Vipshop's Q3 2025: Contradictions Emerge on Quick Commerce Impact, Off-Price Retail Strategy, Consumer Sentiment, AI Adoption, and Shareholder Returns

Date of Call: November 20, 2025

Financials Results

• Revenue: RMB 21.4 billion, up 3.4% YOY from RMB 20.7 billion
• EPS: RMB 2.42 per diluted ADS, up from RMB 1.97 in the prior year period
• Gross Margin: 23.0%, compared with 24.0% in the prior year period
• Operating Margin: 5.9%, compared with 6.4% in the prior year period

Guidance:

• Q4 2025 total net revenues expected to be RMB 33.2 billion to RMB 34.9 billion, representing approximately 0% to 5% YOY (preliminary; subject to change).
• Reaffirmed 2025 shareholder return commitment: no less than 75% of the RMB 9 billion full-year 2024 non-GAAP net income; will evaluate appropriate return level for next year.

Business Commentary:

* Revenue Growth and Customer Expansion: - Vipshop Holdings reported total net revenues of RMB 21.4 billion for Q3 2025, up 3.4% year-over-year. - The growth was driven by improved customer trends, expansion in core categories like apparel-related items, and the success of Super VIP membership.

• Operational Efficiency and Cost Management:
• Despite a slight decline in gross margin and operating margin, Vipshop maintained non-GAAP operating margin at 7.5%.

• The company focused on value-driven growth opportunities in merchandising and AI technology, leading to better customer engagement and marketing efficiency.

• AI Integration and Customer Engagement:

• Vipshop is actively deploying AI across its operations, including search and recommendations, customer service, and marketing.

• The integration of AI agents has enhanced customer experiences, improved business insights, and boosted marketing efficiency.

• Shareholder Returns and Financial Stability:

• Vipshop committed to returning no less than 75% of the full-year 2024 non-GAAP net income to shareholders in 2025.
• The company has already returned over $730 million through dividends and share buybacks, demonstrating financial stability and commitment to shareholder value.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted "tangible progress" and "clear top-line expansion"; CEO: "We have great confidence in our long-term roadmap for sustainable, profitable growth." CFO: revenues "increased by 3.4% year-over-year" and net income attributable to shareholders "increased by 16.8% year-over-year."

Q&A:

• Question from Thomas Chang (Jefferies): Can management comment on the impact of Quick Commerce on the competitive landscape for your apparel-led business? Also, how has GMV trended in October and November to date and what is your outlook for 2026?
  Response: Not entering Quick Commerce; selective speed improvements (e.g., next-day delivery for some SKUs) instead. October/November (W11) showed decent YoY GMV growth; Q4 revenue guide is +0–5% and 2026 targeted for steady, high-quality growth.

• Question from Alicia Yap (Citigroup): Please elaborate on the merchandising-team restructuring—what changed, how it helped this quarter, and whether it improves preference prediction or supplier relationships to secure SVIP-favored product. Also, how is AI being used to grow SVIP and win back churned users?
  Response: Organization refreshed across merchandising, customer, operations and tech (flatter structure, new senior hires, founders more hands-on) to improve cross-team collaboration and assortment; AI (search/recommendations, virtual try-on, AI ads, AI agents) is boosting conversion, acquisition efficiency and being piloted for retention/churn prevention.

• Question from Andre Chang (JP Morgan): Operating profit and margin declined YoY despite net profit growth—when do you expect operating margin/profit to return to positive YoY growth? Also, any update on a potential Hong Kong listing?
  Response: Gross margin dipped due to customer incentives; management expects gross margin to stabilize around ~23% (comparable to 2024) with future margin recovery driven by merchandising, AI and marketing efficiency; no substantive update on a Hong Kong listing—monitoring markets and will disclose progress.

• Question from Wei Sheng (UBS): With active customers and revenue turning positive this quarter, should we expect continued sequential improvement in Q4 and what are the investments/operational focuses for user growth in 2026? Also, what are plans for shareholder returns next year?
  Response: Expect customer growth to accelerate in Q4 vs Q3 and to remain steady into 2026 via diversified acquisition/activation and SVIP expansion; committed to 2025 shareholder returns (≥75% of 2024 non-GAAP net income) and will evaluate appropriate return levels for next year.

