Products
China Nepstar's typical store carries approximately 1,800 to 2,350 different products. It offers a range of complementary products in each therapeutic category so that customers have more choices to suit their needs. In addition, its staff recommends a combination of products to enhance the treatment. For products with the same therapeutic purpose, the company offers choices in each of the high, medium and low price ranges to suit the needs of customers with different spending power. In each therapeutic category, it also offers high margin private label products.
Prescription Drugs
China Nepstar offers approximately 1,199 prescription drugs. The Company accepts prescriptions only from licensed health care providers and does not prescribe medications or otherwise practice medicine. Its in-store pharmacists verify the validity, accuracy and completeness of all prescription drug orders. The Company asks all prescription drug customers to provide it with information regarding drug allergies, existing medical conditions and existing medications. Its in-store pharmacists also perform a drug utilization review, in which they cross-check every prescription against the customer's submitted information for drug, disease and allergy interactions. Sales of prescription drugs accounted for 23.4% of its revenue during the year ended December 31, 2007.
Over-the-Counter
The company offers approximately 1,182 OTC drugs, including western medicines and traditional Chinese medicines, for the treatment of common diseases. Sales of OTC drugs accounted for 35.6% its revenue in 2007.
Nutritional Supplements and Herbal Products
China Nepstar offers approximately 636 nutritional supplements, including a variety of healthcare supplements, vitamin, mineral and dietary products. Sales of nutritional supplements accounted for 18.3% of its revenue in 2007. The company offers various types of drinkable herbal remedies and packages of assorted herbs for making soup, which are used by consumers as health supplements. Sales of herbal products accounted for 2.6% of its revenue in 2007.
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Other Products
The company's other products include personal care products, such as skin care, hair care and beauty products, family care products, such as portable medical devices for family use, birth control and early pregnancy test products and convenience products, including soft drinks, packaged snacks, and other consumable, cleaning agents, stationeries. Its other products also include seasonal and promotional items. Sales of other products accounted for 20.1% of China Nepstar's revenue in 2007.
Private Label Products
China Nepstar's private label portfolio has 1,356 products marketed under 133 private labels, covering all categories of products offered by the Company except herbal products. In 2007, private label products accounted for approximately 18.7% of its revenue. Some of its private labels include Beautiful Life, which the Company introduced in November 2005, to market nutritional supplements related to beauty care; Qianlong, which was introduced in January 2006, to market a variety of OTC drugs, including gastrointestinal and dermatology products, and Wisconsin, which was introduced in November 2006, to market 20 different types of nutritional supplements manufactured in the United States.
Stores
In 2007, China Nepstar substantially increased its market penetration in coastal cities with relatively high household disposable income, where it already had a presence.
These cities include Shenzhen (from 202 stores as of December 31, 2006 to 311 stores as of December 31, 2007), Dalian (from 127 stores to 174 stores), Guangzhou (from 123 stores to 161 stores), Hangzhou (from 102 stores to 144 stores), Ningbo (from 73 stores to 96 stores), Dongguan (from 75 stores to 94 stores), Suzhou (from 54 stores to 70 stores), Tianjin (from 23 stores to 66 stores), and Shanghai (from 46 stores to 60 stores).
China Nepstar Chain Drugstore Limited (NPD.NYSE) plans to open 1,050 new chain stores in 2008 and expects to have more than 3000 outlets with about eight million of registered customers by then, said Qian Jiannong, CEO of China Nepstar Chain Drugstore.
As the largest trans-regional chain drugstore in China, China Nepstar Chain Drugstore opened 210 new stores within the fourth quarter and its total chain store number is likely to top 2,000 by the end of this year, said Qian at the celebration meeting for its listing at New York Stock Exchange.
