After recovering from the trade war, the company continues to trade at depressed valuations due to concerns surrounding the brand churn or falling take rates. Traders believe that the brands could create their own e-commerce platforms or leave for reduced-price operators and this could stand as a major concern for Baozun.
Despite this, the company continued to remain excited about the emerging opportunities that will become its growth drivers for the next few years. The opportunity is to sell key brands to give add up more active mini-app businesses. This is likely to acquire superior technological capability more interactive marketing tools and an innovative type of acquisition.
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For the recently completed third-quarter, Baozun posted a 32% jump in earnings helped by growth in services and product sales. The rapid growth of the consignment model and service fee model, as well as strong growth in digital marketing services, drove services revenue higher by 39%.
The acquisition of new brand partners increased popularity, and rising effective marketing and promotional campaigns drove product sales higher by 31%. The company has been struggling in a challenging macroeconomic environment along with the termination of service agreement with one electronics brand. But, the evolving e-commerce in China is likely to be beneficial for the company.