Vipshop Holdings Limited, through its subsidiaries, operates online platforms that offer high-quality branded products to consumers in the People’s Republic of China (the ‘PRC’) through flash sales on its vipshop.com, vip.com online platforms.
The company also operates retail stores in China to supplement its online growth strategy. The company acquired Shan Shan Outlets in July 2019, a leading player in the outlets industry in China, to establish a presence in the offline outlet business in Ch...
Vipshop Holdings Limited, through its subsidiaries, operates online platforms that offer high-quality branded products to consumers in the People’s Republic of China (the ‘PRC’) through flash sales on its vipshop.com, vip.com online platforms.
The company also operates retail stores in China to supplement its online growth strategy. The company acquired Shan Shan Outlets in July 2019, a leading player in the outlets industry in China, to establish a presence in the offline outlet business in China.
The company pioneered an innovative ‘flash sales’ model to reinvent how brands sell, and shoppers buy, off-price products.
As of December 31, 2024, the company had approximately 615.8 million registered members and approximately 293.5 million cumulative customers, collaborated with approximately 30,000 brand partners, and promoted and sold products for over approximately 47,000 popular domestic and international brands.
With the company’s dedicated operations in the discount retail industry, and through its continuous innovations to stimulate customers’ excitement in their shopping experience, it has accumulated a large number of active customers and repeat customers. The total number of the company’s active customers was 84.7 million in 2024. The total number of its repeat customers was 72.8 million in 2024. The company also had 8.8 million active Super VIP customers in 2024.
Flash Sales Model
The company offers sales events daily with an ever-changing and curated selection of popular branded products at deeply discounted prices in limited quantities during limited time periods, creating a ‘thrilling and exciting’ shopping experience for its customers. The company optimizes the brand portfolio and product mix of its daily sales events based on its strong merchandising expertise. As of December 31, 2024, the company had diverse product offerings from a cumulative of approximately 47,000 domestic and international brands, including apparel, accessories, and standardized products. Leveraging the company’s discount retail merchandising expertise and industry insights, it is able to select a range of desirable brands and products from mass market to premium that appeal to a broad base of consumers with different purchasing powers throughout China. To foster customer confidence in purchasing high-quality products from its Vipshop Online Platform, the company provides limited product quality insurance.
The company offers new sales events twice a day starting at 10 a.m. and 8 p.m. Beijing time, respectively. To provide the company’s customers with a greater opportunity to purchase featured discounted products, each customer is only allowed to purchase a limited quantity of the same item, depending on the categories.
The company primarily offers flash sales events through two prime traffic channels, Fengqiang and Kuaiqiang. Each item is available in limited quantity and remains on sale only while supplies last. The products offered on Fengqiang are generally apparel-related products with a discount level of 70% or more off the market retail price. Kuaiqiang, on the other hand, generally distributes standardized products with a discount level ranging from 10% to 90% off the market retail price.
Integrated Platform
The company’s Vipshop Online Platform
The company’s Vipshop Online Platform includes the Vipshop App, the vip.com website, and the Vipshop WeChat Mini-Program. Through the company’s user-friendly Vipshop Online Platform, it offers a curated selection of products and services for shoppers of varying age groups and income levels throughout China, so that they may shop branded products online easily.
The Vipshop App, available on mainstream mobile operating systems, including iOS and Android since 2011, is the company’s top portal of the Vipshop Online Platform in terms of GMV generated and the number of registered members and unique visitors. The company has been upgrading the Vipshop App, adding new features from time to time to increase its customer stickiness and engagement. For the year ended December 31, 2024, GMV generated by its Vipshop App users accounted for approximately 90% of its total online GMV.
The company’s Vipshop WeChat Mini-Program, which it launched in 2017, offers key features of its Vipshop App and allows users to access its platform directly through the WeChat App, one of the most widely used social networks in China.
The company offers new sales events on its Vipshop Online Platform twice a day starting at 10 a.m. and 8 p.m. Beijing time, respectively. Each item is available in limited quantity and remains on sale only while supplies last. The company plans its daily sales events in advance to offer a balanced and diverse mix of brands and products. To further enrich the shopping experience of the company’s customers, and to better address their needs, it has been optimizing and upgrading various sales events on its platform, which also serve as effective touchpoints for it to attract, acquire, and retain customers. Some of the company’s signature sales events include Super Product Category Day, Super Brand Day, and Today’s Top Brands.
The company leverages a variety of channels to better organize its branded products and help customers discover their desired items. Specifically, it operates different channels by product categories, such as womenswear, menswear, sportswear and sporting goods, shoes and bags, accessories, baby and children products, skincare and cosmetics, home goods and other lifestyle products, and supermarket products. The company also constantly adapts various channels to better address the evolving customer needs and reach prospective customers. For instance, it launched Everyday Low Prices and Time-limit Promotions to provide best deals for more value-conscious customers. The company also has dedicated Trendy, Luxury, and Outlet channels primarily targeting customers who desire new, trendy, premium designer, and luxury brands.
