As the barometer of the domestic online consumer sentiment, the performance of listed companies in various e-commerce platforms and brand e-commerce service tracks has attracted attention from all walks of life.

The first to release financial reports, Alibaba's revenue in the first quarter of the 2025 fiscal year (i.e. the second quarter of 2024) increased by 4%, followed by JD Group, which saw a 1.2% year-on-year growth in the second quarter of 2024, both entering a low single-digit growth phase.

This may be related to factors such as the current macroeconomic environment, consumer confidence, and industry competition.

Due to the global economic slowdown and insufficient consumer confidence, the overall growth rate of the e-commerce industry has slowed down. Emerging e-commerce platforms such as PDD Holdings and Xiaohongshu are catching up by leveraging various new channels such as short videos/live streaming/interest-based e-commerce. The number of people sharing the e-commerce market 'cake' is increasing, and consumer attention and wallets are also being continuously divided, which inevitably creates 'impact' on traditional e-commerce giants like Alibaba and JD.com.

In such a complex and evolving competitive landscape, how do the performance of listed companies providing brand e-commerce services fare?

First, let's focus on the latest performance of the industry leader Baozun. On the evening of August 28th, after the closing of trading on the Hong Kong Stock Exchange, Baozun announced its financial report for the second quarter of 2024, ending on June 30th, 2024.

The financial report shows that Baozun's net income in the second quarter of 2024 was 2.4 billion yuan, a year-on-year growth of 3%. Among which, the revenue from e-commerce business was 2.1 billion yuan, a year-on-year growth of 6%, and the revenue from brand management business was 0.29 billion yuan. The operating profit under non-generally accepted accounting principles was approximately 10.04 million yuan, achieving a significant increase year-on-year and a significant improvement in profitability. In the context of drastic changes in the external environment, declining consumer confidence, and intensifying industry competition, Baozun still maintains a stable posture in the face of adversity, especially in its main business of e-commerce, overcoming all obstacles and striving to achieve outstanding performance that surpasses domestic major e-commerce platforms or channels during the same period. It is no easy task.

Building on the foundation and growth trend of the stabilization in the first quarter, Baozun's revenue from e-commerce business finally recorded growth in the second quarter after experiencing ten consecutive quarters of decline, while its brand management business continued to narrow its operating losses and accelerated the expansion of GAP China's store network.

Overall, baozun's performance in the second quarter is better than expected. Looking at the first quarter as well, in the first half of 2024, baozun's overall performance improvement is remarkable, with an accelerated pace of strategic transformation. The achievements made so far have preliminarily validated the success of the transformation strategy, which is worthy of recognition.

Baozun’s e-commerce sector, Baozun E-commerce (BEC), is one of the core business lines of Baozun Group. It focuses on providing comprehensive e-commerce services for brands, including but not limited to store operation, digital marketing, IT solutions, warehousing and distribution, and customer service.

In the latest financial report, Baozun E-commerce (BEC) has not only demonstrated its important role in leading the overall situation but also played a ballast role, making a major contribution to the steady growth and profitability improvement of Baozun as a whole.

The revenue growth rate of the e-commerce sector has returned to positive growth for the first time in the past two and a half years, with a year-on-year growth rate of 6%, mainly due to the strong growth of the high-satisfaction service sector, stabilized dealer income, and outstanding performance during the 618 promotion period.

From the return to positive growth in e-commerce revenue to a significant year-on-year improvement in Baozun Group's non-GAAP operating profit, we have seen a robust and fully-recovered Baozun.

The important driving force behind this is Baozun E-commerce, which directly indicates that the company's market competitiveness in the field of e-commerce is still quite strong, and its leading position is solidified.

To give an analogy, in a highly uncertain and rapidly changing external environment, baozun needs to come up with a "magic sword" that can slay dragons to prove itself once again.

E-commerce has always been the cornerstone of baozun's business. In the first half of 24, baozun Group polished this "magic sword" by focusing all its energy and resources on doing well in baozun e-commerce (BEC), which is not only a return to the basic, but also an optimal opportunity to strengthen its ability to resist external risks and refocus on and consolidate its core underlying capabilities.

What are the underlying business capabilities of baozun's e-commerce business? Omni-channel operation capability is one of them, undoubtedly occupying an important position at present.

When divided by revenue type, it can be seen that its service revenue achieved a 9% year-on-year growth in the second quarter, leading the overall revenue growth. This is a concentrated reflection of baozun's continued focus and breakthrough in omni-channel operation and its capacity building.

Looking at the omni-channel perspective, baozun's growth on the Douyin channel is particularly prominent. In the second quarter, the revenue share of the Douyin channel alone accounted for over 5% of the total e-commerce business revenue, showing triple-digit high growth.

