Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Entity Registrant Name | Vipshop Holdings Ltd |
Entity Central Index Key | 1,529,192 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
Class A ordinary shares | |
Entity Common Stock, Shares Outstanding | 101,508,264 |
Class B ordinary shares | |
Entity Common Stock, Shares Outstanding | 16,510,358 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 591,902 | ¥ 4,109,577 | ¥ 3,324,384 |
Held-to-maturity securities (Note 6) | 96,756 | 671,776 | 1,807,403 |
Accounts receivable, net (Note 4) | 336,154 | 2,333,918 | 351,423 |
Amounts due from related parties (Note 26(a)) | 1,203 | 8,352 | 31,856 |
Other receivables and prepayments, net (Note 5) | 330,380 | 2,293,825 | 1,869,461 |
Inventories | 712,748 | 4,948,609 | 4,566,746 |
Deferred tax assets (Note 23) | 30,940 | 214,815 | 202,003 |
Total current assets | 2,100,083 | 14,580,872 | 12,153,276 |
NON-CURRENT ASSETS | |||
Property and equipment, net (Note 7) | 643,447 | 4,467,451 | 2,949,604 |
Deposits for property and equipment | 149,761 | 1,039,793 | 933,419 |
Land use right, net (Note 8) | 345,536 | 2,399,058 | 197,462 |
Intangible assets, net (Note 9) | 104,443 | 725,147 | 744,369 |
Investment in affiliates (Note 10) | 13,415 | 93,144 | 252,706 |
Other investments (Note 11) | 72,464 | 503,117 | 489,862 |
Available-for-sale securities investments (Note 12) | 58,756 | 407,944 | 269,736 |
Other long-term assets (Note 13) | 73,574 | 510,821 | 1,936,307 |
Goodwill (Note 14) | 52,874 | 367,106 | 108,781 |
Total non-current assets | 1,514,270 | 10,513,581 | 7,882,246 |
Total assets | 3,614,353 | 25,094,453 | 20,035,522 |
CURRENT LIABILITIES | |||
Accounts payable (Including accounts payable of the consolidated VIE and VIE's subsidiaries without recourse to the Company of RMB 48,178 and RMB 22,471 as of December 31, 2015 and December 31, 2016, respectively) | 1,200,290 | 8,333,610 | 6,645,262 |
Advance from customers (Including advance from customers of the consolidated VIE and VIE's subsidiaries without recourse to the Company of RMB 879,848 and RMB 1,211,643 as of December 31, 2015 and December 31, 2016, respectively) | 388,878 | 2,699,981 | 2,009,578 |
Accrued expenses and other current liabilities (Note 15) (Including accrued expenses and other current liabilities of the consolidated VIE and VIE's subsidiaries without recourse to the Company of RMB 1,127,270 and RMB 1,257,667 as of December 31, 2015 and December 31, 2016, respectively) | 478,554 | 3,322,599 | 3,104,622 |
Amounts due to related parties (Note 26(b)) (Including amounts due to related parties of the consolidated VIE and VIE's subsidiaries without recourse to the Company of RMB 82,994 and RMB 591 as of December 31, 2015 and December 31, 2016, respectively) | 7,595 | 52,729 | 206,966 |
Deferred income (Including deferred income of the consolidated VIE and VIE's subsidiaries without recourse to the Company of RMB 95,643 and RMB 16,222 as of December 31, 2015 and December 31, 2016, respectively) | 25,140 | 174,547 | 104,531 |
Short term loans (Note 17) (Including short term loans of the consolidated VIE and VIE's subsidiaries without recourse to the Company of nil and nil as of December 31, 2015 and December 31, 2016) | 95,000 | ||
Total current liabilities | 2,100,457 | 14,583,466 | 12,165,959 |
NON-CURRENT LIABILITIES | |||
Deferred tax liability (Note 23) (Including deferred tax liability of the consolidated VIE and VIE's subsidiaries without recourse to the Company of RMB 116 and RMB 4,904 as of December 31, 2015 and December 31, 2016, respectively) | 14,487 | 100,583 | 175,416 |
Deferred income (Including deferred income of the consolidated VIE and VIE's subsidiaries without recourse to the Company of RMB 3,573 and RMB 1,928 as of December 31, 2015 and December 31, 2016, respectively) | 35,561 | 246,902 | 22,699 |
Convertible senior notes (Note 18) | 631,096 | 4,381,698 | 4,058,181 |
Total non-current liabilities | 681,144 | 4,729,183 | 4,256,296 |
Total liabilities | 2,781,601 | 19,312,649 | 16,422,255 |
EQUITY: | |||
Treasury shares, at cost ( 1,614,135 and 1,356,918 Class A shares as of December 31, 2015 and December 31, 2016, respectively (Note 21) | (101,893) | (707,441) | (844,711) |
Additional paid-in capital | 450,832 | 3,130,126 | 2,838,591 |
Retained earnings | 526,145 | 3,653,026 | 1,616,209 |
Accumulated other comprehensive loss | (49,490) | (343,608) | (70,981) |
Total Vipshop Holdings Limited shareholders' equity | 825,605 | 5,732,180 | 3,539,184 |
Non-controlling interests | 7,147 | 49,624 | 74,083 |
Total shareholders' equity | 832,752 | 5,781,804 | 3,613,267 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 3,614,353 | 25,094,453 | 20,035,522 |
Class A ordinary shares | |||
EQUITY: | |||
Ordinary shares | 9 | 66 | 65 |
Class B ordinary shares | |||
EQUITY: | |||
Ordinary shares | $ 2 | ¥ 11 | ¥ 11 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥)shares |
CURRENT LIABILITIES | ||
Accounts payable of the consolidated VIE and VIE's subsidiaries without recourse to the Company | ¥ 8,333,610 | ¥ 6,645,262 |
Advance from customers of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 2,699,981 | 2,009,578 |
Accrued expenses and other current liabilities of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 3,322,599 | 3,104,622 |
Amounts due to related parties of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 52,729 | 206,966 |
Deferred income of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 174,547 | 104,531 |
Short-term loans of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 95,000 | |
NON-CURRENT LIABILITIES | ||
Deferred tax liability of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 100,583 | 175,416 |
Deferred income-non current of the consolidated VIE and VIE's subsidiaries without recourse to the Company | ¥ 246,902 | ¥ 22,699 |
Class A ordinary shares | ||
EQUITY: | ||
Common shares, shares authorized | shares | 483,489,642 | 483,489,642 |
Common shares, shares issued | shares | 101,508,264 | 100,085,519 |
Common shares, shares outstanding | shares | 101,508,264 | 100,085,519 |
Treasury shares (in shares) | shares | 1,356,918 | 1,614,135 |
Class B ordinary shares | ||
EQUITY: | ||
Common shares, shares authorized | shares | 16,510,358 | 16,510,358 |
Common shares, shares issued | shares | 16,510,358 | 16,510,358 |
Common shares, shares outstanding | shares | 16,510,358 | 16,510,358 |
Consolidated VIE and VIE's subsidiaries | ||
CURRENT LIABILITIES | ||
Accounts payable of the consolidated VIE and VIE's subsidiaries without recourse to the Company | ¥ 22,471 | ¥ 48,178 |
Advance from customers of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 1,211,643 | 879,848 |
Accrued expenses and other current liabilities of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 1,257,667 | 1,127,270 |
Amounts due to related parties of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 591 | 82,994 |
Deferred income of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 16,222 | 95,643 |
Short-term loans of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 0 | 0 |
NON-CURRENT LIABILITIES | ||
Deferred tax liability of the consolidated VIE and VIE's subsidiaries without recourse to the Company | 4,904 | 116 |
Deferred income-non current of the consolidated VIE and VIE's subsidiaries without recourse to the Company | ¥ 1,928 | ¥ 3,573 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||
Product revenues | $ 7,962,250 | ¥ 55,281,900 | ¥ 39,409,961 | ¥ 22,685,111 |
Other revenues | 188,593 | 1,309,402 | 793,251 | 444,202 |
Total net revenues | 8,150,843 | 56,591,302 | 40,203,212 | 23,129,313 |
Cost of goods sold (including inventory write-down of RMB218,108, RMB293,946 and RMB303,233 for the years ended December 31, 2014, 2015 and 2016, respectively) | (6,192,523) | (42,994,688) | (30,306,723) | (17,378,044) |
Gross profit | 1,958,320 | 13,596,614 | 9,896,489 | 5,751,269 |
Fulfillment expenses (including shipping and handling expenses of RMB1,174,296, RMB1,714,606 and RMB2,578,491 for the years ended December 31, 2014, 2015 and 2016, respectively) (Note 27(c)) | (706,399) | (4,904,526) | (3,667,031) | (2,268,949) |
Marketing expenses (Note 27(c)) | (408,711) | (2,837,680) | (2,089,348) | (1,164,149) |
Technology and content expenses (Note 27(c)) | (225,203) | (1,563,582) | (1,076,520) | (670,998) |
General and administrative expenses (Note 27(c)) | (279,583) | (1,941,146) | (1,301,472) | (967,463) |
Total operating expenses | (1,619,896) | (11,246,934) | (8,134,371) | (5,071,559) |
Other operating income (Note 22) | 51,567 | 358,029 | 308,431 | 153,977 |
Income from operations | 389,991 | 2,707,709 | 2,070,549 | 833,687 |
Other non-operating income | ¥ | 20,300 | |||
Impairment loss of investments | (16,502) | (114,574) | (99,749) | (6,166) |
Interest expenses | (12,271) | (85,195) | (85,762) | (75,249) |
Interest income | 15,418 | 107,044 | 267,208 | 288,622 |
Exchange (loss) gain | 7,360 | 51,100 | (101,726) | (853) |
Income before income taxes and share of loss of affiliates | 383,996 | 2,666,084 | 2,050,520 | 1,060,341 |
Income tax expense (Note 23) | (86,681) | (601,828) | (457,745) | (245,032) |
Share of loss of affiliates | (10,297) | (71,489) | (84,063) | (62,716) |
Net income | 287,018 | 1,992,767 | 1,508,712 | 752,593 |
Net loss attributable to non-controlling interests | 6,345 | 44,050 | 80,953 | 88,693 |
Net income attributable to Vipshop Holdings Limited's shareholders | $ 293,363 | ¥ 2,036,817 | ¥ 1,589,665 | ¥ 841,286 |
Weighted average number of Class A and Class B ordinary shares for computing earnings per Class A and Class B ordinary share: | ||||
- Basic (in shares) | 115,958,088 | 115,958,088 | 115,736,092 | 113,310,682 |
- Diluted (in shares) | 125,817,183 | 125,817,183 | 120,168,063 | 120,227,584 |
Net earnings per Class A and Class B ordinary share (Note 24) | ||||
- Basic (in dollars per share) | (per share) | $ 2.53 | ¥ 17.57 | ¥ 13.74 | ¥ 7.42 |
- Diluted (in dollars per share) | (per share) | $ 2.43 | ¥ 16.86 | ¥ 13.23 | ¥ 7 |
Net income | $ 287,018 | ¥ 1,992,767 | ¥ 1,508,712 | ¥ 752,593 |
Other comprehensive loss, net of tax of nil: | ||||
Foreign currency translation adjustments | (41,618) | (288,956) | (55,653) | (1,709) |
Unrealized loss of available-for-sales securities | (2,455) | (17,042) | (7,783) | |
Reclassification adjustment for losses included in net income | 5,267 | 36,567 | ||
Comprehensive income | 248,212 | 1,723,336 | 1,445,276 | 750,884 |
Less: Comprehensive loss attributable to non-controlling interests | (5,884) | (40,854) | (84,119) | (89,975) |
Comprehensive income attributable to Vipshop Holdings Limited's shareholders | $ 254,096 | ¥ 1,764,190 | ¥ 1,529,395 | ¥ 840,859 |
CONSOLIDATED STATEMENTS OF INC5
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||
Inventory written down | ¥ 303,233 | ¥ 293,946 | ¥ 218,108 |
Shipping and handling expenses | 2,578,491 | 1,714,606 | 1,174,296 |
Other comprehensive loss, tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | Class A ordinary sharesOrdinary sharesCNY (¥)shares | Class A ordinary sharesshares | Class B ordinary sharesOrdinary sharesCNY (¥)shares | Additional paid-in capitalCNY (¥) | Treasury StockCNY (¥)shares | Retained earnings (deficit)CNY (¥) | Accumulated other comprehensive income (loss)CNY (¥) | Non-controlling interestCNY (¥) | USD ($)shares | CNY (¥)shares |
Balance at Dec. 31, 2013 | ¥ 62 | ¥ 11 | ¥ 2,297,549 | ¥ (814,742) | ¥ (10,284) | ¥ 1,472,596 | ||||
Balance (in shares) at Dec. 31, 2013 | shares | 95,155,614 | 16,510,358 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 841,286 | ¥ (88,693) | 752,593 | |||||||
Issuance of ordinary shares upon exercise of stock options | ¥ 1 | 10,949 | ¥ 10,950 | |||||||
Issuance of ordinary shares upon exercise of stock options (in shares) | shares | 1,883,977 | 1,883,977 | 1,883,977 | 1,883,977 | ||||||
Issuance of ordinary shares upon vesting of shares awards (in shares) | shares | 988,723 | 988,723 | ||||||||
Share-based compensation expense | 225,494 | ¥ 225,494 | ||||||||
Non-controlling interest arising from business combination | 233,919 | 233,919 | ||||||||
Other capital contribution | 4,225 | 4,225 | ||||||||
Foreign currency translation | (427) | (1,282) | (1,709) | |||||||
Balance at Dec. 31, 2014 | ¥ 63 | ¥ 11 | 2,538,217 | 26,544 | (10,711) | 143,944 | 2,698,068 | |||
Balance (in shares) at Dec. 31, 2014 | shares | 98,028,314 | 16,510,358 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 1,589,665 | (80,953) | 1,508,712 | |||||||
Issuance of ordinary shares upon exercise of stock options | ¥ 2 | 6,321 | ¥ 6,323 | |||||||
Issuance of ordinary shares upon exercise of stock options (in shares) | shares | 956,587 | 956,587 | 956,587 | 956,587 | ||||||
Issuance of ordinary shares upon vesting of shares awards (in shares) | shares | 1,100,618 | 1,100,618 | ||||||||
Share-based compensation expense | 302,941 | ¥ 302,941 | ||||||||
Non-controlling interest arising from business combination | (1,417) | 20,418 | 19,001 | |||||||
Purchase additional ownership interests in a subsidiary | (7,471) | (6,160) | (13,631) | |||||||
Foreign currency translation | (52,487) | (3,166) | (55,653) | |||||||
Fair value changes of available-for-sales securities | (7,783) | (7,783) | ||||||||
Repurchase of ordinary shares | ¥ (844,711) | (844,711) | ||||||||
Repurchase of ordinary shares (in shares) | shares | (1,614,135) | |||||||||
Balance at Dec. 31, 2015 | ¥ 65 | ¥ 11 | 2,838,591 | ¥ (844,711) | 1,616,209 | (70,981) | 74,083 | 3,613,267 | ||
Balance (in shares) at Dec. 31, 2015 | shares | 100,085,519 | 16,510,358 | (1,614,135) | |||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 2,036,817 | (44,050) | $ 287,018 | 1,992,767 | ||||||
Issuance of ordinary shares upon exercise of stock options | 5,747 | ¥ 5,747 | ||||||||
Issuance of ordinary shares upon exercise of stock options (in shares) | shares | 560,930 | 560,930 | 560,930 | 560,930 | ||||||
Issuance of ordinary shares upon vesting of shares awards | ¥ 1 | (1) | ||||||||
Issuance of ordinary shares upon vesting of shares awards (in shares) | shares | 861,815 | 861,815 | ||||||||
Re-issuance of treasury stock upon vesting of shares awards | (137,270) | ¥ 137,270 | ||||||||
Re-issuance of treasury stock upon vesting of shares awards (in shares) | shares | 257,217 | 257,217 | 257,217 | |||||||
Share-based compensation expense | 475,653 | ¥ 475,653 | ||||||||
Non-controlling interest arising from business combination | 73,637 | 73,637 | ||||||||
Capital contribution from non-controlling interest shareholders | 1,800 | 1,800 | ||||||||
Purchase additional ownership interests in a subsidiary | (52,594) | (59,042) | (111,636) | |||||||
Foreign currency translation | (292,152) | 3,196 | $ (41,618) | (288,956) | ||||||
Fair value changes of available-for-sales securities | (17,042) | (2,455) | (17,042) | |||||||
Reclassification adjustment for losses included in net income | 36,567 | $ 5,267 | 36,567 | |||||||
Repurchase of ordinary shares | ¥ (844,711) | |||||||||
Repurchase of ordinary shares (in shares) | shares | (1,614,135) | (1,614,135) | ||||||||
Balance at Dec. 31, 2016 | ¥ 66 | ¥ 11 | ¥ 3,130,126 | ¥ (707,441) | ¥ 3,653,026 | ¥ (343,608) | ¥ 49,624 | $ 832,752 | ¥ 5,781,804 | |
Balance (in shares) at Dec. 31, 2016 | shares | 101,508,264 | 16,510,358 | (1,356,918) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | ||
Cash flows from operating activities: | |||||
Net income | $ 287,018 | ¥ 1,992,767 | ¥ 1,508,712 | ¥ 752,593 | |
Adjustments to reconcile net income to net cash by operating activities: | |||||
Allowance for doubtful debts | 9,589 | 66,575 | 11,884 | 4,167 | |
Write-offs for doubtful debts | (1,272) | (8,832) | |||
Inventory write-down | 43,674 | 303,233 | 293,946 | 218,108 | |
Depreciation of property and equipment | 87,999 | 610,976 | 291,401 | 109,990 | |
Amortization of intangible assets | 52,424 | 363,977 | 289,644 | 250,221 | |
Amortization of land use rights | 5,424 | 37,657 | 2,785 | 689 | |
Impairment loss on intangible assets | 16,907 | ||||
Loss on disposal of property and equipment | 1,512 | 10,499 | 1,688 | 196 | |
Share-based compensation expenses | 68,508 | 475,653 | 302,941 | 225,494 | |
Share of loss of affiliates | 10,297 | 71,489 | 84,063 | 62,716 | |
Impairment loss of investment | 16,502 | 114,574 | 99,749 | 6,166 | |
Interest income on held-to-maturity securities | (4,588) | (31,855) | (133,027) | (119,615) | |
Amortization of debt issuance cost | 5,160 | 35,824 | 33,453 | 26,701 | |
Changes in operating assets and liabilities: | |||||
Accounts receivable | (281,060) | (1,951,397) | (279,165) | (22,950) | |
Amounts due from related parties | 4,357 | 30,251 | (865) | (30,991) | |
Other receivables and prepayments | (46,548) | (323,182) | (1,094,085) | (526,476) | |
Inventories | (98,663) | (685,018) | (1,272,336) | (2,129,050) | |
Deferred tax assets | (1,457) | (10,119) | 31,146 | (165,791) | |
Accounts payable | 223,736 | 1,553,400 | 643,370 | 2,855,375 | |
Advance from customers | 99,439 | 690,402 | 585,624 | [1] | 625,167 |
Accrued expenses and other current liabilities | (43,962) | (305,221) | 537,300 | 1,073,047 | |
Amounts due to related parties | (26,866) | (186,533) | 131,182 | 19,776 | |
Deferred income | 8,000 | 55,549 | (86,880) | 63,158 | |
Deferred tax liability | (11,415) | (79,256) | (67,444) | (52,936) | |
Net cash generated from operating activities | 407,808 | 2,831,413 | 1,915,086 | 3,262,662 | |
Cash flows from investing activities: | |||||
Purchase of property and equipment | (283,400) | (1,967,645) | (2,183,228) | (1,588,910) | |
Purchase of land use right | (28,754) | (199,642) | (118,256) | (82,680) | |
Government subsidies for land use right | 34,577 | 240,069 | 19,550 | ||
Deposit related to acquisition of land use right | (89,042) | (618,219) | (1,873,553) | (44,476) | |
Proceed from disposal of property and equipment | 1,928 | 13,385 | 204 | ||
Purchase of other assets | (738) | (5,121) | (9,388) | (28,964) | |
Purchase of held-to-maturity securities | (311,824) | (2,165,000) | (5,540,000) | (6,317,500) | |
Proceed from redemption of held-to-maturity securities upon maturities | 479,978 | 3,332,482 | 7,633,963 | 5,004,546 | |
Investment in affiliates and other investments | (8,401) | (58,327) | (523,643) | (463,093) | |
Acquisition of subsidiaries, net of cash acquired of RMB125, RMB30,303 and RMB19,490 in 2014, 2015 and 2016, respectively | (15,321) | (106,365) | (39,198) | (687,233) | |
Investment in available-for-sale securities | (14,016) | (97,314) | (246,953) | ||
Prepayment for investment in affiliates and other investments | (48,000) | (40,503) | |||
Increase in entrusted loan to an investee | (4,167) | ||||
Loan to the employees | (6,669) | (46,305) | (9,207) | ||
Withdrawal of deposit for other investment | 1,296 | 9,000 | |||
(Increase) decrease in restricted cash | 400 | (400) | |||
Net cash used in investing activities | (240,386) | (1,669,002) | (2,937,309) | (4,253,380) | |
Cash flows from financing activities: | |||||
Proceeds from bank borrowings | 432 | 3,000 | 669,463 | 1,053,992 | |
Repayment to bank borrowings | (14,115) | (98,000) | (574,463) | (1,053,992) | |
Capital contributions from non-controlling interests | 199 | 1,380 | 9,740 | 7,537 | |
Acquisition of non-controlling interest | (16,079) | (111,636) | |||
Repurchase of ordinary shares | (27,887) | (193,619) | (650,197) | ||
Other capital contributions | 4,225 | ||||
Proceed from issuance of convertible notes | 3,836,110 | ||||
Issuance cost of convertible notes offering | (6,689) | ||||
Proceeds from issuance of ordinary shares upon exercise of stock options | 829 | 5,747 | 6,323 | 10,950 | |
Net cash provided by (used in) financing activities | (56,621) | (393,128) | (539,134) | 3,852,133 | |
Effect of exchange rate changes | 2,293 | 15,910 | 94,990 | (96,928) | |
Net increase (decrease) in cash and cash equivalents | 113,094 | 785,193 | (1,466,367) | 2,764,487 | |
Cash and cash equivalents at beginning of the period | 478,808 | 3,324,384 | 4,790,751 | 2,026,264 | |
Cash and cash equivalents at end of the period | 591,902 | 4,109,577 | 3,324,384 | 4,790,751 | |
Supplemental disclosures of cash flow information: | |||||
Interest paid, net of amount capitalized | 12,271 | 85,195 | 85,775 | 57,851 | |
Income tax paid | 90,902 | 631,129 | 446,621 | 454,510 | |
Supplemental disclosure of non-cash investing and financing activities: | |||||
Payables incurred for purchase of property and equipment | 39,176 | 271,999 | 137,679 | ¥ 361,249 | |
Payables for repurchase of ordinary shares (Note 15 & 21) | ¥ 194,514 | ||||
Payables for acquisition of a subsidiary (Note 3(b)) | $ 10,709 | ¥ 74,352 | |||
[1] |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Acquisition of subsidiaries, cash acquired | ¥ 19,490 | ¥ 30,303 | ¥ 125 |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2016 | |
Organization and principal activities | |
Organization and principal activities | 1. Organization and principal activities Vipshop Holdings Limited (the "Company") was incorporated in the Cayman Islands on August 27, 2010. The Company, through its subsidiaries, and variable interest entities ("VIEs") and VIEs' subsidiaries (collectively, the "Group"), operate online platforms that offer high-quality branded products to consumers in the People's Republic of China (the "PRC") through flash sales on its vipshop.com, vip.com and lefeng.com online platform. Flash sale represents an online retail format combining the advantages of e-commerce and discount sales through selling a finite quantity of discounted products or services online for a limited period of time. The Group began offering services in 2008 through Guangzhou Vipshop Information Technology Co., Ltd. ("Vipshop Information"), a consolidated VIE incorporated in the PRC on August 22, 2008 by Mr. Eric Ya Shen ("Mr. Shen"), the Chairman and chief executive officer of the Company, Mr. Arthur Xiaobo Hong, the Vice Chairman of the Board of Directors of the Company (collectively, the "Founders"), and three other investors (the "Original Investors"). On June 24, 2014, the Company and Ovation Entertainment Limited ("Ovation") have each designated a PRC citizen, namely, Mr. Shen by the Company and Mr. Zhihui Yu by Ovation, to be the nominee shareholders and established Shanghai Pinjian E-Commerce Co., Ltd., ("Lefeng Information") to carry out online retail services. Mr. Shen holds 75% of the equity interest in Lefeng Information, and Mr. Zhihui Yu holds the remaining 25%. On the same day, Lefeng (Shanghai) Information Technology Co., Limited entered into series of agreements with Lefeng Information and each of its individual shareholders that are disclosed in the Note 2(b). As of December 31, 2016, the Company's significant consolidated subsidiaries, VIEs and VIEs' subsidiaries consist of the following: Name of subsidiaries Date of Place of Percentage of Principal activities Vipshop International Holdings Limited ("Vipshop HK") October 22, 2010 Hong Kong % Investment holding Vipshop (China) Co., Ltd. (the "WFOE") January 20, 2011 China % Warehousing, logistics, procurement, research and development, consulting Vipshop (Kunshan) E-Commerce Co., Ltd. ("Vipshop Kunshan") August 2, 2011 China % Warehousing and logistics Vipshop (Jianyang) E-Commerce Co., Ltd. ("Vipshop Jianyang") February 22, 2012 China % Warehousing and logistics Vipshop (Tianjin) E-Commerce Co., Ltd. ("Vipshop Tianjin") July 31, 2012 China % Warehousing and logistics Guangzhou Pinwei Software Co., Ltd. ("Pinwei Software") December 6, 2012 China % Software development and information technology support Vipshop (Zhuhai) E-Commerce Co., Ltd. ("Vipshop Zhuhai") July 16, 2013 China % Warehousing and logistics Vipshop (Hubei) E-Commerce Co., Ltd. ("Vipshop Hubei") July 4, 2013 China % Warehousing and logistics Shanghai Pinzhong Commercial Factoring Co., Ltd. ("Pinzhong Factoring") August 9, 2013 China % Business financing Chongqing Vipshop E-Commerce Co., Ltd. ("Vipshop Chongqing") October 22, 2013 China % Warehousing and logistics Vipshop (Zhaoqing) E-Commerce Co., Ltd. ("Vipshop Zhaoqing") November 22, 2013 China % Warehousing and logistics Name of VIEs and VIEs' subsidiaries Date of Place of Economic Principal activities Guangzhou Vipshop Information Technology Co., Ltd.("Vipshop Information") August 22, 2008 China VIE Online retail Lefeng (Shanghai) Information Technology Co., Limited ("Lefeng Shanghai") August 30, 2013 China 75% Online retail |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs and VIEs' subsidiaries for which the Company is the primary beneficiary. All intercompany transactions, balances and unrealized profit and losses have been eliminated on consolidation. The Company evaluates the need to consolidate its VIEs and VIEs' subsidiaries in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. As foreign-invested companies engaged in Internet-based businesses is subject to significant restrictions under current PRC laws and regulations, the Company and its PRC subsidiary, Vipshop China, as a wholly foreign owned enterprise ("WFOE"), are both restricted from holding the licenses that are necessary for the online operation in China. To comply with these restrictions, The Company conducts the online operations principally through Vipshop Information. Vipshop Information holds the licenses necessary to conduct the Internet-related operations of vipshop.com and vip.com in China. Since the Company does not have any equity interests in Vipshop Information, in order to exercise effective control over its operations, the Company, through its wholly owned subsidiary, the WFOE, entered into a series of contractual arrangements with Vipshop Information and its shareholders, pursuant to which the Company is entitled to receive effectively all economic benefits generated from Vipshop Information shareholders' equity interests in it. Details of certain key agreements entered into between the WFOE, Vipshop Information and each of its individual shareholders on January 20, 2011 and amended on October 8, 2011 are as follows: Power of Attorney Agreements: Each equity holder of Vipshop Information irrevocably authorized the WFOE to exercise the rights related to their shareholdings, including attending shareholders' meetings and voting on their behalf on all matters, including but not limited to matters related to the transfer, pledge or disposition of their respective equity interests in Vipshop Information, and appointment of the executive directors and senior management of Vipshop Information. The WFOE has the right to appoint any individual or entity to exercise the power of attorney on its behalf. Each power of attorney will remain in effect until the shareholder ceases to hold any equity interest in Vipshop Information. Amended and Restated Exclusive Business Cooperation Agreement: The WFOE entered into an agreement with Vipshop Information to provide Vipshop Information with technical, consulting and other services. In considerations of these services, Vipshop Information shall pay the WFOE fees equal to 100% of its net income of Vipshop Information, provided that the WFOE, at its sole discretion, shall have the right to adjust the rate of the service through written notice. The WFOE is the exclusive provider of these services for a term of 10 years and may be extended for a period to be determined by the WFOE. The WFOE may terminate this agreement at any time by giving 30 days prior written notice. Vipshop Information has no right to terminate this agreement unless the WFOE commits gross negligence or fraud. Amended and Restated Equity Interest Pledge Agreements: Each equity holder of Vipshop Information pledged all their respective equity interests in Vipshop Information as security to ensure that Vipshop Information fully performs its obligations under the Exclusive Business Cooperation Agreement, and pays the consulting and service fees to the WFOE when the fees becomes due. The agreement will remain in effect until all of the obligations of Vipshop Information under the Amended and Restated Exclusive Business Cooperation Agreement have been duly performed or terminated. Amended and Restated Exclusive Option Agreements: Each equity holder of Vipshop Information granted the WFOE an irrevocable and exclusive right to purchase, or designate one or more persons to purchase, their equity interest in Vipshop Information at the WFOE's sole and absolute discretion to the extent permitted by the PRC laws. The purchase price is 10 Renminbi ("RMB") (US$1.44); if appraisal is required by laws of the PRC at the time when the WFOE exercises the option, the parties shall negotiate in good faith, to make necessary adjustments to the purchase price based on the appraisal result to comply with applicable laws of the PRC. The term of this agreement is ten years from the execution date of October 8, 2011, which may be extended for a period to be determined by the WFOE. Exclusive Purchase Framework Agreement: The WFOE and Vipshop Information entered into this agreement during the third quarter of fiscal 2011. Under this agreement, Vipshop Information agrees to purchase products or services exclusively from the WFOE or its subsidiaries. Vipshop Information and its subsidiaries must not purchase from any third party products or services which the WFOE is capable of providing. The term of this agreement is ten years from September 1, 2011. If neither party objects in writing nor both parties remain cooperating at the expiration of the agreement, the parties will continue to be bound by this agreement until a new agreement is entered into. Vipshop Information must pay the WFOE for its products an amount, which includes a service fee, based on the unit price and the quantity of the products ordered by Vipshop Information. The WFOE may terminate this agreement at any time by giving 15 days' prior written notice. Vipshop Information has no right to terminate this agreement unless the WFOE commits gross negligence or fraud. In October 2012, the Company effected transfer of 10.4% of equity interest from one of the former shareholder of Vipshop Information to Mr. Shen, an existing shareholder of Vipshop Information. In August 2015, the Company effected transfer of 22.0% of equity interest from two of the former shareholders of Vipshop Information to Mr. Shen and a concurrent capital increase of Vipshop Information from RMB24.5 million to RMB274.5 million as contributed by Mr. Shen. In December 2015, the Company effected a concurrent capital increase of Vipshop Information to RMB824.5 million as contributed by Mr. Shen. The Company amended the contractual arrangements the relevant entities had as explained above with Mr. Shen and Mr. Arthur Xiaobo Hong to reflect each transfer. As of December 31, 2016, shareholders of Vipshop Information include Mr. Shen and Mr. Arthur Xiaobo Hong, holding 99.23% and 0.77% of the total equity interests in Vipshop Information, respectively. The Company participated significantly in the design of Vipshop Information. Based on the Amended and Restated Equity Pledge Agreements, the Amended and Restated Exclusive Option Agreement, and the Power of Attorney Agreements dated January 20, 2011, the Company has the ability to effectively control Vipshop Information through the WFOE. The Company is also able to receive a majority of the economic benefits of Vipshop Information, because of its ability to effectively determine the service fees payable by Vipshop Information to the WFOE under the Amended and Restated Exclusive Business Cooperation Agreement, and through the Exclusive Purchase Framework Agreement. Therefore, the Company has determined that it is the primary beneficiary of Vipshop Information and has consolidated its respective results for the periods presented. The Company also has another set of contractual arrangements among Lefeng Shanghai, Lefeng Information, and shareholders of Lefeng Information, under which Lefeng Shanghai is the primary beneficiary of Lefeng Information and the Company consolidates Lefeng Information through Lefeng Shanghai. The contractual arrangements thereunder are substantially similar to the set with Vipshop Information described above. Other than Vipshop Information and Lefeng Information, the Company has no interest in any other variable interest entities. Risks in relation to the VIE structure The Group believes that the VIE arrangements are in compliance with PRC law and are legally enforceable. The equity holders of the VIEs are also shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, there are certain risks related to the VIE arrangements, which include but are not limited to the following: • If the Group's ownership structure, are found to be in violation of any existing or future PRC laws or regulations, the relevant governmental authorities, including the China Securities Regulatory Commission, would have broad discretion in dealing with such violation, including levying fines, confiscating its income or the income of the WFOE, Vipshop Information, Lefeng Shanghai, or Lefeng Information, revoking the business licenses or operating licenses of the WFOE, Vipshop Information, Lefeng Shanghai, or Lefeng Information, shutting down the Group's servers or blocking the Group's