Cellmid Ltd’s (ASX:CDY) has received the first order from Ourui Health Management Limited (OHM) pursuant to the distribution agreement signed on 14 December 2020 for the sale of its Japanese, Ju-Ju® and Lexilis® branded, anti-ageing hair and skincare products in China.
The company has received the first order for 66,000 bottles of Jo-Ju® shampoo to be delivered in bulk, as no import permit has been received for the fully finished shampoo yet and these will be packaged in China at OHM’s costs.
CDY has also received another order for 18,672 bottles of fully finished Jo-Ju® lotions with an import permit and that will be delivered in February and April 2021 with combined revenue of $530,000, which would be paid before and will accrue on delivery.
The master distribution agreement between two companies
In December 2020, Cellmid’s subsidiaries Advangen Ltd and Advangen Inc (Japan) have signed an exclusive Asian master distribution agreement with Ourui Health Management Ltd for the distribution of its Japanese, Ju-Ju® and Lexilis® branded, anti-ageing hair and skincare products.
Ourui, based in Hong Kong, was founded by serial beauty entrepreneur Steven Ko, who was also one of the founders of Red Earth, an Australian make-up brand sold through 600 retail stores in 45 countries before it was acquired by Esprit Holdings Ltd in 2001.
The first order of 66,000 bottles is a part of the 500,000 units order requirement for the first twelve months of the contract.
It is anticipated that approximately half of the first-year orders will be received in October 2021, in preparation for the largest shopping day of November 11, 2021, in the Chinese retail calendar.
Minimum purchase orders increase is likely to increase1,000,000 units in the second year and it is expected to achieve double-digit annual growth in percentage terms thereafter.