One extremely important measure that led to baozun's rapid growth in Douyin channel revenue in the second quarter was the completion of the acquisition of Luokee Xun, as well as the migration of projects and the integration of back-end capabilities at the business level.

According to publicly available information, Luokee Xun, established in 2016, has more than 7 years of experience in content e-commerce platform operation and live broadcasting. It provides one-stop services such as video, live broadcasting, media placement, and digital marketing for major international and domestic fashion brands.

Luokee Xun has become a gold-tier service provider of Douyin, an outstanding content power service provider of Douyin e-commerce, a luxury gold award service provider, one of the top 10 agencies for Taobao live broadcasting, and one of the first invited service agencies for Little Red Book. Luokee Xun has also been recognized by the industry as one of the top 5 Douyin operation service companies in China. Baozun and Luokee Xun have two major live streaming centers in Shanghai and Hangzhou with a total area of over 0.01 million square meters, further expanding the advantages and scale of this business.

So, after the acquisition and integration are completed, baozun, which has incorporated Loke's technology and quickly completed its business integration, has successfully demonstrated value that far exceeds the "1+1>2" equation. Coupled with baozun's experience and resource accumulation in omni-channel operation, the future baozun not only has a broader industry perspective and various comparative advantages compared to other DP service providers, but also has the opportunity to provide innovative live streaming services that combine product and performance for brand owners, potentially becoming a new paradigm for e-commerce live streaming.

It can be said that the all-channel operation capability, after filling the gaps, has further achieved a leap forward improvement.

In the second quarter, the reason why baozun's e-commerce business sector was able to recover and grow against the trend can be attributed to the following points:

Firstly, the stable customer renewal situation, with an overall renewal rate of over 95% in the first half of the year. The high renewal rate reflects the continuous consolidation and deepening of the long-term cooperative relationship between baozun and brand partners. It further strengthens the company's "customer first" strategy and directly indicates that customers are satisfied with the effectiveness of baozun's e-commerce services.

Secondly, thanks to the steady progress of the dealer and distributor business.

In the second quarter, baozun signed a cooperation agreement with Joseph Joseph, a well-known kitchenware brand in the United Kingdom, and has also landed previous brands such as ALDO, a well-known fashion brand from Canada, Bissell, a well-known high-end home appliance brand from the United States, and NUXE, a French cosmetics and skincare brand. The baozun dealer and distributor business brand matrix consisting of these four international well-known brands has begun to show initial effects, and the gross margin of the business is trending steadily.

According to public information, Baozun has several distribution agencies with high growth potential that are currently being negotiated and promoted.

The distribution agency business is also an important part of Baozun's e-commerce (BEC) business line, involving the use of digital means for procurement, supply chain and warehousing, inventory management, marketing, customer service, etc. The efficiency, user reach, and ability to respond to market changes that continue to improve will all affect the final results. The full-chain coverage business model helps Baozun's e-commerce better control the supply chain, optimize inventory, reduce costs, and ultimately enhance the brand's customer service experience. The rapid implementation of the distribution agency business can well test the leading edge of Baozun's e-commerce business in full-chain services and operational capabilities.

Finally, the success of Baozun's e-commerce business also partly reflects the high growth potential of new businesses. The breakthrough of new businesses attests to the progress Baozun has made in new capacity building. In the second quarter, Baozun successfully expanded its new business and conducted business cooperation with more than 30 new brands.

In terms of new service types, Baozun continues to expand the chain of value-added services, and the revenue from technical services and digital marketing and other value-added services has recorded strong growth.

At the same time, Baozun also provides order management system (OMS) services for internationally renowned FMCG groups and platform customer service services for Tmall, as well as B2B logistics and warehousing services for well-known domestic apparel brands. These new business explorations further deepen the long-term cooperative relationship between Baozun and brand partners.

The booming new business is expected to press the accelerator button for Baozun's e-commerce (BEC) business cycle.

The reason why Baozun's e-commerce business can take off and rise again in the new era.

We believe that it is closely related to the long-term competitive ability of Baozun's internal combinatorial, reusable, and accumulative long-term competitive ability, which also brings certainty to the future development of Baozun's e-commerce business. For example, the aforementioned omni-channel operation capability and end-to-end service capability. The grasp of the AIGC application capability is also a good example.

Since the second half of last year, Baozun's e-commerce has gradually achieved significant results in the application of AIGC technology, especially in its operation support system ROSS, where the AI text generation application BaozunGPT has been developed. This application has been integrated with multiple large models at home and abroad and has been widely used in e-commerce operations, marketing, design, and other various office scenarios. BaozunGPT supports training Baozun's own business knowledge through embedding conversion and combines the capabilities of large models to generate more accurate content. In addition, Baozun also integrates GPT with RPA, BI, and other tools, embeds them into business processes and systems, and widely applies them to social media marketing trend analysis, VOC customer service operation analysis, and other scenarios.

