Thank you, operator. Hello, everyone, and thank you for joining Vipshop's Second Quarter 2025 Earnings Conference Call. With us today are Eric Shen, our Co-Founder, Chairman and CEO; and Mark Wang, our CFO. Before management begins their prepared remarks, I would like to remind you that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to, those outlined in our safe harbor statement in our earnings release and the public filings with the Securities and Exchange Commission, which also apply to this call to the extent any forward-looking statements may be made. Please note that certain financial measures used on this call, such as non-GAAP operating income, non-GAAP net income attributable to Vipshop's shareholders and non-GAAP net income per ADS are not presented in accordance with the U.S. GAAP. Please refer to our earnings release for details relating to the reconciliation of our non-GAAP measures to GAAP measures. With that, I would now like to turn the call over to Mr. Eric Shen.

Good morning and good evening, everyone. Welcome, and thank you for joining our second quarter 2025 earnings conference call. In the second quarter, our team acted swiftly to revive customer activities and the sales momentum, driving stabilization in our business. These efforts delivered measurable progress against our key priorities for renewed growth. Total GMV returned to growth driven by clear strength in the apparel-related category, reflecting our refined adjustments in the merchandising portfolio. Total active customers also showed clear signs of recovery. Super VIP membership sustained its double-digit growth. In the second quarter, active SVIP customers increased by 15% year-over-year, contributing 52% of our online spending. These high-value customer segments continued to outperform in terms of sales and revenue growth. With the fast-moving industry dynamics, we remain anchored to the vision of discount retail for brands. We believe at its heart, discount retail for brands is about offering customers beloved brands and high-quality products at exceptional value while the execution mainly innovates. The fundamentals stay true: great brands, great quality, and great value. To achieve this, we are making changes to shape our merchandising strategy, which is key to delivering unique, compelling value to brand partners and customers. We are relying on our merchandising team to better capitalize on our evolving customer trends and lifestyles while enhancing cross-category synergies. Operationally, we are taking a more holistic approach to plan and manage our brand and customer interactions to maximize platform-wide value creation. We will also unify the marketing, customer growth, and engagement efforts to advance customer value through each life cycle stage across customer segments. We hope these initiatives will inject great agility and efficiency into our business model, creating a self-reinforcing flywheel that advances our growth priorities from merchandising operations to customer engagement. To start with merchandising, we are pursuing a path that is unique to Vipshop. We focus on the three pillars of our merchandising strategy: relevancy, differentiation, and specialization. In a competitive environment, we stand out by consistently offering customers high-value brands that they love, exclusively made for Vipshop customized products, and a carefully curated portfolio of highly sought-after items. In the meantime, we keep up with new trends, new styles, and innovative fabrics and materials in each category. This ensures a steady and sustainable inflow of inventory that aligns with shifting customer demand. In the first half, we added close to 500 brands to our platform, which are gaining traction among customers. The Made for Vipshop line is a key part of our differentiation. It's delivering a more compelling brand of quality and value that results in high-value customers, repeat purchases, and better conversions. In the second quarter, it maintained strong sales momentum, contributing meaningfully to our apparel sales. For many brands, this customized product accounts for more than 20% of their sales on our platform. In the second quarter, we added more high-fashion selections, achieving improved sell-through. We saw growing customer recognition of our platform as the go-to place for fresh sales and treasure hunting. Leveraging our global sales capabilities, we will have a steady stream of differentiated items flowing into our assortment so that shoppers always have something to discover as they come back. For our customers, we continue to create a unique experience that not only reinforces the affordability and reliability they love but also inspires them to discover the value and freshness we offer. This is coming from optimized traffic allocation along with the customer journey, enhanced through improved search and the recommendations for both existing and new offerings. A good example of our customer-centric approach is the SVIP loyalty program. In the second quarter, we upgraded our private sales for SVIP members, offering beloved branded products to create a great sense of exclusivity and delight. We expect the loyalty program to deliver a more differentiated and personalized experience for our top-tier customers. Lastly, we continue to develop and leverage AI capabilities as part of our overall technology advancement to drive growth and efficiency. We are deepening collaboration with the business team to expand AI application cases and deliver measurable results. We see promising early traction across our AI initiatives. AI-generated reviews and Q&A are contributing to enhanced customer journeys. AI-driven sales support initiatives benefit conversions and issue resolution. Besides, AI-powered marketing content demonstrates effective reach to potential customers. Despite the near-term challenges, we are investing in multiple ways to grow share across our merchandising portfolio and customer segments. Our roadmap for sustainable, profitable growth in the long term relies on consistent and collaborative execution every day. It stays true to who we have always been while adapting to evolving trends, enhancing our capabilities, and always thinking about our unique role in retail for today's customers. At this point, let me hand over the call to our CFO, Mark Wang, to go over our financial results.

