On the evening of May 19, vipshop released its financial report for the first quarter of 2021. During the period, vipshop’s net revenue reached 28.4 billion yuan and net profit reached 1.7 billion yuan, a substantial increase over the same period of last year. It is worth noting that the marketing expenses of vipshop in the first quarter were 1.3 billion yuan, a year-on-year increase of over 200%. Shen Ya, chairman and CEO of vipshop, said that the trend of vipshop’s customer acquisition continues to be strong, and the company will further deepen its cooperation with brand’s customized products to continuously improve user stickiness.
Revenue growth over 50%
Vipshop’s first quarter financial report showed that the company’s total net revenue was 28.4 billion yuan, a year-on-year increase of 51.1%; The net profit attributable to vipshop shareholders was 1.5 billion yuan, a year-on-year increase of 125.7%; Not in accordance with US GAAP, the net profit attributable to vipshop shareholders was 1.7 billion yuan, up 73.7% year on year. In fact, affected by the epidemic, vipshop’s performance data declined in the first quarter of 2020, with total net revenue of 18.8 billion yuan, down about 13% from 21.3 billion yuan in the same period of the previous year.
In contrast, vipshop’s net revenue in the first quarter of 2021 increased by about 33.3% compared with that in 2019.
In addition, in the first quarter, vipshop had 45.8 million active users, a year-on-year increase of 54%. Shen Ya said that the number of active users of vipshop increased from 29.6 million in the same period last year to 45.8 million, showing a sustained and strong customer acquisition trend.
As for the next way to get new customers, Shen Ya said that vipshop will optimize and upgrade the way to get customers, so as to achieve accurate triggering of users and achieve more efficient customer acquisition. However, for new customers, vipshop has not set too high KPI.
In recent quarters, the number of male users of vipshop has also increased rapidly, and the number of orders from male users has increased significantly. From 2020 to now, the number of orders for related goods of male users has increased by more than 80% year on year, surpassing the increase of orders for female users in the same period. In this regard, Shen Ya said frankly that there will be no major adjustment to the commodity structure of the platform for the time being. The number of male users still accounts for a low proportion, and the platform is still dominated by female users.
Big increase in marketing expenses
In the first quarter of this year, the slogan “open vipshop, search for my same good things” appeared frequently in many online dramas and variety shows. At the same time, vipshop’s marketing expenses are also increasing significantly. According to the financial report, in the first quarter of 2021, vipshop’s marketing expenses were 1.3 billion yuan, compared with 412.3 million yuan in the same period last year. In the first quarter of 2021, marketing expenses accounted for 4.6% of the total net revenue, up from 2.2% in the same period of last year, mainly due to increased investment in advertising activities related to customer acquisition and retention.
In fact, according to the annual data of 2020, vipshop spent 4.28 billion yuan on marketing, up 28.9% from 3.32 billion yuan in 2019.
Behind vipshop’s increasing marketing coverage, vipshop is catching up with comprehensive e-commerce platforms. A few years ago, vipshop was as famous as Alibaba and Jingdong. Now, there is a big gap in the number of active users and revenue scale. Vipshop needs marketing expenses to improve its sense of existence.
At the same time, vipshop’s other expenses showed a small decline. Among them, the cost of technology and content in the first quarter of 2021 decreased to 337.5 million yuan from 338.4 million yuan in the same period of last year. In the first quarter of 2021, technology and content expenditures accounted for 1.2% of total net income, down from 1.8% in the same period last year.
Seeking customer growth through customization
In the first quarter of 2021, vipshop gave a good financial report. However, on May 19, vipshop opened at $22.51 a share, down more than 10%. The feedback from the capital market also seems to hope that vipshop will give more imagination on the sale mode.
Vipshop’s special sales occupy the leading position in the industry, but they also need to be upgraded iteratively. Zhang Shule, an Internet commentator, once pointed out that vipshop can try to seek product differentiation in a short period with a small number of “popular” specials.
Shen Ya mentioned in the financial report conference call that vipshop has been trying to launch “special” products with more than 500 cooperative brands. Vipshop will continue to strengthen the ability to push “customized” products, which is also to improve the company’s differentiated competitive strength. At present, the customer conversion rate of vipshop’s customized products is better than that of ordinary products. Next, vipshop will continue to dig deep into the customized product business.
Beijing Business Daily reporter Wang Weiyi
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