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Aug. 15 (NBD) -- Chinese online discount retailer Vipshop Holdings Ltd (NYSE:VIPS) released on Monday its unaudited financial results for the second quarter of 2018.

The company generated a net revenue of 20.7 billion yuan (3.0 billion U.S. dollars), up 18.4 percent year over year from 17.5 billion yuan (2.5 billion U.S. dollars) in the same period of last year. Its net income attributable to shareholders surged by 76.4 percent year on year to 681.6 million yuan (99.0 million U.S. dollars), from 386.5 million yuan (56.1 million U.S. dollars) for the second quarter of 2017.

Despite the growing earnings, shares of Vipshop plunged over 10 percent in after-hours trading on Monday as the Chinese firm posted a worse-than-expected EPS (Earnings Per Share).

The non-GAAP net income attributable to Vipshop's shareholders per diluted ADS for the second quarter of 2018 was 0.84 yuan (0.12 U.S. dollar), lower than 1.09 yuan (0.16 U.S. dollar) in the prior year period.

Players in the e-commerce sector saw declining earnings resulting from slower growth in the number of traditional e-commerce consumers, rising costs of obtaining customers and other factors.

Thus, Vipshop is seeking to tap more consumers through the tie-up with e-commerce giant JD.com and technology firm Tencent. 

According to Vipshop's report, the new users directed via its flagship store on JD.com's website and the mini program on WeChat contributed 24 percent to the total increment of consumers during the second quarter this year. 

However, the discount retailer saw a slowdown in user growth since this year. The number of active users for the first quarter of 2018 totaled 26.6 million, representing a rise of 2 percent which was far less than the 31.3-percent growth in the prior year period. The new financial report shows that the active users numbered 29.8 million in the second quarter, up 6 percent year on year, a much slower growth compared with the same period in 2017.

When commenting on such situation, Vipshop held that though the user number was growing slower, yet the per capita consumption went up by 12 percent in the second quarter and the repurchase rate reached up to 85 percent, higher than last year's 79 percent. 

The high repurchase rate indicates high loyalty of Vipshop's regular customers, and the online retailer now should focus on developing new members, Li Chengdong, an analyst of e-commerce industry, told NBD.

 

Email: zhanglingxiao@nbd.com.cn

Editor: Zhang Lingxiao