Thanks, Eric, and hello, everyone. We have delivered another quarter of healthy profitability, with margins holding up well as we moved at pace to stabilize the business. This underscores our team's consistent financial discipline in a dynamic operating environment. During the quarter, we prioritized investments in growth initiatives related to customer engagement and the merchandising categories where we saw good momentum. We were more agile to dynamically reallocate resources in response to more productive activities that really helped the business grow profit. As Eric indicated, through a series of organizational changes, we have further enhanced strategic clarity and execution speed across the company. Though we are early on our journey, these actions are building tangible traction, enabling us to position the business for a return to sustainable, profitable growth in the quarters ahead. Furthermore, we are firmly on track to deliver our shareholder return commitment for 2025, which is no less than 75% of the RMB 9 billion full-year 2024 non-GAAP net income. In the first half, we distributed a total of over USD 640 million through a combination of dividend payments and share buybacks, reflecting both our robust cash flow generation and the conviction in the company's fundamental value and growth prospects. Now moving to our detailed quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented below are in renminbi, and all the percentage changes are year-over-year changes, unless otherwise noted. Total net revenues for the second quarter of 2025 were RMB 25.8 billion compared with RMB 26.9 billion in the prior year period. Gross profit was RMB 6.1 billion compared with RMB 6.3 billion in the prior year period. Gross margin was 23.5% compared with 23.6% in the prior year period. Total operating expenses increased by 6.3% year-over-year to RMB 4.6 billion from RMB 4.3 billion in the prior year period. As a percentage of total net revenue, total operating expenses were 17.7% compared with 16.0% in the prior year period. Fulfillment expenses decreased by 2.6% year-over-year to RMB 2.1 billion from RMB 2.2 billion in the prior year period. As a percentage of total net revenues, fulfillment expenses were 8.2% compared with 8.1% in the prior year period. Marketing expenses decreased by 3.3% year-over-year to RMB 715.9 million from RMB 740.7 million in the prior year period. As a percentage of total net revenues, marketing expenses were 2.8%, which remained stable as compared with that in the prior year period. Technology and content expenses decreased by 9.3% year-over-year to RMB 442.0 million from RMB 487.2 million in the prior year period. As a percentage of total net revenues, technology and content expenses were 1.7% compared with 1.8% in the prior year period. General and administrative expenses were RMB 1.3 billion compared with RMB 900.7 million in the prior year period, primarily reflecting an increase in the share-based compensation expenses for Shan Shan Outlets. As a percentage of total net revenues, general and administrative expenses were 5.0% compared with 3.4% in the prior year period. Income from operations was RMB 1.7 billion compared with RMB 2.2 billion in the prior year period. Operating margin was 6.6% compared with 8.3% in the prior year period. Non-GAAP income from operations was RMB 2.4 billion compared with RMB 2.6 billion in the prior year period. Non-GAAP operating margin was 9.3% compared with 9.5% in the prior year period. Net income attributable to Vipshop shareholders was RMB 1.5 billion compared with RMB 1.9 billion in the prior year period. Net margin attributable to Vipshop shareholders was 5.8% compared with 7.2% in the prior year period. Net income attributable to Vipshop shareholders per diluted ADS was RMB 2.91 compared with RMB 3.49 in the prior year period. Non-GAAP net income attributable to Vipshop shareholders was RMB 2.1 billion compared with RMB 2.2 billion in the prior year period. Non-GAAP net margin attributable to Vipshop shareholders was 8.0% compared with 8.1% in the prior year period. Non-GAAP net income attributable to Vipshop shareholders per diluted ADS was RMB 4.06 compared with RMB 3.91 in the prior year period. As of June 30, 2025, the company had cash and cash equivalents and a restricted cash of RMB 24.7 billion, with short-term investments of RMB 3.0 billion. Looking forward to the third quarter of 2025, we expect our total net revenues to be between RMB 20.7 billion and RMB 21.7 billion, representing a year-over-year increase of approximately 0% to 5%. Please note that this forecast reflects our current and preliminary view of the market and operational conditions, which are subject to change. With that, I would now like to open the call to Q&A.

And the first question comes from Alicia Yap with Citigroup.

My first question is about the latest e-commerce competition. I understand that there is very limited overlap, but curious to get management's view whether the recent start-up initiatives of quick commerce by other e-commerce platforms have any impact on Vipshop? Have you seen any change of purchasing frequency declining or budget spend coming down by your customers? My second question is about the weather. So given the recent uncertainty of weather conditions with heavy rain and flood in many areas of China, has that affected the apparel items purchasing demand for summer clothing?

