China Jo-Jo Drugstores Releases 2020 Letter from the Chairman

Rhea-AI Summary

China Jo-Jo Drugstores (NASDAQ: CJJD) addressed shareholders in a letter highlighting challenges faced during the 2020 COVID-19 pandemic. The national pharmaceutical retail market in China saw a decline of 1.7%. Despite this, the company achieved remarkable growth, with Daguan store sales soaring 323% year-over-year. Online revenue surged by 26.1% during the "618" festival and 64.5% during "Double 11". Looking forward to 2021, the company aims to enhance its digital transformation and service quality while continuing partnerships to improve healthcare delivery.

Positive

• Daguan store sales increased by 323% year-over-year.
• Online revenue rose 26.1% during the "618" shopping festival.
• Online revenue increased 64.5% during the "Double 11" shopping festival.
• Signed MOU with Zhejiang Provincial Government for smart medicine vending machine.

Negative

• National pharmaceutical retail market in China dropped by 1.7% in Q2 2020.

HANGZHOU, China, Feb. 2, 2021 /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 2020 COVID-19 pandemic has brought unexpected challenges to everyone. It also brought tremendous impact and pressure to the development of enterprises. During this period, we made every effort to guarantee sufficient medicine supply, build a pandemic medicine center and provide online pharmacy consultation services. We used our expertise to fight against the pandemic.

Facing Challenges and Seizing Opportunities

2020 was a difficult year. Due to the pandemic, the value of the national pharmaceutical retail market in China dropped to RMB107.7 billion in the second quarter, representing a 1.7% decrease, and it tends to further decline. Business transformation promoted due to frequent policy changes. During this period, we enhanced various information and data systems, continued to develop the management system serving for member patients who have chronic diseases, upgraded our "Medical + Medicine" business model, introduced digital services such as Xiaoqiao robots to our customers, developed 24-hour service stores, launched a new OA system, and accelerated comprehensive budget management.

Opening up a New Page with Rapid Development

During the Company's 17th anniversary celebration, the single-day sales of our Daguan store exceeded RMB1.2 million, and the overall performance of the store achieved an unprecedented success, the revenue increased by 323% compared to the same period of last year. Regarding our online business, revenue increased by 26.1% year-over-year during the "618" shopping festival, and revenue increased by 64.5% year-over-year during the "Double 11" shopping festival. Following the online and offline business cooperation with Yingda Insurance in 2019, Jo-Jo Drugstores officially took over the medical and health management services from Yingda Insurance in 2020. The Company also signed an MOU with Zhejiang Provincial Government to conduct research and development on building the first smart medicine vending machine with medical insurance payment of the province. Once complete, we plan to promote it all over the province.

Highlights of 2020

In January 2020, the Company's Binjiang district comprehensive clinic jointly launched an eye care charity program with Zhejiang Colorful Sunshine Charity Foundation.

In February 2020, Jo-Jo Drugstores was recognized as one of seven municipal-level temporary reserve organizations for prevention and control materials in Hangzhou; It is also one of the pilot organizations to distribute free masks authorized by the government during the COVID-19 outbreak.

In March 2020, Jo-Jo Drugstores received thank-you letters from Hangzhou Economic and Information Bureau, conveyed their appreciation for the Company's contribution to fight against the novel coronavirus outbreak. In May 2020, the leaders of the Hangzhou Municipal Medical Insurance Bureau sent Jo-Jo Drugstores a silk banner to express their gratitude for our strong support in the battle against the pandemic.

In July 2020, the Company's Binjiang District comprehensive clinic successfully launched a medical insurance program, and became the designated medical institution for patients with basic medical insurance.

In August 2020, Hangzhou Jo-Jo Drugstores was awarded the Top 30 National Health New Retailers.

In September 2020, Hangzhou Jo-Jo Drugstores remains the Top 100 Chinese Pharmaceutical Retail Company in the industry for 13 consecutive years.

In October 2020, our chronic disease management team won the first place in the Health Ambassador Selection Competition.

In November 2020, Mr. Lei Liu, Chairman of Jo-Jo Drugstores, won the "Gold Leaf Award" as the "Influential Entrepreneur of the Year"; Jo-Jo Drugstores won the Outstanding Enterprise Award in the 15th China Growth Pharmaceutical Enterprise Development Forum; We also won the Daguan Street Pioneer Enterprise Award and the Public Welfare Enterprise Award.

Outlook for 2021

With quality-driven mentality, Jo-Jo Drugstores will continue to promote chronic disease and membership management. With 85 hospital-side pharmacies, the Company will focused on the "Medical + Medicine" model speed up team building, consolidate internal strength, improve medical service standards, and continue to improve the quality of our medicine. At the same time, we will continue to cooperate with suppliers, governments, associations, prestigious universities and other partners. We will strive to realize the smart medicine diagnosis model.

Innovation is our ultimate goal. In 2021, Jo-Jo Drugstores will continue to accelerate digital transformation in organizational system and business processes, improve work efficiency and risk control at the management level, enhance online and offline integration, and further improve user experience and service quality in our pharmacies. At the same time, the Company will continue to leverage our existing platforms and create more value for our community.

Providing quality services is our never-changing commitment. The need to customize and individualize one's medical consumption is increasing. Jo-Jo Drugstores adheres to the customer-oriented guidance, and continues to upgrade its services to be more diversified, muti-dimensional, and personalized. With the aim of creating a one-stop health management and service platform for consumers, the Company will keep on improving medical quality, upgrading service and the optimizing work flow.

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.

FAQ

What were the sales increases reported by China Jo-Jo Drugstores in 2020?

Daguan store sales increased by 323% year-over-year, and online revenue grew by 26.1% during the "618" festival and 64.5% during the "Double 11" festival.

How did the COVID-19 pandemic affect China Jo-Jo Drugstores?

The pandemic caused a decline in the national pharmaceutical retail market by 1.7% in Q2 2020, impacting business operations.

What strategic initiatives does China Jo-Jo Drugstores plan for 2021?

The company plans to enhance digital transformation, improve service quality, and continue partnerships for healthcare delivery.

Did China Jo-Jo Drugstores receive any governmental recognition during 2020?

Yes, the company was recognized as a temporary reserve organization for control materials in Hangzhou and received thank-you letters for its pandemic response.