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Baozun Inc.

Baozun Inc.BZUN财报

Nasdaq

Baozun Inc is a leading digital commerce service provider focused on the Chinese market. It delivers full-stack e-commerce solutions including official store operation, digital marketing, logistics and fulfillment, customer support, and technical infrastructure services for global and local consumer brands across fashion, beauty, FMCG, consumer electronics, and other core retail segments.

What changed in Baozun Inc.'s 20-F — 2022 vs 2023

Top changes in Baozun Inc.'s 2023 20-F

683 paragraphs added · 620 removed · 494 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

177 edited+51 added−32 removed666 unchanged
For more detailed information, see “Item 3. Key Information - D.
For more detailed information, see “Item 3. Key Information - D.
We cannot assure you that our current business activities will not be found in violation of any future laws and regulations or any of the laws and regulations currently in effect due to changes in the relevant authorities’ interpretation of these laws and regulations.
We cannot assure you that our current business activities will not be found in violation of any future laws and regulations or any of the laws and regulations currently in effect due to future changes in the relevant authorities’ interpretation of these laws and regulations.
We entered into a series of contractual arrangements with Shanghai Zunyi and its shareholders, which enable us to: ● exercise effective control over Shanghai Zunyi; ● receive substantially all of the economic benefits of Shanghai Zunyi; and ● have an exclusive option to purchase all or part of the equity interests and assets in Shanghai Zunyi when and to the extent permitted by PRC law.
We entered into a series of contractual arrangements with Shanghai Zunyi and its shareholders, which enable us to: ● exercise effective control over Shanghai Zunyi; ● receive substantially all of the economic benefits of Shanghai Zunyi; and ● have an exclusive option to purchase all or part of the equity interests and assets in Shanghai Zunyi when and to the extent permitted by PRC law.
If we or our VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: ● revoking the business licenses and/or operating licenses of such entities; ● shutting down our website, or discontinuing or restricting the conduct of any transactions between certain of our PRC subsidiaries and VIE; ● imposing fines, confiscating the income from our PRC subsidiaries or VIE, or imposing other requirements with which we or our VIE may not be able to comply; 40 Table of Contents ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIE and deregistering the equity pledges of our VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIE; or ● restricting or prohibiting our use of the proceeds of any financing outside China to finance our business and operations in China, and taking other regulatory or enforcement actions that could be harmful to our business.
If we or our VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: ● revoking the business licenses and/or operating licenses of such entities; ● shutting down our website, or discontinuing or restricting the conduct of any transactions between certain of our PRC subsidiaries and VIE; ● imposing fines, confiscating the income from our PRC subsidiaries or VIE, or imposing other requirements with which we or our VIE may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIE and deregistering the equity pledges of our VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIE; or 40 Table of Contents ● restricting or prohibiting our use of the proceeds of any financing outside China to finance our business and operations in China, and taking other regulatory or enforcement actions that could be harmful to our business.
If the imposition of any of these government actions causes us to lose our right to direct the activities of Shanghai Zunyi or our right to receive substantially all the economic benefits and residual returns from Shanghai Zunyi and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of Shanghai Zunyi in our consolidated financial statements.
If the imposition of any of these government actions causes us to lose our right to direct the activities of Shanghai Zunyi or our right to receive substantially all the economic benefits and residual returns from Shanghai Zunyi and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of Shanghai Zunyi in our consolidated financial statements.
Certain events having significant negative impact specifically on the U.S. capital markets may result in a decline in the trading price of our Class A ordinary shares notwithstanding that such event may not impact the trading prices of securities listed in Hong Kong generally or to the same extent, or vice versa.
Certain events having significant negative impact specifically on the U.S. capital markets may result in a decline in the trading price of our Class A ordinary shares notwithstanding that such event may not impact the trading prices of securities listed in Hong Kong generally or to the same extent, or vice versa.
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 is 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 is unable to inspect or investigate completely registered public accounting firms.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
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 is 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 is unable to inspect or investigate completely registered public accounting firms.
Subsidiaries ​ Subsidiaries ​ adjustments ​ Totals ​ ​ (in RMB thousands) Cash and cash equivalents ​ 783,543 ​ 1,316,401 ​ 44,076 ​ — ​ 2,144,020 Restricted cash — 101,704 — — 101,704 Short-term investments 138,052 757,373 — — 895,425 Accounts receivable, net — 6,233,974 295,409 (4,236,705) 2,292,678 Inventories, net — 942,837 160 — 942,997 Advances to suppliers — 424,051 2,041 (53,480) 372,612 Prepayments and other current assets 2,060 10,195,321 437,658 (10,080,624) 554,415 Amounts due from related parties — 77,540 3 15,727 93,270 Amounts due from subsidiaries and VIE 1,434,838 — — (1,434,838) — Investments in and amount due from subsidiaries and VIE 2,114,145 — — (2,114,145) — Investments in equity investees 10,019 5,829,241 — (5,569,567) 269,693 Property and equipment, net — 694,265 1,495 (1,314) 694,446 Intangible assets, net — 271,284 38,126 1,314 310,724 Land use right, net — 39,490 — — 39,490 Operating lease right-of-use assets — 847,047 — — 847,047 Goodwill — 336,326 — — 336,326 Other non-current assets — 65,114 — — 65,114 Deferred tax assets — 162,509 — — 162,509 Total assets 4,482,657 28,294,477 818,968 (23,473,632) 10,122,470 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term loan — 1,016,071 — — 1,016,071 Accounts payable — 3,439,358 201,321 (3,165,947) 474,732 Notes payable — 487,837 — — 487,837 Income tax payables — 46,828 959 (959) 46,828 Accrued expenses and other current liabilities 33,737 11,933,627 212,140 (11,153,964) 1,025,540 Derivative liabilities 364,758 — — — 364,758 Amounts due to related parties — 30,434 15,727 (15,727) 30,434 Current operating lease liabilities — 235,445 — — 235,445 Deferred tax liabilities — 28,082 — — 28,082 Long-term operating lease liabilities — 673,955 — — 673,955 Other non-current liabilities — 62,450 — — 62,450 Total liabilities 398,495 17,954,087 430,147 (14,336,597) 4,446,132 ​ 10 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ ​ ​ VIE and VIE’s Eliminating Consolidated ​ ​ Baozun Inc. ​ Subsidiaries ​ Subsidiaries ​ adjustments ​ Totals ​ ​ (in RMB thousands) Cash and cash equivalents ​ 1,894,125 ​ 2,698,474 ​ 13,946 ​ — ​ 4,606,545 Restricted cash ​ — ​ 93,219 ​ — ​ — ​ 93,219 Accounts receivable, net ​ — ​ 4,747,333 ​ 299,250 ​ (2,785,665) ​ 2,260,918 Inventories, net ​ — ​ 1,070,534 ​ 3,033 ​ — ​ 1,073,567 Advances to suppliers ​ — ​ 545,751 ​ 35,571 ​ (53,349) ​ 527,973 Prepayments and other current assets ​ 106,282 ​ 8,400,000 ​ 162,552 ​ (8,096,060) ​ 572,774 Amounts due from related parties ​ — ​ 68,984 ​ 420 ​ (420) ​ 68,984 Amounts due from subsidiaries and VIE ​ 2,189,936 ​ — ​ — ​ (2,189,936) ​ — Investments in and amount due from subsidiaries and VIE ​ 2,440,880 ​ — ​ — ​ (2,440,880) ​ — Investments in equity investees ​ 110,479 ​ 5,811,748 ​ — ​ (5,591,439) ​ 330,788 Property and equipment, net ​ — ​ 652,641 ​ 1,797 ​ (1,552) ​ 652,886 Intangible assets, net ​ — ​ 380,574 ​ 13,084 ​ 1,552 ​ 395,210 Land use right, net ​ — ​ 40,516 ​ — ​ — ​ 40,516 Operating lease right-of-use assets ​ — ​ 1,095,570 ​ — ​ — ​ 1,095,570 Goodwill ​ — ​ 397,904 ​ — ​ — ​ 397,904 Other non-current assets ​ — ​ 87,926 ​ — ​ — ​ 87,926 Deferred tax assets ​ — ​ 114,200 ​ — ​ — ​ 114,200 Total assets ​ 6,741,702 ​ 26,205,374 ​ 529,653 ​ (21,157,749) ​ 12,318,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term loan ​ 1,740,004 ​ 548,461 ​ — ​ — ​ 2,288,465 Accounts payable ​ — ​ 2,223,190 ​ 140,451 ​ (1,869,562) ​ 494,079 Notes payable ​ — ​ 529,603 ​ — ​ — ​ 529,603 Income tax payables ​ 94,298 ​ 33,692 ​ 497 ​ (497) ​ 127,990 Accrued expenses and other current liabilities ​ 11,041 ​ 10,033,408 ​ 27,538 ​ (9,087,468) ​ 984,519 Amounts due to related parties ​ — ​ 73,794 ​ — ​ — ​ 73,794 Current operating lease liabilities ​ — ​ 278,176 ​ — ​ — ​ 278,176 Deferred tax liabilities ​ — ​ 51,525 ​ — ​ — ​ 51,525 Long-term operating lease liabilities ​ — ​ 883,495 ​ — ​ — ​ 883,495 Other non-current liabilities ​ — ​ 125,985 ​ — ​ — ​ 125,985 Total liabilities ​ 1,845,343 ​ 14,781,329 ​ 168,486 ​ (10,957,527) ​ 5,837,631 ​ The following table presents the condensed consolidating statements of operations for our VIE and other entities for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ VIE and VIE’s ​ Eliminating ​ Consolidated ​ Baozun Inc.
Subsidiaries ​ Subsidiaries ​ adjustments ​ Totals ​ ​ (in RMB thousands) Cash and cash equivalents ​ 783,543 ​ 1,316,401 ​ 44,076 ​ — ​ 2,144,020 Restricted cash — 101,704 — — 101,704 Short-term investments 138,052 757,373 — — 895,425 Accounts receivable, net — 6,233,974 295,409 (4,236,705) 2,292,678 Inventories, net — 942,837 160 — 942,997 Advances to suppliers — 424,051 2,041 (53,480) 372,612 Prepayments and other current assets 2,060 10,195,321 437,658 (10,080,624) 554,415 Amounts due from related parties — 77,540 3 15,727 93,270 Amounts due from subsidiaries and VIE 1,434,838 — — (1,434,838) — Investments in and amount due from subsidiaries and VIE 2,114,145 — — (2,114,145) — Investments in equity investees 10,019 5,829,241 — (5,569,567) 269,693 Property and equipment, net — 694,265 1,495 (1,314) 694,446 Intangible assets, net — 271,284 38,126 1,314 310,724 Land use right, net — 39,490 — — 39,490 Operating lease right-of-use assets — 847,047 — — 847,047 Goodwill — 336,326 — — 336,326 Other non-current assets — 65,114 — — 65,114 Deferred tax assets — 162,509 — — 162,509 Total assets 4,482,657 28,294,477 818,968 (23,473,632) 10,122,470 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term loan — 1,016,071 — — 1,016,071 Accounts payable — 3,439,358 201,321 (3,165,947) 474,732 Notes payable — 487,837 — — 487,837 Income tax payables — 46,828 959 (959) 46,828 Accrued expenses and other current liabilities 33,737 11,933,627 212,140 (11,153,964) 1,025,540 Derivative liabilities 364,758 — — — 364,758 Amounts due to related parties — 30,434 15,727 (15,727) 30,434 Current operating lease liabilities — 235,445 — — 235,445 Deferred tax liabilities — 28,082 — — 28,082 Long-term operating lease liabilities — 673,955 — — 673,955 Other non-current liabilities — 62,450 — — 62,450 Total liabilities 398,495 17,954,087 430,147 (14,336,597) 4,446,132 ​ ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2021 ​ ​ ​ VIE and VIE’s Eliminating Consolidated ​ ​ Baozun Inc. ​ Subsidiaries ​ Subsidiaries ​ adjustments ​ Totals ​ ​ (in RMB thousands) Cash and cash equivalents ​ 1,894,125 ​ 2,698,474 ​ 13,946 ​ — ​ 4,606,545 Restricted cash ​ — ​ 93,219 ​ — ​ — ​ 93,219 Accounts receivable, net ​ — ​ 4,747,333 ​ 299,250 ​ (2,785,665) ​ 2,260,918 Inventories, net ​ — ​ 1,070,534 ​ 3,033 ​ — ​ 1,073,567 Advances to suppliers ​ — ​ 545,751 ​ 35,571 ​ (53,349) ​ 527,973 Prepayments and other current assets ​ 106,282 ​ 8,400,000 ​ 162,552 ​ (8,096,060) ​ 572,774 Amounts due from related parties ​ — ​ 68,984 ​ 420 ​ (420) ​ 68,984 Amounts due from subsidiaries and VIE ​ 2,189,936 ​ — ​ — ​ (2,189,936) ​ — Investments in and amount due from subsidiaries and VIE ​ 2,440,880 ​ — ​ — ​ (2,440,880) ​ — Investments in equity investees ​ 110,479 ​ 5,811,748 ​ — ​ (5,591,439) ​ 330,788 Property and equipment, net ​ — ​ 652,641 ​ 1,797 ​ (1,552) ​ 652,886 Intangible assets, net ​ — ​ 380,574 ​ 13,084 ​ 1,552 ​ 395,210 Land use right, net ​ — ​ 40,516 ​ — ​ — ​ 40,516 Operating lease right-of-use assets ​ — ​ 1,095,570 ​ — ​ — ​ 1,095,570 Goodwill ​ — ​ 397,904 ​ — ​ — ​ 397,904 Other non-current assets ​ — ​ 87,926 ​ — ​ — ​ 87,926 Deferred tax assets ​ — ​ 114,200 ​ — ​ — ​ 114,200 Total assets ​ 6,741,702 ​ 26,205,374 ​ 529,653 ​ (21,157,749) ​ 12,318,980 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term loan ​ 1,740,004 ​ 548,461 ​ — ​ — ​ 2,288,465 Accounts payable ​ — ​ 2,223,190 ​ 140,451 ​ (1,869,562) ​ 494,079 Notes payable ​ — ​ 529,603 ​ — ​ — ​ 529,603 Income tax payables ​ 94,298 ​ 33,692 ​ 497 ​ (497) ​ 127,990 Accrued expenses and other current liabilities ​ 11,041 ​ 10,033,408 ​ 27,538 ​ (9,087,468) ​ 984,519 Amounts due to related parties ​ — ​ 73,794 ​ — ​ — ​ 73,794 Current operating lease liabilities ​ — ​ 278,176 ​ — ​ — ​ 278,176 Deferred tax liabilities ​ — ​ 51,525 ​ — ​ — ​ 51,525 Long-term operating lease liabilities ​ — ​ 883,495 ​ — ​ — ​ 883,495 Other non-current liabilities ​ — ​ 125,985 ​ — ​ — ​ 125,985 Total liabilities ​ 1,845,343 ​ 14,781,329 ​ 168,486 ​ (10,957,527) ​ 5,837,631 ​ The following table presents the condensed consolidating statements of operations for our VIE and other entities for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ VIE and VIE’s ​ Eliminating ​ Consolidated ​ Baozun Inc.
We had negative operating cash flows for the year ended December 31, 2021 primarily due to (i) the continuous negative impact of COVID-19 pandemic on our business, (ii) a decrease in sales from several brand partners in the apparel and accessories category due to the Better Cotton Initiatives, (iii) an increase in account receivables caused by the growth of our consignment and service fee models, as well as in their write-downs, and (iv) an increase in our working capital expenditures, including to fund increased inventories and prepayments for goods under our distribution model.
We had negative operating cash flows for the year ended December 31, 2021 primarily due to (i) the negative impact of COVID-19 pandemic on our business, (ii) a decrease in sales from several brand partners in the apparel and accessories category due to the Better Cotton Initiatives, (iii) an increase in account receivables caused by the growth of our consignment and service fee models, as well as in their write-downs, and (iv) an increase in our working capital expenditures, including to fund increased inventories and prepayments for goods under our distribution model.
Risk Factors.” Risks Related to Our Business ● If the e-commerce market in China does not grow, or grows more slowly than we expect, demand for our services and solutions could be adversely affected. ● If the complexities and challenges faced by brand partners seeking to sell online diminish, or if our brand partners increase their in-house e-commerce capabilities as an alternative to our solutions and services, demand for our solutions and services could be adversely affected. ● Our success is tied to the success of our existing and future brand partners for which we operate their brand e-commerce business. ● If we are unable to retain our existing brand partners, our results of operations could be materially and adversely affected. 12 Table of Contents ● We may continue to incur losses in the future and may not be able to return to and subsequently maintain profitability. ● If we fail to maintain our relationships with e-commerce channels or adapt ourselves to emerging e-commerce channels, or if e-commerce channels otherwise curtail or inhibit our ability to integrate our solutions with their channels, our solutions would be less appealing to existing and potential brand partners. ● We rely on the success of certain e-commerce channels such as Tmall. ● Under the consignment model and service fee model, a variable portion of the revenues we generate from certain brand partners is based upon the amount of GMV, and any change to such pricing mechanism may adversely affect our financial results. ● We may not be able to compete successfully against current and future competitors. ● Material disruption of e-commerce channels could prevent us from providing services to our brand partners and reduce sales in stores operated by us. ● The proper functioning of our technology platform is essential to our business.
Risk Factors.” Risks Related to Our Business ● If the e-commerce market in China does not grow, or grows more slowly than we expect, demand for our services and solutions could be adversely affected. 11 Table of Contents ● If the complexities and challenges faced by brand partners seeking to sell online diminish, or if our brand partners increase their in-house e-commerce capabilities as an alternative to our solutions and services, demand for our solutions and services could be adversely affected. ● Our success is tied to the success of our existing and future brand partners for which we operate their brand e-commerce business. ● If we are unable to retain our existing brand partners, our results of operations could be materially and adversely affected. ● We may continue to incur losses in the future and may not be able to return to and subsequently maintain profitability. ● If we fail to maintain our relationships with e-commerce channels or adapt ourselves to emerging e-commerce channels, or if e-commerce channels otherwise curtail or inhibit our ability to integrate our solutions with their channels, our solutions would be less appealing to existing and potential brand partners. ● We rely on the success of certain e-commerce channels such as Tmall. ● Under the consignment model and service fee model, a variable portion of the revenues we generate from certain brand partners is based upon the amount of GMV, and any change to such pricing mechanism may adversely affect our financial results. ● We may not be able to compete successfully against current and future competitors. ● Material disruption of e-commerce channels could prevent us from providing services to our brand partners and reduce sales in stores operated by us. ● The proper functioning of our technology platform is essential to our business.
Our prospects for growth depend on our ability to innovate and continue to strategize new value-added brand e-commerce service through improved technologies and on our ability to effectively commercialize such innovations. There are uncertainties related to our investments in new solutions, services, emerging channels and regions.
For BEC, our prospects for growth depend on our ability to innovate and continue to strategize new value-added brand e-commerce service through improved technologies and on our ability to effectively commercialize such innovations. There are uncertainties related to our investments in new solutions, services, emerging channels and regions.
Other five of our subsidiaries qualified as a “high and new technology enterprise” starting from 2018 and renewed the qualification subsequently, and are therefore subject to a 15% preferential income tax rate with a valid term of three years from the year of qualification or renewal.
Five of our subsidiaries qualified as a “high and new technology enterprise” starting from 2018 and renewed the qualification subsequently, and are therefore subject to a 15% preferential income tax rate with a valid term of three years from the year of qualification or renewal.
A lower withholding income tax rate of 5% is applied if the FIE’s immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China, subject to a qualification review at the time of the distribution.
A lower withholding income tax rate of 5% is applied if the immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with China, subject to a qualification review at the time of the distribution.
In particular, any recent significant decline in the market price of our ADSs increases the risk of us becoming a PFIC. The market price of our ADSs may continue to fluctuate considerably and, consequently, we cannot assure you of our PFIC status for any taxable year.
In particular, any significant decline in the market price of our ADSs increases the risk of us becoming a PFIC. The market price of our ADSs may continue to fluctuate considerably and, consequently, we cannot assure you of our PFIC status for any taxable year.
Risks Related to Doing Business in the People’s Republic of China ● Changes in the political and economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies. ● There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations. ● We are subject to laws that are applicable to retailers, including advertising and promotion laws and consumer protection laws that could require us to modify our current business practices and incur increased costs. ● Failure to comply with the relatively new E-Commerce Law may have a material adverse impact on our business, financial conditions and results of operations. ● The approval of or the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore listings and capital raising activities under PRC law.
Risks Related to Doing Business in the People’s Republic of China ● Changes in the political and economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies. ● There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations. ● We are subject to laws that are applicable to retailers, including advertising and promotion laws and consumer protection laws that could require us to modify our current business practices and incur increased costs. 12 Table of Contents ● Failure to comply with the relatively new E-Commerce Law may have a material adverse impact on our business, financial conditions and results of operations. ● The approval of or the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore listings and capital raising activities under PRC law.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” 6 Table of Contents Permissions Required from the PRC Authorities for Our Operations Our business is subject to supervision and regulation by relevant PRC government authorities, including without limitation the Ministry of Commerce of the PRC, or the MOFCOM, the PRC Ministry of Industry and Information Technology, or the MIIT, the PRC State Administration for Market Regulation (formerly known as the SAIC), or the SAMR and National Medical Products Administration.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” 4 Table of Contents Permissions Required from the PRC Authorities for Our Operations Our business is subject to supervision and regulation by relevant PRC government authorities, including without limitation the Ministry of Commerce of the PRC, or the MOFCOM, the PRC Ministry of Industry and Information Technology, or the MIIT, the PRC State Administration for Market Regulation (formerly known as the SAIC), or the SAMR and National Medical Products Administration.
Risk Factors — Risks Related to Our Corporate Structure — Any failure by our VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.” 5 Table of Contents Our business and operations are primarily based in the PRC, and are governed by PRC laws, rules and regulations, and the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable.
Risk Factors — Risks Related to Our Corporate Structure — Any failure by our VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.” 3 Table of Contents Our business and operations are primarily based in the PRC, and are governed by PRC laws, rules and regulations, and the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable.
Risk Factors — Risks Related to Doing Business in the People’s Republic of China — Failure to comply with the relatively new E-Commerce Law may have a material adverse impact on our business, financial conditions and results of operations.” There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules.
Risk Factors — Risks Related to Doing Business in the People’s Republic of China — Failure to comply with the relatively new E-Commerce Law may have a material adverse impact on our business, financial conditions and results of operations.” There are substantial uncertainties regarding the interpretation and application of PRC laws, regulations and rules.
For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied. 8 Table of Contents The table above has been prepared under the assumption that 95% of the net revenues of our VIE will be distributed as fees to WFOE under tax neutral contractual arrangements.
For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied. 6 Table of Contents The table above has been prepared under the assumption that 95% of the net revenues of our VIE will be distributed as fees to WFOE under tax neutral contractual arrangements.
A separate determination must be made after the close of each taxable year as to whether a non-United States corporation is a PFIC for that year. We believe we were not a PFIC for the taxable year ended December 31, 2022, and we do not expect to become a PFIC in the foreseeable future.
A separate determination must be made after the close of each taxable year as to whether a non-United States corporation is a PFIC for that year. We believe we were not a PFIC for the taxable year ended December 31, 2023, and we do not expect to become a PFIC in the foreseeable future.
If there is any amount payable to WFOE under the contractual agreements, our VIE will settle the amount accordingly. For the years ended December 31, 2020, 2021 and 2022, no dividends or distributions were made to the Parent by our subsidiaries. For the years ended December 31, 2020, 2021 and 2022, no dividends or distributions were made to U.S. investors.
If there is any amount payable to WFOE under the contractual agreements, our VIE will settle the amount accordingly. For the years ended December 31, 2021, 2022 and 2023, no dividends or distributions were made to the Parent by our subsidiaries. For the years ended December 31, 2021, 2022 and 2023, no dividends or distributions were made to U.S. investors.
If we choose to do so, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. We had negative operating cash flows in the years ended December 31, 2021, and may have negative operating cash flows in the future.
If we choose to do so, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. We had negative operating cash flows in the year ended December 31, 2021, and may have negative operating cash flows in the future.
As e-commerce business via internet and mobile network is still evolving in China, new laws and regulations may be adopted from time to time, and substantial uncertainties exist regarding interpretation and implementation of current and future PRC laws and regulations applicable to our business operations.
As e-commerce business via internet and mobile network is still evolving in China, new laws and regulations may be adopted from time to time, and substantial uncertainties exist regarding interpretation and implementation of PRC laws and regulations applicable to our business operations.
Considering the future operating and cashflow needs of our VIE, for the years ended December 31, 2020, 2021 and 2022, no service fees were charged to our VIE by WFOE, and no payments were made by our VIE under the Exclusive Technology Service Agreement.
Considering the future operating and cashflow needs of our VIE, for the years ended December 31, 2021, 2022 and 2023, no service fees were charged to our VIE by WFOE, and no payments were made by our VIE under the Exclusive Technology Service Agreement.
Any failure to maintain the satisfactory performance of our platform could materially and adversely affect our business and reputation. ● We have experienced rapid growth in recent years, and failure to manage our growth and return to or maintain profitability could harm our business and prospects.
Any failure to maintain the satisfactory performance of our platform could materially and adversely affect our business and reputation. ● We have experienced steady growth in recent years, and failure to manage our growth and return to or maintain profitability could harm our business and prospects.
Our revenue growth may slow or our revenues may decline for many reasons, including competition, slower growth of the China retail or China online retail sales, fulfillment bottlenecks, emergence of alternative business models, changes in government policies and other general economic conditions. Our growth has placed, and continues to place, significant strain on our management and resources.
Our revenue growth may slow or our revenues may decline for many reasons, including competition, slower growth of the China retail or China online retail sales, fulfillment bottlenecks, emergence of alternative business models, changes in government policies and other general economic conditions. 17 Table of Contents Our growth has placed, and continues to place, significant strain on our management and resources.
Furthermore, our articles of association are specific to us and include certain provisions that may be different from common practices in Hong Kong. 57 Table of Contents Our articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders’ opportunity to sell their ADSs and/or Class A ordinary shares at a premium.
Furthermore, our articles of association are specific to us and include certain provisions that may be different from common practices in Hong Kong. Our articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders’ opportunity to sell their ADSs and/or Class A ordinary shares at a premium.
Any such negative publicity, regardless of veracity, may have a material adverse effect on our business and financial results, our reputation and the trading price of our ADSs and/or Class A ordinary shares. 28 Table of Contents If counterfeit products are sold in the stores we operate or the platform we operated, our reputation and financial results could be materially and adversely affected.
Any such negative publicity, regardless of veracity, may have a material adverse effect on our business and financial results, our reputation and the trading price of our ADSs and/or Class A ordinary shares. If counterfeit products are sold in the stores we operate or the platform we operated, our reputation and financial results could be materially and adversely affected.
If we are unable to maintain these relationships or enter into new arrangements on acceptable terms, our ability to attract new brand partners and new customers could be harmed. Further, many of the parties with which we may have online advertising arrangements provide advertising services for other marketers of goods.
We also provide digital marketing services to our other customers. If we are unable to maintain these relationships or enter into new arrangements on acceptable terms, our ability to attract new brand partners and new customers could be harmed. Further, many of the parties with which we may have online advertising arrangements provide advertising services for other marketers of goods.
