The following discussion and analysis of our financial condition and results of operations is based upon and should be read in conjunction with our audited consolidated combined financial statements and unaudited consolidated combined financial information included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information - D. Risk Factors” and elsewhere in this annual report. 109 Table of Contents A. Operating Results Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving the retail industry and online retail, including: ● Levels of per capita disposable income and consumer spending in China and our target markets. Consumer spending power has been rising in China and in our other target markets in Asia, including Hong Kong and Taiwan. The growth of the e-commerce market in these markets depends on continued increase in consumption. ● Development and popularity of e-commerce in China and in our target markets. Driven by the growth of the internet, broadband, personal computer and mobile penetration and the development of fulfillment, payment and other ancillary services associated with online purchases, e-commerce is expected to rapidly rise in significance in China and in our other target markets in Asia. The growing number of online shoppers has made online marketplaces and other e-commerce channels popular retail platforms for brands. The growth of our business depends on the development and popularity of e-commerce, and the value of e-commerce as part of the expansion strategies of brands. While our business is influenced by general factors affecting our industry, our operating results are more directly affected by company specific factors, including the following major factors: ● Our ability to retain and attract brand partners. The number of our brand partners directly affects our total revenues. We would need to continue to maintain and expand our brand partner base to maintain and grow our revenues. ● Our ability to increase revenues and manage pricing. Increases in revenues depend on our ability to attract higher traffic to the online stores, convert more store visitors into consumers, increase consumers’ order values, grow repeat customer base, provide superior experience to consumers and expand product offerings. Increases in revenues also depend on our ability to manage product pricing and maintain the level of services fees charged to our brand partners and other customer. ● Our ability to enhance cooperation with marketplaces and other channels. We generate a substantial portion of our revenues through product sales on official marketplace stores that we operate on Tmall. Our future growth depends on our ability to enhance cooperation with Tmall and expand working relationships with other major online marketplaces, such as JD.com and Pinduoduo, and social media channels, such as WeChat Mini Programs and RED (Xiaohongshu), as well as emerging live streaming and short video platforms, such as Douyin and Kuaishou. ● Our ability to innovate and effectively invest in our technology platform and fulfillment infrastructure. Our ability to innovate and continue to strategize new value-added brand e-commerce service through improved technologies, especially data analytics and marketing know-how, is key to better serving our brand partners and helping them enhance their e-commerce success. This will in turn contribute to our ability to retain and attract brand partners, sell more solutions and generate more revenues. Our ability to invest in our technology platform and fulfillment infrastructure cost-effectively also affects our results of operations. 110 Table of Contents ● Our ability to manage our business model mix and product mix. We generally operate e-commerce businesses for our brand partners based on one of our three business models: distribution model, consignment model and service fee model, or, in some circumstances, a combination of these business models. We derive product sales revenues when we sell products to consumers under the distribution model. We derive services revenues primarily under the consignment model and the service fee model. For services provided under the consignment model and the service fee model, we charge fixed fees and/or variable fees primarily based on GMV or other variable factors such as number of orders fulfilled. In addition to serving our brand partners, we also provide digital marketing and other services to other customers under our service fee model. Our net revenues and our profitability could fluctuate depending on the mix of our product sales revenues and services revenues, and brand partners’ category mix during certain time period. In addition, depending on the product category, we may derive more revenues from product sales than services, or vice versa, which may further impact our profitability. ● Our ability to manage and turnaround of Gap Greater China. In November 2022, our wholly-owned subsidiary, White Horse Hongkong Holding Limited, entered into a share purchase agreement with The Gap, Inc. and Gap (UK Holdings) Ltd. for the acquisition of Gap Greater China, which we believe will serve as a key component of our business operations. The turnaround of Gap Greater China requires significant managerial and financial resources and could result in a diversion of resources from our existing business, which in turn could adversely affect our growth and business operations. In addition, the business operations of any future newly acquired business, including Gap Greater China, could also materially deviate from our expectations, or may have a material adverse impact on their respective business, financial conditions and results of operations. Any such negative developments of Gap Greater China or any future newly acquired business could materially and adversely affect our business, financial condition, and results of operations. ● Our ability to innovate and develop products. We believe that product lives at the center of our brand management business and we focus on designing innovative and high-quality products that tailer for Chinese consumers demand. Our Retail Operation System (ROP) allows us to leverage data-driven insights from consumers to improve product development and innovation. This process and feedback loop allows us to drive innovation across our brands’ existing product categories to deliver cutting-edge performance for consumers. ● Our ability to manage localized supply chain. Since we acquired Gap Greater China business, one of our key focus is on diversifying our localized supplier network, maintaining multiple manufacturing sources and expanding our distribution footprint. We may be impacted by increased costs relating to our expansion efforts, including with respect to raw materials, labor, transportation and sustainability initiatives in an evolving regulatory and public opinion environment. Disruptions in our supply chain operations due to these or other factors could result in product shortages, declining sales, reputational damage or significant costs. ● Our ability to manage growth, control costs and manage working capital. Our expansion will result in substantial demands on our management, operational, technological, financial and other resources. Our ability to control cost and manage working capital is key to our success. Our continued success depends on our ability to leverage our scale to obtain more favorable terms, including better credit terms and larger credit lines, from our brand partners, marketplaces, advertising partners, lessors of warehouses and logistics service providers. Our ability to gain better insight into inventory turnover and sales patterns, which allows us to better optimize our working capital, may also affect our operations. Operational highlights Operational Highlights of E-Commerce In 2025, for E-Commerce segment, total net revenues increased 2% year-over-year to RMB8,271 million and adjusted operating profit increased 22% year-over-year to RMB219 million. E-Commerce has become a sustainable cash engine. Through sharper execution and continued cost rigor, E-Commerce is now more agile and consistently profitable. We have moved from pursuing scale to focusing on value—prioritizing margin expansion and reliable cash generation. 111 Table of Contents Our omni-channel capability remains one of Baozun’s core advantages and a focus for development going forward. We continue to develop our omni-channel capabilities, with a strong focus on emerging channels, such as Douyin and Rednote. We believe leveraging this established network will extend our success across major e-commerce platforms and drive sustained growth. In 2025, we received 41 awards in the Tmall ecosystem, including the prestigious “2025 Tmall Ecosystem Excellence in Service Award”. On Douyin, we were once again certified as a “Douyin E-commerce Diamond Service Partner,” the platform’s highest tier of accreditation. Together, these recognitions affirm our sustained leadership and execution strength across major platforms. We also continued to focus on strengthening our bottom line. Across the organization, we are implementing a series of lean initiatives designed to streamline processes, reduce costs, and enhance efficiency. Furthermore, we are expanding the use of Artificial Intelligence tools across a wider range of employees and business scenarios to enhance productivity. These efforts have significantly improved our profitability. Operational Highlights of Brand Management In 2025, for Brand Management segment, total net revenues increased by 25% year-over-year to RMB1,845 million and adjusted operating loss improved 45% year-over-year to RMB93 million. We have 177 offline stores under our management as of December 31, 2025. Our key strategic pillars for 2025 focus on merchandising, channel expansion and marketing initiatives for Gap, aimed at building healthy topline momentum while continuing to improve profitability. Merchandising Management Merchandising remains the core growth engine for GAP. China-for-China product is our core priority. It is essential for us to interpret the GAP’s brand DNA in a way that’s relevant to the Chinese market. Core categories such as denim, sweatshirts, and knitwear continued to anchor performance, supported by selective collaborations that complemented the assortment. For instance, our partnership with the Forbidden City and the Peking Opera, has maintained strong sell-through, showcasing our ability to blend Chinese cultural storytelling with GAP’s global DNA in a commercially effective manner. During the year, we collaborated closely with brand ambassadors to create authentic, engaging content that connects with our audience. We also launched seasonal products and limited styling collections aligned with key moments in the retail calendar. These ambassador-driven initiatives have boosted social buzz, leading to higher consumer