No. of Recommendations: 1
Baozun's one of my few non-TMF companies that I have invested in.

Something to read for all Baozun shareholders:


SHANGHAI, China, April 11, 2018 (GLOBE NEWSWIRE) --

Dear Shareholders:

We have just had another great year! Before I go into details, let me offer my thanks and appreciation to all of my colleagues at Baozun (BZUN), and to our brand partners, customers, board of directors, and investors. Thank you all for your support and recognition.

2017 marked the start of Baozun’s second decade in business. It also marked a tipping point for online retail in China. While the rapid pace of development in the branded e-commerce market continued throughout the year, online shopping began to have a dramatic impact on offline retail. This impact could be seen across the entire industry, including market surveys, product development, brand creation, market promotions, supply chain reorganization, and technology. This transformation creates both a huge opportunity and a challenge for brands, the industry and Baozun.


cont'd

https://seekingalpha.com/pr/17127333-baozun-releases-2017-ch...

Starrob
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Starrob,
Why have you decided to invest in this company?

Andy
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Starrob,
Why have you decided to invest in this company?


Andy


It was a good fit for my portfolio. I build a portfolio by diversifying by the types of risk and the amount of risk that I am willing to take.

For Baozun, I wanted to diversify internationally, specifically into China. I consider Chinese ecommerce the sector with the biggest upside with the least risk in China. I bought small amounts of Baozun and JD.com to accomplish that diversification.

Why not invest in Alibaba? Alibaba, in my opinion, engages in some questionable behavior and I would not be surprised if Alibaba has a major scandal in China that hurts US investors at some point. The China Hustle would still be alive: https://www.youtube.com/watch?v=55892jT06aI

I consider Baozun and JD.com the least likely Chinese company engaging in serious fraud but I still have only one percent invested into each currently. I think there's probably other ethical Chinese companies like Baidu but I like Chinese ecommerce players best because I think the Chinese government would be the least likely to go after the companies. I think the social network players like Momo and Weibo would be at highest risk for the Chinese government to take them to task.


Starrob
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Starrob,

I consider Baozun and JD.com the least likely Chinese company engaging in serious fraud but I still have only one percent invested into each currently. I think there's probably other ethical Chinese companies like Baidu but I like Chinese ecommerce players best because I think the Chinese government would be the least likely to go after the companies. I think the social network players like Momo and Weibo would be at highest risk for the Chinese government to take them to task.

I would agree with everything you have said here except for Baozun. It is such a small company for a China investment. What makes you think they are a reliable company? Is there something that you saw that made you believe in them? Small cap Chinese companies are hard to believe in but if you found something that makes you think they are an honest company I would like to hear it.


Andy
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I would agree with everything you have said here except for Baozun. It is such a small company for a China investment. What makes you think they are a reliable company? Is there something that you saw that made you believe in them? Small cap Chinese companies are hard to believe in but if you found something that makes you think they are an honest company I would like to hear it.

buynholdisdead


Baozun would NOT be a microcap dealing fertilizer in Mongolia or some microcap company dealing squid snacks that no one has heard of before. Baozun would also NOT be a company that makes storefronts for rinky dink companies about to go out of business.


Baozun would be 2.51 smallcap company that has a business model that's evolving to become more and more like Shopify. Currently, Baozun has a a strategic partnership with Alibaba but creates storefronts for western brands on both Alibaba’s T-Mall and on JD.com. Baozun has at least 95 brands as clients that includes Nike, Coach, Converse, Levi’s, Calvin Klein in fashion; Subaru, Honda, Mitsubishi (MTU), Fiat (FIATY) and Toyota (TM); Haagen-Dazs and Godiva; Johnson & Johnson (JNJ) and Pepsi (PEP); and Microsoft (MSFT) and GoPro (GPRO).

Baozun already would be known as the company that Western brands goes to in China if they want to establish a eCommerce storefront. While I might not be able to do on the ground due diligence of Chinese companies, I am quite sure companies like Microsoft, Coach and Nike have done due diligence before entrusting Baozun to build their eCommerce storefront.

The upside (reward) in Baozun would be in Baozun also gaining domestic Chinese brands both large and small as clients. The downside (risk) would be in a company like Alibaba or JD.com competing directly with what Baozun does. Similar to how Shopify has the risk of Amazon or Google deciding that they want to build a similar service to Shopify.

Other than that Baozun has all the other risks that any Chinese company would have.


Starrob
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Baozun would be 2.51 smallcap company that has a business model that's evolving to become more and more like Shopify. Currently, Baozun has a a strategic partnership with Alibaba but creates storefronts for western brands on both Alibaba’s T-Mall and on JD.com. Baozun has at least 95 brands as clients that includes Nike, Coach, Converse, Levi’s, Calvin Klein in fashion; Subaru, Honda, Mitsubishi (MTU), Fiat (FIATY) and Toyota (TM); Haagen-Dazs and Godiva; Johnson & Johnson (JNJ) and Pepsi (PEP); and Microsoft (MSFT) and GoPro (GPRO).

Thanks Starrob, Very interesting. I think I will look into them.

Andy
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Thanks Starrob, Very interesting. I think I will look into them.

Andy

Just be aware that it can be a very volatile stock. I have had the stock move 15-20% in one day on different days both on the upside and downside.

Today the stock lost -6.69%...I think mostly because of Tencent sending most Chinese stocks into a downer today:

Chinese internet–related stocks continue to feel pressure from Tencent’s (OTCPK:TCEHY -10%) plans to focus on investments rather than short-term margins and Naspers’ $10.6B sale of Tencent shares.

https://seekingalpha.com/news/3341097-chinese-internet-stock...

Starrob
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