While its physical stores and wholesale revenues slipped, pharmacy retailer China Jo-Jo Drugstoresrecorded an increase of about 96.7 per cent in its online revenues during the third quarter ended December 31.
Through its own retail stores (59 in Zhejiang Province), wholesale distribution and online pharmacy, the New York-listed company is a leading provider of pharmaceutical and healthcare products in China.
Overall, its revenues of about $24.7 million for the period were up 15.9 per cent. Its retail drugstores brought in $12.9 million, down 2.7 per cent, while its wholesale businesses netted about $3.1 million, a decrease of of 13.8 per cent. However, its online pharmacy revenue rose 96.7 per cent to total about $8.6 million.
This gave the company a gross profit of about $4.8 million for the quarter, up 52.3 per cent on the previous year. The online profit soared 194.1 per cent to about $1.8 million, while its stores had a 20.3 per cent increase to about $2.8 million.
Over the nine months of the financial year, revenue totalled $68.6 million, up 22 per cent, with gross profit up 56.1 per cent to about $13.2 million.
Sales and marketing expenses grew by $1.1 million, or 50.5 per cent, mainly because of higher labour costs and service fees for its eCommerce platforms.
“We are seeing improvements in gross margin from increased volume in our online business as our revenue mix continues to shift to our fast-growing online business,” says chairman/CEO Lei Liu, who predicts a strong quarter to end the fiscal year.
“Investments and efforts in building critical mass to service China’s consumer needs in the pharmacy space is taking shape, creating new opportunities to diversify our revenue base.”
Closer collaborations with large local pharmaceutical vendors are also providing cost advantages. Co-operation with business-to-consumer online vendors have expanded, with the company’s products listed on such platforms as Taobao, JD and www.yhd.com and customers being directed back to China Jo-Jo’s website.
Meanwhile, the company continues to benefit from working with large insurance companies such asThe People’s Insurance Company of China. Commercial health insurance in China continues to expand to supplement the nation’s social health insurance.
Lei Liu says there is a “relentless call” for healthcare reform in China, including an end to hospitals dominating prescription sales. Meanwhile, China Jo-Jo has also seen its loyalty program expand to embrace more than 2 million customers.
