Good Life China (GLCC) Update on Haorizi New Retail Model
BEIJING, Oct 22, 2008 /PRNewswire-FirstCall via COMTEX/ -- Deputy General Manager Zhou Yi of Good Life China Corporation
www.goodlifechina.com (GLCC.PK) provided more details of Good Life China's advances in its new approach to business.
The Company is moving away from a traditional "franchise retail store model" and is on the verge of re-inventing itself with membership and licensing rights to maximize gross revenues and significantly mitigate the business risk associated with traditional retail models.
Haorizi* New Retail Model takes Good Life out of the middleman position in terms of ownership of the products sold through its retail distribution network. In its place, the Company will generate revenue from its advanced retail distribution channel management and e-commerce platform. A comprehensive integrated trading platform provides advanced functionality for retailers and suppliers alike. The platform has a retail facing access service for retail operators, a supply side facing program for suppliers, and a back office system for Good Life itself.
On the retail side, traditional franchise fees are being phased out and replaced by subscription or membership fees charged to retail outlets to become a Good Life retailer. These fees can typically be paid on an instalment basis. Membership normally runs for a 3 year period and can then be renewed on an ongoing basis for additional 3 year terms.
This provides retailers with access to Good Life's sophisticated retail trading and e-commerce enabled platform, as well as access to hundreds of suppliers and thousands of products which would normally be beyond the capabilities of individual storekeepers.
In addition, there are monthly system access fees to provide maintenance on ongoing upgrades to the retail trading platform.
On the Supply Side of the equation, suppliers can become Good Life member suppliers in a similar fashion. They pay an upfront fee for the proprietary software developed by Good Life and then pay for periodic updates to the software platform as it continues to add new service capabilities and functionality.
Revenue comes from a combination of Software purchase and upgrade fees, and payments services, which are based on a percentage of gross wholesale value of products shipped through Good Life's retail network. These are negotiated on a contract basis with each member supplier. Supplier billing cycles are paid weekly.
The Company is in the final stages of switching over its retail network to the new system and the supplier base is essentially already converted to the new system.
Zhou Yi notes, "We will have much more detailed analysis available within roughly 3 - 4 months time, once the transition is completed and we have some history with the new system. Importantly, the approach remains flexible, so we can adjust fees where we see an imbalance and optimize the approach over the longer term."
*Haorizi is the retail banner under which the Company conducts business in China.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Certain forward information contained in this release contains forward-looking statements that involve risk and uncertainties, including but not limited to, those relating to development and expansion activities, domestic and global conditions, and market competition.
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CONTACT: corporate@goodlifechina.com
SOURCE Good Life China Corporation
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