 General and administrative expenses 4,189,690 3.6 4,459,518 4.3 4,146,568 584,032 3.7 Total operating expenses 18,448,714 15.7 16,143,466 15.6 17,418,317 2,453,318 15.5 Fulfillment expenses .
The following table sets forth the components of our operating expenses both in absolute amount and as a percentage of total net revenues for the periods indicated: For the Year Ended December 31, 2022 2023 2024 RMB’000 % RMB’000 % RMB’000 US$’000 % Fulfillment expenses 7,247,210 7.0 8,262,004 7.3 8,346,864 1,143,516 7.7 Marketing expenses 2,831,316 2.7 3,242,215 2.9 2,979,654 408,211 2.8 Technology and content expenses 1,605,422 1.6 1,767,530 1.6 1,892,434 259,262 1.7 General and administrative expenses 4,459,518 4.3 4,146,568 3.7 3,992,657 546,992 3.7 Total operating expenses 16,143,466 15.6 17,418,317 15.5 17,211,609 2,357,981 15.9 110 Table of Contents Fulfillment expenses .
The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2021 2022 2023 RMB RMB RMB US$ (in thousands) Net cash from operating activities 6,744,644 10,519,692 14,414,513 2,030,242 Net cash (used in) from investing activities (2,326,489 ) 1,049,153 (5,160,337 ) (726,818 ) Net cash used in financing activities (58,788 ) (5,573,391 ) (6,146,005 ) (865,647 ) Effect of exchange rate changes 581 (63,322 ) 85,794 12,084 Cash, cash equivalents, and restricted cash at beginning of year 12,811,321 17,171,269 23,103,401 3,254,046 Cash, cash equivalents, and restricted cash at end of year 17,171,269 23,103,401 26,297,366 3,703,907 For the year ended December 31, 2021, 2022, and 2023, Vipshop Holdings Limited did not provide any capita contribution to its subsidiaries.
The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Net cash from operating activities 10,519,692 14,414,513 9,128,983 1,250,666 Net cash from (used in) investing activities 1,049,153 (5,160,337 ) (3,565,550 ) (488,478 ) Net cash used in financing activities (5,573,391 ) (6,146,005 ) (4,969,579 ) (680,830 ) Effect of exchange rate changes (63,322 ) 85,794 63,283 8,670 Cash, cash equivalents, and restricted cash at beginning of year 17,171,269 23,103,401 26,297,366 3,602,724 Cash, cash equivalents, and restricted cash at end of year 23,103,401 26,297,366 26,954,503 3,692,752 For the year ended December 31, 2022, 2023 and 2024, Vipshop Holdings Limited did not provide any capital contribution to its subsidiaries.
As of December 31, 2022 and 2023, we did not have any significant unrecognized uncertain tax positions. 123 Table of Contents Recent Accounting Pronouncements For a summary of recently issued accounting pronouncements, see Note 2(aj) to the consolidated financial statements of Vipshop Holdings Limited pursuant to Item 18 of Part III of this annual report.
Recent Accounting Pronouncements For a summary of recently issued accounting pronouncements, see Note 2(aj) to the consolidated financial statements of Vipshop Holdings Limited pursuant to Item 18 of Part III of this annual report. 127 Table of Contents
As of December 31, 2022 and 2023, our cash, cash equivalents, restricted cash, and short-term investments were held in the following currency denominations and jurisdictions in which our subsidiaries domiciled: As of December 31, 2022 2023 Subsidiaries in China (1) Subsidiaries in Hong Kong and Other Regions Subsidiary in the United States Total Subsidiaries in China (1) Subsidiaries in Hong Kong and Other Regions Subsidiary in the United States Total (in thousands) Currency Denomination RMB 14,173,647 4,662,341 — 18,835,988 23,404,854 2,346,519 — 25,751,373 US$ 39,005 4,092,179 248 4,131,432 37,049 1,903,106 331 1,940,486 Others 2 1,731,883 — 1,731,885 2 588,705 — 588,708 Total 14,212,654 10,486,403 248 24,699,305 23,441,905 4,838,330 331 28,280,567 Note: (1) Also include the consolidated variable interest entities in China.
As of December 31, 2023 and 2024, our cash, cash equivalents, restricted cash, and short-term investments were held in the following currency denominations and jurisdictions in which our subsidiaries domiciled: As of December 31, 2023 2024 Subsidiaries in China (1) Subsidiaries in Hong Kong and Other Regions Subsidiary in the United States Total Subsidiaries in China (1) Subsidiaries in Hong Kong and Other Regions Subsidiary in the United States Total (in thousands) Currency Denomination RMB 23,404,854 2,346,519 — 25,751,373 21,211,074 2,304,057 — 23,515,131 US$ 37,049 1,903,106 331 1,940,486 25,231 5,234,279 337 5,259,847 Others 2 588,705 — 588,708 2 52,279 — 52,281 Total 23,441,905 4,838,330 331 28,280,567 21,236,307 7,590,615 337 28,827,259 Note: (1) Also include the consolidated variable interest entities in China.
As of December 31, 2022 and 2023, our cash, cash equivalents, and restricted cash held by the consolidated variable interest entities and subsidiaries in China were as follows: As of December 31, 2022 2023 RMB RMB US$ (in thousands) Cash, Cash Equivalents, and Restricted Cash Consolidated variable interest entities in China 2,815,440 4,690,655 660,665 Subsidiaries in China 10,671,933 17,751,050 2,500,183 Total 13,487,373 22,441,705 3,160,848 As of December 31, 2022 and 2023, our short-term investments held by the consolidated variable interest entities and subsidiaries in China were as follows: As of December 31, 2022 2023 RMB RMB US$ (in thousands) Short-term Investments Consolidated variable interest entities in China 100,734 — — Subsidiaries in China 624,547 1,000,200 140,875 Total 725,281 1,000,200 140,875 115 Table of Contents The PRC government authorities regulate the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currencies out of China.
As of December 31, 2023 and 2024, our cash, cash equivalents, and restricted cash held by the consolidated variable interest entities and subsidiaries in China were as follows: As of December 31, 2023 2024 RMB RMB US$ (in thousands) Cash, Cash Equivalents, and Restricted Cash Consolidated variable interest entities in China 4,690,655 3,899,279 534,199 Subsidiaries in China 17,751,050 17,337,028 2,375,163 Total 22,441,705 21,236,307 2,909,362 119 Table of Contents As of December 31, 2023 and 2024, our short-term investments held by the consolidated variable interest entities and subsidiaries in China were as follows: As of December 31, 2023 2024 RMB RMB US$ (in thousands) Short-term Investments Subsidiaries in China 1,000,200 — — The PRC government authorities regulate the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currencies out of China.
We evaluate the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2021, 2022, and 2023, we did not have any unrecognized tax benefits.
The first profit making year for this subsidiary was 2021. 111 Table of Contents We evaluate the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions.
Our interest income increased from RMB671.5 million in 2021 to RMB764.0 million in 2022, primarily due to the increase in interest-bearing investments, such as the deposits and short-term investments in the banks. Share of Income/(Loss) of Equity Method Investees .
Our interest income increased from RMB780.3 million in 2023 to RMB809.8 million (US$110.9 million) in 2024, primarily due to the increase in interest-bearing investments, such as the deposits and short-term investments with commercial banks. Share of Income of Equity Method Investees .
We also procured several bank borrowings in an aggregate amount of RMB1.43 billion (US$200.8 million) and had unutilized banking facilities in an amount of RMB7.20 billion (US$1.0 billion) as of December 31, 2023.
We also procured several bank borrowings in an aggregate amount of RMB2.40 billion (US$328.7 million) and had unutilized banking facilities in an amount of RMB11.82 billion (US$1.62 billion) as of December 31, 2024.
Our cost of revenues increased from RMB81.54 billion in 2022 to RMB87.14 billion (US$12.27 billion) in 2023, primarily due to the increase in cost of products sold in line with the increase in our products sales volume. We recorded RMB130.7 million and RMB(681.2) million (US$(95.9) million) in changes of inventory write-down in 2022 and 2023, respectively.
