Vipshop's Q3 2025 Earnings Call: Contradictions on Quick Commerce Strategy, 2026 Revenue Outlook, Hong Kong Listing, and AI Adoption

Date of Call: None provided

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:

• Total net revenues for Q4 2025 expected to be RMB 33.2 billion to RMB 34.9 billion (0% to +5% YOY)
• Gross profit margin expected to be roughly 23%, comparable to 2024
• 2025 shareholder returns: commit to return at least 75% of 2024 non-GAAP net income; on track

Business Commentary:

* Revenue and Earnings Growth: - Vipshop Holdings reported a 3.4% year-over-year increase in total net revenues to RMB 21.4 billion in Q3 2025. - The growth was fueled by the company's focus on high-quality development, strategic investments in merchandising, customer engagement, and AI-driven enhancements.

• Super VIP Membership Growth:
• Active Super VIP customers grew by 11% year-over-year, contributing 51% of online spending.

• This sustained growth was driven by continuous upgrades to SVIP benefits and targeted engagement initiatives that effectively converted regular customers.

• Operational Efficiency and AI Integration:

• Vipshop implemented AI agents to enhance search and recommendations, leading to a tangible increase in conversions and contributing to sales growth.

• The integration of AI also improved marketing efficiency through AI-generated content and media placements, boosting customer acquisition.

• Shareholder Returns and Financial Health:

• Vipshop returned over $730 million to shareholders through dividends and buybacks in 2025, on track to meet its commitment of returning 75% of the full-year 2024 non-GAAP net income.
• The company's healthy financial position and growth strategy reflect its commitment to balancing growth investments with value creation.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted revenue turned to growth (+3.4% YOY) and net income attributable to shareholders rose 16.8% YOY. They stated confidence in the long-term roadmap and noted progress on merchandising, AI initiatives and being on track to return >=75% of 2024 non-GAAP net income, supporting an upbeat tone.

Q&A:

• Question from Thomas Chang (Jefferies): Can Management comment about the potential impact of Quick Commerce on Vipshop's competitive landscape? Also, how's October and November GMV momentum and the 2026 outlook?
  Response: We will not enter quick commerce; instead we’ll speed select standardized SKUs and logistics (e.g., next-day delivery) where relevant; Oct–Nov showed decent GMV momentum, Q4 revenue guided +0% to +5%, and 2026 expected to be steady, high-quality growth.

• Question from Alicia Yap (Citigroup): Can management elaborate the merchandising team restructuring and how it helped the quarter? Was it to better predict customer preferences or secure SVIP-preferred merchandise? Also, how is AI being used to grow SVIP and win back churned users?
  Response: We realigned the organization across merchandising, customer, operations and tech, refreshed senior merchandising talent to improve assortment and supplier collaboration; concurrently accelerating AI (search/recommendations, virtual try-on, AI ads, AI agents) to boost conversion, acquisition and retention, including churn targeting.

• Question from Andre Chang (JP Morgan): When do you expect operating profit and operating margin to return to positive year-on-year growth? And any update on plans for a Hong Kong listing?
  Response: Gross margin dipped due to incentives; we expect gross margin to be largely stable around ~23% (comparable to 2024); no substantive update on Hong Kong listing—management is monitoring market conditions and will update if there is progress.

• Question from Wei Sheng (UBS): Should we expect continued sequential improvement in active customers and revenue in Q4? What are the investment and operational focuses for user growth and retention, and what are thoughts on the shareholder return program for next year?
  Response: Expect customer growth to accelerate in Q4 versus Q3 and to be steady into 2026 driven by expanded acquisition channels, SVIP expansion and AI-driven engagement; shareholder returns remain a priority—on track for >=75% of 2024 non-GAAP net income in 2025 and will be evaluated for next year.

Contradiction Point 1

Quick Commerce and Strategic Positioning

It highlights a contradiction in Vipshop's strategic positioning regarding Quick Commerce, which could impact investor perceptions of the company's competitive strategy.

