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This content is a press release from our partner Globe Newswire. The AP newsroom and editorial departments were not involved in its creation.

Baozun Announces Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

March 6, 2019

SHANGHAI, China, March 06, 2019 (GLOBE NEWSWIRE) -- Baozun Inc. (Nasdaq: BZUN) (“Baozun” or the “Company”), the leading brand e-commerce service partner that helps brands execute their e-commerce strategies in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2018.

Fourth Quarter 2018 Financial Highlights

-- Total net revenues were RMB2,201.9 million (US$1320.3 million), an increase of 40.7% year-over-year. Services revenue was RMB1,226.6 million (US$178.4 million), an increase of 56.7% year-over-year. Product sales revenue was RMB975.4 million (US$141.9 million), an increase of 24.6% year-over-year.

-- Income from operations was RMB229.8 million (US$33.4 million), an increase of 30.8% year-over-year. Operating margin was 10.4%, compared with 11.2% in the same quarter of last year.

-- Non-GAAP income from operations2 was RMB247.1 million (US$35.9 million), an increase of 30.1% year-over-year. Non-GAAP operating margin was 11.2%, compared with 12.1% in the same quarter of last year.

-- Net income attributable to ordinary shareholders of Baozun Inc. was RMB188.2 million (US$27.4 million), an increase of 28.4% year-over-year.

-- Non-GAAP net income attributable to ordinary shareholders of Baozun Inc.3 was RMB205.3 million (US$29.9 million), an increase of 27.8% year-over-year.

-- Basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per American Depository Share (“ADS4”) were RMB3.29 (US$0.48) and RMB3.17 (US$0.46), respectively, compared with basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB2.67 and RMB2.48, respectively, for the same period of 2017.

-- Basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS5 were RMB3.59 (US$0.52) and RMB3.46 (US$0.50), respectively, compared with basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB2.93 and RMB2.72, respectively, for the same period of 2017.

Fourth Quarter 2018 Operational Highlights

-- Total Gross Merchandise Volume (“GMV”)6 was RMB12,037.7 million, an increase of 42.8% year-over-year.

-- Distribution GMV7 was RMB1,118.7 million, an increase of 23.3% year-over-year.

-- Non-distribution GMV8 was RMB10,919.0 million, an increase of 45.2% year-over-year.

-- Number of brand partners increased to 185 as of December 31, 2018, from 152 as of December 31, 2017.

-- Number of GMV brand partners increased to 178 as of December 31, 2018, from 146 as of December 31, 2017.

Fiscal Year 2018 Financial Highlights

-- Total net revenues were RMB5,393.0 million (US$784.4 million), an increase of 30.0% year-over-year.

-- Income from operations was RMB355.8 million (US$51.7 million), an increase of 38.8% year-over-year.

-- Non-GAAP income from operations was RMB433.2 million (US$63.0 million), an increase of 37.4% year-over-year.

-- Net income attributable to ordinary shareholders of Baozun Inc. was RMB269.7 million (US$39.2 million), an increase of 29.1% year-over-year.

-- Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. was RMB346.2 million (US$50.3 million), an increase of 29.5% year-over-year.

-- Basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per ADS were RMB4.76 (US$0.69) and RMB4.51 (US$0.66), respectively, compared with basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB3.87 and RMB3.56, respectively, for fiscal year 2017.

-- Basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS were RMB6.11 (US$0.89) and RMB5.79 (US$0.84), respectively, compared with basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB4.95 and RMB4.55, respectively, for fiscal year 2017.

Fiscal Year 2018 Operational Highlights

-- Total GMV was RMB29,426.0 million, an increase of 54.0% year-over-year.

-- Distribution GMV was RMB2,902.0 million, an increase of 10.8% year-over-year.

-- Non-distribution GMV was RMB26,524.0 million, an increase of 60.8% year-over-year.