Our cost of revenues increased from RMB81.54 billion in 2022 to RMB87.14 billion (US$12.27 billion) in 2023, primarily due to the increase in cost of products sold in line with the increase in our products sales volume. 117 Table of Contents Gross Profit and Gross Margin .
Our other operating income in 2022 was primarily due to income derived from government grants and tax rebates. Interest Expenses . We incurred RMB24.3 million interest expenses in 2022, as compared to RMB14.5 million in 2021, primarily due to the increase in short-term loan during the year. Interest Income .
Our other operating income in 2024 primarily included income derived from government grants and tax rebates. Interest Expenses . We incurred RMB57.7 million (US$7.9 million) interest expenses in 2024, as compared to RMB22.9 million in 2023, primarily due to the increase in short-term loans. Interest Income .
For the Year Ended December 31, 2021 2022 2023 RMB RMB RMB (in thousands) Segment Interest Income Vip.com 528,294 622,686 654,485 Shan Shan Outlets 57,732 53,659 42,807 Others 85,736 87,925 84,532 Inter-segment interest income (301 ) (252 ) (1,532 ) Total 671,461 764,018 780,292 Segment Interest Expense Vip.com (13,864 ) (23,573 ) (22,821 ) Shan Shan Outlets (597 ) (685 ) (111 ) Others (301 ) (252 ) (1,532 ) inter-segment interest expense 301 252 1,532 Total (14,461 ) (24,258 ) (22,932 ) 111 Table of Contents The following table sets forth assets information in the reportable segments reviewed by our management.
For the Year Ended December 31, 2022 2023 2024 RMB RMB RMB (in thousands) Segment Interest Income Vip.com 622,686 654,485 610,161 Shan Shan Outlets 53,659 42,807 41,932 Others 87,925 84,532 158,734 Inter-segment interest income (252 ) (1,532 ) (1,035 ) Total 764,018 780,292 809,792 Segment Interest Expense Vip.com (23,573 ) (22,821 ) (57,627 ) Shan Shan Outlets (685 ) (111 ) (53 ) Others (252 ) (1,532 ) (1,031 ) Inter-segment interest expense 252 1,532 1,035 Total (24,258 ) (22,932 ) (57,676 ) The following table sets forth share of (loss) income of investments accounted under the equity method for the years ended December 31, 2022, 2023 and 2024.
Our general and administrative expenses increased from 3.6% to 4.3% as a percentage of our total net revenues during the same period. Other Operating Income . Our other operating income amounted to RMB724.8 million in 2022, as compared to RMB924.6 million in 2021.
As a percentage of our total net revenues, our general and administrative expenses was 3.7%, remaining flat compared to the same period last year. Other Operating Income . Our other operating income amounted to RMB915.2 million (US$125.4 million) in 2024, as compared to RMB801.6 million in 2023.
Fulfillment expenses primarily consist of shipping and handling expenses, packaging expenses, and logistics center rental expenses, as well as compensation and benefits of our logistics staff. Our shipping and handling expenses were RMB5.24 billion, RMB5.06 billion, and RMB5.84 billion (US$822.1 million) in 2021, 2022, and 2023, respectively.
Fulfillment expenses primarily consist of shipping and handling expenses, packaging expenses, depreciation and amortization of warehouse and logistics equipment, compensation and benefits of our logistics and client service cost. Our shipping and handling expenses were RMB5.06 billion, RMB5.84 billion and RMB5.82 billion (US$797.7 million) in 2022, 2023 and 2024, respectively.
Net Income . As a result of the foregoing, we recorded a net income of RMB6.31 billion in 2022, as compared to a net income of RMB4.69 billion in 2021. Net Income Attributable to Non-controlling Interests .
As a result of the foregoing, we recorded a net income of RMB7.84 billion (US$1.07 billion) in 2024, as compared to a net income of RMB8.20 billion in 2023. Net Income Attributable to Non-controlling Interests.
Our technology and content expenses increased from RMB1.52 billion in 2021 to RMB1.61 billion in 2022, and also slightly increased from 1.3% to 1.6% as a percentage of our total net revenues during the same period, primarily due to our continuing efforts to invest in human capital and advanced technologies. General and administrative expenses .
Our technology and content expenses increased from RMB1.77 billion in 2023 to RMB1.89 billion (US$259.3 million) in 2024, primarily due to our continuing efforts to invest in advanced technologies such as large model and AIGC. As a percentage of our total net revenues, our technology and content expenses slightly increased from 1.6% in 2023 to 1.7% in 2024.
Adjustments are recorded when estimated net realizable value is less than cost.
Adjustments are recorded when estimated net realizable value is less than cost. Write-downs are recorded in cost of revenues in the consolidated statements of income and comprehensive income.
We also had value-added tax payable of RMB391.4 million, RMB256.9 million, and RMB189.4 million (US$26.7 million) as of December 31, 2021, 2022, and 2023, respectively, included as accrued expenses and other current liabilities.
We also had value-added tax payable of RMB256.9 million, RMB189.4 million and RMB193.5 million (US$26.5 million) as of December 31, 2022, 2023 and 2024, respectively, included as accrued expenses and other current liabilities. We do not net off value-added tax recoverable and payable from different entities within our group companies. For more information on PRC tax regulations, see “Item 4.
As a result of the foregoing, our gross profit decreased from RMB23.11 billion in 2021 to RMB21.62 billion in 2022. Our gross margin increased from 19.7% in 2021 to 21.0% in 2022, primarily due to the optimization of product categories. Operating Expenses .
As a result of the foregoing, our gross profit decreased from RMB25.72 billion in 2023 to RMB25.47 billion (US$3.49 billion) in 2024. Our gross margin increased from 22.8% in 2023 to 23.5% in 2024, primarily due to continued optimization of product categories. Operating Expenses .
Net cash used in financing activities amounted to RMB5.57 billion in 2022, primarily consisting of (i) RMB4.59 billion of proceeds from bank borrowings and other borrowings, offset by RMB4.05 billion of repayment to bank and other borrowings, (ii) RMB6.26 billion of repurchase of ordinary shares, and (iii) RMB185.2 million of capital contributions from non-controlling interests shareholders.
Financing Activities Net cash used in financing activities amounted to RMB4.97 billion (US$680.8 million) in 2024, primarily consisting of (i) RMB3.87 billion (US$529.6 million) of repurchase of ordinary shares, (ii) RMB5.44 billion (US$745.9 million) of repayment to bank and other borrowings, (iii) RMB1.68 billion (US$230.8 million) of dividend distribution to shareholders, (iv) RMB512.0 million (US$70.1 million) for acquisition of non-controlling interests, and partially offset by RMB6.40 billion (US$876.8 million) of proceeds from bank borrowings and other borrowings and RMB160.5 million (US$22.0 million) of capital contributions from non-controlling interests shareholders.
Our AI capabilities enable us to elevate customer shopping experience and empower our brand partners to improve their operating efficiency. 120 Table of Contents The back-end modules, which refer to modules supporting our business operations, mainly include customer service, ERP, warehouse and logistics management, product information management, business intelligence, and administration management systems.
With such simultaneous development, we strengthen our relationships with the brand partners and open up more opportunities to pursue further in-depth collaborations. 124 Table of Contents The back-end modules, which refer to modules supporting our business operations, mainly include customer service, ERP, warehouse and logistics management, product information management, business intelligence, and administration management systems.
Payment Due by Period Total Less than 1 year 1-2 years 3-5 years More than 5 years (RMB in thousands) Operating lease obligations 927,691 104,076 78,513 202,004 543,098 Short-term debt obligations 1,627,007 1,627,007 — — — Capital expenditures commitment 1,060,084 1,013,428 45,037 1,619 — Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023.
Payment Due by Period Total Less than 1 year 1-2 years 3-5 years More than 5 years Operating lease obligations 845,438 86,876 70,340 222,790 465,432 Short-term debt obligations 2,605,629 2,605,629 — — — Capital expenditures commitment 1,199,691 997,829 150,281 46,126 5,455 Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024.
The adjustment for changes in operating assets and liabilities primarily reflected (i) a decrease in inventories of RMB1.46 billion due to our efforts in improving our inventory management, (ii) an increase in accounts payable of RMB983.0 million due to our efforts in improving our procurement management, and (iii) a decrease in advances from customers and accrued expenses and other current liabilities of RMB343.2 million, primarily due to a decrease in our net revenues.