engagement, increased brand visibility, and a stronger brand voice. Marketing Management Our strategic marketing initiatives are fundamental to strengthening brand equity, amplifying brand desirability through compelling storytelling and digital engagement. By leveraging multi-channel campaigns and targeted collaborations, we effectively enhance customer acquisition and foster lasting brand loyalty in a competitive apparel landscape. These efforts are pivotal in shaping consumer perception, which directly supports sustainable growth and a healthier brand portfolio. Marketing in 2025 began with localized campaigns such as the Forbidden City collaboration and community-focused initiatives like Brannan Bear, helping to strengthen consumer engagement and brand relevance. This momentum continued with additional partnerships, including the appointment of Chengyi as brand ambassador in mid-September 2025, which contributed to improved brand visibility and broader appeal among younger consumers. Throughout the year, the team enhanced its use of integrated online and offline campaigns, social content, and experiential formats to deepen customer interaction. Overall, marketing efforts in 2025 contributed to a gradual strengthening of brand positioning and provided meaningful support to traffic, engagement, and sales performance. Retail Management Offline expansion continues to be a strategic priority for us. With a consumer-centric and retail-oriented strategy, we have successfully improved our competitiveness, store efficiency, and responsiveness to the ever-changing market. During the Year, we continued to optimize our retail management capabilities. In 2025, we opened a total of 29 new GAP stores, bringing our total store count to 164 by the year end. Our new stores continue to outperform older locations, driven by better site selection and enhanced visual merchandising. For instance, our upgraded stores at Dongguan Minying International Trade City and Shanghai Century Link flagship in the fourth quarter of 2025, have delivered impressive results. The improved in-store experience and outfit-based presentation have driven a double-digit gain in sales productivity. These early performance indicators are highly encouraging and reinforce our confidence in our store expansion strategy. As a result, we are accelerating our store opening efforts to build on this momentum, and will continue to leverage a hybrid model that combines direct and partnership stores for network expansion, in line with our asset-light approach. 112 Table of Contents Supply Chain Management Effective supply chain management is crucial for achieving sustainable growth. We focus on product innovation, quality control, and ensuring the responsiveness and cost-effectiveness of our supply chain. During the Year, we enhanced our supply chain capabilities to better meet consumer demands. We will continue to develop strategies to enhance the operational efficiency of our supply chain and unlock gross margin opportunities. We believe improving our supply chain efficiencies and managing working capital through the effective use of our infrastructure will enable us to control costs better and provide superior service to our customers. Talent We believe that the talent, commitment, and passion of our teams will always be key to our competitive edge. We offer a unique fashion proposition, defined by creativity, innovation, design, and quality. We successfully filled critical positions in a short timeframe. Our new hires are local industry experts with vast experience in both well-known leading multinational corporations and local apparel companies. We believe this will accelerate our business transformation and enhance organizational efficiency. Overall, Brand Management in 2025, reached a defining inflection point. After three years of repositioning and localization, our brand management platform and GAP achieved its first quarterly breakeven in terms of adjusted operating profit in the fourth quarter of 2025. This milestone validates the sustainability of our model. Importantly, scale is beginning to translate into tangible operating leverage, marking the transition from turnaround to profitable growth. Financial Operations Overview In 2023, 2024 and 2025, our total net revenues were RMB8,812.0 million, RMB9,422.2 million and RMB9,945.5 million, (US$1,422.2 million), respectively. For the same periods, net revenues from product sales accounted for 38.1%, 36.8% and 38.7%, respectively, of our total net revenues. We recorded net loss of RMB222.8 million, RMB138.4 million and RMB199.6(US$28.5 million) in 2023, 2024 and 2025, respectively. We had non-GAAP net loss of RMB3.3 million in 2023, non-GAAP net income of RMB15.1 million in 2024 and non-GAAP net income of RMB99.1 million in 2025. See “Item 5. Operating and Financial Review and Prospects - A. Operating Results - Non-GAAP Financial Measures.” The following describes key components of our statements of operations: Net Revenues We generate revenue from two revenue streams: (i) product sales and (ii) services. We generally operate e-commerce businesses based on one of our three business models: distribution model, consignment model, and service fee model, or, in some circumstances, a combination of the business models. We derive product sales revenues primarily through selling products to consumers under the distribution model. We select and purchase goods from our brand partners and/or their authorized distributors and generally sell branded goods directly to consumers through our online stores, we also sell our own brand goods through our offline stores. Revenues generated from product sales include fees charged to consumers for shipping and handling expenses. We record product sales revenue, net of return allowances, value added tax and related surcharges, when the products are delivered and accepted by consumers. We offer consumers an unconditional right of return for a typical period of seven days upon receipt of products. Return allowances, which reduce net revenues, are estimated based on our analysis of returns by categories of products based on historical data. The amount of goods returned was RMB328.8 million, RMB682.6 million and RMB915.0 million, (US$130.8 million) for the years ended December 31, 2023, 2024 and 2025, respectively, accounting for 9.8%, 19.7% and 23.8%,of the product sales revenue in the respective periods. We derive services revenues primarily under the consignment model and service fee model. Under the service fee model, we provide a variety of e-commerce services, such as IT solutions, online store operation, digital marketing, and customer service to our brand partners and other customers. Under the consignment model, in addition to the services provided under the service fee model, we also provide warehousing and fulfillment services, whereby our brand partners (and/or their authorized distributors) stock goods in our warehouses for future sales and we act as an agent to facilitate our brand partners’ online sales of their branded products as we bear no physical and general inventory risk and have no discretion in establishing price. 113 Table of Contents For services provided under the consignment model or service fee model, we charge our brand partners a combination of fixed fees and/or variable fees based on the value of merchandise sold, number of orders fulfilled or other variable factors. In particular, variable fees based on GMV are calculated using a predetermined ratio that we have negotiated with our brand partners, which may vary depending on factors such as the type and extent of the services we render. Revenue generated from some IT solutions such as one-time online store design and setup services is recognized at a point in time when the services are rendered. Revenue generated from services relating to online store operation, digital marketing, customer services, and warehousing and fulfillment are recognized over the service term in the amount including fixed fees and/or variable fees to which we have a right to invoice. ​ The following table sets forth our revenues by source for each period indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ % Net revenues ​ ​ ​ ​ ​ ​ ​ Product sales 3,357,202 ​ 38.1 ​ 3,466,928 ​ 36.8 ​ 3,849,559 ​ 550,480 ​ 38.7 Services 5,454,811 ​ 61.9 ​ 5,955,301 ​ 63.2 ​ 6,095,924 ​ 871,706 ​ 61.3 Total net revenues 8,812,013 ​ 100.0 ​ 9,422,229 ​ 100.0 ​ 9,945,483 ​ 1,422,186 ​ 100.0 ​ Operating expenses Our operating expenses consist primarily of cost of products, fulfillment expenses, sales and marketing expenses, technology and content expenses, and general and administrative expenses. The following table breaks down our total operating expenses by these categories, by amounts and as percentages of total net revenues for each of the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ (in thousands, except for percentage) Net revenues 8,812,013 ​ 100.0 ​ 9,422,229 ​ 100.0 ​ 9,945,483 ​ 100.0 Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of products (2,409,110) ​ (27.3) ​ (2,473,804) ​ (26.3) ​ (2,576,012) ​ (25.9) Fulfillment (2,507,306) ​ (28.5) ​ (2,461,591) ​ (26.1) ​ (2,309,755) ​ (23.2) Sales and marketing (2,829,016) ​ (32.1) ​ (3,380,724) ​ (35.9) ​ (3,847,237) ​ (38.7) Technology and content (505,203) ​ (5.7) ​ (550,289) ​ (5.8) ​ (463,206) ​ (4.7) General and administrative (855,914) ​ (9.7) ​ (719,157) ​ (7.6) ​ (751,627) ​ (7.6) Other operating income, net 123,368 ​ 1.4 ​ 55,445 ​ 0.6 ​ 77,304 ​ 0.8 Impairment of goodwill ​ (35,212) ​ (0.4) ​ (6,934) ​ (0.1) ​ (18,395) ​ (0.2) Total operating expenses (9,018,393) ​ (102.3) ​ (9,537,054) ​ (102.2) ​ (9,888,928) ​ (99.4) ​ Cost of products is incurred under the distribution model. Cost of products consists of the purchase price of products and inbound shipping charges, as well as inventory write-downs. Inbound shipping charges to receive products from the suppliers are included in the inventories, and recognized as cost of products upon sale of the products to the consumers. Our cost of products does not include other direct costs related to product sales such as shipping and handling expenses, payroll and benefits of staff, rental expenses of logistic centers and depreciation expenses. Therefore our cost of products may not be comparable to other companies which include such expenses in their cost of products. Our fulfillment expenses primarily consist of (i) expenses charged by third-party couriers for dispatching and delivering products to consumers, (ii) expenses incurred in operating our fulfillment and customer service center, including personnel cost and expenses attributable to buying, receiving, inspecting and warehousing inventories, retrieval, packaging and preparing customer orders for shipment, and store operations, (iii) rental expenses of leased warehouses, and (iv) packaging material costs. We expect our fulfillment expenses to increase as we will lease more warehouses or cooperate with more warehouse operators to meet the demand driven by the expansion of our fulfillment services. We plan to make our fulfillment operations more efficient by enhancing the utilization rate of available spaces, deploying automated warehouse facilities, optimizing our third-party couriers network, and improving workflow efficiency. 