websites, discontinuing or placing restrictions or onerous conditions on the Group's operations, requiring the Group to undergo a costly and disruptive restructuring, restricting or prohibiting the Group's use of various funding to finance its business and operations in China, and taking other regulatory or enforcement actions that could be harmful to the Group's business; • The Group relies on contractual arrangements with the VIEs and their equity holders for a majority all of its PRC operations, which may not be as effective as direct ownership in providing operational control; • The Group may have to incur significant cost to enforce, or may not be able to effectively enforce, the contractual arrangements with the VIEs and their equity holders in the event of a breach or non-compliance by the VIEs or their equity holders; and • Each of the shareholders of the VIEs is also a director of the Company or its subsidiaries, and has a duty of care and loyalty to the Company and its shareholders as a whole under Cayman Islands law. Under the contractual arrangements with the VIEs and their shareholders, (a) the Company may replace any such individual as a shareholder of the VIEs at the Company's discretion, and (b) each of these individuals has executed a power of attorney to appoint the WFOE or its designated third party to vote on their behalf and exercise shareholder rights of the VIE. However, the Company cannot assure that these individuals will act in the best interests of the Company should any conflicts of interest arise, or that any conflicts of interest will be resolved in the Company's favor. These individuals may breach or cause the VIE to breach the existing contractual arrangements. If the Company cannot resolve any conflicts of interest or disputes between the Company and any of these individuals, the Company would have to rely on legal proceedings, which may be expensive, time-consuming and disruptive to its operations. There is also substantial uncertainty as to the outcome of any such legal proceedings. • There are, however, substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. Particularly, in January 2015, the Ministry of Commerce published a discussion draft of the proposed Foreign Investment Law for public review and comments. Under the draft Foreign Investment Law, variable interest entities would also be deemed as foreign-invested enterprises, if they are ultimately "controlled" by foreign investors, and be subject to restrictions on foreign investments. The draft Foreign Investment Law, if enacted as proposed, may materially impact the entire legal framework regulating the foreign investments in China as well as the viability of the Group's current corporate structure, corporate governance and business operations in many aspects. The financial information of the Company's VIEs and VIEs' subsidiaries, including total assets, total liabilities, net revenues, total operating expenses, net income attributable to the Company and cashflows after intercompany eliminations are as follows: As of December 31, 2015 2016 RMB RMB Total assets Current Liabilities: Accounts payable ) ) Advance from customers ) ) Accrued expenses and other current liabilities ) ) Amounts due to related parties ) ) Deferred income ) ) Total current liabilities ) ) Deferred tax liability ) ) Deferred income ) ) Total liabilities ) ) Year ended December 31, 2014 2015 2016 RMB RMB RMB Net revenues Total operating expenses ) ) ) Net income Year ended December 31, 2014 2015 2016 RMB RMB RMB Net cash provided by (used in) operating activities (Note a) ) ) Net cash (used in) provided by investing activities ) Net cash provided by (used in) financing activities ) Note a: Cash flows provided by (used in) operating activities in 2014, 2015 and 2016 include amounts due to the Group's subsidiaries of RMB718,759, RMB(1,649,956) and RMB(994,474). There are no consolidated VIEs' assets that are collateral for the VIEs' obligations or are restricted solely to settle the VIEs' obligations. The Company has not provided any financial support that it was not previously contractually required to provide to the VIEs. (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management of the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates. The Group's management based their estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group's financial statements include inventory write-down, valuation of goodwill and intangible assets acquired in the business acquisitions and acquisition of significant equity affiliates both on the acquisition dates and at the time of impairment assessments, valuation of significant other investments impairment assessment and valuation of receivables arising from customer financing. Changes in facts and circumstances may result in revised estimates. (d) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid investments with maturity of less than three months. Cash and cash equivalents are placed with financial institutions with high-credit ratings and quality. (e) Held-to-maturity securities The Group invests in debt securities which have fixed maturity dates, pay a fixed return on the amount invested and early redemption of these securities is not allowed. The Group classifies these investments as held-to-maturity as it has both the positive intent and ability to hold them until maturity. (f) Inventories Inventory used to be stated at the lower of cost or market before 2016. The Group early adopted Accounting Standard Update ("ASU") 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory and applied it prospectively from 2016. Upon the adoption of this new accounting guidance, inventory is stated at the lower of cost or net realisable value. Cost of inventory is determined using the weighted average cost method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs, disposal, and transportation. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value for slow-moving merchandise and damaged goods. The amount of write down is also dependent upon factors such as whether the goods are returnable to vendors, inventory aging, historical and forecasted consumer demand, and promotional environment. The Group assesses the inventory write-down based on different product categories and applies a certain percentages based on aging. The Group classifies all goods into the following two categories: non-returnable goods and returnable goods. Non-returnable goods cannot be returned to suppliers and general inventory write-down of different percentages are applied to these goods within the different aging categories. These percentages were developed based on historical write-down on these different types of goods. In addition to general write-down, specific write-down will also be applied to non-returnable goods if assessed to be needed based on the factors mentioned above. Returnable goods will have no general write-down based on aging but specific write down will be made at the end of each reporting periods based on forecast sales, conditions of the goods and planned promotions. Write downs are recorded in cost of goods sold in the consolidated statements of income and comprehensive income. (g) Accounts receivable from customer financing business Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for uncollectible accounts. The Group establishes an allowance for uncollectible accounts receivable based on estimates, historical experience and other factors surrounding the credit risk of specific customers. Uncollectible accounts receivable are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. The Group recorded the allowance for the uncollectible accounts receivables in the amount of nil and RMB43,641 in relation to receivables from customer financing business as of December 31, 2015 and 2016. (h) Other receivable from supplier financing business Other receivable are stated at the historical carrying amount net of write-offs and allowance for uncollectible accounts. The Group establishes an allowance for uncollectible other receivable based on estimates, historical experience and other factors surrounding the credit risk of specific suppliers. Uncollectible accounts receivable are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. The Group recorded the allowance for the uncollectible other receivables in the amount of RMB11,884 and RMB21,942 in relation to receivables from supplier financing business as of December 31, 2015 and 2016, respectively. (i) Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income. Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows, taking into account the assets' estimated residual value: Classification Estimated useful life Buildings 20 years Furniture, fixtures and equipment 2 to 10 years Leasehold improvements Shorter of lease term or the estimated useful life of lease improvements Motor vehicles 5 years Software 3 years Direct and incremental costs related to the construction of assets, including costs under the construction contracts, duties and tariffs, equipment installation and shipping costs, are capitalized. Management estimates the residual value of its furniture, fixtures and equipment and motor vehicles to be 5%. (j) Capitalization of interest Interest and amortization of deferred financing costs incurred on funds used to construct the Group's warehouses during the active construction period are capitalized. Interest subject to capitalization primarily includes interest paid or payable on the Group's convertible senior notes due 2019 at interest of 1.5%. The capitalization of interest and amortization of deferred financing costs ceases once a project is substantially completed or development activity is suspended for more than a brief period. The amount to be capitalized is determined by applying the weighted average interest rate of the Group's outstanding borrowings to the average amount of accumulated capital expenditures for assets under construction during the year and is added to the cost of the underlying assets and amortized over their respective useful lives. Total interest expenses incurred amounted to RMB84,281, RMB94,077 and RMB99,437, of which RMB9,033, RMB8,315 and RMB14,242 were capitalized for the years ended December 31, 2014, 2015 and 2016, respectively. (k) Land use rights Land use rights represent amounts paid for the Group's lease for the use right of lands located in Zhaoqing City, Tianjin City, Qingdao City, Ezhou City, Zhengzhou City, Guangzhou City and Jianyang City of PRC. Amounts are charged to earnings ratably over the term of the lease of 50 years. (l) Intangible assets, net Acquired intangible assets mainly consist of domain name, customer relationship, non-compete agreements, trademarks and payment license acquired from third parties and from business combination. Domain name and trademarks Domain name and trademarks purchased from third parties are initially recorded at cost and amortized on a straight-line basis over the estimated economic lives of approximately two to three years. Intangible assets arising from business combination Identifiable intangibles assets are required to be determined separately from goodwill based on their fair values. In particular, an intangible asset acquired in a business combination should be recognized as an asset separate from goodwill if it satisfies either the "contractual-legal" or "separability" criterion. Intangible assets with a definite economic life are carried at cost less accumulated amortization. Amortization for identifiable intangibles assets are computed using the straight-line method over the intangible assets' economic lives. Alternatively, intangible assets acquired in a business combination with indefinite lives are carried out cost less than subsequent accumulated impairment loss. Cost to renew or extend the term of a recognized intangible asset is charged to profit or loss as incurred in the consolidated statements of income and comprehensive income. Estimated economic lives of the intangible assets are as follows: Classification Estimated economic life Customer relationship 4 - 14 years Trademarks 2 - 5 years Non-compete agreement 3 years Domain name 2 - 3 years Payment license Indefinite life (m) Investment in affiliates Affiliated companies are entities over which the Group has significant influence, but which it does not control. The Group generally considers an ownership interest of 20% or higher to represent significant influence. Investments in affiliates are accounted for by the equity method of accounting. Under this method, the Group's share of the post-acquisition profits or losses of the affiliated companies is recognized in the statement of income and comprehensive income and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its affiliated companies are eliminated to the extent of the Group's interest in the affiliated companies; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Group's share of losses in an affiliated company equals or exceeds its interest in the affiliated company, the Company does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the affiliated company. The Group is required to perform an impairment assessment of its investments whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary. The Group assess its equity investments for other-than-temporary impairment by considering all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information such as financing needs, the Group's intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value, and the severity and duration of the impairment. The Group has recorded impairment losses in the periods presented. As of December 31, 2015 and 2016, the accumulated impairment loss of investments were RMB58,510 and RMB58,510, respectively. The other-than-temporary impairment recorded in 2015 on the equity affiliate due to sustained depression of the affiliate's expected results of operations. (n) Other investments Other investments represent investments in equity security of private companies which the Group owes equity interest, over which the Group exerts no significant influence and are measured initially at cost. The Group reviews the investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable. Certain of the Group's investments are in development stage companies whose success depends on factors including the ability of the investee companies to raise additional funds in financial markets that can be volatile and other key business factors, any of which may impact the Company's ability to recover its investments. At Decemer 31, 2015 and 2016, the accumulated impairment loss of invesetments were RMB41,239 and RMB110,608, respectively. (o) Available for sale securities The Group invests in marketable equity securities and debt securities to meet business objectives. These marketable securities are reported at fair value, classified and accounted for as available-for-sale securities in investment securities. The assessment of a decline in the fair value of an individual security is based on whether the decline is other-than-temporary. The Group assesses its available-for-sale securities for other-than-temporary impairment by considering factors including, but not limited to, its ability and intent to hold the individual security, severity of the impairment, expected duration of the impairment and forecasted recovery of fair values. Investments classified as available-for-sale securities are reported at fair value with unrealized gains or losses, if any, recorded in accumulated other comprehensive income in shareholders' equity. If the Group determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of the write-down is accounted for as a realized loss charged in the consolidated statement of income and comprehensive income. The fair values of the investments would not be adjusted for subsequent recoveries in fair values. The Group recorded nil, nil and RMB48,634 of impairment on available-for-sale securities for the years ended December 31, 2014, 2015 and 2016. (p) Impairment of long-lived assets (other than goodwill and intangible assets with indefinite life) The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Group assesses the recoverability of these long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the future undiscounted cash flow is less than the carrying amount of the assets, the Group recognizes an impairment equal to the difference between the carrying amount and fair value of these assets. The Group recorded no impairment for the years ended December 31, 2014, 2015 and 2016, respectively. (q) Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired in a business combination. Goodwill is not amortized but is tested for impairment on an annual basis as of December 31, and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with Accounting Standards Codification ("ASC") 350-20, a company firstly has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step quantitative impairment test is mandatory. The Company may also elect to proceed directly to the two-step impairment test without considering qualitative factors. The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount. If the carrying amount of each reporting unit exceeds its fair value, an impairment loss equal to the difference between the implied fair value of the reporting unit and their carrying amounts will be recorded. Application of impairment test for goodwill requires significant management judgment, including the identification of the reporting unit, assigning assets, liabilities and goodwill to each reporting unit, and determining the fair value of each reporting unit. The fair value of each reporting unit is determined by analysis of discounted cash flows. The significant assumptions regarding reporting unit's future operating performance are revenue growth rates, costs of goods and operating expenses growth rates, discount rates and terminal values. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. In 2015, management has conducted step 1 of the quantitative impairment test to compare the carrying value of the reporting unit, including assigned goodwill, to its respective fair value. The fair value of the reporting unit was estimated by using the income approach. Based on the quantitative test, it was determined that the fair value of the reporting unit tested exceeded its carrying amount and, therefore, step two of the two-step goodwill impairment test was not required. The management concluded that goodwill was not impaired as of December 31, 2015. In 2016, management has conducted the qualitative impairment test to compare the carrying value of the reporting units, including assigned goodwill, to its respective fair value. Based on the qualitative impairment assessment, it was determined that it is more likely than not the fair values of the reporting units tested exceeded their carrying amounts and, therefore, quantitative impairment test for goodwill was not required. The management concluded that goodwill were not impaired as of December 31, 2016. (r) Intangible assets with indefinite lives Intangible assets with indefinite lives represents the purchase price of the payment license in a business combination. The payment license was determined to have an indefinite life. In determining its indefinite life, the Company considered the following: the expected use of the intangible; the longevity of the license; the legal, regulatory and contractual provisions that affect their maximum useful life; the Company's ability to renew or extend the asset's legal or contractual life without substantial costs; effects of the regulatory environment; maintenance expenditures required to obtain the expected future cash flows from the asset; and considerations for obsolescence, demand, competition and other economic factors. Intangible assets with indefinite lives is not amorti |
Significant acquisition and equ
Significant acquisition and equity transactions | 12 Months Ended |
Dec. 31, 2016 | |
Significant acquisition and equity transactions | |
Significant acquisition and equity transactions | 3. Significant acquisition and equity transactions (a) Acquisitions in 2015 The Group completed several acquisitions during 2015 by acquiring over 50% of the net assets of the following companies in cash. These acquisitions have been accounted for using the acquisition method for business combinations. These acquisitions are not material individually or in aggregate to the Group's consolidated financial statements. The acquisition cost was recorded in general and administrative expenses when it incurred and it was not material in aggregate. The Group made series of investments into Zhengzhou Andaxin Transportation Co., Ltd. ("Zhengzhou Andaxin") which is a PRC registered company that provides logistic services in 2015, and held 90% equity interest of Zhengzhou Andaxin as of December 31, 2015 with total consideration of RMB25,251. The financial results of Zhengzhou Andaxin are immaterial to the Group's net assets and results of operations. The acquisition was accounted for as a purchase and the results of Zhengzhou Andaxin are included in the Group's consolidated results from the acquisition date. The Group recorded RMB17,807 in goodwill related to the acquisition. No additional intangible asset was identified during this acquisition. During the year ended December 31, 2015, the Group acquired equity interests of certain logistic companies and another service entity with voting right over than 50%. The acquisitions are not individually and in aggregate significant to the Group's net assets and results of operations. These acquisitions have an aggregate purchase price of RMB47,516. The acquisitions were accounted for under purchase accounting and the results of these logistic companies are included in the Group's consolidated results from the acquisition dates. The Group recorded RMB19,917 in goodwill related to the acquisitions of these logistic companies. No additional intangible asset was identified during these acquisitions. Based on the assessment of the acquired companies' financial performance made by the Group, acquired companies including its subsidiary during 2015 are not considered material to the consolidated results of operations both individually and in aggregate. Thus pro forma results of operations for these acquisitions in 2015 as well as the results of operations since the date of acquisitions to the period end have not been presented. None of the goodwill recognized during the acquisitions is expected to be deductible for income tax purposes. (b) Acquisitions in 2016 In February 2015, the Group acquired a 42.61% equity interest of Feiyuan Logistic Company Ltd. and its subsidiaries ("Feiyuan") and obtained significant influence over it. As a result, Feiyuan become an equity affiliate of the Group. Feiyuan is a company principally providing warehousing, express, transportation and distribution services to E-commerce companies in southeast China. In January 2016, the Group acquired additional equity interest of 26.18% in Feiyuan with a cash consideration of RMB65,452 and Feiyuan become subsidiaries of the Group since then, as the Group has control over its operating and financing decisions. The acquisition had been accounted for as a business combination, and the results of operations of Feiyuan have been included in the Group's consolidated financial statements from the acquisition date. The Group made estimates and judgments in determining the fair values of acquired assets and liabilities, based on an independent valuation report and management's experiences with similar assets and liabilities. The following table summarizes the estimated fair values for major classes of assets acquired and liabilities assumed at the date of acquisition: RMB Weighted average amortization Net tangible liabilities acquired ) Intangible assets—customer relationship Goodwill Deferred tax liabilities ) Non-controlling interest ) Total consideration Consideration transferred Cash Fair value of the Group's previously held equity interests in Feiyuan (Note) Total consideration Note: The fair value of the Group's previously held equity interests in Feiyuan as at the acquisition date was determined by using the discounted cash flow model. The key inputs from this valuation include a risk-adjusted discount rate and discount of lack of control. No gain or loss was recognized as a result of remeasuring to fair value of the previously held equity interests in Feiyuan. In May 2016, the Group acquired additional non-controlling equity interest of 28.19% in Feiyuan with a cash consideration of RMB110,001, which did not result in change in control and was accounted for as equity transaction. After these transactions, the Group hold 96.98% equity interest of Feiyuan. In September 2016, the Group completed the acquisition of Zhejiang Ebatong Technology Co. ("Ebatong"), following the completion of the transaction, Ebatong became a wholly-owned subsidiary of the Group. Ebatong is a company which principally provides third party payment service to customers, acquisition of Ebatong was primarily for the purpose of developing the Company's internet payment channel. After the acquisition, Ebatong changed its business registration into Zhejaing Vipshop Payment Co., Ltd. The total cash consideration was RMB410,417 in which RMB336,065 was paid during the year ended December 31, 2016 and the remaining amount of RMB74,352 was included in the other payables. The acquisition cost amounted to RMB4,000 was recorded in general and administrative expenses when it incurred. The acquisition had been accounted for as a business combination and the results of operations of Ebatong have been included in the Group's consolidated financial statements from the acquisition date. The Group made estimates and judgments in determining the fair value of acquired assets and liabilities, based on an independent valuation report and management's experiences with similar assets and liabilities. The following table summarizes the estimated fair values for major classes of assets acquired and liabilities assumed at the date of acquisition: RMB Weighted average amortization Net tangible assets acquired Intangible assets—Payment license Indefinite life Goodwill Total consideration Consideration transferred and liabilities assumed Cash Other receivables Total consideration During the year ended December 31, 2016, the Group acquired additional equity interests of certain logistic companies and obtained over 50% voting right. The acquisitions are not individually and in aggregate significant to the Group's net assets and results of operations. These acquisitions have an aggregate purchase price of RMB50,218. The acquisitions were accounted for under purchase accounting and the results of these logistic companies are included in the Group's consolidated results from the acquisition dates. The Group recorded RMB34,365 in goodwill related to the acquisitions of these logistic companies. No additional intangible asset was identified during these acquisitions. Based on the assessment of the acquired companies' financial performance made by the Group, acquired companies including its subsidiaries during 2016 are not considered material to the consolidated results of operations both individually and in aggregate. Thus pro forma results of operations for these acquisitions in 2016 as well as the results of operations since the date of acquisitions to the period end have not been presented. None of the goodwill recognized during the acquisitions is expected to be deductible for income tax purposes. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Receivable, Net | |
Accounts Receivable, Net | 4. Accounts Receivable, Net As of December 31, 2015 2016 RMB RMB Components of accounts receivable are as follows: Delivery service providers (Note a) Other trade receivables (Note b) Other Subtotal Less: allowance for doubtful debts — ) Total No individual accounts receivable consists more than 10% of the account receivable as of December 31, 2015 and 2016. Note a: For certain sales transactions, delivery service providers will collect payments from the Group's customers upon delivery of goods, and remit such payments back to the Group on a periodic basis. Note b: The Group provides consumer financing to certain customers as part of the Group's internet financing activities conducted since 2015. The movement of allowance for doubtful debts during the years are as follow: Year ended December 31, 2014 2015 2016 RMB RMB RMB Allowance for doubtful debts: Balance at beginning of the year — — — Allowance during the year — — ) Write-offs during the year — — Balance at end of the year — — ) |
Other Receivables and Prepaymen
Other Receivables and Prepayments, Net | 12 Months Ended |
Dec. 31, 2016 | |
Other Receivables and Prepayments, Net | |
Other Receivables and Prepayments, Net | 5. Other Receivables and Prepayments, Net As of December 31, 2015 2016 RMB RMB Components of other receivables and prepayments are as follows: Deposits (Note a) Cash advanced to staff Loan to staff VAT receivable Interest receivable Advances to suppliers related to financing activities (Note b) Advances to suppliers related to procurement activities Prepaid expense Receivables on behalf of staffs for options exercised and non-vested shares vested Others Less: allowance for doubtful debts (Note c) ) ) Total Note a: Deposits consist of amounts paid to vendors for advertising and rentals. Note b: The Group provides financing to some of its suppliers by advancing them cash, and held portions of accounts payables the Group owes to them as pledges or procurements are expected to be made by the Group from the suppliers in the near term. Note c: The Group considers many factors in assessing the collectability of its receivable, such as, the age of the amounts due, the debtor's payment history, credit-worthiness, and financial conditions of the debtor and industry trends. An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable. The Group also makes specific allowance if there is strong evidence indicating that the receivable is likely to be unrecoverable. Receivable balances are written off after all collection efforts have been exhausted. The movement of allowance for doubtful debts during the years are as follow: Year ended December 31, 2014 2015 2016 RMB RMB RMB Allowance for doubtful debts: Balance at beginning of the year — ) ) Allowance during the year ) ) ) Write-offs during the year — Balance at end of the year ) ) ) |
Held-to-Maturity Securities
Held-to-Maturity Securities | 12 Months Ended |
Dec. 31, 2016 | |
Held-to-Maturity Securities | |
Held-to-Maturity Securities | 6. Held-to-Maturity Securities As of December 31, 2015 and 2016, the Group's held-to-maturity securities consist of debt securities carried at amortized cost of RMB1,807,403 and RMB671,776 respectively, which approximate the aggregate fair value. All of these securities mature within one year and are classified as current asset. The amount of unrealized holding gain as of December 31, 2015 and 2016 was RMB17,403 and RMB1,776 respectively. The held-to-maturity securities all consist of wealth management products purchased from third-party financial institutions with high credit ratings in China. These debt securities have fixed maturity dates and pay a target return on the amount invested. In addition, the principals of these securities are fully guaranteed and early redemption is not allowed. There has been no impairment recognized and no sales of any held-to-maturity securities before maturities during the periods presented. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment, Net | |
Property and Equipment, Net | 7. Property and Equipment, Net As of December 31, 2015 2016 RMB RMB Cost: Building Furniture, fixtures and equipment Leasehold improvements Motor vehicles Software Construction in process Sub-total Less: accumulated depreciation ) ) Property and equipment, net Year ended December 31, 2014 2015 2016 RMB RMB RMB Depreciation expenses were charged to: Fulfillment expenses Marketing expenses Technology and content expenses General and administrative expenses Total |
Land Use Rights, Net
Land Use Rights, Net | 12 Months Ended |
Dec. 31, 2016 | |
Land Use Rights, Net | |
Land Use Rights, Net | 8. Land Use Rights, Net As of December 31, 2015 2016 RMB RMB Cost: Land in Zhaoqing City Land in Tianjing City Land in Jianyang City Land in Ezhou City — Land in Zhengzhou City — Land in Qingdao City — Land in Guangzhou City — Sub-total Less: Accumulated amortization ) ) Land use rights, net The expiry dates of the land use rights are from October 2064 to August 2065. Expenses charged were RMB689, RMB2,785 and RMB37,657 for the years ended December 31, 2014, 2015 and 2016, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets, Net | |