The adjustment for changes in operating assets and liabilities primarily reflected (i) a decrease in accounts payable of RMB2.17 billion (US$297.4 million) due to decreased inventory purchases and (ii) a decrease in inventories of RMB944.7 million (US$129.4 million) due to our efforts in improving our inventory management.
We rely on a combination of our internally developed proprietary technologies, open source solutions, and licensed technologies to optimize every aspect of our operations for the benefit of our customers and brand partners. Our systems can be divided into front-end, middle-end, and back-end modules, all built on top of advanced technologies.
We rely on a combination of our internally developed proprietary technologies, open source solutions, and licensed technologies to optimize every aspect of our operations for the benefit of our customers and brand partners. We have invested in Artificial Intelligence (AI) and our in-house developed AI model enables our team to serve customers and brand partners with greater efficiency.
General and administrative expenses primarily consist of compensation and benefits of our headquarters and administrative staff, rental expenses, costs for professional services, payment processing fees, impairment of long-lived assets, and other administrative and overhead expenses. We expect our general and administrative expenses to remain relatively stable in the foreseeable future.
In the foreseeable future, we expect to make continues investment in large model and AIGC to enhance user experience, improve operating efficiency and reduce the overall cost. General and administrative expenses . General and administrative expenses primarily consist of compensation and benefits of our headquarters and administrative staff, payment processing fees, depreciations, rental expenses, and other administrative and overhead expenses.
Our marketing expenses decreased from RMB5.09 billion in 2021 to RMB2.83 billion in 2022, primarily due to our decreased spending in promotion and advertising activities. Technology and content expenses .
Our marketing expenses decreased from RMB3.24 billion in 2023 to RMB2.98 billion (US$408.2 million) in 2024, primarily due to our disciplined marketing strategy which resulted in decreased promotion and advertising activities. Technology and content expenses .
Net cash from operating activities amounted to RMB6.74 billion in 2021, which was primarily attributable to a net income of RMB4.69 billion, adjusted for certain non-cash expenses consisting primarily of (i) share-based compensation expenses of RMB1.01 billion, and (ii) depreciation of property and equipment of RMB1.10 billion, attributable to increases in warehouse and outlets, (iii) impairment loss of equity method investees and other investments of RMB414.8 million.
Operating Activities Net cash from operating activities amounted to RMB9.13 billion (US$1.25 billion) in 2024, which was primarily attributable to a net income of RMB7.84 billion (US$1.07 billion), adjusted for certain non-cash expenses consisting primarily of (i) share-based compensation expenses of RMB1.54 billion (US$210.7 million), (ii) depreciation of property and equipment of RMB1.42 billion (US$194.3 million), attributable to increases in warehouse and outlets, (iii) amortization of land use rights of RMB270.1 million (US$37.0 million) due to the increase of land use rights, partially offset by (i) share of income of equity method investees of RMB167.0 million (US$22.9 million) and (ii) investment gain and revaluation of investments of RMB135.1 million (US$18.5 million).
Our operating expenses decreased from RMB18.45 billion in 2021 to RMB16.14 billion in 2022, primarily due to decreases in fulfillment expenses and marketing expenses, partially offset by increases in technology and content expenses as well as general and administrative expenses. Fulfillment expenses . Our fulfillment expenses decreased from RMB7.65 billion in 2021 to RMB7.25 billion in 2022.
Our operating expenses decreased from RMB17.42 billion in 2023 to RMB17.21 billion (US$2.36 billion) in 2024, primarily due to the decreases in marketing expenses, and general and administrative expenses, partially offset by the increase in fulfillment expenses and technology and content expenses. 116 Table of Contents Fulfillment expenses .
(2) Unallocated expenses include share-based compensation and amortization of intangible assets resulting from business acquisitions, which are not allocated to segments. The following table sets forth interest income and interest expenses (included in the measurement of segment profit or loss) for the years ended December 31, 2021, 2022, and 2023.
(5) Other income and expenses include interest income, exchange gain/(loss), investment gain/(loss) and revaluation of investments, interest expenses and impairment loss of investments. The following table sets forth depreciation of property and equipment, net (included in the measurement of segment profit or loss) for the years ended December 31, 2022, 2023 and 2024.
Cost of Revenues . Our cost of revenues decreased from RMB93.95 billion in 2021 to RMB81.54 billion in 2022, primarily due to the decrease in cost of products sold in line with the decrease in our products sales volume. We recorded RMB35.3 million and RMB130.7 million in inventory write-down in 2021 and 2022, respectively.
Our cost of revenues decreased from RMB87.14 billion in 2023 to RMB82.95 billion (US$11.36 billion) in 2024, primarily due to the decrease in cost of products sold in line with the decrease in our products sales volume. Gross Profit and Gross Margin .
Changes in recognition and measurement estimates are recognized in the period in which the changes occur.
Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of December 31, 2023 and 2024, we did not have any significant unrecognized uncertain tax positions.
We recorded share of loss of equity method investees of RMB6.6 million in 2022, as compared to share of income of equity method investees of RMB42.3 million in 2021, which was primarily due to the increase in share of loss from Guofu Life Insurance Co., Ltd, and the decrease in share of income from HongShan Fashion and Technology Industry Fund Investment Limited Partnership, partially offset by the decrease in share of loss from Kunshan Baowei Information Technology Limited and Sichuan VipFubon Consumer Finance Co., Ltd.
We recorded share of income of equity method investees of RMB167.0 million (US$22.9 million) in 2024, as compared to share of income of equity method investees of RMB80.3 million in 2023, which was primarily due to the increase in share of income from Guofu Life Insurance Co., Ltd. Net Income .
In 2022, we fulfilled over 739.5 million customer orders, as compared to approximately 786.6 million customer orders in 2021. Our fulfillment expenses as a percentage of our total net revenues increased from 6.5% in 2021 to 7.0% in 2022, primarily due to the increase of sales return rate. Marketing expenses .
Our fulfillment expenses increased from RMB8.26 billion in 2023 to RMB8.35 billion (US$1.14 billion) in 2024 and our fulfillment expenses as a percentage of our total net revenues increased from 7.3% in 2023 to 7.7% in 2024, primarily due to the increase in sales return and the increase of warehouse staffs cost. Marketing expenses .

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Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeWe have also been advised by our Cayman Islands legal counsel that a judgment obtained in any federal or state court in the United States will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final and conclusive, (iv) is not in respect of taxes, a fine, or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
Biggest changeWe have also been advised by our Cayman Islands legal counsel that a judgment obtained in any federal or state court in the United States will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final and conclusive, (iv) is not in respect of taxes, a fine, or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. 139 Table of Contents However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the United States courts under the civil liability provisions of the securities laws if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature.
The plan administrator may permit an award other than an incentive share option to be transferred to or exercised by certain persons related to the participant by express provision in the award or by an amendment to the award.
The plan administrator may permit an award other than an incentive share option to be transferred to or exercised by certain persons related to the participant by express provision in the award or by an amendment to the award.
With the approval of our board of directors, at any time and from time to time, the plan administrator may terminate, amend or modify the 2014 Share Incentive Plan; provided, however, that to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, unless we decide to follow home country practice, shareholder approval is required for any plan amendment, including any amendment to the plan that (i) increases the number of shares available under the 2014 Share Incentive Plan, (ii) permits the plan administrator to extend the exercise period for an option beyond ten years from the date of grant, or (iii) results in a change in eligibility requirements.
With the approval of our board of directors, at any time and from time to time, the plan administrator may terminate, amend or modify the Amended and Restated 2014 Share Incentive Plan; provided, however, that to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, unless we decide to follow home country practice, shareholder approval is required for any plan amendment, including any amendment to the plan that (i) increases the number of shares available under the Amended and Restated 2014 Share Incentive Plan, (ii) permits the plan administrator to extend the exercise period for an option beyond ten years from the date of grant, or (iii) results in a change in eligibility requirements.