114 Table of Contents Our sales and marketing expenses primarily consist of payroll, bonus and benefits of sales and marketing staff, advertising costs, service fees paid to marketplaces, agency fees and costs for promotional materials. Our sales and marketing expenses have increased in recent years primarily due to the growth of our sales and marketing team and an expansion of our marketing efforts. We expect that our sales and marketing expenses will continue to increase due to our increased sales volume contributed by our existing and new brand partners and as we devote further efforts to expand digital marketing services for our brand partners and other customers and engage in additional advertising and marketing activities. We plan to make our sales and marketing more efficient by promotion operation automation, enhancing the effectiveness of marketing activities and improving the workflow efficiency. Our technology and content expenses consist primarily of payroll and related expenses for employees in our technology and system department, technology infrastructure expenses, costs associated with the computers, storage and telecommunications infrastructure for internal use and other costs, such as editorial content costs. We expect spending in technology and content to increase over time as we continue to invest in our technology platform to provide comprehensive services to brand partners. Our general and administrative expenses consist primarily of payroll and related expenses for our management and other employees involved in general corporate functions, office rentals, depreciation and amortization expenses relating to property and equipment used in general and administrative functions, provision for allowance for doubtful accounts, professional service and consulting fees and other expenses incurred in connection with general corporate purposes. We expect our general and administrative expenses to increase as we incur additional expenses in connection with the expansion of our business and our operations. Our other operating income, net consist primarily of government subsidies, which mainly consist of cash subsidies by our subsidiaries in the PRC from local governments. Taxation Cayman Islands Our company was incorporated in the Cayman Islands as an exempted company with limited liability. The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands. Payments of dividends and capital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the ordinary shares, nor will gains derived from the disposal of the shares be subject to Cayman Islands income or corporation tax. Hong Kong Our subsidiaries incorporated in Hong Kong are subject to 16.5% Hong Kong profit tax on their taxable income generated from operations in Hong Kong, except for one subsidiary of the Company which is a qualifying corporation under the two-tiered Profits Tax rate regime. For this subsidiary, the first HK$2 million of assessable profits are taxed at 8.25% and the remaining assessable profits are taxed at 16.5%. 115 Table of Contents China Generally, our subsidiaries and our VIE in China are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%. According to National Tax Letter 2009 No. 203, if an entity is certified as a “High and New Technology Enterprise” (“HNTE”), it is entitled to a preferential income tax rate of 15%. For the year ended December 31, 2025, three subsidiaries of the Company were certified as HNTEs, thus applied 15% tax rate. Before May 1, 2018, we are subject to VAT at a rate of 17% on product sales and 6% on our services, in each case less any deductible VAT we have already paid or borne. On November 19, 2017, the State Council promulgated The Decisions on Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the Provisional Regulations of the PRC on Value-added Tax, or Order 691. According to the VAT Law and Order 691, all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of the PRC are the taxpayers of VAT. The VAT tax rates generally applicable are simplified as 17%, 11%, 6% and 0%, and the VAT tax rate applicable to the small-scale taxpayers is 3%. The Notice of the MOF and the SAT on Adjusting Value-added Tax Rates, or the Notice, was promulgated on April 4, 2018 and came into effect on May 1, 2018. According to the Notice, the VAT tax rate of 17% and 11% are changed into 16% and 10%, respectively. In March 2019, the MOF, the SAT and the General Administration of Customs jointly promulgated the Announcement on the Policies for Furtherance of the Reform of Value-Added Tax, or the Announcement 39, according to which: (i) for VAT taxable sales acts or importation of goods originally subject to VAT tax rates of 16% and 10%, respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) for purchase of agricultural products originally subject to deduction rate of 10%, such deduction rate shall be adjusted to 9%; (iii) for purchase of agricultural products for the purpose of production and sales or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the deduction rate of 10%; (iv) for exported goods and labor originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) for exported goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%. Announcement 39 became effective on April 1, 2019 and superseded then existing provisions which were inconsistent with Announcement 39. Therefore, from May 1, 2018 to March 31, 2019, the VAT tax rates of our PRC subsidiaries changed from 17% to 16% on product sales. After April 1, 2019, the VAT tax rates of our PRC subsidiaries changed from 16% to 13% on product sales. VAT tax rate of our services revenues remains to be the same as that before May 1, 2018, which is 6%. We are also subject to surcharges on VAT payments in accordance with PRC law. On December 25, 2024, the prevailing VAT regulations were enacted into the Value-Added Tax Law of the People’s Republic of China (the “VAT Law”), which came into effect on January 1, 2026 along with its implementation rules. In terms of tax rates, the VAT Law maintains the existing standard rates of 13%, 9% and 6%. Dividends paid by our wholly foreign-owned subsidiaries in China to our intermediary holding companies in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital entered into on August 21, 2006 and receive approval from the relevant tax authority. If the relevant Hong Kong entities satisfy all the requirements under the tax arrangement and receives approval from the relevant tax authority, then the dividends paid to the Hong Kong entities would be subject to withholding tax at the standard rate of 5%. If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the EIT Law, such entity would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information - D. Risk Factors - Risks Related to Doing Business in the People’s Republic of China - We may be treated as a resident enterprise for PRC tax purposes under the EIT Law, and we may therefore be subject to PRC income tax on our global income.” Critical Accounting Policies and Estimates We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates. 116 Table of Contents The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. Inventories Inventories consisting of products available for sale, are valued at the lower of cost or market. Cost of inventories is determined using the weighted average cost method. Valuation of inventories is based on currently available information about expected recoverable value. The estimate is dependent upon factors such as historical trends of similar merchandise, inventory aging, historical and forecasted consumer demand and promotional environment. When evidence exists that the net realizable value of inventory is lower than its cost, a write-down is recognized in cost of products in the consolidated statements of operation in the period when it occurs. Inventory write-downs related to the accidents, i.e. fire, are recorded in other operating income (expense), net in the consolidated statements of operations. Business combination We account for business combinations using the acquisition method of accounting, which requires that once control is obtained, the purchase price be allocated to all tangible assets and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Any excess purchase price over the fair value of the net assets acquired is recorded as goodwill. The determination of the fair value of assets acquired and liabilities assumed requires estimates and assumptions with respect to the revenue growth rates, perpetual growth rate, discount rates and useful lives which to base the cash flow projections. Although we believe that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from the forecasted amounts and the difference could be material. Goodwill Goodwill represents the excess of the purchase consideration over the fair value of the identifiable assets and liabilities acquired as a result of our acquisitions of interests in our subsidiaries and our VIE. We allocate goodwill to reporting units based on the benefit each reporting unit derived from the business combination. Goodwill is tested for impairment at reporting unit level on an annual basis, or more frequently if events occur or circumstances change, indicating that it is more likely than not the fair value of a reporting unit would be below its carrying value. The Company perform the ongoing annual impairment test for goodwill at the end of the fourth quarter. the Company may elect to perform qualitative assessment for the reporting units containing goodwill to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If a qualitative assessment is not performed, or if as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of each reporting unit exceeds its fair value, an impairment loss equal to the difference between the fair value of the reporting unit and its carrying amount will be recorded. The impairment loss charged will be limited to the amount of goodwill allocated to that reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily through the use of a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the revenue growth rates for business, estimation of the useful life over which cash flows will occur, and determination of discount rate, including company-specific risk premium used to derive the discount rate. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit. 117 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated both in absolute amount and as a percentage of our total net revenues. Our historical results of operations are not necessarily indicative of the results for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ % ​ (in thousands, except for per share and per ADS data and number of shares) Net revenues ​ ​ ​ ​ ​ ​ ​ Product sales 3,357,202 ​ 38.1 ​ 3,466,928 ​ 36.8 ​ 3,849,559 ​ 550,480 ​ 38.7 Services 5,454,811 ​ 61.9 ​ 5,955,301 ​ 63.2 ​ 6,095,924 ​ 871,706 ​ 61.3 Total net revenues 8,812,013 ​ 100.0 ​ 9,422,229 ​ 100.0 ​ 9,945,483 ​ 1,422,186 ​ 100.0 Operating expenses(1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of products (2,409,110) ​ (27.3) ​ (2,473,804) ​ (26.3) ​ (2,576,012) ​ (368,365) ​ (25.9) Fulfillment (2,507,306) ​ (28.5) ​ (2,461,591) ​ (26.1) ​ (2,309,755) ​ (330,291) ​ (23.2) Sales and marketing (2,829,016) ​ (32.1) ​ (3,380,724) ​ (35.9) ​ (3,847,237) ​ (550,148) ​ (38.7) Technology and content (505,203) ​ (5.7) ​ (550,289) ​ (5.8) ​ (463,206) ​ (66,238) ​ (4.7) General and administrative (855,914) ​ (9.7) ​ (719,157) ​ (7.6) ​ (751,627) ​ (107,481) ​ (7.6) Other operating income, net 123,368 ​ 1.4 ​ 55,445 ​ 0.6 ​ 77,304 ​ 11,054 ​ 0.8 Impairment of goodwill ​ (35,212) ​ (0.4) ​ (6,934) ​ (0.1) ​ (18,395) ​ (2,630) ​ (0.2) Total operating expenses (9,018,393) ​ (102.3) ​ (9,537,054) ​ (101.2) ​ (9,888,928) ​ (1,414,099) ​ (99.5) Income (loss) from operations (206,380) ​ (2.3) ​ (114,825) ​ (1.2) ​ 56,555 ​ 8,087 ​ 0.5 Other income (expenses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income 82,113 ​ 0.9 ​ 68,752 ​ 0.7 ​ 58,556 ​ 8,373 ​ 0.6 Interest expense (41,344) ​ (0.5) ​ (38,987) ​ (0.4) ​ (44,572) ​ (6,374) ​ (0.4) Unrealized investment (loss) gain ​ (68,031) ​ (0.8) ​ 4,851 ​ 0.1 ​ (16,574) ​ (2,370) ​ (0.2) Gain on disposal of investment ​ — ​ — ​ — ​ — ​ 562 ​ 80 ​ 0.0 Gain (loss) on disposal/acquisition of subsidiaries ​ 631 ​ 0.0 ​ — ​ — ​ (36,262) ​ (5,185) ​ (0.4) Impairment loss of investments — ​ — ​ (14,403) ​ (0.2) ​ (213,406) ​ (30,517) ​ (2.1) Exchange loss (8,530) ​ (0.1) ​ (10,213) ​ (0.1) ​ (3,718) ​ (532) ​ 0.0 Fair value change on financial instruments ​ 24,515 ​ 0.3 ​ 11,838 ​ 0.1 ​ (1,904) ​ (272) ​ 0.0 Loss before income tax and share of income in equity method investment (217,026) ​ (2.5) ​ (92,987) ​ (1.0) ​ (200,763) ​ (28,710) ​ (2.0) Income tax expense (12,003) ​ (0.1) ​ (20,739) ​ (0.2) ​ (9,907) ​ (1,417) ​ (0.1) Share of income (loss) in equity method investment 6,253 ​ 0.1 ​ (24,658) ​ (0.3) ​ 11,090 ​ 1,586 ​ 0.1 Net loss (222,776) ​ (2.5) ​ (138,384) ​ (1.5) ​ (199,580) ​ (28,541) ​ (2.0) Net loss (income) attributable to noncontrolling interests (9,677) ​ (0.1) ​ 1,990 ​ (0.0) ​ (23,374) ​ (3,342) ​ (0.2) Net income attributable to redeemable noncontrolling interests ​ (45,969) ​ (0.5) ​ (48,804) ​ (0.5) ​ (19,146) ​ (2,738) ​ (0.2) Net loss attributable to ordinary shareholders of Baozun Inc. (278,422) ​ (3.2) ​ (185,198) ​ (2.0) ​ (242,100) ​ (34,621) ​ (2.4) Net loss per share attributable to ordinary shareholders of Baozun Inc. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic (1.56) ​ 0.0 ​ (1.03) ​ 0.0 ​ (1.40) ​ (0.20) ​ 0.0 Diluted (1.56) ​ 0.0 ​ (1.03) ​ 0.0 ​ (1.40) ​ (0.20) ​ 0.0 Net loss per ADS attributable to ordinary shareholders of Baozun Inc. (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic (4.68) ​ 0.0 ​ (3.09) ​ 0.0 ​ (4.19) ​ (0.60) ​ 0.0 Diluted (4.68) ​ 0.0 ​ (3.09) ​ 0.0 ​ (4.19) ​ (0.60) ​ 0.0 Weighted average shares used in calculating net loss per ordinary share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic 178,549,849 ​ — ​ 179,678,986 ​ — ​ 173,480,754 ​ 173,480,754 ​ — Diluted 178,549,849 ​ — ​ 179,678,986 ​ — ​ 173,480,754 ​ 173,480,754 ​ — (1) Share-based compensation expenses are allocated in operating expenses items as follows: 118 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Fulfillment ​ (6,443) ​ (4,885) ​ (1,011) ​ (145) Sales and marketing ​ (33,955) ​ (19,943) ​ (3,661) ​ (524) Technology and content ​ (12,184) ​ (11,290) ​ (2,006) ​ (287) General and administrative ​ (50,867) ​ (45,483) ​ (13,253) ​ (1,894) ​ (103,449) ​ (81,601) ​ (19,931) ​ (2,850) (2) Each ADS represents three Class A ordinary shares. Year Ended December 31, 2024 Compared to Year Ended December 31, 2025. Net Revenues Our total net revenues increased by 5.6% from RMB9,422.2 million in 2024 to RMB9,945.5 million (US$1,422.2 million) in 2025. The increase in total net revenues was driven by revenue growth in both the Company’s E-Commerce and Brand Management business lines. Revenue from product sales The increase in the revenue from products sales during the Year as compared with last year was mainly due to the incremental contribution from product sales from Brand Management, which mainly comprised retail revenue from Gap China business, including both offline store sales and online sales. Product sales included product sales from E-Commerce and Brand Management of RMB2,009.8 million and RMB1,841.6 million for the Year, respectively, compared with product sales from E-Commerce and Brand Management of RMB1,999.6 million and RMB1,469.6 million for the year ended December 31, 2024. Revenue from services The increase in revenue from services during the Year as compared with last year was mainly due to a 8.5% year-over-year growth in digital marketing and IT solutions, driven by content creation and technology monetization, together with a 8.3% year-over-year growth in online store operations. Operating Expenses Our operating expenses increased by 3.7% from RMB9,537.1 million in 2024 to RMB9,888.9 million (US$1,414.1 million) in 2025, which primarily resulted from the increase in cost of products which is in line with product sales and the increase in sales and marketing expenses. Cost of Products. Our cost of products increased by 4.1% from RMB2,473.8 million in 2024 to RMB2,567.0 million (US$368.4 million) in 2025. Cost of products as a percentage of net revenues from product sales decreased from 71.4% in 2024 to 66.9% in 2025 primarily due to the Company’s cost control initiatives and efficiency improvements. Fulfillment Expenses. Our fulfilment expenses decreased by 6.2% from RMB2,461.6 million (US$337.2 million) for the year ended December 31, 2024 to RMB2,309.8 million (US$330.3 million) for the Year. The decrease was primarily due to the Company’s cost control initiatives and efficiency improvements. Sales and Marketing Expenses. Our sales and marketing expenses increased by 13.8% from RMB3,380.7 million (US$463.2 million) for the year ended December 31, 2024 to RMB3,847.2 million (US$550.1 million) for the Year, primarily attributable to higher revenue contributions from digital marketing services for BEC, as well as increased marketing activities and offline stores for BBM during the Year. Technology and Content Expenses. Our technology and content expenses decreased by 15.8% from RMB550.3 million (US$75.4 million) for the year ended December 31, 2024 to RMB463.2 million (US$66.2 million) for the Year. The decrease was primarily due to the Company’s cost control initiatives and efficiency improvements. 119 Table of Contents General and Administrative Expenses. Our general and administrative expenses increased by 4.5% from RMB719.2 million (US$98.5 million) for the year ended December 31, 2024 to RMB751.6 million (US$107.5 million) for the Year, the increase was primarily due to a write-down of account receivable totaling RMB53.3 million in the second quarter of 2025, partially offset by the Company’s continued efforts to implement cost control and efficiency improvement initiatives. Other Operating Income, Net. The other operating income increased by 39.4% from RMB55.4 million (US$7.6 million) for the year ended December 31, 2024 to RMB77.3 million (US$11.1 million) for the Year, primarily attributable to an increase in government grants received. Impairment of Goodwill. We incurred impairment of goodwill of RMB18.4 million (US$2.6 million) in 2025, compared to RMB6.9 million in 2024, because the fair value of our reporting unit based on the quantitative impairment test was less than its carrying amount. Income from Operations As a result of the foregoing, our income from operations was RMB56.6 million (US$8.1 million) in 2025, compared with loss from operations of RMB114.8 million in 2024. Other Income (Expenses) We incurred total other income/expense for both 2024 and 2025. Our other expenses was RMB257.3million (US$36.8million) in 2025, compared to other income of RMB21.8 million in 2024. This increase was mainly due to the following transactions: On September 2, 2025, the Group entered into an equity transfer agreement with a third party pursuant to which the Group transferred 41% equity interests in Shanghai Mansen Brand Management Co., Ltd. (“Mansen”) to the counterparty, with the corresponding consideration therefor being RMB4.76 million. As of December 31, 2025, the Group had 33.52% equity interests as well as debt investments in Mansen which in aggregate amounted to RMB156.0 million before impairment. The Group recognized impairment losses of RMB155.5 million in 2025. Further in March 2026, the Group entered into an agreement with the third party to transfer all of its remaining equity interests and loans in Mansen for a total consideration of RMB0.5 million. Interest Income. Our interest income decreased from RMB68.8 million in 2024 to RMB586. million (US$8.4 million) in 2025. The decrease was primarily due to the reduction in bank deposit interest rates. Interest Expense. Our interest expense was RMB39.0 million in 2024 and RMB44.6 million (US$6.4million) in 2025, which represents the interest on the bank loans and notes payable. Unrealized Investment Loss/Gain. Our unrealized investment loss was RMB16.6 million (US$2.4 million) in 2025, compared with an unrealized investment gain of RMB4.9 million in 2024. The unrealized investment loss during the year was mainly related to decrease in the trading price of publicly listed companies we invested in. Loss on disposal of subsidiaries. Loss on disposal of subsidiaries was RMB36.3 million (US$5.2 million), compared with nil in the fiscal year of 2024. The loss was primarily due to the Company’s disposal of subsidiaries following a strategic adjustment in the third quarter of 2025. Impairment Loss of Investments. Our Impairment Loss of Investments was RMB213.4 million (US$30.5 million) in 2025. Our Impairment Loss of Investments was RMB14.4 million in 2024. The increase in impairment loss of investments was primarily associated with impairment loss of RMB151.6 million related to a previous debt investment in the e-commerce business, and impairment losses of RMB61.8 million for certain equity investments during the fourth quarter of 2025. Exchange Loss. Our exchange loss was RMB3.7 million (US$0.5 million) in 2025, compared with exchange loss of RMB10.2 million in 2024, primarily due to exchange rate fluctuation. 