[caption id="attachment_94859" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   2Q19 Results Vipshop reported 2Q19 revenues of ¥22.7 billion, up 9.7% year over year and beating the consensus estimate of ¥21.6 billion. Growth was primarily driven by an increase in the number of total active customers, but also benefited from the emphasis on high-margin apparel, in which the gross merchandise value (GMV) grew 19% year over year – the fastest of all major categories. GMV for the quarter increased 11% year over year to ¥35.1 billion. Gross profit increased 25.9% year over year to ¥5.1 billion. Gross margin expanded 288 basis points (bps) to 22.4%. Non-GAAP diluted EPS increased 88.1% to ¥1.58, beating the consensus estimate of ¥0.98. Total operating expenses were ¥4.2 billion, up 7.2% year over year. .

• The number of active customers increased 11% year over year to 33.1 million.
• Total orders increased 33% year over year to 147.8 million.

Business Highlights The company believes customers increasingly expect omnichannel shopping experiences, and so announced the acquisition of Shan Shan Outlets to enter the discount retail segment. Vipshop will continue to focus on its online business, complemented by an offline capability to help suppliers manage inventory cycles more efficiently. Vipshop also made further progress on outsourcing its delivery to third-party couriers, with around 30% of daily orders now fulfilled by a third-party logistics partner. The company will carefully monitor the impact on customer experience to determine whether to outsource more orders. Outlook For 3Q19, the company expects total revenues to be ¥17.8–18.7 billion, a year-over-year growth rate of approximately 0-5%. The conservative growth rate reflects limited promotional events and seasonality of apparel in the third quarter.