The company’s Vipshop Online Platform offers many user-friendly features that enhance customer experience, including AI-powered searches, personalized recommendations, live streaming, and other innovative functions that simulate the ‘in-store’ shopping experience. For the company’s Super VIP members, it operates a dedicated membership store that allows its paid members to enjoy their exclusive membership privileges, such as an extra 5% discount, special offers, private sales, and personalized customer service.
The company’s Offline Operations
In addition to the company’s Vipshop Online Platform, it operated a nationwide offline network consisting of 20 Shan Shan Outlets and a number of other offline retail stores as of December 31, 2024, that complement its online business. Leveraging the extensive experience that it has amassed from its online platform operations, the offline stores offer popular branded products at discounts to cater to the preferences of consumers from different geographic locations. The offline stores enhance consumer experience through personalized recommendations and interactive services provided by sales staff, and generate customer traffic that, in turn, feeds back to its online platform.
In 2024, most of the company’s sales were generated through its Vipshop Online Platform, and the sales through these offline outlets and stores were immaterial to its business.
Brand Partners
Since the company’s inception in August 2008, it has attracted a broad and diverse group of brand partners. The company’s brand partners primarily include brand owners, and, to a lesser extent, brand distributors and resellers. As of December 31, 2024, it worked with over 30,000 brand partners.
To strengthen the synergies between the company’s brand partners and it, the company constantly leverages its mid-end merchant platform to equip its brand partners with data analyses and operational insights, including, among other things, industry landscape, market demand and trends, pricing recommendations, and customer behavior- and transaction-related analyses, so that brands can dynamically monitor, formulate, and adjust their sales, marketing, and operating strategies. To further strengthen ties with brands and enable them to achieve success on its platform, the company proactively identifies and selects premium brands with good performance on its platform for in-depth collaborations, such as product innovation and customization to roll out merchandise specifically for the Vipshop Online Platform. For example, the company collaborates with some brand partners to develop merchandise specifically for its Vipshop Online Platform, known as ‘Made for Vipshop,’ to further differentiate its offerings.
Brand Selection and Procurement
Brand Selection
The company has implemented a strict and methodical brand selection process. The company’s merchandising team, which consisted of over 1,000 members as of December 31, 2024, is responsible for identifying potential qualified brands based on its selection guidelines. The company also unveiled its Global Buyer Manifesto, highlighting the merchandising teams’ commitment to core principles, like focusing on sourcing top-quality products, meticulously selecting brands, maintaining strict quality standards, and offering competitive pricing to ensure a worry-free shopping experience for users; collaborating with brands to provide great deals; encouraging eco-friendly consumer behavior by advocating environmental protection and sustainable practices.
Leveraging the industry expertise of the company’s merchandising team and its proprietary consumer insights, it carefully selects prospective brand partners and works with those that offer high-quality or premium products that are desirable among consumers in China, and that are willing to provide competitive prices and favorable payment and product return terms. In addition to the more mature brands that have an established network of offline stores in China, the company also proactively introduces new and up-and-coming brands that appeal to younger generations and middle-class consumers, such as trendy and boutique brands, and the prestigious brands that have not been introduced to its platform.
Once a potential brand partner is identified, the company conducts due diligence reviews on its qualifications, including whether it holds the proper business operation licenses, safety, sanitary and quality certifications, trademark registration certificates, and license agreements in relation to the branded products. This review process helps ensure that the company maintains a portfolio of brands with high standards and good reputation that can meet its customers’ expectations.
The company generally enters into agreements with brand partners based on its standard form, in which brand partners grant it authorization to market and sell products of certain brands on its Vipshop Online Platform. In most cases, the company enters into annual framework agreements with its brand partners, with separate agreements for supplemental supply orders for each flash sales event.
In addition, the company requires its brand partners that contract with it to comply with the anti-bribery and anti-corruption provisions specifically included in such agreements.
Product Selection
The company’s key management team members have extensive experience and expertise in the retail industry, with insightful knowledge and deep understanding of consumers’ needs and preferences. In addition, it has a professional merchandising team that continually optimizes the company’s brand portfolio and product mix. Before each flash sales event, the company considers and analyzes historical patterns, fashion trends, seasonality, and customer feedback to project the volume of each particular product that it should offer for the event. To maximize sales, the company carefully plans its product mix to achieve a balanced and diverse product offering across different categories. The company is able to select appealing products from a broad brand base, negotiate favorable terms with its brand partners, and occasionally secure unique products from certain brand partners that are, for a certain period of time, specifically offered on its platform.