Contradiction Point 1

Impact of Quick Commerce on Vipshop's Business

It involves differing perspectives on whether the rise of quick commerce affects Vipshop's business model and customer behavior, which could impact strategic decisions and market positioning.

Can management comment on the latest trends and potential impact from quick commerce? - Thomas Chang (Jefferies)

2025Q3: We are not planning to enter Quick Commerce, as it primarily benefits grocery and food delivery categories. However, we are enhancing our value proposition by improving delivery metrics, optimizing logistics, and implementing other customer-centric initiatives. - Eric Shen(CEO)

Have recent quick commerce initiatives by other e-commerce platforms impacted Vipshop? - Alicia Yap (Citigroup)

2025Q2: Jessie Zheng: On quick e-commerce, we don't see any material impact, as we focus on apparel sales with only a small portion of standardized items. Changes in customer behavior are due to offerings and pricing, not directly impacted by quick e-commerce. - Jessie Zheng(Head of IR)

Contradiction Point 2

Strategic Focus on Off-Price Retail

It reflects differing strategic priorities for Vipshop's business model, with implications for product offerings and market positioning.

What is the outlook for 2026? - Thomas Chang (Jefferies)

2025Q3: Regarding 2026, we anticipate opportunities in off-price retail for brands amidst normalizing consumer sentiment. - Eric Shen(CEO)

What is the progress and outlook for the Shan Shan Outlet business for next year? - Wei Xiong (UBS)

2025Q2: Shan Shan Outlets have shown strong momentum, with 20 stores and double-digit same-store growth. We are looking for suitable locations to expand our outlet business, seeing it as a long-term asset. - Jessie Zheng(Head of IR)

Contradiction Point 3

Consumer Sentiment and Revenue Growth Expectations

It involves differing expectations regarding consumer sentiment and revenue growth, which are critical for understanding the company's financial performance and strategic positioning.

Can management provide insights on Quick Commerce trends and their potential impact? How are October and November performance shaping up, and what is the outlook for 2026? - Thomas Chang (Jefferies)

2025Q3: We observed solid growth momentum during the Double 11 shopping event, and we expect this trend to continue, with a Q4 guidance of 0-5% revenue growth. - Eric Shen(CEO)

Can management comment on recent consumer sentiment? What is the outlook for FY2025 revenue and earnings? Can management comment on the June 18th campaign? - Thomas Chong (Jefferies)

2025Q1: We see signs of improvement in overall consumption sentiment. After a muted start, there's an uptick since March and continuing into the second quarter. We maintain our view that we will regain growth track in the second half of the year. - Eric Ya Shen(CEO)

Contradiction Point 4

AI Application and Impact on Marketing and Operations

It highlights changes in the company's approach to AI and its role in marketing and operations, which can impact strategic initiatives and operational efficiencies.

Can you explain the recent merchandising team restructuring and how it impacted Q4 performance? How is AI helping to drive Super VIP member growth and retention? - Alicia Yap (Citigroup)

2025Q3: The AI application is benefiting our business through visual models and AI-generated content in advertising, enhancing customer experience and conversion rates. Additionally, we are exploring the use of AI agents for customer retention and churn reduction. - Eric Shen(CEO)

How should we think about the balance between marketing spend and maintaining margins this year? - Roger Duan (Barclays)

2025Q1: We will focus on AI as an important technological deployment to enhance our marketing and operation capabilities. The AI application will provide better interactivity with our customers and in return, improve conversion rates. - Jessie Zheng(CIO)

Contradiction Point 5

Shareholder Return and Dividend Distribution

It involves changes in financial forecasts, specifically regarding the company's commitment to shareholder returns, which are critical for investor expectations.

Will sequential improvement continue in the fourth quarter? What are your plans for the shareholder return program next year? - Wei Sheng (UBS)

2025Q3: Vipshop is on track to return no less than 75% of the RMB 9 billion non-GAAP net income to shareholders in 2025. As of Q3, we have returned over $730 million through dividends and buybacks. For 2026, we will re-evaluate and announce the appropriate shareholder return levels. - Mark Wang(CFO)

How should we think about revenue and margin trends for the rest of the year? - Thomas Chong (Jefferies)

2024Q4: We will continue our commitment to returning capital to shareholders while staying flexible and prudent in capital allocation, with an overall objective to strike appropriate balance between capital return and reinvestment. - Jessie Fan(Head of Investor Relations)