Political tensions between the United States and China have escalated since the COVID-19 outbreak and the PRC National People’s Congress’ passage of Hong Kong national security legislation, the imposition of U.S. sanctions on certain Chinese officials from China’s central government and the Hong Kong Special Administrative Region by the U.S. government, the imposition of sanctions on certain individuals from the U.S. by the Chinese government, various executive orders issued by former U.S.
Political tensions between the United States and China have escalated since the PRC National People’s Congress’ passage of Hong Kong national security legislation, the imposition of U.S. sanctions on certain Chinese officials from China’s central government and the Hong Kong Special Administrative Region by the U.S. government, the imposition of sanctions on certain individuals from the U.S. by the Chinese government, various executive orders issued by former U.S.
We have concluded that our internal control over financial reporting was effective as of December 31, 2022, but we cannot assure you that in the future we will not identify material weaknesses in our internal control over financial reporting.
We have concluded that our internal control over financial reporting was effective as of December 31, 2023, but we cannot assure you that in the future we will not identify material weaknesses in our internal control over financial reporting.
In addition to the above factors, the prices and trading volumes of our ADSs and/or Class A ordinary shares may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry, brand partners, suppliers or third-party sellers; ● announcements of studies and reports relating to the quality of our product and service offerings or those of our competitors; ● changes in the economic performance or market valuations of other e-commerce companies; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the online retail market; ● announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates among the RMB , the Hong Kong dollar and the U.S. dollar; ● natural disasters or health epidemic such as COVID-19; ● political or market instability or disruptions, pandemics or epidemics and other disruptions to China’s economy or the global economy, and actual or perceived social unrest in the United States, Hong Kong or other jurisdictions; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; ● litigation, government investigation or other legal or regulatory proceeding; ● our share repurchase programs; and 53 Table of Contents ● any future issuances of securities, including sales or perceived potential sales of additional ordinary shares or ADSs in certain circumstances.
In addition to the above factors, the prices and trading volumes of our ADSs and/or Class A ordinary shares may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry, brand partners, suppliers or third-party sellers; ● announcements of studies and reports relating to the quality of our product and service offerings or those of our competitors; ● changes in the economic performance or market valuations of other e-commerce companies; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the online retail market; ● announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates among the RMB , the Hong Kong dollar and the U.S. dollar; ● natural disasters or health epidemic; ● political or market instability or disruptions, pandemics or epidemics and other disruptions to China’s economy or the global economy, and actual or perceived social unrest in the United States, Hong Kong or other jurisdictions; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares or ADSs; ● litigation, government investigation or other legal or regulatory proceeding; ● our share repurchase programs; and ● any future issuances of securities, including sales or perceived potential sales of additional ordinary shares or ADSs in certain circumstances. 53 Table of Contents Any of these factors may result in large and sudden changes in the volume and trading price of our ADSs and/or Class A ordinary shares.
Liquidity and Capital Resources.” Our substantial level of indebtedness could have important consequences, including the following: ● we must use a substantial portion of our cash flow from operations to pay interest and principal on our indebtedness, which will reduce funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes and potential acquisitions; 21 Table of Contents ● our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired; ● we will be exposed to fluctuations in interest rates and currency exchange rates; ● our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions; ● we may be more vulnerable to the economic downturns and adverse developments in our business; ● we may be unable to comply with financial and other restrictive covenants in our debt agreements, which could result in an event of default that, if not cured or waived, may result in acceleration of certain of our debt, have an adverse effect on our business and prospects, and force us into bankruptcy or liquidation; and ● in the event of insolvency, liquidation, reorganization, dissolution or other winding up of our business, if there are not sufficient assets remaining to pay all creditors, then all or a portion of the amounts due on our indebtedness then outstanding would remain unpaid.
Liquidity and Capital Resources.” Our substantial level of indebtedness could have important consequences, including the following: ● we must use a substantial portion of our cash flow from operations to pay interest and principal on our indebtedness, which will reduce funds available to us for other purposes such as working capital, capital expenditures, other general corporate purposes and potential acquisitions; ● our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired; ● we will be exposed to fluctuations in interest rates and currency exchange rates; ● our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions; ● we may be more vulnerable to the economic downturns and adverse developments in our business; ● we may be unable to comply with financial and other restrictive covenants in our debt agreements, which could result in an event of default that, if not cured or waived, may result in acceleration of certain of our debt, have an adverse effect on our business and prospects, and force us into bankruptcy or liquidation; and ● in the event of insolvency, liquidation, reorganization, dissolution or other winding up of our business, if there are not sufficient assets remaining to pay all creditors, then all or a portion of the amounts due on our indebtedness then outstanding would remain unpaid. 21 Table of Contents We may incur substantial additional indebtedness in the future, subject to the restrictions contained in our existing credit facility and the terms of any of our other indebtedness.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. ​ 9 Table of Contents Financial Information Related to Our VIE The following table presents the condensed consolidating balance sheet data for our VIE and other entities as of the dates presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ ​ ​ ​ VIE and VIE’s Eliminating Consolidated ​ Baozun Inc.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. ​ 7 Table of Contents Financial Information Related to Our VIE The following table presents the condensed consolidating balance sheet data for our VIE and other entities as of the dates presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ​ ​ ​ ​ VIE and VIE’s ​ Eliminating ​ Consolidated ​ Baozun Inc.
We rely on certain key operating metrics to evaluate the performance of our business, and any perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We rely on certain key operating metrics, such as GMV, to evaluate the performance of our business.
We rely on certain key operating metrics to evaluate the performance of our business, and any perceived inaccuracies in such metrics may harm our reputation and negatively affect our business. We rely on certain key operating metrics to evaluate the performance of our business.
Because of the different characteristics of the U.S. and Hong Kong capital markets, the historical market prices of our ADSs may not be indicative of the trading performance of the Class A ordinary shares. 56 Table of Contents Exchange between our Class A ordinary shares and our ADSs may adversely affect the liquidity and/or trading price of each other.
Because of the different characteristics of the U.S. and Hong Kong capital markets, the historical market prices of our ADSs may not be indicative of the trading performance of the Class A ordinary shares. Exchange between our Class A ordinary shares and our ADSs may adversely affect the liquidity and/or trading price of each other.
There can be no assurance that failure to manage our warehouse capacity and utilization will not have a material adverse effect on our business and results of operation. 27 Table of Contents We are subject to third-party payment processing related risks.
There can be no assurance that failure to manage our warehouse capacity and utilization will not have a material adverse effect on our business and results of operation. We are subject to third-party payment processing related risks.
Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanisms.
With respect to foreign regulatory investigations, although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanisms.
As a result of such potential breach, our reputation, financial condition and results of operations may be materially and adversely affected. 15 Table of Contents We may continue to incur losses in the future and may not be able to return to and subsequently maintain profitability.
As a result of such potential breach, our reputation, financial condition and results of operations may be materially and adversely affected. We may continue to incur losses in the future and may not be able to return to and subsequently maintain profitability.
Michael Qingyu Zhang are both PRC citizens. Revenues from Shanghai Zunyi contributed to 9.8%, 8.6% and 6.8% of our total net revenues in 2020, 2021 and 2022, respectively. Investors in our ADSs are not purchasing equity interest in our VIE in China, but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands.
Michael Qingyu Zhang are both PRC citizens. Revenues from Shanghai Zunyi contributed to 8.6%, 6.8% and 6.2% of our total net revenues in 2021, 2022 and 2023, respectively. Investors in our ADSs are not purchasing equity interest in our VIE in China, but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands.
Moreover, if we are unable to manage and conduct marketing and promotional activities for our clients cost-effectively, they may turn to other alternatives, reducing our revenues and potentially materially adversely affecting our business and reputation. We may not be able to respond to rapid changes in channel technologies or requirements.
Moreover, if we are unable to manage and conduct marketing and promotional activities for our clients cost-effectively, they may turn to other alternatives, reducing our revenues and potentially materially adversely affecting our business and reputation. 24 Table of Contents We may not be able to respond to rapid changes in channel technologies or requirements.
Failure to comply with the requirements may lead to fines, revocation of business permits or licenses and other sanctions. Finally, we procure equipment or software for storage, encryption and decryption from time to time.
Failure to comply with the requirements may lead to fines, revocation of business permits or licenses and other sanctions. 33 Table of Contents Finally, we procure equipment or software for storage, encryption and decryption from time to time.
We may be required to perform impairment assessment and suffer significant impairment loss or downward adjustments of our investments in the future due to the impact of evolving e-commerce dynamics, COVID-19, regulatory and competitive environment of the industries, circumstances of our invested companies and other factors.
We may be required to perform impairment assessment and suffer significant impairment loss or downward adjustments of our investments in the future due to the impact of evolving e-commerce dynamics, health epidemics such as COVID-19, regulatory and competitive environment of the industries, circumstances of our invested companies and other factors.
Failure to comply with the requirements may lead to fines, revocation of business permits or licenses and other sanctions. 34 Table of Contents We may not be able to adequately protect our intellectual property rights.
Failure to comply with the requirements may lead to fines, revocation of business permits or licenses and other sanctions. We may not be able to adequately protect our intellectual property rights.
If we fail to collect a substantial portion of our rebates receivables, our results of operations and financial condition would be materially and adversely affected. If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected.
If we fail to collect a substantial portion of our rebates receivables, our results of operations and financial condition would be materially and adversely affected. 23 Table of Contents If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected.
We also enter into confidentiality agreements with our employees and any third parties who may access our proprietary information, and we rigorously control access to our proprietary technology and information. Intellectual property protection may not be sufficient in China or other countries in which we operate.
We also enter into confidentiality agreements with our employees and any third parties who may access our proprietary information, and we rigorously control access to our proprietary technology and information. 34 Table of Contents Intellectual property protection may not be sufficient in China or other countries in which we operate.
The proper functioning of our technology platform is essential to our business. Any failure to maintain the satisfactory performance of our platform could materially and adversely affect our business and reputation. The satisfactory performance, reliability and availability of our technology platform are critical to our success and our ability to attract and retain brand partners and provide quality customer services.
Any failure to maintain the satisfactory performance of our platform could materially and adversely affect our business and reputation. The satisfactory performance, reliability and availability of our technology platform are critical to our success and our ability to attract and retain brand partners and provide quality customer services.
Non-compliance with the Overseas Listing Filing Rules or an overseas listing completed in breach of the Overseas Listing Filing Rules may result in a warning on the relevant domestic companies and a fine of RMB1 million (US$144,986.4) to RMB10 million (US$1.4 million) on them.
Non-compliance with the Overseas Listing Filing Rules or an overseas listing completed in breach of the Overseas Listing Filing Rules may result in a warning on the relevant domestic companies and a fine of RMB1 million (US$140,847.1) to RMB10 million (US$1.4 million) on them.
As of the date of this annual report, our board of directors consists of eight directors, four of which meet the “independence” requirements of the Nasdaq Stock Market Rules. We have relied on and intend to continue to rely on some of these exemptions.
As of the date of this annual report, our board of directors consists of seven directors, three of which meet the “independence” requirements of the Nasdaq Stock Market Rules. We have relied on and intend to continue to rely on some of these exemptions.
Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems.
Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy.
As of December 31, 2022, we provided e-commerce solutions to more than 400 brand partners. Newly added brand partners typically require a ramping up period before they can fully utilize our services.
As of December 31, 2023, we provided e-commerce solutions to more than 450 brand partners. Newly added brand partners typically require a ramping up period before they can fully utilize our services.
The controlling shareholders or actual controllers of the domestic company organize or instigate the relevant illegal acts, or conceals relevant matters resulting in the illegal acts, may be fined between RMB1 million (US$144,986.4) to RMB10 million (US$1.4 million).
The controlling shareholders or actual controllers of the domestic company organize or instigate the relevant illegal acts, or conceals relevant matters resulting in the illegal acts, may be fined between RMB1 million (US$140,847.1) to RMB10 million (US$1.4 million).
The net loss in 2022 was mainly due to a fair value loss on derivative liabilities of RMB364.8 million (US$52.9 million), a loss on disposal of subsidiaries and investments in equity investee of RMB107.0 million (US$15.5 million), an unrealized investment loss of RMB97.8 million (US$14.2 million) during the 2022, as well as weaker profitability from operations caused by a combination of deteriorated macro-economic environment and negative impact from the Better Cotton Initiatives.
The net loss in 2022 was mainly due to a fair value loss on derivative liabilities of RMB364.8 million, a loss on disposal of subsidiaries and investments in equity investee of RMB107.0 million, an unrealized investment loss of RMB97.8 million during the 2022, as well as weaker profitability from operations caused by a combination of deteriorated macro-economic environment and negative impact from the Better Cotton Initiatives.
However, if we are found to be in violation of the rules regulating dispatched contract workers, we may be ordered to rectify the noncompliance by entering into written employment contracts with our dispatched contract workers, and if we fail to rectify within the time period specified by the labor authority, we may be subject to a penalty ranging from RMB5,000 (US$724.9) to RMB10,000 (US$1,449.9) per dispatched worker.
However, if we are found to be in violation of the rules regulating dispatched contract workers, we may be ordered to rectify the noncompliance by entering into written employment contracts with our dispatched contract workers, and if we fail to rectify within the time period specified by the labor authority, we may be subject to a penalty ranging from RMB5,000 (US$704.2) to RMB10,000 (US$1,408.5) per dispatched worker.
For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective. (4) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise, or FIE, to its immediate holding company outside of China.
For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective. (4) The PRC Enterprise Income Tax Law imposes a withholding income tax of 10% on dividends distributed by a company in mainland China to its immediate holding company outside of China.
As a dual-listed company, we are subject to Hong Kong and the Nasdaq Global Select Market listing and regulatory requirements concurrently. The Hong Kong Stock Exchange and the Nasdaq Global Select Market have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of retail and institutional participation).
We are subject to Hong Kong and Nasdaq listing and regulatory requirements concurrently. The Hong Kong Stock Exchange and the Nasdaq Global Select Market have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of retail and institutional participation).
Junhua Wu, without including shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security, represent 31.6% and 13.1% of the aggregate voting power of our company, respectively, as of March 31, 2023. The interests of Mr.
Junhua Wu, without including shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security, represent 31.1% and 12.8% of the aggregate voting power of our company, respectively, as of March 31, 2024. The interests of Mr.
According to the National Bureau of Statistics of China, China’s real GDP growth rate was 2.3% in 2020, which increased to 8.1% in 2021 and slowed to 3.0% in 2022.
According to the National Bureau of Statistics of China, China’s real GDP growth rate was 8.1% in 2021, slowed to 3.0% in 2022 and increased to 5.2% in 2023.
Some of our other brand partners also contributed significantly to our total GMV while our net revenues related to them were less significant (each less than 10% of our total net revenues in 2022) as they mainly utilized our capabilities under the service fee model or consignment model and therefore we did not generate any product sales revenue related to them.
Some of our other brand partners also contributed substantially to our total GMV while our net revenues related to them were less significant as they mainly utilized our capabilities under the service fee model or consignment model and therefore we did not generate any product sales revenue related to them.
On February 17, 2015, the PRC State Council, or the State Council, promulgated the Deposit Insurance Regulation, which requires banks registered within China to provide deposit insurance to depositors. However, pursuant to the Deposit Insurance Regulation, the insurance provided by the banks has a coverage limit of RMB500,000 (US$72,493.2).
On February 17, 2015, the PRC State Council, or the State Council, promulgated the Deposit Insurance Regulation, which requires banks registered within China to provide deposit insurance to depositors. However, pursuant to the Deposit Insurance Regulation, the insurance provided by the banks has a coverage limit of RMB500,000 (US$70,423.5).
However, if any dispute relating to these contracts or the replacement of the shareholders remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and courts and therefore will be subject to uncertainties in the PRC legal system.
However, if any dispute relating to these contracts or the replacement of the shareholders remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and courts and therefore will be subject to uncertainties in the interpretation and enforcement of PRC laws and regulations.
Therefore, actual results may differ from these accounting estimates. As of December 31, 2020, 2021 and 2022, we recorded deferred tax assets of RMB54.6 million, RMB114.2 million and RMB162.5 million (US$23.6 million), respectively. We account for income taxes using the asset and liability method.
Therefore, actual results may differ from these accounting estimates. As of December 31, 2021, 2022 and 2023, we recorded deferred tax assets of RMB114.2 million, RMB162.5 million and RMB200.6 million (US$28.3 million), respectively. We account for income taxes using the asset and liability method.
We may be subject to natural disasters, acts of war or terrorism or other factors beyond our control. Natural disasters, acts of war, terrorism or other factors beyond our control may adversely affect the economy, infrastructure and livelihood of the people in the regions where we conduct our business.
Natural disasters, health epidemics, acts of war, terrorism or other factors beyond our control may adversely affect the economy, infrastructure and livelihood of the people in the regions where we conduct our business.
Under the service fee model and consignment model, we normally charge service fees from our brand partners with a credit period of 10 days to four months. As of December 31, 2020, 2021 and 2022, our accounts receivable amounted to RMB2,189.0 million, RMB2,260.9 million and RMB2,292.7 million (US$332.4 million), respectively.
Under the service fee model and consignment model, we normally charge service fees from our brand partners with a credit period of 10 days to four months. As of December 31, 2021, 2022 and 2023, our accounts receivable amounted to RMB2,260.9 million, RMB2,292.7 million and RMB2,184.7 million (US$307.7 million), respectively.
If we cannot successfully manage our product mix, address new challenges or compete effectively, we may not be able to recover costs of our investments and eventually achieve profitability, and our future results of operations and growth prospects may be materially and adversely affected.
Therefore, our past results of operations should not be taken as indicative of our future performance. If we cannot successfully manage our product mix, address new challenges or compete effectively, we may not be able to recover costs of our investments and eventually achieve profitability, and our future results of operations and growth prospects may be materially and adversely affected.
It may be difficult for overseas regulators to conduct investigations or collect evidence within China. Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China.
Memorandum and Articles of Association - Differences in Corporate Law.” It may be difficult for overseas regulators to conduct investigations or collect evidence within China. Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China.
As of December 31, 2022, the number of shares which may be issued pursuant to all outstanding awards, including options and restricted share units under the Share Incentive Plans, was 8,483,047. For the years ended December 31, 2020, 2021 and 2022, we recorded an aggregate of RMB108.4 million, RMB196.5 million and RMB142.4 million (US$20.6 million), respectively, in share-based compensation expenses.
As of December 31, 2023, the number of shares which may be issued pursuant to all outstanding awards, including options and restricted share units under the Share Incentive Plans, was 8,502,786. For the years ended December 31, 2021, 2022 and 2023, we recorded an aggregate of RMB196.5 million, RMB142.4 million and RMB103.4 million (US$14.6 million), respectively, in share-based compensation expenses.
However, we may transfer cash to our VIE by loans or collect cash from our VIE for inter-group transactions. 7 Table of Contents The following table sets forth the amount of the transfers for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2020 2021 2022 ​ ​ (RMB in thousands) Capital contributions from Hong Kong subsidiaries to PRC subsidiaries ​ 608,841 ​ 383,585 ​ — Loans from Parent to Hong Kong subsidiaries ​ 2,809,271 ​ — ​ — Repayment from Hong Kong subsidiaries to Parent ​ — ​ 2,256,302 ​ 1,127,579 Loans from Hong Kong subsidiaries to PRC subsidiaries ​ 371,925 ​ 867,646 ​ 1,049,077 Amounts paid by our VIE to PRC subsidiaries ​ 735,580 ​ 757,749 ​ 152,201 ​ Our VIE may transfer cash to Shanghai Baozun E-Commerce Limited, or the WFOE, by paying service fees according to the exclusive technology service agreement.
However, we may transfer cash to our VIE by loans or collect cash from our VIE for inter-group transactions. 5 Table of Contents The following table sets forth the amount of the transfers for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2021 2022 2023 ​ ​ (RMB in thousands) Capital contributions from Hong Kong subsidiaries to PRC subsidiaries ​ 383,585 ​ — ​ — Loans from Parent to Hong Kong subsidiaries ​ — ​ — ​ — Repayment from Hong Kong subsidiaries to Parent ​ 2,256,302 ​ 1,127,579 ​ 365,227 Loans from Hong Kong subsidiaries to PRC subsidiaries ​ 867,646 ​ 1,049,077 ​ — Amounts paid by our VIE to PRC subsidiaries ​ 757,749 ​ 152,201 ​ 694,906 ​ Our VIE may transfer cash to Shanghai Baozun E-Commerce Limited, or the WFOE, by paying service fees according to the exclusive technology service agreement.
As of December 31, 2020, 2021 and 2022, we recorded rebates receivables of RMB319.5 million, RMB288.2 million and RMB239.8 million (US$34.8 million), respectively. The rebates receivables are settled by offsetting the accounts payable. We cannot assure you that we will be able to collect all rebates receivables in the future.
As of December 31, 2021, 2022 and 2023, we recorded rebates receivables of RMB288.2 million, RMB239.8 million and RMB197.8 million (US$27.9 million), respectively. The rebates receivables are settled by offsetting the accounts payable. We cannot assure you that we will be able to collect all rebates receivables in the future.
In 2021, we provided an allowance of RMB93.3 million (US$14.6 million) of accounts receivable in connection with the default of this distributor and did not make additional allowance in 2022. See “Item 8. Financial Information — A.
In 2021, we provided an allowance of RMB93.3 million (US$13.1 million) of accounts receivable in connection with the default of this distributor and did not make additional allowance in 2022 or 2023, respectively. See “Item 8. Financial Information — A.
We also received subsidies from local governments in China as incentives for conducting business in certain local districts. We recognized cash subsidies of RMB40.1 million, RMB41.3 million and RMB72.9 million (US$10.6 million) for the years ended December 31, 2020, 2021 and 2022, respectively.
We also received subsidies from local governments in China as incentives for conducting business in certain local districts. We recognized cash subsidies of RMB41.3 million, RMB72.9 million and RMB78.5 million (US$11.1 million) for the years ended December 31, 2021, 2022 and 2023, respectively.
Revenues from Shanghai Zunyi contributed to 9.8%, 8.6% and 6.8% of our total net revenues in 2020, 2021 and 2022, respectively.
Revenues from Shanghai Zunyi contributed to 8.6%, 6.8% and 6.2% of our total net revenues in 2021, 2022 and 2023, respectively.
This may happen because of broad market and industry factors, like the performance and fluctuation in the market prices or the underperformance or deteriorating financial results of other companies with business operations located mainly in China that have listed their securities in Hong Kong and/or the United States.
This may happen because of broad market and industry factors, like the performance and fluctuation in the market prices or the underperformance or deteriorating financial results of other companies with business operations located mainly in China that have listed their securities in Hong Kong and/or the United States, or because of the trends in the global economy in general or the Chinese economy in particular, or because of international geopolitical tensions.
As of December 31, 2022, we directly operated 40 warehouses with an aggregate gross floor area of over 1,030,000 square meters in nine strategic cities. Managing these facilities is complex and our successful management of warehouse capacity and utilization is important to our profitability.
As of December 31, 2023, we directly operated 36 warehouses with an aggregate gross floor area of over 938,000 square meters in ten strategic cities. Managing these facilities is complex and our successful management of warehouse capacity and utilization is important to our profitability.
Any of these factors may result in large and sudden changes in the volume and trading price of our ADSs and/or Class A ordinary shares. In addition, global stock markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies and industries.
In addition, global stock markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies and industries. These market fluctuations may significantly affect the trading price of our ADSs and/or Class A ordinary shares.
Consolidated Statements and Other Financial Information — Legal Proceedings,” we were previously the subject of a shareholder class action.
As noted in “Item 8. Financial Information — A. Consolidated Statements and Other Financial Information — Legal Proceedings,” we were previously the subject of a shareholder class action.