“We closed out the year strongly with solid financial and operational results driven primarily by strong growth from existing online stores, improved efficiency as a result of the application of innovative proprietary technologies and tools, and growth in our digital marketing services,” commented Mr. Vincent Qiu, Chairman and Chief Executive Officer of Baozun. “Despite some uncertainties in macroeconomic, I am confident in our ability to develop new technologies and apply them to our expanding portfolio of omni-channel services which will create more value for our brand partners and drive future sustainable growth. We continue to see the number of new brand partners coming on board accelerating and we are confident that our investments in strengthening our long-term technological competitive advantage will further reinforce our market leading position in China’s brand e-commerce market.”

Mr. Robin Lu, Chief Financial Officer of Baozun commented, “We are pleased to deliver another strong quarter of growth with GMV increasing by 42.8% year-over-year. Total net revenue also increased significantly, growing by 40.7% year-over-year. Investments in technological innovation and productization during the quarter were RMB21.0 million, which we believe will enable us to expand our addressable market and strengthen our long-term competitiveness. We remain confident in our strategy and the effectiveness of our operations and services, and expect GMV to grow by 40% to 50% year-over-year and total net revenues to increase to over RMB7.2 billion during fiscal year 2019. For the first quarter of 2019, we expect GMV to grow by 55% to 60% year-over-year.”

Fourth Quarter 2018 Financial Results

Total net revenues were RMB2,201.9 million (US$320.3 million), an increase of 40.7% from RMB1,565.4 million in the same quarter of last year.

Product sales revenue was RMB975.4 million (US$141.9 million), an increase of 24.6% from RMB782.8 million in the same quarter of last year. The increase was primarily attributable to the increase in product sales revenue resulting from the increased popularity of brand partners’ products and Baozun’s increasingly effective marketing and promotional campaigns.

Services revenue was RMB1,226.6 million (US$178.4 million), an increase of 56.7% from RMB782.6 million in the same quarter of last year. The increase was primarily attributable to the rapid growth in sales from existing brand partners and the addition of new brand partners under the Company’s consignment model and service fee model.

Total operating expenses were RMB1,972.2 million (US$286.8 million), compared with RMB1,389.7 million in the same quarter of last year.

-- Cost ofproductswas RMB790.1 million (US$114.9 million), compared with RMB630.3 million in the same quarter of last year. The increase was primarily due to higher costs associated with an increase in product sales revenue.

-- Fulfillment expenses were RMB512.0 million (US$74.5million), compared with RMB339.5 million in the same quarter of last year. The increase was primarily due to an increase in GMV from the Company’s distribution and consignment model business and increased warehouse rental expenses.

-- Sales and marketing expenses were RMB543.7 million (US$79.1 million), compared with RMB343.0 million in the same quarter of last year. The increase was primarily due to the addition of online store operational staff, an increase in promotional and marketing expenses, including digital marketing expenses.

-- Technology and content expenses were RMB84.0 million (US$12.2 million), compared with RMB44.9 million in the same quarter of last year. The increase was primarily due to increased investments in innovation and productization, and recruitment of additional technology-focused staff.

-- General and administrative expenses were RMB42.8 million (US$6.2 million), compared with RMB33.0 million in the same quarter of last year. The increase was primarily due to an increase in administrative, corporate strategy, and business planning staff.

Income from operations was RMB229.8 million (US$33.4 million), compared with RMB175.7 million in the same quarter of last year. Operating margin was 10.4%, compared with 11.2% in the same quarter of last year.

Non-GAAP income from operations was RMB247.1 million (US$35.9 million), compared with RMB189.9 million in the same quarter of last year. Non-GAAP operating margin was 11.2%, compared with 12.1% in the same quarter of last year.

Net income attributable to ordinary shareholders of Baozun Inc. was RMB188.2 million (US$27.4 million), an increase of 28.4% from the same quarter of last year. Basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per ADS were RMB3.29 (US$0.48) and RMB3.17 (US$0.46), respectively, compared with basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB2.67 and RMB2.48, respectively, in the same period of 2017.

Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. was RMB205.3 million (US$29.9 million), an increase of 27.8% from the same quarter of last year. Basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS were RMB3.59 (US$0.52) and RMB3.46 (US$0.50), respectively, compared with basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB2.93 and RMB2.72, respectively, in the same period of 2017.

Fiscal Year 2018 Financial Results

Total net revenues were RMB5,393.0 million (US$784.4 million), an increase of 30.0% from RMB4,148.8 million in fiscal year 2017.

Product sales revenue was RMB2,516.9 million (US$366.1 million), an increase of 11.5% from RMB2,257.6 million in fiscal year 2017. The increase was primarily attributable to the increase in product sales revenue resulting from the increased popularity of brand partners’ products and Baozun’s increasingly effective marketing and promotional campaigns, which were partially offset by the transition of a leading electronics brand partner’s business from the distribution model to the consignment model in September 2017.

Services revenue was RMB2,876.2 million (US$418.3 million), an increase of 52.1% from RMB1,891.2 million in fiscal year 2017. The increase was primarily attributable to the rapid growth in sales from existing brand partners and the addition of new brand partners under the Company’s consignment model and service fee model.

Total operating expenses were RMB5,037.3 million (US$732.6 million), compared with RMB3,892.5 million in fiscal year 2017.

-- Cost of productswas RMB2,034.9 million (US$296.0 million), compared with RMB1,917.5 million in fiscal year 2017. The increase was primarily due to higher costs associated with an increase in product sales revenue, which were partially offset by the transition of a leading electronics brand partner’s business from the distribution model to the consignment model in September 2017.

-- Fulfillment expenses were RMB1,262.3 million (US$183.6 million), compared with RMB818.2 million in fiscal year 2017. The increase was primarily due to an increase in GMV from the Company’s distribution and consignment model business and increased warehouse rental expenses.

-- Sales and marketing expenses were RMB1,339.0 million (US$194.7 million), compared with RMB910.8 million in fiscal year 2017. The increase was primarily due to the addition of online store operational staff and an increase in promotional and marketing expenses.

-- Technology and content expenses were RMB269.0 million (US$39.1 million), compared with RMB140.7 million in fiscal year 2017. The increase was primarily due to increased investments in innovation and productization, and recruitment of additional technology-focused staff.

-- General and administrative expenses were RMB154.8 million (US$22.5 million), compared with RMB116.6 million in fiscal year 2017. The increase was primarily due to an increase in administrative, corporate strategy, and business planning staff.

Income from operations was RMB355.8 million (US$51.7 million), compared with RMB256.3 million in 2017. Operating margin was 6.6%, compared with 6.2% last year.

Non-GAAP income from operations was RMB433.2 million (US$63.0 million), compared with RMB315.3 million in 2017. Non-GAAP operating margin was 8.0%, compared with 7.6% last year.

Net income attributable to ordinary shareholders of Baozun Inc. was RMB269.7 million (US$39.2 million), an increase of 29.1% from RMB208.9 million in fiscal year 2017. Basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per ADS were RMB4.76 (US$0.69) and RMB4.51 (US$0.66), respectively, compared with basic and diluted net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB3.87 and RMB3.56, respectively, for fiscal year 2017.

Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. was RMB346.2 million (US$50.3 million), an increase of 29.5% from RMB267.4 million in fiscal year 2017. Basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS were RMB6.11 (US$0.89) and RMB5.79 (US$0.84), respectively, compared with basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS of RMB4.95 and RMB4.55, respectively, for fiscal year 2017.

As of December 31, 2018, the Company had RMB513.9 million (US$74.7 million) in cash, cash equivalents and short-term investment, a decrease from RMB557.4 million as of December 31, 2017.

Business Outlook

Based on current macroeconomic and operating conditions, for the first quarter of 2019, the Company expects total net revenues to be between RMB1.25 billion and RMB1.30 billion, with services revenue to increase by over 45% on a year-over-year basis.

