The Grand Slam Group (03390.HK) announced on April 8 that as of the date of the announcement, the Group and Jianbei Miaomiao Group had entered into a number of agreements to take advantage of the respective advantages of the two groups to form a closer alliance to implement further strategic cooperation.
It is reported that the group is mainly engaged in the distribution of proprietary Chinese medicine, health care, skin care, personal care and other health care products. Over the years, the Group has established a sound and effective distribution channel and provided a complete set of products welcomed by customers. In addition, the group has rich experience in brand management. Through various sales and marketing strategies, the Group strives to make the third-party brand products and private brand products distributed by the Group known to its customers, with a view to increasing the market share of these products.
Jianbei Miaomiao Group is mainly engaged in the marketing and distribution of brand health products in Greater China, Southeast Asia and other countries. Jianbei Miao Miao Group is also operating two GMP certified proprietary Chinese medicine production facilities. The product portfolio of Jianbei Miao Miao Group currently includes Baoji pills, Hejigong pain relieving and fever powder, Tang Taizong Huoluo Oil, Feiying Huoluo Oil, Shiling Oil, Shiling Oil and Shangfengke. All these brands enjoy high visibility among consumers and have a strong market position, so they can create sustainable synergy for the marketing and distribution resources managed by Jianbei Miao Miao Group.
In addition to being a supplier of some proprietary Chinese medicines and consumer health products, the Jacobson Research Pharmaceutical Group (21%), the Group (49%) and an independent third party (30%) now jointly own a company. the company wholly owns another Hong Kong company, which is mainly engaged in retail (through two retail outlets) and wholesale pharmaceutical and proprietary Chinese medicine products in Hong Kong.
As both the Group and Jianbei Miao Miao Group have in-depth understanding and expertise in the market of proprietary Chinese medicine and Chinese health products and supplements, the parties hope to make use of their respective advantages and cooperate with each other in the following ways.
In order to make use of the strong development and manufacturing capabilities of Jianbei Miaomiao Group and the strong brand management expertise of the Group, the contracting parties intend to enable Jianbei Miaomiao Group to develop and manufacture private brand products that cater to market trends and consumer needs, the Group provides distribution channels for the distribution of these private brand products, and the Joint Venture Group formulates and implements various sales and marketing strategies. In order to create the brand image of own-brand products and increase their market share.
In this regard, the Group and Jianbei Miao Miao Group have entered into a joint venture agreement on the establishment of a joint venture company on April 8, 2021. The joint venture company is 50% owned by the Group and Jianbei Miao Miao Group and will be jointly controlled by the two groups. The joint venture company is not a subsidiary of the joint venture partner, and the financial statements of the joint venture group will be accounted for by the group on the basis of equity.
The joint venture company is an investment holding company, and the initial plan of the Group and Jianbei Miaomiao Group is that the joint venture group will have two separate business units, namely, the marketing department and the IP rights of its own brand products.
According to the joint venture agreement, the parties to, (i) will register and establish IP company as soon as possible after signing the joint venture agreement to hold all the IP rights of their own brand products. The company will be owned by Jianbei Miao Miao Group and JV Company, respectively. And (ii) upon the establishment of IP, Jianbei Miaomiao Group will facilitate the granting of exclusive distribution rights to the Group for distribution of its own brand products, while the Joint Venture Group will be responsible for the marketing and promotion of its own brand products.
Private-label products are expected to be launched in the second half of 2021.