We rely on the success of certain e-commerce channels such as Tmall. A substantial majority of our GMV is derived from merchandise sold or services rendered on Tmall. In 2022, our GMV derived from merchandise sold or services rendered on Tmall comprised approximately 69.3% of our total GMV.
We rely on the success of certain e-commerce channels such as Tmall. A substantial majority of our GMV is derived from merchandise sold or services rendered on Tmall.
There remains high uncertainty in the interpretation and enforcement of the law. In particular, due to lack of details on the implementation of the Cybersecurity Law, we cannot assure you that we would be able to comply with the requirements in a timely manner.
In particular, due to lack of details on the implementation of the Cybersecurity Law, we cannot assure you that we would be able to comply with the requirements in a timely manner.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Our technologies span across all areas of digital commerce areas--from business applications to data intelligence, and from technology platforms to enterprise integration. Business applications include Direct-to-Consumer touchpoints, Omni-channel business operations, and Big data business intelligence. Technical stacks encompass IaaS, PaaS, and SaaS layers.
Our technologies span across all areas of digital commerce from business applications to data intelligence, and from technology platforms to enterprise integration. Business applications include Direct-to-Consumer touchpoints, Omni-channel business operations, and Big data business intelligence. Technical stacks encompass IaaS, PaaS, and SaaS layers.
SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event.
SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event.
Examples of our O2O capabilities include: ● allowing consumers to place purchase orders and make payments online, and pick up or return and exchange goods offline; ● aligning consumers’ online and offline loyalty programs; ● syncing online and offline QR codes; ● providing brand partners with an effective channel to interact with offline consumers and providing offline consumers with a convenient and reliable channel to online shopping via interactive screens in offline retail stores; 76 Table of Contents ● devising and executing O2O strategies for traditional brands lacking IT and system integration capabilities but that have strong offline presence; ● connecting and integrating brand partners’ offline stores with their official brand stores, marketplaces stores and other brand hubs ; and ● utilizing CPS (cost-per-sale), a WeChat Mini Program-based tool, to help brand partners formulate key SKU promotion strategies, design promotional events and articles, track sales performance of the sales agents by tracing the products and sales events they share and calculate commissions accordingly.
Examples of our O2O capabilities include: ● allowing consumers to place purchase orders and make payments online, and pick up or return and exchange goods offline; ● aligning consumers’ online and offline loyalty programs; ● syncing online and offline QR codes; ● providing brand partners with an effective channel to interact with offline consumers and providing offline consumers with a convenient and reliable channel to online shopping via interactive screens in offline retail stores; 78 Table of Contents ● devising and executing O2O strategies for traditional brands lacking IT and system integration capabilities but that have strong offline presence; ● connecting and integrating brand partners’ offline stores with their official brand stores, marketplaces stores and other brand hubs ; and ● utilizing CPS (cost-per-sale), a WeChat Mini Program-based tool, to help brand partners formulate key SKU promotion strategies, design promotional events and articles, track sales performance of the sales agents by tracing the products and sales events they share and calculate commissions accordingly.
The Measures for Cyber Security Review provides that, among others, (i) the purchase of cyber products and services by critical information infrastructure operators and the network platform operators engaging in data processing activities that affects or may affect national security should be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is responsible for the implementation of cybersecurity review under the CAC; (ii) network platform operators with personal information data of more than one million users are obliged to apply for a cybersecurity review by the Cybersecurity Review Office before listing abroad; and (iii) relevant governmental authorities in the PRC may initiate cybersecurity review if they determine an internet platform operator’s network products or services or data processing activities affect or may affect national security. 93 Table of Contents On July 7, 2022, the CAC adopted the Measures for the Security Assessment of Data Exit, which took into effect on September 1, 2022 and stipulates that data processors who provide overseas the personal information and important data collected and generated during operations within the PRC shall be subject to security assessment by the CAC.
The Measures for Cyber Security Review provides that, among others, (i) the purchase of cyber products and services by critical information infrastructure operators and the network platform operators engaging in data processing activities that affects or may affect national security should be subject to the cybersecurity review by the Cybersecurity Review Office, the department which is responsible for the implementation of cybersecurity review under the CAC; (ii) network platform operators with personal information data of more than one million users are obliged to apply for a cybersecurity review by the Cybersecurity Review Office before listing abroad; and (iii) relevant governmental authorities in the PRC may initiate cybersecurity review if they determine an internet platform operator’s network products or services or data processing activities affect or may affect national security. 96 Table of Contents On July 7, 2022, the CAC adopted the Measures for the Security Assessment of Data Exit, which took into effect on September 1, 2022 and stipulates that data processors who provide overseas the personal information and important data collected and generated during operations within the PRC shall be subject to security assessment by the CAC.
Regulation Relating to Dividend Withholding Tax The EIT Law and its implementation rules provide that since January 1, 2008, an enterprise income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC. 96 Table of Contents Pursuant to the Arrangement Between the Mainland of 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 Incomes, or the Double Tax Avoidance Arrangement and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
Regulation Relating to Dividend Withholding Tax The EIT Law and its implementation rules provide that since January 1, 2008, an enterprise income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC. 99 Table of Contents Pursuant to the Arrangement Between the Mainland of 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 Incomes, or the Double Tax Avoidance Arrangement and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.
We provide a one-stop CRM service from strategy to execution. Our CDP helps brands integrate member data from different platforms, form visual dashboards, and automatically generate intelligent analysis reports. We provide customized member mini program planning, design and development for brands. We tailor activities, content and mechanisms for brands that cover the entire consumer lifecycle.
We provide a one-stop CRM service from strategy to execution. Our CDP helps brands integrate member data from different platforms, form visual dashboards, and automatically generate intelligent analysis reports. We provide customized member mini program planning, design and development for brands. We tailor activities, content and mechanisms for brands that cover the entire consumer lifecycle across platforms.
BOCDOP also focuses on comprehensive and integrated management of back-end product operation, order fulfillment, inventory management and other aspects for multiple channels, and is committed to empowering the digital transformation of a wider global retail market by providing an end-to-end digital business solution covering brand. ​ ​ 80 Table of Contents In order to help brands better address the complicated and diverse scenarios of new retail business and to streamline the entire e-commerce operation process, BOCDOP introduced three key tools that comprise an end-to-end digital business solution for brands: 1.
BOCDOP also focuses on comprehensive and integrated management of back-end product operation, order fulfillment, inventory management and other aspects for multiple channels, and is committed to empowering the digital transformation of a wider global retail market by providing an end-to-end digital business solution covering brand. ​ ​ 82 Table of Contents In order to help brands better address the complicated and diverse scenarios of new retail business and to streamline the entire e-commerce operation process, BOCDOP introduced three key tools that comprise an end-to-end digital business solution for brands: 1.
Brands that seek collaboration with our competitors may end up having to work with multiple service providers with different technology infrastructure, information system and operational requirements, while their e-commerce related needs can be served by our omni-channel end-to-end solutions in a seamless and efficient manner. 83 Table of Contents Environmental Social and Governance We are committed to providing solutions in a responsible and transparent manner to drive sustainable development and increase value creation for all stakeholders.
Brands that seek collaboration with our competitors may end up having to work with multiple service providers with different technology infrastructure, information system and operational requirements, while their e-commerce related needs can be served by our omni-channel end-to-end solutions in a seamless and efficient manner. 86 Table of Contents Environmental Social and Governance We are committed to providing solutions in a responsible and transparent manner to drive sustainable development and increase value creation for all stakeholders.
Pursuant to the notice, the domain name used by an internet-based information service provider in providing internet-based information services must be registered and owned by such provider in accordance with the law. 95 Table of Contents Regulations on Tax Enterprise Income Tax The PRC enterprise income tax, or EIT, is calculated based on the taxable income determined under the applicable EIT Law and its implementation rules, which became effective on January 1, 2008 and was amended on February 24, 2017 and December 29, 2018, respectively.
Pursuant to the notice, the domain name used by an internet-based information service provider in providing internet-based information services must be registered and owned by such provider in accordance with the law. 98 Table of Contents Regulations on Tax Enterprise Income Tax The PRC enterprise income tax, or EIT, is calculated based on the taxable income determined under the applicable EIT Law and its implementation rules, which became effective on January 1, 2008 and was amended on February 24, 2017 and December 29, 2018, respectively.
Specifically, the efforts involved (1) multi-cloud development lifecycle, (2) light-mode deployments, (3) internationalization, and (4) Enterprise Application Integration (EAI) standardization. 79 Table of Contents IT Commercialization It is worth highlighting that in 2022, Baozun officially launched a new technology business brand named Baozun Omini-Channel Digital Operating Platform (“BOCDOP”), aimed at supporting the digital transformation of the retail industry.
Specifically, the efforts involved (1) multi-cloud development lifecycle, (2) light-mode deployments, (3) internationalization, and (4) Enterprise Application Integration (EAI) standardization. 81 Table of Contents IT Commercialization It is worth highlighting that in 2022, Baozun officially launched a new technology business brand named Baozun Omini-Channel Digital Operating Platform (“BOCDOP”), aimed at supporting the digital transformation of the retail industry.
We leverage all of these platforms to deliver omni-channel solutions that combine the strengths of diverse platforms to achieve optimal branding effect and sales results responsive to the e-commerce objectives of each brand partner. 75 Table of Contents Official Marketplace Stores We maintain close working relationships with the major online marketplaces in China, such as Tmall, JD.com and Pinduoduo.
We leverage all of these platforms to deliver omni-channel solutions that combine the strengths of diverse platforms to achieve optimal branding effect and sales results responsive to the e-commerce objectives of each brand partner. 77 Table of Contents Official Marketplace Stores We maintain close working relationships with the major online marketplaces in China, such as Tmall, JD.com and Pinduoduo.
UNEX is seamlessly integrated with our e-commerce support systems such as order management system, or OMS, and warehouse management system, or WMS, to ensure synchronization across omni-channel solutions. 77 Table of Contents ● Cloud-based System is a system established on our cloud infrastructure with a high level of safety and stability that enables efficient setup of official brand stores and official brand WeChat Mini Programs.
UNEX is seamlessly integrated with our e-commerce support systems such as order management system, or OMS, and warehouse management system, or WMS, to ensure synchronization across omni-channel solutions. 79 Table of Contents ● Cloud-based System is a system established on our cloud infrastructure with a high level of safety and stability that enables efficient setup of official brand stores and official brand WeChat Mini Programs.
We are subject to the above laws and regulations as an online distributor of commodities and believe that we are currently in compliance with these regulations in all material aspects. 91 Table of Contents Regulation Relating to Cybersecurity The National People’s Congress Standing Committee promulgated the Cybersecurity Law on November 7, 2016, which took effect from June 1, 2017.
We are subject to the above laws and regulations as an online distributor of commodities and believe that we are currently in compliance with these regulations in all material aspects. 94 Table of Contents Regulation Relating to Cybersecurity The National People’s Congress Standing Committee promulgated the Cybersecurity Law on November 7, 2016, which took effect from June 1, 2017.
If such products and services will or may affect national security, the operator shall apply for cyber security review to the cyber security review office. 92 Table of Contents On January 23, 2019, the Office of the Central Cyberspace Affairs Commission and other three authorities jointly issued the Circular on the Special Campaign of Correcting Illegal Collection and Usage of Personal Information via Apps.
If such products and services will or may affect national security, the operator shall apply for cyber security review to the cyber security review office. 95 Table of Contents On January 23, 2019, the Office of the Central Cyberspace Affairs Commission and other three authorities jointly issued the Circular on the Special Campaign of Correcting Illegal Collection and Usage of Personal Information via Apps.
Michael Qingyu Zhang, our co-founder. Its business includes providing brand e-commerce service to our brand partners. 101 Table of Contents We have entered into contractual arrangements with Shanghai Zunyi and its shareholders, through which we exercise effective control over operations of Shanghai Zunyi and receive substantially all economic benefits generated from it.
Michael Qingyu Zhang, our co-founder. Its business includes providing brand e-commerce service to our brand partners. 104 Table of Contents We have entered into contractual arrangements with Shanghai Zunyi and its shareholders, through which we exercise effective control over operations of Shanghai Zunyi and receive substantially all economic benefits generated from it.
Our brand partners and/or their authorized distributors are deemed as our suppliers under the distribution model and our customers under the service fee model and consignment model. 74 Table of Contents Our contracts with our brand partners are generally not on an exclusive basis and we generally do not have contractual rights to exclusively sell the products of our brand partners on any e-commerce channel under the distribution model.
Our brand partners and/or their authorized distributors are deemed as our suppliers under the distribution model and our customers under the service fee model and consignment model. 76 Table of Contents Our contracts with our brand partners are generally not on an exclusive basis and we generally do not have contractual rights to exclusively sell the products of our brand partners on any e-commerce channel under the distribution model.
In terms of anti-bribery and anti-corruption, we formulated policies and procedures, established the compliance and fraud investigation department and an anti-corruption management structure with clear responsibilities, and continued to enhance integrity awareness. Meanwhile, we have established whistleblowing channels and whistleblower protection policy. In 2022, there were no reported violations of anti-competitive behavior or anti-corruption incidents.
In terms of anti-bribery and anti-corruption, we formulated policies and procedures, established the compliance and fraud investigation department and an anti-corruption management structure with clear responsibilities, and continued to enhance integrity awareness. Meanwhile, we have established whistleblowing channels and whistleblower protection policy. In 2023, there were no reported violations of anti-competitive behavior or anti-corruption incidents.
Our PRC subsidiary, Beijing Jingtang International Travel Agency Limited, has obtained a license covering outbound, inbound travel business and domestic travel agency business but has not yet carried out relevant business. 90 Table of Contents Except for licenses and permits, we are also subject to various legal obligations as distributors of certain products.
Our PRC subsidiary, Beijing Jingtang International Travel Agency Limited, has obtained a license covering outbound, inbound travel business and domestic travel agency business but has not yet carried out relevant business. 93 Table of Contents Except for licenses and permits, we are also subject to various legal obligations as distributors of certain products.
The E-Commerce Law also organized rules on e-commerce contact execution and performance between e-commerce product/service providers and customers. 94 Table of Contents Regulation Relating to Mobile Applications On June 14, 2022, the CAC promulgated the Regulations for the Administration of Mobile Internet Application Information Services, which came into effect on August 1, 2022.
The E-Commerce Law also organized rules on e-commerce contact execution and performance between e-commerce product/service providers and customers. 97 Table of Contents Regulation Relating to Mobile Applications On June 14, 2022, the CAC promulgated the Regulations for the Administration of Mobile Internet Application Information Services, which came into effect on August 1, 2022.
Accordingly, as of the date of this annual report, we did not purchase any insurance to cover the risks relating to the contractual arrangements. 103 Table of Contents SAFE promulgated SAFE Circular 37 on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005.
Accordingly, as of the date of this annual report, we did not purchase any insurance to cover the risks relating to the contractual arrangements. 106 Table of Contents SAFE promulgated SAFE Circular 37 on July 4, 2014, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005.
Our PRC subsidiaries engaging in food operation business have obtained Food Operation Permits or completed the record-filing. 89 Table of Contents Permits for Liquor Circulation Any entity or individual engaged in the wholesale or retail of liquor may be required by local governments to obtain local licenses for the distribution of alcoholic products, or the Permits for Liquor Circulation.
Our PRC subsidiaries engaging in food operation business have obtained Food Operation Permits or completed the record-filing. 92 Table of Contents Permits for Liquor Circulation Any entity or individual engaged in the wholesale or retail of liquor may be required by local governments to obtain local licenses for the distribution of alcoholic products, or the Permits for Liquor Circulation.
Our warehouses cater to different product categories. In addition, we also collaborate with four third-party warehousing service providers and store goods in warehouses operated by them as of December 31, 2022, to better utilize warehouse resources and better serve brand partners’ needs.
Our warehouses cater to different product categories. In addition, we also collaborate with four third-party warehousing service providers and store goods in warehouses operated by them as of December 31, 2023, to better utilize warehouse resources and better serve brand partners’ needs.
However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules; accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC legal counsel.
However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of PRC laws, regulations and rules; accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC legal counsel.
Our largest customer and its affiliates accounted for 15.7%, 11.4% and 14.0% of our total net revenues for the same periods, respectively. For concentration risk related to our brand partners, please see “Item 3. Key Information - D.
Our largest customer and its affiliates accounted for 11.4%, 14.0% and 14.0% of our total net revenues for the same periods, respectively. For concentration risk related to our brand partners, please see “Item 3. Key Information - D.
It allows us to efficiently build up comprehensive functions for an online store, such as real-time data exchange, digital marketing, order management, product recommendations, membership management, payment management, as well as O2O functions. The system contains various prototypes to ensure greater efficiency in setting up online stores, while also supporting comprehensive customization to best fulfill brand partners’ specific needs.
It allows us to efficiently build up comprehensive functions for an online store, such as real-time data exchange, digital marketing, order management, product recommendations, membership management, payment management, as well as O2O functions. UNEX contains various prototypes to ensure greater efficiency in setting up online stores, while also supporting comprehensive customization to best fulfill brand partners’ specific needs.
We received our ISO27001 certifications in December 2015, which was renewed in December 2018 and December 2021, respectively, each with a valid term of three years. We received our GB/T 19001-2016/ISO 9001:2015 certification in October 2020 with a valid term of three years.
We received our ISO27001 certifications in December 2015, which was renewed in December 2018, December 2021 and October 2023, respectively, each with a valid term of three years. We received our GB/T 19001-2016/ISO 9001:2015 certification in October 2023 with a valid term of three years.
We provide proprietary e-commerce technology which can be customized to and integrated with our brand partners’ existing operational back-end systems in a convenient and cost-effective manner. 70 Table of Contents Where necessary, we also help our brand partners set up or improve the suitability of their own IT infrastructure for e-commerce operations.
We provide proprietary e-commerce technology which can be customized to and integrated with our brand partners’ existing operational back-end systems in a convenient and cost-effective manner. Where necessary, we also help our brand partners set up or improve the suitability of their own IT infrastructure for e-commerce operations.
Risk Factors - Risks Related to Our Business - If we are unable to retain our existing brand partners, our results of operations could be materially and adversely affected.” Our contracts with brand partners under the consignment model and service fee model typically have a term of 12 to 36 months, which can be renewed at the option of our brand partners.
Risk Factors - Risks Related to Our Business - If we are unable to retain our existing brand partners, our results of operations could be materially and adversely affected.” 85 Table of Contents Our contracts with brand partners under the consignment model and service fee model typically have a term of 12 to 36 months, which can be renewed at the option of our brand partners.
The equity pledge of Shanghai Zunyi has already been registered with the relevant branch of the SAMR. 102 Table of Contents Exclusive Technology Service Agreement . On April 1, 2014, Shanghai Zunyi and Shanghai Baozun entered into an exclusive technology service agreement.
The equity pledge of Shanghai Zunyi has already been registered with the relevant branch of the SAMR. 105 Table of Contents Exclusive Technology Service Agreement . On April 1, 2014, Shanghai Zunyi and Shanghai Baozun entered into an exclusive technology service agreement.
According to the Regulations on Management of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement. 100 Table of Contents Seasonality Our results of operations are subject to seasonal fluctuations.
According to the Regulations on Management of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement. Seasonality Our results of operations are subject to seasonal fluctuations.
As we assume inventory ownership under the distribution model, other than quality issues, we generally are not allowed to return unsold inventories to the brand partners and/or their authorized distributors. We adopt the distribution model primarily to cater to specific needs of brand partners for certain product categories, such as appliances and beauty and cosmetics.
As we assume inventory ownership under the distribution model, other than quality issues, we generally are not allowed to return unsold inventories to the brand partners and/or their authorized distributors. 70 Table of Contents We adopt the distribution model primarily to cater to specific needs of brand partners for certain product categories, such as appliances and beauty and cosmetics.
In addition to fulfilling brand partners’ e-commerce orders, we have launched additional value-added services to enrich our warehouse and logistics service offerings, such as anti-counterfeit code protection, tailor-made packaging, B2B offline store fulfillment, and O2O integrated inventory management. 73 Table of Contents We adopt a flexible outsourcing logistics model with several third-party logistic partners supported by our robust and advanced WMS.
In addition to fulfilling brand partners’ e-commerce orders, we have launched additional value-added services to enrich our warehouse and logistics service offerings, such as anti-counterfeit code protection, tailor-made packaging, B2B offline store fulfillment, and O2O integrated inventory management. We adopt a flexible outsourcing logistics model with several third-party logistic partners supported by our robust and advanced WMS.
Our digital marketing service can also be provided independently from our brand e-commerce service and is available to our non-brand partners, which serves as an additional brand partner acquisition channel. 71 Table of Contents Leveraging our experience in the e-commerce value chain, we have achieved broad awareness and recognition of our expertise in digital marketing.
Our digital marketing service can also be provided independently from our brand e-commerce service and is available to our non-brand partners, which serves as an additional brand partner acquisition channel. Leveraging our experience in the e-commerce value chain, we have achieved broad awareness and recognition of our expertise in digital marketing.
Yunzhuan can also do AI video editing that fits the fast-moving livestreaming environment to create product specific short video that can become social content to drive traffic. We provide live streaming services for brands on various platforms. Our services cover the planning and production of live and short video content.
Yunzhuan can also do AI video editing that fits the fast-moving livestreaming environment to create product specific short video that can become social content to drive traffic. 74 Table of Contents We provide live streaming services for brands on various platforms. Our services cover the planning and production of live and short video content.
We are committed to raising public awareness about environmental issues, promoting an eco-friendly mindset among our business partners, and promoting sustainable consumption. 84 Table of Contents Responding to Climate Change : We recognize the impact of climate-related risks and opportunities on our business operation, and are working to mitigate such impact by building business resilience.
We are committed to raising public awareness about environmental issues, promoting an eco-friendly mindset among our business partners, and promoting sustainable consumption. Responding to Climate Change : We recognize the impact of climate-related risks and opportunities on our business operation, and are working to mitigate such impact by building business resilience.
In 2021, we provided an allowance of RMB93.3 million (US$14.6 million) of accounts receivable in connection with the default of this distributor, and did not make additional allowance in 2022.
In 2021, we provided an allowance of RMB93.3 million (US$14.6 million) of accounts receivable in connection with the default of this distributor, and did not make additional allowance in 2023.
Any failure to maintain the satisfactory performance of our platform could materially and adversely affect our business and reputation.” We regard our trademarks, patents, software copyrights, service marks, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to our success.
Any failure to maintain the satisfactory performance of our platform could materially and adversely affect our business and reputation.” 84 Table of Contents We regard our trademarks, patents, software copyrights, service marks, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to our success.
The following flowchart illustrates our warehousing and fulfillment process: In 2021, we further expanded our logistics network through our acquisitions of BolTone and BaoBest. The acquisition of BolTone has enlarged our premium warehouse capacities and extended our vertical coverage such as fast moving consumer goods category and beauty and cosmetics category.
The following flowchart illustrates our warehousing and fulfillment process: In 2021, we further expanded our logistics network through our acquisitions of BolTone , which has enlarged our premium warehouse capacities and extended our vertical coverage such as fast moving consumer goods category and beauty and cosmetics category.