Conference Call

The Company will host a conference call to discuss the earnings at 7:30 a.m. Eastern Time on Wednesday, March 6, 2019 (8:30 p.m. Beijing time on the same day).

Dial-in numbers for the live conference call are as follows:

International +852-3027-6500 U.S. Toll Free +1-855-824-5644 Mainland China Toll Free 8009-880-563 Hong Kong 3027-6500 Passcode: 59357923#

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 p.m. Hong Kong Time, March 13, 2019.

Dial-in numbers for the replay are as follows:

International Dial-in +852-3027-6520 U.S. Toll Free +1 646-982-0473 Passcode: 319313381#

A live and archived webcast of the conference call will be available on the Investor Relations section of Baozun’s website at http://ir.baozun.com/.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP financial measures in evaluating its business. For example, the Company uses non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. Non-GAAP income/(loss) from operations is income/(loss) from operations excluding the impact of share-based compensation expenses and amortization of intangible assets resulting from business acquisition. Non-GAAP operating margin is non-GAAP income from operations as a percentage of total net revenues. Non-GAAP net income/(loss) is net income/(loss) excluding the impact of share-based compensation expenses and amortization of intangible assets resulting from business acquisition. Non-GAAP net margin is non-GAAP net income as a percentage of total net revenues. Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. is net income (loss) attributable to ordinary shareholders of Baozun Inc. excluding the impact of share-based compensation expenses and amortization of intangible assets resulting from business acquisition. Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS is non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. divided by weighted average number of shares used in calculating net income (loss) per ordinary share multiplied by three.

The Company presents the non-GAAP financial measures because they are used by the Company’s management to evaluate the Company’s financial and operating performance and formulate business plans. Non-GAAP income/(loss) from operations and non-GAAP net income/(loss) enable the Company’s management to assess the Company’s financial and operating results without considering the impact of share-based compensation expenses and amortization of intangible assets resulting from business acquisition. The Company also believes that the use of the non-GAAP measures facilitates investor assessment of the Company’s financial and operating performance.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP income/(loss) from operations, non-GAAP net income/(loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc., and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS is that they do not reflect all items of income and expense that affect the Company’s operations. Share-based compensation expenses and amortization of intangible assets resulting from business acquisition have been and may continue to be incurred in the Company’s business and is not reflected in the presentation of non-GAAP income/(loss) from operations and non-GAAP net income/(loss). Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited. In light of the foregoing limitations, the non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss), non-GAAP net margin, non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS for the period should not be considered in isolation from or as an alternative to income/(loss) from operations, operating margin, net income/(loss), net margin, net income (loss) attributable to ordinary shareholders of Baozun Inc. and net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, or other financial measures prepared in accordance with U.S. GAAP.

The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company’s performance. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliations of GAAP and Non-GAAP Results.”

Safe Harbor Statements

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “going forward,” “outlook” and similar statements. For example, our statement about our expectations for Company performance in the first quarter and fiscal year 2019 is a forward-looking statement and is inherently uncertain. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company’s control, which may cause the Company’s actual results, performance or achievements to differ materially from those in the forward-looking statements. For example, the level of consumer economic activity in China could impact our sales results in unpredicted ways. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

About Baozun Inc.

Baozun is the leading brand e-commerce service partner that helps brands 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. The Company’s integrated end-to-end 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.

For more information, please visit http://ir.baozun.com

For investor and media inquiries, please contact:

Baozun Inc.Ms. Coco Shiir@baozun.com

ChristensenIn ChinaMr. Christian ArnellPhone: +86-10-5900-1548E-mail: carnell@christensenir.com

In U.S.Ms. Linda BergkampPhone: +1-480-614-3004Email: lbergkamp@ChristensenIR.com

Baozun Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) As of --------------------------------------------- December 31, December 31, December 31, 2017 2018 2018 ----------------- ------------ ------------ RMB RMB US$ ASSETS Current assets Cash and cash equivalents 244,809 457,340 66,517 Restricted cash 48,848 125,515 18,255 Short-term investment 312,614 56,535 8,223

