So that’s how we benefit from the very resilient consumption trend among our customer cohorts. In terms of sales and marketing expense, in Q4 because we had — we did much better than expected in terms of sales, that brought the sales and marketing spends ratio down a little bit. And actually for this line, our sales and marketing spend will be continued to be relatively stable. Of course, we want to spend prudently, especially to acquire more high quality customers in 2024. But we will continue to look at the effectiveness and the efficiency of customer acquisition from a number of factors including LTV, ROI, payback period etcetera. So sales and marketing expense ratio will continue to be very manageable and we will continue to spend in a rational way to spend on those channels who can provide the best ROI.
So basically, we don’t worry too much about our sales and marketing spend and it’s going to be very limited as a percentage of total revenue. Return rates, for the last year, return rates have been growing on a year-over-year basis. We think we did see a 3 to 4 percentage point growth in return rates. But now we have mentioned this before, our return and exchange services is a part of our value proposition to provide the best-in-class services to our customers and they’re building in our profitability model, it hasn’t been impacting our profitability levels for the past several quarters. And the return rates are trending a little bit higher because a number of factors. One is apparel contribution. In the last couple of years, so we have seen apparel contribution growing on our platform and apparel as you know, they naturally have higher return rates.
And second, our return and exchange has become a standardized practice within the industry and a lot of customers are taking Vipshop as a fitting room and the more they try them actually the more likely they will buy. So it’s not only us, as far as we know, the return rate within the industry is actually growing. That’s the reality. And lastly although we don’t have accurate information about that, it’s just our guess. We think that consumers are becoming more cautious and selective in terms of their spending. They want to spend money only on those essential pieces that they need. So that might be one of the reasons that return rate is going higher.
Operator: Thank you. We will take our next question. Your next question comes from the line of Ronald Keung from Goldman Sachs. Please go ahead. Your line is open.
Ronald Keung: Thank you, Shen, Mark and team. I have two questions. [Foreign Language]. Thank you, management. I have two questions. One is, I want to hear how our trends have been for the first quarter so far January and February as a whole? And how do we see demand tracking since Chinese New Year? And how should we think about the gap between GMV and revenue for 2024 compared with the big gap in 2023? Second is shareholder return. I’ve seen a $1 billion free cash flow. We haven’t done too much buybacks in the past two quarters. Now we have a $250 million of regular dividend. So what is the plan for let’s say the remaining free cash flow? Is there any room for further shareholder return? Thank you.
Eric Shen: [Foreign Language]. Okay. First on your — on Q1 guidance, actually quarter-to-date we have seen business momentum in January actually benefiting from a very favorable weather, because at that time it was still quite cold. So our business performance was really quite well or quite good. And we continue to see recovery following the Spring festival. And recently, we’ve seen that our sales had been ramping up relatively slower than expected, because of the unexpected weather conditions, sometimes very cold and which actually delay to some extent the seasonal shift to spring apparel. But overall, we think Q1 will continue to be another quarter of relatively stable growth. And in terms of the revenue and GMV growth gap, for this year we continue to expect a slightly higher return rate because of the still higher apparel contribution as well as SVIP contribution.
But return rate is not going to be significantly higher as we saw in — as we saw for 2023. We expect at most is going to be 1 percentage points to 1.5 percentage points higher, which means that there is a chance that we can narrow the revenue and the GMV growth gap to some extent.
Mark Wang: Okay. For second question, let me answer your question. And thanks for your question regarding the cash dividends and also the share buyback programs. And actually, we have been focusing on long-term capital policy and the combination of the annual dividend and buyback reflects our confidence in long-term growth and profitability, as well as our long-term commitment to create value to our shareholders. Regarding the total amount of the dividend, we considered multiple factors such as working capital for business development, CapEx, profitability and cash flow. The dividend amount will be reviewed and determined annually. Well, as to buyback, we have repurchased a total of nearly $2 billion from April 2021 to the end of 2023.
The existing $1 billion buyback program, which is effective through March 2025, has been utilized $452 million as of December 31, 2023, and the remaining parts will be executed from time-to-time, taking into account factors such as price, valuation and the marketing fluctuations. So therefore, the cash dividends and the share buyback, I think that’s the two ways we would like to provide return to our shareholders. And these two ways or two regimes will implement parallel. Yes. Thank you.
Operator: Thank you. We will take our next question. Your next question comes from the line of Andre Chang from JPMorgan. Please go ahead. Your line is open.
