Vipshop Q3: The fog, but the market wants more

Source: Dongge's E-commerce Insights

Author: Li Chengdong

Vipshop recently released a slightly better-than-expected Q3 earnings report, with almost all key metrics returning to positive growth.

In Q3 2025, Vipshop's net revenue reached RMB 21.4 billion (same below), up 3.4% YoY; Non-GAAP net profit was RMB 1.5 billion, up 14.6% YoY. Active users grew to 40.1 million, up 1.3% YoY; GMV reached RMB 43.1 billion, up 7.5% YoY. Earnings per share (EPS) reached $2.98.

The company expects Q4 revenue to be between RMB 33.2 billion and RMB 34.9 billion, representing YoY growth of 0% to 5%.

Overall, revenue and user growth have returned to positive territory, with mostly positive signals. However, Vipshop's stock price declined on the day of the earnings release. Besides being affected by the three major U.S. stock indices, the cautious Q4 outlook may be the main reason influencing investor sentiment, which also reflects the market's higher expectations for Vipshop.

Revenue and User Growth Turn Positive, No Plans for Instant Retail

Over the past year, while Vipshop's performance has been stable, the issue of growth insufficiency has been evident. Thus, for the market, the highlight of this Q3 report is the return of revenue and active user growth to positive territory.

Dongge believes the primary driver of Vipshop's growth this quarter is the continued recovery of the macro environment and discretionary consumption, with consumers increasingly willing to pay for high-value channels. This is reflected in the earnings report, where, besides revenue, orders, and GMV growth, campaigns like "Super Brand Day" and "Flash Sale"—focused on deep discounts—saw significant YoY sales growth in Q3.

Meanwhile, Vipshop's membership base continues to play a "ballast" role—in Q3, super VIP active users maintained double-digit YoY growth, contributing 51% of online sales.

To retain these high-value users long-term, Vipshop has continuously enhanced member-exclusive benefits, including unlimited free shipping, an extra 5% discount on already discounted items, and various card and coupon perks. Online initiatives like "Super V Subsidy Day" and "Super V Brand Day," along with offline private sales events, provide members with more pricing benefits, enhancing their sense of value and satisfaction.

In Q3, Vipshop increased customer acquisition efforts, boosting incentives to attract new users. Marketing expenses rose from around RMB 618 million in the same period last year to approximately RMB 667 million, with the marketing expense-to-revenue ratio also increasing.

On another front, Vipshop aims to attract more new users through differentiated product offerings. In Q3, the company deepened collaborations with international brands like Alexander Wang, bebe, OUTDOOR PRODUCTS, and PINKO to expand product supply. Sales for "Vipshop Exclusives" grew 41% YoY, with over 100 new brand partnerships added.

Additionally, Vipshop recently made a major move in luxury authentication—fully integrating with the China Inspection and Quarantine (CIQ) Authentic Product Management System. CIQ appraisers have officially stationed at Vipshop's luxury warehouses to inspect every luxury item, gradually rolling out CIQ authentication reports for full coverage.

However, despite these new initiatives across "people, products, and platforms," management responded to repeated investor inquiries about the instant retail market by stating that the company's core category is apparel, which doesn't require rapid delivery like standardized or food products. While logistics will be accelerated, Vipshop won't join the instant retail trend. "We'll continue to leverage our strengths in branded flash sales."

Dongge agrees with this stance. "Every inch has its strengths and weaknesses." Vipshop's long-standing competitive edge lies in branded flash sales, and it won't recklessly chase new trends or aim for "big and comprehensive."

Cautious Q4 Outlook Raises Market Expectations

Despite the solid earnings report, Vipshop's stock didn't surge on the release day.

Besides slight declines in gross profit and margins due to marketing spend, the market generally views Vipshop's Q4 outlook as cautious.

When asked about Q4 expectations, management stated during the earnings call, "October and November trends are still decent, including the overall Double 11 promotions. We remain positive about Q4, expecting YoY growth of 0-5%." They also noted that long-term gross margins could stabilize around 23%.

But investor expectations are clearly higher. Rumors suggest Vipshop may consider a Hong Kong listing as early as 2026, which could further raise market expectations for its performance and profitability.

Vipshop's Q3 report also highlights some welcome changes, such as accelerated AI integration: the launch of the "Try It On" virtual fitting feature, allowing users to share outfits with friends; and AI applications in search recommendations, customer service, ad placement, and business analytics to improve operational efficiency.

While the earnings outlook didn't surprise, Vipshop remains generous with shareholder returns.

Management revealed that as of the Q3 earnings release date, the company had returned over $730 million to shareholders via dividends and buybacks this year. They reiterated their commitment to returning at least 75% of 2024's full-year Non-GAAP net profit (about $900 million) to shareholders in 2025.

Dongge believes Vipshop's brand flash-sale model has stabilized in terms of user perception and platform value. Overall, performance won't see wild swings, and shareholder returns have been consistently strong. If user growth can sustain YoY increases while maintaining stable performance, Vipshop could stand out as a "clear stream" in the fiercely competitive e-commerce industry.