Organization and principal activities

12 Months Ended

Dec. 31, 2012

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 to be the holding company, its subsidiaries and variable interest entity (“VIE”) is engaged in the provision of operating an online platform. The Company offers high-quality branded products to consumers in the People’s Republic of China (the “PRC”) through flash sales on its vipshop.com website. Flash sales represents a new 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. At the time of the Company’s incorporation and through the date of the Reorganization as described below, the ownership interest of the Company was held by five individuals indirectly through their respective investment holding companies. These individuals are 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”). The Company, its subsidiaries and consolidated variable interest entity (“VIE”) are collectively referred to as the “Group”.

Vipshop Information Technology Co., Ltd. (“Vipshop Information” or the “VIE”) was incorporated in the PRC on August 22, 2008, to operate an online platform for sales of products. On the date of Reorganization, Vipshop Information are owned by the same five ultimate shareholders of the Company as described above, with the same respective percentage of ownership for each of the five ultimate shareholders.

To comply with PRC laws and regulations that restrict foreign owned enterprises from holding the licenses that are necessary for the operation of internet access, the distribution of online information and the conduct of online commerce, the Company entered into the following transactions (collectively, the “Reorganization”).

On October 22, 2010, the Company incorporated a wholly owned subsidiary, Vipshop International Holdings Limited in Hong Kong (“Vipshop HK”) as the intermediate holding company for Vipshop (China) Co., Ltd. (formerly known as Vipshop Information Computer Service Co. Ltd., the “WOFE”). The WOFE was incorporated on January 20, 2011 in the PRC as a wholly owned subsidiary of Vipshop HK with initial registered capital of RMB10 million (US$1.6 million). On the same day, the WOFE entered into series agreements with Vipshop Information and each of its individual shareholders that are disclosed in the Note 2(b).

The Reorganization has been accounted for as a recapitalization because there was no control or collaborative group established before or after the Reorganization, and the assets and liabilities were recorded at their historical costs. The Company, its subsidiaries and variable interest entity are collectively referred to as the Group. Accordingly, the Group’s consolidated financial statements for the periods presented have been prepared by including the financial statements of the Company, its subsidiaries and the VIE.

As of December 31, 2012, the Company’s significant consolidated subsidiaries and VIE consist of the following:

Name	Date of incorporation	Place of incorporation	Percentage of shareholdings		Principal activities
Guangzhou Vipshop Information Technology Co., Ltd.(“Vipshop Information” or the “VIE”)	August 22, 2008	China	VIE		Online retail
Vipshop International Holdings Limited(“Vipshop HK”)	October 22, 2010	Hong Kong	100	%	Investment holding
Vipshop (China) Co., Ltd.(the “WOFE”)	January 20, 2011	China	100	%	Warehousing, logistics, procurement, research and development, consulting
Vipshop (Kunshan) E-Commerce Co., Ltd.(“Vipshop Kunshan”)	August 2, 2011	China	100	%	Warehousing and logistics
Vipshop (Jianyang) E-Commerce Co., Ltd.(“Vipshop Jianyang”)	February 22, 2012	China	100	%	Warehousing and logistics
Vipshop (Beijing) E-Commerce Co., Ltd.(“Vipshop Beijing”)	March 13, 2012	China	100	%	Warehousing and logistics
Vipshop (Tianjin) E-Commerce Co., Ltd.(“Vipshop Tianjin”)	July 31, 2012	China	100	%	Warehousing and logistics
Guangzhou Pinwei Software Co., Ltd. (“Pinwei Software”)	December 6, 2012	China	100	%	Software development and information technology support