Executive Summary

Amazon.com Inc. (NASDAQ:AMZN), a US based e-commerce company, is aiming to

expand their market share in one of the most populated country that has the largest
market size. They are considering to acquire a company from China, one of the
largest e-commerce market as they believe that it can boost their revenue growth in
the future. The target company is Vipshop Holdings Ltd (NYSE:VIPS). Vipshop is a
leading online discount retailer for brands in China. The Company offers high quality
and popular branded products to consumers throughout China at a significant
discount from retail prices. As compared to conventional on-line marketplaces or
large-scale multi-category online retailers, Vipshop has successfully created a third e-
commerce model and proven that it can provide tremendous scale and profitability.
By providing special offers and deep discounts on branded products, the Company
has pioneered the online discount retail model in China and become the expert and
leader trusted by its customers and brand partners alike. Since its founding in August
2008, the Company has rapidly built a sizeable and growing base of customers and
brand partners.
This report aims to deliver a thorough analysis to the acquirer about their own
business condition and also about the opportunity of acquiring VIPSHOP Holdings for
the future. This report includes business fundamental, macroeconomic and industry
overview, financial projection, and valuation. Our conclusion in this report is the
target value of the company.
Acquire Vipshop Holdings could give potential benefits primarily in terms of huge
customer base to penetrate new market and technology advancement, especially in
China’s market.

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COMPANY OVERVIEW AND BUSINESS DESCRIPTION
Amazon.com, Inc.
Founded in 1994, Our client Amazon Inc is a US based retail giant, and currently
positioned at top as world’s largest internet retailer. Beside online retail business,
Amazon also broadened its range of products and services to not only serve
consumers, but also sellers, enterprises, and content creators. As of December 31,
2016, the company is being ranked as the largest ecommerce company by revenue
and market capitalization. All the company’s sales comes from retail websites which
mostly generated from electronics and other general merchandise (72% from total
sales). In the ownership composition, 60.56% is holded by institutional holdings and
the rest is by non-institutional.
Figure 1. Institutional Holdings

Source : NASDAQ

The top five holders of Institutional Holdings are Vanguard Group Inc (27,872,279
shares), BlackRock Inc (24,535,840 shares), FMR LLC (17,497,896 shares), Price T
RoweAssociates Inc /MD/ (17,026,012 shares), and State Street Corp (15,920,952).

Executive Officers of the Registrant

Figure 2. Executive Officers of the Registrant

Source : Company Data

 Jeffrey P. Bezos. Mr. Bezos has been Chairman of the Board of Amazon.com
since founding it in 1994 and Chief Executive Officer since May 1996. Mr.

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 Bezos served as President of the Company from founding until June 1999 and
again from October 2000 to the present.
 Jeffrey M. Blackburn has served as Senior Vice President, Business
Development, since April 2006.
 Andrew R. Jassyhas served as CEO Amazon Web Services since April 2016, and
Senior Vice President, Amazon Web Services, from April 2006 until April 2016.
 Brian T. Olsavsky has served as Senior Vice President and Chief Financial
Officer since June 2015, Vice President, Finance for the Global Consumer
Business from December 2011 to June 2015, and numerous financial
leadership roles across Amazon with global responsibility since April 2002.
 Shelley L. Reynolds has served as Vice President, Worldwide Controller, and
Principal Accounting Officer since April 2007.
 Jeffrey A. Wilkehas served as CEO Worldwide Consumer since April 2016,
Senior Vice President, Consumer Business, from February 2012 until April
2016, and as Senior Vice President, North America Retail, from January 2007
until February 2012.
 David A. Zapolsky has served as Senior Vice President, General Counsel, and
Secretary since May 2014, Vice President, General Counsel, and Secretary
from September 2012 to May 2014, and as Vice President and Associate
General Counsel for Litigation and Regulatory matters from April 2002 until
September 2012.
Board of Directors
Figure 3. Board of Directors