Intangible Assets, Net | 9. Intangible Assets, Net As of December 31, 2015 As of December 31, 2016 Cost Accumulated Impairment Net Cost Accumulated Impairment Net RMB (Note a) RMB Domain names ) — ) — — Customer Relationships ) — ) — Trademarks ) — ) — Non-compete agreement ) — ) — Payment license (Note b) — — — — — — Others ) ) ) ) Total ) ) ) ) Note: (a) Amortization expenses for intangible assets were RMB250,221, RMB289,644 and RMB363,977 for the years ended December 31, 2014, 2015 and 2016, respectively. The Group expects to record amortization expenses of RMB340,707, RMB46,914, RMB2,782, RMB2,275 and RMB1,438 for the years ending December 31, 2017, 2018, 2019, 2020 and 2021 respectively. (b) The payment license, which enbles the Group to provide payment services and qualifies as a paying institution, has a legal life of 5 years and the nearest expiry date is June 2017, but it is renewable every 5 years at minimal cost. The Group believes it would renew the payment license continuously and has the ability to do so. As a result, the payment license is considered by the Group as having an indefinite life because it is expected to contribute to net cash inflow indefinitely. |
Investment in Affiliates
Investment in Affiliates | 12 Months Ended |
Dec. 31, 2016 | |
Investment in Affiliates | |
Investment in Affiliates | 10. Investment in Affiliates Investments in affiliates as of December 31, 2015 and 2016 were as follows: As of December 31, 2015 2016 RMB RMB Equity-method investments: Ovation (i) Feiyuan (Note 3(b)) — Others (ii) Total Details of the significant investments are as follows: (i) On February 21, 2014, the Group acquired a 23% equity interest in Ovation, which is a BVI company that engages in research and development, and distribution of beauty products and production and publication of TV programme, for a total consideration of approximately US$55,777 (approximately RMB339,303) pursuant to a share purchase and subscription agreement with Ovation and certain of its existing shareholders. (ii) Other investments in affiliates comprise of a number of investments in private companies which the Group owns 20% voting right or higher and have significant influence, these investments include certain PRC registered companies that provides logistic services and engages in cosmetic sales. During the years ended December 31, 2014, 2015 and 2016, the Group recognized its share of loss of affiliates in the amount of RMB62,716, RMB84,063 and RMB71,489 respectively. The total impairment losses on equity method investments were nil, RMB58,510 and nil during the years ended December 31, 2014, 2015 and 2016, respectively. The amount of impairment in 2015 relate to Ovation and is recorded as impairment loss of investments in the consolidated statements of income and comprehensive income. |
Other Investments
Other Investments | 12 Months Ended |
Dec. 31, 2016 | |
Other Investments | |
Other Investments | 11. Other Investments As of December 31, 2015 2016 RMB RMB Cost-method investments: WangZhi Technology Limited. Qima Holdings Limited. BabySpace Corporation Hifashion Group Inc. Others (Note) Total investment costs: Less: Accumulated impairment ) ) Total Note: Other investments comprise of a number of investments in private companies which the Group owes equity interest of less than 20%, including certain E-commence companies and PRC registered companies that provide technology services. The impairment losses on cost method investments were RMB6,166, RMB41,239 and RMB65,940 during the years ended December 31, 2014, 2015 and 2016, respectively. |
Available-for-Sale Securities I
Available-for-Sale Securities Investments, Non-Current | 12 Months Ended |
Dec. 31, 2016 | |
Available-for-Sale Securities Investments | |
Available-for-Sale Securities Investments, Non-Current | 12. Available-for-Sale Securities Investments: The carrying amount and fair value of the Group's available-for-sale securities investments were RMB269,736 and RMB407,944 as follows as of December 31, 2015 and 2016. As of December 31, 2015 Amortized Gross Gross Fair RMB RMB RMB RMB Listed equity securities. ) Debt securities — — Total ) As of December 31, 2016 Amortized Gross Gross Fair RMB RMB RMB RMB Listed equity securities. — Debt securities — — Total — The Group reviews its available-for-sale investments regularly to determine if an investment is other-than-temporarily impaired due to changes in quoted market price or other impairment indicators such as market condition for the investees' industry and products and services. The Group recorded impairments in the amounts of nil, nil and RMB48,634 for the years ended December 31, 2014, 2015 and 2016, respectively. |
Other Long-Term Assets
Other Long-Term Assets | 12 Months Ended |
Dec. 31, 2016 | |
Other Long-Term Assets | |
Other Long-Term Assets | 13. Other Long-Term Assets As of December 31, 2015 2016 RMB RMB Deposit for land use rights (Note a) Prepayment for investments (Note b) Others Total Note a: During the year ended December 31, 2015, the Group signed contracts with local government and paid certain amounts of deposits to purchase land use rights located in Ezhou City, Jianyang City, Zhaoqing City and Guangzhou City in the PRC. The purchase process for these land use rights was completed during the year ended December 31, 2016, and the deposits were transferred to the land use rights. During the year ended December 31, 2016, the Group signed some new contracts with local governments and paid cerntain amounts of deposits to purchase land use rights located in Chongqing City, Xinjiang Autonomous Region, Liaoning Province, Hengyang City, Tianjin City, Shanxi Province and Guangzhou City. Note b: The Company signed contracts to acquire certain investments from the investees' existing shareholders. According to the agreements, the Company needs to prepay deposits before the completion of the legal closing process of the acquisitions. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill | |
Goodwill | 14. Goodwill The movements in carrying amount of goodwill are as follows: Goodwill RMB Balance as of January 1, 2015 Addition for acquisition—Zhengzhou Andaxin Addition for acquisition—Explink Addition for acquisition—Other investments Balance as of December 31, 2015 Addition for acquisition—Feiyuan (Note 3(b)) Addition for acquisition—Ebatong (Note 3(b)) Addition for acquisition—Other investments Balance as of December 31, 2016 As stated in Note 3, the Group has acquired certain businesses during 2015 and 2016. The excess of purchase price over net tangible assets and identifiable intangible assets acquired were recorded as goodwill accordingly. The Group performed the annual impairment analysis as of the balance sheet date. There has been no impairment recognized in goodwill during the periods presented. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 15. Accrued Expenses and Other Current Liabilities As of December 31, 2015 2016 RMB RMB Accrued advertising expense Accrued shipping and handling expenses Accrued payroll Social benefit provision Deposits from delivery service providers Other tax payable Income tax payable VAT tax payable Accrued rental expenses Accrued administrative expenses Amounts received on behalf of third-party merchants (Note a) Payables for repurchase of ordinary shares (Note 21) — Interest payable Others Total Note a: Amounts relate to the cash collected on behalf of third-party merchants which the Company provides platform access for sales of their products. |
Employee Retirement Benefit
Employee Retirement Benefit | 12 Months Ended |
Dec. 31, 2016 | |
Employee Retirement Benefit | |
Employee Retirement Benefit | 16. Employee Retirement Benefit Full time employees in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Group to make contributions based on certain percentages of the employees' basic salaries. Other than the contribution, there is no further obligation under these plans. The total contributions and accruals made for such employee benefits was RMB196,778, RMB337,762 and RMB585,073 for the years ended December 31, 2014, 2015 and 2016, respectively. |
Short term loans
Short term loans | 12 Months Ended |
Dec. 31, 2016 | |
Short term loans | |
Short term loans | 17. Short term loans On December 31, 2015, a subsidiary of the Group entered into a short-term loan arrangement with a domestic bank in the PRC to finance its working capital, the outstanding amount as of December 31, 2015 was RMB95,000 with an interest rate of 4.35% per annum and a maturity term of three months. The loan is guaranteed by a pledge of the Group's held-to-maturity securities amounted to RMB100,000. The full loan amount was settled during the year ended December 31, 2016. On March 9, 2016, a subsidiary of the Group entered into an interest-free loan with a local bank to finance its working capital, the principle amount was RMB3,000. The loan was settled during the year ended December 31, 2016. |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2016 | |
Convertible Senior Notes | |
Convertible Senior Notes | 18. Convertible Senior Notes On March 17, 2014, the Company issued US$632,500 (approximate RMB4,391,448) in aggregate principal amount of 1.5% Convertible Senior Notes due 2019 (the "Notes"). The Notes can be converted into the Company's ADSs, each representing 1 / 5 Class A ordinary share of the Company, par value 0.001 per share (the "ordinary shares"), at the option of the holders, based on an initial conversion rate of 49.693 of the Company's ADSs (4.9693 ADSs before the ADS ratio change effective November 3, 2014) per 1,000 principal amount of Notes (US$20.124 per ADS, or $201.24 per ADSs before the ADS ratio change). Holders of the Notes will have the right to require the Company to repurchase for cash all or part of their Notes on March 15, 2017 or upon the occurrence of certain fundamental changes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. The Notes bear interest at a rate of 1.5% per year, payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2014. The Notes will mature on March 15, 2019, unless previously repurchased or converted in accordance with their terms prior to such date. The net proceeds from the Notes offering were US$617,191 (approximate RMB4,285,157), after deducting discounts to the initial purchaser of US$14,231(approximate RMB98,806) and debt issuance costs of US$1,078 (approximate RMB7,485). Debt issuance costs and debt discounts are recorded as a direct deduction from the face amount of Convertible Senior Notes, and amortized as interest expenses, using the effective interest method, from issuance date to the first put date of the Notes (March 15, 2017). In February and March 2017, the Group has entered into a commitment letter and a related financing agreement with two reputable international banks respectively that permits the Group to borrow up to US$632.5 million (approximate RMB4,391 million) and the loan will mature in 364 days from the date of drawdown, which is more than twelve months from the year ended December 31, 2016. Therefore, the Notes were classified as non-current liability on the consolidated balance sheets of Company. On March 15, 2017, part of the Notes holders exercised their option to redeem the Notes, the total redemption amount is US$3,125 (approximate RMB21,697), and the remaining amount of the Notes will mature on March 15, 2019. The Company recorded the Notes as a liability in their entirety, and the conversion feature or any other feature does not need to be bifurcated and accounted for separately. As of December 31, 2016, none of the Notes had been converted yet. |
Distribution of Profit
Distribution of Profit | 12 Months Ended |
Dec. 31, 2016 | |
Distribution of Profit | |
Distribution of Profit | 19. Distribution of Profit Pursuant to the laws applicable to entities incorporated in the PRC, the PRC subsidiaries are prohibited from distributing their statutory capital and are required to appropriate from PRC GAAP profit after tax to other non-distributable reserve funds after offsetting accumulated losses from prior years, until the cumulative amount of such reserve fund reaches 50% of their registered capital. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriation at 10% of after tax profit (as determined under accounting principles generally accepted in the PRC at each year-end); the appropriation to the other fund are at the discretion of the subsidiaries. The general reserve is used to offset future extraordinary losses. A subsidiary may, upon a resolution passed by the shareholders, convert the general reserve into capital. The staff welfare and bonus reserve is used for the collective welfare of the employees of the subsidiary. The enterprise expansion reserve is for the expansion of the subsidiary's operations and can be converted to capital subject to approval by the relevant authorities. These reserves represent appropriations of the retained earnings determined in accordance with Chinese law, and are not distributable as cash dividends to the Group. Relevant PRC statutory laws and regulations permit payment of dividends by the Company's PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The Company's PRC subsidiaries transferred RMB135,797, RMB234,425 and RMB84,873 to general reserve during the years ended December 31, 2014, 2015 and 2016, respectively. The balance of restricted net assets was RMB1,957,529 and RMB4,278,531 of which RMB829,500 and RMB829,500 was attributed to the net assets of the VIEs and VIEs' subsidiaries, and RMB1,128,029 and RMB1,128,029 was attributed to the paid in capital of the WFOE, as of December 31, 2015 and 2016, respectively. |
Capital Structure
Capital Structure | 12 Months Ended |
Dec. 31, 2016 | |
Capital Structure | |
Capital Structure | 20. Capital Structure Issuance of convertible senior notes On March 17, 2014, the Company completed a public offering of 1,140,000 ADSs by certain of the Company's selling shareholders, representing 2,280,000 ordinary shares, at a public offering price of US143.74 per ADS, and US$550,000 (approximate RMB3,818,650) aggregate principal amount of the Company's 1.50% convertible senior notes due 2019. Concurrently, the underwriters exercised in full the option to purchase an aggregate of 171,000 additional ADSs from certain selling shareholders at the public offering price of the offering and up to an additional US$82,500 (approximate RMB572,798) aggregate principal amount of the Company's 1.50% convertible senior notes due 2019. Dual-class share structure On September 15, 2014, the Company's shareholders voted in favor of a proposal to adopt a dual-class share structure, pursuant to which the Company's authorized share capital was reclassified and re-designated into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share being entitled to one vote and each Class B ordinary share being entitled to ten votes on all matters that are subject to shareholder vote. Both Class A ordinary shares and Class B ordinary shares are entitled to the same dividend right. The holders of the Group's ordinary shares are entitled to such dividends as may be declared by the board of directors subject to the Companies Law. The computation of net earnings per Class A ordinary shares and Class B ordinary shares have been adjusted retroactively for all periods presented to reflect this change. As of December 31, 2015 and 2016, all Class B ordinary shares were held by the Chairman of the Company. ADS Ratio Change Effective November 3, 2014, the Company changed its ADS to Class A ordinary share ratio from one ADS representing two Class A ordinary shares to five ADSs representing one Class A ordinary share. The computation of net earnings per ADS have been adjusted retroactively for all periods presented to reflect this change. Exercise of stock options During the years ended December 31, 2014, 2015 and 2016, 1,883,977, 956,587 and 560,930 Class A ordinary shares were issued respectively as a result of exercises of share options by employees and a consultant. Vesting of shares awards During the years ended December 31, 2014, 2015 and 2016, 988,723, 1,100,618 and 861,815 Class A ordinary shares were issued respectively as a result of vesting of shares awards granted to employees and consultants. |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 31, 2016 | |
Treasury Stock | |
Treasury Stock | 21. Treasury Stock On November 17, 2015, the Company's board of directors approved a share repurchase program whereby the Company may purchase its own ADSs with an aggregate value of up to US$300 million over the following 24-month period, ending on November 16, 2017. As of December 31, 2016, the Company has repurchased 1,614,135 shares from the market in the consideration of approximately RMB844,711 in aggregate. Part of the considerations for the repurchase of shares in the amount RMB194,514 has not yet been settled as at December 31, 2015, but was fully settled during the year ended December 31, 2016. During the year ended December 31, 2016, 257,217 of the treasury stock was re-issued to employees of the Group for the purpose of share awards. |
Other Income
Other Income | 12 Months Ended |
Dec. 31, 2016 | |
Other Income | |
Other Income | 22. Other Income Other income consists of government grants and miscellaneous. Government grants represent rewards provided by the relevant PRC municipal government authorities to the Group for business achievements made by the Group, tax refunds, or subsidies for asset related investments made by the Group. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. A government grant will only be recognized as other income when it is probable that any future economic benefit associated with an item will flow to the Group, and the grant has been received because the amount of such government grants are determined solely at the discretion of the relevant government authorities and there is no assurance that the Group will continue to receive these government grants in the future. Grants related to depreciable assets are recognized in profit or loss over the periods in which depreciation expense on those assets is recognized, corresponding to the useful lives of the assets. Other income is comprised of: Year ended December 31, 2014 2015 2016 RMB RMB RMB Government grants Claims for goods insurance Others Total other income |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 23. Income Taxes Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong The provision for current income taxes of the subsidiaries operating in Hong Kong has been calculated by applying the current rate of taxation of 16.5% for the years ended December 31, 2014, 2015 and 2016, if applicable. People's Republic of China Under the Law of the People's Republic of China on Enterprise Income Tax ("EIT Law"), domestically owned enterprises and foreign invested enterprises (the "FIEs") are subject to a uniform tax rate of 25%. While the EIT Law equalizes the tax rates for FIEs and domestically-owned enterprises, preferential tax treatment may continue to be given to companies in certain encouraged sectors and to entities classified as high-technology companies, regardless of whether these are domestically-owned enterprises or FIEs. The Group's subsidiaries and the variable interest entity in the PRC are all subject to the tax rate of 25% for the periods presented, except for Vipshop Jianyang, Vipshop Chongqing, Vipshop Zhuhai and Pinwei Software that enjoyed the following preferential tax treatment: Vipshop Jianyang and Vipshop Chongqing have been recognized as within encouraged industries in the Western Regions of China and enjoyed a preferential income tax rate of 15% since year 2012 and year 2014 respectively. Vipshop Zhuhai enjoyed a preferential tax rate of 15% on annual renewal basis as it is located in an economy development zone in the PRC. The term "domestically-owned enterprises in an industry sector encouraged by the PRC government" as used herein refers to any enterprise that its primary business falls into the scopes of the encouraged industries stipulated in the existing related policies, including Industrial Restructuring Guidance Catalogue (2011), Industrial Restructuring Guidance Catalogue (2005), Catalogue for the Guidance of Foreign Investment Industries (Revised in 2007), Circular Caishui (2014) and Catalogues of Foreign-invested Advantage Industries in Central-Western Areas (2008 Revision), and the annual primary business revenue of which accounts for more than 70% of the total enterprise revenue. Pinwei Software was qualified as a high and new technology enterprise and enjoy a preferential corporate income tax rate of 15% Circular Caishui (2014) for the period from January 1, 2015 to December 31, 2016. The Group evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2015 and 2016, the Group had no unrecognized tax benefits. The Group does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. The Group will classify interest and penalties related to income tax matters, if any, in income tax expense. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding RMB100 (US$14) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. Income tax expense is comprised of: Year ended December 31, 2014 2015 2016 RMB RMB RMB Income (loss) before tax and share of loss of affiliates Income from China operations Loss from non-China operations ) ) ) Total income before tax and share of loss of affiliates Year ended December 31, 2014 2015 2016 RMB RMB RMB Income tax expenses applicable to China operations Current tax (Note) Deferred tax ) ) ) Subtotal income tax expenses applicable to China operations Total tax expenses Note: All current tax was related to income tax in PRC and Hong Kong. Under the EIT Law, enterprises are classified as either resident or non-resident. A resident enterprise refers to one that is incorporated under the PRC law or under the law of a jurisdiction outside the PRC with its "de facto management organization" located within the PRC. Non-residential enterprise refers to one that is incorporated under the law of a jurisdiction outside the PRC with its "de facto management organization" located also outside the PRC, but which has either set up institutions or establishments in the PRC or has income originating from the PRC without setting up any institution or establishments in the PRC. Under the current EIT Implementation Regulations, "de facto management organization" is defined as the organization of an enterprise through which substantial and comprehensive management and control over the business, operations, personnel, accounting and properties of the enterprise are exercised. Under the New Tax Law and the New EIT Implementation Regulations, a resident enterprise's global net income will be subject to a 25% enterprise income tax rate. Uncertainties exist with respect to how the New Tax Law and New EIT Implementation Regulations apply to the Group's overall operations, and more specifically, with regard to tax residency status. On April 22, 2009, the State Administration of Taxation, or the SAT, issued SAT Circular 82, which provides certain specific criteria for determining whether the "de facto management body" of a PRC-controlled enterprise that is incorporated offshore is located in China. In addition, the SAT issued a bulletin on July 27, 2011 providing more guidance on the implementation of Circular 82 and clarifies matters such as resident status determination. Due to the present uncertainties resulting from the limited PRC tax guidance on this issue, it is unclear that the legal entities organized outside of PRC should be treated as residents for New Tax Law purposes. Nevertheless, even if one or more of its legal entities organized outside of the PRC were characterized as PRC tax residents, both of them are still in accumulated loss position and no significant impact would be expected on the net current tax payable balance and the net deferred tax balance. If the entity were to be non-resident for PRC tax purpose, dividends paid to it out of profits earned after January 1, 2008 would be subject to a withholding tax. In the case of dividends paid by PRC subsidiaries the withholding tax would be 10% and in the case of a subsidiary 25% or more directly owned by residents which meet the criteria of beneficial owner in the Hong Kong SAR, the withholding tax would be 5%. Aggregate undistributed earnings of the Group's subsidiaries and the VIEs in the PRC that are available for distribution to the Group of approximately RMB4,148.1 million and RMB6,993.1 million as of December 31, 2015 and 2016 respectively are considered to be indefinitely reinvested under ASC No.740-30, Accounting for Income Taxes—Special Areas , and accordingly, no provision has been made for the Chinese dividend withholding taxes that would be payable upon the distribution of those amounts to the Group. If those earnings were to be distributed or they were determined to be no longer permanently reinvested, the Group would have to record a deferred income tax liability in respect of those undistributed earnings of approximately RMB207.4 million and RMB349.7 million as of December 31, 2015 and 2016 respectively. A reconciliation of the income tax expense to income before income tax and share of loss of affiliates computed by applying the PRC statutory income tax rate of 25% per the consolidated statements of income and comprehensive income is as follows: Year ended December 31, 2014 2015 2016 RMB RMB RMB Income before income tax and share of loss of affiliates Computed income tax expense at PRC EIT tax rate Effect of non-deductible expenses, including: —Share-based compensation expenses —Other non-deductible expenses Effect of different tax rates of a subsidiary operating in other jurisdiction Effect of tax holidays on concessionary rates granted to PRC subsidiaries ) ) ) Effect of non-taxable income ) ) ) Change in valuation allowance ) Others ) Actual income tax expenses The aggregate amount and per share effect of the tax holidays and tax concessions are as follows: Year ended December 31, 2014 2015 2016 RMB RMB RMB The aggregate effect Per share effect: Class A and Class B ordinary share: —basic —diluted 0. 38 The principal components of deferred tax assets are as follows: As of December 31, 2015 2016 RMB RMB Deferred tax assets: Net operating loss carry forwards Allowance for doubtful debts Allowance for other investments Inventory write-down Payroll payable and other accruals Deferred revenue Advertising expenses — Others Less: valuation allowance ) ) Total deferred tax assets-current Deferred tax liability: Intangible assets Total deferred tax liability The amount of tax loss carried forward was RMB238,606 and RMB702,705 of December 31, 2015 and 2016, respectively, for the Group's certain subsidiaries and VIEs. The Group has provided a valuation allowance for the deferred tax assets relating to the future benefit of net operating loss carry forwards and other deferred tax assets of certain subsidiaries as of December 31, 2015 and 2016, respectively, as management is not able to conclude that the future realization of some of those net operating loss carry forwards and other deferred tax assets are more likely than not. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share | |
Earnings Per Share | 24. Earnings Per Share As of December 31, 2014, 2015 and 2016, there are nil, nil and 909,568 employee stock options or non-vested ordinary shares which could potentially dilute basic net earnings per share in the future, but which were excluded from the computation of diluted net earnings per share in the periods presented, as their effects would have been anti-dilutive. The effect of the convertible senior notes has been excluded from the computation of diluted earnings per share for the years ended December 31, 2014 and 2015 as the effect would be anti-dilutive. Basic net earnings per share is based on the weighted average number of ordinary shares outstanding during each period. Diluted net earnings per share is based on the weighted average number of ordinary shares outstanding and incremental weighted average number of ordinary shares from assumed vesting of non-vested shares and exercise of share options, and conversion of the convertible senior notes during each period. As economic rights and obligations are applied equally to both Class A and Class B ordinary shares, earnings are allocated between the two classes of ordinary shares evenly with the same allocation on a per share basis. Basic earnings per share and diluted earnings per share have been calculated for the years ended December 31, 2014, 2015 and 2016 as follows: Year ended December 31, 2014 2015 2016 Class A and Class B Class A and Class B Class A and Class B RMB RMB RMB Basic earnings per share attributable to Vipshop Holdings Limited's ordinary shareholders: Numerator: Earnings attributable to Class A and Class B ordinary shareholders for computing basic earnings per Class A and Class B ordinary share Denominator: Weighted average number of Class A and Class B ordinary shares outstanding for computing basic earnings per Class A and Class B ordinary share Basic earnings per Class A and Class B ordinary shares Diluted earnings per share for the years ended December 31, 2014, 2015 and 2016 are calculated as follows: Year ended December 31, 2014 2015 2016 Class A and Class B Class A and Class B Class A and Class B Diluted earnings per share: Numerator: Net earnings attributable to Class A and Class B ordinary shareholders for computing diluted earnings per Class A and Class B ordinary share Denominator: Weighted average number of Class A and Class B ordinary shares outstanding for computing basic earnings per Class A and Class B ordinary share Dilutive employee share options and non-vested ordinary shares Dilutive convertible senior notes — — Weighted average number of Class A and Class B ordinary shares outstanding for computing diluted earnings per Class A and Class B ordinary share Diluted earnings per Class A and Class B ordinary shares The Company granted a number of non-vested ordinary shares to certain executive officers and employees during 2014, 2015 and 2016 (refer to Note 27 (b)), these non-vested shares are not included in the computation of basic earnings per share. Such shares are considered contingently returnable shares because in the event a non-vested shareholder's employment for the Company is terminated for any reason prior to the fourth anniversary of the grant date, the outstanding non-vested shares shall be forfeited and automatically transferred to and reacquired by the Company at nil consideration. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and contingencies | |
Commitments and contingencies | 25. Commitments and contingencies Operating Leases Agreements The Group leases office space and certain equipment under non-cancellable operating lease agreements that expire at various dates through October 2025. Those lease agreements provide for periodic rental increases based on both contractual incremental rates and inflation rates adjustments over the leased periods. Some of these lease agreements include terms of renewal ranging from one to ten years upon expiry of their respective original lease terms, without purchase options or escalation clause. If these lease agreements are not renewed, the Company is obligated to remove the facilities constructed under certain of its warehouse space lease contracts, although the Company expects such related removal costs to be not significant. During the three years ended December 31, 2014, 2015 and 2016, the Company incurred rental expenses amounting to RMB163,332, RMB191,253 and RMB248,264, respectively. As of December 31, 2016, minimum lease payments under all non-cancellable leases were as follows: RMB Year ending December 31, 2017 Year ending December 31, 2018 Year ending December 31, 2019 Year ending December 31, 2020 Year ending December 31, 2021 Over December 31, 2021 Total minimum lease payments Capital commitment As of December 31, 2016, the Group has contracted for capital expenditures of RMB938,464. Contingencies The Company and certain of the Company's officers and directors were named as defendants in two putative securities class actions filed in the U.S. District Court for the Southern District of New York: Heller v. Vipshop Holdings Limited et al., Civil Action No. 1:15-cv-03870-LTS (S.D.N.Y.)(filed on May 19, 2015) and Schwartz v. Vipshop Holdings Limited et al., Civil Action No. 1:15-cv-05097-LTS (S.D.N.Y.)(filed on June 30, 2015). The complaints in both putative class actions allege that certain of the Company's financial statements and other public disclosures contained misstatements or omissions and assert claims under the U.S. securities laws. On September 15, 2015, the court consolidated the two actions, and appointed a lead plaintiff and approved the lead plaintiff's selection of lead counsel for the consolidated action. On November 24, 2015, the lead plaintiff filed a Notice of Voluntary Dismissal without Prejudice which was entered by the court, voluntarily dismissing, without prejudice, all claims in the consolidated action. The Group is subject to periodic legal or administrative proceedings in the ordinary course of business. The Group does not believe that any currently pending legal proceeding to which the Group is a party will have a material effect on its business, results of operations or cash flows. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | 26. Related Party Transactions For the years ended December 31, 2014, 2015 and 2016, the Group entered into the following material related party transactions: Year ended December 31, 2014 2015 2016 RMB RMB RMB Purchase of goods (Note a) Delivery of goods (Note b) — Other income — Other expense — — Note a: The goods were purchased from an affiliate of the Company and companies controlled or significantly influenced by shareholders. Note b: The Group engages certain of the Group's affiliates to deliver the goods to its customers. Details of those material related party transactions provided in the table above are as follows: (a) Amounts due from related parties Amounts due from related parties are made up by amounts due from affiliates and companies controlled by the shareholders. Amounts due from related parties as of December 31, 2015 and 2016 amounted to RMB31,856 and RMB8,352, respectively, are prepayments related to purchases of goods or services from affiliates and the entities controlled by shareholders of the Company. (b) Amounts due to related parties Amounts due to related parties are made up by shareholder loans and amounts due to affiliates and companies controlled or significantly influenced by shareholders. The amounts due to affiliates and companies controlled or significantly influenced by shareholders as of December 31, 2015 and 2016 amounted to RMB206,966 and RMB52,729 respectively, and were unsecured and interest free. These amounts are all related to purchases of goods or logistic services from these parties. |