How is Vipshop addressing the Quick Commerce trend in e-commerce? - Thomas Chang (Jefferies)

2025Q3: Vipshop is not planning to enter the Quick Commerce market, as our main product categories are apparel, which does not require immediate delivery. - [Eric Shen](CEO)

How has recent e-commerce competition impacted Vipshop's business, and has recent weather affected demand for summer apparel? - Alicia Yap (Citigroup Inc., Research Division)

2025Q2: Vipshop doesn't see any material impact from instant or quick e-commerce initiatives on their business. - [Jessie Zheng](Head of Investor Relations)

Contradiction Point 2

Customer Growth and Revenue Expectations for 2026

It involves differing expectations for customer growth and revenue expectations for 2026, which are critical for investor forecasting.

Will customer and revenue growth continue to improve sequentially in Q4 and beyond? What are shareholder return plans for 2026? - Wei Sheng (UBS)

2025Q3: For the full year 2025, we expect revenue growth of approximately 4% to 6%. For the fourth quarter of 2025, we expect revenue growth of approximately 15% to 17% year-over-year. - [Mark Wang](CFO)

Can you elaborate on the third quarter revenue guidance returning to positive YoY growth and the recent surge in share repurchases? - Chih-Hung Chang (JPMorgan Chase & Co, Research Division)

2025Q2: The positive top line growth guidance is attributed to organizational changes and merchandising adjustments that have led to customer growth recovery. Merchandising optimization and customer relevance offerings are expected to support future growth. - [Jessie Zheng](Head of Investor Relations)

Contradiction Point 3

Hong Kong Listing Update

It involves changes in the company's position regarding a potential Hong Kong listing, which could affect the company's financial strategy and investor sentiment.

Is there any update on the potential Hong Kong listing? - Andre Chang(JP Morgan)

2025Q3: Regarding the Hong Kong listing, we are closely following market changes and will update accordingly. - [Mark Wang](CFO)

Is there any view on a secondary listing in Hong Kong? - Alicia Yap(Citigroup)

2025Q1: On Hong Kong listing, we are evaluating the option and will keep the market updated if there is progress. - [Jessie Zheng](Head of Investor Relations)

Contradiction Point 4

AI Utilization in Merchandising and Customer Engagement

It highlights differences in the company's approach to merchandising and AI utilization, which can impact customer engagement and operational efficiency.

Can management explain the recent merchandising team restructuring and its impact on Q4 performance? How is AI supporting Super VIP growth and customer retention? - Alicia Yap(Citigroup)

2025Q3: AI is being leveraged to improve conversion rates and acquisition efficiency by enhancing customer experience with AI-generated content, optimizing marketing, and addressing customer churn. - [Eric Shen](CEO)

What is the strategy for future SVIP program growth? How do you assess the competitive landscape in e-commerce? - Wei Xiong(UBS)

2025Q1: This quarter, we also enhanced our merchandising capabilities through better customer insights and AI-driven improvements. - [ Jessie Zheng](Head of Investor Relations)

Contradiction Point 5

Quick Commerce Strategy

It highlights Vipshop's strategic approach to the Quick Commerce market, which can impact expectations for market entry, operational strategy, and revenue growth.

How is Vipshop addressing the trend of Quick Commerce in the online shopping competitive landscape? - Thomas Chang(Jefferies)

2025Q3: Vipshop is not planning to enter the Quick Commerce market, as our main product categories are apparel, which does not require immediate delivery. - [Eric Shen](CEO)

Is Q1 revenue expected to be toward the low or high end of the guidance? Can management comment on recent consumer sentiment? - Thomas Chong(Jefferies)

2024Q4: We are also exploring ways to improve the convenience of our platform to adapt to the rapid changes in consumer behavior, which include the rise of Quick Commerce. - [Jessie Fan](Head of Investor Relations)