Source : Company Data

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In addition Amazon hired nearly 130,000 employees globally in 2017, excluding
acquisitions. Amazon now employs more than 17,500 veterans and military spouses
across the U.S., and plans to hire over 10,000 more by 2021.
The Current and The Next Project
 Amazon launched new ways for developers to earn money building for Alexa,
including paid skill content through inskill purchasing, premium subscription
content, and a more frictionless checkout experience with Amazon Pay. New
skills offering premium paid content include The Ellen DeGeneres Show’s
popular Heads Up! game, The Match Game, and the History Channel’s
Ultimate History Quiz. Amazon also introduced new tools and developer kits,
including the Alexa Mobile Accessory Kit and Alexa Premium Far-Field Voice
Development Kit, to make it easier for developers to bring Alexa to more
devices.
 Amazon announced that the Prime Video app is now available on Apple TV in
over 100 countries. Prime members now have more ways to stream award-
winning and critically-acclaimed titles, including Amazon Original Movies and
Prime Originals.
 Amazon Prime Video continues to launch local Original Series, including
Breathe in India, as well as Pastewka and Glory is Gone in Germany.
 AWS continued to expand its infrastructure in 2017 to best serve customers,
launching a new region in France and a second AWS Region in China during
the quarter. AWS plans to open 12 more Availability Zones across four regions
(Bahrain, Hong Kong, Sweden, and a second GovCloud Region in the U.S.)
between now and early 2019. AWS now operates 52 Availability Zones across
18 infrastructure regions globally.
 For more project can be seen in the appendix.

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MACROECONOMIC AND INDUSTRY OVERVIEW
Macroeconomic Outlook
The past decade has been characterized by fragile growth, high investor uncertainty
and periodic spikes in global financial market volatility. As crisis-related fragilities and
the adverse effects of other recent shocks gradually subside, the world economy has
strengthened. Towards the end of 2016, global economic activity began to see a
modest pickup, which extended into 2017.
In 2017, global economic growth is estimated to have reached 3% when calculated at
market exchange rates, or 3.6% when adjusted for purchasing power parities, the
highest growth rate since 2011 (figure 4). Currently, all major developed economies
are experiencing a synchronized upturn in growth. Compared to the previous year,
growth strengthened in almost two thirds of countries worldwide in 2017.
Figure 4. Growth Of World Gross Product

At the global level, world gross product (WGP) is forecast to expand at a steady pace
of 3.0% in 2018 and 2019. Developing economies remain the main drivers of global
growth. In 2017, East and South Asia accounted for nearly half of global growth, as
both regions continue to expand at a rapid pace. The Chinese economy alone
contributed about one-third of global growth during the year.
Consumer Confidence Index (CCI) also hit record in history, reaching 101.05 as of
February 2018 (Appendix 7).

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The Trade War Risk : INFLATION
According to The Wall Street Jurnal, the shots exchanged by the U.S. and China could
be particularly troubling for investors, because they stoke a fear that has already
rocked markets, inflation.The U.S.’s threat to impose tariffs on $50 billion of Chinese
imports across 1,300 categories of products and China’s swift response has raised the
risk of a more serious disruption.While tariffs are still a threat, disruptions to trade
could ultimately prove inflationary, as they represent a shock to the supply side of
the economy. It would be piled on top of other forces that suggest inflationary
pressures should build, such as U.S. tax and spending policy and low unemployment,
which suggest strong demand, including for imports.U.S. import inflation picked up to
3.5% in February, having dipped close to 1% in 2017 Prices of Chinese imports are up
just 0.3% over the past year(appendix 8).
American unemployment stood at 4.1 percent in March, a 17-year low. All these
economic indicators suggest that the U.S. economy is doing well, regardless of the
trade deficit.American economic policy for the past 30 years encouraged U.S.
companies to outsource labor-intensive manufacturing to China and other Asian
countries while retaining the most valuable parts of American ingenuity: innovation,
technology and brand.
The U.S.-China trade relations in the next 20 years will look very different from the
past two decades. The benefits of globalization since joining the World Trade
Organization in 2001 have opened China’s mind to the idea of open markets.China is
shifting its economy from the world’s largest exporter to the world’s largest
consumer.

