HANGZHOU, China, March 4, 2019 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD)
("Jo-Jo Drugstores" or the "Company"), a leading online and offline
retailer, wholesale distributor of pharmaceutical and other
healthcare products, and healthcare provider in China, released a letter to shareholders from
the Chairman of the Company's board of directors today.
Dear Shareholders,
The year of 2018 was an extraordinary year for Jo-Jo Drugstores
as we positioned ourselves as the most reliable pharmaceutical
company in Hangzhou, China. As the
sole Chinese pharmaceutical retail company listed on the NASDAQ in
the U.S., Jo-Jo Drugstores, through 15 years of continuous research
and development, has developed a solid foundation in the
pharmaceutical supply chain, franchising, medical and technology
industries. We customized a strategic development plan, as we
disclosed in a press release dated December
31, 2018 and adjusted our organizational structure,
including the addition of a new executive officer, Mr. Wei Hu, as Chief Operating Officer in 2018, to
diligently prepare for our further development in 2019.
The Market Challenges and Opportunities
The year of 2018 was a challenging year for the Chinese
pharmaceutical industry. The slowdown in economic growth, the
expanded supervision for medical insurance as well as the increase
in labor costs have put tremendous pressure on the development of
the pharmaceutical industry. Particularly, with the implementation
of drug procurement regulations and drug price limits, the decline
in the profit margin for drugs sales has become an inevitable
trend. According to the national pharmaceutical industry analysis
agency, the overall size of the national pharmaceutical retail
market in 2018 reached RMB384.2
billion, representing a 4.85% increase, which is the lowest
increase in the past 20 years. The year of 2018 also marked the
first time that the growth rate of pharmacy retail sales has not
surpassed the national GDP growth rate.
However, opportunities are often generated in a complicated
situation. The health industry is still very popular among
investors. With the integration of resources, the upgrading of
technology, the implementation of effective cost controls, the
innovation of models and the advantages of a high-quality talent
pool, many well-known companies and leaders in the capital markets
are looking for investments in the development of medicine and
health.
Our Observations on the Market Dynamics
There are fascinating changes and dynamics taking place behind
the scenes in this rapidly developing market in China.
Firstly, the influence of the new medical reforms can be seen in
the squeezed profit margins of medicines, the changing structure of
the healthcare space, and the continued increased usage of medical
technology. This is in line with the people's demand for rational
diagnosis and treatment using rational medicine.
Secondly, the pressure of the national health insurance
regulations requires medical institutions to use medical insurance
funds in an effective and reasonable manner in order to curtail
overtreatment and misallocation in pharmaceutical and medical
services in China. As a supplement
to basic medical insurance, commercial insurance has played an
increasingly important role. Medical reform has continued to
progress, and medical insurance, medicines, and medical care are
the core fields of the reform.
Thirdly, although the decline in the profit margin of
pharmaceutical retail is an inevitable trend, the public's demand
for medical and health services is growing and the current medical
services are unable to meet the needs of the market.
Our Strategies and Objectives
Implementing the Medical + Medicine Business model
This strategy was proposed by the Company at its inception and
has proven to be effective. The Company will continue focusing on
providing quality medical services and helping people become
healthier in addition to the medicine retails.
Medical Linkage & Technology Empowerment
Upgrading and Renovation of Pharmacies: We have initially
deployed two new major system platforms for chronic disease
management and Internet hospital services. Through the connections
we have generated with major hospitals in provinces and cities,
customers can get access to professional medical services, health
management and proper guidance regarding their medication from our
drug stores and can easily connect to top hospitals. The software
upgrade for several of our major pharmacies is driven primarily by
our efforts to increase professionalism and service quality.
In 2019, we plan to provide customers with accurate medication
guidance under the principle of reasonable diagnosis and treatment
as we focus on the needs of customers, implement a training and
evaluation program for professional promotion and set up
courses for employees for the consultation and sales of medicines.
We will continue to improve our stores' images, merchandise
displays, environmental and sanitation conditions, service
etiquette, member management, and other services. Through
normalized inspection training and randomized inspections by
our internal management team, we are striving to standardize our
stores' services.