Our technology systems and applications facilitate brand partners’ digital transformation throughout the e-commerce value chain--from storefront sales to backend fulfillment; from consumer acquisition to customer lifecycle management; from achieving operational efficiency to gaining industry insights. We have copyrights to 238 software programs developed by us relating to various aspects of our operations as of March 31, 2023.
Our technology systems and applications facilitate brand partners’ digital transformation throughout the e-commerce value chain--from storefront sales to backend fulfillment; from consumer acquisition to customer lifecycle management; from achieving operational efficiency to gaining industry insights. We have copyrights to 293 software programs developed by us relating to various aspects of our operations as of March 31, 2024.
In addition, we screen potential brand partners based on criteria such as projected annual GMV and service fees, projected profitability, projected growth outlook and proposed duration of cooperation.
In addition, we screen potential brand partners based on criteria such as service fees, projected profitability, projected growth outlook and proposed duration of cooperation.
Furthermore, sales in the retail industry are typically significantly higher in the fourth quarter of the year than in the preceding three quarters, particularly in November when Singles Day campaign occurs and consumers tend to do more shopping. C.
Furthermore, sales in the retail industry are typically significantly higher in the fourth quarter of the year than in the preceding three quarters, particularly in November when Singles Day campaign occurs and consumers tend to do more shopping. 103 Table of Contents C.
It allows us to efficiently build up comprehensive functions necessary for an online store, such as real-time data exchange, digital marketing, order management, product recommendations, membership management, payment management, as well as O2O functions. Online Store Operations We believe efficient online store operations are crucial to our brand partners’ e-commerce business.
It allows us to efficiently build up comprehensive functions necessary for an online store, such as real-time data exchange, digital marketing, order management, product recommendations, membership management, payment management, as well as O2O functions. 72 Table of Contents Online Store Operations We believe efficient online store operations are crucial to our brand partners’ e-commerce business.
Accordingly, as of the Latest Practicable Date, we did not purchase any insurance to cover the risks relating to the contractual arrangements. D. Property, Plants and Equipment Properties and Facilities We are headquartered in Shanghai and leased an aggregate of approximately 70,000 square meters of offices and operation centers as of December 31, 2022.
Accordingly, as of the Latest Practicable Date, we did not purchase any insurance to cover the risks relating to the contractual arrangements. D. Property, Plants and Equipment Properties and Facilities We are headquartered in Shanghai and leased an aggregate of approximately 91,000 square meters of offices and operation centers as of December 31, 2023.
We include the financial results of our VIE and its subsidiaries in our consolidated financial statements in accordance with U.S. GAAP as if they were our wholly-owned subsidiaries. Our VIE contributed an aggregate of 9.8%, 8.6% and 6.8% of our net revenues for the years ended December 31, 2020, 2021 and 2022, respectively.
We include the financial results of our VIE and its subsidiaries in our consolidated financial statements in accordance with U.S. GAAP as if they were our wholly-owned subsidiaries. Our VIE contributed an aggregate of 8.6%, 6.8% and 6.2% of our net revenues for the years ended December 31, 2021, 2022 and 2023, respectively.
These solutions include new initiatives such as live streaming, key opinion leader and key opinion consumer positioning to convert marketing power into sales results. 72 Table of Contents In addition, we monitor and respond to comments about our brand partners on internet forums and product review websites.
These solutions include new initiatives such as live streaming, key opinion leader and key opinion consumer positioning to convert marketing power into sales results. In addition, we monitor and respond to comments about our brand partners on internet forums and product review websites.
We constantly develop new technologies and infrastructure in order to provide innovative and reliable solutions to our brand partners. 66 Table of Contents ● Omni-channel coverage: We help brand partners adapt to and thrive on China’s complex e-commerce ecosystem and evolving e-commerce landscape. We enable brands to integrate online and offline operations.
We constantly develop new technologies and infrastructure in order to provide innovative and reliable solutions to our brand partners. ● Omni-channel coverage: We help brand partners adapt to and thrive on China’s complex e-commerce ecosystem and evolving e-commerce landscape. We enable brands to integrate online and offline operations.
Our brand partners increasingly merge their view of their official brand stores and WeChat Mini-Programs into a single private domain, and as such, we have consolidated our official brand stores and WeChat Mini-Programs into a single metric. As of December 31, 2020,2021 and 2022, we operated 96, 95 and 101 official brand stores and Wechat Mini-program stores, respectively.
Our brand partners increasingly merge their view of their official brand stores and WeChat Mini-Programs into a single private domain, and as such, we have consolidated our official brand stores and WeChat Mini-Programs into a single metric. As of December 31, 2021, 2022 and 2023, we operated 95, 101 and 113 official brand stores and Wechat Mini-program stores, respectively.
Our e-commerce capabilities encompass every aspect of the e-commerce value chain, including: ● IT solutions; ● online store operation; ● digital marketing; ● customer service; and/or ● warehousing and fulfillment.
Our e-commerce capabilities encompass every aspect of the e-commerce value chain, including: ● IT solutions; ● online store operation; ● digital marketing; 69 Table of Contents ● customer service; and/or ● warehousing and fulfillment.
Non-compliance with the Overseas Listing Filing Rules or an overseas listing completed in breach of the Overseas Listing Filing Rules may result in a warning on the relevant domestic companies and a fine of RMB1 million (US$144,986.4) to RMB10 million (US$1.4 million) on them.
Non-compliance with the Overseas Listing Filing Rules or an overseas listing completed in breach of the Overseas Listing Filing Rules may result in a warning on the relevant domestic companies and a fine of RMB1 million (US$140,847.1) to RMB10 million (US$1.4 million) on them.
Brand Partners & Brand Partner Development and Services Brand Partners As of December 31, 2022, we provided e-commerce solutions to more than 400 brand partners primarily under service contracts with a term typically ranging from 12 months to 36 months.
Brand Partners & Brand Partner Development and Services Brand Partners As of December 31, 2023, we provided e-commerce solutions to more than 450 brand partners primarily under service contracts with a term typically ranging from 12 months to 36 months.
In addition, we rely on contractual restrictions, such as confidentiality and non-disclosure agreements with our brand partners and employees. 81 Table of Contents Data Privacy and Cybersecurity Data privacy protection and cyber security are top priorities for us.
In addition, we rely on contractual restrictions, such as confidentiality and non-disclosure agreements with our brand partners and employees. Data Privacy and Cybersecurity Data privacy protection and cyber security are top priorities for us.
In the opinion of Han Kun Law Offices, our PRC legal counsel, (i) the ownership structures of Shanghai Baozun and Shanghai Zunyi do not and will not violate any mandatory requirements of applicable PRC laws and regulations currently in effect; (ii) except as disclosed elsewhere in this annual report, the contractual arrangements between Shanghai Baozun, Shanghai Zunyi and its shareholders governed by PRC law are valid, binding and enforceable, and do not and will not result in any violation of mandatory requirements of applicable PRC laws or regulations currently in effect; and (iii) the contractual arrangements entered into by the variable interest entity, the corresponding subsidiaries and the respective VIE equity holders governed by PRC laws and regulations do not and will not violate any provisions of the articles of association of the variable interest entity or the corresponding subsidiaries.
In the opinion of Han Kun Law Offices, our PRC legal counsel, (i) the ownership structures of Shanghai Baozun and Shanghai Zunyi do not violate any mandatory requirements of applicable PRC laws and regulations currently in effect; (ii) the contractual arrangements between Shanghai Baozun, Shanghai Zunyi and its shareholders governed by PRC law are valid, binding and enforceable, and do not result in any violation of mandatory requirements of applicable PRC laws or regulations currently in effect; and (iii) the contractual arrangements entered into by the variable interest entity, the corresponding subsidiaries and the respective VIE equity holders governed by PRC laws and regulations do not violate any provisions of the articles of association currently in effect of the variable interest entity or the corresponding subsidiaries.
Service Fee Model Under the service fee model, we provide one or more of the following services in exchange for service fees: ● IT solutions, including consultations with brand partners, IT infrastructure setup and integration, and online store setup and design; ● online store operation , including merchandising, site content management and store event management; ● digital marketing , including marketing campaign planning and media services, social marketing, creative contents and big data support; and/or ● customer service, including pre-sale and post-sale customer services. 69 Table of Contents Our brand partners are deemed as our customers under the service fee model.
Service Fee Model Under the service fee model, we provide one or more of the following services in exchange for service fees: ● IT solutions, including consultations with brand partners, IT infrastructure setup and integration, and online store setup and design; ● online store operation , including merchandising, site content management and store event management; ● digital marketing , including marketing campaign planning and media services, social marketing, creative contents and big data support; and/or ● customer service, including pre-sale and post-sale customer services.
In addition, our VIE or its shareholders may breach the contractual arrangements with us. In such cases, we would have to rely on legal remedies under PRC law, which may not always be effective, particularly in light of uncertainties in the PRC legal system. See “Item 3. Key Information — D.
In addition, our VIE or its shareholders may breach the contractual arrangements with us. In such cases, we would have to rely on legal remedies under PRC law, which may not always be effective, particularly in light of uncertainties in the interpretation and enforcement of PRC laws and regulations. See “Item 3. Key Information — D.
Customers Our top five customers and their affiliates accounted for 26.6%, 19.2% and 21.4% of our total net revenues for the years ended December 31, 2020, 2021 and 2022, respectively. These customers are brand partners under the consignment model or service fee model.
Customers Our top five customers and their affiliates accounted for 19.2%, 21.4% and 22.3% of our total net revenues for the years ended December 31, 2021, 2022 and 2023, respectively. These customers are brand partners under the consignment model or service fee model.
Anyone processing personal information in violation of or failing to perform any obligation of personal information protection specified in Personal Information Protection Law in the processing of personal information will be ordered to make a correction, given a warning, and confiscated of any illegal gain by the authorities performing personal information protection duties, and any application program that illegally processes personal information will be ordered to suspend or terminate its services; and if the required correction is not made, a fine of up to RMB1 million (US$144,986) will be imposed on the violator; and any person in charge or any other individual directly liable for the violation will be fined between RMB10,000 (US$1,449.9) and RMB100,000 (US$14,498.6).
Anyone processing personal information in violation of or failing to perform any obligation of personal information protection specified in Personal Information Protection Law in the processing of personal information will be ordered to make a correction, given a warning, and confiscated of any illegal gain by the authorities performing personal information protection duties, and any application program that illegally processes personal information will be ordered to suspend or terminate its services; and if the required correction is not made, a fine of up to RMB1 million (US$140,847.1) will be imposed on the violator; and any person in charge or any other individual directly liable for the violation will be fined between RMB10,000 (US$1,408.5) and RMB100,000 (US$14,084.7).
Road Transportation Operation Permit Under the Regulations on Road Transportation promulgated by the State Council in April 2004 and latest amended on March 29, 2022, which became effective on May 1, 2022, and the Provisions on Administration of Road Transportation and Stations (Sites) issued by the Ministry of Transport in June 2005 and latest amended on September 26, 2022, any entity engaging in the business of operating road transportation must obtain a Road Transportation Operation Permit.
Road Transportation Operation Permit Under the Regulations on Road Transportation promulgated by the State Council in April 2004 and latest amended on July 20, 2023, which became effective on May 1, 2022, and the Provisions on Administration of Road Transportation and Stations (Sites) issued by the Ministry of Transport in June 2005 and latest amended on November 10, 2023, any entity engaging in the business of operating road transportation must obtain a Road Transportation Operation Permit.
For example, pursuant to the Administrative Measures of Shanghai Municipality for Production and Sales of Alcohol Commodities, which was adopted by the Standing Committee of Shanghai People’s Congress in 1998 and amended on September 17, 2010, local enterprises that engage in alcohol wholesaling must apply to the municipal wine monopoly bureau for an alcohol wholesale license, while local enterprises that engage in alcohol retailing must apply to the district wine administrative department for an alcohol retail license.
For example, pursuant to the Administrative Measures of Shanghai Municipality for Production and Sales of Alcohol Commodities, which was adopted by the Standing Committee of Shanghai People’s Congress in 1997 and latest amended on December 28, 2023, local enterprises that engage in alcohol wholesaling must apply to the municipal alcohol commodities monopoly bureau for an alcohol wholesale license, while local enterprises that engage in alcohol retailing must apply to the district alcohol commodities administrative department for an alcohol retail license.
Regulations Regarding Foreign Investment Investment activities in the PRC by foreign investors are principally governed by the Catalog of Industries for Encouraging Foreign Investment, or the Encouraging Catalog, and the Special Administrative Measures, or Negative List, for Foreign Investment Access, or the Negative List, which were promulgated and are amended from time to time by MOFCOM and the NDRC, and together with the Foreign Investment Law and its respective implementation rules and ancillary regulations.
The direct or indirect investment activities of a foreign investor shall be governed by the PRC Foreign Investment Law and its implementation rules. 90 Table of Contents Foreign Investment Law Investment activities in the PRC by foreign investors are principally governed by the Catalog of Industries for Encouraging Foreign Investment, or the Encouraging Catalog, and the Special Administrative Measures, or Negative List, for Foreign Investment Access, or the Negative List, which were promulgated and are amended from time to time by MOFCOM and the NDRC, and together with the Foreign Investment Law and its respective implementation rules and ancillary regulations.
In October 2019, SAFE issued the Notice of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, pursuant to which foreign- invested enterprises whose approved business scope does not include equity investments are allowed to use their capital funds obtained from foreign exchange settlement to make domestic equity investments in China, provided that such investments do not violate the Negative List and the target investment projects are genuine and in compliance with laws.
In October 2019, SAFE issued the Notice of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, pursuant to which foreign- invested enterprises whose approved business scope does not include equity investments are allowed to use their capital funds obtained from foreign exchange settlement to make domestic equity investments in China, provided that such investments do not violate the Negative List and the target investment projects are genuine and in compliance with laws. 100 Table of Contents In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, or SAFE Circular 59, which was further amended in May 2015.
To protect our proprietary rights in services and technology, we rely on trademark, copyright and trade secret protection laws in the PRC. As of March 31, 2023, we owned 203 registered trademarks, 6 patents, copyrights to 238 software programs developed by us relating to various aspects of our operations, and 97 registered domain names.
To protect our proprietary rights in services and technology, we rely on trademark, copyright and trade secret protection laws in the PRC. As of March 31, 2024, we owned 229 registered trademarks, nine patents, copyrights to 293 software programs developed by us relating to various aspects of our operations, and 106 registered domain names.
Meanwhile, we provide job opportunities for people with disabilities and encourage them to exert their creativity in their positions, and provide them with a barrier-free working environment. In 2022, we hired 14 employees with disabilities, working for our operation, human resources, and design departments.
We dedicated to increase gender diversity. Meanwhile, we provide job opportunities for people with disabilities and encourage them to exert their creativity in their positions, and provide them with a barrier-free working environment. In 2023, we hired 13 employees with disabilities, working for our operation, human resources, and design departments.
We derive product sales revenues primarily through selling the products that we purchase from our brand partners and/or their authorized distributors to consumers under the distribution model. ● Services revenues.
We derive product sales revenues primarily through selling the products that we purchase from our brand partners and/or their authorized distributors to consumers under the distribution model. ● Services revenues. We derive services revenues primarily through charging brand partners and other customers fees under the service fee model and consignment model.
However, we may not be aware of the identities of all our beneficial owners who are PRC residents. In addition, we do not have control over our beneficial owners and cannot assure you that all of our PRC resident beneficial owners will comply with SAFE Circular 37 and its implementation rules, including relevant annual filing requirement.
In addition, we do not have control over our beneficial owners and cannot assure you that all of our PRC resident beneficial owners will comply with SAFE Circular 37 and its implementation rules, including relevant annual filing requirement.
We target to reduce greenhouse gas (GHG) emission (Scope 1, 2 and 3 ) by 50% by 2030, compared to a 2021 baseline, and to achieve GHG neutrality (Scope 1, 2 and 3) by the end of 2050.
We target to reduce greenhouse gas (GHG) emission (Scope 1, 2 and 3) by 50% by 2030, compared to a 2021 baseline, and to achieve GHG neutrality (Scope 1, 2 and 3) by the end of 2050. In 2023, our Scope 1 and Scope 2 greenhouse gas emissions decreased by 27.58% compared to 2021.
We create and publish contents on our brand partners’ accounts, and we engage in dialogue with consumers who post on our brand partners’ accounts. We track visitors’ activities and analyze the impact of our social marketing outreach, and we also facilitate interactive marketing through livestreams and short-form videos. In 2019, we were certified by Alibaba Group as an MCN partner.
We create and publish contents on our brand partners’ accounts, and we engage in dialogue with consumers who post on our brand partners’ accounts. We track visitors’ activities and analyze the impact of our social marketing outreach, and we also facilitate interactive marketing through livestreams and short-form videos.
It identifies the control implementation deficiencies in the various departments daily operation processes, proposes improvement plans and continuously tracks the actual implementation of improvements to achieve continuous monitoring and reduction of the Company’s risks in a timely manner.
It identifies the control implementation deficiencies in the various departments daily operation processes, proposes improvement plans and continuously tracks the actual implementation of improvements to achieve continuous monitoring and reduction of the Company’s risks in a timely manner. In 2023, the company identified risks including strategic risks, financial risks, market risks, operational risks, and legal risks.
As of December 31, 2022, we directly operated 40 warehouses with an aggregate gross floor area of over 1,030,000 square meters in nine cities, including Shanghai, Beijing, Suzhou, Shenzhen, Guangzhou, Langfang, Chengdu, Wuxi and Jiaxing Our directly-operated warehouses fulfilled approximately 68.3 million, 50.4 million and 56.8 million outbound orders to consumers in 2020, 2021 and 2022, respectively.
As of December 31, 2023, we directly operated 36 warehouses with an aggregate gross floor area of over 938,000 square meters in ten cities, including Shanghai, Suzhou, Shenzhen, Guangzhou, Langfang, Chengdu, Wuxi, Kunming, Hangzhou and Jiaxing Our directly-operated warehouses fulfilled approximately 50.4 million, 56.8 million and 68.9 million outbound orders to consumers in 2021, 2022 and 2023, respectively.
The Measures for Cyber Security Review was issued on April 13, 2020 and came into effect on June 1, 2020. According to the Measures for Cyber Security Review, a critical information infrastructure operator, before purchasing network products and services, shall prejudge the national security risks that may arise after the products and services are put into use.
The Measures for Cyber Security Review was issued on December 28, 2021 and came into effect on February 15, 2022. According to the Measures for Cyber Security Review, a critical information infrastructure operator, before purchasing network products and services, shall prejudge the national security risks that may arise after the products and services are put into use.
We have developed and utilized Yunzhuan, an AI-based automated content generator that identifies specifications of merchandise based on pictures of such merchandises using image recognition technology and automatically generates batches of promotional articles on such merchandises, which helps to reduce manual inputs and improve marketing efficiency.
We work with industry-leading luxury brands to excel their visual presentation and technological innovation. We have developed and utilized Yunzhuan, an AI-based automated content generator that identifies specifications of merchandise based on pictures of such merchandises using image recognition technology and automatically generates batches of promotional articles on such merchandises, which helps to reduce manual inputs and improve marketing efficiency.
We make forecast of the necessary inventory level based on historical sales data and carefully formulate our procurement plans. For promotional events such as the Singles Day promotion, we pre-order sufficient level of inventory to meet surging demand.
Inventory Management We adopt different strategies to manage our inventory in order to deal with non-seasonal and seasonal demands. We make forecast of the necessary inventory level based on historical sales data and carefully formulate our procurement plans. For promotional events such as the Singles Day promotion, we pre-order sufficient level of inventory to meet surging demand.
The flowchart below illustrates our capabilities and the solutions we offer for each aspect of our brand e-commerce operations: ​ ​ IT Solutions With our expertise in technology infrastructure and systems, interactive page design and our deep understanding of Chinese consumers’ online shopping habits, we provide consultations to our brand partners, help our brand partners set up e-commerce sites that enhance their brands and cater specifically to local consumers.
Over the course of the collaboration, many brand partners appreciate the value we bring to them and gradually expand their engagement with us to a broader set of solutions. 71 Table of Contents The flowchart below illustrates our capabilities and the solutions we offer for each aspect of our brand e-commerce operations: ​ ​ IT Solutions With our expertise in technology infrastructure and systems, interactive page design and our deep understanding of Chinese consumers’ online shopping habits, we provide consultations to our brand partners, help our brand partners set up e-commerce sites that enhance their brands and cater specifically to local consumers.
Our technology stack can support all categories of products and is comprised of three layers: ● Front-end systems, including various cloud-based omni-channel technology solutions, customized SaaS (software as a service) tools and efficiency-oriented applications. ● Middle-end systems, including business middle platform and data middle platform . ● Back-end infrastructure, including proprietary Baozun Hybrid Cloud with strong computing, storage and network capabilities.
Our technology stack can support all categories of products and is comprised of three layers: ● Front-end systems, including various cloud-based omni-channel technology solutions, customized SaaS (software as a service) tools and efficiency-oriented applications. ● Middle-end systems, including business middle platform and data middle platform . ● Back-end infrastructure, including proprietary Baozun Hybrid Cloud with strong computing, storage and network capabilities. 68 Table of Contents Based on the different needs of our brand partners, we operate under three business models: distribution model, service fee model and consignment model.
In 2022, Baozun E-commerce has successfully passed the ISO27701 certification for Privacy Information Management System, which is another international security authority certification that Baozun E-commerce has obtained after obtaining the ISO27001 certification for Information Security Management System in 2015.
In 2022, Baozun E-commerce has successfully passed the ISO27701 certification for Privacy Information Management System, renewed in October 2023 with a valid term of two years, which is another international security authority certification that Baozun E-commerce has obtained after obtaining the ISO27001 certification for Information Security Management System in 2015.
On December 27, 2021, MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), which became effective on January 1, 2022.
On December 27, 2021, MOFCOM and the NDRC promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version), which became effective on January 1, 2022. On October 26, 2022, MOFCOM and the NDRC also jointly promulgated the Catalog of Industries for Encouraging Foreign Investment (2022 Version), which became effective on January 1, 2023.
Regulations Relating to Leasing Pursuant to the Law on Administration of Urban Real Estate, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing such provisions as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties.
Regulations Relating to Leasing Pursuant to the Law on Administration of Urban Real Estate, adopted by the National People’s Congress Standing Committee on July 5, 1994 and latest amended on August 26, 2019, when leasing premises, the lessor and lessee are required to enter into a written lease contract, containing such provisions as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties.
Employee rights and benefits : We adhere to the principle of fair employment and equal pay. We strive to provide our employees with comprehensive social benefits, a diverse work environment and a wide range of career and leadership development and training opportunities.
We strive to provide our employees with comprehensive social benefits, a diverse work environment and a wide range of career and leadership development and training opportunities.
Baozun Hybrid Cloud provides secure and elastic computing power, storage, and network infrastructure that facilitates brand partners’ business 24/7. It can be readily expanded internally or through public clouds (such as AliCloud, AWS cloud) to accommodate business and customer needs.
It offers secure and elastic computing power, storage, and network infrastructure, supporting our brand partners’ business around the clock. It can be readily expanded internally or through public clouds (such as AliCloud, AWS cloud) to accommodate business and customer needs.
To optimize our efficiency and effectiveness of our media solution, we developed a media tool call Yunbian. Yunbian can help to create media plans as well as reports that can significantly help our media professionals to do media placement. Yunbian is now connected to Ali, Tencent and Jingdong.
Yunbian can help to create media plans as well as reports that can significantly help our media professionals to do media placement. Yunbian is now connected to Ali, Tencent and Jingdong.
We operate an in-house, professional photography studio in Shanghai to create digital product images for product features, promotions and advertising campaigns. Our production services range from pre-production work such as casting, art direction and styling to post-production editing and retouching.
We operate an in-house, professional photography studio in Shanghai to create digital product images for product features, promotions and advertising campaigns. Our production services range from pre-production work such as casting, art direction and styling to post-production editing and retouching. We also possess a team of creative, data, development and AI experts. We provide a premium mini-program interactive solution.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