Accounts receivable, net9 1,085,669 1,547,631 225,094 Inventories1 382,028 650,348 94,589 Advances to suppliers 88,881 166,076 24,155 Prepayments and other current assets1 214,636 286,149 41,619 Amounts due from related parties 88,795 32,270 4,693 --------- --------- ------- Total current assets 2,466,280 3,321,864 483,145 Non-current assets Investments in equity investees 24,268 33,974 4,941 Property and equipment, net 330,924 402,740 58,576 Intangible assets, net 66,150 132,393 19,256 Land use right, net 44,618 43,593 6,340 Goodwill 13,158 13,158 1,914 Other non-current assets 18,043 30,021 4,366 Deferred tax assets 15,528 38,081 5,539 Totalnon-current assets 512,689 693,960 100,932 Total assets 2,978,969 4,015,824 584,077 --------- --------- -------

Baozun Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) As of --------------------------------------- December December 31, December 31, 31, 2017 2018 2018 ----------- ------------ ------------ RMB RMB US$ LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Short-term loan 172,000 436,200 63,443 Accounts payable 583,532 886,340 128,912 Notes payable 48,000 26,770 3,894 Income tax payables 30,420 62,764 9,129 Accrued expenses and other current liabilities1 314,870 322,668 46,930 Amounts due to related parties - 13,994 2,035 Total current liabilities 1,148,822 1,748,736 254,343 Long-term loan - 68,753 10,000 Deferred tax liability 3,710 3,319 483 --------- - ------------ ------------ Total non-current liabilities 3,710 72,072 10,483 --------- - ------------ ------------ Total liabilities 1,152,532 1,820,808 264,826 --------- - ------------ ------------ Baozun Inc. shareholders’ equity: Class A ordinary shares (US$0.0001 par value; 470,000,000 shares authorized, 152,824,659 and 159,247,873 shares issued and outstanding 95 98 14 as of December 31, 2017 and 2018, respectively) Class B ordinary shares (US$0.0001 par value; 30,000,000 shares authorized, 13,300,738 shares issued and outstanding as of December 8 8 1 31, 2017 and 2018, respectively) Additional paid-in capital 1,823,925 1,903,503 276,853 Accumulated profit (deficit) (25,000 ) 244,712 35,592 Accumulated other comprehensive income 9,995 29,222 4,250 --------- - ------------ ------------ Total Baozun Inc. shareholders’ equity 1,809,023 2,177,543 316,710 Noncontrolling interests 17,414 17,473 2,541 --------- - ------------ ------------ Total equity 1,826,437 2,195,016 319,251 Total liabilities andshareholders’equity 2,978,969 4,015,824 584,077 --------- - ------------ ------------

Baozun Inc.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In thousands, except for share and per share data and per ADS data)