120 Table of Contents Fair value change on financial instruments. We recorded fair value gain of RMB11.8 million in 2024 and fair value loss of RMB1.9 million (US$0.3 million) in 2025. The fair value loss on financial instruments this year was mainly due to loss recognized in connection with equity contracts with a holder of non-controlling interest while the gain recognized from the financial instruments the Company invested last year. Income Tax Expense Our income tax expense was RMB9.9 million (US$1.4 million) in 2025, compared with RMB20.7 million in 2024. Our income tax expense in 2025 was mainly due to substantial recognition of deferred taxes. Share of Loss (Income) in Equity Method Investment Our share of income in equity method investment was RMB11.1 million (US$1.6 million) in 2025, compared with share of loss in equity method investment was RMB 24.7 million in 2024. Our share of loss (income) in equity method investment over these periods resulted from our investment in Hunter Gcsea Limited, Beijing Pengtai Baozun E-commerce Co., Ltd., or Pengtai Baozun, and other equity investees, as well as other-than-temporary impairment of certain equity method investments. Net Loss As a result of the foregoing, our net loss was RMB199.6 million (US$28.5 million) in 2025, compared with net loss of RMB138.4 million in 2024. Net Loss (Income) Attributable to Ordinary Shareholders of Baozun Inc. Our net loss attributable to ordinary shareholders of Baozun Inc. was RMB242.1 million (US$34.6 million) in 2025, compared with net loss attributable to ordinary shareholders of Baozun Inc. of RMB185.2 million in 2024. Year Ended December 31, 2023 Compared to Year Ended December 31, 2024. Net Revenues Our total net revenues increased by 6.9% from RMB8,812.0 million in 2023 to RMB9,422.2 million (US$1,290.8 million) in 2024. The increase in total net revenues was driven by revenue growth in both the Company’s E-Commerce and BBM business lines. Revenue from product sales The increase in the revenue from products sales during the Year as compared with last year was mainly due to the incremental contribution from product sales from Brand Management, which mainly comprised retail revenue from Gap China business, including both offline store sales and online sales; and partially offset by the decline from BEC due to the weak performance in the appliance, fast-moving consumer goods and electronics categories, as well as the Company’s optimization of its product distribution model, especially in the category of electronics. Product sales included product sales from E-Commerce and Brand Management of RMB1,999.6 million and RMB1,469.6 million for the Year, respectively, compared with product sales from E-Commerce and Brand Management of RMB2,092.2 million and RMB1,265.0 million for the year ended December 31, 2023. Revenue from services The increase in revenue from services during the Year as compared with last year was mainly due to a 22.2% year-over-year growth in digital marketing and IT solutions, driven by content creation and technology monetization, together with a 10.0% year-over-year growth in online store operations. ​ 121 Table of Contents Operating Expenses Our operating expenses increased by 5.8% from RMB9,018.4 million in 2023 to RMB9,537.1 million (US$1,306.6 million) in 2024, which primarily resulted from the increase in cost of products which is in line with product sales and the increase in sales and marketing expenses. Cost of Products. Our cost of products increased by 2.7% from RMB2,409.1 million in 2023 to RMB2,473.8 million (US$338.9 million) in 2024. Cost of products as a percentage of net revenues from product sales remained stable as 71.8% in 2023 and 71.4% in 2024. Fulfillment Expenses. Our fulfillment expenses decreased by 1.8% from RMB2,507.3 million in 2023 to RMB2,461.6 million (US$337.2 million) in 2024, compared with RMB2,507.3 million in the fiscal year of 2023. The decrease was mainly due to the Company’s cost control initiatives and efficiency improvements. Sales and Marketing Expenses. Our sales and marketing expenses increased by 19.5% from RMB2,829.0 million in 2023 to RMB3,380.7 million (US$463.2 million) in 2024. The increase was mainly due to higher revenue contributions from digital marketing services for BEC, as well as increased marketing activities and expenses related to more offline stores for BBM during the year. Technology and Content Expenses. Our technology and content expenses increased by 8.9% from RMB505.2 million in 2023 to RMB550.3 million (US$75.4 million) in 2024. The increase was mainly due to more revenues from IT solutions during the year, partially offset by the Company’s cost control initiatives and efficiency improvements. ​ General and Administrative Expenses. Our general and administrative expenses decreased by 16.0% from RMB855.9 million in 2023 to RMB719.2 million (US$98.5 million) in 2024. The decrease was primarily due to the Company’s cost control initiatives and efficiency improvements. Other Operating Income, Net. Other operating income was RMB55.4 million (US$7.6 million) in 2024, compared with RMB123.4 million in 2023, primarily due to a decrease in government grants received. Impairment of Goodwill. We incurred impairment of goodwill of RMB6.9 million (US$1.0 million) in 2024, compared to RMB35.2 million in 2023, because the fair value of our reporting unit based on the quantitative impairment test was less than its carrying amount. Income from Operations As a result of the foregoing, our loss from operations was RMB114.8 million (US$15.7 million) in 2024, compared with loss from operations of RMB206.4 million in 2023. Other Income (Expenses) We incurred total other income/expense for both 2023 and 2024. Our other income was RMB21.8 million (US$3.0 million) in 2024, compared to other expenses of RMB10.6 in 2023. This increase was mainly due to unrealized investment gain which was mainly related to the increase in the trading price of Amber International, a public company listed on the Nasdaq Global Market that the Company invested in January 2021 partially offset by impairment loss of certain equity investments. Interest Income. Our interest income decreased from RMB82.1 million in 2023 to RMB68.8 million (US$9.4 million) in 2024. The decrease was primarily due to the reduction in bank deposit interest rates. Interest Expense. Our interest expense was RMB41.3 million in 2023 and RMB39.0 million (US$5.3 million) in 2024, which represents the interest on the bank loans and notes payable. 122 Table of Contents Unrealized Investment Loss/Gain. Our unrealized investment gain was RMB4.9 million (US$0.7 million) in 2024, compared with an unrealized investment loss of RMB68.0 million in 2023. The unrealized investment gain during the year was mainly related to the increase in the trading price of Amber International Interactive partially offset by the unrealized investment loss due to the decrease in the trading price of Lanvin Group Holdings Limited. Impairment Loss of Investments. Our Impairment Loss of Investments was RMB14.4 million (US$2.0 million) in 2024. We did not record such loss in 2023. Exchange Gain (Loss). Our exchange loss was RMB10.2 million (US$1.4 million) in 2024, compared with exchange loss of RMB8.5 million in 2023, primarily due to exchange rate fluctuation. Fair Value Loss (Gain) on Derivative Liabilities. We recorded fair value gain on derivative liabilities of RMB24.5 million in 2023 and RMB11.8 million (US$1.6 million) in 2024. The fair value gain on financial instruments this year is mainly comprised of the gain recognized from the financial instruments the Company invested in during the second quarter of 2024, while the fair value gain on derivative liabilities last year was in connection with the equity contracts with a holder of non-controlling interest. Income Tax Expense Our income tax expense was RMB20.7 million (US$2.8 million) in 2024, compared with RMB12.0 million in 2023. Our income tax expense in 2024 was due to the increase in taxable profit generated from the certain profit-making PRC subsidiaries in the same period. Share of Loss (Income) in Equity Method Investment Our share of loss in equity method investment was RMB24.7 million (US$3.4 million) in 2024, compared with share of income in equity method investment was RMB6.3 million in 2023. Our share of loss (income) in equity method investment over these periods resulted from our investment in Beijing Pengtai Baozun E-commerce Co., Ltd., or Pengtai Baozun, and other equity investees, as well as other-than-temporary impairment of certain equity method investments. Net Loss As a result of the foregoing, our net loss was RMB138.4 million (US$19.0 million) in 2024, compared with net loss of RMB222.8 million in 2023. Net Loss (Income) Attributable to Ordinary Shareholders of Baozun Inc. Our net loss attributable to ordinary shareholders of Baozun Inc. was RMB185.2 million (US$25.4 million) in 2024, compared with net loss attributable to ordinary shareholders of Baozun Inc. of RMB278.4 million in 2023. Segment Information Beginning with the first quarter of 2023, we implemented certain segment reporting changes to better reflect our strategic transformation initiatives. As a result, we reported two operating segments, namely E-Commerce and Brand Management in 2023. Specifically, E-Commerce include BEC and BZI business lines and Brand Management include BBM business lines. 123 Table of Contents The table below provides a summary of our operating segment results. ​ ​ ​ ​ ​ ​ ​ ​ ​ For the fiscal year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ RMB ​ RMB ​ RMB ​ ​ (in thousands) Net revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ E-Commerce 7,621,114 ​ 8,070,271 ​ 8,271,229 Brand Management 1,271,027 ​ 1,474,351 ​ 1,845,418 Inter-segment eliminations * (80,128) ​ (122,393) ​ (171,164) Total consolidated net revenues 8,812,013 ​ 9,422,229 ​ 9,945,483 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Operating Profits (Losses) **: ​ ​ ​ ​ ​ E-Commerce 163,990 ​ 179,622 ​ 219,320 Brand Management ​ (187,663) ​ (168,767) ​ (93,028) Inter-segment eliminations * — ​ (210) ​ (133) Total Adjusted Operating Profits (23,673) ​ 10,645 ​ 126,159 Unallocated expenses: ​ ​ ​ ​ ​ Share-based compensation expenses (103,449) ​ (81,601) ​ (19,931) Amortization of intangible assets resulting from business acquisition (31,875) ​ (36,257) ​ (31,128) Acquisition-related expenses (12,171) ​ — ​ — Cancellation fees of repurchased shares — ​ (678) ​ (150) Impairment of goodwill (35,212) ​ (6,934) ​ (18,395) Total other expenses (10,646) ​ 21,838 ​ (257,318) Loss before income tax (217,026) ​ (92,987) ​ (200,763) *The inter-segment eliminations mainly consist of revenues from services provided by E-Commerce to Brand Management. **Adjusted Operating Profits (Losses) represent segment profits (losses), which is income (loss) from operations from each segment without allocating share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, cancellation fees of repurchased shares and impairment of goodwill. For E-Commerce segment, we achieved total net revenues of RMB8,271 million and RMB8,070 million in the fiscal year of 2025 and 2024 respectively. The increase of E-Commerce segment revenue was mainly due to the growth in online store operation and digital marketing and IT solutions of service revenue. We achieved adjusted operating profit of RMB219 million and RMB180 million in the fiscal year of 2025 and 2024 respectively. The increase of E-Commerce segment adjusted operating profit was mainly due to the increase in total revenues. For Brand Management segment, we achieved total net revenues of RMB1,845 million and RMB1,474 million in the fiscal year of 2025 and 2024 respectively. The increase of Brand Management segment revenue was mainly due to the incremental revenue contribution from Gap Greater China, our newly acquired business in 2023. We achieved adjusted operating loss of RMB93 million and RMB169 million in the fiscal year of 2025 and 2024 respectively. The Brand Management segment adjusted operating loss was mainly due to Gap Greater China, which has shown decent momentum in reducing its operating loss on year-over-year comparable basis. 