88 edited+59 added−40 removed110 unchanged
The unrealized investment loss in the fiscal year 2022 was partially offset by the unrealized investment gain of RMB4.2 million, which was related to the increase in the trading price of Lanvin Group, a company listed on the New York Stock Exchange in December 2022 that we invested in June 2021. Loss on Disposal of Investment.
The unrealized investment loss in the fiscal year 2022 was partially offset by the unrealized investment gain of RMB4.2 million, which was related to the increase in the trading price of Lanvin Group, a company listed on the New York Stock Exchange in December 2022 that we invested in June 2021. Gain (loss) on disposal of investments.
Other five of our subsidiaries qualified as a “high and new technology enterprise” starting from 2018 and renewed the qualification subsequently, and are therefore subject to a 15% preferential income tax rate with a valid term of three years from the year of qualification or renewal.
Five of our subsidiaries qualified as a “high and new technology enterprise” starting from 2018 and renewed the qualification subsequently, and are therefore subject to a 15% preferential income tax rate with a valid term of three years from the year of qualification or renewal.
Increases in GMV and revenues depend on our ability to attract higher traffic to the online stores, convert more store visitors into consumers, increase consumers’ order values, grow repeat customer base, provide superior experience to consumers and expand product offerings.
Increases in revenues depend on our ability to attract higher traffic to the online stores, convert more store visitors into consumers, increase consumers’ order values, grow repeat customer base, provide superior experience to consumers and expand product offerings.
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 from January 1, 2022 to December 31, 2022 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause 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 from January 1, 2023 to December 31, 2023 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. 109 Table of Contents Before May 1, 2018, we are subject to VAT at a rate of 17% on product sales and 6% on our services, in each case less any deductible VAT we have already paid or borne.
The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. 113 Table of Contents Before May 1, 2018, we are subject to VAT at a rate of 17% on product sales and 6% on our services, in each case less any deductible VAT we have already paid or borne.
We plan to make our sales and marketing more efficient by promotion operation automation, enhancing the effectiveness of marketing activities and improving the workflow efficiency. 108 Table of Contents Our technology and content expenses consist primarily of payroll and related expenses for employees in our technology and system department, technology infrastructure expenses, costs associated with the computers, storage and telecommunications infrastructure for internal use and other costs, such as editorial content costs.
We plan to make our sales and marketing more efficient by promotion operation automation, enhancing the effectiveness of marketing activities and improving the workflow efficiency. 112 Table of Contents Our technology and content expenses consist primarily of payroll and related expenses for employees in our technology and system department, technology infrastructure expenses, costs associated with the computers, storage and telecommunications infrastructure for internal use and other costs, such as editorial content costs.
Recently Issued Accounting Pronouncements Not Yet Adopted See Item 18 of Part III, “Financial Statements — Note 2 — Summary of Significant Principal Accounting Policies — (ai) Recently Issued Accounting Pronouncements.” 111 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated both in absolute amount and as a percentage of our total net revenues.
Recently Issued Accounting Pronouncements Not Yet Adopted See Item 18 of Part III, “Financial Statements — Note 2 — Summary of Significant Principal Accounting Policies — (ai) Recently Issued Accounting Pronouncements.” 115 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated both in absolute amount and as a percentage of our total net revenues.
The increase in our inventories, accounts receivable, advances to suppliers, operating lease right-of-use assets and operating lease liabilities was due to the growth of our business. 121 Table of Contents Net cash used in operating activities in 2021 was RMB96.1 million and primarily consisted of net loss of RMB206.0 million, as adjusted for non-cash items, and the effects of changes in operating assets and liabilities.
The increase in our inventories, accounts receivable, advances to suppliers, operating lease right-of-use assets and operating lease liabilities was due to the growth of our business. 127 Table of Contents Net cash used in operating activities in 2021 was RMB96.1 million and primarily consisted of net loss of RMB206.0 million, as adjusted for non-cash items, and the effects of changes in operating assets and liabilities.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information - D. Risk Factors” and elsewhere in this annual report. 104 Table of Contents A.
Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information - D. Risk Factors” and elsewhere in this annual report. 107 Table of Contents A.
Our other expenses increased by 281.1% from RMB161.0 million in 2021 to RMB613.6 million (US$89.0 million) in 2022. This increase was mainly due to a fair value loss on derivative liabilities, an increase in loss on disposal of investment, and an increase in exchange loss, partially offset by a decrease in unrealized investment loss. Interest Income.
Our other expenses increased by 281.1% from RMB161.0 million in 2021 to RMB613.6 million in 2022. This increase was mainly due to a fair value loss on derivative liabilities, an increase in loss on disposal of investment, and an increase in exchange loss, partially offset by a decrease in unrealized investment loss. Interest Income.
We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. 110 Table of Contents Inventories Inventories consisting of products available for sale, are valued at the lower of cost or market. Cost of inventories is determined using the weighted average cost method.
We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. 114 Table of Contents Inventories Inventories consisting of products available for sale, are valued at the lower of cost or market. Cost of inventories is determined using the weighted average cost method.
Our cost of products decreased by 31.1% from RMB3,276.6 million in 2021 to RMB2,256.0 million (US$327.1 million) in 2022. Cost of products as a percentage of net revenues from product sales increased from 84.6% in 2021 to 85.3% in 2022 primarily due to the optimization of our product portfolio in distribution model. Fulfillment Expenses.
Our cost of products decreased by 31.1% from RMB3,276.6 million in 2021 to RMB2,256.0 million in 2022. Cost of products as a percentage of net revenues from product sales increased from 84.6% in 2021 to 85.3% in 2022 primarily due to the optimization of our product portfolio in distribution model. Fulfillment Expenses.
Investing Activities Net cash used in investing activities in 2022 was RMB1,306.7 million (US$189.4 million), and primarily consisted of (i) purchase of short term investment, (ii) purchases of property and equipment, which comprised equipment for warehouse, computer hardware for newly hired employees and leasehold improvements, (iii) net cash paid for business combination, (iv) investment in equity investees, and (v) additions of intangible assets due to capitalization of internally developed software.
Net cash used in investing activities in 2022 was RMB1,306.7 million, and primarily consisted of (i) purchase of short term investment, (ii) purchases of property and equipment, which comprised equipment for warehouse, computer hardware for newly hired employees and leasehold improvements, (iii) net cash paid for business combination, (iv) investment in equity investees, and (v) additions of intangible assets due to capitalization of internally developed software.
We incurred gain on repurchase of 1.625% convertible senior notes due 2024 of RMB7.9 million (US$1.1 million) in 2022. We did not record such gain in 2021. Impairment Loss of Investments. Our impairment loss of investments was RMB8.4 million (US$1.2 million) in 2022, compared with RMB3.5 million in 2021.
We incurred gain on repurchase of 1.625% convertible senior notes due 2024 of RMB7.9 million in 2022. We did not record such gain in 2021. Impairment Loss of Investments. Our impairment loss of investments was RMB8.4 million in 2022, compared with RMB3.5 million in 2021.
In addition, depending on the product category, we may derive more revenues from product sales than services, or vice versa, which may further impact our profitability. ● Our ability to manage and maintain profitability of Gap Greater China.
In addition, depending on the product category, we may derive more revenues from product sales than services, or vice versa, which may further impact our profitability. ● Our ability to manage and turnaround of Gap Greater China.
As such, we believe that the non-GAAP financial measures facilitate investors’ assessment of our operating performance, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in their financial and operational decision-making. The non-GAAP financial measures are not defined under U.S.
As such, we believe that the non-GAAP financial measures facilitate investors’ assessment of our operating performance, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in their financial and operational decision-making. 122 Table of Contents The non-GAAP financial measures are not defined under U.S.
Our share of loss (income) in equity method investment over these periods resulted from our investment in Beijing Pengtai Baozun E-commerce Co., Ltd., or Pengtai Baozun, and other equity investees. Net Loss As a result of the foregoing, our net loss was RMB610.4 million (US$88.5 million) in 2022, compared with net loss of RMB206.0 million in 2021.
Our share of loss (income) in equity method investment over these periods resulted from our investment in Beijing Pengtai Baozun E-commerce Co., Ltd., or Pengtai Baozun, and other equity investees. Net Loss As a result of the foregoing, our net loss was RMB610.4 million in 2022, compared with net loss of RMB206.0 million in 2021.
Financing Activities Net cash used in financing activities in 2022 was RMB1,650.4 million (US$239.3 million), primarily attributable to (i) repayment of short-term borrowings of RMB1,375.8 million, and (ii) repurchase of convertible senior notes of RMB1,760.0 million, partially offset by proceeds of RMB1,843.5 million from short-term bank loans.
Net cash used in financing activities in 2022 was RMB1,650.4 million, primarily attributable to (i) repayment of short-term borrowings of RMB1,375.8 million, and (ii) repurchase of convertible senior notes of RMB1,760.0 million, partially offset by proceeds of RMB1,843.5 million from short-term bank loans.
Our unrealized investment loss was RMB97.8 million (US$14.2 million) in 2022, compared with RMB210.0 million in 2021. The unrealized investment loss in both periods was related to the decrease in the trading price of iClick Interactive, a public company listed on the Nasdaq Global Market that we invested in January 2021.
Our unrealized investment loss was RMB97.8 million in 2022, compared with RMB210.0 million in 2021. The unrealized investment loss in both periods was related to the decrease in the trading price of iClick Interactive, a public company listed on the Nasdaq Global Market that we invested in January 2021.
Operating Expenses Our operating expenses decreased by 10.9% from RMB9,389.2 million in 2021 to RMB8,367.3 million (US$1,213.2 million) in 2022, which primarily resulted from decreases in our cost of products, general and administrative expenses, and technology and content expenses, partially offset by increases in our fulfillment expenses and sales and marketing expenses. Cost of Products.
Operating Expenses Our operating expenses decreased by 10.9% from RMB9,389.2 million in 2021 to RMB8,367.3 million in 2022, which primarily resulted from decreases in our cost of products, general and administrative expenses, and technology and content expenses, partially offset by increases in our fulfillment expenses and sales and marketing expenses. Cost of Products.
We recorded fair value loss on derivative liabilities of RMB364.8 million (US$52.9 million) in 2022, which was primarily due to changes in fair value of the derivative liabilities in connection with the 30% equity interest of our subsidiary, Baotong Inc., that we issued to Cainiao Smart Logistics Investment Limited.
We recorded fair value loss on derivative liabilities of RMB364.8 million in 2022, which was primarily due to changes in fair value of the derivative liabilities in connection with the 30% equity interest of our subsidiary, Baotong Inc., that we issued to Cainiao Smart Logistics Investment Limited.
Our interest income decreased from RMB62.9 million in 2021 to RMB45.8 million (US$6.6 million) in 2022. The decrease was primarily due to a decrease in proceeds from short term investments. Interest Expense. Our interest expense was RMB56.8 million in 2021 and RMB56.9 million (US$8.3 million) in 2022, which generally remained stable. Unrealized Investment Loss.
Our interest income decreased from RMB62.9 million in 2021 to RMB45.8 million in 2022. The decrease was primarily due to a decrease in proceeds from short term investments. Interest Expense. Our interest expense was RMB56.8 million in 2021 and RMB56.9 million in 2022, which generally remained stable. Unrealized Investment Loss.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. Our VIE, Shanghai Zunyi, contributed an aggregate of 9.8%, 8.6% and 6.8% of our net revenues for the years ended December 31, 2020, 2021 and 2022, respectively. C.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. Our VIE, Shanghai Zunyi, contributed an aggregate of 8.6%, 6.8% and 6.2% of our net revenues for the years ended December 31, 2021, 2022 and 2023, respectively. C.
In 2022, the principal items accounting for the changes in operating assets and liabilities were a decrease in operating lease right-of-use assets of RMB248.5 million (US$36.0 million), a decrease in advance to suppliers of RMB158.3 million (US$23.0 million), an increase in accrued expenses and other current liabilities of RMB99.1 million (US$14.4 million), an increase in accounts payables of RMB57.4 million (US$8.3 million), partially offset by a decrease in operating lease liabilities of RMB252.3 million (US$36.6 million), an increase in prepayments and other current assets of RMB135.0 million (US$19.6 million), a decrease in tax payables of RMB81.2 million (US$11.8 million), a decrease in amounts due to related party of RMB43.4 million (US$6.3 million), an increase in accounts receivable of RMB42.4 million (US$6.1 million), a decrease in notes payable of RMB41.8 million (US$6.1 million), and an increase in inventories of RMB31.0 million (US$4.5 million).
In 2022, the principal items accounting for the changes in operating assets and liabilities were a decrease in operating lease right-of-use assets of RMB248.5 million, a decrease in advance to suppliers of RMB158.3 million, an increase in accrued expenses and other current liabilities of RMB99.1 million, an increase in accounts payables of RMB57.4 million, partially offset by a decrease in operating lease liabilities of RMB252.3 million, an increase in prepayments and other current assets of RMB135.0 million, a decrease in tax payables of RMB81.2 million, a decrease in amounts due to related party of RMB43.4 million, an increase in accounts receivable of RMB42.4 million, a decrease in notes payable of RMB41.8 million, and an increase in inventories of RMB31.0 million.
Maintaining the profitability of Gap Greater China requires significant managerial and financial resources and could result in a diversion of resources from our existing business, which in turn could adversely affect our growth and business operations.
The turnaround of Gap Greater China requires significant managerial and financial resources and could result in a diversion of resources from our existing business, which in turn could adversely affect our growth and business operations.
We expect our fulfillment expenses to increase as we will lease more warehouses or cooperate with more warehouse operators to meet the demand driven by the increase in GMV and the expansion of our fulfillment services.
We expect our fulfillment expenses to increase as we will lease more warehouses or cooperate with more warehouse operators to meet the demand driven by the expansion of our fulfillment services.
Operating Results - Non-GAAP Financial Measures.” Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving the retail industry and online retail, including: ● Levels of per capita disposable income and consumer spending in China and our target markets .
Operating Results Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving the retail industry and online retail, including: ● Levels of per capita disposable income and consumer spending in China and our target markets .
Our ability to invest in our technology platform and fulfillment infrastructure cost-effectively also affects our results of operations. ● Our ability to manage our business model mix and product mix .
Our ability to invest in our technology platform and fulfillment infrastructure cost-effectively also affects our results of operations. 108 Table of Contents ● Our ability to manage our business model mix and product mix .
We did not record impairment of goodwill in 2021. 113 Table of Contents Income from Operations As a result of the foregoing, our income from operations was RMB33.3 million (US$4.8 million) in 2022, compared with RMB7.0 million in 2021. Other Income (Expenses) We incurred total other expenses for both 2021 and 2022.
We did not record impairment of goodwill in 2021. 119 Table of Contents Income from Operations As a result of the foregoing, our income from operations was RMB33.3 million in 2022, compared with RMB7.0 million in 2021. Other Income (Expenses) We incurred total other expenses for both 2021 and 2022.
Adjustment for non-cash items primarily included RMB196.5 million (US$28.5 million) of depreciation and amortization, RMB161.6 million (US$23.4 million) of inventory write-down, RMB142.4 million (US$20.6 million) of share-based compensation, RMB107.0 million (US$15.5 million) of loss on disposal of subsidiaries and investment in equity investee, and RMB97.8 million (US$14.2 million) of unrealized loss related to investment securities, partially offset by RMB56.1 million (US$8.1 million) of deferred income tax.
Adjustment for non-cash items primarily included RMB196.5 million of depreciation and amortization, RMB161.6 million of inventory write-down, RMB142.4 million of share-based compensation, RMB107.0 million of loss on disposal of subsidiaries and investment in equity investee, and RMB97.8 million of unrealized loss related to investment securities, partially offset by RMB56.1 million of deferred income tax.
In addition to serving our brand partners, we also provide digital marketing and other services to other customers under our service fee model. Our net revenues as a percentage of our GMV and our profitability could vary depending on the mix of our product sales revenues and services revenues, and brand partners’ category mix during certain time period.
In addition to serving our brand partners, we also provide digital marketing and other services to other customers under our service fee model. Our net revenues and our profitability could fluctuate depending on the mix of our product sales revenues and services revenues, and brand partners’ category mix during certain time period.
Our accounts payable include accounts payable for payments in connection with inventory that we purchased and products sold under the consignment model and service fee model for which we are responsible for payment collection. As of December 31, 2020, 2021 and 2022, our accounts payable amounted to RMB421.6 million, RMB494.1 million and RMB474.7 million (US$68.8 million), respectively.
Our accounts payable include accounts payable for payments in connection with inventory that we purchased and products sold under the consignment model and service fee model for which we are responsible for payment collection. As of December 31, 2021, 2022 and 2023, our accounts payable amounted to RMB494.1 million, RMB474.7 million and RMB563.6 million (US$79.4 million), respectively.
The amount of goods returned was RMB212.2 million, RMB330.7 million and RMB188.9 million (US$27.4 million) for the years ended December 31, 2020, 2021, and 2022, respectively, accounting for 2.4%, 7.4% and 7.1% of the product sales revenue in the respective periods. We derive services revenues primarily under the consignment model and service fee model.
The amount of goods returned was RMB330.7 million, RMB188.9 million and RMB328.8 million (US$46.3 million) for the years ended December 31, 2021, 2022, and 2023, respectively, accounting for 7.4%,7.1% and 9.8% of the product sales revenue in the respective periods. We derive services revenues primarily under the consignment model and service fee model.
We incurred a loss on disposal of investment in 2022 primarily because we disposed a loss-making subsidiary of our warehouse and supply chain businesses, resulting in a loss of RMB91.1 million (US$13.2 million) loss in the third quarter of 2022 . Gain on Repurchase of 1.625% Convertible Senior Notes Due 2024.
We incurred a loss on disposal/acquisition of subsidiaries in 2022 primarily because we disposed a loss-making subsidiary of our warehouse and supply chain businesses, resulting in a loss of RMB90.1 million loss in the third quarter of 2022. Gain on Repurchase of 1.625% Convertible Senior Notes Due 2024.
We derive product sales revenues primarily through selling products to consumers under the distribution model. We select and purchase goods from our brand partners and/or their authorized distributors and generally sell branded goods directly to consumers through our online stores. Revenues generated from product sales include fees charged to consumers for shipping and handling expenses.
We select and purchase goods from our brand partners and/or their authorized distributors and generally sell branded goods directly to consumers through our online stores. Revenues generated from product sales include fees charged to consumers for shipping and handling expenses.
Our fulfillment expenses increased by 2.2% from RMB2,661.1 million in 2021 to RMB2,719.7 million (US$394.3 million) in 2022. The increase was in line with the growth of our revenue generated from our warehousing and fulfillment and IT maintenance services. Sales and Marketing Expenses.
Our fulfillment expenses increased by 2.2% from RMB2,661.1 million in 2021 to RMB2,719.7 million in 2022. The increase was in line with the growth of our revenue generated from our warehousing and fulfillment and IT maintenance services. Sales and Marketing Expenses. Our sales and marketing expenses increased by 4.9% from RMB2,549.8 million in 2021 to RMB2,674.4 million in 2022.
Our impairment of investments in 2022 was due to the loss of investment in equity investees. We review the investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable. Exchange Gain (Loss).
Our impairment of investments in 2022 was due to the loss of investment in equity investees. We review the investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable. Exchange Gain (Loss). Our exchange loss was RMB32.4 million in 2022, compared with exchange gain of RMB46.2 million in 2021.
Net Revenues Our total net revenues increased by 6.2% from RMB8,851.6 million in 2020 to RMB9,396.3 million in 2021. Net revenues generated from product sales decreased by 0.8% mainly due to deteriorated macro-economic environment and negative impact from the Better Cotton Initiatives while net revenues from services increased by 11.7%.
Net Revenues Our total net revenues decreased by 10.6% from RMB9,396.3 million in 2021 to RMB8,400.6 million in 2022. Net revenues generated from product sales decreased by 31.7% mainly due to deteriorated macro-economic environment and negative impact from the Better Cotton Initiatives while net revenues from services increased by 4.2%.
We would need to continue to maintain and expand our brand partner base to maintain and grow our revenues. 105 Table of Contents ● Our ability to increase GMV and revenues and manage pricing .
We would need to continue to maintain and expand our brand partner base to maintain and grow our revenues. ● Our ability to increase revenues and manage pricing .
We employed 691 IT professionals to design, develop and operate our technology platform as of December 31, 2022. 123 Table of Contents D.
We employed 867 IT professionals to design, develop and operate our technology platform as of December 31, 2023. 129 Table of Contents D.
Our cash and cash equivalents generally consist of bank deposits. As of December 31, 2022, we had credit facilities with terms ranging from three months to one year for an aggregate amount RMB3,329.0 million (US$482.7 million) from 17 Chinese commercial banks.
Our cash and cash equivalents generally consist of bank deposits. As of December 31, 2023, we had credit facilities with terms ranging from three months to one year for an aggregate amount RMB3,715.8 million (US$523.4 million) from 18 Chinese commercial banks.
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. As of December 31, 2022, the amount restricted, including paid-in capital and statutory reserve funds, was RMB2,361.6 million (US$342.4 million).
Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. As of December 31, 2023, the amount restricted, including paid-in capital and statutory reserve funds, was RMB3,335.0 million (US$469.7 million).
Revenue generated from services relating to online store operation, digital marketing, customer services, and warehousing and fulfillment are recognized over the service term in the amount including fixed fees and/or variable fees to which we have a right to invoice. ​ 107 Table of Contents The following table sets forth our revenues by source for each period indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % Net revenues Product sales 3,906,611 44.1 ​ 3,873,589 ​ 41.2 ​ 2,644,214 ​ 383,375 ​ 31.5 Services 4,944,952 55.9 ​ 5,522,667 ​ 58.8 ​ 5,756,417 ​ 834,602 ​ 68.5 Total net revenues 8,851,563 100.0 ​ 9,396,256 ​ 100.0 ​ 8,400,631 ​ 1,217,977 ​ 100.0 ​ Operating expenses Our operating expenses consist primarily of cost of products, fulfillment expenses, sales and marketing expenses, technology and content expenses, and general and administrative expenses.
Revenue generated from services relating to online store operation, digital marketing, customer services, and warehousing and fulfillment are recognized over the service term in the amount including fixed fees and/or variable fees to which we have a right to invoice. ​ The following table sets forth our revenues by source for each period indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % Net revenues Product sales 3,873,589 41.2 ​ 2,644,214 ​ 31.5 ​ 3,357,202 ​ 472,852 ​ 38.1 Services 5,522,667 58.8 ​ 5,756,417 ​ 68.5 ​ 5,454,811 ​ 768,294 ​ 61.9 Total net revenues 9,396,256 100.0 ​ 8,400,631 ​ 100.0 ​ 8,812,013 ​ 1,241,146 ​ 100.0 ​ 111 Table of Contents Operating expenses Our operating expenses consist primarily of cost of products, fulfillment expenses, sales and marketing expenses, technology and content expenses, and general and administrative expenses.
Net Loss (Income) Attributable to Ordinary Shareholders of Baozun Inc. Our net loss attributable to ordinary shareholders of Baozun Inc. was RMB653.3 million (US$94.7 million) in 2022, compared with net loss attributable to ordinary shareholders of Baozun Inc. of RMB219.8 million in 2021. Year Ended December 31, 2020 Compared to Year Ended December 31, 2021.
Net Loss (Income) Attributable to Ordinary Shareholders of Baozun Inc. Our net loss attributable to ordinary shareholders of Baozun Inc. was RMB653.3 million in 2022, compared with net loss attributable to ordinary shareholders of Baozun Inc. of RMB219.8 million in 2021.
The following table breaks down our total operating expenses by these categories, by amounts and as percentages of total net revenues for each of the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB % Net revenues 8,851,563 ​ 100.0 ​ 9,396,256 ​ 100.0 ​ 8,400,631 ​ 100.0 Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of products (3,326,243) ​ (37.6) ​ (3,276,571) ​ (34.9) ​ (2,255,950) ​ (26.9) Fulfillment (2,259,176) ​ (25.5) ​ (2,661,126) ​ (28.3) ​ (2,719,749) ​ (32.4) Sales and marketing (2,130,667) ​ (24.1) ​ (2,549,842) ​ (27.1) ​ (2,674,358) ​ (31.8) Technology and content (409,870) ​ (4.6) ​ (448,410) ​ (4.8) ​ (427,954) ​ (5.1) General and administrative (224,045) ​ (2.5) ​ (525,802) ​ (5.6) ​ (371,470) ​ (4.4) Other operating income, net 57,115 ​ 0.6 ​ 72,516 ​ 0.8 ​ 95,292 ​ 1.1 Impairment of goodwill ​ — ​ — ​ — ​ — ​ (13,155) ​ (0.2) Total operating expenses (8,292,886) ​ (93.7) ​ (9,389,235) ​ (99.9) ​ (8,367,344) ​ (99.6) ​ Cost of products is incurred under the distribution model.
The following table breaks down our total operating expenses by these categories, by amounts and as percentages of total net revenues for each of the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB % RMB % RMB % ​ Net revenues 9,396,256 ​ 100.0 ​ 8,400,631 ​ 100.0 ​ 8,812,013 ​ 100 % Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of products (3,276,571) ​ (34.9) ​ (2,255,950) ​ (26.9) ​ (2,409,110) ​ (27.3) ​ Fulfillment (2,661,126) ​ (28.3) ​ (2,719,749) ​ (32.4) ​ (2,507,306) ​ (28.5) ​ Sales and marketing (2,549,842) ​ (27.1) ​ (2,674,358) ​ (31.8) ​ (2,829,016) ​ (32.1) ​ Technology and content (448,410) ​ (4.8) ​ (427,954) ​ (5.1) ​ (505,203) ​ (5.7) ​ General and administrative (525,802) ​ (5.6) ​ (371,470) ​ (4.4) ​ (855,914) ​ (9.7) ​ Other operating income, net 72,516 ​ 0.8 ​ 95,292 ​ 1.1 ​ 123,368 ​ 1.4 ​ Impairment of goodwill ​ — ​ — ​ (13,155) ​ (0.2) ​ (35,212) ​ (0.4) ​ Total operating expenses (9,389,235) ​ (99.9) ​ (8,367,344) ​ (99.6) ​ (9,018,393) ​ (102.3) ​ ​ Cost of products is incurred under the distribution model.
As a result, our PRC subsidiaries, our VIE in China may purchase foreign exchange for the payment of license, content or other royalty fees and expenses to offshore licensors, etc. 120 Table of Contents Our wholly foreign-owned subsidiary may convert Renminbi amounts that it generates in its own business activities, including technical consulting and related service fees pursuant to its contract with our VIE, as well as dividends it receives from its subsidiaries, into foreign exchange and pay them to its non-PRC parent companies in the form of dividends.
Our wholly foreign-owned subsidiary may convert Renminbi amounts that it generates in its own business activities, including technical consulting and related service fees pursuant to its contract with our VIE, as well as dividends it receives from its subsidiaries, into foreign exchange and pay them to its non-PRC parent companies in the form of dividends.
Our technology and content expenses decreased by 4.6% from RMB448.4 million in 2021 to RMB428.0 million (US$62.0 million) in 2022. The decrease was mainly due to the Company’s cost control initiatives and efficiency improvements, which was partially offset by the Company’s ongoing investment in technological innovation and productization. General and Administrative Expenses.
The decrease was mainly due to the Company’s cost control initiatives and efficiency improvements, which was partially offset by the Company’s ongoing investment in technological innovation and productization. General and Administrative Expenses. Our general and administrative expenses decreased by 29.4% from RMB525.8 million in 2021 to RMB371.5 million in 2022.