Currently, thousands of Baozun employees use BaozunGPT in their daily work, which greatly simplifies workflows, improves work efficiency, and brings a continuous stream of innovative suggestions to the company.

In addition to cost savings, the key to opening up the development space of Baozun's e-commerce business and accelerating the 'positive cycle' flywheel effect is the significant improvement in efficiency and the enhancement of accuracy and breadth in capturing business opportunities. In this sense, Baozun has always been ahead of most competitors, and it is gaining new opportunities and growth that others find difficult to achieve from market challenges.

'New productive forces refer to the qualitative leap of productivity achieved through the introduction of new technologies, new methods, and new concepts.' The e-commerce industry fundamentally requires continuous innovation through technology and data, so it is also one of the industries where new productive forces are concentrated. Baozun President Yu Junrui once said this when discussing the understanding of new productive forces.

This year, Baozun launched the omni-channel growth engine i-MORE, which may be an important innovation in the process of creating new productive force tools. Its purpose is to help brands achieve omni-channel growth and respond to new challenges in the e-commerce field.

This model summarizes Baozun's operational wisdom in the omni-channel and end-to-end links over more than ten years of service and practice for 8 industries and over 450 international brands. Here is a brief introduction to the core + four key points of the i-MORE model:

1) Intelligence empowerment: The i-MORE model, with data intelligence at its core, provides decision support, optimizes consumer experience and operational efficiency for brands through data analysis and artificial intelligence technology.

2) Dynamic merchandising: The model emphasizes quick response to market trends and deep understanding of consumer preferences, driving product strategies with data to ensure brands can timely launch products that meet market demand. In essence, this is a consumer-centric strategy.

3) Connected omni-channel: The i-MORE model supports brands in achieving integration across multiple sales channels and platforms, breaking down barriers between online and offline and different channels, providing a seamless consumer experience. It emphasizes the ability to achieve full-channel integration.

4) Reliable supply chain: Represents supply chain optimization capabilities. This model includes an efficient supply chain solution to ensure that brands can maintain efficient and high-quality logistics services during high traffic promotion periods.

5) Unified experience: The i-MORE model focuses on providing consistent high-standard experiences at all consumer touchpoints, whether it is through DTC channels, distribution channels, or online and offline platforms, achieving a unified consumer experience.

The emergence of i-MORE and its core intelligence empowerment also highly interprets Baozun's concept of 'not only being the hands and feet of brands, but also being their brain.'

Especially in the second half of the development of e-commerce, the competition has shifted from increment to stock. Whether it is an e-commerce platform or a brand's e-commerce channel, everyone wants to seize market opportunities, fundamentally aiming to attract consumers.

For example, the cancellation of pre-sales in this year's 618 promotion will make merchants rely more on big data to predict consumer purchasing behavior in order to promptly stock up and meet market demands. Under this requirement, merchants not only need to accurately grasp current consumer preferences, but also require third parties to predict future trends in advance, especially for products that may become popular.

To achieve this effect, it is precisely the dynamic merchandising in Baozun's newly created i-MORE model that can accurately reach the target. In short, this model revolves around consumer needs, uses data to drive product decisions, and ultimately aims to provide what consumers want. It covers everything from production, design, product procurement, product selection, daily product operation, data analysis, and visualization, with the ultimate goal of making products adapt to the ever-changing needs of consumers.

In addition, during the 618 promotion, a certain brand customer also used the intelligent tools embedded in the i-MORE model to help the brand quickly respond to market changes and optimize inventory management and logistics scheduling. For example, Baozun's independently developed PPM and BBI product solutions have helped brand users improve operational efficiency and effectively solve current decision-making dilemmas using data as the spearhead.

Here we can see that the launch of the i-MORE engine is a key step for Baozun in its digital transformation and technological empowerment. It not only enhances service accessibility and efficiency, but also significantly strengthens Baozun's competitiveness in the digital commerce field.

The effectiveness and success of the i-MORE engine is essentially the result of Baozun's years of accumulated advantages.

In summary, the return to growth of Baozun e-commerce is also the inevitable result of the stability of its cornerstone business and its continued ability to innovate.

For the latter, Baozun's innovative driven growth is also reflected in its business model, for example, through new tools like the i-MORE model, Baozun is able to provide more personalized and efficient services to meet the changing needs of the market.

In addition, the proactive strategic layout of Baozun plays a crucial role, for example, through the acquisition of Gap China's business to expand brand management capabilities, as well as the continuous and conscious strengthening of omni-channel operations, all of which have laid the foundation for Baozun's long-term growth.

Looking ahead, as long as Baozun continues to strengthen its core business and actively embrace innovation, it will be able to adapt to market changes, meet customer demands, and continue to lead market trends, achieving sustainable business and performance growth. (End of the article)