China Jo-Jo Drugstores Stock

China Jo-Jo Drugstores, Inc. operates as a retailer and distributor of pharmaceutical and other healthcare products primarily found in retail pharmacies in the People’s Republic of China (PRC or China).

As of March 31, 2021, the company operates under the store brand ‘Jiuzhou Grand Pharmacy’ in Hangzhou city.

During the year ended March 31, 2021, the company sold its Lin’An Jiuzhou Pharmacy Co., Ltd, which runs stores in Linan City, to local investors. On the other side, the company has been concentrating on new stores within Hangzhou metropolitan area and opened new stores in the year ended March 31, 2021.

Segments

The company operates through four segments in China: Retail Drugstores, Online Pharmacy, Drug Wholesale, and Herb Farming.

Retail Drugstores

This segment sells prescription and over-the-counter (OTC) medicines, traditional Chinese medicine (TCM), dietary supplements, medical devices, and sundry items to retail customers.

Online Pharmacy

This segment sells OTC drugs, dietary supplements, medical devices, and sundry items to customers through several third-party platforms, such as Alibaba’s Tmall, JD.com, and Amazon.com; and the company’s own platform all over China.

Drug Wholesale

This segment includes supplying the company’s own retail drugstores with prescription and OTC medicines, TCM, dietary supplement, medical devices, and sundry items (which sales have been eliminated as intercompany transactions); and also selling them to other drug vendors and hospitals.

Herb Farming

This segment cultivates selected herbs for sales to other drug vendors. The company also engages in online sales and clinic services.

The company’s stores provide customers with a variety of pharmaceutical products, including prescription and OTC drugs, nutritional supplements, TCM, personal and family care products, and medical devices, as well as convenience products, including consumable, seasonal, and promotional items. Additionally, the company has doctors licensed in both western medicine and TCM on site for the consultation, examination, and treatment of common ailments at scheduled hours. The company’s stores vary in size, but average close to 200 square meters per store.

The company operates its pharmacies (including the medical clinics) through the following companies in China that it controls through contractual arrangements:

Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd. (Jiuzhou Pharmacy), which the company controls contractually, operates its ‘Jiuzhou Grand Pharmacy’ stores.

Hangzhou Jiuzhou Clinic of Integrated Traditional and Western Medicine (General Partnership), which the company controls contractually, operates one of its three medical clinics.

Hangzhou Jiuzhou Medical & Public Health Service Co., Ltd., which the company controls contractually, operates its other medical clinics.

The company also offers OTC drugs and nutritional supplements for sale through a website (www.dada360.com) operated by Jiuzhou Pharmacy. For the year ended March 31, 2021, retail revenue, including pharmacies, medical clinics accounted for approximately 57.2% of its total revenue, while online pharmacy revenue accounted for 16.8% of its total revenue.

The company has operated a wholesale business through Zhejiang Jiuxin Medicine Co., Ltd. (Jiuxin Medicine), distributing third-party pharmaceutical products (similar to those carried by its pharmacies) primarily to trading companies throughout China. Jiuxin Medicine is wholly owned by Jiuzhou Pharmacy.

The company also has an herb farming business cultivating and wholesaling herbs used for TCM. This business is conducted through Hangzhou Qianhong Agriculture Development Co., Ltd., a wholly-owned subsidiary.

Pharmacies

The company offers sundry products (personal care products, such as skin care, hair care and beauty products; convenience products, such as soft drinks, packaged snacks, and other consumable; cleaning agents; stationeries; and seasonal and promotional items tailored to local consumer demand for convenience and quality); and medical devices (family planning and birth control products, early pregnancy test products, portable electronic diagnostic apparatus, rehabilitation equipment, and surgical tools, such as hemostats, needle forceps, and surgical scissors).

The company favors retail locations in residential communities with relatively concentrated consumer purchasing power or are located in close proximity to local hospitals, and evaluate potential store sites to assess consumer traffic, visibility and convenience.

The company has licensed physicians available at several of its ‘Jiuzhou Grand Pharmacy’ locations for the consultation, examination, and treatment of common ailments at scheduled hours. In addition, its Daguan, Wenhua, Xiasha and Yueming stores have adjoining medical clinics that provide urgent care (for conditions, such as sprains, minor lacerations, and dizziness), TCM treatments (including acupuncture, therapeutic massage, moxibustion, and cupping), and minor outpatient surgical treatments (such as suturing).

Online Sales

The company engages in retailing OTC drugs and nutritional supplements on the Internet at www.dada360.com. It has established payment methods with banks and online intermediaries, such as Alipay, and is cooperating with business-to-consumer online vendors, such as Taobao. By using Taobao’s platform in addition to its own website, the company can be exposed to a range of customers.

Wholesale

Since acquiring Jiuxin Medicine in August 2011, the company has been distributing third-party products primarily to drug distributors throughout China.

The company signed a strategic cooperation agreement with Dong’a Gelatin and acts as its local sale agent in Zhejiang Province.

Customers

Retail Customers: For the year ended March 31, 2021, the company’s pharmacies collectively served an average of 15,509 customers per day.

Online Sales Customers: The company’s online customers primarily consist of consumers between the ages of 20 and 40. While its website is accessible throughout China, approximately thirty percent of its online sales during the year ended March 31, 2021, were from Zhejiang and neighboring Jiangsu and Shanghai.

Wholesale Customers: The company’s wholesale customers are primarily third-party trading companies that purchase from it to resell to pharmacies throughout China. The company also supplies some hospitals and pharmacies.

Herb Farming Customers: The company’s farming customers primarily include local herb vendors. For the year ended March, 31, 2021, it had not harvested or sold any herbs.

Suppliers

For the year ended March 31, 2021, one supplier, HuaDong Pharmaceutical Co., Ltd. accounted for more than twenty-one and eight percent and eighteen of its total purchases and total purchase deposits.

Intellectual Property

The company owns and operates various websites, such as www.dada360.com (for online sales), www.chinajzyy.com (its corporate website used in China), and www.jiuzhou360.com (its English-language corporate website). The company also owns two inactive domain names.

History

China Jo-Jo Drugstores, Inc. was founded in 2003. The company was incorporated in Nevada in 2006.