Net cash used in investing activities was RMB616.4 million in 2020, and primarily consisted of (i) purchases of property and equipment, which comprised equipment for warehouse, computer hardware for newly hired employees and leasehold improvements, (ii) purchases of short-term investment, (iii) additions of intangible assets due to capitalization of internally developed software and (iv) investment in equity investees, and partially offset by proceeds from maturity of short-term investments.
Investing Activities Net cash used in investing activities in 2023 was RMB340.4 million (US$47.9 million), and primarily consisted of (i) purchase of short term investment, (ii) purchases of property and equipment, which comprised equipment for warehouse, computer hardware for newly hired employees and leasehold improvements, (iii) acquisition of GAP, (iv) investment in equity investees, and (v) additions of intangible assets due to capitalization of internally developed software.
Our net loss attributable to ordinary shareholders of Baozun Inc. was RMB219.8 million in 2021, compared with net income attributable to ordinary shareholders of Baozun Inc. of RMB426.0 million in 2020. 116 Table of Contents Non-GAAP Financial Measures In evaluating our business, we consider and use non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc., and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, as supplemental measures to review and assess our operating performance.
Non-GAAP Financial Measures In evaluating our business, we consider and use non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc., and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, as supplemental measures to review and assess our operating performance.
We recorded net income of RMB426.5 million in 2020 and net loss RMB206.0 million in 2021, respectively, and net loss of RMB610.4 million (US$88.5 million) in 2022. We had non-GAAP net income ofRMB536.1 million, RMB217.4 million and RMB182.6 million (US$26.5 million) in 2020, 2021 and 2022, respectively. See “Item 5. Operating and Financial Review and Prospects - A.
We had non-GAAP net income of RMB217.4 million and RMB182.6 million in 2021 and 2022, respectively, and non-GAAP net loss of RMB3.3 million (US$0.5 million) in 2023. See “Item 5. Operating and Financial Review and Prospects - A.
Our exchange loss was RMB32.4 million (US$4.7 million) in 2022, compared with exchange gain of RMB46.2 million in 2021. Such change was primarily due to the appreciation of RMB against the U.S. dollar, as we had net assets in U.S. dollar during 2022. Fair Value Loss on Derivative Liabilities.
Such change was primarily due to the appreciation of RMB against the U.S. dollar, as we had net assets in U.S. dollar during 2022. Fair Value Loss on Derivative Liabilities.
Our sales and marketing expenses increased by 4.9% from RMB2,549.8 million in 2021 to RMB2,674.4 million (US$387.7 million) in 2022. The increase was primarily due to higher cost for front-end staff, which was in line with our business growth in digital marketing services. Technology and Content Expenses.
The increase was primarily due to higher cost for front-end staff, which was in line with our business growth in digital marketing services. Technology and Content Expenses. Our technology and content expenses decreased by 4.6% from RMB448.4 million in 2021 to RMB428.0 million in 2022.
Increases in GMV and revenues also depend on our ability to manage product pricing and maintain the level of services fees charged to our brand partners and other customer. ● Our ability to enhance cooperation with marketplaces and other channels .
Increases in revenues also depend on our ability to manage product pricing and maintain the level of services fees charged to our brand partners and other customer. ● Our ability to enhance cooperation with marketplaces and other channels . We generate a substantial portion of our revenues through product sales on official marketplace stores that we operate on Tmall.
Our share of income in equity method investment over these periods resulted from our investment in Beijing Pengtai Baozun E-commerce Co., Ltd., or Pengtai Baozun, and other equity investees. Net Loss (Income) As a result of the foregoing, our net loss was RMB206.0 million in 2021, compared with net income of RMB426.5 million in 2020.
Our share of loss (income) in equity method investment over these periods resulted from our investment in Beijing Pengtai Baozun E-commerce Co., Ltd., or Pengtai Baozun, and other equity investees. 118 Table of Contents Net Loss As a result of the foregoing, our net loss was RMB222.8 million (US$31.4 million) in 2023, compared with net loss of RMB610.4 million in 2022.
The decrease in our inventories from December 31, 2021 to December 31, 2022 was primarily due to the optimization of our product portfolio, which resulted in contraction in distribution model and a lower inventory volume. The increase in our inventory turnover days over these periods was due to changes in our product mix with new brands acquired.
Our inventory turnover days were 117 days in 2021, 163 days in 2022 and 151 days in 2023. The decrease in our inventories from December 31, 2021 to December 31, 2022 was primarily due to the optimization of our product portfolio, which resulted in contraction in distribution model and a lower inventory volume.
The increase in accounts payable turnover days from 2021 to 2022 was primarily due to the fluctuations in our product mix.
Our accounts payable turnover days were 51 days in 2021, 78 days in 2022 and 79 days in 2023. The increase in accounts payable turnover days from 2021 to 2022 was primarily due to the fluctuations in our product mix. Our accounts payable turnover days remained relatively stable from 2022 to 2023.
We did not record any fair value loss on derivative liabilities in 2021. Income Tax Expense Our income tax expense was RMB26.5 million (US$3.8 million) in 2022, compared with RMB55.3 million in 2021.
We did not record any fair value loss on derivative liabilities in 2021. 120 Table of Contents Income Tax Expense Our income tax expense was RMB26.5 million in 2022, compared with RMB55.3 million in 2021. Our income tax expense in 2022 was due to taxable profit generated in the same period.
(2) ​ ​ ​ ​ ​ ​ ​ Basic 6.82 0.0 (3.05) 0.0 (10.69) (1.55) 0.0 Diluted 6.69 0.0 (3.05) 0.0 (10.69) (1.55) 0.0 Weighted average shares used in calculating net income (loss) per ordinary share ​ ​ ​ ​ ​ ​ ​ Basic 187,322,781 — 216,370,290 — 183,274,855 183,274,855 — Diluted 190,988,171 — 216,370,290 — 183,274,855 183,274,855 — ​ (1) Share-based compensation expenses are allocated in operating expenses items as follows: 112 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ ​ (in thousands) Fulfillment (8,497) ​ (16,845) ​ (13,730) ​ (1,991) Sales and marketing (38,631) ​ (89,275) ​ (57,548) ​ (8,344) Technology and content (16,711) ​ (38,001) ​ (22,512) ​ (3,264) General and administrative (44,601) ​ (52,426) ​ (48,591) ​ (7,044) ​ (108,440) ​ (196,547) ​ (142,381) ​ (20,643) (2) Each ADS represents three Class A ordinary shares.
(2) ​ ​ ​ ​ ​ ​ ​ Basic (3.05) 0.0 (10.69) 0.0 (4.68) (0.66) 0.0 Diluted (3.05) 0.0 (10.69) 0.0 (4.68) (0.66) 0.0 Weighted average shares used in calculating net income per ordinary share ​ ​ ​ ​ ​ ​ ​ Basic 216,370,290 — 183,274,855 — 178,549,849 178,549,849 — Diluted 216,370,290 — 183,274,855 — 178,549,849 178,549,849 — (1) Share-based compensation expenses are allocated in operating expenses items as follows: 116 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Fulfillment (16,845) ​ (13,730) ​ (6,443) ​ (907) Sales and marketing (89,275) ​ (57,548) ​ (33,955) ​ (4,782) Technology and content (38,001) ​ (22,512) ​ (12,184) ​ (1,716) General and administrative (52,426) ​ (48,591) ​ (50,867) ​ (7,165) ​ (196,547) ​ (142,381) ​ (103,449) ​ (14,570) (2) Each ADS represents three Class A ordinary shares.
Our unrealized investment loss was RMB210.0 million in 2021, compared with nil in 2020. Unrealized investment loss in 2021 was mainly due to decrease in the trading price of iClick Interactive, a public company listed on the Nasdaq Global Market that we invested in January 2021. Impairment Loss of Investments.
Unrealized Investment Loss. Our unrealized investment loss was RMB68.0 million (US$9.6 million) in 2023, compared with RMB97.8 million in 2022. The unrealized investment loss in both periods was related to the decrease in the trading price of iClick Interactive, a public company listed on the Nasdaq Global Market that we invested in January 2021.
Accounts receivable turnover days for a given period are equal to the average accounts receivable balances as of the beginning and the end of the period divided by total net revenues during the period and multiplied by the number of days during the period (i.e., the actual number of days in a given year for calculating turnover days in such year or 90 days for calculating turnover days in a given quarter).
Accounts receivable turnover days for a given period are equal to the average accounts receivable balances as of the beginning and the end of the period divided by total net revenues during the period and multiplied by the number of days during the period (i.e., the actual number of days in a given year for calculating turnover days in such year or 90 days for calculating turnover days in a given quarter). 125 Table of Contents Our inventories were RMB1,073.6 million, RMB943.0 million and RMB1,045.1 million (US$147.2 million) as of December 31, 2021, 2022 and 2023.
The increase in accounts payable from December 31, 2020 to December 31, 2021 reflected growth in our scale of operations. The decrease in accounts payable from December 31, 2021 to December 31, 2022 reflected contraction in our scale of distribution model due to the optimization of our product portfolio.
The decrease in accounts payable from December 31, 2021 to December 31, 2022 reflected contraction in our scale of distribution model due to the optimization of our product portfolio. The increase in our accounts payable from December 31, 2022 to December 31, 2023 was primarily due to Gap Shanghai, a subsidiary we acquired in the first quarter of 2023.
We believe that our current levels of cash balances, cash flows from operations and existing credit facilities will be sufficient to meet our anticipated cash needs to fund our operations for at least the next 12 months. In addition, our cash flows from operations could be affected by our payment terms with our brand partners.
On May 2, 2022, the 2024 Notes were fully repurchased. We believe that our current levels of cash balances, cash flows from operations and existing credit facilities will be sufficient to meet our anticipated cash needs to fund our operations for at least the next 12 months.
Liquidity and Capital Resources Cash Flows and Working Capital We have financed our operations primarily through cash generated from operating activities, proceeds from our public offerings and private placements, and short-term and long-term bank borrowings. As of December 31, 2022, we had RMB2,144.0 million (US$310.9 million) in cash and cash equivalents and RMB101.7 million (US14.7 million) in restricted cash.
Liquidity and Capital Resources Cash Flows and Working Capital We have financed our operations primarily through cash generated from operating activities and short-term and long-term bank borrowings. As of December 31, 2023, we had RMB2,149.5 million (US$302.8 million) in cash and cash equivalents and RMB202.8 million (US$28.6 million) in restricted cash.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2022. Net Revenues Our total net revenues decreased by 10.6% from RMB9,396.3 million in 2021 to RMB8,400.6 million (US$1,218.0 million) in 2022.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2023. Net Revenues Our total net revenues increased by 4.9% from RMB8,400.6 million in 2022 to RMB8,812.0 million (US$1,241.1 million) in 2023.
We incurred impairment of goodwill of RMB13.2 million (US$1.9 million) in 2022 because the fair value of our reporting unit based on the quantitative impairment test was less than its carrying amount.
Other operating income was RMB95.3 million in 2022, compared with RMB72.5 million in 2021. The other operation income in 2022 was mainly government subsidies. Impairment of Goodwill. We incurred impairment of goodwill of RMB13.2 million in 2022 because the fair value of our reporting unit based on the quantitative impairment test was less than its carrying amount.
GAAP. 117 Table of Contents We compensate for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.
We encourage you to review our financial information in its entirety and not rely on a single financial measure. 123 Table of Contents A reconciliation of these non-GAAP financial measures in 2021, 2022 and 2023 to the nearest U.S.
We recorded a gain on disposal of investment of RMB0.2 million in 2021 and a loss on disposal of investment of RMB107.0 million (US$15.5 million) in 2022.
We recorded a gain on disposal of investments of RMB0.2 million in 2021 and a loss on disposal of investments of RMB17.0 million in 2022. (Loss) gain on disposal/acquisition of subsidiaries. We recorded a loss on disposal/acquisition of subsidiaries of RMB90.1 million in 2022.
Our general and administrative expenses decreased by 29.4% from RMB525.8 million in 2021 to RMB371.5 million (US$53.9 million) in 2022.
Our general and administrative expenses increased by 130.4% from RMB371.5 million in 2022 to RMB855.9 million (US$120.6 million) in 2023.
Our historical results of operations are not necessarily indicative of the results for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ (in thousands, except for per share and per ADS data and number of shares) Net revenues Product sales 3,906,611 44.1 3,873,589 41.2 2,644,214 383,375 31.5 Services 4,944,952 55.9 5,522,667 58.8 5,756,417 834,602 68.5 Total net revenues 8,851,563 100.0 9,396,256 100.0 8,400,631 1,217,977 100.0 Operating expenses (1) ​ ​ ​ ​ ​ ​ ​ Cost of products (3,326,243) (37.6) (3,276,571) (34.9) (2,255,950) (327,082) (26.9) Fulfillment (2,259,176) (25.5) (2,661,126) (28.3) (2,719,749) (394,327) (32.4) Sales and marketing (2,130,667) (24.1) (2,549,842) (27.1) (2,674,358) (387,745) (31.8) Technology and content (409,870) (4.6) (448,410) (4.8) (427,954) (62,047) (5.1) General and administrative (224,045) (2.5) (525,802) (5.6) (371,470) (53,858) (4.4) Other operating income, net 57,115 0.6 72,516 0.8 95,292 13,816 1.1 Impairment of goodwill ​ — ​ — ​ — ​ — ​ (13,155) ​ (1,907) ​ (0.2) Total operating expenses (8,292,886) (93.7) (9,389,235) (99.9) (8,367,344) (1,213,150) 99.6 Income from operations 558,677 6.3 7,021 0.1 33,287 4,827 0.4 Other income (expenses) ​ ​ ​ ​ ​ ​ ​ Interest income 41,373 0.5 62,943 0.7 45,816 6,643 0.5 Interest expense (66,124) (0.7) (56,847) (0.6) (56,917) (8,252) (0.7) Unrealized investment loss ​ — ​ — ​ (209,956) ​ (2.2) ​ (97,827) ​ (14,184) ​ (1.2) Gain on disposal of investment ​ — ​ — ​ 150 ​ 0.0 ​ (107,032) ​ (15,518) ​ (1.3) Gain on repurchase of 1.625% convertible senior notes due 2024 ​ — ​ — ​ — ​ — ​ 7,907 ​ 1,146 ​ 0.1 Impairment loss of investments (10,800) (0.1) (3,541) (0.1) (8,400) (1,218) (0.1) Exchange gain (loss) 25,725 0.3 46,226 0.5 (32,384) (4,695) (0.4) Fair value loss on derivative liabilities ​ — ​ — ​ — ​ — ​ (364,758) ​ (52,885) ​ (4.3) Income (loss) before income tax and share of income in equity method investment 548,851 6.2 (154,004) (1.6) (580,308) (84,136) (6.9) Income tax expense (127,787) (1.4) (55,259) (0.6) (26,480) (3,839) (0.3) Share of income (loss) in equity method investment 5,470 0.1 3,300 0.0 (3,586) (520) 0.0 Net income (loss) 426,534 4.8 (205,963) (2.2) (610,374) (88,495) (7.3) Net loss (income) attributable to noncontrolling interests (796) (0.0) (1,505) 0.0 843 122 0.0 Net (income) loss attributable to redeemable noncontrolling interests ​ 254 ​ — ​ (12,362) ​ (0.1) ​ (43,759) ​ (6,344) ​ (0.5) Net income (loss) attributable to ordinary shareholders of Baozun Inc. 425,992 4.8 (219,830) (2.3) (653,290) (94,717) (7.8) Net income (loss) per share attributable to ordinary shareholders of Baozun Inc. ​ ​ ​ ​ ​ ​ ​ Basic 2.27 0.0 (1.02) 0.0 (3.56) (0.52) 0.0 Diluted 2.23 0.0 (1.02) 0.0 (3.56) (0.52) 0.0 Net income (loss) per ADS attributable to ordinary shareholders of Baozun Inc.
Our historical results of operations are not necessarily indicative of the results for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ (in thousands, except for per share and per ADS data and number of shares) Net revenues Product sales 3,873,589 41.2 2,644,214 31.5 3,357,202 472,852 38.1 Services 5,522,667 58.8 5,756,417 68.5 5,454,811 768,294 61.9 Total net revenues 9,396,256 100.0 8,400,631 100.0 8,812,013 1,241,146 100.0 Operating expenses (1) ​ ​ ​ ​ ​ ​ ​ Cost of products (3,276,571) (34.9) (2,255,950) (26.9) (2,409,110) (339,316) (27.3) Fulfillment (2,661,126) (28.3) (2,719,749) (32.4) (2,507,306) (353,147) (28.5) Sales and marketing (2,549,842) (27.1) (2,674,358) (31.8) (2,829,016) (398,459) (32.1) Technology and content (448,410) (4.8) (427,954) (5.1) (505,203) (71,156) (5.7) General and administrative (525,802) (5.6) (371,470) (4.4) (855,914) (120,553) (9.7) Other operating income, net 72,516 0.8 95,292 1.1 123,368 17,377 1.4 Impairment of goodwill ​ — ​ — ​ (13,155) ​ (0.2) ​ (35,212) ​ (4,960) ​ (0.4) Total operating expenses (9,389,235) (99.9) (8,367,344) 99.6 (9,018,393) (1,270,214) (102.3) Income (loss) from operations 7,021 0.1 33,287 0.4 (206,380) (29,068) (2.3) Other income (expenses) ​ ​ ​ ​ ​ ​ ​ Interest income 62,943 0.7 45,816 0.5 82,113 11,565 0.9 Interest expense (56,847) (0.6) (56,917) (0.7) (41,344) (5,823) (0.5) Unrealized investment loss ​ (209,956) ​ (2.2) ​ (97,827) ​ (1.2) ​ (68,031) ​ (9,582) ​ (0.8) Gain (loss) on disposal of investment ​ 150 ​ 0.0 ​ (16,967) ​ (0.2) ​ — ​ — ​ — (Loss) gain on disposal/acquisition of subsidiaries ​ — ​ — ​ (90,065) ​ (1.1) ​ 631 ​ 89 ​ 0.0 Gain on repurchase of 1.625% convertible senior notes due 2024 ​ — ​ — ​ 7,907 ​ 0.1 ​ — ​ — ​ — Impairment loss of investments (3,541) (0.1) (8,400) (0.1) — — — Exchange gain (loss) 46,226 0.5 (32,384) (0.4) (8,530) (1,201) (0.1) Fair value loss (gain) on derivative liabilities ​ — ​ — ​ (364,758) ​ (4.3) ​ 24,515 ​ 3,453 ​ 0.3 Loss before income tax and share of income in equity method investment (154,004) (1.6) (580,308) (6.9) (217,026) (30,567) (2.5) Income tax expense (55,259) (0.6) (26,480) (0.3) (12,003) (1,691) (0.1) Share of income (loss) in equity method investment 3,300 0.0 (3,586) 0.0 6,253 881 0.1 Net loss (205,963) (2.2) (610,374) (7.3) (222,776) (31,377) (2.5) Net (income) loss attributable to noncontrolling interests (1,505) 0.0 843 0.0 (9,677) (1,363) (0.1) Net income attributable to redeemable noncontrolling interests ​ (12,362) ​ (0.1) ​ (43,759) ​ (0.5) ​ (45,969) ​ (6,475) ​ (0.5) Net loss attributable to ordinary shareholders of Baozun Inc.
Our capital expenditures were used primarily for (i) the purchase of buildings, computer hardware, office furniture and equipment and warehouse equipment, (ii) leasehold improvements, (iii) cost incurred for internal development of software, and (iv) land use rights. Actual future capital expenditures may differ from the amounts indicated above. We have no capital commitment as of December 31, 2022.
Capital Expenditures We had capital expenditures of RMB352.8 million, RMB259.2 million and RMB230.2 million (US$32.4 million) in 2021, 2022 and 2023, respectively. Our capital expenditures were used primarily for (i) the purchase of buildings, computer hardware, office furniture and equipment and warehouse equipment, (ii) leasehold improvements, (iii) cost incurred for internal development of software, and (iv) land use rights.
Financial Operations Overview . The following describes key components of our statements of operations: Net Revenues We generate revenue from two revenue streams: (i) product sales and (ii) services. We generally operate e-commerce businesses based on one of our three business models: distribution model, consignment model, and service fee model, or, in some circumstances, a combination of the business models.
We generally operate e-commerce businesses based on one of our three business models: distribution model, consignment model, and service fee model, or, in some circumstances, a combination of the business models. We derive product sales revenues primarily through selling products to consumers under the distribution model.
As of the date of this annual report, we have settled RMB1,467.1 million (US$212.9 million) of our accounts receivable as of December 31, 2022, constituting 64.0% of the accounts receivable then outstanding, net of allowance for doubtful accounts. The increase in accounts receivable over these periods was due to the increase in our product sales and service volumes.
As of the date of this annual report, we have settled RMB1,814.3 million (US$255.5 million) of our accounts receivable as of December 31, 2023, constituting 83.0% of the accounts receivable then outstanding, net of allowance for doubtful accounts. The decrease in accounts receivable from 2022 to 2023 was due to our strengthened capital management of receivables.
Any such negative developments of Gap Greater China or any future newly acquired business could materially and adversely affect our business, financial condition, and results of operations. ● Our ability to manage growth, control costs and manage working capital . Our expansion will result in substantial demands on our management, operational, technological, financial and other resources.
Any such negative developments of Gap Greater China or any future newly acquired business could materially and adversely affect our business, financial condition, and results of operations. ● Our ability to innovate and develop products.
Our income tax expense in 2022 was due to taxable profit generated in the same period. 114 Table of Contents Share of Loss (Income) in Equity Method Investment Our share of loss in equity method investment was RMB3.6 million (US$0.5 million) in 2022, compared with share of income in equity method investment was RMB3.3 million in 2021.
Income Tax Expense Our income tax expense was RMB12.0 million (US$1.7 million) in 2023, compared with RMB26.5 million in 2022. Our income tax expense in 2023 was due to taxable profit generated in the same period.
Net revenues generated from product sales decreased by 31.7% mainly due to deteriorated macro-economic environment and negative impact from the Better Cotton Initiatives while net revenues from services increased by 4.2%. The increase in our net revenues generated from services was primarily attributable to higher revenue contribution from value-added services, especially in digital marketing and IT solutions.
The increase in our net revenues generated from services was primarily attributable to higher revenue contribution from value-added services, especially in digital marketing and IT solutions.
The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ (in thousands) Net cash provided by (used in) operating activities 310,014 (96,107) ​ 382,605 55,473 Net cash (used in) provided by investing activities (616,367) 375,820 ​ (1,306,661) (189,449) Net cash provided by financing activities 2,666,837 749,953 ​ (1,650,402) (239,286) Net increase in cash, cash equivalents and restricted cash 2,360,484 1,029,666 ​ (2,574,458) (373,262) Cash, cash equivalents and restricted cash, beginning of year 1,526,810 3,731,019 ​ 4,699,764 737,495 Effect of exchange rate changes (156,275) (60,921) ​ 120,418 (38,633) Cash, cash equivalents and restricted cash, end of year 3,731,019 4,699,764 ​ 2,245,724 325,600 ​ Operating Activities Net cash used provided by operating activities in 2022 was RMB382.6 million (US$55.5 million) and primarily consisted of net loss of RMB610.4 million (US$88.5 million), as adjusted for non-cash items, and the effects of changes in operating assets and liabilities.
Furthermore, capital account transactions, which include foreign direct investment and loans, must be approved by and/or registered with SAFE and its local branches. 126 Table of Contents The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ (in thousands) Net cash (used in) provided by operating activities (96,107) 382,605 ​ 448,255 63,135 Net cash provided by (used in) investing activities 375,820 (1,306,661) ​ (340,372) (47,939) Net cash provided by (used in) financing activities 749,953 (1,650,402) ​ (8,033) (1,132) Net increase (decrease) in cash, cash equivalents and restricted cash 1,029,666 (2,574,458) ​ 99,850 14,064 Cash, cash equivalents and restricted cash, beginning of year 3,731,019 4,699,764 ​ 2,245,724 316,304 Effect of exchange rate changes (60,921) 120,418 ​ 6,721 946 Cash, cash equivalents and restricted cash, end of year 4,699,764 2,245,724 ​ 2,352,295 331,314 ​ Operating Activities Net cash provided by operating activities in 2023 was RMB448.3 million (US$63.1 million) and primarily consisted of net loss of RMB222.8 million (US$31.4 million), as adjusted for non-cash items, and the effects of changes in operating assets and liabilities.
We also pledged cash of RMB101.7 million (US$14.7 million) to banks in relation to bank guarantees issued on behalf of us, deposit required by our business partners or security for issuance of commercial acceptance notes that mainly relate to purchase of inventories as of December 31, 2022.
Under these credit facilities, we had RMB183.2 million (US$25.8 million) as guarantee for the issuance of notes payable, and RMB107.2 million (US$15.1 million) for the issuance of letters of guarantee to our suppliers, so as of December 31, 2023, we had RMB 2,309.7 million (US$325.3 million) available for future borrowing under these credit facilities. 124 Table of Contents We also pledged cash of RMB202.8 million (US$28.6 million) to banks in relation to bank guarantees issued on behalf of us, deposit required by our business partners or security for issuance of commercial acceptance notes that mainly relate to purchase of inventories as of December 31, 2023.
GAAP performance measures is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ ​ (in thousands) Income from operations 558,677 7,021 33,287 4,827 Add: Share-based compensation expenses 108,440 196,547 142,381 20,643 Amortization of intangible assets resulting from business acquisition 1,564 20,536 39,431 5,717 Acquisition-related expenses ​ — ​ — ​ 13,694 ​ 1,985 Impairment of goodwill ​ — ​ — ​ 13,155 ​ 1,907 Loss on variance from expected contingent acquisition payment ​ — ​ — ​ 9,495 ​ 1,377 Cancellation fees of repurchased ADSs and returned ADSs ​ — ​ — ​ 4,650 ​ 674 Non-GAAP income from operations 668,681 224,104 256,093 37,130 ​ ​ ​ ​ ​ Net income (loss) 426,534 (205,963) (610,374) (88,495) Add: Share-based compensation expenses 108,440 196,547 142,381 20,643 Amortization of intangible assets resulting from business acquisition 1,564 20,536 39,431 5,717 Acquisition-related expenses ​ — ​ — ​ 13,694 ​ 1,985 Impairment of goodwill and investments ​ — ​ — ​ 21,555 ​ 3,125 Loss on variance from expected contingent acquisition payment ​ — ​ — ​ 9,495 ​ 1,377 Cancellation fees of repurchased ADSs and returned ADSs ​ — ​ — ​ 4,650 ​ 674 Fair value loss on derivative liabilities ​ — ​ — ​ 364,758 ​ 52,885 Loss on disposal of subsidiaries and investment in equity investee ​ — ​ — ​ 107,032 ​ 15,518 Unrealized investment loss ​ — ​ 209,956 ​ 97,827 ​ 14,184 Less: Tax effect of amortization of intangible assets resulting from business acquisition (392) (3,686) (7,880) (1,142) Non-GAAP net income 536,146 217,390 182,569 26,471 ​ ​ ​ ​ ​ Net income (loss) attributable to ordinary shareholders of Baozun Inc. 425,992 (219,830) (653,290) (94,717) Add: Share-based compensation expenses 108,440 196,547 142,381 20,643 Amortization of intangible assets resulting from business acquisition 796 15,574 30,076 4,361 Acquisition-related expenses ​ — ​ — ​ 13,694 ​ 1,985 Impairment of goodwill and investments ​ — ​ — ​ 21,555 ​ 3,125 Loss on variance from expected contingent acquisition payment ​ — ​ — ​ 9,495 ​ 1,377 Cancellation fees of repurchased ADSs and returned ADSs ​ — ​ — ​ 4,650 ​ 674 Fair value loss on derivative liabilities ​ — ​ — ​ 364,758 ​ 52,885 Loss on disposal of subsidiaries and investment in equity investee ​ — ​ — ​ 107,032 ​ 15,518 Unrealized investment loss ​ — ​ 209,956 ​ 97,827 ​ 14,184 Less: Tax effect of amortization of intangible assets resulting from business acquisition (200) (2,645) (5,972) (866) Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. 535,028 199,602 132,206 19,169 ​ ​ ​ ​ ​ Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS: ​ ​ ​ ​ Basic 8.57 2.77 2.16 0.31 Diluted 8.40 2.72 2.13 0.31 ​ ​ ​ ​ ​ Weighted average shares used in calculating net income (loss) ​ ​ ​ ​ Basic 187,322,781 216,370,290 183,274,855 183,274,855 Diluted 190,988,171 216,370,290 185,897,231 185,897,231 ​ 118 Table of Contents B.
(219,830) (653,290) (278,422) (39,215) Add: Share-based compensation expenses 196,547 142,381 103,449 14,570 Amortization of intangible assets resulting from business acquisition 15,574 30,076 24,206 3,409 Acquisition-related expenses ​ — ​ 13,694 ​ 12,171 ​ 1,714 Impairment of goodwill and investments ​ — ​ 21,555 ​ 35,212 ​ 4,960 Loss on variance from expected contingent acquisition payment ​ — ​ 9,495 ​ — ​ — Cancellation fees of repurchased ADSs and returned ADSs ​ — ​ 4,650 ​ — ​ — Fair value loss (gain) on derivative liabilities ​ — ​ 364,758 ​ (24,515) ​ (3,453) Loss (gain) on disposal of subsidiaries and investment in equity investee ​ — ​ 107,032 ​ (652) ​ (92) Unrealized investment loss ​ 209,956 ​ 97,827 ​ 68,031 ​ 9,582 Less: Tax effect of amortization of intangible assets resulting from business acquisition (2,645) (5,972) (4,569) (644) Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. 199,602 132,206 (65,089) (9,169) ​ ​ ​ ​ ​ Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS: ​ ​ ​ ​ Basic 2.77 2.16 (1.09) (0.15) Diluted 2.72 2.13 (1.09) (0.15) ​ ​ ​ ​ ​ Weighted average shares used in calculating net income ​ ​ ​ ​ Basic 216,370,290 183,274,855 178,549,849 178,549,849 Diluted 216,370,290 185,897,231 178,549,849 178,549,849 ​ B.
In 2020, the principal items accounting for the changes in operating assets and liabilities were a decrease in accounts payable of RMB450.8 million, an increase in inventories of RMB237.7 million, an increase in operating lease liabilities of RMB87.7 million and a decrease in income tax payables of RMB9.4 million, partially offset by an increase in accounts receivable of RMB400.1 million, an increase in notes payable of RMB290.1 million, an increase in accrued expenses and other current liabilities of RMB392.8 million, an increase in operating lease right-of-use assets of RMB84.2 million and an increase in prepayments and other current assets of RMB50.5 million.
In 2023, the principal items accounting for the changes in operating assets and liabilities were an increase in operating lease right-of-use assets of RMB143.8 million (US$20.3 million), an increase in other non-current assets of RMB21.7 million (US$3.1 million), an increase in advance to suppliers of RMB65.9 million (US$9.3 million), a decrease in accrued expenses and other current liabilities of RMB14.0 million (US$2.0 million), a decrease in accounts payables of RMB133.5 million (US$18.8 million), and an increase in amounts due from related parties of RMB4.7 million (US$0.7 million),partially offset by a decrease in operating lease liabilities of RMB144.2 million (US$20.3 million), an increase in prepayments and other non-current assets of RMB10.9 million (US$1.5 million), an increase in tax payables of RMB27.4 million (US$3.9 million), an increase in amounts due to related party of RMB2.4 million(US$0.3 million), an increase in accounts receivable of RMB226.9 million (US$32.0 million), an increase in notes payable of RMB18.8 million (US$2.6 million), and a decrease in inventories of RMB33.8 million(US$4.8 million).
Under the distribution model, we generally receive funds from the e-commerce platforms within no more than two weeks after online consumers have confirmed receipt of goods. As of December 31, 2020, 2021 and 2022, our accounts receivable amounted to RMB2,189.0 million, RMB2,260.9 million and RMB2,292.7 million (US$332.4 million), respectively.
Our accounts receivable mainly represent amounts due from customers and consumers and are recorded net of allowance for doubtful accounts. Under the distribution model, we generally receive funds from the e-commerce platforms within no more than two weeks after online consumers have confirmed receipt of goods.

