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29	29	The company's principal executive offices are located at Building B, No. 1268 Wanrong Road, Shanghai 200436, the People’s Republic of China. The company's telephone number at this address is +86 21 8026-6000. The company's agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 801 2nd Avenue, Suite 403, New York, NY 10017. The company's Internet address is www.baozun.com. The information on its website is not a part of this document.
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31		-==== Business Overview ====
	31	+= Business Overview =
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33	33	Baozun is the leading brand e-commerce service partner in China, with a market share of approximately 22% as measured by transaction value in 2015, according to iResearch. The company help brands execute their e-commerce strategies in China by selling their goods directly to consumers 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. The company deliver omni-channel solutions to create seamless shopping experience across various touch points online and offline, enabling optimal and consistent branding and generating sales results that reflect its brand partners’ unique e-commerce proposition.
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76	76	In 2014, 2015 and 2016, net revenues from product sales accounted for 74.9%, 74.7% and 64.2%, respectively, of its net revenues. Over time, the company work with its brand partners under different combinations of business models to meet their evolving needs and sales objectives. Accordingly, its revenue mix may vary over time.
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78		-**Business Models**
	78	+== Business Models ==
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80	80	The company believe 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. Depending on each brand partner’s specific needs and characteristics of its product category, the company provide solutions to its brand partners under one or a combination of its three business models: distribution model, consignment model and service fee model.
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82		-**Distribution Model**
	82	+== Distribution Model ==
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84	84	Under the distribution model, the company select and purchase goods from its brand partners and/or their authorized distributors and sell goods directly to consumers through official brand stores or official marketplace stores operated by it. In order to generate product sales, the company utilize every aspect of its e-commerce capabilities. Specifically, the company utilize its IT and store operation capabilities to set up and operate online stores, including brand stores and marketplace stores. The company utilize its warehousing and fulfillment capabilities to store and deliver goods to its consumers. The company utilize its customer service capability to facilitate sales and ensure its consumers are satisfied. In order to increase its product sales, the company utilize its digital marketing capabilities to boost site traffic and transaction volume. When the company operate stores under the distribution model, the sites will typically indicate that Baozun is the seller of the products and, when the company deliver goods to its consumers, the invoices and tax receipts will typically bear its name instead of those of its brand partners.
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86		-**Service Fee Model**
	86	+== Service Fee Model ==
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88	88	Under the service fee model, the company provide one or more of the following services in exchange for service fees:
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92	92	* digital marketing; and/or
93	93	* customer service.
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95		-**Consignment Model**
	95	+== Consignment Model ==
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97	97	Under the consignment model, in addition to the above services the company may offer under the service fee model, the company also provide warehousing and fulfillment services, whereby its brand partners stock goods in its warehouses for future sales and Baozun is responsible for delivering goods to customers. In contrast with the distribution model, however, the company do not take title to the products, do not have any latitude in establishing prices and selecting merchandise, have no discretion in selecting suppliers and generally are not involved in determining product specifications. The company may also facilitate its brand partners’ online sales of goods as an agent and charge its brand partners commission fees based on a pre-determined formula.
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99		-**Brand E-commerce and Maikefeng**
	99	+= Brand E-commerce and Maikefeng =
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101	101	//End-to-end Brand E-commerce Capabilities for Brand Partners//
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107	107	[[image:https://www.sec.gov/Archives/edgar/data/1625414/000114420417020069/pg39img1_20f.jpg]]
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109		-**IT Solutions**
	109	+== IT Solutions ==
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111	111	With its expertise in technology infrastructure and system, web design and its intimate understanding of Chinese consumers’ online shopping habits, the company help its brand partners set up effective e-commerce sites that both enhance their brands and cater specifically to local consumers. The company provide proprietary e-commerce technology which can be customized to and integrated with its brand partners’ existing operation back-end systems in a convenient and cost-effective manner.
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117	117	The company also offer brand partners with the official brand WeChat store platform service, which enables brand partner to quickly expand their presence on WeChat without the heavy costs associated with creating a new online store. The company's new official brand WeChat store platform includes a number of customizable options to make it easier for customers to interact directly with the brands and accommodate promotional campaigns.
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119		-**Store Operations**
	119	+== Store Operations ==
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121	121	The company believe efficient store operations are crucial to its brand partners’ e-commerce business. The company staff dedicated operations teams for stores operated by it. The company's operations teams closely monitor and are responsible for all activities and the daily upkeep of online stores. The functions of the operations teams broadly fall into two categories: merchandising and site content management.
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129	129	Site Content Management: In addition to providing design services during the initial store setup, the company also periodically update the content on stores operated by it in order to maintain the appeal of the stores. Baozun has a design services team that helps ensure that brands’ online stores are artfully presented, and refreshed in keeping up-to-date with its brand partners’ latest advertising campaigns. The company's design services team regularly works with its brand partners in producing the most updated digital content, including product photography, site banners and other promotional content. For more information about its design services team, see “—Digital Marketing—Creative Contents.”
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131		-**Digital Marketing**
	131	+== Digital Marketing ==
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133	133	The company believe performance digital marketing is key in boosting visitor traffic to stores operated by it and increasing conversion and overall transaction volume.
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143	143	* The company also employ a team of copywriting staff who produces product descriptions and related content, such as buyers’ guides, sizing charts, product tours and comparison shopping tools.
144	144	* Consumer Data: The company use data the company collect from its data warehouse and reporting system to understand consumers’ online shopping habits and apply these insights to create impactful marketing campaign for its brand partners. For more information about its data warehouse and reporting system, please see “—Technology Infrastructure and Capabilities—Data Warehouse and Reporting System.”