Share-based Payments
Share-based Payments | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Payments | |
Share-based Payments | 27. Share-based Payments (a) Stock incentive plan In March 2011, the Company adopted the Vipshop Holdings Limited 2011 Stock Incentive Plan (the "2011 Plan"), which provide up to an aggregate of 7,350,000 Class A ordinary shares of the Company as stock based compensation to employees, directors, officers and consultants and other eligible personal of the Group. In 2012, the Company adopted the 2012 Stock Incentive Plan (the "2012 Plan"), which provide up to an aggregate of 9,000,000 Class A ordinary shares of the Company, and the maximum aggregate number of shares that may be issued per calendar year is 1,500,000 from 2012 until the termination of the 2012 Plan. In July 2014, the Company adopted the 2014 Stock Incentive Plan (the "2014 Plan"), whose the maximum aggregate number of ordinary shares may be issued under the 2014 Plan is (i) 5,366,998 Class A ordinary shares, and (ii) an automatic increase on January 1 of each year after the effective date of the 2014 Plan by that number of shares representing 1.5% of the Company's then total issued and outstanding share capital as of December 31 of the preceding year, or such less number as determined by the board of directors. During the years ended December 31,2014, 2015 and 2016, no stock option were granted to executive officers, employees and non-employees of the Group under the 2011, 2012 and 2014 Plans. The expiration dates of the options were 10 years from grant date, vesting is subject to the continuous services of the option holders to the Group, and post-termination exercise period was nine months. During any authorized leave of absence, the vesting of the option shall be suspended after the leave of absence exceeds a period of 90 days. Vesting of the option shall resume upon the option holders' return to service to the Group. The vesting schedule shall be extended by the length of the suspension. In the event of termination of the option holders' continuous service for cause, the option holders' right to exercise the option shall terminate concurrently, except otherwise determined by the plan administrator, and the Company shall have the rights to repurchase all vested options purchased by the option holders at a discount price determined by the plan administrator. The stock option holders have waived any voting rights with regard to the shares and granted a power of attorney to the Board of Directors of the Company to exercise voting rights with respect to the shares. For the years ended December 31, 2014, 2015 and 2016, the share option movements were as follows: Options Weighted Weighted Weighted Weighted Aggregate US$ US$ US$ US$ As of January 1, 2014 7.69 years Exercised ) 6.50 years Forfeited ) 7.19 years Outstanding as of December 31, 2014 6.77 years Exercised ) 5.45 years Forfeited ) 5.96 years Outstanding as of December 31, 2015 5.89 years Exercised ) 4.61 years Forfeited ) 4.92 years Outstanding as of December 31, 2016 4.97 years Non vested as of December 31, 2016 Options vested and expected to vest as of December 31, 2016 4.97 years Exercisable as of December 31, 2016 4.97 years For the years ended December 31, 2014, 2015 and 2016, the Group recognized share based payment expenses of RMB34,934, RMB23,366 and RMB7,002 in connection with the share options granted to employees, respectively. The total fair value of shares vested during 2015 and 2016 was RMB24,603 and RMB7,621 respectively. As of December 31, 2016, there was RMB243 unrecognized compensation cost related to unvested share options granted to executive and employees of the Group. The unvested share options expense relating to the stock options of the Group is expected to be recognized over a weighted average period of 0.25 years on a straight-line basis schedule as of December 31, 2016. (b) Non-vested shares During 2014, 2015 and 2016, a total of 1,932,680, 951,684 and 1,815,919 non-vested shares were granted to executive officers, employees, members of Audit Committee and consultants of the Group under the 2012 and 2014 Plan, respectively. Most of the non-vested shares granted have a vesting period of four years of employment services with the first one-fourth vesting on the first anniversary from grant date, and the remaining three fourth vesting on a monthly basis over a three-year period ending on the fourth anniversary of the grant date. The non-vested shares are not transferable and may not be sold or pledged and the holder has no voting or dividend right on the non-vested shares. In the event a non-vested shareholder's employment for the Company is terminated for any reason prior to the fourth anniversary of the grant date, the holder's right to the non-vested shares will terminate effectively. The outstanding non-vested shares shall be forfeited and automatically transferred to and reacquired by the Company at nil consideration. For the years ended December 31, 2015 and 2016, the non-vested shares movement was as follows: Non-vested shares Outstanding as of January 1, 2015 Granted Vested ) Forfeited ) Outstanding as of December 31, 2015 Granted Vested ) Forfeited ) Outstanding as of December 31, 2016 The Group recognized compensation expense over the four year service period on a straight line basis, and applied a forfeiture rate of nil for key management and 13% for employees in 2014, 2015 and 2016, respectively. The aggregate fair value of the restricted shares at grant dates was RMB900,361, RMB657,794 and RMB824,474 during 2014, 2015 and 2016 respectively. The fair values of non-vested shares are measured at the respective fair values of the Company's ordinary shares on the grant-dates. For the years ended December 31, 2014, 2015 and 2016, the Group recognized share based payment expenses of RMB190,560, RMB279,575 and RMB468,651 in connection with the non-vested shares granted to employees, respectively. As of December 31, 2016 there was RMB1,280,756 unrecognized compensation cost related to non-vested shares which is expected to be recognized over a weighted average vesting period of 3.4 years. The weighted average granted fair value per share of non-vested shares granted during the years ended December 31, 2014, 2015 and 2016 was US$63.31 (RMB392.81), US$109.00 (RMB706.08) and US$67.66 (RMB469.76) respectively. (c) Share-based compensation expenses For the years ended December 31, 2014, 2015 and 2016, share-based compensation expenses have been included in the following balances on the consolidated statements of income and comprehensive income: Year ended December 31, 2014 2015 2016 RMB RMB RMB Fulfillment expenses ) ) ) Marketing expenses ) ) ) Technology and content expenses ) ) ) General and administrative expenses ) ) ) ) ) ) |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2016 | |
Segment information | |
Segment information | 28. Segment information The Group has only one reportable segment, which is the sales, product distribution and offering of goods on its online platforms. The Group's chief operating decision-maker ("CODM") has been identified as the Company's President Office, consist of the Company's Chief Executive Officer, Chief Finance Officer, Chief Technology Officer and certain Senior Vice Presidents, who review operating results to make decisions about allocating resources and assessing performance for the entire Group. Hence, the Group operates and manages its business without segments. The Group's net revenues are all generated from customers in the PRC. All the property, plant and equipment of the Group are substantially located at the PRC. Product revenues: relate to sales of apparel, shoes and bags and other products. Other revenues: relate to revenues from product promotion and online advertising, and commission fees charged to third-party merchants which the Company provides platform access for sales of their product, and revenues from logistic and warehouse services provided to vendors of the Group. Revenues from different product groups and services are as follows: Year ended December 31, 2014 2015 2016 RMB RMB RMB Product revenues Apparel Shoes and bags Cosmetics Sportswear and sporting goods Home goods and other lifestyle products Toys, kids and baby Other goods Other revenues Total net revenues |
Subsequent event
Subsequent event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent event | |
Subsequent event | 29. Subsequent event On January 1, 2017, the Company granted 900,000 restricted shares to its senior management, at the same date, the Company also granted 1,320,000 stock options to its senior management at the exercise price of US$13.67 per ordinary share pursuant to the Company's 2014 Share Incentive plan. Twenty five percent of the restricted shares and stock options will be vested and become exercisable on the first anniversary of the grant date; and the remaining seventy five percent of the restricted shares and stock option will be vested and become exercisable on a monthly basis over a three-year period ending on the fourth anniversary of the grant date, so that each installment of 1/48 of the restricted shares and stock option will vested and become exercisable by the end of each full-month period after the first anniversary of the grant date until the fourth anniversary of the grant date. |
Schedule I-Condensed Financial
Schedule I-Condensed Financial Information | 12 Months Ended |
Dec. 31, 2016 | |
Schedule I-Condensed Financial Information | |
Schedule I-Condensed Financial Information | Schedule I—Condensed Financial Information Statements of Income and Comprehensive Income (All amounts in thousands) Year ended December 31, 2014 2015 2016 2016 RMB RMB RMB US$ General and administrative expenses ) ) ) ) Loss from operations ) ) ) ) Interest expense ) ) ) ) Share of loss of affiliates ) ) ) ) Impairment loss of investments ) ) — — Equity in incomes of subsidiaries and VIEs Net income Other comprehensive income, net of tax: Foreign currency translation adjustments ) ) ) ) Share of comprehensive income of subsidiaries — ) Comprehensive income attributable to Vipshop Holdings Limited's shareholders VIPSHOP HOLDINGS LIMITED Schedule I—Condensed Financial Information Balance Sheets (All amounts in thousands, except for share and per share data) As of December 31, 2015 2016 2016 RMB RMB US$ ASSETS Cash and cash equivalents Investment in affiliates Available-for-sale securities investments Investment in subsidiaries and VIEs Amount due from subsidiaries and VIEs TOTAL ASSETS LIABILITIES AND EQUITY Accrued expenses Convertible senior notes Deferred income Total liabilities EQUITY Class A ordinary shares (US$0.0001 par value, 483,489,642 shares authorized, and 100,085,519 and 101,508,264 shares issued and outstanding as of December 31, 2015 and December 31, 2016, respectively) Class B ordinary shares (US$0.0001 par value, 16,510,358 shares authorized, and 16,510,358 and 16,510,358 shares issued and outstanding as of December 31, 2015 and December 31, 2016, respectively) Treasury stock, at cost (1,614,135 and 1,356,918 Class A shares as of December 31, 2015 and December 31, 2016, respectively) ) ) ) Additional paid-in capital Retained earnings Accumulated other comprehensive loss ) ) ) Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY VIPSHOP HOLDINGS LIMITED Schedule I—Condensed Financial Information STATEMENTS OF CASH FLOWS (All amounts in thousands) Year ended December 31, 2014 2015 2016 2016 RMB RMB RMB US$ Cash flow from operating activities: Net income Adjustments to reconcile net income to net cash by operating activities: Equity in incomes of subsidiaries and variable interest entities ) ) ) ) Share of loss of affiliates Impairment loss of investments — — Share-based compensation expenses Amortization of debt issuance cost Changes in operating assets and liabilities: Amounts due from subsidiaries ) Accrued expenses and other current liabilities ) Deferred income — Net cash (used in) generated from operating activities ) Cash flows from investing activities: Investment in affiliates and other investments ) ) — — Investment in available-for-sales securities — ) — — Acquisition of a subsidiary, net of cash acquired ) — — — Net cash used in investing activities ) ) — — Cash flows from financing activities: Proceeds from issuance of convertible notes — — — Repurchase of ordinary shares — ) ) ) Issuance cost of convertible notes offering ) — — — Proceeds from issuance of ordinary shares upon exercise of stock options Other financing activities — — — Net cash provided by (used in) financing activities ) ) ) Effect of exchange rate changes Net increase (decrease) in cash and cash equivalents ) Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period VIPSHOP HOLDINGS LIMITED NOTE TO SCHEDULE I (All amounts in thousands, except for share or per share data) Schedule I has been provided pursuant to the requirement of Rule 12-04(a) and 4-08(e)(3) of Regulation S-X, which require condensed financial information as to financial position, cash flows and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries together exceed 25 percent of consolidated net assets as of end of the most recently completed fiscal year. As of December 31, 2015 and 2016, RMB1,957,529 and RMB4,278,531 of the restricted capital and reserves are not available for distribution respectively, and as such, the condensed financial information of Vipshop Holdings Limited ("Parent Company") has been presented. Relevant PRC laws and regulations also restrict the subsidiaries in PRC, the VIEs and VIEs' subsidiaries from transferring a portion of their net assets to the Company in the form of loans and advances or cash dividends. No dividends have been paid by the subsidiaries in the PRC of the Company or the VIEs to the Company during the periods presented. Total restricted net assets of the Group represent net assets of the subsidiaries in the PRC, the VIEs and VIE's subsidiaries. The balance of restricted net assets was RMB1,957,529 and RMB4,278,531 of which RMB829,500 and RMB829,500 was attributed to the net assets of the VIEs and VIEs' subsidiaries, and RMB1,128,029 and RMB1,128,029 was attributed to the paid in capital of the WFOE, as of December 31, 2015 and 2016, respectively. During the each of the three years in the period ended December 31, 2016, no cash dividend was declared and paid by the Parent Company. Basis of preparation The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in its consolidated financial statements, except that the Parent Company has used the equity method to account for its investment in its subsidiaries, VIEs and VIEs' subsidiaries. Accordingly, the condensed financial information presented herein represents the financial information of the Parent Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosure certain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying Consolidated Financial Statements. |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Basis of Presentation | (a) Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). |
Principles of consolidation | (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs and VIEs' subsidiaries for which the Company is the primary beneficiary. All intercompany transactions, balances and unrealized profit and losses have been eliminated on consolidation. The Company evaluates the need to consolidate its VIEs and VIEs' subsidiaries in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. As foreign-invested companies engaged in Internet-based businesses is subject to significant restrictions under current PRC laws and regulations, the Company and its PRC subsidiary, Vipshop China, as a wholly foreign owned enterprise ("WFOE"), are both restricted from holding the licenses that are necessary for the online operation in China. To comply with these restrictions, The Company conducts the online operations principally through Vipshop Information. Vipshop Information holds the licenses necessary to conduct the Internet-related operations of vipshop.com and vip.com in China. Since the Company does not have any equity interests in Vipshop Information, in order to exercise effective control over its operations, the Company, through its wholly owned subsidiary, the WFOE, entered into a series of contractual arrangements with Vipshop Information and its shareholders, pursuant to which the Company is entitled to receive effectively all economic benefits generated from Vipshop Information shareholders' equity interests in it. Details of certain key agreements entered into between the WFOE, Vipshop Information and each of its individual shareholders on January 20, 2011 and amended on October 8, 2011 are as follows: Power of Attorney Agreements: Each equity holder of Vipshop Information irrevocably authorized the WFOE to exercise the rights related to their shareholdings, including attending shareholders' meetings and voting on their behalf on all matters, including but not limited to matters related to the transfer, pledge or disposition of their respective equity interests in Vipshop Information, and appointment of the executive directors and senior management of Vipshop Information. The WFOE has the right to appoint any individual or entity to exercise the power of attorney on its behalf. Each power of attorney will remain in effect until the shareholder ceases to hold any equity interest in Vipshop Information. Amended and Restated Exclusive Business Cooperation Agreement: The WFOE entered into an agreement with Vipshop Information to provide Vipshop Information with technical, consulting and other services. In considerations of these services, Vipshop Information shall pay the WFOE fees equal to 100% of its net income of Vipshop Information, provided that the WFOE, at its sole discretion, shall have the right to adjust the rate of the service through written notice. The WFOE is the exclusive provider of these services for a term of 10 years and may be extended for a period to be determined by the WFOE. The WFOE may terminate this agreement at any time by giving 30 days prior written notice. Vipshop Information has no right to terminate this agreement unless the WFOE commits gross negligence or fraud. Amended and Restated Equity Interest Pledge Agreements: Each equity holder of Vipshop Information pledged all their respective equity interests in Vipshop Information as security to ensure that Vipshop Information fully performs its obligations under the Exclusive Business Cooperation Agreement, and pays the consulting and service fees to the WFOE when the fees becomes due. The agreement will remain in effect until all of the obligations of Vipshop Information under the Amended and Restated Exclusive Business Cooperation Agreement have been duly performed or terminated. Amended and Restated Exclusive Option Agreements: Each equity holder of Vipshop Information granted the WFOE an irrevocable and exclusive right to purchase, or designate one or more persons to purchase, their equity interest in Vipshop Information at the WFOE's sole and absolute discretion to the extent permitted by the PRC laws. The purchase price is 10 Renminbi ("RMB") (US$1.44); if appraisal is required by laws of the PRC at the time when the WFOE exercises the option, the parties shall negotiate in good faith, to make necessary adjustments to the purchase price based on the appraisal result to comply with applicable laws of the PRC. The term of this agreement is ten years from the execution date of October 8, 2011, which may be extended for a period to be determined by the WFOE. Exclusive Purchase Framework Agreement: The WFOE and Vipshop Information entered into this agreement during the third quarter of fiscal 2011. Under this agreement, Vipshop Information agrees to purchase products or services exclusively from the WFOE or its subsidiaries. Vipshop Information and its subsidiaries must not purchase from any third party products or services which the WFOE is capable of providing. The term of this agreement is ten years from September 1, 2011. If neither party objects in writing nor both parties remain cooperating at the expiration of the agreement, the parties will continue to be bound by this agreement until a new agreement is entered into. Vipshop Information must pay the WFOE for its products an amount, which includes a service fee, based on the unit price and the quantity of the products ordered by Vipshop Information. The WFOE may terminate this agreement at any time by giving 15 days' prior written notice. Vipshop Information has no right to terminate this agreement unless the WFOE commits gross negligence or fraud. In October 2012, the Company effected transfer of 10.4% of equity interest from one of the former shareholder of Vipshop Information to Mr. Shen, an existing shareholder of Vipshop Information. In August 2015, the Company effected transfer of 22.0% of equity interest from two of the former shareholders of Vipshop Information to Mr. Shen and a concurrent capital increase of Vipshop Information from RMB24.5 million to RMB274.5 million as contributed by Mr. Shen. In December 2015, the Company effected a concurrent capital increase of Vipshop Information to RMB824.5 million as contributed by Mr. Shen. The Company amended the contractual arrangements the relevant entities had as explained above with Mr. Shen and Mr. Arthur Xiaobo Hong to reflect each transfer. As of December 31, 2016, shareholders of Vipshop Information include Mr. Shen and Mr. Arthur Xiaobo Hong, holding 99.23% and 0.77% of the total equity interests in Vipshop Information, respectively. The Company participated significantly in the design of Vipshop Information. Based on the Amended and Restated Equity Pledge Agreements, the Amended and Restated Exclusive Option Agreement, and the Power of Attorney Agreements dated January 20, 2011, the Company has the ability to effectively control Vipshop Information through the WFOE. The Company is also able to receive a majority of the economic benefits of Vipshop Information, because of its ability to effectively determine the service fees payable by Vipshop Information to the WFOE under the Amended and Restated Exclusive Business Cooperation Agreement, and through the Exclusive Purchase Framework Agreement. Therefore, the Company has determined that it is the primary beneficiary of Vipshop Information and has consolidated its respective results for the periods presented. The Company also has another set of contractual arrangements among Lefeng Shanghai, Lefeng Information, and shareholders of Lefeng Information, under which Lefeng Shanghai is the primary beneficiary of Lefeng Information and the Company consolidates Lefeng Information through Lefeng Shanghai. The contractual arrangements thereunder are substantially similar to the set with Vipshop Information described above. Other than Vipshop Information and Lefeng Information, the Company has no interest in any other variable interest entities. Risks in relation to the VIE structure The Group believes that the VIE arrangements are in compliance with PRC law and are legally enforceable. The equity holders of the VIEs are also shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, there are certain risks related to the VIE arrangements, which include but are not limited to the following: • If the Group's ownership structure, are found to be in violation of any existing or future PRC laws or regulations, the relevant governmental authorities, including the China Securities Regulatory Commission, would have broad discretion in dealing with such violation, including levying fines, confiscating its income or the income of the WFOE, Vipshop Information, Lefeng Shanghai, or Lefeng Information, revoking the business licenses or operating licenses of the WFOE, Vipshop Information, Lefeng Shanghai, or Lefeng Information, shutting down the Group's servers or blocking the Group's websites, discontinuing or placing restrictions or onerous conditions on the Group's operations, requiring the Group to undergo a costly and disruptive restructuring, restricting or prohibiting the Group's use of various funding to finance its business and operations in China, and taking other regulatory or enforcement actions that could be harmful to the Group's business; • The Group relies on contractual arrangements with the VIEs and their equity holders for a majority all of its PRC operations, which may not be as effective as direct ownership in providing operational control; • The Group may have to incur significant cost to enforce, or may not be able to effectively enforce, the contractual arrangements with the VIEs and their equity holders in the event of a breach or non-compliance by the VIEs or their equity holders; and • Each of the shareholders of the VIEs is also a director of the Company or its subsidiaries, and has a duty of care and loyalty to the Company and its shareholders as a whole under Cayman Islands law. Under the contractual arrangements with the VIEs and their shareholders, (a) the Company may replace any such individual as a shareholder of the VIEs at the Company's discretion, and (b) each of these individuals has executed a power of attorney to appoint the WFOE or its designated third party to vote on their behalf and exercise shareholder rights of the VIE. However, the Company cannot assure that these individuals will act in the best interests of the Company should any conflicts of interest arise, or that any conflicts of interest will be resolved in the Company's favor. These individuals may breach or cause the VIE to breach the existing contractual arrangements. If the Company cannot resolve any conflicts of interest or disputes between the Company and any of these individuals, the Company would have to rely on legal proceedings, which may be expensive, time-consuming and disruptive to its operations. There is also substantial uncertainty as to the outcome of any such legal proceedings. • There are, however, substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. Particularly, in January 2015, the Ministry of Commerce published a discussion draft of the proposed Foreign Investment Law for public review and comments. Under the draft Foreign Investment Law, variable interest entities would also be deemed as foreign-invested enterprises, if they are ultimately "controlled" by foreign investors, and be subject to restrictions on foreign investments. The draft Foreign Investment Law, if enacted as proposed, may materially impact the entire legal framework regulating the foreign investments in China as well as the viability of the Group's current corporate structure, corporate governance and business operations in many aspects. The financial information of the Company's VIEs and VIEs' subsidiaries, including total assets, total liabilities, net revenues, total operating expenses, net income attributable to the Company and cashflows after intercompany eliminations are as follows: As of December 31, 2015 2016 RMB RMB Total assets Current Liabilities: Accounts payable ) ) Advance from customers ) ) Accrued expenses and other current liabilities ) ) Amounts due to related parties ) ) Deferred income ) ) Total current liabilities ) ) Deferred tax liability ) ) Deferred income ) ) Total liabilities ) ) Year ended December 31, 2014 2015 2016 RMB RMB RMB Net revenues Total operating expenses ) ) ) Net income Year ended December 31, 2014 2015 2016 RMB RMB RMB Net cash provided by (used in) operating activities (Note a) ) ) Net cash (used in) provided by investing activities ) Net cash provided by (used in) financing activities ) Note a: Cash flows provided by (used in) operating activities in 2014, 2015 and 2016 include amounts due to the Group's subsidiaries of RMB718,759, RMB(1,649,956) and RMB(994,474). There are no consolidated VIEs' assets that are collateral for the VIEs' obligations or are restricted solely to settle the VIEs' obligations. The Company has not provided any financial support that it was not previously contractually required to provide to the VIEs. |
Use of Estimates | (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management of the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates. The Group's management based their estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group's financial statements include inventory write-down, valuation of goodwill and intangible assets acquired in the business acquisitions and acquisition of significant equity affiliates both on the acquisition dates and at the time of impairment assessments, valuation of significant other investments impairment assessment and valuation of receivables arising from customer financing. Changes in facts and circumstances may result in revised estimates. |
Cash and Cash Equivalents | (d) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid investments with maturity of less than three months. Cash and cash equivalents are placed with financial institutions with high-credit ratings and quality. |
Held-to-maturity securities | (e) Held-to-maturity securities The Group invests in debt securities which have fixed maturity dates, pay a fixed return on the amount invested and early redemption of these securities is not allowed. The Group classifies these investments as held-to-maturity as it has both the positive intent and ability to hold them until maturity. |
Inventories | (f) Inventories Inventory used to be stated at the lower of cost or market before 2016. The Group early adopted Accounting Standard Update ("ASU") 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory and applied it prospectively from 2016. Upon the adoption of this new accounting guidance, inventory is stated at the lower of cost or net realisable value. Cost of inventory is determined using the weighted average cost method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs, disposal, and transportation. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value for slow-moving merchandise and damaged goods. The amount of write down is also dependent upon factors such as whether the goods are returnable to vendors, inventory aging, historical and forecasted consumer demand, and promotional environment. The Group assesses the inventory write-down based on different product categories and applies a certain percentages based on aging. The Group classifies all goods into the following two categories: non-returnable goods and returnable goods. Non-returnable goods cannot be returned to suppliers and general inventory write-down of different percentages are applied to these goods within the different aging categories. These percentages were developed based on historical write-down on these different types of goods. In addition to general write-down, specific write-down will also be applied to non-returnable goods if assessed to be needed based on the factors mentioned above. Returnable goods will have no general write-down based on aging but specific write down will be made at the end of each reporting periods based on forecast sales, conditions of the goods and planned promotions. Write downs are recorded in cost of goods sold in the consolidated statements of income and comprehensive income. |
Property and Equipment | (i) Property and Equipment Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income. Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows, taking into account the assets' estimated residual value: Classification Estimated useful life Buildings 20 years Furniture, fixtures and equipment 2 to 10 years Leasehold improvements Shorter of lease term or the estimated useful life of lease improvements Motor vehicles 5 years Software 3 years Direct and incremental costs related to the construction of assets, including costs under the construction contracts, duties and tariffs, equipment installation and shipping costs, are capitalized. Management estimates the residual value of its furniture, fixtures and equipment and motor vehicles to be 5%. |