For the three months endedDecember31, For the year ended December 31, ----------------------------------- 2017 2018 2017 2018 ----------- ------------------------- ----------- ----------------------- RMB RMB US$ RMB RMB US$ Net revenues Product sales 782,798 975,395 141,865 2,257,632 2,516,862 366,062 Services 782,560 1,226,552 178,395 1,891,176 2,876,175 418,322 ----------- ----------- ------------- ----------- ----------- ----------- Total net revenues 1,565,358 2,201,947 320,260 4,148,808 5,393,037 784,384 Operating expenses(1) Cost of products (630,276) (790,131) (114,920) (1,917,467) (2,034,852) (295,957) Fulfillment (339,530) (511,967) (74,463) (818,173) (1,262,302) (183,594) Sales and marketing (2) (343,007) (543,658) (79,071) (910,843) (1,338,970) (194,745) Technology and content (44,929) (83,995) (12,217) (140,689) (268,973) (39,121) General and administrative (33,033) (42,794) (6,224) (116,554) (154,845) (22,521) Other operating income (loss), net 1,067 370 54 11,250 22,678 3,298 ----------- ----------- ------------- ----------- ----------- ----------- Total operating expenses (1,389,708) (1,972,175) (286,841) (3,892,476) (5,037,264) (732,640) ----------- ----------- ------------- ----------- ----------- ----------- Incomefrom operations 175,650 229,772 33,419 256,332 355,773 51,744 Other income (expenses) Interest income 3,545 1,415 206 13,350 8,017 1,166 Interest expense (3,497) (4,897) (712) (4,252) (13,058) (1,899) Gain on disposal of investment 4,664 - - 5,464 - - Impairment loss of investments (6,227) (7,497) (1,090) (6,227) (9,021) (1,312) Exchange gain (loss) 928 1,279 186 (21) (5,991) (871) ----------- ----------- ------------- ----------- ----------- ----------- Income before income tax 175,063 220,072 32,009 264,646 335,720 48,828 Income tax expense (3) (28,586) (31,936) (4,645) (54,251) (64,953) (9,447) Share of income (loss) in equity method investment, net of tax 17 312 45 (1,265) (996) (145) of nil ----------- ----------- Net income 146,494 188,448 27,409 209,130 269,771 39,236 Net (income) loss attributable to 66 (205) (30) (264) (59) (9) noncontrolling interests ----------- ----------- ------------- ----------- ----------- ----------- Net income attributable to ordinary 146,560 188,243 27,379 208,866 269,712 39,227 shareholders of Baozun Inc. ----------- ----------- ------------- ----------- ----------- ----------- Net income per share attributable to ordinary shareholders of Baozun Inc.: Basic 0.89 1.10 0.16 1.29 1.59 0.23 Diluted 0.83 1.06 0.15 1.19 1.50 0.22 Net income per ADS attributable to ordinary shareholders of Baozun Inc.: Basic 2.67 3.29 0.48 3.87 4.76 0.69 Diluted 2.48 3.17 0.46 3.56 4.51 0.66 Weighted average shares used in calculating net income per ordinary share Basic 164,471,581 171,399,524 171,399,524 162,113,815 169,884,906 169,884,906 Diluted 177,081,330 178,026,070 178,026,070 176,115,049 179,327,029 179,327,029 Net income 146,494 188,448 27,409 209,130 269,771 39,236 Other comprehensive income, net of tax of nil: Foreign currency translation (10,317) 1,022 149 (34,353) 19,227 2,796 adjustment ----------- ----------- ------------- ----------- ----------- ----------- Comprehensive income 136,177 189,470 27,558 174,777 288,998 42,032 ----------- ----------- ------------- ----------- ----------- -----------

(1) Share-based compensation expenses are allocated in operating expenses items as follows:

For the three months For the year ended endedDecember31, December 31, ---------------------- 2017 2018 2017 2018 ------ ------------- ------ -------------- RMB RMB US$ RMB RMB US$ Fulfillment 720 2,174 316 2,904 5,831 848 Sales and marketing 5,120 6,509 947 20,363 28,346 4,123 Technology and content 2,818 2,367 344 13,822 13,445 1,956 General and administrative 5,212 5,853 851 21,142 28,240 4,107 ------ ------ ----- ------ ------ ------ 13,870 16,903 2,458 58,231 75,862 11,034 ------ ------ ----- ------ ------ ------

(2) Including amortization of intangible assets resulting from business acquisition, which amounted to RMB0.4 million for both the three months period ended December 31, 2017 and 2018. Including amortization of intangible assets resulting from business acquisition, which amounted to RMB0.8 million and RMB1.6 million for the year ended December 31, 2017 and 2018, respectively.

(3) Including income tax benefits of RMB0.1 million related to the reversal of deferred tax liabilities, which was recognized on business acquisition for both the three months period ended December 31, 2017 and 2018. Including income tax benefits of RMB0.2 million and RMB0.4 million related to the reversal of deferred tax liabilities, which was recognized on business acquisition for the year ended December 31, 2017 and 2018, respectively.