The company utilizes consumer insights through its customer relationship management and business intelligence systems to strategize its upcoming flash sales events to enhance the timeliness and relevance of its product offerings. In addition, it provides data analytics and insights to its brand partners through its merchant platform to help them improve their product development, as well as sales and marketing strategies to further optimize their sales efficiency and promote additional sales opportunities with it. Since 2020, the company has been collaborating with some of its brand partners to design ‘Made for Vipshop’ products to further differentiate its offerings.
Product and Service Offerings
Product Categories
The company offers a broad spectrum of products ranging from womenswear, menswear, sportswear and sporting goods, shoes and bags, accessories, baby and children products, skincare and cosmetics, home goods and other lifestyle products, and supermarket products from desirable domestic and international brands. The company pays close attention to every aspect of its services to enhance customer experience from packaging to shipping and to after-sales customer service.
Other Services
The significant scale of the company’s business allows it to provide a variety of services to create additional value for its business partners and ultimately benefit its customers, including platform access service, promotion and advertising service, inventory and warehouse management service, logistics service, outlet management service, and membership service. The company’s internet finance offerings primarily consist of consumer financing and supplier financing services, which currently serve as a supporting function for its core online retail business.
Payment, Fulfillment, and Return
Payment
The company provides its customers with the flexibility to choose from a number of payment options. The company’s payment options include its Vipshop Payment service and payment through third-party online payment services, such as WeChat Pay, Alipay, and the emerging e-RMB online payment offered by domestic banks. All of the company’s total online orders are collected through online payment services, of which WeChat Pay was used to process a significant portion of its total orders, and its Vipshop Payment service was used to process a meaningful portion of its total orders.
Fulfillment
The company has established a logistics network and warehousing capacity with nationwide coverage. It has adopted a flexible logistics model supported by its robust and advanced warehouse management system. The company works with top delivery companies with nationwide coverage, such as SF Express and Tongda Operators, to ensure reliable and timely delivery of its orders.
Logistics Network and Warehouse Management System: The company’s logistics network consists of regional logistics hubs and local distribution centers. The company has regional logistics hubs strategically deployed across China. It maintains local distribution centers to facilitate the distribution of standardized and frequently purchased products, and has established several bonded warehouses in China to support its cross-border business.
The company’s automated warehouse management system enables it to closely monitor each step of the fulfillment process, from when a purchase order is confirmed with a brand partner, to when the products are stocked in its logistics centers, and eventually when the product is packaged and picked up for shipment to the customer. The company has continually focused on implementing new initiatives to refine its automated warehouse management system throughout its operations. For example, it has implemented the honeycomb system, an automated goods-to-person warehousing system well-suited for handling large quantities with high access speeds, in the company’s South China, Southwest China, and East China logistics hubs to improve picking efficiency and accuracy of consumers’ orders. As the company offers a curated selection of brands and products for each daily sale, its logistics centers and inventory management systems are also specifically designed to support the frequent sales events on its flash sales platform and a large volume of inventory turnover. In 2024, the company processed approximately 757.5 million customer orders.
Since 2013, the company has been implementing innovative solutions to further enhance its logistics efficiency. The ‘just-in-time’ method allows some of its suppliers to not load inventories to its warehouses before the products are put up for sale. Instead, the suppliers load inventories to its warehouses only within a period of time after being notified when orders have been generated. Compared to the traditional bulk load-in and bulk load-out method, the ‘just-in-time’ method enables the company and its suppliers to increase the number of products offered on its platform and further diversify its product offerings. The company processes orders containing products from multiple suppliers in its mega-warehouses across China. Moreover, the ‘third-party logistics’ method launched in 2013 allows some of its suppliers to lease vacant space in its warehouses to manage their supplies. The ‘third-party logistics’ model increases utilization of its warehouses while enabling certain suppliers to manage their supplies more efficiently. In 2019, the company launched the ‘just-in-time X’ model that allows single-supplier orders from certain reliable brand partners to be shipped directly from the suppliers’ warehouses to the end customers. Since then, the company has been gradually shifting towards the ‘just-in-time X’ model, which further improved its logistic efficiency.
Delivery Services: The company delivers orders placed on its Vipshop Online Platform to all areas in China through leading reputable third-party delivery companies with nationwide coverage, such as SF Express and Tongda Operators. In particular, in November 2019, the company terminated its delivery service unit operated by a subsidiary of Pin Jun Tong, namely Pinjun. Upon termination of Pinjun’s delivery service unit, in November 2019, the company entered into a cooperation agreement (which was subsequently supplemented in November 2021 and October 2023) with SF Holding (which operates the SF Express business) to enhance the company’s cooperation with SF Holding, and utilize its delivery services to optimize the efficiency of its logistics operations, improve operating leverage in its fulfillment expenses, and provide its customers with superior delivery services. The company expects SF Holding to deliver substantially all of its orders in the foreseeable future.