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Item 6. [Reserved]

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

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On May 5, 2015, we adopted our 2015 Plan, which was further amended in July 2016. As of December 31, 2022, the maximum number of shares which may be issued pursuant to all outstanding awards under the 2015 Plan was 2,687,777. On November 1, 2022, the 2014 Plan and the 2015 Plan were terminated and replaced by the 2022 Plan.
On May 5, 2015, we adopted our 2015 Plan, which was further amended in July 2016. As of December 31, 2023, the maximum number of shares which may be issued pursuant to all outstanding awards under the 2015 Plan was 2,687,777. On November 1, 2022, the 2014 Plan and the 2015 Plan were terminated and replaced by the 2022 Plan.
A director will be removed from office automatically if the director (i) dies, becomes bankrupt or makes any arrangement or composition with his creditors, (ii) is found to be or becomes of unsound mind, (iii) resigns his office by notice in writing to us, (iv) without special leave of absence from the board of directors, is absent from three consecutive meetings of the board of directors and the board of directors resolves that his office be vacated, or (v) if he shall be removed from office pursuant to our memorandum and articles of association or the Companies Act. 132 Table of Contents Employment Agreements We have entered into employment agreements with each of our executive officers.
A director will be removed from office automatically if the director (i) dies, becomes bankrupt or makes any arrangement or composition with his creditors, (ii) is found to be or becomes of unsound mind, (iii) resigns his office by notice in writing to us, (iv) without special leave of absence from the board of directors, is absent from three consecutive meetings of the board of directors and the board of directors resolves that his office be vacated, or (v) if he shall be removed from office pursuant to our memorandum and articles of association or the Companies Act. 138 Table of Contents Employment Agreements We have entered into employment agreements with each of our executive officers.
The shares which may be issued pursuant to the awards under the 2022 Plan shall be Class A ordinary shares. As of December 31, 2022, the number of shares which may be issued pursuant to all outstanding awards under the 2022 Plan was 6,595,577. Key Terms of Share Incentive Plans Types of Awards.
The shares which may be issued pursuant to the awards under the 2022 Plan shall be Class A ordinary shares. As of December 31, 2023, the number of shares which may be issued pursuant to all outstanding awards under the 2022 Plan was 6,595,577. Key Terms of Share Incentive Plans Types of Awards.
Unless terminated earlier, the Share Incentive Plans will expire and no further awards may be granted after the tenth anniversary of the shareholders’ approval of the Share Incentive Plans, respectively. 128 Table of Contents The following table summarizes, as of December 31, 2022, the outstanding options that we granted to our directors, executive officers, and other individuals as a group under our Share Incentive Plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares ​ ​ ​ ​ ​ Underlying ​ Exercise Price ​ ​ ​ ​ Name Outstanding Options (US$/Share) Date of Grant Date of Expiration Junhua Wu 1,732,674 0.0136; 0.0001 Various dates from August 29, 2014 to February 6, 2015 Various dates from August 28, 2024 to February 5, 2025 Bin Yu * 0.0001 May 20, 2015 May 19, 2025 Other individuals as a group ​ 119,796 ​ 0.0136; 1.5 ​ various dates from January 30, 2010 to February 6, 2015 ​ various dates from January 29, 2020 to February 5, 2025 * Upon exercise of all options granted and vesting of all restricted share units, would beneficially own less than 1% of our outstanding ordinary shares.
Unless terminated earlier, the Share Incentive Plans will expire and no further awards may be granted after the tenth anniversary of the shareholders’ approval of the Share Incentive Plans, respectively. 134 Table of Contents The following table summarizes, as of December 31, 2023, the outstanding options that we granted to our directors, executive officers, and other individuals as a group under our Share Incentive Plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares ​ ​ ​ ​ ​ Underlying ​ Exercise Price ​ ​ ​ ​ Name Outstanding Options (US$/Share) Date of Grant Date of Expiration Junhua Wu ​ 1,732,674 ​ 0.0136; 0.0001 Various dates from August 29,2014 to February 6, 2015 ​ Various dates from August 28, 2024 to February 5, 2025 Bin Yu ​ * ​ 0.0001 May 20, 2015 ​ May 19, 2025 Other individuals as a group ​ 119,796 ​ 0.0136; 1.5 ​ various dates from January 30, 2010 to February 6, 2015 ​ various dates from January 29, 2020 to February 5, 2025 * Upon exercise of all options granted and vesting of all restricted share units, would beneficially own less than 1% of our outstanding ordinary shares.
Qiu worked as a technical and solution architect and held technical management positions in various multinational companies, including NCR (Shanghai) Technology Services Ltd., China Hewlet-Packard Co., Ltd. (HP China) and Sun Microsystems (China) Limited. Mr. Qiu obtained his bachelor’s degree in electronic engineering from Tsinghua University in July 1992 in Beijing, the PRC. 124 Table of Contents Mr.
Qiu worked as a technical and solution architect and held technical management positions in various multinational companies, including NCR (Shanghai) Technology Services Ltd., China Hewlet-Packard Co., Ltd. (HP China) and Sun Microsystems (China) Limited. Mr. Qiu obtained his bachelor’s degree in electronic engineering from Tsinghua University in July 1992 in Beijing, the PRC. 130 Table of Contents Mr.
On May 30, 2014, we adopted our 2014 Plan to roll over the options granted under Shanghai Baozun Plan with the same amount, terms and vesting schedule. As of December 31, 2022, the maximum number of shares which may be issued pursuant to all outstanding awards under the 2014 Plan was 1,887,470.
On May 30, 2014, we adopted our 2014 Plan to roll over the options granted under Shanghai Baozun Plan with the same amount, terms and vesting schedule. As of December 31, 2023, the maximum number of shares which may be issued pursuant to all outstanding awards under the 2014 Plan was 1,887,470.
The following summarizes, as of December 31, 2022, the options and restricted share units that we granted to our directors and executive officers and to other individuals as a group under our Share Incentive Plans to attract and retain the best available personnel, to provide additional incentives to selected employees, directors, and consultants and to promote the success of our business.
The following summarizes, as of December 31, 2023, the options and restricted share units that we granted to our directors and executive officers and to other individuals as a group under our Share Incentive Plans to attract and retain the best available personnel, to provide additional incentives to selected employees, directors, and consultants and to promote the success of our business.
The board, acting on the recommendation of our compensation committee, may determine the remuneration to be paid to non-employee directors, being our directors other than our executive directors, namely Mr. Satoshi Okada, Ms. Yang Liu, Mr. Yiu Pong Chan, Ms. Bin Yu, Mr. Steve Hsien-Chieng Hsia and Mr. Benjamin Changqing Ye.
The board, acting on the recommendation of our compensation committee, may determine the remuneration to be paid to non-employee directors, being our directors other than our executive directors, namely Mr. Satoshi Okada, Ms. Yang Liu, Mr. Yiu Pong Chan, Mr. Steve Hsien-Chieng Hsia and Mr. Benjamin Changqing Ye.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares, as of March 31, 2023, by: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% 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, 2024, by: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% of our ordinary shares.
(11) Represents Class A ordinary shares and Class B ordinary shares held by all of our directors and executive officers as a group and ordinary shares issuable upon exercise of options and vesting of restricted share units within 60 days of March 31, 2023 held by all of our directors and executive officers as a group.
(11) Represents Class A ordinary shares and Class B ordinary shares held by all of our directors and executive officers as a group and ordinary shares issuable upon exercise of options and vesting of restricted share units within 60 days of March 31, 2024 held by all of our directors and executive officers as a group.
The 2014 Plan and the 2015 Plan continue to govern all awards granted prior to November 1, 2022 but no new awards shall be granted under the 2014 Plan and the 2015 Plan following November 1, 2022. 127 Table of Contents 2022 Plan On November 1, 2022, we adopted our 2022 Plan.
The 2014 Plan and the 2015 Plan continue to govern all awards granted prior to November 1, 2022 but no new awards shall be granted under the 2014 Plan and the 2015 Plan following November 1, 2022. 133 Table of Contents 2022 Plan On November 1, 2022, we adopted our 2022 Plan.
(1) Represents ten Class A ordinary shares and 9,410,369 Class B ordinary shares held by Jesvinco Holdings Limited, a company incorporated in British Virgin Islands wholly owned by Mr. Qiu, 850,507 Class A ordinary shares beneficially owned by Mr.
(1) Represents ten Class A ordinary shares and 9,410,369 Class B ordinary shares held by Jesvinco Holdings Limited, a company incorporated in British Virgin Islands wholly owned by Mr. Qiu, 850,807 Class A ordinary shares beneficially owned by Mr.
Board Diversity Board Diversity Matrix (As of March 31, 2023) Country of Principal Executive Offices: People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 8 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 1 LGBTQ+ 0 Did Not Disclose Demographic Background 0 ​ Duties of Directors Under Cayman Islands law, our directors have a fiduciary duty to act honestly, in good faith and with a view to our best interests.
Board Diversity Board Diversity Matrix (As of March 31, 2024) Country of Principal Executive Offices: People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 7 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 6 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 1 LGBTQ+ 0 Did Not Disclose Demographic Background 0 ​ Duties of Directors Under Cayman Islands law, our directors have a fiduciary duty to act honestly, in good faith and with a view to our best interests.
Xie has extensive experience in enterprise applications and consumer internet industries. He received his bachelor’s degree in mathematics from the University of North Carolina at Chapel Hill in May 1997 and master’s degree in computer sciences from the University of Wisconsin-Madison in May 2000 in the U.S. 126 Table of Contents B.
Xie has extensive experience in enterprise applications and consumer internet industries. He received his bachelor’s degree in mathematics from the University of North Carolina at Chapel Hill in May 1997 and master’s degree in computer sciences from the University of Wisconsin-Madison in May 2000 in the U.S. B.
Prior to Alibaba Group, Ms. Yang Liu worked at IBM from September 2008 to September 2014 and was responsible for implementing cross-industry CRM solutions for IBM’s global business consulting division, and she supported leading global brands in delivering customer-centric digital transformation projects. Ms.
Yang Liu worked at IBM from September 2008 to September 2014 and was responsible for implementing cross-industry CRM solutions for IBM’s global business consulting division, and she supported leading global brands in delivering customer-centric digital transformation projects. Ms.
(10) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2023 held by Mr. Xie.
(10) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr. Xie.
The nominating and corporate governance committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors, or for appointment to fill any vacancy; 131 Table of Contents ● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect 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 our board of directors on all matters of corporate governance and on any corrective action to be taken; 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 assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. 137 Table of Contents The nominating and corporate governance committee is responsible for, among other things: ● identifying and recommending nominees for election or re-election to our board of directors, or for appointment to fill any vacancy; ● reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; ● identifying and recommending to our board the directors to serve as members of committees; ● advising the board periodically with respect 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 our board of directors on all matters of corporate governance and on any corrective action to be taken; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Board Practices Board of Directors Our board of directors consists of eight directors. A director is not required to hold any shares in our company by way of qualification.
Board Practices Board of Directors Our board of directors consists of seven directors. A director is not required to hold any shares in our company by way of qualification.
Wu and Casvendino Holdings Limited, respectively. (3) Represents 26,469,422 Class A ordinary shares held by Alibaba Investment Limited, a company wholly owned by Alibaba Group Holding Limited. The business address for Ms. Liu is No. 969 West Wenyi Road, Hangzhou, Zhejiang Province, China. Ms. Liu disclaims beneficial ownership of our ordinary shares held by Alibaba Investment Limited.
(3) Represents 26,469,422 Class A ordinary shares held by Alibaba Investment Limited, a company wholly owned by Alibaba Group Holding Limited. The business address for Ms. Liu is No. 969 West Wenyi Road, Hangzhou, Zhejiang Province, China. Ms. Liu disclaims beneficial ownership of our ordinary shares held by Alibaba Investment Limited.
Vincent Wenbin Qiu, and 1,975,575 Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2023 held by Mr. Qiu. (2) Represents 3,890,369 Class B ordinary shares held by Casvendino Holdings Limited, a company incorporated in the British Virgin Islands wholly owned by Mr.
Vincent Wenbin Qiu, and 2,431,059 Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr. Qiu. (2) Represents 3,890,369 Class B ordinary shares held by Casvendino Holdings Limited, a company incorporated in the British Virgin Islands wholly owned by Mr.
He is currently a fellow member of the Charted Institute of Management Accountant. Mr. Peter Tao Liang currently serves as our senior vice president, in charge of operation of logistics and supply chain group and operation management center. Mr. Liang rejoined us in November 2019. Mr.
He is currently a fellow member of the Charted Institute of Management Accountant. Mr. Peter Tao Liang currently serves as our senior vice president, in charge of operation of logistics and supply chain group, operation management center and creative content to commerce business unit. Mr. Liang rejoined us in November 2019. Mr.
(14) Represents 3,890,369 Class B ordinary shares and 2,358,957 Class A ordinary shares issuable upon exercise of options and vesting of restricted share units within 60 days of March 31, 2023 held by Casvendino Holdings Limited, a company incorporated in British Virgin Islands wholly owned by Mr. Wu.
(14) Represents 3,890,369 Class B ordinary shares and 771,033 Class A ordinary shares issuable upon exercise of options and vesting of restricted share units within 60 days of March 31, 2024 held by Casvendino Holdings Limited, a company incorporated in British Virgin Islands wholly owned by Mr. Wu.
Our sixth amended and restated memorandum and articles of association permit indemnification of officers and directors for losses, damages, costs and expenses incurred in or about their conduct of our business or affairs (including as a result of any mistake or judgment) or in the execution or discharge of his duties, powers, authorities or discretions unless such losses or damages arise from dishonesty, fraud or wilful default of such directors or officers.
Our sixth amended and restated memorandum and articles of association provides for the indemnification of officers and directors for against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained in or about their conduct of our business or affairs (including as a result of any mistake or judgment) or in the execution or discharge of his duties, powers, authorities or discretions unless such losses or damages arise from dishonesty, fraud or wilful default of such directors or officers.
These shares, however, are not included in the computation of the percentage ownership of any other person. 134 Table of Contents Except as otherwise noted, the address of each person listed in the following table is c/o Baozun Inc., No. 1-9, Lane 510, West Jiangchang Road, Shanghai 200436, the People’s Republic of China. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially ​ ​ Owned as of March 31, 2023 ​ ​ ​ Percentage Percentage ​ ​ Class A ​ Class B ​ of total ​ of aggregate ​ ​ ordinary ​ ordinary ​ ordinary ​ voting Name ​ shares ​ shares ​ shares ​ power** Directors and Executive Officers: ​ Vincent Wenbin Qiu (1) 2,826,092 ​ 9,410,369 ​ 6.8 % 32.4 % Junhua Wu (2) 2,405,709 ​ 3,890,369 ​ 3.5 % 13.8 % Yang Liu (3) ​ 26,469,422 ​ — ​ 14.9 % 8.9 % Satoshi Okada (4) * ​ — ​ * ​ * ​ Yiu Pong Chan * ​ — ​ * ​ * ​ Bin Yu (5) * ​ — ​ * ​ * ​ Steve Hsien-Chieng Hsia (6) * ​ — ​ * ​ * ​ Benjamin Changqing Ye (7) * ​ — ​ * ​ * ​ Arthur Yu (8) * ​ — ​ * ​ * ​ Peter Tao Liang (9) ​ * ​ — ​ * ​ * ​ Jason Nan Xie (10) ​ * ​ — ​ * ​ * ​ All our Directors and Executive Officers as a group (11) 32,344,062 ​ 13,300,738 ​ 25.0 % 54.6 % ​ ​ ​ Principal Shareholders: ​ Alibaba Investment Limited (12) 26,469,422 ​ — ​ 14.9 % 8.9 % Jesvinco Holdings Limited (13) 10 ​ 9,410,369 ​ 5.3 % 31.6 % Casvendino Holdings Limited (14) 2,358,957 3,890,369 ​ 3.5 % 13.8 % * Less than 1% ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A ordinary shares and Class B ordinary shares as a single class.
These shares, however, are not included in the computation of the percentage ownership of any other person. 140 Table of Contents Except as otherwise noted, the address of each person listed in the following table is c/o Baozun Inc., No. 1-9, Lane 510, West Jiangchang Road, Shanghai 200436, the People’s Republic of China. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially ​ ​ Owned as of March 31, 2024 ​ ​ ​ Percentage Percentage ​ ​ Class A ​ Class B ​ of total ​ of aggregate ​ ​ ordinary ​ ordinary ​ ordinary ​ voting Name ​ shares ​ shares ​ shares (%) ​ power (%)** Directors and Executive Officers: Vincent Wenbin Qiu (1) 3,281,876 ​ 9,410,369 ​ 6.8 ​ 31.9 Junhua Wu (2) 2,550,459 ​ 3,890,369 ​ 3.5 ​ 13.6 Yang Liu (3) ​ 26,469,422 ​ — ​ 14.4 ​ 8.7 Satoshi Okada (4) * ​ — ​ * ​ * Yiu Pong Chan (5) * ​ — ​ * ​ * Steve Hsien-Chieng Hsia (6) * ​ — ​ * ​ * Benjamin Changqing Ye (7) * ​ — ​ * ​ * Arthur Yu (8) * ​ — ​ * ​ * Peter Tao Liang (9) ​ * ​ — ​ * ​ * Jason Nan Xie (10) ​ * ​ — ​ * ​ * All our Directors and Executive Officers as a group (11) 33,452,676 ​ 13,300,738 ​ 24.9 ​ 54.2 ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ Alibaba Investment Limited (12) 26,469,422 ​ — ​ 14.4 ​ 8.7 Jesvinco Holdings Limited (13) 10 ​ 9,410,369 ​ 5.1 ​ 31.1 Casvendino Holdings Limited (14) 771,033 3,890,369 ​ 2.5 ​ 13.1 * Less than 1% ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A ordinary shares and Class B ordinary shares as a single class.
To our knowledge, as of March 31, 2023, a total of 112,963,989 (including 0 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans and the shares repurchased by us from the open market under our share repurchase program) Class A ordinary shares are held by one record holder in the United States, i.e., JPMorgan Chase Bank, N.A., the depositary of our ADS program.
To our knowledge, as of March 31, 2024, a total of 132,766,266 (including 3,239,277 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans and the shares repurchased by us from the open market under our share repurchase program) Class A ordinary shares are held by one record holder in the United States, i.e., JPMorgan Chase Bank, N.A., the depositary of our ADS program.
Compensation Committee . Our compensation committee consists of Mr. Yiu Pong Chan, Mr. Steve Hsien-Chieng Hsia and Ms. Bin Yu. Mr. Yiu Pong Chan is the chairman of our compensation committee. We have determined that Mr. Yiu Pong Chan, Mr. Steve Hsien-Chieng Hsia and Ms. Bin Yu satisfy the “independence” requirements of the Nasdaq Stock Market Rules.
Compensation Committee . Our compensation committee consists of Mr. Yiu Pong Chan, Mr. Steve Hsien-Chieng Hsia and Mr. Benjamin Changqing Ye. Mr. Yiu Pong Chan is the chairman of our compensation committee. We have determined that Mr. Yiu Pong Chan, Mr. Steve Hsien-Chieng Hsia and Mr. Benjamin Changqing Ye satisfy the “independence” requirements of the Nasdaq Stock Market Rules.
(6) Represents Class A ordinary shares issuable upon vesting of restricted share units and in the form of ADS held by Mr. Hsia. 135 Table of Contents (7) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2023 held by Mr. Ye.
(6) Represents Class A ordinary shares issuable upon vesting of restricted share units and in the form of ADS held by Mr. Hsia. (7) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr.
As of December 31, 2022, approximately 70% of our information technology staff had bachelor’s or higher degrees. We have streamlined our R&D team to improve efficiency.
As of December 31, 2023, approximately 76.0% of our information technology staff had bachelor’s or higher degrees. We have streamlined our R&D team to improve efficiency.
(8) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2023 held by Mr. Yu. (9) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2023 held by Mr. Liang.
Ye. 141 Table of Contents (8) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr. Yu. (9) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr. Liang.
Benjamin Changqing Ye satisfy the “independence” requirements of the Nasdaq Stock Market Rules and Rule 10A-3 under the Exchange Act. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Steve Hsien-Chieng Hsia satisfy the “independence” requirements of the Nasdaq Stock Market Rules and Rule 10A-3 under the Exchange Act. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Mr. Steve Hsien-Chieng Hsia, Mr. Yiu Pong Chan and Ms. Bin Yu. Mr. Steve Hsien-Chieng Hsia is the chairperson of our nominating and corporate governance committee. We have determined that Mr. Steve Hsien-Chieng Hsia, Mr. Yiu Pong Chan and Ms.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Mr. Steve Hsien-Chieng Hsia, Mr. Yiu Pong Chan and Mr. Benjamin Changqing Ye. Mr. Steve Hsien-Chieng Hsia is the chairperson of our nominating and corporate governance committee. We have determined that Mr. Steve Hsien-Chieng Hsia, Mr. Yiu Pong Chan and Mr.
Benjamin Changqing Ye. Ms. Bin Yu is the chairman of our audit committee. Ms. Bin Yu is the audit committee financial expert under the applicable rules of the SEC. We have determined that Ms. Bin Yu, Mr. Yiu Pong Chan and Mr.
Yiu Pong Chan and Mr. Steve Hsien-Chieng Hsia. Mr. Benjamin Changqing Ye is the chairman of our audit committee and the audit committee financial expert under the applicable rules of the SEC. We have determined that Mr. Benjamin Changqing Ye, Mr. Yiu Pong Chan and Mr.
Mr. Chan holds a master’s degree of commerce in accounting and finance with first-class honor in April 1999 and a bachelor’s degree of commerce in May 1996 from the University of Auckland. Ms. Bin Yu has served as our independent director since May 2015. Ms.
Mr. Chan holds a master’s degree of commerce in accounting and finance with first-class honor in April 1999 and a bachelor’s degree of commerce in May 1996 from the University of Auckland. Mr. Steve Hsien-Chieng Hsia has served as our independent director since May 2016. Mr.
The following table provides a breakdown of our employees as of December 31, 2022 by function: ​ ​ ​ ​ Function Number Front-end (1) 5,405 Warehouse and Logistics ​ 1,209 Information technology 691 Back-end (2) 283 Total 7,588 (1) Front-end functions include store management and operations, customer service, business development, design and digital marketing. 133 Table of Contents (2) Back-end functions include administration, finance, legal, internal audit and sales operation team.
The following table provides a breakdown of our employees as of December 31, 2023 by function: ​ ​ ​ ​ Function Number Front-end (1) 5,395 Warehouse and Logistics ​ 1,011 Information technology 867 Back-end (2) 554 Total 7,827 (1) Front-end functions include store management and operations, customer service, business development, design and digital marketing. 139 Table of Contents (2) Back-end functions include administration, finance, legal, internal audit and sales operation team.
The following table summarizes, as of the date of December 31, 2022, the outstanding restricted share units that we granted to our directors, executive officers, and other individuals as a group under our Share Incentive Plans. ​ ​ ​ ​ ​ ​ ​ Name Restricted Share Unit Date of Grant Date of Expiration Arthur Yu 1,816,800 ​ Various dates from September 23, 2020 to December 2, 2022 ​ Various dates from September 22, 2030 to December 1, 2032 Vincent Wenbin Qiu ​ 1,025,550 ​ Various dates from August 25, 2019 to August 20, 2021 ​ Various dates from August 24, 2029 to August 19, 2031 Junhua Wu ​ 460,500 ​ Various dates from August 25, 2019 to August 20, 2022 ​ Various dates from August 24, 2029 to August 19, 2032 Peter Tao Liang ​ * ​ Various dates from February 17, 2020 to December 2, 2022 ​ Various dates from February 16, 2030 to December 1, 2032 Jason Nan Xie ​ * ​ Various dates from February 17, 2020 to December 2, 2022 ​ Various dates from February 16, 2030 to December 1, 2032 Bin Yu ​ * ​ August 20, 2022 ​ August 19, 2031 Steve Hsien-Chieng Hsia ​ * ​ August 20, 2022 ​ August 19, 2031 Yiu Pong Chan ​ * ​ August 20, 2022 ​ August 19, 2031 Benjamin Changqing Ye ​ * ​ August 20, 2022 ​ August 19, 2031 Other individuals as a group ​ 2,720,400 ​ Various dates from March 13, 2020 to December 2, 2022 ​ Various dates from March 12, 2030 to December 1, 2032 * Upon exercise of all options granted and vesting of all restricted share units, would beneficially own less than 1% of our outstanding ordinary shares. 129 Table of Contents C.
The following table summarizes, as of the date of December 31, 2023, the outstanding restricted share units that we granted to our directors, executive officers, and other individuals as a group under our Share Incentive Plans. ​ ​ ​ ​ ​ ​ ​ Name Restricted Share Unit Date of Grant Date of Expiration Arthur Yu ​ 1,527,480 ​ Various dates from September 23, 2020 to April 1, 2023 ​ Various dates from September 22, 2020 to March31, 2033 Vincent Wenbin Qiu ​ 1,348,992 ​ April 1, 2023 ​ March 31, 2033 Junhua Wu ​ 297,000 ​ Various dates from March 13, 2020 to August 20, 2021 ​ Various dates from March 12, 2030 to August 19, 2031 Peter Tao Liang ​ * ​ Various dates from February 17, 2020 to April 1, 2023 ​ Various dates from February 16, 2030 to March 31, 2033 Jason Nan Xie ​ * ​ Various dates from February 17, 2020 to April 1, 2023 ​ Various dates from February 16, 2030 to March 31, 2033 Bin Yu ​ * ​ August 20, 2021 ​ August 19, 2031 Steve Hsien-Chieng Hsia ​ * ​ August 20, 2021 ​ August 19, 2031 Yiu Pong Chan ​ * ​ August 20, 2021 ​ August 19, 2031 Benjamin Changqing Ye ​ * ​ August 20, 2021 ​ August 19, 2031 Other individuals as a group ​ 2,720,400 ​ Various dates from March 13, 2020 to October 10, 2023 ​ Various dates from March 12, 2030 to October 9, 2033 * Upon exercise of all options granted and vesting of all restricted share units, would beneficially own less than 1% of our outstanding ordinary shares. 135 Table of Contents C.
The calculations in the table below assume there are 177,941,955 ordinary shares (including 164,641,217 Class A ordinary shares, excluding the 0 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans and the shares repurchased by us from the open market under our share repurchase program, and 13,300,738 Class B ordinary shares) outstanding as of March 31, 2023.
The calculations in the table below assume there are 183,229,592 ordinary shares (including 169,928,854 Class A ordinary shares, excluding 3,239,277 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our share incentive plans and the shares repurchased by us from the open market under our share repurchase program, and 13,300,738 Class B ordinary shares) outstanding as of March 31, 2024.
(4) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2023 held by Mr. Okada. (5) Represents Class A ordinary shares issuable upon exercise of options and vesting of restricted share units within 60 days of March 31, 2023 held by Ms. Yu.
(4) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr. Okada. (5) Represents Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr. Chan.
Committee of the Board of Directors We established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. 130 Table of Contents Audit Committee . Our audit committee consists of Ms. Bin Yu, Mr. Yiu Pong Chan and Mr.
Committees of the Board of Directors We established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. 136 Table of Contents Audit Committee . Our audit committee consists of Mr. Benjamin Changqing Ye, Mr.
Satoshi Okada ​ 64 ​ Director ​ October 2014 ​ 2014 ​ Mr. Yiu Pong Chan ​ 50 ​ Independent Director ​ May 2015 ​ 2015 ​ Ms. Bin Yu ​ 53 ​ Independent Director ​ May 2015 ​ 2015 ​ Mr. Steve Hsien-Chieng Hsia ​ 59 ​ Independent Director ​ May 2016 ​ 2016 ​ Mr.
Satoshi Okada ​ 64 ​ Director ​ October 2014 ​ 2014 ​ Mr. Yiu Pong Chan ​ 50 ​ Independent Director ​ May 2015 ​ 2015 ​ Mr. Steve Hsien-Chieng Hsia ​ 59 ​ Independent Director ​ May 2016 ​ 2016 ​ Mr. Benjamin Changqing Ye ​ 52 ​ Independent Director ​ May 2016 ​ 2016 ​ Mr.
Qiu currently serves as chairman of our board of directors and our chief executive officer. Mr. Qiu also has served as a director of several companies in which we have invested. Prior to founding our company, Mr.
Qiu also has served as a director of several companies in which we have invested. Prior to founding our company, Mr.
Wu, 405 Class A ordinary shares beneficially owned by Mr. Wu, and 1,732,674 Class A ordinary shares issuable upon exercise of options within 60 days of March 31, 2023 held by Casvendino Holdings Limited, and 46,347 and 626,283 Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2023 held by Mr.
Wu, 1,733,079 Class A ordinary shares beneficially owned by Mr. Wu, and 46,437 and 771,033 Class A ordinary shares issuable upon vesting of restricted share units within 60 days of March 31, 2024 held by Mr. Wu and Casvendino Holdings Limited, respectively.
Hsia co-founded and served as chief executive officer of AGENDA Corporation, a digital marketing agency in Asia from February 1996 to 2013. Prior to AGENDA Corporation (formerly known as DeliriumCyberTouch Corporation and CyberTouch, respectively), Mr. Hsia co-founded NextWare, an enterprise software company in Malaysia and served as the managing director from 1991 to February 1996. Mr.
Prior to AGENDA Corporation (formerly known as DeliriumCyberTouch Corporation and CyberTouch, respectively), Mr. Hsia co-founded NextWare, an enterprise software company in Malaysia and served as the managing director from 1991 to February 1996. Mr. Hsia received his bachelor’s degree in computer science from the University of California, Berkeley in May 1987. 131 Table of Contents Mr.
In this role, she leads the promotion of digital brand transformation across a variety of industry verticals by leveraging Alibaba’s advanced data technologies, and promotes comprehensive Tmall ecological partnership capabilities that bring technology into best practices. In addition, Ms. Liu created the framework of Tmall consumer strategy methodology and widely applied it to common strategy standards.
Liu joined Alibaba Group in September 2014 and currently serves as the General Manager of Tmall-Business Growth center of Alibaba’s Taobao & Tmall Group. In this role, she leads the promotion of digital brand transformation across a variety of industry verticals by leveraging Alibaba’s advanced data technologies, and promotes comprehensive Tmall ecological partnership capabilities that bring technology into best practices.
Hsia has served as a director of Wearnes-Starchase Limited, a Singapore-based automobile dealership group, since November 2018. From 2011 to 2013, Mr. Hsia served as the Asia-Pacific chief operating officer of Wunderman Worldwide, LLC, a digital marketing agency under WPP, LLC, an advertising and media holding company. Mr.
Hsia served as the Asia-Pacific chief operating officer of Wunderman Worldwide, LLC, a digital marketing agency under WPP, LLC, an advertising and media holding company. Mr. Hsia co-founded and served as chief executive officer of AGENDA Corporation, a digital marketing agency in Asia from February 1996 to 2013.
The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.
Peter Tao Liang ​ 36 ​ Senior Vice President ​ November 2019 ​ 2014 ​ Mr. Jason Nan Xie ​ 49 ​ Vice President ​ December 2019 ​ 2019 ​ ​ Mr. Vincent Wenbin Qiu is our founder. Since the founding of our business in 2007, Mr.
Jason Nan Xie ​ 49 ​ Vice President ​ December 2019 ​ 2019 ​ ​ Mr. Vincent Wenbin Qiu is our founder. Since the founding of our business in 2007, Mr. Qiu currently serves as chairman of our board of directors and our chief executive officer. Mr.
Compensation In 2022, we accrued aggregate fees, salaries and benefits (excluding equity-based grants) of approximately RMB20,464.3 million (US$2,967.1 million) to our directors and executive officers as a group and granted an aggregate of 2,464,284 restricted share units to our directors and executive officers.
Compensation In 2023, we accrued aggregate fees, salaries and benefits (excluding equity-based grants) of approximately RMB18.1 million (US$2.6 million) to our directors and executive officers as a group and granted an aggregate of 2,116,200 restricted share units to our directors and executive officers. 132 Table of Contents We have neither set aside nor accrued any amount of cash to provide pension, retirement or other similar benefits to our officers and directors.
We had a total of 762, 794 and 691 information technology staff as of December 31, 2020, 2021 and 2022, respectively. The decrease in our employees was primarily due to our disposal of a loss-making subsidiary of our warehouse and supply chain businesses in the third quarter of 2022.
The decrease in our employees from 2021 to 2022 was primarily due to our disposal of a loss-making subsidiary of our warehouse and supply chain businesses in the third quarter of 2022. The increase in our employees from 2022 to 2023 was primarily due to related to Gap Shanghai, a subsidiary the Company acquired in the first quarter of 2023.
Employees As of December 31, 2022, we had 7,588 full-time employees, including 1,266 full-time employees from the acquired business entities in 2022. We had a total of 6,076 and 8,821 full-time employees as of December 31, 2020 and 2021, respectively.
Employees As of December 31, 2023, we had 7,827 full-time employees. We had a total of 8,821 and 7,588 full-time employees as of December 31, 2021 and 2022, respectively. We had a total of 794, 691 and 867 information technology staff as of December 31, 2021, 2022 and 2023, respectively.
Benjamin Changqing Ye ​ 52 ​ Independent Director ​ May 2016 ​ 2016 ​ Mr. Arthur Yu ​ 42 ​ Chief Financial Officer and President of BEC ​ Chief Financial Officer in December 2020 and President of BEC in December 2022 ​ 2020 ​ Mr.
Arthur Yu ​ 42 ​ Chief Financial Officer and President of BEC ​ Chief Financial Officer in December 2020 and President of BEC in December 2022 ​ 2020 ​ Mr. Peter Tao Liang ​ 36 ​ Senior Vice President ​ November 2019 ​ 2014 ​ Mr.
Hsia received his bachelor’s degree in computer science from the University of California, Berkeley in May 1987. Mr. Benjamin Changqing Ye has served as our independent director since May 2016. Mr.
Benjamin Changqing Ye has served as our independent director since May 2016. Mr.
She was a Certified Public Accountant in the United States admitted by the Accountancy Board of Ohio. 125 Table of Contents Mr. Steve Hsien-Chieng Hsia has served as our independent director since May 2016. Mr. Hsia has been the chief executive officer of Playnovate, Inc., an online STEAM education service provider in the U.S., since April 2020. Mr.
Hsia has been the chief executive officer of Playnovate, Inc., an online STEAM education service provider in the U.S., since April 2020. Mr. Hsia has served as a director of Wearnes-Starchase Limited, a Singapore-based automobile dealership group, since November 2018. From 2011 to 2013, Mr.
For options and restricted share units granted to our officers, directors and employees, see “ — B. Compensation — Share Incentive Plans.” ​
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. ​ For options and restricted share units granted to our officers, directors and employees, see “ — B. Compensation — Share Incentive Plans.” ​ F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. ​
Removed
Liu joined Alibaba Group in September 2014 and currently serves as a senior expert managing the consumer strategy center and partnership development center of Alibaba’s Tmall business group.
Added
In addition, Ms. Liu created the framework of Tmall consumer strategy methodology and widely applied it to common strategy standards. Prior to Alibaba Group, Ms.
Removed
Yu served as the chief financial officer of Lingochamp Information Technology (Shanghai) Co., Ltd., an AI technology driven education company, from September 2017 to January 2020. Ms. Yu has been a director of iDreamSky Technology Holdings Limited, a China-based digital entertainment platform operator listed on the Hong Kong Stock Exchange, since May 2018. Ms.
Added
Benjamin Changqing Ye satisfy the “independence” requirements of the Nasdaq Stock Market Rules.
Removed
Yu has been an independent director of GDS Holdings Limited, a colocation, managed hosting and managed cloud services provider primarily listed on The Nasdaq Stock Market and secondarily listed on the Hong Kong Stock Exchange, since November 2016. Ms.
Removed
Yu has been an independent director of Kuke Music Holdings Limited, a leading provider of classical music licensing, subscription and education services in China listed on the New York Stock Exchange, since January 2021. Ms.
Removed
Yu has been an independent director of ZERO2IPO HOLDINGS INC., an integrated service platform for equity investment industry listed on the Hong Kong Stock Exchange, since December 2020. In addition, Ms.
Removed
Yu served as an independent director and the audit committee chair of Tian Ge Interactive Holdings Limited, a live social video platform in China listed on the Hong Kong Stock Exchange, from June 2014 to January 2021. Ms.
Removed
Yu also served as chief financial officer of Innolight Technology Corporation, a high-speed optical transceiver supplier in China, from January 2015 to May 2016 and the chief financial officer of Star China International Media Limited, a company engaged in the entertainment TV programs business.
Removed
She previously served as the chief financial officer from 2012 to 2013, and the vice president of finance from 2011 to 2012, of Youku Tudou Inc.’s predecessor, Tudou Holdings Limited. Ms.
Removed
Yu obtained a master’s degree in education and a master’s degree in accounting from the University of Toledo in the United States in August 1998 and May 1999, respectively, and an EMBA degree from Tsinghua University and INSEAD in January 2013 in Beijing, the PRC.
Removed
We have neither set aside nor accrued any amount of cash to provide pension, retirement or other similar benefits to our officers and directors.
Removed
Bin Yu satisfy the “independence” requirements of the Nasdaq Stock Market Rules. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.