124 Table of Contents Non-GAAP Financial Measures In evaluating our business, we consider and use non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc., and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, as supplemental measures to review and assess our 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, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill, loss on variance from expected contingent acquisition payment, and cancellation fees of repurchased ADSs and returned ADSs. Non-GAAP net income (loss) is net income (loss) excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, loss on variance from expected contingent acquisition payment, cancellation fees of repurchased ADSs and returned ADSs, fair value loss (gain) on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries and investment in equity investee, and unrealized investment loss (gain). 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, amortization of intangible assets resulting from business acquisition, acquisition-related expenses, impairment of goodwill and investments, other-than-temporary impairment of equity method investments, loss on variance from expected contingent acquisition payment, cancellation fees of repurchased ADSs and returned ADSs, fair value loss (gain) on derivative liabilities, loss (gain) on disposal/acquisition of subsidiaries and investment in equity investee, and unrealized investment loss (gain). Diluted 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, as each ADS represents three of our Class A ordinary shares. 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, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun and diluted Non-GAAP net income (loss) attributable to ordinary shareholders of Baozun per ADS reflect the Company’s ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that the use of the non-GAAP financial measures facilitates investors to understand and evaluate the Company’s current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of the Company’s core operating results and business outlook. 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 diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS is that they do not reflect all items of income (loss) and expense that affect our operations. Share-based compensation expenses and amortization of intangible assets resulting from business acquisition and unrealized investment loss have been and may continue to be incurred in our business and are not reflected in the presentation of non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and diluted non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS. 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 net income (loss), non-GAAP net income (loss) attributable to ordinary shareholders of Baozun Inc. and diluted 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, net income (loss), net income (loss) attributable to ordinary shareholders of Baozun Inc., net income (loss) attributable to ordinary shareholders of Baozun Inc. per ADS, or other financial measures prepared in accordance with U.S. GAAP. We compensate for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure. 125 Table of Contents A reconciliation of these non-GAAP financial measures in 2023, 2024 and 2025 to the nearest U.S. GAAP performance measures is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ RMB ​ ​ RMB ​ ​ RMB ​ ​ US$ ​ ​ (in thousands) Income (loss) from operations (206,380) ​ (114,825) ​ 56,555 ​ 8,087 Add: Share-based compensation expenses 103,449 ​ 81,601 ​ 19,931 ​ 2,850 Amortization of intangible assets resulting from business acquisition 31,875 ​ 36,257 ​ 31,128 ​ 4,451 Acquisition-related expenses ​ 12,171 ​ — ​ — ​ — Impairment of goodwill ​ 35,212 ​ 6,934 ​ 18,395 ​ 2,630 Cancellation fees of repurchased ADSs and returned ADSs ​ — ​ 678 ​ 150 ​ 21 Non-GAAP income (loss) from operations ​ (23,673) ​ 10,645 ​ 126,159 ​ 18,039 ​ ​ ​ ​ ​ ​ ​ ​ Net loss (222,776) ​ (138,384) ​ (199,580) ​ (28,541) Add: Share-based compensation expenses 103,449 ​ 81,601 ​ 19,931 ​ 2,850 Amortization of intangible assets resulting from business acquisition 31,875 ​ 36,257 ​ 31,128 ​ 4,451 Acquisition-related expenses 12,171 ​ — ​ – ​ – Impairment of goodwill and investments ​ 35,212 ​ 21,337 ​ 231,801 ​ 33,147 Other-than-temporary impairment of equity method investments ​ — ​ 26,115 ​ – ​ – Cancellation fees of repurchased ADSs and returned ADSs ​ — ​ 678 ​ 150 ​ 21 Fair value (gain) loss on derivative liabilities ​ (24,515) ​ — ​ 7,654 ​ 1,095 (Gain) loss on disposal of subsidiaries and investment in equity investee ​ (631) ​ — ​ 35,700 ​ 5,105 Unrealized investment loss (gain) ​ 68,031 ​ (4,851) ​ 16,574 ​ 2,370 Less: Tax effect of amortization of intangible assets resulting from business acquisition, loss on disposal of subsidiaries and impairment of investments(1) ​ (6,086) ​ (7,611) ​ (44,227) ​ (6,324) Non-GAAP net (loss) income ​ (3,270) ​ 15,142 ​ 99,131 ​ 14,174 ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to ordinary shareholders of Baozun Inc. (278,422) ​ (185,198) ​ (242,100) ​ (34,621) Add: Share-based compensation expenses 103,449 ​ 81,601 ​ 19,931 ​ 2,850 Amortization of intangible assets resulting from business acquisition 24,206 ​ 25,776 ​ 21,651 ​ 3,096 Acquisition-related expenses 12,171 ​ — ​ – ​ – Impairment of goodwill and investments 35,212 ​ 20,742 ​ 229,359 ​ 32,797 Other-than-temporary impairment of equity method investments ​ — ​ 26,115 ​ – ​ – Cancellation fees of repurchased ADSs and returned ADSs ​ — ​ 678 ​ 150 ​ 21 Fair value (gain) loss on derivative liabilities ​ (24,515) ​ — ​ 4,822 ​ 690 (Gain) loss on disposal of subsidiaries and investment in equity investee ​ (652) ​ — ​ 35,700 ​ 5,105 Unrealized investment loss (gain) ​ 68,031 ​ (4,851) ​ 16,574 ​ 2,370 Less: Tax effect of amortization of intangible assets resulting from business acquisition, loss on disposal of subsidiaries and impairment of investments(1) ​ (4,569) ​ (5,234) ​ (41,858) ​ (5,986) Non-GAAP net (loss) income attributable to ordinary shareholders of Baozun Inc. ​ (65,089) ​ (40,371) ​ 44,229 ​ 6,322 ​ ​ ​ ​ ​ ​ ​ ​ Diluted non-GAAP net (loss) income attributable to ordinary shareholders of Baozun Inc. per ADS: (1.09) ​ (0.67) ​ 0.76 ​ 0.11 Weighted average shares used in calculating diluted net (loss) income per ordinary shares 178,549,849 ​ 179,678,986 ​ 173,601,782 ​ 173,601,782 ​ (1)The Company evaluated the non-GAAP adjustments items and concluded that these items have immaterial income tax effects except for amortization of intangible assets resulting from business acquisition, loss on disposal of subsidiaries and impairment of investments. B. Liquidity and Capital Resources Cash Flows and Working Capital We have financed our operations primarily through cash generated from operating activities and short-term and long-term bank borrowings. As of December 31, 2025, we had RMB907.3 million (US$129.7 million) in cash and cash equivalents and RMB141.0 million (US$20.2 million) in restricted cash. Our cash and cash equivalents generally consist of bank deposits. As of December 31, 2025, we had credit facilities with terms ranging from three months to one year for an aggregate amount RMB3,632.0 million (US$519.4 million) from 11 Chinese commercial banks. Under these credit facilities, we had RMB386.2 million (US$55.2 million) as guarantee for the issuance of notes payable, and RMB128.3 million (US$18.3 million) for the issuance of letters of guarantee to our suppliers, so as of December 31, 2025, we had RMB2,104.5 million (US$300.9 million) available for future borrowing under these credit facilities. 126 Table of Contents We also pledged cash of RMB139.0 million (US$19.9 million) to banks in relation to bank guarantees issued on behalf of us, deposit required by our business partners or security for issuance of commercial acceptance notes that mainly relate to purchase of inventories as of December 31, 2025. We believe that our current levels of cash balances, cash flows from operations and existing credit facilities will be sufficient to meet our anticipated cash needs to fund our operations for at least the next 12 months. In addition, our cash flows from operations could be affected by our payment terms with our brand partners. Furthermore, we may need additional cash resources in the future if we experience changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand, we may seek to issue debt or equity securities or obtain additional credit facilities. Our accounts receivable mainly represent amounts due from customers and consumers and are recorded net of allowance for doubtful accounts. Under the distribution model, we generally receive funds from the e-commerce platforms within no more than two weeks after online consumers have confirmed receipt of goods. As of December 31, 2023, 2024 and 2025, our accounts receivable amounted to RMB2,184.7 million, RMB2,033.8 million and RMB2,173.2 million (US$310.8 million), respectively. As of the date of this annual report, we have settled RMB1,385.6 million (US$198.1 million) of our accounts receivable as of December 31, 2025, constituting 63.8% of the accounts receivable then outstanding, net of allowance for doubtful accounts. The increase in accounts receivable from 2024 to 2025 was due to the growth in revenue during the current year. Our accounts receivable turnover days were 93 days in 2023, 82 days in 2024 and 77 days in 2025. The decrease in turnover days from 2024 to 2025 was due to our strengthened capital management of receivables, as well as the shortened payment cycles