The audit committee will be responsible for, among other things: • appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; • reviewing with the independent auditors any audit problems or difficulties and management’s response; 130 Table of Contents • discussing the annual audited financial statements with management and the independent auditors; • reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; • reviewing and approving all proposed related party transactions; and • meeting separately and periodically with management and the independent auditors; and monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The audit committee will be responsible for, among other things: • appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; • reviewing with the independent auditors any audit problems or difficulties and management’s response; • discussing the annual audited financial statements with management and the independent auditors; • reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; • reviewing and approving all proposed related party transactions; and • meeting separately and periodically with management and the independent auditors; and monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The nominating and corporate governance committee is responsible for, among other things: • selecting and recommending to the board nominees for election by the shareholders or appointment by the board; • reviewing annually with the board the current composition of the board with regard to characteristics such as independence, knowledge, skills, experience and diversity; • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and • and advising the board periodically with regard to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The nominating and corporate governance committee is responsible for, among other things: • selecting and recommending to the board nominees for election by the shareholders or appointment by the board; • reviewing annually with the board the current composition of the board with regard to characteristics such as independence, knowledge, skills, experience and diversity; 135 Table of Contents • making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and • and advising the board periodically with regard to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
(2) For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of the stock options or vesting of restricted shares within 60 days after March 31, 2024.
(2) For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of the stock options or vesting of restricted shares within 60 days after March 31, 2025.
To our knowledge and based on our review of our register of shareholders as of March 31, 2024, 82,489,720 Class A ordinary shares were held of record by one holder that resides in the United States, Deutsche Bank Trust Company Americas, the depositary of our ADS program.
To our knowledge and based on our review of our register of shareholders as of March 31, 2025, 82,489,720 Class A ordinary shares were held of record by one holder that resides in the United States, Deutsche Bank Trust Company Americas, the depositary of our ADS program.
The following paragraphs describe the principal terms of our 2014 Share Incentive Plan: Plan Administration . The plan will be administered by the Compensation Committee, or a committee of two or more directors to whom the Compensation Committee may delegate the authority to grant or amend awards to participants other than independent directors and executive officers.
The following paragraphs describe the principal terms of our Amended and Restated 2014 Share Incentive Plan: Plan Administration . The plan will be administered by the Compensation Committee, or a committee of two or more directors to whom the Compensation Committee may delegate the authority to grant or amend awards to participants other than independent directors and executive officers.
Wang served as the chief financial officer of Benlai Group, an online fresh grocery player in China, from April 2021 to November 2022. From October 2017 to March 2021, Mr. Wang served as the vice president in the finance department of Xiaomi Corporation (SEHK: 1810). Prior to that, Mr.
Prior to joining us, Mr. Wang served as the chief financial officer of Benlai Group, an online fresh grocery player in China, from April 2021 to November 2022. From October 2017 to March 2021, Mr. Wang served as the vice president in the finance department of Xiaomi Corporation (SEHK: 1810). Prior to that, Mr.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2024 by: • each of our directors and executive officers; and • each person known to us to beneficially own 5% or more of our ordinary shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2025 by: • each of our directors and executive officers; and • each person known to us to beneficially own 5% or more of our ordinary shares.
The registered address of Elegant Motion Holdings Limited is Trident Chambers, Wickhams Cay, PO Box 146, Road Town, Tortola, British Virgin Islands. (14) Represents 12,852,698 Class A ordinary shares held by Tencent Mobility Limited as reported on the Schedule 13D/A filed with the SEC on December 16, 2019.
The registered address of Elegant Motion Holdings Limited is Trident Chambers, Wickhams Cay, PO Box 146, Road Town, Tortola, British Virgin Islands. 138 Table of Contents (14) Represents 12,852,698 Class A ordinary shares held by Tencent Mobility Limited as reported on the Schedule 13D/A filed with the SEC on December 16, 2019.
For equity-based grants to our directors and executive officers, see “—Stock Incentive Plans.” Stock Incentive Plans We have adopted three plans since our inception. The 2011 Stock Incentive Plan and 2012 Share Incentive Plan each terminated at the end of their respective ten-year terms, although some grants from each of these plans are still outstanding.
For equity-based grants to our directors and executive officers, see “—Stock Incentive Plans.” 130 Table of Contents Stock Incentive Plans We have adopted three plans since our inception. The 2011 Stock Incentive Plan and 2012 Share Incentive Plan each terminated at the end of their respective ten-year terms, although some grants from each of these plans are still outstanding.
Among our directors and executive officers, Martin Chi Ping Lau, Jacky Yu Xu, Xing Liu, and Nanyan Zheng habitually reside in Hong Kong while the other directors and executive officers all habitually reside in mainland China.
Among our directors and executive officers, Arthur Xiaobo Hong, Martin Chi Ping Lau, Jacky Yu Xu, Xing Liu, and Nanyan Zheng habitually reside in Hong Kong while the other directors and executive officers all habitually reside in mainland China.
Chien received her bachelor’s degree in economics from the Massachusetts Institute of Technology in June 1992 and an MBA degree from the Walter A. Haas School of Business at University of California, Berkeley in May 1996. 125 Table of Contents Mr. Nanyan Zheng has served as our independent director since March 2012. Mr.
Chien received her bachelor’s degree in economics from the Massachusetts Institute of Technology in June 1992 and an MBA degree from the Walter A. Haas School of Business at University of California, Berkeley in May 1996. Mr. Nanyan Zheng has served as our independent director since March 2012. Mr.
Mr. Arthur Xiaobo Hong is our co-founder and has served as the vice chairman of our board of directors since January 2011. Mr. Hong has served as our chief operating officer since August 2012. Mr. Hong has over 10 years of experience in the distribution of consumer goods and e-commerce industry. 124 Table of Contents Mr.
Mr. Arthur Xiaobo Hong is our co-founder and has served as the vice chairman of our board of directors since January 2011. Mr. Hong has served as our chief operating officer since August 2012. Mr. Hong has over 10 years of experience in the distribution of consumer goods and e-commerce industry. Mr.
Name Number of Ordinary Shares Underlying Options Exercise Price (US$/Share) Date of Grant Date of Expiration Eric Ya Shen 2,601,894 66.85 January 1, 2020 December 31, 2029 * 68.35 January 1, 2017 December 31, 2026 Arthur Xiaobo Hong 2,681,894 66.85 January 1, 2020 December 31, 2029 Donghao Yang * 0.50 August 30, 2011 January 1, 2026 Nanyan Zheng * 2.50 April 16, 2012 December 31, 2024 Kathleen Chien * 2.50 April 16, 2012 December 31, 2024 Chun Liu * 2.50 January 1, 2013 January 1,2026 Note: * Aggregate number of shares beneficially owned by the person account for less than 1% of our total outstanding ordinary shares. 129 Table of Contents The following table summarizes, as of December 31, 2023, the outstanding restricted shares we granted to our directors and executive officers under the 2012 Share Incentive Plan and the 2014 Share Incentive Plan.
Name Number of Ordinary Shares Underlying Options Exercise Price (US$/Share) Date of Grant Date of Expiration Eric Ya Shen 2,601,894 66.85 January 1, 2020 December 31, 2029 51,669 68.35 January 1, 2017 December 31, 2026 Arthur Xiaobo Hong 2,681,894 66.85 January 1, 2020 December 31, 2029 Donghao Yang * 0.50 August 30, 2011 January 1, 2026 Nanyan Zheng * 2.50 April 16, 2012 December 31, 2024 Kathleen Chien * 2.50 April 16, 2012 December 31, 2024 Chun Liu * 2.50 January 1, 2013 January 1,2026 Note: * Aggregate number of shares beneficially owned by the person account for less than 1% of our total outstanding ordinary shares. 133 Table of Contents The following table summarizes, as of December 31, 2024, the outstanding restricted shares we granted to our directors and executive officers under the 2012 Share Incentive Plan, the 2014 Share Incentive Plan and the Amended and Restated 2014 Share Incentive Plan.
