IPO Report: Baozun (BZUN)

Francis Gaskins |

Baozun (BZUN) handleswarehousing and fulfillment, customer service, closeouts for leading brands. It is based in Shanghai, China.

Five other companies are scheduled for the week of May 18. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Morgan Stanley, Credit Suisse, BofA Merrill Lynch
Co-managers: None

End of lockup (180 days): November 17, 2015
End of 25-day quiet period: Monday, June 15, 2015

BZUN scheduled a $143 million IPO with a market capitalization of $632 million at a price range midpoint of $13 for Thursday, May 21, 2015 on Nasdaq.

Baozun Summary

In China, warehousing & fulfillment, customer service, closeouts for leading brands. 

Baozun Valuation


Pre-IPO grade-score summary

Accumulated deficit (mm)





Per share dilution







Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Baozun (BZUN)







Annualizing Q1 net income


Annualizing Q1 non-GAAP net income



Baozun Conclusion


No competitors name in SEC filing

75% product sales with a 32% gross margin

Annualizng Q1:

496 P/E on net income

133 P/E on non-GAAP net  income

Q1 Results:

Rev +78% to $78mm, gross margin $ +80%

Net income +12.4%

Non-GAAP net income +128%

Price to sales of 2.1

Price to book of 3.1

Orders fulfilled  from warehouse:  5mm in '14, 5.9mm March '15 12 mos

Baozun Business

BZUN is the leading brand e-commerce solutions provider in China, with a market share of approximately 20% as measured by transaction value in 2014, according to the iResearch Report.

BZUN’s integrated brand e-commerce capabilities encompass all aspects of the e-commerce value chain covering IT solutions, store operations, digital marketing, customer services, warehousing and fulfillment.

BZUN helps brand partners execute their e-commerce strategies in China by selling their goods directly to customers online or by providing services to assist with their e-commerce operations.

With e-commerce in China growing rapidly in both in scale and complexity, more global brands view e-commerce as a valuable part of their China expansion strategy, and brands look to BZUN as a trusted partner and rely on BZUN’s local knowledge and industry expertise to execute and integrate e-commerce strategies without the investment associated with establishing and maintaining local infrastructure and capabilities on their own.

Baozun Brand Partners

The number of BZUN’s brand partners grew from 56 as of December 31, 2012, to 71 as of December 31, 2013, to 93 as of December 31, 2014 and to 94 as of March 31, 2015.

These brands cover diverse categories, including apparel, appliances, electronics, home, food and health, cosmetics and fast moving consumer goods, insurance and automobile.
Many of BZUN’s brand partners occupy leading positions in their respective industries, such as Philips, Nike, Microsoft and Haagen-Dazs.

According to the iResearch Report, BZUN is the leading brand e-commerce solutions provider in China that has penetrated into the most diversified and comprehensive range of categories.

Maikefeng (closeouts)

To extend product and service offerings to cover the entire product cycle, BZUN began operation of Maikefeng, a closeout retail online platform, in March 2014, which has grown significantly since then.

BZUN offers authentic, quality products at steeply discounted prices to consumers on the Maikefeng mobile application and mkf.com website.

BZUN's strong merchandizing expertise enables us to select the brand composition and product mix of our sales on Maikefeng that appeal to our customers.

BZUN carefully selects prospective brands for the Maikefeng platform, and target to work with those that are well-known and offer high quality or premium products that are popular among consumers in China, and those are willing to provide competitive prices and favorable payment credit and product return terms.

BZUN believes that its Maikefeng platform helps brand partners sell out-of-season inventory, generate more sales and acquire additional traffic, which will help BZUN attract new brands and build stronger ties with existing brand partners.

In addition, BZUN's warehousing services help attract brands to the Maikefeng platform as they allow existing users of these services to adopt BZUN's Maikefeng platform and solve excess inventory issues without the need to physically move inventory.

As of March 31, 2015, Maikefeng had attracted 411 brands and housed over 37,930 distinct items for sale.

