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China Jo-Jo Drugstores Announces Fiscal 2014 Second Quarter Financial Results
Date:11/14/2013

rations going forward.(3)

Online sales increased by $736,420 or 85.6%.
We have been working with business-to-consumer online vendors, including Taobao, by posting our products on their online platforms, which direct customers back to our website.
Such arrangement has exposed our online presence to a wider consumer base.
In addition, since the end of 2012, we have expended considerable efforts in identifying popular products that can drive sales.
As a result, we have seen steady growth in online sales. 

Gross Profit

Gross profit decreased by $473,794 or 13.8% period over period primarily as a result of the contraction in wholesale business.
Gross margin increased period over period from 12.5% to 17.8% as a result of higher wholesale profit margin, offset by a lower retail profit margin.
The average gross margins for our three business segments are as follows:Three months endedSeptember 30,20132012Average gross margin for retail business 23.0%26.6%Average gross margin for wholesale business 7.6%3.9%Average gross margin for farming business N/AN/A 

Retail gross margin decreased primarily due to price adjustments that we made. Some adjustments were made to comply with government price controls. Others were made to stay competitive with local community hospitals that are able to sell at or near cost as their pharmacies are indirectly subsidized through the government. We also adjusted prices to match or better other competitors' prices. Accordingly, overall retail gross profit margin decreased. 

Wholesale gross margin increased because we are now focused on profitability for this segment such as by selling high margin products.
By comparison, our drive to generate sales volume by selling very low margin products created the low gross margin a year ago.

Selling and Marketing Expenses

Sales and marketing expenses increased by $876,510 or 41.7% period over period.
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SOURCE China Jo-Jo Drugstores, Inc.
Copyright©2012 PR Newswire.
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