Except as otherwise provided in an individual award agreement or any other written agreement entered into between a participant and us, our plan administrator may provide for one or more of the following in the event of a change of control or other similar corporate transaction: (i) the termination of each award outstanding under the plan at a specific time in the future, with each participant having the right to exercise the vested portion of the awards during a period of time as determined by the plan administrator; (ii) the termination of any award in exchange for an amount of cash equal to the amount that could have been obtained upon the exercise of the award; (iii) the replacement of an award with other rights or property selected by the plan administrator; (iv) the assumption of the award by our successor, parent or subsidiary, or the substitution of an award granted by our successor, parent or subsidiary, with appropriate adjustments; or (v) payment of an award in cash based on the value of our ordinary shares on the date of the corporate transaction plus reasonable interest on the award. 2014 Share Incentive Plan In July 2014, we adopted our 2014 Share Incentive Plan, which permits the grant of options to purchase our ordinary shares, restricted shares, share appreciation rights, and other types of awards as deemed appropriate by the administrator.
Except as otherwise provided in an individual award agreement or any other written agreement entered into between a participant and us, our plan administrator may provide for one or more of the following in the event of a change of control or other similar corporate transaction: (i) the termination of each award outstanding under the plan at a specific time in the future, with each participant having the right to exercise the vested portion of the awards during a period of time as determined by the plan administrator; (ii) the termination of any award in exchange for an amount of cash equal to the amount that could have been obtained upon the exercise of the award; (iii) the replacement of an award with other rights or property selected by the plan administrator; (iv) the assumption of the award by our successor, parent or subsidiary, or the substitution of an award granted by our successor, parent or subsidiary, with appropriate adjustments; or (v) payment of an award in cash based on the value of our ordinary shares on the date of the corporate transaction plus reasonable interest on the award. 131 Table of Contents Amended and Restated 2014 Share Incentive Plan In August 2024, we adopted our Amended and Restated 2014 Share Incentive Plan, which permits the grant of options to purchase our ordinary shares, restricted shares, restricted share units, share appreciation rights, and other types of awards as deemed appropriate by the administrator.
Therefore, any United States judgement may only be enforceable in mainland China or Hong Kong provided that the conditions set forth in the laws of these jurisdictions are determined by the courts of mainland China or Hong Kong, as applicable, to have been fulfilled.
Therefore, any United States judgement may only be enforceable in mainland China or Hong Kong provided that the conditions set forth in the laws of these jurisdictions are determined by the courts of mainland China or Hong Kong, as applicable, to have been fulfilled. 140 Table of Contents
We have adopted a charter for each of the audit committee, the compensation committee, and the nominating and corporate governance committee. Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Ms. Kathleen Chien, Mr. Nanyan Zheng, and Mr. Chun Liu. Ms. Kathleen Chien, Mr. Nanyan Zheng, and Mr.
We have adopted a charter for each of the audit committee, the compensation committee, and the nominating and corporate governance committee. Each committee’s members and functions are described below. 134 Table of Contents Audit Committee. Our audit committee consists of Ms. Kathleen Chien, Mr. Nanyan Zheng, and Mr. Chun Liu. Ms. Kathleen Chien, Mr. Nanyan Zheng, and Mr.
Lau received a bachelor of science degree in electrical engineering from the University of Michigan in July 1994, a master of science degree in electrical engineering from Stanford University in July 1995 and an MBA degree from Kellogg Graduate School of Management, Northwestern University in June 1998. Mr.
Lau received a bachelor of science degree in electrical engineering from the University of Michigan in July 1994, a master of science degree in electrical engineering from Stanford University in July 1995 and an MBA degree from Kellogg Graduate School of Management, Northwestern University in June 1998. 128 Table of Contents Mr.
Xiaochun Zhang have the power to jointly direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to these shares, as reported by Elegant Motion, Eric Ya Shen, and Xiaochun Zhang on the Schedule 13G/A filed with the SEC on February 8, 2024.
Xiaochun Zhang have the power to jointly direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to these shares, as reported by Elegant Motion, Eric Ya Shen, and Xiaochun Zhang on the Schedule 13G/A filed with the SEC on November 15, 2024.
Zheng founded Plateno Group Ltd. in 2013, which wholly owned 7 Days Groups Holdings Ltd. after its privatization and launched a series of new mid-level and upscale hotel brands, and served as the chairman of Plateno Group Ltd. from 2013 to 2019. Mr. Mark Wang has served as our chief financial officer since May 2023. Prior to joining us, Mr.
Zheng founded Plateno Group Ltd. in 2013, which wholly owned 7 Days Groups Holdings Ltd. after its privatization and launched a series of new mid-level and upscale hotel brands, and served as the chairman of Plateno Group Ltd. from 2013 to 2019. 129 Table of Contents Mr. Mark Wang has served as our chief financial officer since May 2023.
Share Incentive Grants The following table summarizes, as of December 31, 2023, the outstanding options we granted to our directors and executive officers under the 2011 Stock Incentive Plan, the 2012 Share Incentive Plan, and the 2014 Share Incentive Plan.
Share Incentive Grants The following table summarizes, as of December 31, 2024, the outstanding options we granted to our directors and executive officers under the 2011 Stock Incentive Plan, the 2012 Share Incentive Plan, and the Amended and Restated 2014 Share Incentive Plan.
Xiaochun Zhang have the power to jointly direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to these shares. As of March 31, 2024, Mr. Eric Ya Shen beneficially owned (i) 2,533 Class A ordinary shares, (ii) 1,908,592 Class A ordinary shares issuable to Mr.
Xiaochun Zhang have the power to jointly direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to these shares. As of March 31, 2025, Mr. Eric Ya Shen beneficially owned (i) 2,533 Class A ordinary shares, (ii) 2,355,574 Class A ordinary shares issuable to Mr.
In addition, we also provide our employees fringe benefits such as free lunches and periodic appreciation payments to employees’ family members. For the year ended December 31, 2023, we did not experience any significant labor disputes. 132 Table of Contents E.
In addition, we also provide our employees fringe benefits such as free lunches and periodic appreciation payments to employees’ family members. For the year ended December 31, 2024, we did not experience any significant labor disputes. E.
Name Number of Restricted Shares Date of Grant Donghao Yang * January 1, 2017 * December 1, 2020 Frank Lin * January 1, 2013 * April 1, 2016 * April 1, 2020 Xing Liu * April 1, 2016 * April 1, 2020 Nanyan Zheng * April 1, 2020 Kathleen Chien * January 1, 2013 * April 1, 2016 * April 1, 2020 Chun Liu * January 1, 2013 * April 1, 2016 * April 1, 2020 Tao Feng * August 1, 2022 Mark Wang * June 1, 2023 Note: * Aggregate number of shares beneficially owned by the person account for less than 1% of our total outstanding ordinary shares.
Name Number of Restricted Shares Date of Grant Donghao Yang * January 1, 2017 * December 1, 2020 * December 1, 2024 Frank Lin * January 1, 2013 * April 1, 2016 * April 1, 2020 * April 1, 2024 Xing Liu * April 1, 2016 * April 1, 2020 * April 1, 2024 Nanyan Zheng * April 1, 2020 * April 1, 2024 Kathleen Chien * April 1, 2016 * April 1, 2020 * April 1, 2024 Chun Liu * January 1, 2013 * April 1, 2016 * April 1, 2020 * April 1, 2024 Mark Wang * June 1, 2023 Mike Li * October 1, 2024 Note: * Aggregate number of shares beneficially owned by the person account for less than 1% of our total outstanding ordinary shares.
B. Compensation For the fiscal year ended December 31, 2023, we paid an aggregate of fees, salaries, and benefits (excluding equity-based grants) of approximately RMB8.3 million (US$1.2 million) to our executive officers, and we paid an aggregate of approximately RMB4.2 million (US$0.6 million) to our directors.
B. Compensation For the fiscal year ended December 31, 2024, we paid an aggregate of fees, salaries, and benefits (excluding equity-based grants) of approximately RMB7.1 million (US$1.0 million) to our executive officers, and we paid an aggregate of approximately RMB4.4 million (US$0.6 million) to our directors.
Directors and Executive Officers Age Position/Title Eric Ya Shen 52 Chairman of the Board of Directors, Chief Executive Officer Arthur Xiaobo Hong 51 Vice Chairman of the Board of Directors, Chief Operating Officer Martin Chi Ping Lau 51 Director Jacky Yu Xu 52 Director Donghao Yang 52 Director Chun Liu (1) 56 Independent Director Frank Lin (2) 59 Independent Director Xing Liu (3) 53 Independent Director Kathleen Chien (1)(2)(3) 54 Independent Director Nanyan Zheng (1)(2)(3) 55 Independent Director Mark Wang 40 Chief Financial Officer Tao Feng 39 Chief Technology Officer Notes: (1) Member of our audit committee.