Item 7. Management's Discussion & Analysis

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

42 edited+4 added−1 removed7 unchanged
The balances with the related parties as of December 31, 2022 as disclosed above are all trade in nature. Transactions with Tsubasa Corporation In 2021, we repurchased 19,042,105 Class A ordinary shares from Tsubasa Corporation, one of our shareholders and a company wholly owned by Softbank Corp, at an aggregate purchase price of approximately US$105.0 million in privately negotiated transactions.
The balances with the related parties as of December 31, 2023 as disclosed above are all trade in nature. Transactions with Tsubasa Corporation In 2021, we repurchased 19,042,105 Class A ordinary shares from Tsubasa Corporation, one of our shareholders and a company wholly owned by Softbank Corp, at an aggregate purchase price of approximately US$105.0 million in privately negotiated transactions.
Organizational Structure — Contractual Arrangements with Shanghai Zunyi and Its Shareholders.” 136 Table of Contents Transactions and Agreements with Alibaba, Cainiao and AJ (Hangzhou) Network Technology Company Limited For official marketplace stores on Tmall operated by us, Tmall provides a wide range of services including platform support, pay-for-performance marketing, and display marketing services.
Organizational Structure — Contractual Arrangements with Shanghai Zunyi and Its Shareholders.” Transactions and Agreements with Alibaba, Cainiao and AJ (Hangzhou) Network Technology Company Limited For official marketplace stores on Tmall operated by us, Tmall provides a wide range of services including platform support, pay-for-performance marketing, and display marketing services.
In May 2021, Hangzhou Dajing Guangtong Network Technology Co., Ltd., or Dajing, became our related party as an associate. Dajing provides marketing and platform services to us. In 2021 and 2022, we incurred marketing and platform service fees in an amount of RMB665 thousand and RMB250 thousand (US$36.2 thousand) to Dajing. Transactions with Jiangsu Creaway Supply Chain Management Co., Ltd.
In May 2021, Hangzhou Dajing Guangtong Network Technology Co., Ltd., or Dajing, became our related party as an associate. Dajing provides marketing and platform services to us. In 2021, 2022 and 2023, we incurred marketing and platform service fees in an amount of RMB665 thousand, RMB250 thousand and nil to Dajing. Transactions with Jiangsu Creaway Supply Chain Management Co., Ltd.
As of December 31, 2022, amounts due from Pengtai Baozun were RMB2.0 million. Transactions with Shanghai Misako E-commerce Limited In October 2018, Shanghai Misako E-commerce Limited, or Misako, became our related party as an e-commerce joint venture. We provide store operation services to Misako.
As of December 31, 2023, amounts due from Pengtai Baozun were RMB2.0 million (US$0.3 million). Transactions with Shanghai Misako E-commerce Limited In October 2018, Shanghai Misako E-commerce Limited, or Misako, became our related party as an e-commerce joint venture. We provide store operation services to Misako.
Creaway Group provided logistics services and received logistics services to and from Baoleantone of RMB2.3 million (US$0.4 million) and RMB2.2 million (US$0.4 million) in 2021, respectively, and RMB2.2 million (US$0.3 million) and RMB4.3 million (US$0.6 million) in 2022, respectively.
Creaway Group provided logistics services and received logistics services to and from Baoleantone of RMB2.3 million (US$0.4 million) and RMB2.2 million (US$0.4 million) in 2021, respectively, RMB2.2 million (US$0.3 million) and RMB4.3 million (US$0.6 million) in 2022, respectively, and RMB1.4 million (US$0.2 million) and RMB2.9 million (US$0.4 million) in 2023, respectively.
Transactions with Hangzhou Baichen Technology Co., Ltd. In September 2020, Hangzhou Baichen Technology Co., Ltd., or Baichen, became our related party as an associate. Baichen provides marketing and platform services to us. In 2020, 2021 and 2022, we incurred marketing and platform service fees in an amount of RMB3.8 million, RMB6.2 million and RMB0.7 million (US$0.1 million) to Baichen, respectively.
In September 2020, Hangzhou Baichen Technology Co., Ltd., or Baichen, became our related party as an associate. Baichen provides marketing and platform services to us. In 2021, 2022 and 2023, we incurred marketing and platform service fees in an amount of RMB6.2 million, RMB0.7 million and RMB0.7 million (US$0.1 million) to Baichen, respectively.
Transactions with Changsha Benwei Fresh Food Brand Management Co., Ltd In December 2021, Changsha Benwei Fresh Food Brand Management Co., Ltd, became our related party as an associate. We provided store operation service to Benwei and generated service revenue of RMB 6.3 million(US$ 0.9 million) in 2022. Benwei provided marketing and platform service to us.
Transactions with Changsha Benwei Fresh Food Brand Management Co., Ltd In December 2021, Changsha Benwei Fresh Food Brand Management Co., Ltd, became our related party as an associate. We provided store operation service to Benwei and generated service revenue of RMB 6.3 million and RMB5.4 million (US$0.8 million) in 2022 and 2023. Benwei provided marketing and platform service to us.
Transactions with Aoxue Culture Communication (Beijing) Co., Ltd In September 2021, Aoxue Culture Communication (Beijing) Co., Ltd, became our related party as an associate. We provided store operation service to Aoxue and generated service revenue of RMB 3.2 million(US$ 0.5 million) in 2022.
Transactions with Aoxue Culture Communication (Beijing) Co., Ltd In September 2021, Aoxue Culture Communication (Beijing) Co., Ltd, became our related party as an associate. We provided store operation service to Aoxue and generated service revenue of RMB3.2 million and RMB1.5 million (US$0.2 million) in 2022 and 2023.
We provide store operation services to Baichen, and generated service revenue of nil and nil and RMB20 thousand (US$2.9 thousand) from Baichen in 2020, 2021 and 2022, respectively. Transactions with Hunan Leier Media Co., Ltd. In March 2021, Hunan Leier Media Co., Ltd., or Leier, became our related party as an associate. Leier provides marketing and platform services to us.
We provide store operation services to Baichen, and generated service revenue of nil, RMB20 thousand and RMB235 thousand (US$33 thousand) from Baichen in 2021, 2022 and 2023, respectively. Transactions with Hunan Leier Media Co., Ltd. In March 2021, Hunan Leier Media Co., Ltd., or Leier, became our related party as an associate. Leier provides marketing and platform services to us.
We provided store operation service to Laifeng and generated service revenue of RMB 0.8 million(US$ 0.1 million) in 2022. As of December 31, 2022, amounts due from Laifeng were RMB61 thousand (US$8.8 thousand), mainly representing store operation service fees collected by Laifeng.
We provided store operation service to Laifeng and generated service revenue of RMB 0.8 million and RMB0.8 million (US$0.1 million) in 2022 and 2023. As of December 31, 2023, amounts due from Laifeng were RMB204 thousand (US$29 thousand), mainly representing store operation service fees collected by Laifeng.
As of December 31, 2022, amounts due from Aoxue were RMB3.2 million (US$0.5 million), mainly representing store operation service fees collected by Aoxue. Transactions with Laifeng Brand Management (Shanghai) Co., Ltd. In September 2021, Laifeng Brand Management (Shanghai) Co., Ltd., became our related party as an associate.
As of December 31, 2023, amounts due from Aoxue were RMB0.5 million (US$0.1 million), mainly representing store operation service fees collected by Aoxue. Transactions with Laifeng Brand Management (Shanghai) Co., Ltd. In September 2021, Laifeng Brand Management (Shanghai) Co., Ltd., became our related party as an associate.
In addition, pursuant to the shareholders agreement, for a period of six months (or such longer period as Baozun and Cainiao may agree) starting from July 29, 2023, Cainiao has the call option to acquire additional shares so that it will own in an aggregate of 60% equity interest of Baotong, according to terms and conditions set forth under the shareholders agreement.
In addition, pursuant to the Shareholders Agreements, for a period of 12 months (or such longer period as Baozun and Cainiao may agree) starting from July 29, 2024, Cainiao has a call option, subject to further negotiation, to acquire additional shares so that it will own in an aggregate of 60% equity interest of Baotong, according to the terms and conditions set forth under the shareholders agreement.
We provide store operation services to Kewei, and generated service revenue of RMB3.7 million and RMB1.6 million and RMB0.9 million (US$0.1 million) from Kewei in 2020, 2021 and 2022, respectively. Kewei also provides marketing and platform services to us.
We provide store operation services to Kewei, and generated service revenue of RMB1.6 million, RMB0.9 million and RMB3.0 million (US$0.4 million) from Kewei in 2021, 2022 and 2023, respectively. Kewei also provides marketing and platform services to us.
Transactions with Baobida IOT Technology (Suzhou) Co., Ltd In July 2022, Baobida IOT Technology (Suzhou) Co., Ltd , or “Baobida,” became our related party as an associate. We provided warehousing service to Baobida and generated service revenue of nil, nil and RMB 461.4 thousand(US$ 66.9 thousand) in 2020, 2021, 2022, respectively. Baobida provided logistic service to us.
Transactions with Baobida IOT Technology (Suzhou) Co., Ltd In July 2022, Baobida IOT Technology (Suzhou) Co., Ltd , or “Baobida,” became our related party as an associate. We provided warehousing service to Baobida and generated service revenue of nil RMB461.4 thousand and nil in 2021, 2022, 2023, respectively. Baobida provided logistic service to us.
As of December 31, 2022, the amounts due from Signify Investment were RMB3.6 million (US$0.5 million), representing store operation services fees to be paid by Signify Investment to us. Transactions with Shanghai Kewei E-Commerce Co., Ltd. In June 2020, Shanghai Kewei E-commerce Co., Ltd., or Kewei, became our related party as an e-commerce joint venture.
As of December 31, 2023, the amounts due from Signify Investment were RMB1.7 million (US$0.2 million), representing store operation services fees to be paid by Signify Investment to us. Transactions with Shanghai Kewei E-Commerce Co., Ltd. In June 2020, Shanghai Kewei E-commerce Co., Ltd., or Kewei, became our related party as an e-commerce joint venture.
In August 2020, Zunrui (Nantong) E-commerce Co., Ltd., or Zunrui, became our related party as an e-commerce joint venture. We receive outsourcing labor service, including customer services, from Zunrui. In 2020 and 2021, we incurred outsourcing labor cost of RMB4.0 million and RMB10.3 million (US$1.6 million), respectively. Zunrui was acquired by us in June 2021.
In August 2020, Zunrui (Nantong) E-commerce Co., Ltd., or Zunrui, became our related party as an e-commerce joint venture. We receive outsourcing labor service, including customer services, from Zunrui. In 2021, we incurred outsourcing labor cost of RMB10.3 million (US$1.6 million), respectively. Zunrui was acquired by us in June 2021. Transactions with Hangzhou Baichen Technology Co., Ltd.
As of December 31, 2022, amounts due to Alibaba Group were RMB21.3 million (US$3.1 million), mainly representing payable for the commission services provided by AJ, a subsidiary of Alibaba Group and logistics, marketing and platform services fees to be paid to Alibaba Group by us.
As of December 31, 2023, amounts due to Alibaba Group were RMB30.5 million (US$4.3 million), mainly representing payable for the commission services provided by AJ, a subsidiary of Alibaba Group and logistics, marketing and platform services fees to be paid to Alibaba Group by us.
We did not incur any related party transaction with Tsubasa Corporation in 2022. Employment Agreements See “Item 6. Directors, Senior Management and Employees — C. Board Practices — Employment Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees —B. Compensation— Share Incentive Plans.” 140 Table of Contents C. Interests of Experts and Counsel Not applicable. ​
We did not incur any related party transaction with Tsubasa Corporation in 2022 or 2023. Employment Agreements See “Item 6. Directors, Senior Management and Employees — C. Board Practices — Employment Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees —B. Compensation— Share Incentive Plans.” 146 Table of Contents C.
In 2020, 2021 and 2022, we incurred logistic service fees in an amount of nil, nil and RMB8.2 million (US$1.2 million) to Baobida, respectively.
In 2021, 2022 and 2023, we incurred logistic service fees in an amount of nil, RMB8.2 million and RMB0.7 million (US$0.1 million) to Baobida, respectively.
We incurred logistic service fee of RMB89.0 million, RMB72.5 million RMB47.6 million (US$6.9 million) to Alibaba Group and generated warehousing services revenue of RMB1.3 million, RMB32.8 thousand and RMB34.6 million (US$5.0 million) in 2020, 2021 and 2022, respectively, after Cainiao and AJ became our related parties.
We incurred logistic service fee of RMB72.5 million, RMB47.6 million and RMB38.4 million (US$5.4 million) to Alibaba Group and generated warehousing services revenue of RMB32.8 thousand, RMB34.6 million and RMB70.6 million (US$9.9 million) in 2021, 2022 and 2023, respectively, after Cainiao and AJ became our related parties.
In 2021 and 2022, we incurred marketing and platform service fees in an amount of RMB466 thousand and RMB271 thousand (US$39.3 thousand) to Leier. As of December 31, 2022, amounts due to Leier were nil. The amounts due from Leier were RMB6.3 million (US$0.9 million). Transactions with Hangzhou Dajing Guangtong Network Technology Co., Ltd.
In 2021, 2022 and 2023, we incurred marketing and platform service fees in an amount of RMB466 thousand, RMB271 thousand and nil to Leier, respectively. As of December 31, 2023, amounts due to Leier were nil. The amounts due from Leier were nil. Transactions with Hangzhou Dajing Guangtong Network Technology Co., Ltd.
Creaway Group collected logistics service revenues and advanced logistics service fees for Baoleantone of RMB68.6 million (US$10.8 million) and RMB57.9 million (US$9.1 million) in 2021, and RMB64.6 million (US$9.4 million) and RMB13.4 million (US$1.9 million) in 2022.
Creaway Group collected logistics service revenues and advanced logistics service fees for Baoleantone of RMB68.6 million (US$10.8 million) and RMB57.9 million (US$9.1 million) in 2021, RMB64.6 million (US$9.4 million) and RMB13.4 million (US$1.9 million) in 2022, and RMB12.8million (US$1.8 million) and RMB1.3 million (US$0.2 million) in 2023.
Transactions with Jiangsu Shanggao Supply Chain Co., Ltd. In December 2019, Jiangsu Shanggao Supply Chain Co., Ltd., or Shanggao, became our related party as an e-commerce joint venture. We receive logistics services from Shanggao. In 2020, 2021 and 2022, we incurred logistics service fees of RMB5.8 million, RMB0.3 million and nil, respectively, to Shanggao.
In December 2019, Jiangsu Shanggao Supply Chain Co., Ltd., or Shanggao, became our related party as an e-commerce joint venture. We receive logistics services from Shanggao. In 2021, 2022 and 2023, we incurred logistics service fees of RMB0.3 million, nil and nil, respectively, to Shanggao. As of December 31, 2023, amounts due to Shanggao were nil.
In 2022, we incurred marketing and platform service fees in an amount of RMB0.7 million (US$0.1 million) to Benwei.
In 2022 and 2023, we incurred marketing and platform service fees in an amount of RMB0.7 million and RMB3.4 million (US$0.5 million) to Benwei.
We incurred commission fees of RMB624.9 thousand, RMB282.9 thousand and RMB nil thousand (US$ nil thousand) to, and generated services revenue of RMB21.4 million, RMB12.3 million RMB7.5 million (US$1.1 million) from, AJ (Hangzhou) Network Technology Company Limited, or AJ, a subsidiary of Alibaba Group, in 2020,2021 and 2022, respectively. Alibaba Group is one of our major shareholders.
We incurred commission fees of RMB282.9 thousand, nil, and nil to, and generated services revenue of RMB12.3 million, RMB7.5 million and RMB5.7 million (US$0.8 million) from, AJ (Hangzhou) Network Technology Company Limited, or AJ, a subsidiary of Alibaba Group, in 2021,2022 and 2023, respectively. Alibaba Group is one of our major shareholders.
We provide store operation services, warehousing services and IT services to Signify Investment, and generated service revenue of RMB29.2 million, RMB9.0 million and RMB6.7 million (US$1.0 million) from Signify Investment in 2020, 2021 and 2022, respectively.
We provide store operation services, warehousing services and IT services to Signify Investment, and generated service revenue of RMB9.0 million, RMB6.7 million and RMB6.5 million (US$0.9 million) from Signify Investment in 2021, 2022 and 2023, respectively.
As of December 31, 2022, amounts due from Alibaba Group were RMB38.4 million (US$5.6 million), representing receivables to be collected from Alibaba Group for store operation services and warehousing services provided by us and deposits paid.
As of December 31, 2023, amounts due from Alibaba Group were RMB48.1 million (US$6.8 million), representing receivables to be collected from Alibaba Group for store operation services and warehousing services provided by us and deposits paid.
In 2020, 2021 and 2022, we incurred marketing and platform service fees in an amount of RMB2.1 million and RMB27.0 million and RMB52.8 million (US$7.7 million) to Kewei, respectively. As of December 31, 2022, the amounts due from Kewei were 5.6 million (US$0.8 million). 138 Table of Contents Transactions with Zunrui (Nantong) E-commerce Co., Ltd.
In 2021, 2022 and 2023, we incurred marketing and platform service fees in an amount of RMB27.0 million, RMB52.8 million and RMB16.3 million (US$2.3 million) to Kewei, respectively. 144 Table of Contents As of December 31, 2023, the amounts due from Kewei were 0.9 million (US$0.1 million). Transactions with Zunrui (Nantong) E-commerce Co., Ltd.
As of December 31, 2022, amounts due to Creaway Group were RMB2.9 million (US$0.4 million), mainly representing logistic service expenses advanced by Creaway Group, and amounts due from Creaway Group were RMB6.9 million (US$1.0 million), mainly representing logistic service fees collected by Creaway Group.
As of December 31, 2023, amounts due to Creaway Group were RMB1.0 million (US$0.1million), mainly representing logistic service expenses advanced by Creaway Group, and amounts due from Creaway Group were RMB6.6 million (US$0.9 million), mainly representing logistic service fees collected by Creaway Group.
We have provided IT services to Pengtai Baozun since 2019. In 2020, 2021 and 2022, we generated services revenue of RMB4.3 million, RMB2.1 million and nil from 137 Table of Contents Pengtai Baozun. We have provided store operation service to Pengtai and generated services revenue of RMB5.0 million (US$0.7 million).
We have provided IT services to Pengtai Baozun since 2019. In 2021,2022 and 2023, we generated services revenue of RMB2.1 million, nil and nil from Pengtai Baozun. We have provided store operation service to Pengtai Baozun since 2022 and generated services revenue of RMB5.0 million and RMB5.2 million (US$0.7 million) in 2022 and 2023, respectively.
As of December 31, 2022, amounts due to Benwei were RMB2 thousand (US$0.3 thousand), mainly representing marketing and platform service expenses to be paid to Benwei, and amounts due from Benwei were RMB6.6 million (US$1.0 million), mainly representing store operation service fees collected by Benwei.
As of December 31, 2023, amounts due to Benwei were RMB4 thousand (US$1 thousand), mainly representing marketing and platform service expenses to be paid to Benwei, and amounts due from Benwei were RMB3.8 million (US$0.5 million), mainly representing store operation service fees collected by Benwei.
In 2020, 2021 and 2022, we incurred service fees of RMB671.5 million, RMB752.8 million and RMB746.9 million (US$108.3 million), respectively.
In 2021, 2022 and 2023, we incurred service fees of RMB752.8 million, RMB746.9 million and RMB278.9 million (US$39.3 million), respectively.
In addition, if certain triggering events occur, Cainiao has the right to require Baozun to redeem its shares at a price equal to the initial investment plus an internal rate of return of 6% per annum. In 2021, we received logistic services from Cainiao and provide warehousing service to Cainiao and AJ.
In addition, if certain triggering events occur, Cainiao has the right to require Baozun to redeem its shares at a price equal to the actual investment plus an internal rate of return of 6% per annum.
Since August 2019, pursuant to the amended agreement among us, Ahead, and AJ, all transactions and balances with Ahead have been transferred to AJ, which became our related party as a subsidiary of Alibaba.
We did not incur any related party transaction with Ahead in 2021, 2022 or 2023. 143 Table of Contents Since August 2019, pursuant to the amended agreement among us, Ahead, and AJ, all transactions and balances with Ahead have been transferred to AJ, which became our related party as a subsidiary of Alibaba.
On the same day, Baozun, Baotong and Cainiao entered into a business cooperation agreement aiming to further explore and develop fulfillment and e-commerce opportunities. On October 29, 2021, Baozun, Baotong and Cainiao entered into a shareholders agreement which provides for certain special rights for the shareholders of Baotong.
On the same day, Baozun, Baotong and Cainiao entered into a business cooperation agreement aiming to further explore and develop fulfillment and e-commerce opportunities.
We provided store operation service and warehousing service to Mansen and generated service revenue of RMB 1.4 million(US$ 0.2 million) and RMB5 thousand(US$0.7 thousand) in 2022, respectively. As of December 31, 2022, amounts due from Mansen were RMB1.5 million (US$0.2 million), mainly representing store operation service and warehousing service fees collected by Mansen.
We provided store operation service and warehousing service to Mansen and generated service revenue of RMB1.4 million and RMB5 thousand in 2022, respectively, and RMB195 thousand (US$28 thousand) and nil in 2023, respectively. As of December 31, 2023, amounts due from Mansen were nil.
We receive outsourcing labor service, including customer services, from Juxi. In 2020, 2021 and 2022, we incurred outsourcing labor cost of RMB18.0 million, RMB15.2 million and RMB6.4 million (US$0.9 million) to Juxi, respectively. As of December 31, 2022, amounts due to Juxi were RMB1.5 million (US$0.2 thousand), representing outsourcing labor cost to be paid to Juxi by us.
In 2021, 2022 and 2023, we incurred outsourcing labor cost of RMB15.2 million, RMB6.4 million and RMB6.5 million (US$0.9 million) to Juxi, respectively. As of December 31, 2023, amounts due to Juxi were RMB0.5 million (US$0.1 million), representing outsourcing labor cost to be paid to Juxi by us. Transactions with Jiangsu Shanggao Supply Chain Co., Ltd.
As of December 31, 2022, amounts due to Baobida were RMB4.2 million (US$0.6 million), mainly representing logistic service expenses to be paid to Baobida, and amounts due from Baobida were RMB19.1 million (US$2.8 million), mainly representing loans to Baobida. 139 Table of Contents Transactions with Shanghai Mansen Brand Management Co., Ltd In January 2022, Shanghai Mansen Brand Management Co., Ltd, became our related party as an associate.
As of December 31, 2023, amounts due to Baobida werenil, and amounts due from Baobida were nil. 145 Table of Contents Transactions with Shanghai Mansen Brand Management Co., Ltd In January 2022, Shanghai Mansen Brand Management Co., Ltd, became our related party as an associate.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees — E. Share Ownership.” B. Related Party Transactions Contractual Arrangements with Shanghai Zunyi and Its Shareholders We operate our relevant business through contractual arrangements between our wholly-owned subsidiary, Shanghai Baozun, and our VIE, Shanghai Zunyi, and the shareholders of Shanghai Zunyi.
Related Party Transactions Contractual Arrangements with Shanghai Zunyi and Its Shareholders We operate our relevant business through contractual arrangements between our wholly-owned subsidiary, Shanghai Baozun, and our VIE, Shanghai Zunyi, and the shareholders of Shanghai Zunyi. For a description of these contractual arrangements, see “Item 4. Information on the Company — C.
In 2020, 2021 and 2022, we generated services revenue of nil, nil and nil from Misako, respectively. As of December 31, 2022, amounts due from Misako were nil. Transactions with Hangzhou Juxi Technology Co., Ltd. In June 2019, Hangzhou Juxi Technology Co., Ltd., or Juxi, became our related party as an e-commerce joint venture.
We did not incur any related party transaction with Misako in 2021, 2022 or 2023. Transactions with Hangzhou Juxi Technology Co., Ltd. In June 2019, Hangzhou Juxi Technology Co., Ltd., or Juxi, became our related party as an e-commerce joint venture. We receive outsourcing labor service, including customer services, from Juxi.
As of December 31, 2022, amounts due to Shanggao were RMB500 thousand (US$72.5 thousand), representing logistics service fees to be paid to Shanggao by us. Transactions with Signify (China) Investment Co., Ltd. In January 2020, Signify (China) Investment Co., Ltd., or Signify Investment, became our related party as an e-commerce joint venture.
Transactions with Signify (China) Investment Co., Ltd. In January 2020, Signify (China) Investment Co., Ltd., or Signify Investment, became our related party as an e-commerce joint venture.
In addition, Ahead has engaged us to provide brand e-commerce solutions and services to their own brand clients. In 2020, 2021 and 2022, after it had become one of our related parties, we incurred commission fees of nil, nil and nil to and generated services revenue of nil, nil and nil from Ahead, respectively.
In addition, Ahead has engaged us to provide brand e-commerce solutions and services to their own brand clients.
Removed
For a description of these contractual arrangements, see “Item 4. Information on the Company — C.
Added
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees — E. Share Ownership.” 142 Table of Contents B.
Added
Baozun, Baotong and Cainiao entered into a shareholders agreement on October 29, 2021 and an amendment to the shareholders agreement on August 18, 2023 (collectively, the “ Shareholders Agreements ”), which provide for certain special rights for the shareholders of Baotong.
Added
As of the date of this annual report, Cainiao’s shareholding in Baotong was increased to 37% due to the pre-money valuation adjustment as specified in the Shareholders Agreements. In 2021, we received logistic services from Cainiao and provide warehousing service to Cainiao and AJ.
Added
Interests of Experts and Counsel Not applicable. ​

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