attributable to Gap Greater China, our newly acquired business in 2023 which primarily engages in retail businesses. Accounts receivable turnover days for a given period are equal to the average accounts receivable balances as of the beginning and the end of the period divided by total net revenues during the period and multiplied by the number of days during the period (i.e., the actual number of days in a given year for calculating turnover days in such year or 90 days for calculating turnover days in a given quarter). Our inventories were RMB1,045.1 million, RMB1,117.4 million and RMB879.4 million (US$125.8 million) as of December 31, 2023, 2024 and 2025. Our inventory turnover days were 151 days in 2023, 160 days in 2024 and 141 days in 2025. The decrease in our inventories from December 31, 2023 to December 31, 2024 was primarily due to the incremental product sales. The decrease in our inventories from December 31, 2024 to December 31, 2025 was primarily due to the optimization of our product portfolio, which resulted in contraction in distribution model and a lower inventory volume. The increase in our inventory turnover days from 2023 to 2024 was due to changes in our product mix with new brands acquired. The decrease in our inventory turnover days from 2024 to 2025 was due to our strategy for product sales and distribution model of pursuing high-quality growth with a clear focus on profitability and working capital efficiency, as well as our strengthening of inventory management. Inventory turnover days for a given period are equal to the average inventory balances as of the beginning and the end of the period divided by total cost of products during the period and multiplied by the number of days during the period (i.e., the actual number of days in a given year for calculating turnover days in such year or 90 days for calculating turnover days in a given quarter). Our accounts payable include accounts payable for payments in connection with inventory that we purchased and products sold under the consignment model and service fee model for which we are responsible for payment collection. As of December 31, 2023, 2024 and 2025, our accounts payable amounted to RMB563.6 million, RMB620.7 million and RMB466.1 million (US$66.6 million), respectively. The increase in our accounts payable from December 31, 2023 to December 31, 2024 was primarily due to the increase of turnover days. The decrease in our accounts payable from December 31, 2024 to December 31, 2025 reflected contraction in our scale of distribution model due to the optimization of our product portfolio. Our accounts payable turnover days were 79 days in 2023 and 87 days in 2024 and 77 days in 2025. The increase in our accounts payable turnover days from 2023 to 2024 was primarily due to the Group optimizes supplier payment terms. The decrease in our accounts payable turnover days from 2024 to 2025 was primarily due to the fluctuations in our product mix. Accounts payable turnover days for a given period are equal to the average accounts payable balances as of the beginning and the end of the period divided by total cost of products during the period and multiplied by the number of days during the period (i.e., the actual number of days in a given year for calculating turnover days in such year or 90 days for calculating turnover days in a given quarter). Although we consolidate the results of our VIE, we only have access to cash balances or future earnings of our VIE through our contractual arrangements with it. See “Item 4. Information on the Company - C. Organizational Structure - Contractual Arrangements with Shanghai Zunyi and Its Shareholders.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “ - Holding Company Structure.” 127 Table of Contents As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our wholly foreign-owned subsidiaries in China only through loans or capital contributions, subject to the approval of or filing with government authorities and limits on the amount of capital contributions and loans. In addition, subject to applicable restrictions under PRC foreign exchange laws and regulations, our wholly foreign-owned subsidiaries in China may provide Renminbi funding to their respective subsidiaries through capital contributions and entrusted loans, and to our VIE only through entrusted loans. See “Item 3. Key Information - D. Risk Factors - Risks Related to Doing Business in the People’s Republic of China - PRC regulations of loans to PRC entities and direct investment in PRC entities by offshore holding companies may delay or prevent us from using the proceeds of our offerings to make loans or additional capital contributions to our foreign-invested enterprises or our VIE.” Renminbi may be converted into foreign exchange for current account items, including interest and trade- and service-related transactions. As a result, our PRC subsidiaries, our VIE in China may purchase foreign exchange for the payment of license, content or other royalty fees and expenses to offshore licensors, etc. Our wholly foreign-owned subsidiary may convert Renminbi amounts that it generates in its own business activities, including technical consulting and related service fees pursuant to its contract with our VIE, as well as dividends it receives from its subsidiaries, into foreign exchange and pay them to its non-PRC parent companies in the form of dividends. However, current PRC regulations permit our wholly foreign-owned subsidiary to pay dividends to us only out of their accumulated profits, if any, determined in accordance with its articles of association and Chinese accounting standards and regulations. Our wholly foreign-owned subsidiary is required to set aside at least 10% of its after-tax profits after making up for previous years’ accumulated losses each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, capital account transactions, which include foreign direct investment and loans, must be approved by and/or registered with SAFE and its local branches. The following table sets forth a summary of our cash flows for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ (in thousands) Net cash provided by operating activities 448,255 ​ 101,278 ​ 420,434 ​ 60,121 Net cash used in investing activities (340,372) ​ (817,606) ​ (898,586) ​ (128,497) Net cash used in financing activities (8,033) ​ (19,737) ​ (107,491) ​ (15,371) Net increase (decrease) in cash, cash equivalents and restricted cash 99,850 ​ (736,065) ​ (585,644) ​ (83,748) Cash, cash equivalents and restricted cash, beginning of year 2,245,724 ​ 2,352,295 ​ 1,644,314 ​ 225,270 Effect of exchange rate changes 6,721 ​ 28,084 ​ (10,377) ​ 8,382 Cash, cash equivalents and restricted cash, end of year 2,352,295 ​ 1,644,314 ​ 1,048,294 ​ 149,904 ​ 128 Table of Contents Operating Activities Net cash provided by operating activities in 2025 was RMB420.4 million (US$60.1 million) and primarily consisted of net loss of RMB 199.6 million (US$ 28.5 million), as adjusted for non-cash items, and the effects of changes in operating assets and liabilities. Adjustment for non-cash items primarily included RMB221.7 million (US$31.7 million) of depreciation and amortization, RMB126.9 million (US$18.1 million) of inventory write-down, RMB19.9 million (US$2.9 million) of share-based compensation, RMB11.9 million (US$1.7 million) of loss on disposal of property and equipment, RMB11.1 million (US$1.6 million) of share of income in equity method investment, RMB18.4 million (US$2.6 million) of impairment of goodwill, RMB3.7 million (US$0.5 million) of exchange loss, RMB1.9 million (US$0.3 million) of fair value loss on derivative liabilities, RMB213.4 million (US$30.5 million) of impairment loss of investments, RMB58.3 million (US$8.3 million) of provision for allowance for credit gain, RMB0.6 million (US$0.1 million) of gain on disposal of investments, RMB36.3 million (US$5.2 million) of gain on acquisition of subsidiaries, RMB3.5 million (US$0.5 million) of unrealized interest income on long-term debt investments and RMB16.6 million (US$2.4 million) of realized and unrealized loss related to investment securities, partially offset by RMB56.8 million (US$8.1 million) of deferred income tax. In 2025, the principal items accounting for the changes in operating assets and liabilities were an increase in operating lease right-of-use assets of RMB115.7 million (US$16.5 million), an increase in advance to suppliers of RMB12.6 million (US$1.8 million), an increase in accrued expenses and other current liabilities of RMB384.2 million (US$54.9 million), an increase in prepayments and other current assets of RMB52.0 million (US$7.4 million), an increase in tax payables of RMB8.9 million (US$1.3 million), an increase in dividend received from investees of RMB14.7 million (US$2.1 million), an increase in inventories of RMB91.3 million (US$13.1 million) and an increase in amounts due from related parties of RMB0.8 million (US$0.1 million), partially offset by a decrease in other non-current assets of RMB8.8 million (US$1.3 million), a decrease in accounts payables of RMB131.9 million (US$18.9 million), a decrease in operating lease liabilities of RMB111.6 million (US$16.0 million), a decrease in amounts due to related party of RMB3.8 million(US$0.5 million), a decrease in accounts receivable of RMB328.6 million (US$47.0 million), a decrease in notes payable of RMB126.0 million (US$18.0 million) and a decrease in other non-current liabilities of RMB6.5 million (US$0.9 million). The increase in our inventories and operating lease right-of-use assets was due to the growth of our business. Net cash provided by operating activities in 2024 was RMB101.3 million (US$13.9 million) and primarily consisted of net loss of RMB 138.4 million (US$ 19.0 million), as adjusted for non-cash items, and the effects of changes in operating assets and liabilities. Adjustment for non-cash items primarily included RMB244.9 million (US$33.6 million) of depreciation and amortization, RMB150.8 million (US$20.7 million) of inventory write-down, RMB76.3 million (US$10.4 million) of share-based compensation, RMB28.5 million (US$3.9 million) of loss on disposal of property and equipment, RMB24.7 million (US$3.4 million) of share of lose in equity method investment, RMB6.9 million (US$1.0 million) of impairment of goodwill, RMB10.2 million (US$1.4 million) of exchange loss, RMB11.8 million (US$1.6 million) of fair value gain on derivative liabilities, and RMB14.4 million (US$2.0 million) of impairment loss of investments, RMB0.9 million (US$0.1 million) of reversal of allowance for credit loss and RMB4.9 million(US$0.7 million) of realized and unrealized gain related to investment securities, partially offset by RMB40.9 million (US$5.6 million) of deferred income tax. In 2024, the principal items accounting for the changes in operating assets and liabilities were an increase in operating lease right-of-use assets of RMB302.7 million (US$41.5 million), a decrease in other non-current assets of RMB56.7 million (US$7.8 million), a decrease in advance to suppliers of RMB90.3 million (US$12.4 million), a decrease in accrued expenses and other current liabilities of RMB94.3 million (US$12.9 million), an increase in accounts payables of RMB57.1 million (US$7.8 million), and an increase in amounts due from related parties of RMB56.9 million (US$7.8 million),partially offset by a decrease in operating lease liabilities of RMB291.1 million (US$39.9 million), a decrease in prepayments and other current assets of RMB105.8 million (US$14.5 million), an increase in tax payables of RMB12.2 million (US$1.7 million), a decrease in amounts due to related party of RMB26.8 million(US$3.7 million), an increase in accounts receivable of RMB181.6 million (US$24.9 million), a decrease in notes payable of RMB45.5 million (US$6.2 million), an increase in dividend received from investees of RMB8.1 million(US$1.1 million), an increase in other liabilities of RMB23.8 million(US$3.3 million), and a decrease in inventories of RMB222.5 million (US$30.5 million). The increase in our accounts receivable, accounts payable and operating lease right-of-use assets was due to the growth of our business. 