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146		-**Customer Service**
	146	+== Customer Service ==
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148	148	Providing satisfactory pre-sale and post-sale customer services is one of its top priorities. The company believe in the importance of real-time customer assistance. Customers can contact it through real-time online chat, phone calls or emails. Pre-sale questions relating to product details comprise most of the questions the company receive from customers, and the company believe that a great pre-sale customer service experience could encourage customers’ purchases. Customers can access its online representatives and service hotlines 9 a.m. to 10 p.m. daily (except three days per year during the Chinese New Year holiday).
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150	150	The company assign its brand partners dedicated brand customer service teams who have undergone full basic customer service training, initial and periodic examinations and targeted coaching sessions.
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152		-**Warehousing and Fulfillment**
	152	+== Warehousing and Fulfillment ==
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154	154	Baozun 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 consumers of online stores. The company adopt a flexible logistics model supported by its robust and advanced warehouse management system. The company partner with leading nationwide and quality logistics services providers to ensure reliable and timely delivery to over 500 cities across China through their network. The following flowchart illustrates its warehousing and fulfillment process:
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158	158	As of December 31, 2016, the company operate seven warehouses with an aggregate gross floor area of approximately 174,943 square meters in Guangzhou, Suzhou, and Hong Kong. The company's warehouses cater to different product categories. The company provide value-added services to its brand partners, such as anti-counterfeit code protection and tailor-made packaging. In addition, the company also store goods in three other warehouses operated by third parties. With its proprietary warehouse management systems, Baozun is able to closely monitor each step of the fulfillment process from the time a purchase order is confirmed and the product stocked in its warehouses, up to when the product is packaged and picked up by a logistics services provider for delivery to a customer. Shipments from suppliers first arrive at its warehouses. At each warehouse, inventory is bar-coded and tracked through its warehouse management system, allowing real-time monitoring of inventory levels across its network. The company's warehouse management system is specifically designed to support a large volume of inventory turnover. The company's warehouses fulfilled approximately 5.0 million, 10.7 million and 17.8 million orders in 2014, 2015 and 2016, respectively. As of December 31, 2016, its warehouse management processing system was capable of processing 600,000 inbound pieces and 1,100,000 outbound orders per day. During the Singles Day promotion in 2016, its warehouse management processing system processed approximately 4.6 million orders, showcasing its ability to support an enormous flow of transaction and order traffic. The company closely monitor the speed and service quality of the logistics services providers through consumer surveys and feedbacks from consumers to ensure their satisfaction.
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160		-**Maikefeng**
	160	+== Maikefeng ==
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162	162	To extend its product and service offerings to cover the entire product cycle, the company began operation of Maikefeng, its retail online platform, in March 2014, which has grown significantly since then. The company offer authentic, quality products at steeply discounted prices to consumers on its Maikefeng mobile application.
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168	168	The company opened up its Maikefeng platform to third-party sellers to diversify its product offerings and improve operational efficiency in May 2015. Third-party sellers sell products to the consumers through its mobile applications and these sellers may also use its other value-added services, and the company charge such third-party sellers service fees for its other value-added services the company provide upon their request. Upon successful sales at Maikefeng, the company charge commissions from such third-party sellers at a fixed fee rate based on the sales volume. The company monitor third-party sellers’ performance and activities on its Maikefeng platform closely to ensure that they meet its requirements for authentic products and high-quality customer service. In this business model, since Maikefeng is operated as an intermediary platform that facilitates transactions between merchants and consumers, the company generally are not the primary obligor, do not bear the inventory risk, do not have the ability to establish the price or control the related shipping services utilized by third-party sellers.
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170		-**Brand Partners & Brand Partner Development and Services**
	170	+= Brand Partners & Brand Partner Development and Services =
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172		-**Brand Partners**
	172	+== Brand Partners ==
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174	174	As of December 31, 2016, the company were providing e-commerce solutions to 133 brand partners primarily under annual or tri-annual service contracts. The company's brand partners cover diverse product categories, including apparel, appliances, electronics, home and furnishings, food and health products, cosmetics, fast moving consumer goods, insurance and automobile.
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176	176	In response to its brand partners’ needs to leverage its expertise to help them expand their e-commerce business in the Greater China region, Baozun has extended its service and operational capabilities beyond mainland China. The company can now provide brand partners such as Microsoft and Nike end-to-end e-commerce solutions in Hong Kong. The company also got approval from the Investment Commission of Taiwan’s Ministry of Economic Affairs in October 2015 and started to provide brand partners end-to-end e-commerce solutions in Taiwan in April 2016. The company provide IT service, customer service and warehousing and logistics services through local staff on the ground and online store operations and digital marketing through the home team in mainland China. Some of its existing brand partners have had years of cooperation with it and the company generated a significant portion of its net revenue through (i) the sale of products in the stores of these brands operated by it and (ii) provision of its services to these brand partners. See “Item 3. Key Information—D. Risk Factors—Risks Related to The company's Business—If Baozun is unable to retain its existing brand partners, its results of operations could be materially and adversely affected.”
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178		-**Brand Partner Development and Services**
	178	+== Brand Partner Development and Services ==
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180	180	//Brand Partner Screening and Acquisition//
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184	184	The company intend to grow its business by adding new brand partners into its brand partner portfolio. The company seek to attract new brand partners by providing solutions that enable them to grow their e-commerce business more rapidly and cost-effectively than they could on their own. Baozun has been able to use the capabilities Baozun has developed for its existing brand partners to attract new brand partners.
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186		-**Brand Partner Services Team**
	186	+== Brand Partner Services Team ==
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188	188	The company typically assign each brand partner a dedicated brand partner service team to offer individually tailored services and solutions. All stores across a brand partner’s different channels share the same service team to ensure seamless services to its brand partners.
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