MGC targets Chinese nutraceuticals market
MGC Pharmaceuticals and Chinese e-commerce marketplace YuShop Global have kicked off a full marketing and sales campaign for MGC’s cannabis-based nutraceuticals following a successful eight-week test campaign.
An initial shipment of MGC’s products is now on route to China with the company expecting sales to increase over the next six to nine months based on results from the completed market research.
Under the distribution agreement between the two companies, YuShop will sell MGC’s nutraceutical products to consumers via its online platform and network of retail channel partners, which include 1,500 luxury spas.
YuShop will be responsible for all sales, marketing, logistics and customer service in China, while MGC will retain 65% of the gross sales margin after retail costs and commissions.
The start of full marketing gives the company access to a large, increasingly health-conscious market.
Over 350 million middle-class Chinese vitamin and supplements consumers are expected to purchase over USD$20b worth of vitamins and supplements in 2020, according to performance marketing agency SEO Agency for China.
MGC Managing Director Roby Zomer said: “The successful completion of the market test campaign and the positive initial response received from the Chinese market represents an exciting new potential revenue opportunity for the company that will assist in the advancement of the company’s overarching growth strategy to become a leading international producer of cannabinoid-based products.”
YuShop Chief Executive Officer Nathan Halsey said: “MGC Pharma’s product suite fills an underserved product category in China today and we feel that it will set a standard in the premium CBD infused health products.”
“Our next phase will include rolling out the product suite in over 1,500 premium locations spanning all tier I cities in China, and we expect to reach over 1.5 million targeted consumers per month by end of Q1 2020, with sales expectations to increase over that time accordingly.”
MGC recently reported revenues of $763,000 in the fourth quarter ended 30 June 2019, well above the sales revenue of $296,811 recorded in the entire 2017-2018 financial year.
It reached distribution agreements with five new partners in the June 2019 quarter that provide access to the medical cannabis markets in the UK, Germany, Austria, Switzerland, Brazil and Australia.
NB: This article is for general financial markets news purposes only and is not to be taken as an endorsement of, or advertisement for any individual product, medicine or drug.