Baozun Inc

  • Exchange: NASDAQ
  • Ticker: BZUN

Baozun is a technology platform that enables Western brands to launch e-commerce operations in mainland China.


Baozun

October 25, 2020

Thesis - Baozun is a technology partner that helps Western brands succeed in China. It benefits form the fact the Chinese market is so different to the west and Western brands often struggle to adapt. Its customers include giant names such as Nike, Starbucks and Nestle. Their technology helps brands operate on Chinese shopping channels, market on Chinese social media as well as operational activities such as fulfilment and warehousing. Alibaba owns about 15% if the company, signalling its strong market position. At its current valuation, Baozun has room to grow and benefits from the continued shift towards online shopping.

Financials & Performance - As of Q2 2020, Baozun has 250 brand partners, up from 231 in 2019. Revenue growth has been between 25% and 40% over the last 8 quarters, with gross margins near 40%. In has been listed as a “six-star” service partner by Tmall, highlighting its success with customers and marketplaces.

Risks - Baozun relies on large brands choosing them to enter the market. Should its positioning deteriorate, or brand choose to enter independently, Baozun’s business would suffer. Similarly, the large Chinese marketplaces that it partners with could also begin to offer services similar to Baozun.