Baozun Warehousing and Fulfillment

BZUN has established along the e-commerce value chain a robust logistics network and warehousing capacity to help ensure a smooth and positive shopping experience for customers of online stores.

BZUN adopts a flexible logistics model supported by a robust and advanced warehouse management system.

BZUN partners with leading nationwide and quality logistics services providers to ensure reliable and timely delivery to over 500 cities across China through their network.

BZUN operates five warehouses with an aggregate gross floor area of approximately 72,800 sq.m. in Suzhou, Jiangsu province, and Hong Kong.

As of March 31, 2015, BZUN'sr warehouse management processing system was capable of processing 100,000 inbound pieces and 300,000 outbound orders per day.

On Singles Day in 2014, the warehouse management processing system processed over 202,000 orders, showcasing BZUN's ability to support an enormous flow of transaction and order traffic.

BZUN closely monitors the speed and service quality of the logistics services providers through consumer surveys and feedbacks from consumers to ensure their satisfaction.

Baozun Customer Service

Providing satisfactory pre-sale and post-sale customer services is one of BZUN's top priorities.

BZUN believes in the importance of real-time customer assistance.

Customers can contact BZUN through real-time online chat, phone calls or emails.

Pre-sale questions relating to product details comprise most of the questions BZUN receives from customers.  BZUN believes that a great pre-sale customer service experience could encourage customers’ purchases.

Customers can access BZUN's online representatives and service hotlines 9 a.m. to 10 p.m. daily (except three days per year during the Chinese New Year holiday).

 BZUN assigns brand partners dedicated brand customer service teams who have undergone full basic customer service training, initial and periodic examinations and targeted coaching sessions.

BZUN believes its brand partners value it for its integrated e-commerce capabilities dependable services, deep category expertise, market insight and ability to innovate and adapt to the fast-changing e-commerce market.

BZUN’s end-to-end brand e-commerce capabilities allow it to leverage brand partners’ unique resources and seamlessly integrate with their back-end systems to enable data tracking and analytics for the full transaction value chain, making BZUN a valuable part of its brand partners’ e-commerce functions.

BZUN helps its brand partners establish market presence and launch products quickly on official brand stores and major online marketplaces in China, such as Tmall and JD.com, as well as social media platforms such as Weixin.

BZUN also helps its brand partners devise and execute O2O strategies combining the strengths of their online and offline retail networks.

By enabling seamless shopping experience across various channels both online and offline, BZUN delivers omni-channel solutions to achieve optimal branding effect and sales results that are responsive to its brand partners’ individual e-commerce objectives.

Baozun Intellectual Property

As of March 31, 2015, BZUN owned 32 registered trademarks, copyrights to 6 software programs developed by BZUN relating to various aspects of its operations, and 14 registered domain names.

Baozun Competition

Can’t find a competition heading or anything specific.

Baozun 5% Shareholders Pre-IPO

Vincent Wenbin Qiu       10.1%

Junhua Wu        5.3%      

Qian Wu            23.5%    

David McKee Hand       23.1%

Satoshi Okada 17.8%

Alibaba Investment Limited        23.5% 

Crescent Castle Holdings Ltd     23.1%    

Tsubasa Corporation     17.8%    

Jesvinco Holdings Limited         8.3%      

GS Entities                   9.8%        

Infinity I-China Investments (Israel) L.P.   6.6%                            

Baozun Dividends

No dividends are planned.

Baozun Use of Proceeds

BZUN expects to receive $129 million from its IPO and use it for the following:

US$32.3 million for investment in sales and marketing activities;

US$25.8 million for investment in its research and development and technology infrastructure;

US$12.9 million for expansion of its warehousing and fulfillment infrastructure; and

the balance for general corporate purposes, working capital and potential acquisitions, investments and alliances (although BZUN has no present commitments or agreements to enter into any acquisitions, investments or alliances).

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
BZUN Baozun Inc. 15.15 0.23 1.54 572,006


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