Directors and Executive Officers Age Position/Title Eric Ya Shen 53 Chairman of the Board of Directors, Chief Executive Officer Arthur Xiaobo Hong 52 Vice Chairman of the Board of Directors, Chief Operating Officer Martin Chi Ping Lau 52 Director Jacky Yu Xu 53 Director Donghao Yang 53 Director Chun Liu(1) 57 Independent Director Frank Lin(2) 60 Independent Director Xing Liu(3) 54 Independent Director Kathleen Chien(1)(2)(3) 55 Independent Director Nanyan Zheng(1)(2)(3) 56 Independent Director Mark Wang 41 Chief Financial Officer Mike Li 47 Chief Technology Officer Notes: (1) Member of our audit committee.
The maximum number of shares authorized under the 2011 Stock Incentive Plan was 7,350,000 ordinary shares. The 2011 Stock Incentive Plan expired already while options to acquire 461,234 Class A ordinary shares remained outstanding thereunder as of the date of this annual report. The termination did not adversely affect any rights under awards previously granted.
The 2011 Stock Incentive Plan expired already while options to acquire 447,234 Class A ordinary shares remained outstanding thereunder as of the date of this annual report. The termination did not adversely affect any rights under awards previously granted.
Employees As of December 31, 2023, we had 14,638 full-time employees, compared with 8,013 and 6,815 employees as of December 31, 2021 and 2022, respectively.
Employees As of December 31, 2024, we had 14,966 full-time employees, compared with 6,815 and 14,638 employees as of December 31, 2022 and 2023, respectively.
Number of Ordinary Shares Beneficially Owned (1) % (2) Directors and Executive Officers **: Eric Ya Shen (3) 17,852,209 16.2 Arthur Xiaobo Hong (4) 10,644,065 9.6 Martin Chi Ping Lau (5) * * Jacky Xu (6) * * Chun Liu (7) * * Frank Lin (8) * * Xing Liu (9) * * Kathleen Chien (10) * * Nanyan Zheng (11) * * Donghao Yang (12) * * Tao Feng * * Mark Wang — — All directors and executive officers as a group 29,204,436 25.9 Principal Shareholders: Directors and Executive Officers **: Elegant Motion Holdings Limited (13) 15,941,084 14.7 Tencent Mobility Limited (14) 12,852,698 11.8 High Vivacity Holdings Limited (15) 8,707,142 8.0 Notes: * Less than 1% of our total outstanding ordinary shares. ** Except for Mr.
Number of Ordinary Shares Beneficially Owned (1) % (2) Directors and Executive Officers **: Eric Ya Shen (3) 18,299,191 17.4 Arthur Xiaobo Hong (4) 11,091,048 10.5 Martin Chi Ping Lau (5) * * Jacky Xu (6) * * Chun Liu (7) * * Frank Lin (8) * * Xing Liu (9) * * Kathleen Chien (10) * * Nanyan Zheng (11) * * Donghao Yang (12) * * Mark Wang * * Mike Li * * All directors and executive officers as a group 29,901,130 27.7 % Principal Shareholders: Directors and Executive Officers **: Elegant Motion Holdings Limited (13) 15,941,084 15.5 Tencent Mobility Limited (14) 12,852,698 12.5 High Vivacity Holdings Limited (15) 8,707,142 8.5 Notes: * Less than 1% of our total outstanding ordinary shares. 137 Table of Contents ** Except for Mr.
The maximum aggregate number of shares that may be issued pursuant to our 2014 Share Incentive Plan is (i) 5,366,998 Class A ordinary shares, and (ii) an automatic increase on January 1 of each year after the effective date of the 2014 Share Incentive Plan by that number of shares representing 1.5% of our then total issued and outstanding share capital as of December 31 of the preceding year, or such less number as determined by the board of directors.
The maximum aggregate number of shares authorized under the Amended and Restated 2014 Share Incentive Plan was (i) 13,985,001 Class A ordinary shares, and (ii) an automatic increase on January 1 of each year after the effective date of the 2014 Amended and Restated Share Incentive Plan by that number of shares representing 1.5% of our then total issued and outstanding share capital as of December 31 of the preceding year, or such less number as determined by the board of directors.
The calculations in the shareholder table below are based on 108,474,571 ordinary shares issued and outstanding as of March 31, 2024, comprising of (i) 92,914,213 Class A ordinary shares, excluding the 7,157,755 Class A ordinary shares issued to Deutsche Bank Trust Company Americas, the depositary of our ADS program, for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our stock incentive plans and our treasury ADSs, and (ii) 15,560,358 Class B ordinary shares.
The calculations in the shareholder table below are based on 102,976,663 ordinary shares issued and outstanding as of March 31, 2025, comprising of (i) 87,416,305 Class A ordinary shares, excluding the 12,655,663 Class A ordinary shares issued to Deutsche Bank Trust Company Americas, the depositary of our ADS program, for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our stock incentive plans and our treasury ADSs, and (ii) 15,560,358 Class B ordinary shares.
It will be, however, difficult for U.S. shareholders to originate actions against us in mainland China in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding the ADSs or ordinary shares, to establish a connection to mainland China for a court in mainland China to have jurisdiction as required under the PRC Civil Procedures Law. 135 Table of Contents Furthermore, the United States and Hong Kong do not have a bilateral treaty or multilateral convention in force on reciprocal recognition and enforcement of judgments either.
It will be, however, difficult for U.S. shareholders to originate actions against us in mainland China in accordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only of holding the ADSs or ordinary shares, to establish a connection to mainland China for a court in mainland China to have jurisdiction as required under the PRC Civil Procedures Law.
We have the right to repurchase the restricted shares until they have vested. Transfer Restrictions . Except as otherwise provided by the plan administrator, an award may not be transferred or otherwise disposed of by a participant other than by will or the laws of descent and distribution.
Except as otherwise provided by the plan administrator, an award may not be transferred or otherwise disposed of by a participant other than by will or the laws of descent and distribution.
The following table sets forth the number of our full time employees categorized by areas of operations as of December 31, 2023: Operations Number of Employees Merchandising 1,131 Products and technology support 1,822 Business development, sales and marketing 161 Internet finance 55 Customer service 896 Warehouse management 8,337 Offline stores 268 Administration and management 803 Shan Shan Outlets 1,165 Total 14,638 Our success depends on our ability to attract, retain, and motivate qualified personnel.
The following table sets forth the number of our full time employees categorized by areas of operations as of December 31, 2024: Operations Number of Employees Merchandising 1,084 Products and technology support 1,726 Business development, sales and marketing 154 Internet finance 48 Customer service 709 Warehouse management 8,617 Offline stores 556 Administration and management 701 Shan Shan Outlets 1,371 Total 14,966 136 Table of Contents Our success depends on our ability to attract, retain, and motivate qualified personnel.
The ESG committee is responsible for systematically evaluating, monitoring, and carrying out a variety of ESG initiatives with an aim to strengthen the ESG awareness and efforts at full scale, ranging from energy conservation and emission reduction, responsibility management, customer services, and sustainable supply chain, among other things. 131 Table of Contents Duties of Directors Under Cayman Islands law, our directors have a duty of loyalty to act honestly in good faith with a view to our best interests.
The ESG committee is responsible for systematically evaluating, monitoring, and carrying out a variety of ESG initiatives with an aim to strengthen the ESG awareness and efforts at full scale, ranging from energy conservation and emission reduction, responsibility management, customer services, and sustainable supply chain, among other things.
Yang is Building 35, No. 2519 East Xingang Road, Haizhu District, Guangzhou 510330, People’s Republic of China. (13) Elegant Motion Holdings Limited, or Elegant Motion, is a British Virgin Islands company. Elegant Motion is ultimately wholly owned by the SYZXC Trust. Under the terms of the SYZXC Trust, Mr. Eric Ya Shen and his wife Ms.