INDUSTRY OVERVIEW
E-Commerce Trends to Pay Attention in 2018
E-commerce has experienced an explosive worldwide growth over the past decade,
including in developing countries. The retail e-commerse sales worldwide from 2014
to 2017 has stable growth with average 20% annualy. The industry is generates the
total annual sales of $2.304 Billion. According to eMarketer, the industry is projected

5
to continue growing to $4.878 Billion of total retail e-commerce sales worldwide in
2021 (appendix 10).
The industry will continue to grow along with the more consumers embrace the
virtual world as a safe and convenient place to shop, either on computers or using
their smartphones,but brick and mortar is still a dominant player by a landslide.

The Internet and Mobile Penetration

Another reason that supported e-commerce growth is the internet and mobile
penetration and usage has increased tremendously over the last five years.
Figure 5. Internet Users in the world Figure 6.Internet World Penetration Rates

The Mobile Opportunity

The share of online visits from smartphones continues to grow across all age groups
and industries. According to Adobe Digital Insights data (Appendix12), which
measures 80% of the online transactions at the US 100 largest web retailers:
 Online spend increased 16.9% YoY on Black Friday
 Top selling items included the Nintendo Switch, Hachimals, and Colleggtibles
toys, PJ Masks, LOL Surprise Dolls, ride-on cars, Chromecast, and Roku.
 Thanksgiving weekend 10.1% growth in online spending.
 Small Business Saturday saw the highest smartphone share-of-visits of the
season to date, at 46.5% (not including tablets)
 Cyber Monday was up 16.8% YoY – the largest US online shopping day in
history at $6.59B, more than a billion dollar increase over LY.

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  Mobile had its first $2B (30.4% of revenue came from mobile devices) day on
Cyber Monday. Conversion rate on smartphones was up 10.1% to a rate of
3.5%.
 AOV for Cyber Monday was up 0.1% YoY.

The Omni Channel Figure 7. Illustration of Omni Channel

The Omni Channel capabilities is also take part in makes

this industry growing. According to Statista.com, it was
found that 43% of respondents searched goods online
and purchased them online. A further 14% of
respondents stated that they had search for goods
online and later bought them in a store.
Source:
catchpr.co.uk
The Competitor
Amazon operates in several segments : E-Commerce, Cloud Computing, Media
 In E-commerce segment, the only remaining meaningful retailers for Amazon
from competitive standpoint in the US is Walmart and Costco. Internationally,
Alibaba is a huge competitor to Amazon.
 In cloud computing segment, the competitor is Google and Microsoft
 In stream media/movie segment, the competitor is Netflix

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SWOT ANALYSIS
Figure 8. SWOT Analysis

Source: Team estimates

FINANCIAL STATEMENT ANALYSIS

Business revenue growth of Amazon Inc has averaged 23,9% annually for the last 5
years of operations.In the last reported year, the Amazon Inc net revenue was almost
178 billion U.S. dollars, up from 135.99 billion US dollars in 2016.
Figure 9. Amazon.com Inc Net Sales Revenue (in billion U.S Dollars)

Source : eMarketer© Statista 2018

In the 2016 annual report, the business is generated primarily through net sales from
several segmentation, they are Amazon Web Services (AWS) (9%) , International
(32%), and North America (59%). Figure 2 show detailed revenue share in 2016 .

