...Treat static assets referenced in <style> and <template> as module dependencies and handle them with webpack loaders. Simulate scoped CSS for each component. State-preserving hot-reloading during development. In a nutshell, the combination of webpack and vue-loader gives you a modern, flexible and extremely powerful front-end workflow for authoring Vue.js applications. vue-loader is not a simple source transform loader. It handles each language blocks inside an SFC with its own dedicated loader chain (you can think of each block as a "virtual module"), and finally assembles the blocks together into the final module.