Baozun Inc.Reconciliations of GAAP and Non-GAAP Results(in thousands, except for share and per ADS data)

For the three months endedDecember31, For the year ended December 31, ------------------------------------------- 2017 2018 2017 2018 ----------- - -------------------------- - ----------- - -------------------------- - RMB RMB US$ RMB RMB US$ Income from 175,650 229,772 33,419 256,332 355,773 51,744 operations Add: Share-based compensation 13,870 16,903 2,458 58,231 75,862 11,034 expenses Amortization of intangible assets 391 391 57 782 1,564 228 resulting from business acquisition ----------- - ----------- - ----------- - ----------- - ----------- - ----------- - Non-GAAP income from 189,911 247,066 35,934 315,345 433,199 63,006 operations ----------- - ----------- - ----------- - ----------- - ----------- - ----------- - Net income 146,494 188,448 27,409 209,130 269,771 39,236 Add:Share-based compensation 13,870 16,903 2,458 58,231 75,862 11,034 expenses Amortization of intangible assets 391 391 57 782 1,564 228 resulting from business acquisition Less:Tax effect of amortization of intangible assets (98 ) (98 ) (14 ) (196 ) (392 ) (57 ) resulting from business acquisition ----------- - ----------- - ----------- - ----------- - ----------- - ----------- - Non-GAAP net income 160,657 205,644 29,910 267,947 346,805 50,441 ----------- - ----------- - ----------- - ----------- - ----------- - ----------- - Net income attributable to ordinary 146,560 188,243 27,379 208,866 269,712 39,227 shareholders of Baozun Inc. Add:Share-based compensation 13,870 16,903 2,458 58,231 75,862 11,034 expenses Amortization of intangible assets 199 199 29 398 796 116 resulting from business acquisition Less:Tax effect of amortization of intangible assets (50 ) (50 ) (7 ) (100 ) (200 ) (29 ) resulting from business acquisition ----------- - ----------- - ----------- - ----------- - ----------- - ----------- - Non-GAAPnet income attributable to ordinary shareholders of 160,579 205,295 29,859 267,395 346,170 50,348 Baozun Inc. ----------- - ----------- - ----------- - ----------- - ----------- - ----------- - Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS: Basic 2.93 3.59 0.52 4.95 6.11 0.89 Diluted 2.72 3.46 0.50 4.55 5.79 0.84 Weighted average shares used in calculating net income per ordinary share Basic 164,471,581 171,399,524 171,399,524 162,113,815 169,884,906 169,884,906 Diluted 177,081,330 178,026,070 178,026,070 176,115,049 179,327,029 179,327,029

1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.8755 to US$1.00, the noon buying rate in effect on December 31, 2018 as set forth in the H.10 Statistical Release of the Federal Reserve Board.

2 Non-GAAP income from operations is a non-GAAP financial measure, which is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisition.

3 Non-GAAP net income attributable to ordinary shareholders of Baozun Inc. is a non-GAAP financial measure, which is defined as net income attributable to ordinary shareholders of Baozun Inc. excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisition.

4 Each ADS represents three Class A ordinary shares.

5 Basic and diluted non-GAAP net income attributable to ordinary shareholders of Baozun Inc. per ADS are non-GAAP financial measures, which are defined as non-GAAP net income attributable to ordinary shareholders of Baozun Inc. divided by weighted average number of shares used in calculating basic and diluted net income per ordinary share multiplied by three, respectively.

6 GMV includes value added tax and excludes (i) shipping charges, (ii) surcharges and other taxes, (iii) value of the goods that are returned and (iv) deposits for purchases that have not been settled.

7 Distribution GMV refers to the GMV under the distribution business model.

8 Non-distribution GMV refers to the GMV under the service fee business model and the consignment business model.

9 Certain reclassifications in accounts receivable, inventories, prepayments and other current assets and accrued expenses and other current liabilities as of December 31, 2017 were retrospectively adjusted as a result of the adoption of a new revenue accounting standard effective on January 1, 2018.