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 Figure 10. Amazon Revenue Share 2016

Source : revenuesandprofits.com

Valuation
For the valuation, We decided to use Discounted Cash Flow (DCF) method. DCF
analysis attempts to value a project, company or asset today, based on how much
money it’s projected to make in the future, with the idea that the value is inherently
contingent on its ability generate cash flows for investors. This income-based
business valuation method provides highly accurate estimate of business value based
on the business earning potential. For the forcasting, we’ve decided on a five-year
forecast.
Free Cash Flow.31 Dec 2017, amazon free cash flow is decreased to $8.4 billion for
the trailling twelve months, compared with $10.5 billion for the trailing twelve
months ended December 31, 2016. With the averaged growth rate of 23%. n
Forecasting Free Cash Flows, we estimated free cash flow of $23.64M for Amazon in
Year 5, the final of our company projections.
Discount Rate.We also calculated the company’s discount rate as 11%. We’ll also
assume that long-term cash flows will grow in by 10% per year.
The Terminal Value. The terminal value of VipshopHoldings iscalculated by using the
Gordon Growth Model:

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 Table 1. free cash flow projection for Amazon
Current Terminal
Year Year 1 year 2 year 3 year 4 year 5 Value
Growth 23% 23% 23% 23% 23%
$12,70 $15,63 $19,22 $23,64 $2601,5 B
$8,4 Billion $10,33 B B B B B
Source : eMarketer© Statista 2018

Entreprise ValueTo determine a total company value, or enterprise value (EV), we

take the present value of the cash flows, divide each by the discount rate (11%) , the
result was $1.601,61 Billion include company debt. Without debt, the fair value of
Amazon Inc should around the $1.557,46 Billion.

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Vipshop Holdings Limited
Vipshop Holdings Ltd is a Chinese company that operates the ecommerce website
(VIP.com) specializing in online discount sales. Founded in 2008, the company is
based in Guangdong and was listed in the New York Stock Exchange on March 2012.
Vipshop has established a dominant leadership position in China’s online discount
retail market. In 2016, around 97,7% of the company’s revenue was generated from
electronic shopping, while the other 2,3% came from advertisement. According to
Forbes.com, Vipshop engages in the provision of online products sales and
distributions services. It offers branded fashion, home goods, apparel and accessories
at a deep discount through flash-sale events. It cooperates with domestic and
overseas brand agents and manufacturers.
Figure 11

Source : Company Data

Business revenue growth of Vipshop Holdings has averaged 80 % annually for the last
5 years of operations.

Ownership and Management

In the ownership composition, 63.01% is holded by institutional holdings and the rest
is by non-institutional. The top 5 holders are FMR LLC (24,739,392 shares or equal to
4.19% of total shares), BlackRock Inc. (20,007,313 shares or equal to 3.39% of total
shares),DEUTSCHE BANK AG\ (14,369,930 shares or equal to 2.44% of total
shares),SCHRODER INVESTMENT MANAGEMENT GROUP (13,772,922 shares or equal

11
to 2.33% of total shares), and COMGEST GLOBAL INVESTORS S.A.S.( 13,386,433
shares or equal to 2.27% of total shares).
Executive Officers of the Registrant
Figure 12. Management Team

Source : Company Data

The Vipshop Business Model

The company is generate valuefor two key customers, the vendors and the end-
customer. Vendor is often face the constant struggle of optimizing and managing
inventory which is can lead to holding excess inventory and limited options of what
to do with the inventory. So Vipshop is providing platform for the vendors to sell it
excess inventory directly to consumer at deep discounts. In this case, vendors are
able to liquidate their inventory before the next season. This also becomes value for
the end-customer which is they can get access to high quality brands at deep
discounts because vendors overestimated their inventory needs. This leads the
Vipshopto rapidly increase of repeat customer (figure 13)and stable rate of orders
from repeat customer (figure 14).

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 Figure 13 Figure 14

Source : Company Data Source : Company Data

The company also optimized the inventory management, and does not hold
inventory of the product for longer than a couple days.When flash sale event, the
vendor send the goods to the Vipshop before sending them to the customer.
According to hbs.org, 90% percent of the inventory that Vipshop holds is on
consignment (destined for a customer) and the unsold inventory is returned to the
vendor. So with this business model, Vipshop does not take on inventory risk.