For luxury goods orders, the company delivers the products with an ‘anti-tampering lock’ device to further enhance customer trust.
The company leverages its large-scale operations and reputation to obtain favorable contractual terms from third-party delivery companies. To reduce the risk of reliance on any single delivery company, the company works with most of the major delivery companies in China. It regularly monitors and reviews the delivery companies’ service quality and their compliance with its contractual terms.
Return and Exchange Policy
The company offers its customers the right to return or exchange products purchased from its Vipshop Online Platform within seven days of receipt. The company’s customers can generally return products purchased on its platform within seven days of receipt of the products as long as the products are unused, unwashed, unworn, undamaged, and in their original packaging and original condition. To facilitate the return or exchange, and to enhance customer experience, the company provides door-to-door collection and free return or exchange services without charging any service or warehousing fee. For the return of luxury products, the anti-tampering lock on the product must remain intact. For certain products that are available in other sizes, the company also offers exchange services via SF Express.
Price Assurance
To enhance the shopping experience of the company’s customers, it has established a price assurance policy to allow qualified customers to receive compensation for price differences in the event that the price of the product on its platform experiences a decrease within a certain period of time after the purchase. The company posts its price assurance policy, including its applicable exceptions, on its platform and labels the qualified products accordingly to make sure its customers are well informed of its price assurance arrangements.
Customer Service
The company has a dedicated customer service team responsible for handling general customer inquiries and requests, assisting customers with their ordering process, investigating the status of orders, shipments, and payments, resolving customer complaints, and providing other after-sales services. The company’s customers can contact customer service representatives through its customer service e-mail, real-time online chat, or its customer service hotline 15 hours a day, seven days a week. The company’s Super VIP members enjoy 24/7 customer service support. The company also engages certain high-quality third-party service centers to undertake certain customer services for it. As of December 31, 2024, the company had over 1,500 customer service personnel, including independent contractors.
With a specialized team dedicated to effectively tackling customer concerns, the company strives to align closely with customer expectations and sentiments. The company maintains service quality by carefully selecting personnel, providing its customer service representatives with extensive training, and regularly monitoring and evaluating the performance of each representative. Each new customer service representative is required to complete a mandatory training program in Guangzhou, conducted by experienced managers, covering product knowledge, complaint handling, service attitude, and communication skills. To facilitate timely resolution of customer complaints, the company also trains and delegates its customer service representatives to resolve complaints and remedy situations within a specified authorized amount without having to get approval from their supervisors.
Marketing
The company’s business model and associated value propositions help it build a large base of active customers. The company continues to enhance the element of ‘thrill and excitement’ associated with the customer shopping experience to promote word-of-mouth referrals and repeat customer purchases on its Vipshop Online Platform.
The company leverages various marketing channels, especially digital marketing channels, to strengthen its brand awareness, acquire new customers, and retain existing customers. The company utilizes its big data analytics and insights from its large customer base and business intelligence system to refine its targeted marketing initiatives. For example, the company launched social campaigns, such as live streaming by celebrities and Super VIP special sessions, to give customers more benefits and increase customer interaction. In addition, the company proactively expanded targeted marketing, and adopted various marketing campaigns, such as advertising in TV series and reality shows, and marketing on new media channels to keep customers informed of its latest promotional offerings and the company’s Vipshop brand. Furthermore, the company encourages its customers to share their shopping experiences through an ‘easy-to-share’ function on social media platforms in China, such as WeChat, which can increase their customer stickiness while also serving as a means to attract new customers. Moreover, some of the company’s offline stores are making efforts to utilize private domain traffic by operating their own WeChat groups and providing direct marketing to consumers.
Intellectual Property
As of December 31, 2024, the company had been granted 370 patents and submitted 1,054 patent applications in China, owned 2,264 registered trademarks in China and 103 registered trademarks outside China, 266 copyrights (including copyrights to 235 software products in China that it develops relating to various aspects of the company’s operations), and 30 registered domain names that are material to its business, including vip.com and vipshop.com.
Strategic Investments and Acquisitions
To maintain and strengthen the company’s market position in China, and to supplement its existing business, the company evaluates opportunities for strategic investments in, and acquisitions of, complementary businesses, assets, and technologies, and has made such investments and acquisitions from time to time. The company has made the following strategic investments and acquisitions over the past few years.
History
Vipshop Holdings Limited was founded in 2008. The company was incorporated in the Cayman Islands in 2010.