(13) Elegant Motion Holdings Limited, or Elegant Motion, is a British Virgin Islands company. Elegant Motion is ultimately wholly owned by the SYZXC Trust. Under the terms of the SYZXC Trust, Mr. Eric Ya Shen and his wife Ms.
For the options granted to our directors, officers and employees, please refer to “Item 6. Directors, Senior Management and Employees—B. Compensation.” F.
For the options granted to our directors, officers and employees, please refer to “Item 6. Directors, Senior Management and Employees—B. Compensation.” F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
Wang has also served as an independent director of Beijing Kingsoft Office Software, Inc. (SSE: 688111) since April 2022. Mr. Wang received a bachelor degree in finance from Beijing International Studies University. Mr. Tao Feng has extensive experience and insights in artificial intelligence (AI) as well as technology and product innovations. Prior to joining us, Mr.
Wang has also served as an independent director of Beijing Kingsoft Office Software, Inc. (SSE: 688111) since April 2022. Mr. Wang received a bachelor degree in finance from Beijing International Studies University. Mr. Mike Li has extensive experience working in China’s internet industry. Prior to joining Vipshop, Mr.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 134 Table of Contents Enforceability of Civil Liabilities We are incorporated in the Cayman Islands and conduct substantially all of our operations in China through our PRC subsidiaries and the consolidated variable interest entities.
Enforceability of Civil Liabilities We are incorporated in the Cayman Islands and conduct substantially all of our operations in China through our PRC subsidiaries and the consolidated variable interest entities.
The term of each award grant should be determined by our plan administrator, provided that the term for an option should not exceed 10 years from the date of the grant. Vesting Schedule . In general, the plan administrator determines, or the award agreement specifies, the vesting schedule.
Incentive share options may be granted only to employees of our company or a parent or a subsidiary of our company. Term of the Awards . The term of each award grant should be determined by our plan administrator, provided that the term for an option should not exceed 10 years from the date of the grant. Vesting Schedule .
Liu is Level 11, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. (8) The business address of Mr. Lin is Unit 1, Level 10, Tower W2, Oriental Plaza, Dongcheng District, Beijing, People’s Republic of China. (9) Mr. Liu is a partner of HongShan. The business address of Mr.
Jacky Xu is 17/F, HNA Tower, No. 8 Linhe Zhong Road, Tianhe District, Guangzhou, People’s Republic of China. (7) The business address of Mr. Liu is Level 11, Sohu.com Internet Plaza, No. 1 Unit Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. (8) The business address of Mr.
Eric Ya Shen upon the exercise of options within 60 days after March 31, 2024, and (iii) 380,726 Class A ordinary shares and 15,560,358 Class B ordinary shares held by Elegant Motion Holdings Limited, representing 63.1% of the aggregate voting power of our company. 133 Table of Contents (4) Beneficially owned through High Vivacity Holdings Limited, a British Virgin Islands company, which is ultimately wholly owned by the Nasa Stand Trust, and options of Mr.
Eric Ya Shen upon the exercise of options within 60 days after March 31, 2025, and (iii) 380,726 Class A ordinary shares and 15,560,358 Class B ordinary shares held by Elegant Motion Holdings Limited, representing 64.5% of the aggregate voting power of our company.
Liu is Suite 3613, 36/F, Two Pacific Place, 88 Queensway, Hong Kong. (10) The business address of Ms. Chien is Building 3, No. 1387 Zhang Dong Road, Shanghai 201203, People’s Republic of China. (11) The business address of Mr. Zheng is 10F, 705 Guangzhou Da Dao Nan Road, Guangzhou 510290, People’s Republic of China. (12) The business address of Mr.
Chien is Building 3, No. 1387 Zhang Dong Road, Shanghai 201203, People’s Republic of China. (11) The business address of Mr. Zheng is 10F, 705 Guangzhou Da Dao Nan Road, Guangzhou 510290, People’s Republic of China. (12) The business address of Mr. Yang is Building 35, No. 2519 East Xingang Road, Haizhu District, Guangzhou 510330, People’s Republic of China.
These may include the term of an award, the provisions applicable in the event the participant’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an award. 127 Table of Contents Except as otherwise provided by the plan administrator, an award may not be transferred or otherwise disposed of by a participant other than by will or the laws of descent and distribution.
These may include the term of an award, the provisions applicable in the event the participant’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an award.
Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association.
Duties of Directors Under Cayman Islands law, our directors have a duty of loyalty to act honestly in good faith with a view to our best interests. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances.
Hong granted under our share incentive plans to acquire Class A ordinary shares. Under the terms of the Nasa Stand Trust, Mr. Hong has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to these shares. As of March 31, 2024, Mr.
Hong has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to these shares. As of March 31, 2025, Mr. Hong beneficially owned (i) 2,383,906 Class A ordinary shares that can be acquired by Mr.
The executive officers have also agreed to disclose in confidence to us all inventions, designs, and trade secrets which they conceive, develop, or reduce to practice and to assign all right, title, and interest in them to us, and assist us in obtaining patents. 126 Table of Contents In addition, in general, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and for one year following the last date of employment.
The executive officers have also agreed to disclose in confidence to us all inventions, designs, and trade secrets which they conceive, develop, or reduce to practice and to assign all right, title, and interest in them to us, and assist us in obtaining patents.
Feng received his bachelor’s degree in computer science and technology and his master’s degree in computer application technology from Peking University in July 2007 and July 2010, respectively. Employment Agreements We have entered into employment agreements with each of our executive officers. Generally, under these agreements, each of our executive officers is employed for a specified time period.
Employment Agreements We have entered into employment agreements with each of our executive officers. Generally, under these agreements, each of our executive officers is employed for a specified time period.
Our company has the right to seek damages if a duty owed by our directors to us is breached. Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors and the shareholders.
Terms of Directors and Officers Our officers are elected by and serve at the discretion of the board of directors and the shareholders.
The original term of our 2014 Share Incentive Plan will expire in July 2024, and we plan to renew it for a new ten-year term. 2011 Stock Incentive Plan Our 2011 Stock Incentive Plan was adopted in March 2011 and terminated automatically after its ten-year term in March 2021.
The Amended and Restated 2014 Share Incentive Plan will expire upon the tenth anniversary of the effective date. 2011 Stock Incentive Plan Our 2011 Stock Incentive Plan was adopted in March 2011 and terminated automatically after its ten-year term in March 2021. The maximum number of shares authorized under the 2011 Stock Incentive Plan was 7,350,000 ordinary shares.
Hong beneficially owned (i) 1,936,923 Class A ordinary shares that can be acquired by Mr. Arthur Xiaobo Hong within 60 days after March 31, 2024, and (ii) 8,707,142 Class A ordinary shares held by High Vivacity Holdings Limited. (5) The business address of Mr.
Arthur Xiaobo Hong within 60 days after March 31, 2025, and (ii) 8,707,142 Class A ordinary shares held by High Vivacity Holdings Limited. (5) The business address of Mr. Martin Chi Ping Lau is Tencent Binhai Towers, No. 33 Haitian 2nd Road, Nanshan District, Shenzhen 518054, People’s Republic of China. (6) The business address of Mr.
As of the date of this annual report, options to acquire 5,335,457 Class A ordinary shares and 4,325,365 restricted shares have been granted and are outstanding under the 2014 Share Incentive Plan. The original term of our 2014 Share Incentive Plan will expire in July 2024, and we plan to renew it for a new ten-year term.
As of March 31, 2025, options to acquire 5,335,457 Class A ordinary shares and 3,723,979 restricted shares have been granted and are outstanding under the Amended and Restated 2014 Share Incentive Plan. The Amended and Restated 2014 Share Incentive Plan will expire upon the tenth anniversary of the effective date.
Removed
Feng worked at Tencent where he led monetization initiatives of news and sports businesses, core technology upgrade and product planning of news business. From July 2014 to April 2020, Mr.
Added
Li served as a high-level researcher for the Local Services Group of Alibaba Group Holding Limited (NYSE: BABA; HKEX: 9988 (HKD Counter) and 89988 (RMB Counter)) from December 2020 to September 2024. Prior to that, he served as a senior technology specialist for the search and recommendation business unit of Alibaba Group from January 2013 to December 2020.