Capitalization of interest | (j) Capitalization of interest Interest and amortization of deferred financing costs incurred on funds used to construct the Group's warehouses during the active construction period are capitalized. Interest subject to capitalization primarily includes interest paid or payable on the Group's convertible senior notes due 2019 at interest of 1.5%. The capitalization of interest and amortization of deferred financing costs ceases once a project is substantially completed or development activity is suspended for more than a brief period. The amount to be capitalized is determined by applying the weighted average interest rate of the Group's outstanding borrowings to the average amount of accumulated capital expenditures for assets under construction during the year and is added to the cost of the underlying assets and amortized over their respective useful lives. Total interest expenses incurred amounted to RMB84,281, RMB94,077 and RMB99,437, of which RMB9,033, RMB8,315 and RMB14,242 were capitalized for the years ended December 31, 2014, 2015 and 2016, respectively. |
Land use rights | (k) Land use rights Land use rights represent amounts paid for the Group's lease for the use right of lands located in Zhaoqing City, Tianjin City, Qingdao City, Ezhou City, Zhengzhou City, Guangzhou City and Jianyang City of PRC. Amounts are charged to earnings ratably over the term of the lease of 50 years. |
Intangible assets, net | (l) Intangible assets, net Acquired intangible assets mainly consist of domain name, customer relationship, non-compete agreements, trademarks and payment license acquired from third parties and from business combination. Domain name and trademarks Domain name and trademarks purchased from third parties are initially recorded at cost and amortized on a straight-line basis over the estimated economic lives of approximately two to three years. Intangible assets arising from business combination Identifiable intangibles assets are required to be determined separately from goodwill based on their fair values. In particular, an intangible asset acquired in a business combination should be recognized as an asset separate from goodwill if it satisfies either the "contractual-legal" or "separability" criterion. Intangible assets with a definite economic life are carried at cost less accumulated amortization. Amortization for identifiable intangibles assets are computed using the straight-line method over the intangible assets' economic lives. Alternatively, intangible assets acquired in a business combination with indefinite lives are carried out cost less than subsequent accumulated impairment loss. Cost to renew or extend the term of a recognized intangible asset is charged to profit or loss as incurred in the consolidated statements of income and comprehensive income. Estimated economic lives of the intangible assets are as follows: Classification Estimated economic life Customer relationship 4 - 14 years Trademarks 2 - 5 years Non-compete agreement 3 years Domain name 2 - 3 years Payment license Indefinite life |
Investment in affiliates | (m) Investment in affiliates Affiliated companies are entities over which the Group has significant influence, but which it does not control. The Group generally considers an ownership interest of 20% or higher to represent significant influence. Investments in affiliates are accounted for by the equity method of accounting. Under this method, the Group's share of the post-acquisition profits or losses of the affiliated companies is recognized in the statement of income and comprehensive income and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. Unrealized gains on transactions between the Group and its affiliated companies are eliminated to the extent of the Group's interest in the affiliated companies; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Group's share of losses in an affiliated company equals or exceeds its interest in the affiliated company, the Company does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the affiliated company. The Group is required to perform an impairment assessment of its investments whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary. The Group assess its equity investments for other-than-temporary impairment by considering all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information such as financing needs, the Group's intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value, and the severity and duration of the impairment. The Group has recorded impairment losses in the periods presented. As of December 31, 2015 and 2016, the accumulated impairment loss of investments were RMB58,510 and RMB58,510, respectively. The other-than-temporary impairment recorded in 2015 on the equity affiliate due to sustained depression of the affiliate's expected results of operations. |
Other investments | (n) Other investments Other investments represent investments in equity security of private companies which the Group owes equity interest, over which the Group exerts no significant influence and are measured initially at cost. The Group reviews the investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investments may not be recoverable. Certain of the Group's investments are in development stage companies whose success depends on factors including the ability of the investee companies to raise additional funds in financial markets that can be volatile and other key business factors, any of which may impact the Company's ability to recover its investments. At Decemer 31, 2015 and 2016, the accumulated impairment loss of invesetments were RMB41,239 and RMB110,608, respectively. |
Available for sale securities | (o) Available for sale securities The Group invests in marketable equity securities and debt securities to meet business objectives. These marketable securities are reported at fair value, classified and accounted for as available-for-sale securities in investment securities. The assessment of a decline in the fair value of an individual security is based on whether the decline is other-than-temporary. The Group assesses its available-for-sale securities for other-than-temporary impairment by considering factors including, but not limited to, its ability and intent to hold the individual security, severity of the impairment, expected duration of the impairment and forecasted recovery of fair values. Investments classified as available-for-sale securities are reported at fair value with unrealized gains or losses, if any, recorded in accumulated other comprehensive income in shareholders' equity. If the Group determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of the write-down is accounted for as a realized loss charged in the consolidated statement of income and comprehensive income. The fair values of the investments would not be adjusted for subsequent recoveries in fair values. The Group recorded nil, nil and RMB48,634 of impairment on available-for-sale securities for the years ended December 31, 2014, 2015 and 2016. |
Impairment of long-lived assets (other than goodwill and intangible assets with indefinite life) | (p) Impairment of long-lived assets (other than goodwill and intangible assets with indefinite life) The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Group assesses the recoverability of these long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the future undiscounted cash flow is less than the carrying amount of the assets, the Group recognizes an impairment equal to the difference between the carrying amount and fair value of these assets. The Group recorded no impairment for the years ended December 31, 2014, 2015 and 2016, respectively. |
Goodwill | (q) Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired in a business combination. Goodwill is not amortized but is tested for impairment on an annual basis as of December 31, and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with Accounting Standards Codification ("ASC") 350-20, a company firstly has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step quantitative impairment test is mandatory. The Company may also elect to proceed directly to the two-step impairment test without considering qualitative factors. The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount. If the carrying amount of each reporting unit exceeds its fair value, an impairment loss equal to the difference between the implied fair value of the reporting unit and their carrying amounts will be recorded. Application of impairment test for goodwill requires significant management judgment, including the identification of the reporting unit, assigning assets, liabilities and goodwill to each reporting unit, and determining the fair value of each reporting unit. The fair value of each reporting unit is determined by analysis of discounted cash flows. The significant assumptions regarding reporting unit's future operating performance are revenue growth rates, costs of goods and operating expenses growth rates, discount rates and terminal values. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. In 2015, management has conducted step 1 of the quantitative impairment test to compare the carrying value of the reporting unit, including assigned goodwill, to its respective fair value. The fair value of the reporting unit was estimated by using the income approach. Based on the quantitative test, it was determined that the fair value of the reporting unit tested exceeded its carrying amount and, therefore, step two of the two-step goodwill impairment test was not required. The management concluded that goodwill was not impaired as of December 31, 2015. In 2016, management has conducted the qualitative impairment test to compare the carrying value of the reporting units, including assigned goodwill, to its respective fair value. Based on the qualitative impairment assessment, it was determined that it is more likely than not the fair values of the reporting units tested exceeded their carrying amounts and, therefore, quantitative impairment test for goodwill was not required. The management concluded that goodwill were not impaired as of December 31, 2016. |
Intangible assets with indefinite lives | (r) Intangible assets with indefinite lives Intangible assets with indefinite lives represents the purchase price of the payment license in a business combination. The payment license was determined to have an indefinite life. In determining its indefinite life, the Company considered the following: the expected use of the intangible; the longevity of the license; the legal, regulatory and contractual provisions that affect their maximum useful life; the Company's ability to renew or extend the asset's legal or contractual life without substantial costs; effects of the regulatory environment; maintenance expenditures required to obtain the expected future cash flows from the asset; and considerations for obsolescence, demand, competition and other economic factors. Intangible assets with indefinite lives is not amortized but is tested for impairment on an annual basis as of December 31, and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In 2016, management has conducted the qualitative impairment test and the qualitative assessment indicated that it is more likely than not that the Company's indefinite lived intangible assets are not impaired. |
Business combinations and non-controlling interests | (s) Business combinations and non-controlling interests The Group accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 "Business Combinations". The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities incurred by the Group to the sellers and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total costs of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. For the Group's majority-owned subsidiaries and subsidiaries of VIEs, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Group. Consolidated net income on the consolidated statements of income and comprehensive income includes the net income (loss) attributable to non-controlling interests. The cumulative results of operations attributable to non-controlling interests, are recorded as non-controlling interests in the Group's consolidated balance sheets. |
Debt issuance costs and debt discounts | (t) Debt issuance costs and debt discounts Debt issuance costs and debt discounts are amortized as interest expense, using the effective interest method, through the earlier of the maturity date of the Convertible Senior Notes or the date of redemption, if any. Debt issuance costs and debt discounts are recorded as a direct deduction from the face amount of Convertible Senior Notes. |
Revenue recognition | (u) Revenue recognition The Group recognizes revenue from the sale of apparel, fashion goods, cosmetics, home goods and lifestyle products and other merchandise through its online platforms, including its internet website and cellular phone application. The Group recognizes revenue when persuasive evidence of an arrangement exists, products are delivered, the price to the buyer is fixed or determinable and collectability is reasonably assured. The Group utilizes delivery service providers to deliver goods to its customers directly from its own warehouses. The Group estimates and defers revenue and the related product costs for goods that are in-transit to the customers. The Group offers customers with an unconditional right of return for a period of 7 days upon receipt of products on sales from vip.com and lefeng.com platforms. The Group defers revenue from sales of vip.com platforms until the return period expires as the Group cannot reasonably estimate the amount of future returns. The Group recognizes revenue from sales of lefeng.com platforms when products are delivered to customers because historical returns on sales on lefeng.com are insignificant. Revenue was recorded on a gross basis, net of surcharges and value added tax ("VAT") which is mainly 17% of gross sales. Surcharges are sales related taxes representing the City Maintenance and Construction Tax and Education Surtax. The Group recorded revenue on a gross basis because the Group has the following indicators for gross reporting: it is the primary obligor of the sales arrangements, is subject to inventory risks of physical loss, has latitude in establishing prices, has discretion in suppliers' selection and assumes credit risks on receivables from customers. The Group also retains some of general inventory risks despite its arrangements to return goods to some vendors within limited time periods. Discount coupons membership reward program The Group voluntarily provides discount coupons through certain co-operative websites or through public distributions during its marketing activities. These coupons are not related to prior purchases, and can only be utilized in conjunction with subsequent purchases on the Group's platforms. These discount coupons are recorded as reduction of revenues at the time of use. The Group has established a membership reward program wherein customers earn one point for one RMB of purchase made on the Group's platforms. Membership reward points can be either exchanged into coupons to be used in connection with subsequent purchases, or exchanged into free gifts. The expiry dates of these reward points vary based on different individual promotional programs, while the coupons expire three months after redemption. Prior to fiscal 2014, the Group accrued liabilities for the estimated value of the points earned and expected to be redeemed, which were based on all outstanding reward points related to prior purchases at the end of each reporting period, as it did not have sufficient historical data to reasonably estimate the usage rate of these reward points. Starting from 2014, the Group derecognized the deferred revenue liability and began to recognize revenue based on an estimated breakage rate as it has accumulated sufficient historical data to be able to reasonably estimate the usage rate of these reward points. All the reward points expired as of December 31, 2015. Effective from January 1, 2015, the Company started to adopt a new membership reward points program (the "2015 Reward Program"). Under the 2015 Reward Program, the Company grants Weipin Coin to the customers when they purchase goods from vipshop.com platforms. Customers earn Weipin Coins for purchases made on the Group's platforms. Weipin Coin can be either exchanged into coupons to be used in connection with subsequent purchases, or directly offset against payments when customers make their future purchases. The Group accrued liabilities for the estimated value of the Weipin Coins earned and expected to be redeemed, which were based on all outstanding reward points related to prior purchases at the end of each reporting period, as the Group does not have sufficient historical data to reasonably estimate the usage rate of these new reward points. These liabilities reflect management's best estimate of the cost of future redemptions. As of December 31, 2015 and 2016, the Group recorded deferred revenue related to rewards earned from prior purchases of RMB87,019 and RMB117,617 respectively. The Group does not charge any membership fees from its registered members. New members who register on the Group's platforms or existing members introducing new members to the Group's website will be granted free Weipin Coins, which can be used to offset against payments for future purchases. These Weipin Coins are not related to prior purchases and are recorded as reduction of revenues at the time of use. Credit sales and amounts collected by delivery service providers but not yet remitted to the Group are classified as accounts receivable on the consolidated balance sheets. Payments received in advance of delivery and unused prepaid cards credits are classified as advances from customers. Revenues include fees charged to customers for shipping and handling expenses. The Company pays fees to the delivery service providers and records such fees as shipping and handling expenses. Other revenues Other revenues consist of fees charged to third-party merchants which the Group provides platform access for sales of their products. The Group is not the primary obligor on these transactions, it does not bear the inventory risk, does not have the ability to establish prices and does not provide any fulfillment services as the goods are directly shipped from third-party merchants to end customers. Upon successful sales on the Group's platforms, the Group will charge the third-party merchants commission fees. Commission fees are recognized on a net basis at the point of sales of products, net of return allowance. The Group recognizes other revenue from providing logistic services to external customers, revenue from logistic services are recognized upon the completion of the performance of services. The Group conducts product promotion activities for certain brands on its website, including advanced and prominent placement of vendors' products on its website, and technical consultations services related to on-line advertising. Moreover, the Group also provide inventory and warehouse management services to certain suppliers. These revenues are recognized over the period during which the services are provided and the revenues are earned, net of 6% or 11% VAT, in certain pilot locations as a result of the pilot VAT reform program. |
Cost of goods sold | (v) Cost of goods sold Cost of goods sold consists primarily of cost of merchandise sold and inventory write-down. The amounts of inventory write-down were RMB218,108, RMB293,946 and RMB303,233 for the years ended December 31, 2014, 2015 and 2016, respectively. Cost of goods sold does not include fulfillment expenses, therefore the Group's cost of goods sold may not be comparable to other companies which include such expenses in their cost of goods sold. The Group provides financing to some of its suppliers by advancing them cash for portions of accounts payables the Group owes to them, and receive interest over the financing periods which is presented as a reduction to cost of goods sold. The advances to these suppliers related to the Group's financing activities have no offsetting rights against the Group's accounts payables to these suppliers, and are presented as part of other receivables and prepayments in the consolidated balance sheets (note 5). |
Fulfillment expenses | (w) Fulfillment expenses Fulfillment expenses primarily consist of payroll, bonus and benefits of logistics staff, logistics centers rental expenses, shipping and handling expenses and packaging expenses. |
Marketing expenses | (x) Marketing expenses Marketing expenses primarily consist of payroll, bonus and benefits of marketing staff, advertising costs, agency fees and costs for promotional materials. Advertising expenses are charged to the statements of income and comprehensive income in the period incurred. The amounts of advertising expenses incurred were RMB787,687, RMB1,022,398 and RMB1,671,779 for the years ended December 31, 2014, 2015 and 2016, respectively. |
Technology and content expenses | (y) Technology and content expenses Technology and content expenses primarily consist of payroll, bonus and benefits of the staff in the technology and system department, telecommunications expenses, model fees and photography expenses. |
General and administrative expenses | (z) General and administrative expenses General and administrative expenses primarily consist of payroll, bonus and benefit costs for retail and corporate employees, legal, finance, information systems, rental expenses and other corporate overhead costs. |
Foreign Currency Transactions and Translations | (aa) Foreign Currency Transactions and Translations The functional currency of the Company, Vipshop HK and Lefeng.com Limited are the United States dollar ("US dollar"). The functional currency of all the other significant subsidiaries and the variable interest entities is RMB. Foreign currency denominated monetary assets and liabilities have been translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies have been translated into the functional currency at the applicable rates of exchange prevailing on the date transactions occurred. Transaction gains and losses are recognized in the consolidated statements of income and comprehensive income. The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the People's Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China foreign exchange trading system market. The Group's cash and cash equivalents denominated in RMB amounted to RMB3,216,485 and RMB4,021,551 at December 31, 2015 and 2016, respectively. Change in Reporting Currency to the RMB Effective January 1, 2015, the Company changed its reporting currency from US dollar to RMB. The change in reporting currency is to better reflect the Company's performance and to improve investors' ability to compare the Company's financial results with other publicly traded companies in the industry. Prior to January 1, 2015, the Company reported its consolidated balance sheets and consolidated statements of income and comprehensive income and shareholder's equity and cash flows in US dollar. The audited financial results for the year ended December 31, 2015 are stated in RMB. The related financial statements prior to January 1, 2015 have been recast to reflect RMB as the reporting currency for comparison to the financial results for the year ended December 31, 2015. The financial statements of the Company have been translated into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded as a component of accumulated other comprehensive income or loss in the consolidated statements of changes in shareholders' equity. |
Convenience translation | (ab) Convenience translation Translations of balances in the consolidated balance sheets, consolidated statements of income and comprehensive income, and consolidated statements of cash flows from RMB into US dollar as of and for the year ended December 31, 2016 are solely for the convenience of the readers and were calculated at the rate of 6.9430 representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2016. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US dollar at that rate on December 30, 2016, or at any other rate. |
Income Taxes | (ac) Income Taxes Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Group is required to estimate its income taxes in each of the jurisdictions in which it operates. The Group accounts for income taxes using the liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Value added taxes | (ad) Value added taxes The Company's PRC subsidiaries are subject to VAT at rates ranged from 6% to 17% on proceeds received from customers, and are entitled to a deduction for VAT already paid or borne on the goods purchased by it and utilized in the production of goods that have generated the gross sales proceeds and service incurred. The VAT balance is recorded either in other current liabilities or other current receivables on the consolidated balance sheets. |
Comprehensive income (loss) | (ae) Comprehensive income (loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. During the periods presented, comprehensive income (loss) is reported in the consolidated statements of income and comprehensive income, and other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gain or loss of available-for-sales securities. |
Concentration of credit risk | (af) Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, held-to-maturity securities, amounts due from related parties, other receivables and prepayments. The Group places its cash and cash equivalents and held-to-maturity securities with financial institutions with high-credit ratings and quality. Accounts receivable primarily comprise of amounts receivable from product delivery service providers, receivables from consumer and supplier financing services. There are no significant credit risk concentrated with any specific de livery service providers, end customers under consumer financing, or suppliers under financing service arrangements. Account receivables from product delivery service providers relates to amounts collected from customers by the service providers when products are delivered. The Group conducts a credit evaluation of these service providers and require a certain amount of security deposits from them to manage its credit risk. The principal amounts of all held-to-maturity securities are guaranteed by the issuers. Amounts due from related parties are prepayments related to purchases of goods from the entities controlled by shareholders of the Company. Due to the nature of the relationship, the Company considers there to be no collection risks in regard to amounts due from related parties. With respect to advances to product suppliers, the Group performs on-going credit evaluations of the financial condition of its suppliers. The Group establishes an allowance for doubtful accounts based upon estimates of factors surrounding the credit risk of delivery service providers, end customers, suppliers and other information. |
Fair value of financial instruments | (ag) Fair value of financial instruments Fair value is considered to be the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs may be used to measure fair value include: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Measured at fair value on a recurring basis The Group's financial assets and liabilities or nonfinancial assets and liabilities that were required to be measured at fair value on a recurring basis as at December 31, 2016 include available-for-sale securities investments. As of December 31, 2015 and 2016, information about inputs into the fair value measurements of the Group's assets that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows. Fair Value Measurements at Reporting Description As of Quoted Prices Significant Significant RMB RMB RMB RMB Available-for-sale investments—marketable equity securities — — Available-for-sale investments—debt security — — Fair Value Measurements at Reporting Description As of Quoted Prices Significant Significant RMB RMB RMB RMB Available-for-sale investments—marketable equity securities — — Available-for-sale investments—debt security — — Available-for-sale securities investments represent the marketable equity securities and debt securities invested by the Group. The marketable equity securities are carried at fair values. The Group measures its listed equity securities using quoted prices for the underlying securities in active markets, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 1. The debt securities consist of investments in private companies' redeemable shares that has stated maturity and pay a prospective fixed rate of return. The investment is recorded at fair value on a recurring basis. The fair value is measured using discounted cash flow model based on contractual cash flow and a discount rate of prevailing market yield for products with similar terms as of the measurement date, as such, it is classified within Level 2 measurement. As of December 31, 2015 and 2016, gross unrealized gains of RMB2,498 and RMB11,742 and gross unrealized losses of RMB10,281 and nil were recorded on listed equity securities, respectively. Impairment charges of nil and RMB48,634 were recorded for years ended December 31, 2015 and 2016, respectively. Measured at fair value on a non-recurring basis Other than the impaired intangible assets (Note 9), investment in affiliates (Note 10), and other investments (Note 11), the Group did not have any assets and liabilities that were measured at fair value on a nonrecurring basis. The estimated fair values of the impaired intangible assets, investment in affiliates and other investments at the time of impairment test were estimated by applying unobservable inputs to the discounted cash flow valuation methodology that are significant to the measurement of the fair value of these assets (Level 3). The carrying values of the Group's financial instruments, including cash and cash equivalents, accounts receivable, other receivables, accounts payable, other current liabilities, amounts due from and to related parties, approximate their fair values due to the short term nature of these instruments. The estimated fair value of convertible senior notes as of December 31, 2015 and 2016 were approximately RMB4,346,278 and RMB4,382,445, respectively, as compared to its carrying value of RMB4,058,181 and RMB4,381,698, respectively. Fair value was estimated using quoted market prices and represented a level 1 measurement. The carrying value of the Group's short-term held-to-maturity securities securities approximate their fair values due to the short term nature and significant inputs are observable or can be derived principally from, or corroborated by, observable market data (Level 2). The Group measures certain assets, including investment in affiliates, and other investments, at fair value on a nonrecurring basis when they are deemed to be impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include management judgments, future performance projections, etc. An impairment charge to these investments is recorded when the cost of the investment exceeds its fair value and this condition is determined to be other-than-temporary. |
Operating leases | (ah) Operating leases Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Other leases are accounted for as capital leases. Payments made under operating leases, net of any incentives received by the Group from the leasing company, are charged to the statements of income and comprehensive income on a straight-line basis over the lease periods. |
Share-based Compensation | (ai) Share-based Compensation Employee share-based compensation Share-based payments made to employees, including employee stock options, and non-vested shares issued to employees which the Company has a repurchase option, are recognized as compensation expenses over the requisite service periods. The Group measures the cost of employee services received in exchange for share-based compensation at the grant date fair value of the awards. The Company has elected to recognize compensation expense on a straight-line basis over the requisite service period for the entire award with graded vesting provided that the amount of compensation cost recognized at any date must at least equal the portion of the grant-date value of the award that is vested at that date. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods. Non-employee share-based compensation Share-based compensation made to non-employees are recognized as compensation expenses ratably over the requisite service periods. The Group measures the cost of non-employee services received in exchange for share-based compensation based on the fair value of the equity instruments issued. The Group measures the fair value of the equity instruments in these transactions using the stock price and other measurement assumptions on the measurement date, which is determined as the earlier of the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or the date at which the counterparty's performance is complete. As the quantity and terms of the equity instruments issued to non-employees are known up front, the Group recognizes the cost incurred during financial reporting periods before the measurement date. The Group measures the equity instruments at their then-current fair values at each of the financial reporting dates, and attributes the changes in those fair values over the future services period until the measurement date has been established. |