Business Highlights in Fourth Quarter and Full Year 2017 (Based on IRVipshop)
 In the fourth quarter of 2017, Vipshop received strategic investment of
approximately US$863 million from Tencent and JD.com in consideration for
newly issued Class A ordinary shares of Vipshop (the "Investment Shares")
representing approximately 10% of Vipshop's total issued shares. As a result,
Tencent and JD.com beneficially own, taking into account any existing
holding, approximately 7% and 5.5%, respectively, of Vipshop's total issued
shares. The Investment Shares are subject to a two-year lock-up period, and
Tencent and JD.com have the right to appoint a director and an observer,
respectively, to Vipshop's board of directors. In order to maintain director and
board observer rights after the lock-up period, Tencent and JD.com have to

13
 increase their holdings of Vipshop's total shares issued to 12% and 8%,
respectively, unless otherwise agreed to by Vipshop. Concurrently with the
strategic investment, Tencent, JD.com and Vipshop established strategic
partnerships, through which Vipshop will have traffic access on WeChat
Wallet, JD.com's main page, and JD.com's WeChat Discovery shopping portal.
 In the fourth quarter of 2017, Vipshop's average revenue per customer
increased by 22% year over year, driven by the robust 22% year-over-year
increase in average number of orders per customer. During the quarter, 84%
of customers were repeat customers, up from 75% in the prior year period.
Approximately 96% of orders were placed by repeat customers, up from 92%
in the prior year period. For the full year of 2017, more than 71% of
customers were repeat customers, up from 67% in the prior year, and 95% of
orders were placed by repeat customers, up from 94% in the prior year.
 In the fourth quarter of 2017, Vipshop added a local warehouse in
Quanzhou, China, which brings the Company's total number of local
warehouses to fifteen as of December 31, 2017. In addition, the Company
expanded its overseas warehousing space by adding new locations in Italy and
the United Kingdom, bringing its total international warehousing capacity to
approximately 53,000 square meters. As of December 31, 2017, Vipshop has
approximately 2.5 million square meters of total warehousing space, of which
around 1.5 million square meters is owned by the Company.
 During the fourth quarter of 2017, Vipshop delivered approximately 99% of its
orders through its in-house last mile delivery network, up from 91% in the
prior year period. More than 77% of customer returns were handled directly
by Vipshop's in-house last mile delivery network, as compared to more than
60% in the same period in 2016.
 As of December 31, 2017, close to one million customers enrolled in the
Company's Super VIP Paid Membership Program. The average revenue per
customer and shopping frequency of the program's paid members increased
significantly year over year.

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  More than 3,600 brands participated in Vipshop's anniversary sale
on December 8, 2017, representing a 122% increase from December 8, 2016,
which is an endorsement of the strength of the Vipshop platform and its value
to brands.
 Vipshop recently added a number of popular domestic and international
brands to its platform, such as Vera Wang and Jil Sander Navy.
 On January 25, 2018, Vipshop announced that it has become a sponsor and
the exclusive Chinese e-commerce partner for London Fashion Week, one of
the most influential fashion events worldwide. Through this sponsorship and
partnership, Vipshop aims to introduce more trendy and authentic British
brands to Chinese consumers via its powerful platform. At the same time, the
Company intends to showcase China-inspired fashion concepts to a global
audience. The two parties will officially launch the cooperation ceremony and
hold a brand recruitment event on February 16, 2018.
 During the fourth quarter of 2017, approximately 5.0 million customers
used Vipshop's Internet consumer financing services, representing a 107%
year-over-year increase from 2.4 million users in the prior year period.

