Baozun is the leading brand e-commerce solutions provider in China, with a market share of approximately 22% as measured by transaction value in 2015, according to the iResearch Report. Baozun’s integrated brand e-commerce capabilities encompass all aspects of the e-commerce value chain covering IT solutions, store operations, digital marketing, customer services, warehousing and fulfillment. Baozun helps brand partners execute their e-commerce strategies in China by selling their goods directly to customers online or by providing services to assist with their e-commerce operations.

With e-commerce in China growing rapidly in both scale and complexity, more global brands view e-commerce as a valuable part of their China expansion strategy, and brands look to Baozun as a trusted partner with local knowledge and industry expertise to execute and integrate e-commerce strategies without the investment associated with establishing and maintaining local infrastructure and capabilities on their own.

Baozun had 95 brand partners as of December 31, 2015. These brands cover diverse categories, including apparel, appliances, electronics, home, food and health, cosmetics and fast moving consumer goods, insurance and automobile. Many of Baozun’s brand partners occupy leading positions in their respective industries, such as Philips, Nike, Microsoft and Haagen-Dazs. According to the iResearch Report, Baozun is the leading brand e-commerce solutions provider in China that has penetrated into the most diversified and comprehensive range of categories.

Baozun believes that its brand partners value the Company’s integrated e-commerce capabilities, dependable services, deep category expertise, market insight and ability to innovate and adapt to the fast-changing e-commerce market. Baozun’s end-to-end brand e-commerce capabilities allow it to leverage brand partners’ unique resources and seamlessly integrate them with their back-end systems to enable data tracking and analytics for the full transaction value chain, making Baozun a valuable part of its brand partners’ e-commerce functions. The Company helps its brand partners establish a market presence and launch products quickly on official brand stores and major online marketplaces in China, such as Tmall, JD.com and Amazon, as well as social media platforms such as Weixin. Baozun also helps its brand partners devise and execute O2O strategies combining the strengths of their online and offline retail networks. By enabling a seamless shopping experience across various channels both online and offline, Baozun delivers omni-channel solutions to achieve optimal branding effect and sales results that are responsive to its brand partners’ individual e-commerce objectives.

Baozun’s store operation capabilities, logistics network and warehousing capacities are crucial to its success. The Company provides customizable solutions and dedicated personnel with relevant industry experience and brand-specific training in operating e-commerce stores. It also partners with leading nationwide and local logistics services providers to ensure reliable and timely delivery. For example, the Company understands that according to SF Express, one of the largest express delivery services in China, Baozun is one of its top 10 customers in China. The Company is able to achieve next-day delivery in 95 cities across China. Baozun operates seven warehouses with an aggregate gross floor area of 180,000 square meters that can handle 1,100,000 daily orders and 600,000 daily pieces. Baozun’s warehouse management system is customized to account for variance in arrangements with brand partners and differences in product specifications, ranging from apparel, electronics to beauty and health products.

Technology

Technology is key to Baozun’s success and quick expansion. Leveraging its proprietary and scalable technology infrastructure and systems, the Company provides integrated e-commerce solutions that synchronize marketing campaigns, centralize management of inventory, order fulfillment and customer service, and collect and analyze real-time consumer behavior and transaction data across internet, mobile and offline channels. The scalability of its systems, built on deep vertical knowledge and modular implementation, allows Baozun to efficiently provide customized solutions across categories and support an increasingly larger array of transactions as it adds new brands, integrates new channels and accommodates peaks and surges in consumer demand.

Baozun continues to win brands’ loyalty with its track record of articulating their marketing needs into workable solutions that consistently deliver tangible sales results. Baozun collects valuable consumer behavior data through its customer relationship management system. The Company has also developed Business Intelligence, or BI, software which enables real-time analysis of transaction data across online and mobile channels to make more targeted and insightful marketing recommendations to brand partners that leverage the strengths of various channels. Baozun believes that as it increases its solution offerings and channels to brand partners, launches more marketing initiatives and campaigns and increase their sales, the stickiness of its relationships with brand partners will also grow.