Earnings per share | (aj) Earnings per share Basic earnings per share are computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. |
Treasury stock | (ak) Treasury stock Treasury stock represents ordinary shares repurchased by the Group that are no longer outstanding and are held by the Group. The repurchase of ordinary shares is accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. The cost of treasury stock is transfered to "additional paid-in capital" when it was re-issued for the purpose of stock options exercised and share awards. |
Recent Changes in Accounting Standards | (al) Recent Changes in Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued, ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)", which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The accounting guidance also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfil a contract. ASU 2014-09 can be adopted using one of two retrospective application methods. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date", which defers the effective date of ASU 2014-09 by one year, to fiscal years beginning after December 15, 2017, and interim periods therein. Additionally, the FASB issued the following various updates affecting the guidance in ASU 2014-09. The effective dates and transition requirements are the same as those in ASC Topic 606 above. In March 2016, FASB issued an amendment to the standard, ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations" Under the amendment, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be provided by the other party (as an agent). The Group currently expects to adopt ASU 2014-09 and ASU 2016-08 and related topics in its first quarter of 2018, and is evaluating which transition approach to use. In April 2016, FASB issued ASU 2016-10, "Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing", to clarify identifying performance obligations and the licensing implementation guidance, which retaining the related principles for those areas. In May 2016, the FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients". This update addresses narrow-scope improvements to the guidance on collectability, noncash consideration and completed contracts at transition. The update provides a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. Then, in December 2016, the FASB issued ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers". The updates in ASU 2016-20 affect narrow aspects of the guidance issued in ASU 2014-09. The Group is in the process of evaluating the impact of adoption of this guidance on the consolidated financial statements. The Group plans to adopt these ASU beginning in the first quarter of fiscal 2018. In November 2015, the FASB issued ASU 2015-17, "Income Taxes (Topic 740)": Balance Sheet Classification of Deferred Taxes, which requires deferred income tax liabilities and assets to be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. The guidance is effective for public entities for annual periods beginning after December 15, 2016, and interim periods within those annual periods with early adoption being permitted. The guidance will be applied prospectively upon its effective date by the Group. The Group expects upon adoption of this guidance, the Group's deferred tax assets and deferred tax liabiltiies will be classified to noncurrent. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted only for certain provisions. The guidance should be applied prospectively upon its effective date. The Group is in the process of evaluating the impact of adoption of this guidance on the Group's consolidated financial statements, but it is not expected to have a significant impact. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", which requires lessees to recognize most leases on the balance sheet. This ASU requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. The ASU does not significantly change the lessees' recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors' accounting under the ASC is largely unchanged from the previous accounting standard. In addition, the ASU expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. The provisions of this guidance are effective for annual periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Group is in the process of evaluating the impact of adoption of this guidance on the Group's consolidated financial statements, but expects that it will have an impact on the Group's assets and liabilities. In March 2016, the FASB issued ASU 2016-07 "Investment—Equity Method and Joint Ventures", which eliminate the requirement to retroactively adopt the equity method of accounting. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Group does not anticipate that the adoption of ASU 2016-07 will have a material impact on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-based Payment Accounting", which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. For public entities, the ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption will be permitted in any interim or annual period for which financial statements have not yet been issued or have not been made available for issuance. The guidance should be applied prospectively upon its effective date. The Group does not expect the adoption of ASU 2016-09 to have a material impact on the consolidated financial statements. In June, 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" which is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Organizations will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. The ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization's portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Group will apply the amendments in this guidance through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Group is in the process of evaluating the impact of adoption of this guidance on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230)". The update is intended to improve financial reporting in regards to how certain transactions are classified in the statement of cash flows. This update requires that debt extinguishment costs be classified as cash outflows for financing activities and provides additional classification guidance for the statement of cash flows. The update also requires that the classification of cash receipts and payments that have aspects of more than one class of cash flows to be determined by applying specific guidance under generally accepted accounting principles. The update also requires that each separately identifiable source or use within the cash receipts and payments be classified on the basis of their nature in financing, investing or operating activities. The update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. This guidance will be adopted retrospectively by the Group to all periods presented. The Group does not anticipate that the adoption of ASU 2016-15 will have a material impact on the consolidated financial statements. In October 2016, FASB issued ASU 2016-16, "Income Taxes (Topic 740)". Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Under the new standard, an entity is to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard does not include new disclosure requirements; however, existing disclosure requirements might be applicable when accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. The new standard is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual periods. This guidance will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Group does not anticipate that the adoption of ASU 2016-16 will have a material impact on the consolidated financial statements. In October, 2016, the FASB issued ASU 2016-17, "Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control" which amends the guidance in U.S. GAAP on related parties that are under common control. Specifically, the new ASU requires that a single decision maker consider indirect interests held by related parties under common control on a proportionate basis in a manner consistent with its evaluation of indirect interests held through other related parties. That is, the single decision maker does not consider indirect interests held through related parties as equivalent to direct interests in determining whether it meets the economics criterion to be a primary beneficiary. The ASU does not change the need for a single decision that has determined that it individually does not meet the criterion to be a primary beneficiary to then evaluate whether the related-party group meets these conditions and, if so, to determine whether the single decision maker is the party most closely associated with the variable interest entity in the related-party group. The guidance in ASU 2016-17 is effective for annual periods beginning on or after December 15, 2016, including interim and annual periods. Entities that have not yet adopted ASU 2015-02 are required to adopt the guidance in ASU 2016-17 at the same time they adopt the amendments in ASU 2015-02. The Group is in the process of evaluating the impact of adoption of this guidance on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business". The update affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The update is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update provides a more robust framework to use in determining when a set of assets and activities is a business, and also provides more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. For public companies, the update is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The guidance should be applied prospectively upon its effective date. The effect of ASU 2017-01 on the consolidated financial statements will be dependent on any future acquisitions. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment". The update simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. The update also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The update should be applied on a prospective basis. The nature of and reason for the change in accounting principle should be disclosed upon transition. For public companies, the update is effective for any annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The guidance should be applied prospectively upon its effective date. The Group does not anticipate that the adoption of ASU 2017-04 will have a material impact on the consolidated financial statements. |
Accounts receivable from customer financing business | |
Accounts receivable and other receivable | (g) Accounts receivable from customer financing business Accounts receivable are stated at the historical carrying amount net of write-offs and allowance for uncollectible accounts. The Group establishes an allowance for uncollectible accounts receivable based on estimates, historical experience and other factors surrounding the credit risk of specific customers. Uncollectible accounts receivable are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. The Group recorded the allowance for the uncollectible accounts receivables in the amount of nil and RMB43,641 in relation to receivables from customer financing business as of December 31, 2015 and 2016. |
Other receivable from supplier financing business | |
Accounts receivable and other receivable | (h) Other receivable from supplier financing business Other receivable are stated at the historical carrying amount net of write-offs and allowance for uncollectible accounts. The Group establishes an allowance for uncollectible other receivable based on estimates, historical experience and other factors surrounding the credit risk of specific suppliers. Uncollectible accounts receivable are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected. The Group recorded the allowance for the uncollectible other receivables in the amount of RMB11,884 and RMB21,942 in relation to receivables from supplier financing business as of December 31, 2015 and 2016, respectively. |
Organization and principal ac40
Organization and principal activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization and principal activities | |
Schedule of consolidated subsidiaries, VIEs and VIEs' subsidiaries | As of December 31, 2016, the Company's significant consolidated subsidiaries, VIEs and VIEs' subsidiaries consist of the following: Name of subsidiaries Date of Place of Percentage of Principal activities Vipshop International Holdings Limited ("Vipshop HK") October 22, 2010 Hong Kong % Investment holding Vipshop (China) Co., Ltd. (the "WFOE") January 20, 2011 China % Warehousing, logistics, procurement, research and development, consulting Vipshop (Kunshan) E-Commerce Co., Ltd. ("Vipshop Kunshan") August 2, 2011 China % Warehousing and logistics Vipshop (Jianyang) E-Commerce Co., Ltd. ("Vipshop Jianyang") February 22, 2012 China % Warehousing and logistics Vipshop (Tianjin) E-Commerce Co., Ltd. ("Vipshop Tianjin") July 31, 2012 China % Warehousing and logistics Guangzhou Pinwei Software Co., Ltd. ("Pinwei Software") December 6, 2012 China % Software development and information technology support Vipshop (Zhuhai) E-Commerce Co., Ltd. ("Vipshop Zhuhai") July 16, 2013 China % Warehousing and logistics Vipshop (Hubei) E-Commerce Co., Ltd. ("Vipshop Hubei") July 4, 2013 China % Warehousing and logistics Shanghai Pinzhong Commercial Factoring Co., Ltd. ("Pinzhong Factoring") August 9, 2013 China % Business financing Chongqing Vipshop E-Commerce Co., Ltd. ("Vipshop Chongqing") October 22, 2013 China % Warehousing and logistics Vipshop (Zhaoqing) E-Commerce Co., Ltd. ("Vipshop Zhaoqing") November 22, 2013 China % Warehousing and logistics Name of VIEs and VIEs' subsidiaries Date of Place of Economic Principal activities Guangzhou Vipshop Information Technology Co., Ltd.("Vipshop Information") August 22, 2008 China VIE Online retail Lefeng (Shanghai) Information Technology Co., Limited ("Lefeng Shanghai") August 30, 2013 China 75% Online retail |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of financial information of the Company's VIEs and VIEs' subsidiaries, including total assets, total liabilities, total equity, net revenues, total operating expenses, net income attributable to the Company and cash flows after intercompany eliminations | As of December 31, 2015 2016 RMB RMB Total assets Current Liabilities: Accounts payable ) ) Advance from customers ) ) Accrued expenses and other current liabilities ) ) Amounts due to related parties ) ) Deferred income ) ) Total current liabilities ) ) Deferred tax liability ) ) Deferred income ) ) Total liabilities ) ) Year ended December 31, 2014 2015 2016 RMB RMB RMB Net revenues Total operating expenses ) ) ) Net income Year ended December 31, 2014 2015 2016 RMB RMB RMB Net cash provided by (used in) operating activities (Note a) ) ) Net cash (used in) provided by investing activities ) Net cash provided by (used in) financing activities ) Note a: Cash flows provided by (used in) operating activities in 2014, 2015 and 2016 include amounts due to the Group's subsidiaries of RMB718,759, RMB(1,649,956) and RMB(994,474). |
Schedule of classification and estimated useful lives of plant and equipment | Classification Estimated useful life Buildings 20 years Furniture, fixtures and equipment 2 to 10 years Leasehold improvements Shorter of lease term or the estimated useful life of lease improvements Motor vehicles 5 years Software 3 years |
Schedule of estimated economic lives of the intangible assets | Classification Estimated economic life Customer relationship 4 - 14 years Trademarks 2 - 5 years Non-compete agreement 3 years Domain name 2 - 3 years Payment license Indefinite life |
Schedule of fair value measurements of the Group's assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition | Fair Value Measurements at Reporting Description As of Quoted Prices Significant Significant RMB RMB RMB RMB Available-for-sale investments—marketable equity securities — — Available-for-sale investments—debt security — — Fair Value Measurements at Reporting Description As of Quoted Prices Significant Significant RMB RMB RMB RMB Available-for-sale investments—marketable equity securities — — Available-for-sale investments—debt security — — |
Significant acquisition and e42
Significant acquisition and equity transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Zhejaing Vipshop Payment Co., Ltd (formerly known as Ebatong) | |
Significant acquisition and equity transactions | |
Schedule of estimated fair values for major classes of assets acquired and liabilities assumed | RMB Weighted average amortization Net tangible liabilities acquired ) Intangible assets—customer relationship Goodwill Deferred tax liabilities ) Non-controlling interest ) Total consideration Consideration transferred Cash Fair value of the Group's previously held equity interests in Feiyuan (Note) Total consideration Note: The fair value of the Group's previously held equity interests in Feiyuan as at the acquisition date was determined by using the discounted cash flow model. The key inputs from this valuation include a risk-adjusted discount rate and discount of lack of control. No gain or loss was recognized as a result of remeasuring to fair value of the previously held equity interests in Feiyuan. |
Feiyuan | |
Significant acquisition and equity transactions | |
Schedule of estimated fair values for major classes of assets acquired and liabilities assumed | RMB Weighted average amortization Net tangible assets acquired Intangible assets—Payment license Indefinite life Goodwill Total consideration Consideration transferred and liabilities assumed Cash Other receivables Total consideration |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of components of accounts receivable | As of December 31, 2015 2016 RMB RMB Components of accounts receivable are as follows: Delivery service providers (Note a) Other trade receivables (Note b) Other Subtotal Less: allowance for doubtful debts — ) Total Note a: For certain sales transactions, delivery service providers will collect payments from the Group's customers upon delivery of goods, and remit such payments back to the Group on a periodic basis. Note b: The Group provides consumer financing to certain customers as part of the Group's internet financing activities conducted since 2015. |
Accounts Receivable | |
Schedule of movement of allowance for doubtful debts | Year ended December 31, 2014 2015 2016 RMB RMB RMB Allowance for doubtful debts: Balance at beginning of the year — — — Allowance during the year — — ) Write-offs during the year — — Balance at end of the year — — ) |
Other Receivables and Prepaym44
Other Receivables and Prepayments, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Schedule of components of other receivables and prepayments | As of December 31, 2015 2016 RMB RMB Components of other receivables and prepayments are as follows: Deposits (Note a) Cash advanced to staff Loan to staff VAT receivable Interest receivable Advances to suppliers related to financing activities (Note b) Advances to suppliers related to procurement activities Prepaid expense Receivables on behalf of staffs for options exercised and non-vested shares vested Others Less: allowance for doubtful debts (Note c) ) ) Total Note a: Deposits consist of amounts paid to vendors for advertising and rentals. Note b: The Group provides financing to some of its suppliers by advancing them cash, and held portions of accounts payables the Group owes to them as pledges or procurements are expected to be made by the Group from the suppliers in the near term. Note c: The Group considers many factors in assessing the collectability of its receivable, such as, the age of the amounts due, the debtor's payment history, credit-worthiness, and financial conditions of the debtor and industry trends. An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable. The Group also makes specific allowance if there is strong evidence indicating that the receivable is likely to be unrecoverable. Receivable balances are written off after all collection efforts have been exhausted. |
Other Receivables and Prepayments | |
Schedule of movement of allowance for doubtful debts | Year ended December 31, 2014 2015 2016 RMB RMB RMB Allowance for doubtful debts: Balance at beginning of the year — ) ) Allowance during the year ) ) ) Write-offs during the year — Balance at end of the year ) ) ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | As of December 31, 2015 2016 RMB RMB Cost: Building Furniture, fixtures and equipment Leasehold improvements Motor vehicles Software Construction in process Sub-total Less: accumulated depreciation ) ) Property and equipment, net |
Schedule of depreciation expenses charged into income statement | Year ended December 31, 2014 2015 2016 RMB RMB RMB Depreciation expenses were charged to: Fulfillment expenses Marketing expenses Technology and content expenses General and administrative expenses Total |
Land Use Rights, Net (Tables)
Land Use Rights, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Land Use Rights, Net | |
Schedule of land use rights, net | As of December 31, 2015 2016 RMB RMB Cost: Land in Zhaoqing City Land in Tianjing City Land in Jianyang City Land in Ezhou City — Land in Zhengzhou City — Land in Qingdao City — Land in Guangzhou City — Sub-total Less: Accumulated amortization ) ) Land use rights, net |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Intangible Assets, Net | |
Schedule of intangible assets, net | As of December 31, 2015 As of December 31, 2016 Cost Accumulated Impairment Net Cost Accumulated Impairment Net RMB (Note a) RMB Domain names ) — ) — — Customer Relationships ) — ) — Trademarks ) — ) — Non-compete agreement ) — ) — Payment license (Note b) — — — — — — Others ) ) ) ) Total ) ) ) ) Note: (a) Amortization expenses for intangible assets were RMB250,221, RMB289,644 and RMB363,977 for the years ended December 31, 2014, 2015 and 2016, respectively. The Group expects to record amortization expenses of RMB340,707, RMB46,914, RMB2,782, RMB2,275 and RMB1,438 for the years ending December 31, 2017, 2018, 2019, 2020 and 2021 respectively. (b) The payment license, which enbles the Group to provide payment services and qualifies as a paying institution, has a legal life of 5 years and the nearest expiry date is June 2017, but it is renewable every 5 years at minimal cost. The Group believes it would renew the payment license continuously and has the ability to do so. As a result, the payment license is considered by the Group as having an indefinite life because it is expected to contribute to net cash inflow indefinitely. |
Investment in Affiliates (Table
Investment in Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investment in Affiliates | |
Schedule of investment in affiliates | As of December 31, 2015 2016 RMB RMB Equity-method investments: Ovation (i) Feiyuan (Note 3(b)) — Others (ii) Total Details of the significant investments are as follows: (i) On February 21, 2014, the Group acquired a 23% equity interest in Ovation, which is a BVI company that engages in research and development, and distribution of beauty products and production and publication of TV programme, for a total consideration of approximately US$55,777 (approximately RMB339,303) pursuant to a share purchase and subscription agreement with Ovation and certain of its existing shareholders. (ii) Other investments in affiliates comprise of a number of investments in private companies which the Group owns 20% voting right or higher and have significant influence, these investments include certain PRC registered companies that provides logistic services and engages in cosmetic sales. |
Other Investments (Tables)
Other Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Investments | |
Schedule of other investments | As of December 31, 2015 2016 RMB RMB Cost-method investments: WangZhi Technology Limited. Qima Holdings Limited. BabySpace Corporation Hifashion Group Inc. Others (Note) Total investment costs: Less: Accumulated impairment ) ) Total Note: Other investments comprise of a number of investments in private companies which the Group owes equity interest of less than 20%, including certain E-commence companies and PRC registered companies that provide technology services. |
Available-for-Sale Securities50
Available-for-Sale Securities Investments, Non-Current (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Available-for-Sale Securities Investments | |
Schedule of available-for-sale securities investments | As of December 31, 2015 Amortized Gross Gross Fair RMB RMB RMB RMB Listed equity securities. ) Debt securities — — Total ) As of December 31, 2016 Amortized Gross Gross Fair RMB RMB RMB RMB Listed equity securities. — Debt securities — — Total — |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Long-Term Assets | |
Schedule of other long-term assets | As of December 31, 2015 2016 RMB RMB Deposit for land use rights (Note a) Prepayment for investments (Note b) Others Total Note a: During the year ended December 31, 2015, the Group signed contracts with local government and paid certain amounts of deposits to purchase land use rights located in Ezhou City, Jianyang City, Zhaoqing City and Guangzhou City in the PRC. The purchase process for these land use rights was completed during the year ended December 31, 2016, and the deposits were transferred to the land use rights. During the year ended December 31, 2016, the Group signed some new contracts with local governments and paid cerntain amounts of deposits to purchase land use rights located in Chongqing City, Xinjiang Autonomous Region, Liaoning Province, Hengyang City, Tianjin City, Shanxi Province and Guangzhou City. Note b: The Company signed contracts to acquire certain investments from the investees' existing shareholders. According to the agreements, the Company needs to prepay deposits before the completion of the legal closing process of the acquisitions. |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill | |
Schedule of movements in carrying amount of goodwill by reportable unit | Goodwill RMB Balance as of January 1, 2015 Addition for acquisition—Zhengzhou Andaxin Addition for acquisition—Explink Addition for acquisition—Other investments Balance as of December 31, 2015 Addition for acquisition—Feiyuan (Note 3(b)) Addition for acquisition—Ebatong (Note 3(b)) Addition for acquisition—Other investments Balance as of December 31, 2016 |
Accrued Expenses and Other Cu53
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2015 2016 RMB RMB Accrued advertising expense Accrued shipping and handling expenses Accrued payroll Social benefit provision Deposits from delivery service providers Other tax payable Income tax payable VAT tax payable Accrued rental expenses Accrued administrative expenses Amounts received on behalf of third-party merchants (Note a) Payables for repurchase of ordinary shares (Note 21) — Interest payable Others Total Note a: Amounts relate to the cash collected on behalf of third-party merchants which the Company provides platform access for sales of their products. |
Other Income (Tables)
Other Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Income | |
Schedule of components of other income | Year ended December 31, 2014 2015 2016 RMB RMB RMB Government grants Claims for goods insurance Others Total other income |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of components of income tax expense | Year ended December 31, 2014 2015 2016 RMB RMB RMB Income (loss) before tax and share of loss of affiliates Income from China operations Loss from non-China operations ) ) ) Total income before tax and share of loss of affiliates Year ended December 31, 2014 2015 2016 RMB RMB RMB Income tax expenses applicable to China operations Current tax (Note) Deferred tax ) ) ) Subtotal income tax expenses applicable to China operations Total tax expenses Note: All current tax was related to income tax in PRC and Hong Kong. |
Schedule of reconciliation of the income tax expense to income before income tax and share of loss of affiliates | Year ended December 31, 2014 2015 2016 RMB RMB RMB Income before income tax and share of loss of affiliates Computed income tax expense at PRC EIT tax rate Effect of non-deductible expenses, including: —Share-based compensation expenses —Other non-deductible expenses Effect of different tax rates of a subsidiary operating in other jurisdiction Effect of tax holidays on concessionary rates granted to PRC subsidiaries ) ) ) Effect of non-taxable income ) ) ) Change in valuation allowance ) Others ) Actual income tax expenses |
Schedule of aggregate amount and per share effect of the tax holidays and tax concessions | Year ended December 31, 2014 2015 2016 RMB RMB RMB The aggregate effect Per share effect: Class A and Class B ordinary share: —basic —diluted 0. 38 |
Schedule of the principal components of deferred tax assets | As of December 31, 2015 2016 RMB RMB Deferred tax assets: Net operating loss carry forwards Allowance for doubtful debts Allowance for other investments Inventory write-down Payroll payable and other accruals Deferred revenue Advertising expenses — Others Less: valuation allowance ) ) Total deferred tax assets-current Deferred tax liability: Intangible assets Total deferred tax liability |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share | |
Schedule of calculations of basic earnings per share and diluted earnings per share | Year ended December 31, 2014 2015 2016 Class A and Class B Class A and Class B Class A and Class B RMB RMB RMB Basic earnings per share attributable to Vipshop Holdings Limited's ordinary shareholders: Numerator: Earnings attributable to Class A and Class B ordinary shareholders for computing basic earnings per Class A and Class B ordinary share Denominator: Weighted average number of Class A and Class B ordinary shares outstanding for computing basic earnings per Class A and Class B ordinary share Basic earnings per Class A and Class B ordinary shares Year ended December 31, 2014 2015 2016 Class A and Class B Class A and Class B Class A and Class B Diluted earnings per share: Numerator: Net earnings attributable to Class A and Class B ordinary shareholders for computing diluted earnings per Class A and Class B ordinary share Denominator: Weighted average number of Class A and Class B ordinary shares outstanding for computing basic earnings per Class A and Class B ordinary share Dilutive employee share options and non-vested ordinary shares Dilutive convertible senior notes — — Weighted average number of Class A and Class B ordinary shares outstanding for computing diluted earnings per Class A and Class B ordinary share Diluted earnings per Class A and Class B ordinary shares |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and contingencies | |
Schedule of minimum lease payments under all non-cancellable leases | RMB Year ending December 31, 2017 Year ending December 31, 2018 Year ending December 31, 2019 Year ending December 31, 2020 Year ending December 31, 2021 Over December 31, 2021 Total minimum lease payments |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Schedule of material related party transactions | Year ended December 31, 2014 2015 2016 RMB RMB RMB Purchase of goods (Note a) Delivery of goods (Note b) — Other income — Other expense — — Note a: The goods were purchased from an affiliate of the Company and companies controlled or significantly influenced by shareholders. Note b: The Group engages certain of the Group's affiliates to deliver the goods to its customers. |
Share-based Payments (Tables)
Share-based Payments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Share-based Payments | |
Schedule of share option movements | Options Weighted Weighted Weighted Weighted Aggregate US$ US$ US$ US$ As of January 1, 2014 7.69 years Exercised ) 6.50 years Forfeited ) 7.19 years Outstanding as of December 31, 2014 6.77 years Exercised ) 5.45 years Forfeited ) 5.96 years Outstanding as of December 31, 2015 5.89 years Exercised ) 4.61 years Forfeited ) 4.92 years Outstanding as of December 31, 2016 4.97 years Non vested as of December 31, 2016 Options vested and expected to vest as of December 31, 2016 4.97 years Exercisable as of December 31, 2016 4.97 years |
Schedule of non-vested shares movement | Non-vested shares Outstanding as of January 1, 2015 Granted Vested ) Forfeited ) Outstanding as of December 31, 2015 Granted Vested ) Forfeited ) Outstanding as of December 31, 2016 |
Schedule of share-based compensation expenses | Year ended December 31, 2014 2015 2016 RMB RMB RMB Fulfillment expenses ) ) ) Marketing expenses ) ) ) Technology and content expenses ) ) ) General and administrative expenses ) ) ) ) ) ) |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment information | |