Alicia, thank you for your question. So on the potential impact from instant or quick e-commerce, we don't see any material impact on our business. We are very much focused on apparel sales. And just a small portion of our business is standardized items, which are more suitable for quicker delivery, especially when customers see they can get most of their daily essentials within half an hour delivery. They may choose to shop on quick e-commerce. But overall, we don't see any meaningful impact on our business so far. And on customer behavior, there could be some change. But at the end of the day, it depends on the quality and pricing of the offerings, especially in standardized items. On weather conditions, also we don't see a very meaningful impact despite volatile weather conditions across many regions in China, whether it's rain or flood; we don't see very much impact on people's outing, travel plans, or apparel purchases. We look at the data across different tiers of cities, and we don't see any abnormalities with regard to their travel or apparel shopping activities.

And the next question comes from Andre Chang with JPMorgan.

My first question is about the third quarter revenue guidance returning to positive year-on-year. I want to understand whether there is any comparison effect that's helping the year-on-year growth? Or are we back on a growth trajectory again, suggesting that the company will maintain positive growth in the coming quarters? My second question is about the share repurchase. The company bought back nearly USD 350 million in the second quarter, which is the highest in 2 years. I wonder if there's any reason for such a strong jump in buyback? And should we expect such momentum to continue into the second half of this year given the management commitment in terms of shareholder return for 2025?

So Andre, on your first question on Q3 guidance, we guided for top-line growth at 0% to 5%. And we achieved this positive momentum due to the efforts we have made in the last few quarters. We've made a lot of organizational changes and adjustments in merchandising and operations so that we actually have started to see clear recovery in terms of customer growth. Total active customers have returned to growth so far year-over-year, especially we have seen new customers which had been struggling for a few quarters also return to growth. If customers start to regrow naturally, we are more confident about sales and revenue growth. We've also been focusing on providing more consumer relevance and differentiated offerings, especially to provide them with more items at competitive pricing. So we've performed a lot of optimization on the merchandising front as well; that's why we guide for a positive top-line growth for Q3, and we don't think there is any material base effect for Q3. For Q4, we are also aiming to see positive growth in terms of top line. But Q3, admittedly, we had a high base in 2024, where we benefited from a long streak of cold weather conditions. Overall, we are confident that we can maintain growth for the quarters ahead. We are looking to accelerate the growth in the foreseeable future after we see our recent changes and adjustments materializing into a real growth engine.

Okay. Regarding your second question. Thanks for your question regarding the buyback program. There is no special reason for increasing the amount of the share buyback in the second quarter. We are just committed to returning value to our shareholders continuously. As you may be aware, we have mentioned before that we are going to return no less than 75% of our full-year 2024 non-GAAP net income to shareholders in discretionary share repurchase and/or dividend distributions, actually amounting to almost around USD 900 million. So we're just committed to returning value to our shareholders, and we will continue to invest in our business growth and improve profit, generating cash to support our dividend payout and buyback.

The next question comes from Wei Xiong with UBS.

First, we noticed the relatively stable gap between GMV and revenue this quarter. Just wondering, could management share any latest trend regarding the return rate on our platform? Do we see any further room for improvement to narrow this gap going forward? Or is that gap widening a little bit, considering the very healthy growth of SVIP users in the second half of the year? And secondly, on the other revenue side, could management share the latest progress and revenue and profit trends for Shan Shan Outlet business, as well as some strategic planning and outlook for next year?

Thank you, Xiong Wei. On your first question regarding the return rate, we actually see no surprises as it relates to the return rate. For years, we have seen some relatively stable returns from customer behavior. It's just that our SVIP customers are growing very nicely at double digits. We potentially will look at a 2 to 3 percentage point increase every year in terms of return rate due to the structural factor, but it will be smoothed out on a quarterly basis. We do believe that at some point, we will see a flat return rate quarter-by-quarter. The second question on Shan Shan Outlets, we have seen very good momentum in terms of Shan Shan Outlets. We currently have a total of 20 stores, and the comparable same-store growth has maintained double digits for several quarters. We continue to look for the right cities or locations to expand our outlet business, given the fact that the outlet industry is prospering in China and is riding on the tailwind of value-for-money consumption. We believe there are still a decent number of cities or locations that are suitable for outlet expansion, and we intend to build the outlet business as part of our strategic and long-term assets.

I show no further questions at this time. I will turn the conference back to Jessie for any closing remarks.

Thank you for taking the time to join us today. If you have any questions, please don't hesitate to contact our IR team. We look forward to speaking with you next quarter.

This concludes today's conference call. Thank you for participating, and you may now disconnect.