INDUSTRY OVERVIEW
China’s huge market potential in online discount retail and B2C Market
Figure 15. Industry Overview

Source : Company Data

15
More attractive market opportunity in China
Figure 16. Industry overview

Source : Company Data

A unique player in China’s E-Commerce landscape

Figure 17. Industry overview

Source : Company Data

Competitive advantage
VIPS is operating in a niche market. It is the largest discount retailer in China, so it is
naturally the first choice retailer for companies which need to sell unsold inventory.
No other competitor can offer the same customer reach. BABA and JD, of course,
have more customers, but companies which sell branded goods usually do not want
to mix their new collection (which is fully priced) with old collections (which are
selling at a discount). VIPS has ROE > 30% and ROIC > 40%.

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SWOT Analysis of Vipshop Holdings Limited
As we know, Vipshop is the China's Leading Online Discount Retailer for Brands, so
they should have maintains its dominant position in market by carefully analyzing and
reviewing the SWOT analysis. Based on Fern Fort University extensive research, here
are the summary of SWOT Analysis of Vipshop;
Figure 18. Vipshop SWOT Analysis

Source: Team estimates

FINANCIAL STATEMENT
Based on the Vipshop Reports Unaudited Fourth Quarter and Full Year 2017 Financial
Results, released in 12 February 2018, here are the financial highlight of full year
2017
 Total net revenue for the full year of 2017 increased by 28.8% year over year
to RMB72.9 billion (US$11.2 billion) from RMB56.6 billion in the prior year.
 The number of active customers for the full year of 2017 increased by 11%
year over year to 57.8 million from 52.1 million in the prior year.
 Total orders for the full year of 2017 increased by 24% year over year to 335.0
million from 269.8 million in the prior year.
 Gross profit for the full year of 2017 increased by 19.8% year over year
to RMB16.3 billion (US$2.5 billion) from RMB13.6 billion in the prior year.

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  Net income attributable to Vipshop'sshareholders for the full year of 2017
was RMB1.9 billion (US$299.7 million), as compared with RMB2.0 billion in
the prior year.
 Non-GAAP net income attributable to Vipshop's shareholders for the full
year of 2017 was RMB3.0 billion (US$457.3 million), as compared
with RMB2.9 billion in the prior year.

Valuation
Same as with Amazon Inc, we use Discounted Cash Flow (DCF) method and five years
projection range to valuate this company.
Free Cash Flow 31 Dec 2017, Vipshop Holdings free cash flow is $277,816 Million. We
assume averaged growth rate of 30% per year for the next 5 years. We estimated
free cash flow of $1031,5 M for Vipshop Holdings in Year 5, the final of our company
projections.
Discount Rate We also calculated the company’s discount rate as 13%. We’ll also
assume that long-term cash flows will grow in by 10% per year. The terminal value of
Vipshop is calculated by using the Gordon Growth Model:

Table 2. free cash flow projection for Amazon

Terminal
Current Year Year 1 year 2 year 3 year 4 year 5 Value
Growth 30% 30% 30% 30% 30%
277,81 $361,15 M $469,5 M $610,34 M $793,45 M $1.031,48 M $1.100
Source :Team estimates

Entreprise Value To determine a total company value, or enterprise value (EV), we

take the present value of the cash flows, divide each by the discount rate (13%) , the
result was $17,94 Billion include company debt. Without debt, the fair value of
Vipshop Holdings should around the $16,9 Billion.