Schedule of revenues from different product groups and services | Year ended December 31, 2014 2015 2016 RMB RMB RMB Product revenues Apparel Shoes and bags Cosmetics Sportswear and sporting goods Home goods and other lifestyle products Toys, kids and baby Other goods Other revenues Total net revenues |
Organization and principal ac61
Organization and principal activities (Details) - item | Aug. 27, 2010 | Dec. 31, 2016 | Jun. 24, 2014 |
Original Investors | |||
Organization and principal activities | |||
Number of investors | 3 | ||
Vipshop HK | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
WFOE | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Vipshop Kunshan | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Vipshop Jianyang | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Vipshop Tianjin | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Pinwei Software | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Vipshop Zhuhai | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Vipshop Hubei | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Pinzhong Factoring | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Vipshop Chongqing | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Vipshop Zhaoqing | |||
Organization and principal activities | |||
Percentage of shareholdings | 100.00% | ||
Lefeng Information | |||
Organization and principal activities | |||
Equity interest (as a percent) | 75.00% | ||
Lefeng Information | Mr. Shen | |||
Organization and principal activities | |||
Equity interest (as a percent) | 75.00% | ||
Lefeng Information | Mr. Zhihui Yu | |||
Organization and principal activities | |||
Equity interest (as a percent) | 25.00% |
Summary of Significant Accoun62
Summary of Significant Accounting Policies (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Aug. 31, 2015CNY (¥)item | Oct. 31, 2012item | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014USD ($) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | Jul. 31, 2015CNY (¥) | Dec. 31, 2013CNY (¥) | |
Principles of consolidation | |||||||||||
Concurrent capital | $ 832,752,000 | ¥ 3,613,267,000 | ¥ 2,698,068,000 | ¥ 5,781,804,000 | ¥ 1,472,596,000 | ||||||
Current Liabilities: | |||||||||||
Accounts payable | (1,200,290,000) | (6,645,262,000) | (8,333,610,000) | ||||||||
Advance from customers | (388,878,000) | (2,009,578,000) | (2,699,981,000) | ||||||||
Accrued expenses and other current liabilities | (478,554,000) | (3,104,622,000) | (3,322,599,000) | ||||||||
Amounts due to related parties | (7,595,000) | (206,966,000) | (52,729,000) | ||||||||
Deferred income | (25,140,000) | (104,531,000) | (174,547,000) | ||||||||
Total current liabilities | (2,100,457,000) | (12,165,959,000) | (14,583,466,000) | ||||||||
Deferred tax liability | (14,487,000) | (175,416,000) | (100,583,000) | ||||||||
Deferred income | (35,561,000) | (22,699,000) | (246,902,000) | ||||||||
Total liabilities | (2,781,601,000) | (16,422,255,000) | (19,312,649,000) | ||||||||
Results of operation of the VIE | |||||||||||
Net revenues | 8,150,843,000 | ¥ 56,591,302,000 | 40,203,212,000 | 23,129,313,000 | |||||||
Total operating expenses | (1,619,896,000) | (11,246,934,000) | (8,134,371,000) | (5,071,559,000) | |||||||
Net income | 287,018,000 | 1,992,767,000 | 1,508,712,000 | 752,593,000 | |||||||
Net cash provided by (used in) operating activities (Note a) | 407,808,000 | 2,831,413,000 | 1,915,086,000 | 3,262,662,000 | |||||||
Net cash (used in) provided by investing activities | (240,386,000) | (1,669,002,000) | (2,937,309,000) | (4,253,380,000) | |||||||
Net cash provided by (used in) financing activities | (56,621,000) | (393,128,000) | (539,134,000) | 3,852,133,000 | |||||||
Amounts due to related parties | (26,866,000) | (186,533,000) | 131,182,000 | 19,776,000 | |||||||
Inventories | |||||||||||
General write-down | $ | $ 0 | $ 0 | $ 0 | ||||||||
Consolidated VIE and VIE's subsidiaries | |||||||||||
Financial position of the VIE | |||||||||||
Total assets | 4,673,422,000 | 3,396,705,000 | |||||||||
Current Liabilities: | |||||||||||
Accounts payable | (48,178,000) | (22,471,000) | |||||||||
Advance from customers | (879,848,000) | (1,211,643,000) | |||||||||
Accrued expenses and other current liabilities | (1,127,270,000) | (1,257,667,000) | |||||||||
Amounts due to related parties | (82,994,000) | (591,000) | |||||||||
Deferred income | (95,643,000) | (16,222,000) | |||||||||
Total current liabilities | (2,233,933,000) | (2,508,594,000) | |||||||||
Deferred tax liability | (116,000) | (4,904,000) | |||||||||
Deferred income | (3,573,000) | (1,928,000) | |||||||||
Total liabilities | (2,237,622,000) | ¥ (2,515,426,000) | |||||||||
Results of operation of the VIE | |||||||||||
Net revenues | 5,500,226,000 | 7,388,637,000 | 18,794,999,000 | ||||||||
Total operating expenses | (1,740,370,000) | (1,542,401,000) | (2,269,740,000) | ||||||||
Net income | 230,954,000 | 226,986,000 | 162,955,000 | ||||||||
Net cash provided by (used in) operating activities (Note a) | (1,192,894,000) | (1,363,805,000) | 1,052,069,000 | ||||||||
Net cash (used in) provided by investing activities | 626,798,000 | 1,018,250,000 | (890,327,000) | ||||||||
Net cash provided by (used in) financing activities | (108,779,000) | 809,740,000 | 12,665,000 | ||||||||
Assets collateralizing obligations of variable interest entity | 0 | 0 | 0 | ||||||||
Consolidated VIE and VIE's subsidiaries | Group's subsidiaries | |||||||||||
Results of operation of the VIE | |||||||||||
Amounts due to related parties | ¥ (994,474,000) | (1,649,956,000) | ¥ 718,759,000 | ||||||||
Vipshop Information | |||||||||||
Principles of consolidation | |||||||||||
Concurrent capital | ¥ 274,500,000 | ¥ 824,500,000 | ¥ 24,500,000 | ||||||||
Vipshop Information | Mr. Shen | |||||||||||
Principles of consolidation | |||||||||||
Equity interest transferred from former shareholder to an existing shareholder (as a percent) | 22.00% | 10.40% | |||||||||
Number of former shareholders of Vipshop transfer equity interest to Mr. Shen | item | 2 | 1 | |||||||||
Equity interest (as a percent) | 99.23% | 99.23% | |||||||||
Vipshop Information | Mr. Arthur Xiaobo Hong | |||||||||||
Principles of consolidation | |||||||||||
Equity interest (as a percent) | 0.77% | 0.77% | |||||||||
Vipshop Information | WFOE | Exclusive Business Cooperation Agreement | |||||||||||
Principles of consolidation | |||||||||||
Fees payable in consideration of services, as a percentage of net income | 100.00% | 100.00% | |||||||||
Vipshop Information | WFOE | Exclusive Option Agreements | |||||||||||
Principles of consolidation | |||||||||||
Purchase price of the right to purchase equity interest of each equity holder of VIE | $ 1.44 | ¥ 10 | |||||||||
Vipshop Information | WFOE | Amended and Restated Exclusive Business Cooperation Agreement | |||||||||||
Principles of consolidation | |||||||||||
Term of agreement | 10 years | 10 years | |||||||||
Number of days of which a prior written notice is required to terminate the agreement | 30 days | 30 days | |||||||||
Vipshop Information | WFOE | Amended and Restated Exclusive Option Agreement | |||||||||||
Principles of consolidation | |||||||||||
Term of agreement | 10 years | 10 years | |||||||||
Vipshop Information | WFOE | Exclusive Purchase Framework Agreement | |||||||||||
Principles of consolidation | |||||||||||
Term of agreement | 10 years | 10 years | |||||||||
Number of days of which a prior written notice is required to terminate the agreement | 15 days | 15 days |
Summary of Significant Accoun63
Summary of Significant Accounting Policies - Intangible assets, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($)item | Dec. 31, 2016CNY (¥)item | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Mar. 17, 2014 | |
Property and Equipment | |||||
Residual value of furniture, fixtures and equipment and motor vehicles (as a percent) | 5.00% | ||||
Land use rights | |||||
Amortization period for prepaid land use rights | 50 years | 50 years | |||
Investment to an affiliate | |||||
Accumulated impairment on investments in affiliates | ¥ 58,510 | ¥ 58,510 | |||
Other investments | |||||
Accumulated impairment loss of investments | 110,608 | 41,239 | |||
Available for sale securities | |||||
Impairments of available-for-sale securities | 48,634 | 0 | ¥ 0 | ||
Impairment of long-lived assets (other than goodwill) | |||||
Impairments | ¥ 0 | 0 | 0 | ||
Revenue recognition | |||||
Rate of value added tax as a percentage of gross sales | 17.00% | 17.00% | |||
Number of points that can be earned by customers for one RMB of purchase made | item | 1 | 1 | |||
Period of expiration of discount coupons after redemption | 3 months | 3 months | |||
Deferred revenue related to reward points earned from prior purchases | ¥ 117,617 | 87,019 | |||
Rate of business tax as a percentage of service revenues earned | 6.00% | 6.00% | |||
Rate of business tax as a percentage of value-added tax | 11.00% | 11.00% | |||
Cost of goods sold | |||||
Inventory write-down | $ 43,674 | ¥ 303,233 | 293,946 | 218,108 | |
Marketing expenses | |||||
Advertising expenses | ¥ 1,671,779 | 1,022,398 | 787,687 | ||
Non-compete agreement | |||||
Intangible assets, net | |||||
Estimated economic life | 3 years | 3 years | |||
Minimum | |||||
Revenue recognition | |||||
Rate of value added tax as a percentage of gross sales | 6.00% | 6.00% | |||
Minimum | Customer relationship | |||||
Intangible assets, net | |||||
Estimated economic life | 4 years | 4 years | |||
Minimum | Trademarks | |||||
Intangible assets, net | |||||
Estimated economic life | 2 years | 2 years | |||
Minimum | Domain names | |||||
Intangible assets, net | |||||
Estimated economic life | 2 years | 2 years | |||
Maximum | |||||
Revenue recognition | |||||
Rate of value added tax as a percentage of gross sales | 17.00% | 17.00% | |||
Maximum | Customer relationship | |||||
Intangible assets, net | |||||
Estimated economic life | 14 years | 14 years | |||
Maximum | Trademarks | |||||
Intangible assets, net | |||||
Estimated economic life | 5 years | 5 years | |||
Maximum | Domain names | |||||
Intangible assets, net | |||||
Estimated economic life | 3 years | 3 years | |||
Notes | |||||
Capitalization of interest | |||||
Interest rate (as a percent) | 1.50% | 1.50% | |||
Interest expenses incurred | ¥ 99,437 | 94,077 | 84,281 | ||
Interest expenses capitalized | ¥ 14,242 | 8,315 | ¥ 9,033 | ||
Vip.com | |||||
Revenue recognition | |||||
Period of unconditional right of return offered to customers | 7 days | 7 days | |||
Lefeng.com | |||||
Revenue recognition | |||||
Period of unconditional right of return offered to customers | 7 days | 7 days | |||
Buildings | |||||
Property and Equipment | |||||
Estimated useful life | 20 years | 20 years | |||
Furniture, fixtures and equipment | Minimum | |||||
Property and Equipment | |||||
Estimated useful life | 2 years | 2 years | |||
Furniture, fixtures and equipment | Maximum | |||||
Property and Equipment | |||||
Estimated useful life | 10 years | 10 years | |||
Motor vehicles | |||||
Property and Equipment | |||||
Estimated useful life | 5 years | 5 years | |||
Software | |||||
Property and Equipment | |||||
Estimated useful life | 3 years | 3 years | |||
Accounts receivable from customer financing business | |||||
Accounts receivable from customer financing and supplier financing business | |||||
Allowances for uncollectible receivables | ¥ 43,641 | 0 | |||
Other receivable from supplier financing business | |||||
Accounts receivable from customer financing and supplier financing business | |||||
Allowances for uncollectible receivables | ¥ 21,942 | ¥ 11,884 |
Summary of Significant Accoun64
Summary of Significant Accounting Policies - Foreign Currency Transactions and Translations (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2013CNY (¥) | |
Foreign currency transactions and translations | ||||||
Cash and cash equivalents denominated in RMB | $ 591,902 | ¥ 4,109,577 | $ 478,808 | ¥ 3,324,384 | ¥ 4,790,751 | ¥ 2,026,264 |
Convenience translation | ||||||
Convenience translation calculated at the rate of US$1.00 | 6.9430 | 6.9430 | ||||
Value added taxes | ||||||
Rate of VAT levied on PRC subsidiaries of the company (as a percent) | 17.00% | |||||
Minimum | ||||||
Value added taxes | ||||||
Rate of VAT levied on PRC subsidiaries of the company (as a percent) | 6.00% | |||||
Maximum | ||||||
Value added taxes | ||||||
Rate of VAT levied on PRC subsidiaries of the company (as a percent) | 17.00% | |||||
Foreign currency risk | Denominated in RMB | ||||||
Foreign currency transactions and translations | ||||||
Cash and cash equivalents denominated in RMB | ¥ 4,021,551 | ¥ 3,216,485 |
Summary of Significant Accoun65
Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | |
Fair value of financial instruments | |||||
Gross unrealized gains | ¥ 11,742 | ¥ 2,498 | |||
Gross unrealized losses | 0 | 10,281 | |||
Impairment charges | ¥ 48,634 | 0 | ¥ 0 | ||
Fair value of convertible senior notes | 4,346,278 | ¥ 4,382,445 | |||
Convertible senior notes | 4,058,181 | $ 631,096 | 4,381,698 | ||
Recurring | |||||
Fair value of financial instruments | |||||
Available-for-sale investments- marketable equity securities | 254,736 | 240,889 | |||
Available-for-sale investments-debt security | 15,000 | 167,055 | |||
Recurring | Level 1 | |||||
Fair value of financial instruments | |||||
Available-for-sale investments- marketable equity securities | 254,736 | 240,889 | |||
Recurring | Level 2 | |||||
Fair value of financial instruments | |||||
Available-for-sale investments-debt security | ¥ 15,000 | ¥ 167,055 |
Significant acquisition and e66
Significant acquisition and equity transactions - Acquisitions in 2015 (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2014CNY (¥) | |
Business Acquisition | ||||
Goodwill | ¥ 108,781 | $ 52,874 | ¥ 367,106 | ¥ 60,000 |
Acquisitions in 2015 | ||||
Business Acquisition | ||||
Goodwill expected to be deductible for income tax purposes | ¥ 0 | |||
Acquisitions in 2015 | Minimum | ||||
Business Acquisition | ||||
Percentage of equity interest acquired | 50.00% | |||
Zhengzhou Andaxin | ||||
Business Acquisition | ||||
Equity interest (as a percent) | 90.00% | |||
Total consideration | ¥ 25,251 | |||
Goodwill | 17,807 | |||
Intangible assets | 0 | |||
Certain logistic companies and other entities | ||||
Business Acquisition | ||||
Total consideration | 47,516 | |||
Goodwill | 19,917 | |||
Intangible assets | ¥ 0 | |||
Certain logistic companies and other entities | Minimum | ||||
Business Acquisition | ||||
Equity interest (as a percent) | 50.00% |
Significant acquisition and e67
Significant acquisition and equity transactions - Acquisitions in 2016 (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2016CNY (¥) | May 31, 2016CNY (¥) | Jan. 31, 2016CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Jun. 01, 2016 | Dec. 31, 2015CNY (¥) | Feb. 28, 2015 | Dec. 31, 2014CNY (¥) | |
Fair values for major classes of assets acquired and liabilities assumed | ||||||||||
Goodwill | $ 52,874 | ¥ 367,106 | ¥ 108,781 | ¥ 60,000 | ||||||
Acquisitions in 2016 | ||||||||||
Consideration transferred | ||||||||||
Goodwill expected to be deductible for income tax purposes | 0 | |||||||||
Zhejaing Vipshop Payment Co., Ltd (formerly known as Ebatong) | ||||||||||
Business Acquisition | ||||||||||
Remaining consideration payable | 74,352 | |||||||||
Acquisition cost amounted in general and administrative expenses | ¥ 4,000 | |||||||||
Fair values for major classes of assets acquired and liabilities assumed | ||||||||||
Net tangible assets (liabilities) acquired | ¥ 95,332 | |||||||||
Goodwill | 13,291 | |||||||||
Total consideration | 428,283 | |||||||||
Consideration transferred | ||||||||||
Cash | 410,417 | |||||||||
Cash consideration paid | 336,065 | |||||||||
Other receivables | 17,866 | |||||||||
Total consideration | 428,283 | |||||||||
Zhejaing Vipshop Payment Co., Ltd (formerly known as Ebatong) | Payment license | ||||||||||
Fair values for major classes of assets acquired and liabilities assumed | ||||||||||
Intangible assets | ¥ 319,660 | |||||||||
Feiyuan | ||||||||||
Fair values for major classes of assets acquired and liabilities assumed | ||||||||||
Net tangible assets (liabilities) acquired | ¥ (18,388) | |||||||||
Goodwill | 210,669 | |||||||||
Deferred tax liabilities | (4,423) | |||||||||
Noncontrolling interest | (59,851) | |||||||||
Total consideration | 145,700 | |||||||||
Consideration transferred | ||||||||||
Cash consideration paid | ¥ 110,001 | 65,452 | ||||||||
Fair value of the Group's previously held equity interests in Feiyuan (Note) | 80,248 | |||||||||
Total consideration | 145,700 | |||||||||
Gain (loss) from remeasuring to fair value of the previously held equity interests in acquiree | ¥ 0 | |||||||||
Total equity interest held after acquisition (as a percent) | 96.98% | |||||||||
Percentage of equity interest acquired | 28.19% | 26.18% | 42.61% | |||||||
Feiyuan | Customer relationship | ||||||||||
Fair values for major classes of assets acquired and liabilities assumed | ||||||||||
Intangible assets | ¥ 17,693 | |||||||||
Consideration transferred | ||||||||||
Weighted average amortization period at the acquisition date | 14 years | |||||||||
Certain logistic companies | ||||||||||
Fair values for major classes of assets acquired and liabilities assumed | ||||||||||
Intangible assets | 0 | |||||||||
Goodwill | ¥ 34,365 | |||||||||
Consideration transferred | ||||||||||
Total consideration | ¥ 50,218 | |||||||||
Certain logistic companies | Minimum | ||||||||||
Consideration transferred | ||||||||||
Percentage of equity interest acquired | 50.00% | 50.00% |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
Accounts receivable | |||||
Subtotal | ¥ 351,423 | ¥ 2,380,127 | |||
Less: allowance for doubtful debts | (46,209) | ||||
Total | $ 336,154 | 351,423 | 2,333,918 | ||
Allowance for doubtful debts: | |||||
Allowance during the year | $ (9,589) | ¥ (66,575) | (11,884) | ¥ (4,167) | |
Accounts Receivable | |||||
Allowance for doubtful debts: | |||||
Allowance during the year | (53,316) | ||||
Write-offs during the year | 7,107 | ||||
Balance at end of the year | ¥ (46,209) | ||||
Delivery service providers (Note a) | |||||
Accounts receivable | |||||
Subtotal | 135,050 | 209,340 | |||
Other trade receivables (Note b) | |||||
Accounts receivable | |||||
Subtotal | 190,792 | 2,165,639 | |||
Other | |||||
Accounts receivable | |||||
Subtotal | ¥ 25,581 | ¥ 5,148 |
Other Receivables and Prepaym69
Other Receivables and Prepayments, Net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
Deposits (Note a) | ¥ 210,758 | ¥ 236,066 | |||
Cash advanced to staff | 8,241 | 16,272 | |||
Loan to staff | 12,099 | 12,467 | |||
VAT receivable | 473,932 | 555,899 | |||
Interest receivable | 86,545 | 16,905 | |||
Advances to suppliers related to financing activities (Note b) | 559,857 | 877,697 | |||
Advances to suppliers related to procurement activities | 377,837 | 263,001 | |||
Prepaid expenses | 52,383 | 92,452 | |||
Receivables on behalf of staffs for options exercised and non-vested shares vested | 41,111 | 31,249 | |||
Others | 58,582 | 215,235 | |||
Less: allowance for doubtful debts (Note c) | (11,884) | (23,418) | |||
Total | $ 330,380 | 1,869,461 | ¥ 2,293,825 | ||
Allowance for doubtful debts: | |||||
Allowance during the year | $ (9,589) | ¥ (66,575) | (11,884) | ¥ (4,167) | |
Other Receivables and Prepayments | |||||
Allowance for doubtful debts: | |||||
Balance at beginning of the year | (11,884) | (4,167) | |||
Allowance during the year | (13,259) | (11,884) | (4,167) | ||
Write-offs during the year | 1,725 | 4,167 | |||
Balance at end of the year | ¥ (23,418) | ¥ (11,884) | ¥ (4,167) |
Held-to-Maturity Securities (De
Held-to-Maturity Securities (Details) - Debt securities - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Held-to-Maturity Securities | ||
Amortized cost | ¥ 671,776 | ¥ 1,807,403 |
Amount of unrealized holding gain | 1,776 | 17,403 |
Amount of impairment recognized for held-to-maturity securities | 0 | 0 |
Amount of held-to-maturity securities sold | ¥ 0 | ¥ 0 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
Property and Equipment, Net | |||||
Property and equipment, gross | ¥ 3,448,445 | ¥ 5,538,268 | |||
Less: accumulated depreciation | (498,841) | (1,070,817) | |||
Property and equipment, net | $ 643,447 | 2,949,604 | 4,467,451 | ||
Depreciation expenses | $ 87,999 | ¥ 610,976 | 291,401 | ¥ 109,990 | |
Fulfillment expenses | |||||
Property and Equipment, Net | |||||
Depreciation expenses | 289,338 | 145,375 | 28,634 | ||
Marketing expenses | |||||
Property and Equipment, Net | |||||
Depreciation expenses | 296 | 2,694 | 2,293 | ||
Technology and content expenses | |||||
Property and Equipment, Net | |||||
Depreciation expenses | 262,073 | 132,448 | 65,268 | ||
General and administrative expenses | |||||
Property and Equipment, Net | |||||
Depreciation expenses | ¥ 59,269 | 10,884 | ¥ 13,795 | ||
Buildings | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 2,021,245 | 2,525,064 | |||
Furniture, fixtures and equipment | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 1,078,365 | 1,602,608 | |||
Leasehold improvements | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 118,043 | 252,331 | |||
Motor vehicles | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 58,555 | 117,661 | |||
Software | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 13,395 | 147,329 | |||
Construction in process | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | ¥ 158,842 | ¥ 893,275 |
Land Use Rights, Net (Details)
Land Use Rights, Net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Land use rights, cost | ¥ 2,440,189 | ¥ 200,936 | ||
Less: Accumulated amortization | (41,131) | (3,474) | ||
Land use rights, net | 2,399,058 | 197,462 | ||
Amortization expenses for land use rights | $ 5,424 | 37,657 | 2,785 | ¥ 689 |
Land in Zhaoqing City | ||||
Land use rights, cost | 187,081 | 112,457 | ||
Land in Tianjing City | ||||
Land use rights, cost | 37,905 | 37,905 | ||
Land in Jianyang City | ||||
Land use rights, cost | 143,452 | ¥ 50,574 | ||
Land in Ezhou City | ||||
Land use rights, cost | 241,927 | |||
Land in Zhengzhou City | ||||
Land use rights, cost | 24,776 | |||
Land in Qungdao City | ||||
Land use rights, cost | 68,631 | |||
Land in Guangzhou City | ||||
Land use rights, cost | ¥ 1,736,417 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
Intangible Assets, Net | |||||
Cost | ¥ 1,302,558 | ¥ 1,647,313 | |||
Accumulated amortization | (541,282) | (905,259) | |||
Impairment (note) | (16,907) | (16,907) | |||
Net amount | $ 104,443 | 744,369 | 725,147 | ||
Amortization expenses for intangible assets | $ 52,424 | ¥ 363,977 | 289,644 | ¥ 250,221 | |
Expected amortization expenses | |||||
2,017 | 340,707 | ||||
2,018 | 46,914 | ||||
2,019 | 2,782 | ||||
2,020 | 2,275 | ||||
2,021 | 1,438 | ||||
Domain names | |||||
Intangible Assets, Net | |||||
Cost | 14,983 | 15,927 | |||
Accumulated amortization | (11,869) | (15,927) | |||
Net amount | 3,114 | ||||
Customer relationship | |||||
Intangible Assets, Net | |||||
Cost | 295,610 | 313,303 | |||
Accumulated amortization | (116,954) | (202,418) | |||
Net amount | 178,656 | 110,885 | |||
Trademarks | |||||
Intangible Assets, Net | |||||
Cost | 893,390 | 898,514 | |||
Accumulated amortization | (360,167) | (611,359) | |||
Net amount | 533,223 | 287,155 | |||
Non-compete agreement | |||||
Intangible Assets, Net | |||||
Cost | 70,127 | 70,127 | |||
Accumulated amortization | (43,830) | (67,102) | |||
Net amount | 26,297 | 3,025 | |||
Estimated economic life | 3 years | 3 years | |||
Payment license | |||||
Intangible Assets, Net | |||||
Cost | 319,660 | ||||
Net amount | 319,660 | ||||
Estimated economic life | 5 years | 5 years | |||
Renewal term | 5 years | 5 years | |||
Others | |||||
Intangible Assets, Net | |||||
Cost | 28,448 | 29,782 | |||
Accumulated amortization | (8,462) | (8,453) | |||
Impairment (note) | (16,907) | (16,907) | |||
Net amount | ¥ 3,079 | ¥ 4,422 |
Investment in Affiliates (Detai
Investment in Affiliates (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | Feb. 21, 2014USD ($) | Feb. 21, 2014CNY (¥) | |
Investment in Affiliates | |||||||
Investment in Affiliates | $ 13,415 | ¥ 252,706 | ¥ 93,144 | ||||
Share of loss of affiliates | $ 10,297 | ¥ 71,489 | 84,063 | ¥ 62,716 | |||
Impairment loss for investment in affiliate | ¥ 0 | 58,510 | ¥ 0 | ||||
Others | |||||||
Investment in Affiliates | |||||||
Investment in Affiliates | 29,385 | 21,236 | |||||
Ovation | |||||||
Investment in Affiliates | |||||||
Investment in Affiliates | 137,401 | ¥ 71,908 | |||||
Equity method ownership interest percentage | 23.00% | 23.00% | |||||
Consideration for equity method investment | $ 55,777 | ¥ 339,303 | |||||
Feiyuan | |||||||
Investment in Affiliates | |||||||
Investment in Affiliates | ¥ 85,920 |
Other Investments (Details)
Other Investments (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Investments | |||
Cost | ¥ 613,725 | ¥ 531,101 | |
Less: Accumulated impairment | (110,608) | (41,239) | |
Total | 503,117 | 489,862 | |
Impairment losses | 65,940 | 41,239 | ¥ 6,166 |
WangZhi Technology Limited. | |||
Other Investments | |||
Cost | 172,860 | 161,417 | |
Qima Holdings Limited. | |||
Other Investments | |||
Cost | 74,920 | 69,960 | |
BabySpace Corporation | |||
Other Investments | |||
Cost | 69,370 | 64,778 | |
Hifashion Group Inc. | |||
Other Investments | |||
Cost | 69,370 | 64,778 | |
Others (Note) | |||
Other Investments | |||
Cost | ¥ 227,205 | ¥ 170,168 |
Available-for-Sale Securities76
Available-for-Sale Securities Investments (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | |
Available-for-Sale Securities Investments | |||||
Listed equity securities, Amortized cost | ¥ 262,519 | ¥ 229,147 | |||
Listed equity securities, Gross unrealized gains | 2,498 | 11,742 | |||
Listed equity securities, Gross unrealized losses | (10,281) | ||||
Listed equity securities, Fair value | 254,736 | 240,889 | |||
Debt securities, Amortized cost | 15,000 | 167,055 | |||
Debt securities, Fair value | 15,000 | 167,055 | |||
Amortized cost | 277,519 | 396,202 | |||
Gross unrealized gains | 2,498 | 11,742 | |||
Gross unrealized losses | (10,281) | ||||
Fair value | 269,736 | $ 58,756 | ¥ 407,944 | ||
Impairments of available-for-sale securities | ¥ 48,634 | ¥ 0 | ¥ 0 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Other Long-Term Assets | |||
Deposit for land use rights (Note a) | ¥ 458,447 | ¥ 1,873,553 | |
Prepayment for investments (Note b) | 895 | 57,000 | |
Others | 51,479 | 5,754 | |
Total | $ 73,574 | ¥ 510,821 | ¥ 1,936,307 |
Goodwill (Details)
Goodwill (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Carrying amount of goodwill | |||
Balance at beginning of period | ¥ 108,781 | ¥ 60,000 | |
Balance at end of period | $ 52,874 | 367,106 | 108,781 |
Impairment loss in goodwill recognized | 0 | 0 | |
Zhengzhou Andaxin | |||
Carrying amount of goodwill | |||
Balance at beginning of period | 17,807 | ||
Addition for acquisition | 17,807 | ||
Balance at end of period | 17,807 | ||
Explink | |||
Carrying amount of goodwill | |||
Addition for acquisition | 11,057 | ||
Other investments | |||
Carrying amount of goodwill | |||
Addition for acquisition | 34,365 | ¥ 19,917 | |
Feiyuan | |||
Carrying amount of goodwill | |||
Addition for acquisition | 210,669 | ||
Zhejaing Vipshop Payment Co., Ltd (formerly known as Ebatong) | |||
Carrying amount of goodwill | |||
Addition for acquisition | ¥ 13,291 |
Accrued Expenses and Other Cu79
Accrued Expenses and Other Current Liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Accrued Expenses and Other Current Liabilities | |||
Accrued advertising expense | ¥ 511,394 | ¥ 193,785 | |
Accrued shipping and handling expenses | 624,699 | 1,032,123 | |
Accrued payroll | 649,301 | 425,102 | |
Social benefit provision | 58,166 | 60,911 | |
Deposits from delivery service providers | 152,494 | 93,629 | |
Other tax payable | 69,336 | 38,264 | |
Income tax payable | 275,114 | 216,770 | |
VAT tax payable | 258,221 | 289,633 | |
Accrued rental expenses | 64,829 | 58,276 | |
Accrued administrative expenses | 170,708 | 52,672 | |
Amounts received on behalf of third-party merchants | 302,486 | 388,388 | |
Payables for repurchase of ordinary shares (Note 21) | 194,514 | ||
Interest payable | 18,529 | 17,385 | |
Others | 167,322 | 43,170 | |
Total | $ 478,554 | ¥ 3,322,599 | ¥ 3,104,622 |
Employee Retirement Benefit (De
Employee Retirement Benefit (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Employee Retirement Benefit | |||
Contributions and accruals to employee retirement benefit plan | ¥ 585,073 | ¥ 337,762 | ¥ 196,778 |
Short term loans (Details)
Short term loans (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Mar. 09, 2016 | |
Short term loans | ||
Outstanding amount | ¥ 95,000 | |
Short-term loan with a domestic bank in the PRC | ||
Short term loans | ||
Outstanding amount | ¥ 95,000 | |
Interest rate (as a percent) | 4.35% | |
Maturity term of debt | 3 months | |
Amount of held-to-maturity securities pledged to secure the loan | ¥ 100,000 | |
Interest free loan with a local bank | ||
Short term loans | ||
Principal amount | ¥ 3,000 |
Convertible Senior Notes (Detai
Convertible Senior Notes (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Nov. 04, 2014 | Nov. 03, 2014$ / shares | Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Mar. 31, 2017CNY (¥) | Mar. 15, 2017USD ($) | Mar. 15, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Nov. 02, 2014 | Mar. 17, 2014USD ($)$ / shares | Mar. 17, 2014CNY (¥) | Mar. 16, 2013$ / shares |
ADS | |||||||||||||
Convertible Senior Notes | |||||||||||||
ADS ratio to ordinary shares | 5 | 0.20 | |||||||||||
Ordinary shares, par value | $ 0.001 | ||||||||||||
Notes | |||||||||||||
Convertible Senior Notes | |||||||||||||
Aggregate principal amount of convertible notes | $ 632,500 | ¥ 4,391,448 | |||||||||||
Interest rate (as a percent) | 1.50% | 1.50% | 1.50% | 1.50% | |||||||||
Redemption price due to fundamental change as percentage of principal amount | 100.00% | 100.00% | |||||||||||
Net proceeds from the Notes offering | $ 617,191 | ¥ 4,285,157 | |||||||||||
Discounts to initial purchaser | 14,231 | ¥ 98,806 | |||||||||||
Debt issuance costs | $ 1,078 | 7,485 | |||||||||||
Redemption amount of debt | $ 3,125 | ¥ 21,697 | |||||||||||
Amount of Note has been converted | ¥ | ¥ 0 | ||||||||||||
Notes | ADS | |||||||||||||
Convertible Senior Notes | |||||||||||||
ADS ratio to ordinary shares | 0.2 | 0.2 | |||||||||||
Conversion ratio | 4.9693 | 49.693 | |||||||||||
Conversion price per $1,000 of principal amount | $ 20.124 | $ 201.24 | |||||||||||
Commitment letter and related financing agreement | |||||||||||||
Convertible Senior Notes | |||||||||||||
Aggregate principal amount of convertible notes | $ 632,500 | ¥ 4,391,000 | |||||||||||
Number of international banks | item | 2 | ||||||||||||
Maturity term of debt | 364 days |
Distribution of Profit (Details
Distribution of Profit (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Distribution of Profit | |||
Reserve level threshold for mandatory transfer requirement (as a percent) | 50.00% | ||
Percentage of annual appropriation to general reserve fund required | 10.00% | ||
Transferred to general reserve | ¥ 84,873 | ¥ 234,425 | ¥ 135,797 |
Amount of restricted capital and reserves not available for dividend distribution | 4,278,531 | 1,957,529 | |
WFOE | |||
Distribution of Profit | |||
Amount of restricted capital and reserves not available for dividend distribution | 1,128,029 | 1,128,029 | |
Consolidated VIE and VIE's subsidiaries | |||
Distribution of Profit | |||
Amount of restricted capital and reserves not available for dividend distribution | ¥ 829,500 | ¥ 829,500 |
Capital Structure (Details)
Capital Structure (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Sep. 15, 2014item | Mar. 17, 2014USD ($)$ / sharesshares | Mar. 17, 2014USD ($)$ / sharesshares | Dec. 31, 2016shares | Dec. 31, 2015shares | Dec. 31, 2014shares | Nov. 03, 2014 | Nov. 02, 2014 | Mar. 17, 2014CNY (¥) |
Capital Structure | |||||||||
Number of additional ADSs from certain selling shareholders | 171,000 | ||||||||
Shares issued as a result of exercises of share options by employees and a consultant | 560,930 | 956,587 | 1,883,977 | ||||||
Notes | |||||||||
Capital Structure | |||||||||
Aggregate principal amount of convertible notes | $ 632,500 | $ 632,500 | ¥ 4,391,448 | ||||||
Interest rate (as a percent) | 1.50% | 1.50% | 1.50% | 1.50% | |||||
Initial public offering | |||||||||
Capital Structure | |||||||||
Number of shares issued to investors | 2,280,000 | ||||||||
Initial public offering | Notes | |||||||||
Capital Structure | |||||||||
Aggregate principal amount of convertible notes | $ 550,000 | $ 550,000 | ¥ 3,818,650 | ||||||
Follow-on offering | Notes | |||||||||
Capital Structure | |||||||||
Aggregate principal amount of convertible notes | $ 82,500 | $ 82,500 | ¥ 572,798 | ||||||
ADS | |||||||||
Capital Structure | |||||||||
Public offering price (per ADS) | $ / shares | $ 143.74 | $ 143.74 | |||||||
ADS ratio to ordinary shares | 5 | 0.20 | |||||||
ADS | Notes | |||||||||
Capital Structure | |||||||||