In addition, we aim to keep our costs under control through
managing the procurement, distribution, warehousing, and sales of
drugs, eliminating waste in all links, improving management,
logistics and distribution efficiency as well as optimizing
inventory.
Talent Introduction & Hospital Cooperation
In 2019, Jo-Jo Drugstores expects to have four comprehensive
outpatient departments in stores and ten clinics. The Company's
future development relies highly on our talent and technical
advantages. In addition to employing talented healthcare providers,
the Company has launched a comprehensive cooperation initiative
with the most renowned hospitals in China.
Currently, we intend to cooperate with three prestigious
hospitals which are specialized in ophthalmology and obstetrics and
gynecology (OB-GYN) to explore market opportunities and improve the
Company's brand awareness.
Commercial Insurance Cooperation
Jo-Jo Drugstores has taken an important step in cooperating with
commercial insurance providers to explore the provision of
high-quality health management services that are fully compliant
with the applicable regulations and reasonably priced. At present,
as a result of this new venture with these providers, coverage is
available in Beijing, Shanghai and Zhejiang. By introducing the most professional
health management service packages which pair top doctors from
major hospitals in the area and commercial insurance providers and
by using high-quality resources in the medical field to provide
quality medical services, we are committed to becoming a pioneer
and a benchmark for medical and health service provider covered by
commercial health insurance in China. The development of
pharmacy benefit managers in foreign countries shows that the
efficiency of business model development is inseparable from
technological innovation. We aim to be a pioneer in the business
information technology platform for medicine sales and medical
treatment space and we will continue to optimize platform
functions and enhance its core competitiveness while facing new
business models.
We firmly believe that Jo-Jo Drugstores has stayed abreast of
the trends in quality medical services and has launched a solid
strategy in advance of 2019. The coming year is full of
challenges and opportunities and we are confident that we have
built a solid foundation for Jo-Jo Drugstores' business development
to take off.
On behalf of China Jo-Jo
Drugstores, I would like to express my sincere gratitude to our
customers and partners for your trust in us, to the shareholders
for your continuous support, and to the board members, management
team and staff for your commitment in the past year.
Mr. Lei Liu
Chairman and Chief Executive Officer
China Jo-Jo Drugstores, Inc.
About China Jo-Jo Drugstores,
Inc.
China Jo-Jo Drugstores, Inc.
("Jo-Jo Drugstores" or the "Company"), is a leading online and
offline retailer and wholesale distributor of pharmaceutical and
other healthcare products in China. Jo-Jo Drugstores currently operates
retail drugstores and an online pharmacy. It is also a wholesale
distributor of products similar to those carried in its pharmacies
and it cultivates and sells herbs used for traditional Chinese
medicine. For more information about the Company, please visit
http://jiuzhou360.com. The Company routinely posts important
information on its website.
Forward-Looking Statements
This press release contains information about the Company's
view of its future expectations, plans and prospects that
constitute forward-looking statements. Actual results may
differ materially from historical results or those indicated by
these forward-looking statements as a result of a variety of
factors including, but not limited to, risks and uncertainties
associated with its ability to raise additional funding, its
ability to maintain and grow its business, variability of operating
results, its ability to maintain and enhance its brand, its
development and introduction of new products and services, the
successful integration of acquired companies, technologies and
assets into its portfolio of products and services, marketing and
other business development initiatives, competition in the
industry, general government regulation, economic conditions,
dependence on key personnel, the ability to attract, hire and
retain personnel who possess the technical skills and experience
necessary to meet the requirements of its clients, and its ability
to protect its intellectual property. The Company's encourages
you to review other factors that may affect its future results in
the Company's annual reports and in its other filings with the
Securities and Exchange Commission.
For more information, please contact:
Company Contact:
Frank Zhao
Chief Financial Officer
+86-571-88077108
frank.zhao@jojodrugstores.com
Steve Liu
Investor Relations Director
steve.liu@jojodrugstores.com
Investor Relations Contact:
Tina Xiao
Ascent Investor Relations LLC
+1-917-609-0333
tina.xiao@ascent-ir.com
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SOURCE China Jo-Jo Drugstores,
Inc.