Removed
Feng worked at DiDi Global Inc. where he led AI initiatives of Kuaidi Taxi, digitalization and AI initiatives of DiDi’s chauffeur, bike and e-bike sharing businesses, and technology developments of DiDi Finance. Prior to that, Mr. Feng served at Baidu Inc. (Nasdaq: BIDU; SEHK: 9888) where he was involved in technology innovations such as intelligent recommendation engines. Mr.
Added
Prior to joining Alibaba Group, Mr. Li served as a senior technology director of Asiainfo (China) Software Co., Ltd. from July 2003 to January 2013. Mr. Li received his bachelor’s degree in electrical engineering and automation from Changchun University of Technology in 2000. Mr. Li received another bachelor’s degree in computer science and technology from Zhejiang University in 2003.
Removed
In December 2017, August 2020, and May 2023, we registered additional securities consisting of 5,237,297, 5,973,419, and 5,830,632 Class A ordinary shares that were automatically added to our 2014 Share Incentive Plan, effective January 1 of each years from 2015 to 2023, pursuant to the evergreen provisions.
Added
In addition, in general, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and for one year following the last date of employment.
Removed
Incentive share options may be granted only to employees of our company or a parent or a subsidiary of our company. 128 Table of Contents Term of the Awards .
Added
The original term of our 2014 Share Incentive Plan expired in July 2024, and we adopted an Amended and Restated 2014 Share Incentive Plan in August 2024, which amends and restates the 2014 Share Incentive Plan in its entirety and assumes all awards granted under the 2014 Share Incentive Plan.
Removed
The decrease in the number of full-time employees as of December 31, 2022, as compared to that of December 31, 2021, was primarily due to the personnel optimization of our other offline stores and the personnel outsourcing of Shan Shan Outlets.
Added
The Amended and Restated 2014 Share Incentive Plan amends and restates the previously adopted 2014 Share Incentive Plan of the Company in its entirety and assumes all awards granted under the 2014 Share Incentive Plan.
Removed
Martin Chi Ping Lau is Tencent Binhai Towers, No. 33 Haitian 2nd Road, Nanshan District, Shenzhen 518054, People’s Republic of China. (6) The business address of Mr. Jacky Xu is 17/F, HNA Tower, No. 8 Linhe Zhong Road, Tianhe District, Guangzhou, People’s Republic of China. (7) The business address of Mr.
Added
In general, the plan administrator determines, or the award agreement specifies, the vesting schedule. We have the right to repurchase the restricted shares until they have vested. 132 Table of Contents Transfer Restrictions .
Removed
However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the United States courts under the civil liability provisions of the securities laws if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature.
Added
Except as otherwise provided by the plan administrator, an award may not be transferred or otherwise disposed of by a participant other than by will or the laws of descent and distribution.
Added
In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association. Our company has the right to seek damages if a duty owed by our directors to us is breached.
Added
(4) Beneficially owned through High Vivacity Holdings Limited, a British Virgin Islands company, which is ultimately wholly owned by the Nasa Stand Trust, and options of Mr. Hong granted under our share incentive plans to acquire Class A ordinary shares. Under the terms of the Nasa Stand Trust, Mr.
Added
Lin is Unit 1, Level 10, Tower W2, Oriental Plaza, Dongcheng District, Beijing, People’s Republic of China. (9) Mr. Liu is a partner of HongShan. The business address of Mr. Liu is Suite 3613, 36/F, Two Pacific Place, 88 Queensway, Hong Kong. (10) The business address of Ms.
Added
Furthermore, the United States and Hong Kong do not have a bilateral treaty or multilateral convention in force on reciprocal recognition and enforcement of judgments either.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

8 edited+1 added−0 removed3 unchanged
Biggest changeAs of December 31, 2023, the amounts due to companies controlled by our directors or major shareholders were RMB79.2 million (US$11.2 million), which was unsecured and interest free. We also provided service to companies controlled or significantly influenced by our directors or major shareholders in the amount of RMB1.0 million (US$0.1 million) for the year ended December 31, 2023.
Biggest changeAs of December 31, 2024, the amounts due to companies controlled by our directors or major shareholders were RMB80.8 million (US$11.1 million), which was unsecured and interest free.
As of December 31, 2023, the amounts due from our directors or major shareholders and companies controlled or significantly influenced by our directors or major shareholders were RMB46.8 million (US$6.6 million), which were unsecured and interest free.
As of December 31, 2024, the amounts due from our directors or major shareholders and companies controlled or significantly influenced by our directors or major shareholders were RMB72.6 million (US$10.0 million), which were unsecured and interest free.
As of December 31, 2023, the amount due to companies significantly influenced by us were RMB71.1 million (US$10.0 million), which were unsecured and interest free. We also provided service to companies significantly influenced by us in the amount of RMB16.7 million (US$2.4 million) for the year ended December 31, 2023.
As of December 31, 2024, the amounts due to companies significantly influenced by us were RMB23.4 million (US$3.2 million), which were unsecured and interest free. We also provided service to companies significantly influenced by us in the amount of RMB30.0 million (US$4.1 million) for the year ended December 31, 2024.
Organizational Structure—Contractual Arrangements Relating to the Consolidated Variable Interest Entities.” Transactions with Our Directors and Shareholders We purchased products and goods from companies controlled by our directors or major shareholders in the amount of RMB267.8 million (US$37.7 million) and received service from companies controlled by our directors or major shareholders in the amount of RMB833.0 million (US$117.3 million), for the year ended December 31, 2023.
Organizational Structure—Contractual Arrangements Relating to the Consolidated Variable Interest Entities.” Transactions with Our Directors and Shareholders We purchased products and goods from companies controlled by our directors or major shareholders in the amount of RMB198.8 million (US$27.2 million) and received service from companies controlled by our directors or major shareholders in the amount of RMB817.0 million (US$111.9 million), for the year ended December 31, 2024.
The interest income from the loan and deposit amounted to RMB24.0 million (US$3.4 million) for the year ended December 31, 2023. 136 Table of Contents Employment Agreements See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management—Employment Agreements.” Share Options See “Item 6. Directors, Senior Management and Employees—B. Compensation—Stock Incentive Plans.” C.
The interest income from the loan and deposit amounted to RMB17.5 million (US$2.4 million) for the year ended December 31, 2024. Employment Agreements See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management—Employment Agreements.” Share Options See “Item 6. Directors, Senior Management and Employees—B. Compensation—Stock Incentive Plans.” C.
Transactions with Other Related Parties We purchased products and goods from companies significantly influenced by us in the amount of RMB106.1 million (US$14.9 million) and received service from our affiliates in the amount of RMB5.6 million (US$0.8 million), for the year ended December 31, 2023.
Transactions with Other Related Parties We purchased products and goods from companies significantly influenced by us in the amount of RMB96.1 million (US$13.2 million) and received service from companies significantly influenced by us in the amount of RMB6.4 million (US$0.9 million), for the year ended December 31, 2024.
As of December 31, 2023, the amounts due from companies significantly influenced by us were RMB506.7 million (US$71.4 million), of which RMB483.0 million (US$68.0 million) were short-term loan originated to our company’s joint ventures and affiliates carried an interest rate of 3.45% and deposits to Sichuan VipFubon Consumer Finance Co., Ltd as shareholder deposits at interest rate of 4.9%.
As of December 31, 2024, the amounts due from companies significantly influenced by us were RMB475.5 million (US$65.1 million), of which RMB454.5 million (US$62.3 million) were short-term loan originated to our company’s joint ventures and affiliates carried an interest rate of 2.85% or free interest rate and deposits to Sichuan VipFubon Consumer Finance Co., Ltd as shareholder deposits at interest rate of 3.3%.
Our sales of products to companies significantly influenced by us was RMB73.2 million (US$10.3 million) for the year ended December 31, 2023.
We also provided service and sold products to companies controlled or significantly influenced by our directors or major shareholders in the amount of RMB0.9 million (US$0.1 million) and RMB0.3 million (US$0.04 million), respectively, for the year ended December 31, 2024.
Added
Interests of Experts and Counsel Not applicable. 141 Table of Contents

Other VIPS 10-K year-over-year comparisons