129 Table of Contents Net cash provided by operating activities in 2023 was RMB448.3 million (US$63.1 million) and primarily consisted of net loss of RMB222.8 million (US$31.4 million), as adjusted for non-cash items, and the effects of changes in operating assets and liabilities. Adjustment for non-cash items primarily included RMB251.6 million (US$35.4 million) of depreciation and amortization, RMB152.9 million (US$21.5 million) of inventory write-down, RMB103.4 million (US$14.6 million) of share-based compensation, RMB19.8 million (US$2.8 million) of provision for allowance for credit losses, RMB7.4 million (US$1.0 million) of loss on disposal of property and equipment, RMB6.3 million (US$0.9 million) of share of income in equity method investment, RMB8.5 million (US$1.2 million) of exchange loss, RMB35.2 million (US$5.0 million) of impairment of goodwill, RMB24.5 million (US$3.5 million) of fair value gain on derivative liabilities, RMB0.6 million (US$0.1 million) of loss on disposal of subsidiaries and investment in equity investee, and RMB68.0 million(US$9.6 million) of realized and unrealized loss related to investment securities, partially offset by RMB45.6 million (US$6.4 million) of deferred income tax. In 2023, the principal items accounting for the changes in operating assets and liabilities were an increase in operating lease right-of-use assets of RMB143.8 million (US$20.3 million), an increase in other non-current assets of RMB21.7 million (US$3.1 million), an increase in advance to suppliers of RMB65.9 million (US$9.3 million), an increase in accrued expenses and other current liabilities of RMB14.0 million (US$2.0 million), a decrease in accounts payables of RMB133.5 million (US$18.8 million), and an increase in amounts due from related parties of RMB4.7 million (US$0.7 million),partially offset by a decrease in operating lease liabilities of RMB144.2 million (US$20.3 million), a decrease in prepayments and other non-current assets of RMB10.9 million (US$1.5 million), a decrease in tax payables of RMB27.4 million (US$3.9 million), an increase in amounts due to related party of RMB2.4 million(US$0.3 million), an increase in accounts receivable of RMB226.9 million (US$32.0 million), an increase in notes payable of RMB18.8 million (US$2.6 million), and a decrease in inventories of RMB33.8 million(US$4.8 million). The increase in our accounts receivable, advances to suppliers, operating lease right-of-use assets was due to the growth. Investing Activities Net cash used in investing activities in 2025 was RMB898.6 million (US$128.5 million), and primarily consisted of (i) purchase of short term investment, (ii) purchases of property and equipment, which comprised equipment for warehouse, computer hardware for newly hired employees and leasehold improvements, (iii) maturity of investments, (iv) net cash paid for business combination, (v) additions of intangible assets due to capitalization of internally developed software, (vi) loan to third party. . Net cash used in investing activities in 2024 was RMB817.6 million (US$112.0 million), and primarily consisted of (i) purchase of short term investment, (ii) purchases of property and equipment, which comprised equipment for warehouse, computer hardware for newly hired employees and leasehold improvements, (iii) maturity of short-term investments, (iv) net cash paid for business combination, (v) additions of intangible assets due to capitalization of internally developed software, and (vi) payment of deferred consideration for acquisition of eFashion. Net cash used in investing activities in 2023 was RMB340.4 million (US$47.9 million), and primarily consisted of (i) purchase of short term investment, (ii) purchases of property and equipment, which comprised equipment for warehouse, computer hardware for newly hired employees and leasehold improvements, (iii) acquisition of Gap Greater China, (iv) investment in equity investees, and (v) additions of intangible assets due to capitalization of internally developed software. Financing Activities Net cash used in financing activities in 2025 was RMB107.5 million (US$15.4 million), primarily attributable to (i) repayment of short-term borrowings of RMB2,260.7 million and proceeds from short-term borrowings of RMB2,241.0 million, (ii) contingent payment for acquisition of RMB16.3 million, and (iii) repurchase of ordinary shares of RMB10.2 million, (iv) dividend payment of RMB22.2 million, (v) deferred consideration for the acquisition of subsidiaries of RMB35.8 million. Net cash used in financing activities in 2024 was RMB19.7 million (US$2.7 million), primarily attributable to (i) repayment of short-term borrowings of RMB1,864.5 million and proceeds from short-term borrowings of RMB1,969.7 million, (ii) contingent payment for acquisition of RMB24.2 million, and (iii) repurchase of ordinary shares of RMB95.5 million. Net cash used in financing activities in 2023 was RMB8.0 million (US$1.1 million), primarily attributable to (i) repayment of short-term borrowings of RMB1,721.0 million and proceeds from short-term borrowings of RMB1,820.7 million, (ii) contingent payment for acquisition of RMB32.5 million, and (iii) settle derivative liabilities with Cainiao of RMB74.0 million. 130 Table of Contents Capital Expenditures We had capital expenditures of RMB230.2 million, RMB208.3 million and RMB153.8 million, (US$22.0 million) in 2023, 2024 and 2025, respectively. Our capital expenditures were used primarily for (i) the purchase of buildings, computer hardware, office furniture and equipment and warehouse equipment, (ii) leasehold improvements, (iii) cost incurred for internal development of software, and (iv) land use rights. Actual future capital expenditures may differ from the amounts indicated above. We had no capital commitment as of December 31, 2025. Contractual Obligations The following sets forth information regarding our aggregate payment obligations under our contracts and commercial commitments as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ Total ​ Less than 1 year ​ 1-3 years ​ 3-5 years ​ More than 5 years ​ ​ ​ RMB ​ ​ US$ ​ ​ RMB ​ ​ US$ ​ ​ RMB ​ ​ US$ ​ ​ RMB ​ ​ US$ ​ ​ RMB ​ ​ US$ ​ ​ (in thousands) Operating lease obligations 819,188 ​ 117,143 ​ 274,512 ​ 39,254 ​ 321,498 ​ 45,974 ​ 173,320 ​ 24,784 ​ 49,858 ​ 7,130 Short-term loans 1,208 ​ 173 ​ 1,208 ​ 173 ​ — ​ — ​ — ​ — ​ — ​ — Total 820,396 ​ 117,316 ​ 275,720 ​ 39,427 ​ 321,498 ​ 45,974 ​ 173,320 ​ 24,784 ​ 49,858 ​ 7,130 ​ As of December 31, 2025, we had operating lease liabilities amounting to RMB729.3 million (US$104.3 million), certain of which were secured by the rental deposits and all of which were unguaranteed. Holding Company Structure Baozun Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries, our VIE in China. As a result, our ability to pay dividends depends upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with their articles of association and PRC accounting standards and regulations. Under PRC law, each of our subsidiaries and our consolidated VIE in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of the entity’s registered capital. Each of our PRC subsidiaries and our consolidated VIE may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. As of December 31, 2025, the amount restricted, including paid-in capital and statutory reserve funds, was RMB3,424.9 million (US$489.8 million). Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. Our VIE, Shanghai Zunyi, contributed an aggregate of 6.2%, 5.6% and 4.4%, of our net revenues for the years ended December 31, 2023, 2024 and 2025, respectively. C. Research and Development We devote significant resources to our research and development efforts, focusing on developing our technology infrastructure and proprietary systems, expanding our technological footprint and enhancing the digitalization of brand partners’ retail business. We have a Technology and Innovation Center with offices in Shanghai and Chengdu dedicated to innovating and upgrading our technologies to reinforce our market leadership in China’s brand e-commerce solutions market. The Technology and Innovation Center focuses on enhancing our IT capabilities and helps us shape the market by developing and deploying artificial intelligence solutions in brand e-commerce over time and standardizing new services such as cloud-based operating platforms, big data analysis tools for brand e-commerce, the implementation of artificial intelligence in brand e-commerce over time and the upgrade of current technology systems, in order to serve a wider variety of brand partners and other customers with a broader array of services. In 2019, we upgraded our technology infrastructure to a hybrid cloud model- Baozun Hybrid Cloud - to enhance our storing and computing capabilities. We have integrated and migrated our core e-commerce systems and applications to Baozun Hybrid Cloud, which helped us better utilize cloud computing, enhance the scalability of our business, and improve cost efficiency. We employed 732 IT professionals to design, develop and operate our technology platform as of December 31, 2025. 131 Table of Contents D. Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2025 to December 31, 2025 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. E. Critical Accounting Estimates For our critical accounting estimates, see “Item 5. Operating and Financial Review and Prospects — A. Operating Results —Critical Accounting Policies and Estimates.” Off-Balance Sheet Arrangements We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us. ​