[caption id="attachment_89119" align="aligncenter" width="720"] Source: Company reports/Coresight Research[/caption]   1Q19 Results Vipshop reported 1Q19 revenues of ¥21.3 billion, up 7.3% year over year and beating the consensus estimate of ¥20.5 billion. The growth was primarily driven by an increase in the number of total active customers. It also benefited from the emphasis on the apparel category and the discount retail model, as well as the shift of low-margin products to the marketplace platform. GMV increased 11% year over year to ¥33.8 billion. Gross profit increased 8.7% year over year to ¥4.4 billion. Gross margin increased 26 basis points to 20.4%. Non-GAAP diluted EPS increased 13.3% to ¥1.19, beating the consensus estimate of ¥1.07. Total operating expenses were ¥3.6 billion, up 3.9% year over year. As a percentage of total revenue, operating expenses in the quarter decreased to 16.9% from 17.4% in the same quarter last year.

• The number of active customers increased 14% year over year to 29.7 million.
• Total orders increased 29% year over year to 116.5 million.

Business Highlights The company has begun outsourcing some of the orders from its logistics subsidiary Pinjun Express to third-party logistics partners to optimize fulfillment costs. On the consumer side, the company continues to offer financing services to customers buying on its discount retail platform. In the quarter, nearly 5.5 million active customers used the company’s financing services, representing around 22% of total GMV. The partnerships with Tencent and JD.com have brought new users to the platform. In the quarter, around 25% of Vipshop’s new customers came from the WeChat mini-program and the JD flagship store. Outlook For 2Q19, the company expects total revenues to be ¥20.7-21.7 billion, a year-over-year growth rate of approximately 0% to 5%.