Chinese online discounter VIPShop is reaping the benefits of a 13 per cent increase in active customers last quarter to 32.4 million – well ahead of the 5 per cent full-year improvement.
Its annual results released overnight showed net revenue soared 15.9 per cent last year to RMB84.5 billion (US$12.3 billion) and net income attributable to shareholders rose 9.2 per cent to RMB2.1 billion ($309.6 million). VIPShop says its Gross Merchandise Volume (GMV) for the full year rose 21 per cent to RMB131.0 billion.
“We are pleased to have finished the fourth quarter of 2018 with solid operational results,” said chairman and CEO Eric Shen.
“Going forward, we will continue to strengthen our core capabilities, aiming to bring highly desirable selections of products to our valued customers on a daily basis, which will drive our long-term growth and profitability.”
CFO Donghao Yang said the fourth quarter saw “a healthy sequential recovery” of VIPShop’s bottom-line, which was mostly attributable to a focus on the highly profitable apparel category.
“During this quarter, we began to shift some low-margin categories from our first-party business into the marketplace platform, reducing their drag on our bottom-line while still delivering a solid GMV growth of 15 per cent year over year. We remain focused on stabilising our margins, aiming to drive enhanced shareholder return in the long run.”
During the fourth quarter of last year, VIPShop added about 86,000sqm of warehousing space, taking its capacity to 3 million sqm.
For the first quarter of the new year, the company expects net revenue to grow by up to 5 per cent, to between RMB19.9 billion and RMB20.9 billion.