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INVESTMENT RISK
The Trade War
According to The Wall Street Jurnal, the shots exchanged by the U.S. and China could
be particularly troubling for investors, because they stoke a fear that has already
rocked markets, inflation.The U.S.’s threat to impose tariffs on $50 billion of Chinese
imports across 1,300 categories of products and China’s swift response has raised the
risk of a more serious disruption. While tariffs are still a threat, disruptions to trade
could ultimately prove inflationary, as they represent a shock to the supply side of
the economy.
Competition Risk
Vipshop Holdings is not the only one in china market place, another strong
competitor is and also JD.id. Tmall consumer online shopping platform had 51.3%
market share at the end and 32.9% for JD.com. This means that Vipshop should work
for extra to gain more china market shares.
Fraud
E-commerce transactions are much more likely to result in fraud than face-to-face
ones. The reason is that, when in doubt about the legitimacy of a particular
transaction, web-based merchants cannot physically verify the validity of the card or
verify that the cardholder is an authorized user by requesting his driver’s license. E-
commerce fraud can take many shapes, including:
 A stolen card number is fraudulently used for an online purchase.
 An order is placed by a family member who is not authorized to use the card.
 A legitimate order is disputed by a customer who falsely claims that he did not
receive the delivery.
 A credit is issued to himself by a criminal who has hacked into the merchant’s
system.

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Data Breach
Criminals are always looking for ways to circumvent the e-commerce merchants’ data
protection mechanisms and steal the stored cardholder information. Sensitive
datacan be stolen online or at a physical location:
 Online data breach. Hackers can steal sensitive account information by:
o Intercepting transaction data during transmission to or from the
merchant services provider.
o Accessing the insufficiently well protected payment processor’s
system.

 Physical site data breach. Criminals can get a hold of credit card data from a
physical location by:
o Breaching a credit card processor’s physical site.
o Having one of the processor’s own employees steal data for them.
o Colluding with a driver for the company that provides document-
shredding services for the processor who delivers the unshredded
documents to the criminals.

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APENDIX
Conclusion

Vipshop is operating in a niche market. It is the largest discount retailer in China, so it

is naturally the first choice retailer for companies which need to sell unsold
inventory. No other competitor can offer the same customer reach. BABA and JD, of
course, have more customers, but companies which sell branded goods usually do
not want to mix their new collection (which is fully priced) with old collections (which
are selling at a discount). So acquire Vipshop is give opportunities to access and get
China market share and gain more vendors. The opportunities to get more than 1,900
brands and Rapid increase of repeat customers every years makes Vipshop can be
considered as long term investment for Amazon.

Appendix
Appendix. 1 Amazon Balance Sheet per December 31,2017

Source: Amazon.com Inc.

Appendix
Appendix. 2 Amazon Segment Information

Source: Amazon.com Inc.

Appendix
Appendix. 3 Amazon Statement of Cash Flows

Source: Amazon Inc.

Appendix
Appendix. 4Vipshop unaudited Statement of Income

Source: Vipshop Holdings

Appendix
Appendix. 5Vipshop Holdings Balance Sheets

Source: Vipshop Holdings

Appendix
 Appendix. 6. Vipshop Statement of Cash Flow

Source: Vipshop Holdings

Appendix. 7 Consumer Confidence Index (CCI) for the 35 OECD countries as well as for Brazil, China,
India, Indonesia, Russian Federation and South Africa

Source: Business tendency and consumer opinion surveys

Appendix. 8 U.S. Importing Pressure

Appendix
 Appendix. 9 U.S Trade Deficis

Appendix. 10. Retail E-Commerce sales worldwide

Source: Statista

Appendix
 Appendix. 11 Online Shopper behavior

Source: Statista

Appendix. 12Link to Adobe Insight http://www.cmo.com/adobe-digital-

insights/articles/2018/1/10/mobile-revenues-hit-record-high-this-holiday-
season.html#gs.5vX71zA
Appendix. 13

Appendix
 Appendix. 14

Appendix. 15

Source: Vipshop Holdings

Appendix
 Appendix. 16Vipshop Profit Growth

Source: Vipshop Holdings

Appendix. 17Vipshop Investment in Logistics

Source: Vipshop Holdings

Appendix
Appendix. 18Vipshop Operating Leverage

Source: Vipshop Holdings

Appendix
 Appendix. 19

Source: Vipshop Holdings

Appendix. 20Vipshop Future Strategy

Source: Vipshop Holdings

Appendix
Appendix. 21

Appendix