Then gross margin is fundamental. Without a proper gross margin, you actually cannot do anything. If I stick to financial metrics, inventory management and inventory days of turnover, very important as well, because this is a precondition for the gross margin to remain healthy and controlled obviously of cost. And on all this, we are quite happy with what has happened so far, and these are the metrics we will continue to look at going forward. Now to answer the third part of your question. Although we have premiumized Gap, we haven’t turned it into a luxury brand by far. What we have done really is to make sure that, more, a larger percentage of products are sold at full price instead as being fully-discounted from the first day. And I think that even in the current circumstances of a slower economy, we can see that this is a winning strategy.
And in fact, I would say that, the consumers today are not so much chasing bargains, but they are really looking for value for money and value for money is not just a question of money, it is also a question of value. And what we can see is that, if we give consumers at a reasonable price, a price that reflects the value in the product, the product he or she wants with the quality he or she expects, the design he or she expects, then this is what they consider to be value for money and this works. That’s about the way, I would answer your three parts of question.
Operator: [Operator Instructions]. Our next question comes from Jack Hu with [Alpha Securities]. Please go ahead.
Unidentified Analyst: Hi. Good evening management. Thanks for taking my question. I have a small question regarding M&A strategy. We have seen some progress on Gap business after our acquisition. So could management share some thinking on the M&A strategy going forward? Thank you.
Vincent Qiu: Okay. Thank you, Jack. This is Vincent. I will answer this question. And then, Sandrine, maybe you want to add some comments after that. For the M&A strategy, I think we have two parts and the one important consideration, one part is about the BBM. I think for the BBM M&A for potential brands, Number one is that, we think a rental Gap and Hunter is very important for us. So the first thing, we need to do is start to make Gap turnaround a successful one. And to have Gap and Hunter, with all the potentials they have, to turn this to a very positive opportunity for us, that is number one. Number two is that, we will still be very active in exploring potential brands, but we will be very selective for brands. The brand and the opportunity has to be good and then has synergy meet our criteria.
So, it will be a very selective way for us to acquire new brands. For BEC, we are acquiring necessary capabilities from other companies or vendors, just like location, we just have done. So in this direction, I think, we will be also very selective and I think right now most of the capabilities of Baozun are very strong. We are strong enough in different aspects. So I think only for those very selective opportunities, we consider to acquire in the future. So overall, I think the one principle for us, which is very important is synergy. No matter if it is a brand or it is a company with special capability we are going to acquire, it has to have a very strong synergy to the existing business. No matter it’s a brand business or it is e-commerce business.
So, that is the overall strategy for M&A. So, Sandrine, you want to add something?
Sandrine Zerbib: No, I think I may just say that, yes, of course, we want to, number one, prove the turnaround of the brand, specifically Gap. Number 2, we really want to be very selective and also to be true to our key criteria, which is China-for-China and technology empowerment. So we want to really select brands where these 2 drivers will make a huge difference.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over.
A – Wendy Sun: I could actually just see Thomas back on the queue, maybe the last one please.
Operator: Sure. It looks like we have a re-joiner here. We will now take a question from Thomas Chong with Jefferies.
Q – Thomas Chong: So may I ask a quick follow-up question? I think it’s more relating to the trend for our take rate, can management comments about how we should think about it in the near-term and the long-term?
A – Vincent Qiu: I will take this one. In terms of the take rates for the e-commerce services, what we observe is some of the basic services like the store operations, the customer service, the take rate, it’s under pressure and has a trend to reduce. Our reaction to that is we want to improve our internal efficiency through the economy of scale to make sure we keep competitive in terms of the price we offer to counter the impact of drop the take rate. At the same time we see the take rate for the value added service has been really, for some really high quality service. We see the take rate it’s really firm. So that’s why we shifted a lot of our efforts into creating a good quality higher value added service in our BEC kind of the service offerings.
And at the last, we think from this year we start to do high margin, high quality product sales business. And we believe with more control for the product sales business, we will be able to positively contribute to the gross margin and also to the net profit, these spikes of our high pressure on the take rate.
End of Q&A:
Operator: This now concludes our question-and-answer session. I would like to turn the conference back over to Wendy Sun for any closing remarks.
Wendy Sun: Thank you, operator. On behalf of the Baozun management team, we’d like to thank you for your participation in today’s call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