ADS ratio to ordinary shares | 0.2 | 0.2 | 0.2 | ||||||
ADS | Initial public offering | |||||||||
Capital Structure | |||||||||
Number of shares issued to investors | 1,140,000 | ||||||||
Class A ordinary shares | |||||||||
Capital Structure | |||||||||
Number of votes entitled per share | item | 1 | ||||||||
Shares issued as a result of exercises of share options by employees and a consultant | 560,930 | 956,587 | 1,883,977 | ||||||
Proceeds from issuance of ordinary shares upon vesting of shares awards | 861,815 | 1,100,618 | 988,723 | ||||||
Class B ordinary shares | |||||||||
Capital Structure | |||||||||
Number of votes entitled per share | item | 10 |
Treasury Stock (Details)
Treasury Stock (Details) ¥ in Thousands, $ in Millions | Nov. 17, 2015USD ($) | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥) |
Treasury Stock | |||
Repurchase of treasury stock (in shares) | shares | 1,614,135 | ||
Repurchase of treasury stock | ¥ | ¥ 844,711 | ¥ 844,711 | |
Considerations for shares repurchase program not yet paid | ¥ | ¥ 194,514 | ||
Treasury stock re-issued to employees for share awards (in shares) | shares | 257,217 | ||
ADS | |||
Treasury Stock | |||
Term of share repurchase program | 24 months | ||
ADS | Maximum | |||
Treasury Stock | |||
Stock repurchase program, authorized amount | $ | $ 300 |
Other Income (Details)
Other Income (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Other Income | ||||
Government grants | ¥ 282,866 | ¥ 282,330 | ¥ 121,463 | |
Claims for goods insurance | 19,694 | 11,136 | 27,754 | |
Others | 55,469 | 14,965 | 4,760 | |
Total other income | $ 51,567 | ¥ 358,029 | ¥ 308,431 | ¥ 153,977 |
Income Taxes (Details)
Income Taxes (Details) ¥ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥)¥ / shares | Dec. 31, 2015CNY (¥)¥ / shares | Dec. 31, 2014CNY (¥)¥ / shares | |
Income Taxes | ||||
Unrecognized tax benefits | ¥ 0 | ¥ 0 | ||
Components of income tax expense | ||||
Total tax expenses | $ 86,681 | 601,828 | 457,745 | ¥ 245,032 |
Undistributed earnings of the Group's subsidiaries and the VIEs in the PRC | 6,993,100 | 4,148,100 | ||
Provision for the Chinese dividend withholding taxes | 0 | 0 | ||
Deferred income tax liability not recorded in respect of undistributed earnings | 349,700 | 207,400 | ||
Reconciliation of the income tax expense to income before income tax and share of loss of affiliates | ||||
Income before income tax and share of loss of affiliates | 383,996 | 2,666,084 | 2,050,520 | 1,060,341 |
Computed income tax expense at PRC EIT tax rate | 666,521 | 512,630 | 265,085 | |
Effect of non-deductible expenses, including: | ||||
Share-based compensation expenses | 118,913 | 75,735 | 56,374 | |
Other non-deductible expenses | 6,408 | 4,259 | 9,487 | |
Effect of different tax rates of a subsidiary operating in other jurisdiction | 1,693 | 392 | 578 | |
Effect of tax holidays on concessionary rates granted to PRC subsidiaries | (280,523) | (144,958) | (46,159) | |
Effect of non-taxable income | (17,419) | (7,242) | (20,271) | |
Change in valuation allowance | 105,387 | 10,444 | (15,891) | |
Others | 848 | 6,485 | (4,171) | |
Total tax expenses | $ 86,681 | 601,828 | 457,745 | 245,032 |
Aggregate amount and per share effect of the tax holidays and tax concessions | ||||
The aggregate effect | 280,523 | 144,958 | 46,159 | |
Deferred tax assets: | ||||
Net operating loss carry forwards | 175,676 | 59,652 | ||
Allowance for doubtful debts | 18,017 | 1,083 | ||
Allowance for other investments | 9,044 | 9,678 | ||
Inventory write-down | 46,488 | 33,116 | ||
Payroll payable and other accruals | 21,427 | 28,490 | ||
Deferred revenue | 96,454 | 93,590 | ||
Advertising expenses | 24,354 | |||
Others | 2,039 | 983 | ||
Less: valuation allowance | (154,330) | (48,943) | ||
Total deferred tax assets-current | 214,815 | 202,003 | ||
Deferred tax liability: | ||||
Intangible assets | 100,583 | 175,416 | ||
Total deferred tax liability | 100,583 | 175,416 | ||
China operations | ||||
Components of income tax expense | ||||
Current tax (Note) | 689,473 | 561,001 | 464,025 | |
Deferred tax | (87,645) | (103,256) | (218,993) | |
Total tax expenses | 601,828 | 457,745 | 245,032 | |
Reconciliation of the income tax expense to income before income tax and share of loss of affiliates | ||||
Income before income tax and share of loss of affiliates | 3,241,171 | 2,540,418 | 1,354,239 | |
Effect of non-deductible expenses, including: | ||||
Total tax expenses | 601,828 | 457,745 | 245,032 | |
Non-China operations | ||||
Reconciliation of the income tax expense to income before income tax and share of loss of affiliates | ||||
Income before income tax and share of loss of affiliates | ¥ (575,087) | ¥ (489,898) | ¥ (293,898) | |
Cayman Islands | ||||
Income Taxes | ||||
Withholding tax upon payments of dividends (as a percent) | 0.00% | 0.00% | ||
Hong Kong | ||||
Income Taxes | ||||
Current rate of taxation (as a percent) | 16.50% | 16.50% | 16.50% | 16.50% |
People's Republic of China | ||||
Income Taxes | ||||
Income tax rate (as a percent) | 25.00% | 25.00% | ||
Threshold annual primary business revenue as percentage of total enterprise revenue | 70.00% | 70.00% | ||
Period of statute of limitations, if underpayment of income taxes is due to computational errors | 3 years | 3 years | ||
Period of statute of limitations under special circumstances not clearly defined | 5 years | 5 years | ||
Minimum underpayment of income tax liability subject to five years statute of limitations | $ 14 | ¥ 100 | ||
Period of statute of limitations in case of transfer pricing related adjustment | 10 years | 10 years | ||
Components of income tax expense | ||||
Withholding tax rate for dividends paid by PRC subsidiaries (as a percent) | 10.00% | 10.00% | ||
Threshold percentage ownership by residents which meet the criteria of beneficial owner in the Hong Kong SAR for withholding tax (as a percent) | 25.00% | |||
Withholding tax rate for subsidiary 25% or more directly owned by residents which meet the criteria of beneficial owner in Hong Kong SAR (as a percent) | 5.00% | 5.00% | ||
Deferred tax liability: | ||||
Tax loss carried forward of certain subsidiaries and VIEs | ¥ 702,705 | ¥ 238,606 | ||
People's Republic of China | Vipshop Jianyang | ||||
Income Taxes | ||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | ||
People's Republic of China | Vipshop Zhuhai | ||||
Income Taxes | ||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | ||
Pinwei Software | ||||
Income Taxes | ||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | ||
Class A and Class B ordinary share | ||||
Aggregate amount and per share effect of the tax holidays and tax concessions | ||||
Per share effect - basic (in dollars per share) | ¥ / shares | ¥ 2.42 | ¥ 1.25 | ¥ 0.41 | |
Per share effect - diluted (in dollars per share) | ¥ / shares | ¥ 2.23 | ¥ 1.21 | ¥ 0.38 |
Earnings Per Share (Details)
Earnings Per Share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014CNY (¥)¥ / sharesshares | |
Securities excluded from the computation of diluted net earnings per share (in shares) | 909,568 | 909,568 | 0 | 0 |
Numerator: | ||||
Earnings attributable to Class A and Class B ordinary shareholders for computing basic earnings per Class A and Class B ordinary share | $ 293,363 | ¥ 2,036,817 | ¥ 1,589,665 | ¥ 841,286 |
Denominator: | ||||
Weighted average number of Class A and Class B ordinary shares outstanding for computing basic earnings per Class A and Class B ordinary share | 115,958,088 | 115,958,088 | 115,736,092 | 113,310,682 |
Weighted average number of Class A and Class B ordinary shares outstanding for computing diluted earnings per Class A and Class B ordinary share | 125,817,183 | 125,817,183 | 120,168,063 | 120,227,584 |
Basic earnings per Class A and Class B ordinary shares (in dollars per share) | (per share) | $ 2.53 | ¥ 17.57 | ¥ 13.74 | ¥ 7.42 |
Diluted earnings per Class A and Class B ordinary shares (in dollars per share) | (per share) | $ 2.43 | ¥ 16.86 | ¥ 13.23 | ¥ 7 |
Common Class A and B shares | ||||
Numerator: | ||||
Earnings attributable to Class A and Class B ordinary shareholders for computing basic earnings per Class A and Class B ordinary share | ¥ | ¥ 2,036,817 | ¥ 1,589,665 | ¥ 841,286 | |
Net earnings attributable to Class A and Class B ordinary shareholders for computing diluted earnings per Class A and Class B ordinary share | ¥ | ¥ 2,120,964 | ¥ 1,589,665 | ¥ 841,286 | |
Denominator: | ||||
Weighted average number of Class A and Class B ordinary shares outstanding for computing basic earnings per Class A and Class B ordinary share | 115,958,088 | 115,958,088 | 115,736,092 | 113,310,682 |
Dilutive employee share options and non-vested ordinary shares | 3,572,930 | 3,572,930 | 4,431,971 | 6,916,902 |
Dilutive convertible senior notes | 6,286,165 | 6,286,165 | ||
Weighted average number of Class A and Class B ordinary shares outstanding for computing diluted earnings per Class A and Class B ordinary share | 125,817,183 | 125,817,183 | 120,168,063 | 120,227,584 |
Basic earnings per Class A and Class B ordinary shares (in dollars per share) | ¥ / shares | ¥ 17.57 | ¥ 13.74 | ¥ 7.42 | |
Diluted earnings per Class A and Class B ordinary shares (in dollars per share) | ¥ / shares | ¥ 16.86 | ¥ 13.23 | ¥ 7 |
Commitments and contingencies89
Commitments and contingencies (Details) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2015action | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Rental expenses | ¥ 248,264 | ¥ 191,253 | ¥ 163,332 | |
Minimum lease payments under non-cancellable leases | ||||
Year ending December 31, 2017 | 246,770 | |||
Year ending December 31, 2018 | 200,146 | |||
Year ending December 31, 2019 | 139,733 | |||
Year ending December 31, 2020 | 73,651 | |||
Year ending December 31, 2021 | 48,348 | |||
Over December 31, 2021 | 77,824 | |||
Total minimum lease payments | 786,472 | |||
Capital commitment | ||||
Commitment capital expenditures | ¥ 938,464 | |||
Contingencies | ||||
Number of putative securities class actions filed | action | 2 | |||
Minimum | ||||
Term of renewal | 1 year | |||
Maximum | ||||
Term of renewal | 10 years |
Related Party Transactions (Det
Related Party Transactions (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | |
Related Party Transactions | |||||
Purchase of goods (Note a) | ¥ 155,093 | ¥ 111,191 | ¥ 585,494 | ||
Delivery of goods (Note b) | 137,088 | 469,974 | |||
Other income | 1,773 | 4,027 | |||
Other expense | ¥ 1,475 | ||||
Amounts due from related parties | 31,856 | $ 1,203 | ¥ 8,352 | ||
Amounts due to affiliates and companies controlled or significantly influenced by shareholders related to purchases of goods or logistic services | ¥ 206,966 | ¥ 52,729 |
Share-based Payments (Details)
Share-based Payments (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2014 | Mar. 31, 2011 | |
Share-based Payments | |||||||
Number of options granted to executive officers, employees and a non-employee of the Group (in shares) | 0 | 0 | 0 | ||||
Expiration period from grant date | 10 years | ||||||
Post-termination exercise period | 9 months | ||||||
Maximum period of authorized leave of absence after which vesting shall be suspended | 90 days | ||||||
Options outstanding | |||||||
Outstanding at the beginning of the period (in shares) | 2,436,871 | 3,404,909 | 5,440,760 | ||||
Granted (in shares) | 0 | 0 | 0 | ||||
Exercised (in shares) | (560,930) | (956,587) | (1,883,977) | ||||
Forfeited (in shares) | (3,000) | (11,451) | (151,874) | ||||
Outstanding at the end of the period (in shares) | 1,872,941 | 2,436,871 | 3,404,909 | 5,440,760 | |||
Non-vested at the end of the period (in shares) | 2,855 | ||||||
Vested and expected to vest at the end of the period (in shares) | 1,872,941 | ||||||
Exercisable at the end of the period (in shares) | 1,870,086 | ||||||
Weighted average exercise price per share | |||||||
Outstanding at the beginning of the period (in dollars per share) | $ 1.33 | $ 1.26 | $ 1.18 | ||||
Exercised (in dollars per share) | 1.53 | 1.04 | 0.95 | ||||
Forfeited (in dollars per share) | 2.50 | 2.29 | 2.52 | ||||
Outstanding at the end of the period (in dollars per share) | 0.78 | $ 1.33 | $ 1.26 | $ 1.18 | |||
Vested and expected to vest at the end of the period (in dollars per share) | 1.28 | ||||||
Exercisable at the end of the period (in dollars per share) | $ 1.27 | ||||||
Weighted average remaining contractual years to expiry per share | |||||||
Exercised | 4 years 7 months 10 days | 5 years 5 months 12 days | 6 years 6 months | ||||
Forfeited | 4 years 11 months 1 day | 5 years 11 months 16 days | 7 years 2 months 9 days | ||||
Outstanding at the end of the period | 4 years 11 months 19 days | 5 years 10 months 21 days | 6 years 9 months 7 days | 7 years 8 months 9 days | |||
Vested and expected to vest at the end of the period | 4 years 11 months 19 days | ||||||
Exercisable at the end of the period | 4 years 11 months 19 days | ||||||
Weighted average fair value at grant date | |||||||
Outstanding at the beginning of the period (in dollars per share) | $ 6.31 | ||||||
Exercised (in dollars per share) | $ 3.31 | $ 3.07 | 3.38 | ||||
Forfeited (in dollars per share) | 2.50 | 2.29 | 5.21 | ||||
Outstanding at the end of the period (in dollars per share) | $ 6.31 | ||||||
Non-vested at the end of the period (in dollars per share) | 3.58 | ||||||
Weighted average intrinsic value per option | |||||||
Outstanding at the beginning of the period (in dollars per share) | 96.44 | 40.66 | |||||
Exercised (in dollars per share) | 53.52 | 75.31 | 96.75 | ||||
Forfeited (in dollars per share) | $ 52.55 | $ 74.06 | |||||
Outstanding at the end of the period (in dollars per share) | $ 96.44 | $ 40.66 | |||||
Aggregate intrinsic value | |||||||
Outstanding at the beginning of the period | $ 328,383,350 | $ 221,196,775 | |||||
Exercised | $ 30,022,847 | 72,038,452 | 182,277,923 | ||||
Forfeited | 157,650 | $ 848,073 | |||||
Outstanding at the end of the period | $ 328,383,350 | $ 221,196,775 | |||||
Vested and expected to vest at the end of the period | 100,716,203 | ||||||
Exercisable at the end of the period | $ 100,566,172 | ||||||
Class A ordinary shares | |||||||
Options outstanding | |||||||
Exercised (in shares) | (560,930) | (956,587) | (1,883,977) | ||||
2011 Plan | Class A ordinary shares | |||||||
Share-based Payments | |||||||
Number of ordinary shares authorized as stock based compensation | 7,350,000 | ||||||
2012 Plan | |||||||
Share-based Payments | |||||||
Maximum aggregate number of shares that may be issued per calendar year | 1,500,000 | ||||||
2012 Plan | Class A ordinary shares | |||||||
Share-based Payments | |||||||
Number of ordinary shares authorized as stock based compensation | 9,000,000 | ||||||
2014 Plan | |||||||
Share-based Payments | |||||||
Automatic increase of authorized ordinary shares | 1.50% | ||||||
2014 Plan | Class A ordinary shares | |||||||
Share-based Payments | |||||||
Number of ordinary shares authorized as stock based compensation | 5,366,998 |
Share-based Payments - Expenses
Share-based Payments - Expenses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Additional information related to stock options | |||
Share-based payment expenses related to share options granted | ¥ 475,653 | ¥ 302,941 | ¥ 225,494 |
Fair value of shares vested | 7,621 | 24,603 | |
Employees | |||
Additional information related to stock options | |||
Share-based payment expenses related to share options granted | 7,002 | 23,366 | 34,934 |
Executives and employees | |||
Additional information related to stock options | |||
Unrecognized compensation cost related to unvested share options granted | ¥ 243 | ||
Weighted-average period over which unrecognized compensation cost is to be recognized | 3 months | ||
Non-vested shares | Employees | |||
Additional information related to stock options | |||
Share-based payment expenses related to share options granted | ¥ 468,651 | ¥ 279,575 | ¥ 190,560 |
Share-based Payments - Non-vest
Share-based Payments - Non-vested shares (Details) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016CNY (¥)$ / shares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015$ / shares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014$ / shares | Dec. 31, 2014CNY (¥)¥ / sharesshares | |
Share-based Payments | ||||||
Number of options | 0 | 0 | 0 | |||
Non-vested shares | ||||||
Share-based Payments | ||||||
Non-vested ordinary shares granted to executive officers, employees, members of Audit Committee and consultants (in shares) | 1,815,919 | 951,684 | ||||
Non-vested shares movement | ||||||
Outstanding at the beginning of the period | 2,094,709 | 2,448,779 | ||||
Granted | 1,815,919 | 951,684 | ||||
Vested | (1,119,032) | (1,100,619) | ||||
Forfeited | (371,731) | (205,135) | ||||
Outstanding at the end of the period | 2,419,865 | 2,094,709 | 2,448,779 | |||
2012 Plan | Non-vested shares | ||||||
Share-based Payments | ||||||
Non-vested ordinary shares granted to executive officers, employees, members of Audit Committee and consultants (in shares) | 1,815,919 | 951,684 | 1,932,680 | |||
Vesting period | 4 years | |||||
Vesting percentage on first anniversary from grant date | 25.00% | |||||
Percentage of awards vesting on a monthly basis, ending on the fourth anniversary of the grant date | 75.00% | |||||
Period over which remaining three-fourth shares will vest on a monthly basis | 3 years | |||||
Aggregate fair value of the restricted shares at grant dates | ¥ | ¥ 824,474 | ¥ 657,794 | ¥ 900,361 | |||
Unrecognized compensation cost related to non-vested shares | ¥ | ¥ 1,280,756 | ¥ 1,280,756 | ||||
Weighted-average vesting period over which unrecognized compensation cost is to be recognized | 3 years 4 months 24 days | |||||
Weighted average granted fair value per share of non-vested shares granted during the year (in dollars per share) | (per share) | ¥ 67.66 | ¥ 469.76 | $ 109 | ¥ 706.08 | $ 63.31 | ¥ 392.81 |
Non-vested shares movement | ||||||
Granted | 1,815,919 | 951,684 | 1,932,680 | |||
2012 Plan | Non-vested shares | Key management | ||||||
Share-based Payments | ||||||
Forfeiture rate (as a percent) | 0.00% | 0.00% | 0.00% | |||
2012 Plan | Non-vested shares | Employees | ||||||
Share-based Payments | ||||||
Forfeiture rate (as a percent) | 13.00% | 13.00% | 13.00% |
Share-based Payments - Share-ba
Share-based Payments - Share-based compensation expenses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based compensation expenses | |||
Share-based compensation expenses | ¥ (475,653) | ¥ (302,941) | ¥ (225,494) |
Fulfillment expenses | |||
Share-based compensation expenses | |||
Share-based compensation expenses | (38,428) | (18,665) | (10,822) |
Marketing expenses | |||
Share-based compensation expenses | |||
Share-based compensation expenses | (38,459) | (19,938) | (17,293) |
Technology and content expenses | |||
Share-based compensation expenses | |||
Share-based compensation expenses | (183,122) | (126,274) | (103,160) |
General and administrative expenses | |||
Share-based compensation expenses | |||
Share-based compensation expenses | ¥ (215,644) | ¥ (138,064) | ¥ (94,219) |
Segment information (Details)
Segment information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($)item | Dec. 31, 2016CNY (¥)item | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Segment information | ||||
Number of reportable segments | item | 1 | 1 | ||
Product revenues | ||||
Product revenues | $ 7,962,250 | ¥ 55,281,900 | ¥ 39,409,961 | ¥ 22,685,111 |
Other revenues | 188,593 | 1,309,402 | 793,251 | 444,202 |
Total net revenues | $ 8,150,843 | 56,591,302 | 40,203,212 | 23,129,313 |
Apparel | ||||
Product revenues | ||||
Product revenues | 20,381,929 | 13,887,533 | 9,554,581 | |
Shoes and bags | ||||
Product revenues | ||||
Product revenues | 7,734,909 | 5,439,785 | 3,476,839 | |
Cosmetics | ||||
Product revenues | ||||
Product revenues | 7,574,423 | 5,191,552 | 2,986,807 | |
Sportswear and sporting goods | ||||
Product revenues | ||||
Product revenues | 3,518,007 | 2,656,546 | 1,287,341 | |
Home goods and other lifestyle products | ||||
Product revenues | ||||
Product revenues | 6,622,624 | 2,941,734 | 1,289,114 | |
Toys, kids and baby | ||||
Product revenues | ||||
Product revenues | 5,535,834 | 4,609,484 | 1,575,077 | |
Other goods | ||||
Product revenues | ||||
Product revenues | ¥ 3,914,174 | ¥ 4,683,327 | ¥ 2,515,352 |
Subsequent event (Details)
Subsequent event (Details) - $ / shares | Jan. 01, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent event | ||||
Granted (in shares) | 0 | 0 | 0 | |
Expiration period from grant date | 10 years | |||
Non-vested shares | ||||
Subsequent event | ||||
Shares granted (in shares) | 1,815,919 | 951,684 | ||
Subsequent events | Senior management | First anniversary of the grant date | ||||
Subsequent event | ||||
Restricted shares and stock options will be vested (as a percent) | 25.00% | |||
Subsequent events | Senior management | Three-year period ending on the fourth anniversary of the grant date | ||||
Subsequent event | ||||
Restricted shares and stock options will be vested (as a percent) | 75.00% | |||
Vesting period | 3 years | |||
Percentage of options granted, vesting at the end of each month after the first anniversary | 0.0208333 | |||
Subsequent events | Senior management | 2014 Plan | ||||
Subsequent event | ||||
Granted (in shares) | 1,320,000 | |||
Exercise Price per share (in dollars per share) | $ 13.67 | |||
Subsequent events | Senior management | Non-vested shares | ||||
Subsequent event | ||||
Shares granted (in shares) | 900,000 |
Schedule I-Condensed Financia97
Schedule I-Condensed Financial Information - Statements of Income and Comprehensive Income (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Condensed Financial Information | ||||
General and administrative expenses | $ (279,583) | ¥ (1,941,146) | ¥ (1,301,472) | ¥ (967,463) |
Loss from operations | 389,991 | 2,707,709 | 2,070,549 | 833,687 |
Interest expenses | (12,271) | (85,195) | (85,762) | (75,249) |
Share of loss of affiliates | (10,297) | (71,489) | (84,063) | (62,716) |
Impairment loss of investments | (16,502) | (114,574) | (99,749) | (6,166) |
Net income attributable to Vipshop Holdings Limited's shareholders | 293,363 | 2,036,817 | 1,589,665 | 841,286 |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustments | (41,618) | (288,956) | (55,653) | (1,709) |
Comprehensive income attributable to Vipshop Holdings Limited's shareholders | 254,096 | 1,764,190 | 1,529,395 | 840,859 |
Parent company | ||||
Condensed Financial Information | ||||
General and administrative expenses | (70,710) | (490,939) | (336,783) | (225,494) |
Loss from operations | (70,710) | (490,939) | (336,783) | (225,494) |
Interest expenses | (12,120) | (84,148) | (84,467) | (62,238) |
Share of loss of affiliates | (9,433) | (65,492) | (80,422) | (62,038) |
Impairment loss of investments | (68,648) | (6,166) | ||
Equity in incomes of subsidiaries and VIEs | 385,626 | 2,677,396 | 2,159,985 | 1,197,222 |
Net income attributable to Vipshop Holdings Limited's shareholders | 293,363 | 2,036,817 | 1,589,665 | 841,286 |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustments | (42,078) | (292,152) | (52,487) | (427) |
Share of comprehensive income of subsidiaries | 2,811 | 19,525 | (7,783) | |
Comprehensive income attributable to Vipshop Holdings Limited's shareholders | $ 254,096 | ¥ 1,764,190 | ¥ 1,529,395 | ¥ 840,859 |
Schedule I-Condensed Financia98
Schedule I-Condensed Financial Information - Balance Sheets (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2014CNY (¥) | Dec. 31, 2013CNY (¥) |
ASSETS | ||||||
Cash and cash equivalents | $ 591,902 | ¥ 4,109,577 | $ 478,808 | ¥ 3,324,384 | ¥ 4,790,751 | ¥ 2,026,264 |
Investment in affiliates | 13,415 | 93,144 | 252,706 | |||
Total assets | 3,614,353 | 25,094,453 | 20,035,522 | |||
LIABILITIES AND EQUITY | ||||||
Convertible senior notes | 631,096 | 4,381,698 | 4,058,181 | |||
Total liabilities | 2,781,601 | 19,312,649 | 16,422,255 | |||
EQUITY: | ||||||
Treasury stock, at cost ( 1,614,135 and 1,356,918 Class A shares as of December 31, 2015 and December 31, 2016, respectively) | (101,893) | (707,441) | (844,711) | |||
Additional paid-in capital | 450,832 | 3,130,126 | 2,838,591 | |||
Retained earnings | 526,145 | 3,653,026 | 1,616,209 | |||
Accumulated other comprehensive loss | (49,490) | (343,608) | (70,981) | |||
Total Vipshop Holdings Limited shareholders' equity | 825,605 | 5,732,180 | 3,539,184 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 3,614,353 | 25,094,453 | 20,035,522 | |||
Parent company | ||||||
ASSETS | ||||||
Cash and cash equivalents | 137 | 952 | $ 37 | 255 | ¥ 975 | ¥ 576 |
Investment in affiliates | 10,357 | 71,908 | 137,401 | |||
Available-for-sale securities investments | 114 | 794 | 38,406 | |||
Investment in subsidiaries and VIEs | 526,310 | 3,654,162 | 3,771,569 | |||
Amount due from subsidiaries and VIEs | 928,844 | 6,448,966 | 3,861,551 | |||
Total assets | 1,465,762 | 10,176,782 | 7,809,182 | |||
LIABILITIES AND EQUITY | ||||||
Accrued expenses | 2,669 | 18,529 | 203,131 | |||
Convertible senior notes | 631,096 | 4,381,698 | 4,058,181 | |||
Deferred income | 6,391 | 44,375 | 8,686 | |||
Total liabilities | 640,156 | 4,444,602 | 4,269,998 | |||
EQUITY: | ||||||
Treasury stock, at cost ( 1,614,135 and 1,356,918 Class A shares as of December 31, 2015 and December 31, 2016, respectively) | (101,893) | (707,441) | (844,711) | |||
Additional paid-in capital | 450,832 | 3,130,126 | 2,838,591 | |||
Retained earnings | 526,145 | 3,653,026 | 1,616,209 | |||
Accumulated other comprehensive loss | (49,489) | (343,608) | (70,981) | |||
Total Vipshop Holdings Limited shareholders' equity | 825,606 | 5,732,180 | 3,539,184 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,465,762 | 10,176,782 | 7,809,182 | |||
Class A ordinary shares | ||||||
EQUITY: | ||||||
Ordinary shares | $ 9 | ¥ 66 | ¥ 65 | |||
Additional disclosure | ||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Common shares, shares authorized | 483,489,642 | 483,489,642 | 483,489,642 | 483,489,642 | ||
Common shares, shares issued | 101,508,264 | 101,508,264 | 100,085,519 | 100,085,519 | ||
Common shares, shares outstanding | 101,508,264 | 101,508,264 | 100,085,519 | 100,085,519 | ||
Treasury shares (in shares) | 1,356,918 | 1,356,918 | 1,614,135 | 1,614,135 | ||
Class A ordinary shares | Parent company | ||||||
EQUITY: | ||||||
Ordinary shares | $ 9 | ¥ 66 | ¥ 65 | |||
Additional disclosure | ||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Common shares, shares authorized | 483,489,642 | 483,489,642 | 483,489,642 | 483,489,642 | ||
Common shares, shares issued | 101,508,264 | 101,508,264 | 100,085,519 | 100,085,519 | ||
Common shares, shares outstanding | 101,508,264 | 101,508,264 | 100,085,519 | 100,085,519 | ||
Treasury shares (in shares) | 1,356,918 | 1,356,918 | 1,614,135 | 1,614,135 | ||
Class B ordinary shares | ||||||
EQUITY: | ||||||
Ordinary shares | $ 2 | ¥ 11 | ¥ 11 | |||
Additional disclosure | ||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Common shares, shares authorized | 16,510,358 | 16,510,358 | 16,510,358 | 16,510,358 | ||
Common shares, shares issued | 16,510,358 | 16,510,358 | 16,510,358 | 16,510,358 | ||
Common shares, shares outstanding | 16,510,358 | 16,510,358 | 16,510,358 | 16,510,358 | ||
Class B ordinary shares | Parent company | ||||||
EQUITY: | ||||||
Ordinary shares | $ 2 | ¥ 11 | ¥ 11 | |||
Additional disclosure | ||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Common shares, shares authorized | 16,510,358 | 16,510,358 | 16,510,358 | 16,510,358 | ||
Common shares, shares issued | 16,510,358 | 16,510,358 | 16,510,358 | 16,510,358 | ||
Common shares, shares outstanding | 16,510,358 | 16,510,358 | 16,510,358 | 16,510,358 |
Schedule I-Condensed Financia99
Schedule I-Condensed Financial Information - Statements of Cash Flows and Notes (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Cash flows from operating activities: | ||||
Net income | $ 287,018 | ¥ 1,992,767 | ¥ 1,508,712 | ¥ 752,593 |
Adjustments to reconcile net income to net cash by operating activities: | ||||
Share of loss of affiliates | 10,297 | 71,489 | 84,063 | 62,716 |
Impairment loss of investment | 16,502 | 114,574 | 99,749 | 6,166 |
Share-based compensation expenses | 68,508 | 475,653 | 302,941 | 225,494 |
Amortization of debt issuance cost | 5,160 | 35,824 | 33,453 | 26,701 |
Changes in operating assets and liabilities: | ||||
Amounts due from subsidiaries | 4,357 | 30,251 | (865) | (30,991) |
Deferred income | 8,000 | 55,549 | (86,880) | 63,158 |
Net cash generated from operating activities | 407,808 | 2,831,413 | 1,915,086 | 3,262,662 |
Cash flows from investing activities: | ||||
Investment in affiliates and other investments | (8,401) | (58,327) | (523,643) | (463,093) |
Investment in available-for-sale securities | (14,016) | (97,314) | (246,953) | |
Acquisition of a subsidiary, net of cash acquired | (15,321) | (106,365) | (39,198) | (687,233) |
Net cash used in investing activities | (240,386) | (1,669,002) | (2,937,309) | (4,253,380) |
Cash flows from financing activities: | ||||
Proceeds from issuance of convertible notes | 3,836,110 | |||
Repurchase of ordinary shares | (27,887) | (193,619) | (650,197) | |
Issuance cost of convertible notes offering | (6,689) | |||
Proceeds from issuance of ordinary shares upon exercise of stock options | 829 | 5,747 | 6,323 | 10,950 |
Net cash provided by (used in) financing activities | (56,621) | (393,128) | (539,134) | 3,852,133 |
Effect of exchange rate changes | 2,293 | 15,910 | 94,990 | (96,928) |
Net increase (decrease) in cash and cash equivalents | 113,094 | 785,193 | (1,466,367) | 2,764,487 |
Cash and cash equivalents at beginning of the period | 478,808 | 3,324,384 | 4,790,751 | 2,026,264 |
Cash and cash equivalents at end of the period | 591,902 | 4,109,577 | 3,324,384 | 4,790,751 |
Restriction on dividend distribution | ||||
Amount of restricted capital and reserves not available for dividend distribution | 4,278,531 | 1,957,529 | ||
Consolidated VIE and VIE's subsidiaries | ||||
Cash flows from operating activities: | ||||
Net income | 230,954 | 226,986 | 162,955 | |
Changes in operating assets and liabilities: | ||||
Net cash generated from operating activities | (1,192,894) | (1,363,805) | 1,052,069 | |
Cash flows from investing activities: | ||||
Net cash used in investing activities | 626,798 | 1,018,250 | (890,327) | |
Cash flows from financing activities: | ||||
Net cash provided by (used in) financing activities | (108,779) | 809,740 | 12,665 | |
Restriction on dividend distribution | ||||
Dividend paid to the Company | 0 | 0 | 0 | |
Amount of restricted capital and reserves not available for dividend distribution | 829,500 | 829,500 | ||
Parent company | ||||
Cash flows from operating activities: | ||||
Net income | 293,363 | 2,036,817 | 1,589,665 | 841,286 |
Adjustments to reconcile net income to net cash by operating activities: | ||||
Equity in incomes of subsidiaries and variable interest entities | (385,626) | (2,677,396) | (2,159,985) | (1,197,222) |
Share of loss of affiliates | 9,433 | 65,492 | 80,422 | 62,038 |
Impairment loss of investment | 68,648 | 6,166 | ||
Share-based compensation expenses | 68,508 | 475,653 | 302,941 | 225,494 |
Amortization of debt issuance cost | 5,160 | 35,824 | 33,453 | 26,701 |
Changes in operating assets and liabilities: | ||||
Amounts due from subsidiaries | 27,728 | 192,523 | 993,135 | (2,715,107) |
Accrued expenses and other current liabilities | 3,447 | 23,924 | (8,081) | 16,699 |
Deferred income | 5,140 | 35,688 | 8,686 | |
Net cash generated from operating activities | 27,153 | 188,525 | 908,884 | (2,733,945) |
Cash flows from investing activities: | ||||
Investment in affiliates and other investments | (335,974) | (437,108) | ||
Investment in available-for-sale securities | (38,406) | |||
Acquisition of a subsidiary, net of cash acquired | (687,233) | |||
Net cash used in investing activities | (374,380) | (1,124,341) | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of convertible notes | 3,836,110 | |||
Repurchase of ordinary shares | (27,887) | (193,619) | (650,197) | |
Issuance cost of convertible notes offering | (6,689) | |||
Proceeds from issuance of ordinary shares upon exercise of stock options | 828 | 5,747 | 6,323 | 10,950 |
Other financing activities | 4,225 | |||
Net cash provided by (used in) financing activities | (27,059) | (187,872) | (643,874) | 3,844,596 |
Effect of exchange rate changes | 6 | 44 | 108,650 | 14,089 |
Net increase (decrease) in cash and cash equivalents | 100 | 697 | (720) | 399 |
Cash and cash equivalents at beginning of the period | 37 | 255 | 975 | 576 |
Cash and cash equivalents at end of the period | $ 137 | 952 | 255 | 975 |
Restriction on dividend distribution | ||||
Amount of restricted capital and reserves not available for dividend distribution | 4,278,531 | 1,957,529 | ||
Cash dividend declared and paid to the Company | 0 | 0 | 0 | |
WFOE | ||||
Restriction on dividend distribution | ||||
Amount of restricted capital and reserves not available for dividend distribution | 1,128,029 | 1,128,029 | ||
Group's subsidiaries | ||||
Restriction on dividend distribution | ||||
Dividend paid to the Company | ¥ 0 | ¥ 0 | ¥ 0 |