"The success of the eCommerce industry relies heavily on the development of outstanding capabilities. Thanks to technological advancements, eCommerce has become a vital business model worldwide. China leads the way with over 40% of the global market share, making it the largest eCommerce market. As the industry progresses, competition has become fiercer and newer trends and innovations continue to emerge. Baozun, a pioneer in this field, is already devising fresh plans and strategies to be well-equipped for what lies ahead."

- Vincent Qiu, CEO of Baozun Inc. 

Continue reading below for the full interview with Vincent as he delves into the changing landscape of the eCommerce industry and the strategic approach Baozun is taking to thrive in this competitive environment. 

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It has been 16 years since Baozun was founded in 2007. In your opinion, what stages has the company gone through during these 16 years, and what is its current status?

Vincent: Baozun went through four stages in its development. The first stage was exploring the business model. Although the company was founded in 2007, it took two years to find the right direction. From 2007 to 2008, Baozun went through an exploratory period, trying out various strategies. While some initiatives failed, the company built strong systems, attracted talented professionals, and established relationships with well-known brands. This period laid a solid foundation for Baozun's future success.

During the second stage, which began in 2009, our company experienced rapid growth thanks to Taobao Mall in the eCommerce industry. This growth continued for a decade until 2019, when eCommerce growth rates began to slow down from over 20% to around 10%. We entered our third stage in 2020 as we focused on achieving high-quality, albeit slower, growth.

Baozun is currently in the fourth stage of expanding its business model. We have evolved from only offering eCommerce services to brand management and international businesses. 2023 marks a transition from high-quality growth to the expansion of our business model, which poses significant challenges. Thus, to succeed, we should strive to be exceptional by eliminating unnecessary work and focusing exclusively on the things that are essential.

 

According to Baozun's current development path, which business segments need transformation and breakthroughs, and which ones need to be continued?

Vincent: All segments of our business are equally important, and it's challenging to determine which one holds more significance. We dedicate more of our strategic resources to brand management, and the tactical resources are focused on eCommerce projects. The deployment of our international business demands time as it requires implementation and execution. Currently, this part is the most abstract and challenging. The ability to persevere even when the tasks are undefined is a significant test. We need to maintain control over the pace and produce specific results at certain time points to bring everything together.

 

In the first quarter, Baozun transformed its Creative Content Division to focus on creative marketing and live streaming. It also plans to establish a large live streaming room network with an area of approximately 4,500 square meters at its Shanghai headquarters. Does this signify Baozun's confidence in the live streaming field?

Vincent: The eCommerce industry has matured in terms of operations and digital marketing and competition between marketplaces and platforms will become even fiercer. Live streaming will definitely be a capability possessed by all mainstream platforms in the future. Brands will continue to allocate more marketing budget for live streaming by influencers to keep up with popular trends. Although live streaming may not be revolutionary, it is still a significant shift in consumer behaviour that should not be overlooked. While Baozun may not excel in live streaming on its own, utilising creativity, marketing, and content can maximise Baozun's strengths.

 

When it comes to international business, some Southeast Asian countries are still in the early stages of marketing and have not yet embraced live streaming. How do you view Baozun's business development in Southeast Asia?

Vincent: While opportunities for front-end innovation in Southeast Asia may be limited, there are more opportunities for middle and back-end processes. In terms of front-end marketing methods like live streaming, what we have successfully marketed in China may not be as well-received in Southeast Asia. Different cultures have different preferences. If we compare the market to vehicles, the Chinese market is like a car capable of reaching a top speed of 200 kilometres per hour. If it keeps driving at 100 kilometres per hour, various issues may arise. On the other hand, 90 kilometers per hour may be the optimal speed for Southeast Asia. We observed a significant gap in the middle and back-end areas in Southeast Asia and Baozun happens to be a company with strong capabilities in these areas. Therefore, it is appropriate for us to enter Southeast Asia at this time.

 

When expanding international business, does Baozun hope to work with Chinese brands that it has previously cooperated with or seek new brands overseas?

Vincent: We've identified three distinct groups of partners for our international business. The first group consists of brands we've developed close partnerships with through Baozun's brand management business. These brands set high standards for our international teams, having witnessed our strong capabilities in China. The second group includes brands with existing partnerships in China, whom we help bring successful, tried-and-tested strategies from China to the global market. The third group is made up of Chinese brands looking to expand globally and we're currently exploring this new model. These are the three key groups of brands we're targeting for partnerships in Southeast Asia and beyond.

 

In the face of fierce market competition with major eCommerce platforms becoming adept at eCommerce operations and boasting higher efficiency, what do you think Baozun has done right?

Vincent: At Baozun, we take our work seriously and are committed to doing the right thing. Our DNA is all about being steadfast. When we entered the market in 2000, there were no comprehensive eCommerce solutions for enterprise businesses in China. We set the highest standards and quickly became the go-to for brands seeking eCommerce solutions. From our founding until 2017, Baozun experienced unprecedented growth, and we remain proud of our achievements during those ten years. However, many companies are offering similar services today, so we must strive to be extraordinary and stand out from the competition.

 

The current eCommerce industry is undergoing rapid changes and even top companies have had to make significant adjustments. What do you think are the biggest challenges for Baozun at this stage or in the future?

Vincent: The ongoing competition in the eCommerce industry is not limited to specific areas, as everyone strives for speed and quick monetisation. In order to excel in this industry, constant front-end innovations are necessary, resulting in intense competition.

Looking at the bigger picture, one of the major challenges we face is the uncertainty surrounding the industry's future, which can impact consumers' confidence in making purchases. To overcome this, we must be prepared and focus on building our capabilities to perform exceptionally well.

On a smaller scale, customer satisfaction is crucial. Many operational capabilities related to marketing have become core capabilities across all channels. The way products are selected, the quantity, and pricing all impact the customer experience on different platforms. Enhancing customer satisfaction is, therefore, imperative to help our brand partners achieve unparalleled success

 

Baozun has reported losses in profits in the past one to two years. How do you view this situation?

Vincent: Our industry is currently experiencing fierce competition, which has resulted in a decrease in profits. Nonetheless, we have made remarkable progress in the last two years by providing exceptional eCommerce services and expanding our business model through a clear, step-by-step action plan. Although achieving exceptional outcomes in this sector remains difficult, it is achievable. During this period, our primary focus is on strategic breakthroughs and expanding our business model rather than profitability. We understand that profitability will come naturally once our objectives are accomplished. Therefore, our next course of action is dedicated to achieving the extraordinary.

As the founder of Baozun, the early stages of entrepreneurship were challenging because I had to take on everything myself. However, I am now fortunate to have a strong and experienced team with everyone working together seamlessly to build relationships and accomplish tasks. I am confident about Baozun's future.

 

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