Vipshop, rarely talked about, keeps making money
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
Have you heard of a company called Vipshop?
Its advertising used to be everywhere: in lifts, across all kinds of media. Even I knew the name in Malaysia. But in recent years, when people talk about Chinese e-commerce, it's all Taobao, Pinduoduo and Douyin. You rarely hear about Vipshop any more.
I assumed that with competition in China this brutal and so many e-commerce players crying for help, it probably wasn't doing well either. Then I looked it up: it has been profitable for more than 50 consecutive quarters. Fifty quarters. That's twelve and a half years.
Its business is branded flash sales, which you can think of as an online outlet. Shoppers want branded, quality goods at a good price; brands need a channel to sell through their stock; Vipshop connects the two. In 2025, Vipshop made about RMB105.9 billion in revenue and RMB7.24 billion in net profit attributable to shareholders. Both revenue and profit were lower than the year before, but still making more than RMB7 billion in a year is already impressive.
Of course, part of its profit in the second quarter of 2026 came from a one-off gain after putting outlet projects into a REIT, so not all of it is money from selling goods. Still, if you separate out special gains and one-off tax items, the group remains solidly profitable.
The people most willing to come back
So what's worth studying here?
One thing that really caught my eye is its customer structure. Total active users haven't grown much in recent years, but annual active SVIP members went from 7.6 million in 2023 to 8.8 million in 2024, and 9.8 million in 2025. By the second quarter of 2026, SVIP membership had reached 10 million.
More interesting still: in 2025, these active SVIPs were only about 12% of all active customers, yet contributed 52% of online net GMV. In the second quarter of 2026, active SVIP numbers grew another 8% year on year and contributed 54% of online spending.
Total users barely grew, but the group most willing to keep coming back to buy is growing. I think that number is the real point.
Compared with other platforms, its membership base is actually much smaller. Taobao's 88VIP had about 64 million members as of the end of June 2026, and JD PLUS reached 35 million as early as the first quarter of 2023. The disclosure dates differ, but you can see the gap in scale.
On price, Taobao 88VIP costs RMB88 a year for eligible users; JD PLUS has a promotional sign-up price of RMB99; Vipshop's SVIP annual card has an official price of RMB199.
Of course, each has its own discounts and waivers, so you can't simply say who's most expensive. But at least you can see that you don't need the biggest membership base to build a business that stays profitable.
From chasing growth to protecting profit
From an entrepreneur's point of view, this is a shift in where a business puts its focus.
Early on you need exposure; people need to know who you are. So advertising, fighting for users and chasing growth are normal. But past a certain scale, you have to ask yourself: how much more will I spend to win people who may not need me? Or should I put more resources into the people who already value me and keep coming back?
Today's Vipshop looks more and more like a mature company focused on cash flow and shareholder returns. In 2025 it returned about US$944 million to shareholders through dividends and buybacks. Of course it still wants to grow, but it doesn't need to prove itself with high growth at every step. Judge ads by their return, do the maths on expansion, serve customers well, make money, then reward shareholders: that's a very good way to run a business too.
Why does this case resonate with me so much?
Because when the market is bad, the thing bosses get most nervous about is sales. A bit less today, a bit less tomorrow, so you cut prices, add vouchers, buy traffic, anything to hold up the top line. But in the end, revenue is protected while the bottom line gets thinner and thinner. You make a little less on each order, then make up for it with more orders. The warehouse is busy, the staff are busy, the boss is busy, and there's no money in the account.
What Vipshop taught me isn't to sacrifice the top line, but not to keep cutting into your own profit just to make revenue grow. Don't cut prices and there are no sales; cut prices and there's no profit; then you have to chase even bigger sales. It's very easy to fall into a bad cycle.
Better to go back to the fundamentals of the business.
Serve customers well, pick the right products, make shoppers feel it's worth it, and make brands and suppliers feel that working with you has value. When customers are willing to come back, partners are willing to keep working with you, and the company keeps a reasonable profit, the business has what it needs to keep going. A membership card is just a format. Only when the things behind it are done well do customers have a reason to stay.
I used to treat how loud a company was as a sign of how well it was doing.
Now I find that some companies we rarely talk about have been serving customers, making money and paying it out to shareholders all along. In such a chaotic, cut-throat market, holding on to that is already remarkable.
Especially when I see sales everywhere in Malaysia lately.
Are we chasing profitable growth, or spending money to keep up a scale that merely looks like it isn't shrinking?