NEW YORK, Nov 14, 2011 /PRNewswire/ -- Consumer Capital Group Inc. (OTCBB: CCGN) ("CCG" or the " Company" or "we" or "us"), primarily engaged in the development and operation of its retailing website, "Chinese Consumer Market Network," that provides manufacturers and distributors a platform to promote and sell products and services directly to consumers in China, today announced its financial results for the third quarter ended September 30, 2011.
Jianmin Gao, the CEO of Consumer Capital Group Inc., stated, "During the quarter ended September 30, 2011, CCG continued its emphasis in developing its debit card business through the quarter. As of September 30, 2011, the Company has issued over 600,000 cards, and has 30 province-level and 210 city-level dealers and about 5,300 vendors."
Third Quarter Fiscal 2011 Result of Operations
Net revenues derived from our e-commerce business were $449,084 and $6,977,138 for the three months ended September 30, 2011 and 2010, respectively, a decrease of $6,528,054 or 93.56%. The decrease is the result of our failure to continue to attract more members and grow our membership base as well as our failure to achieve repeat purchases from our existing customers. The Company is now focused on developing a broader sales network by working with dealers to market its website in order to attract more customers in the near future. The Company has put more of its efforts into developing its debit card network business model, which the Company believes will generate and increase revenues.
Net revenues derived from our distribution business were $1,861,485 and $0 for the three months ended September 30, 2011 and 2010, respectively. The increase is due to our acquisition of Beitun Trading, a meat distribution business on November 29, 2010. The Company did not have a distribution business for the three months ended September 30, 2010.
Cost of sales associated with distribution was $1,842,721 and $0 for the three months ended September 30, 2011 and 2010, respectively. Cost of sales consists of the purchase price of consumer products and content sold by us, inbound and outbound shipping charges, and packing supplies. The increase is due to our acquisition of Beitun Trading on November 29, 2010. There was $0 cost of sales associated with distribution during the three months ended September 30, 2010 as we have not acquired Beitun trading until November 29, 2010.
Total operating expenses consist of selling expenses, general and administrative expenses, and financial expenses. Total operating expenses were $653,638 and $5,300,911 for the three months ended September 30, 2011 and 2010, respectively, a decrease of $4,647,273 or 87.67%. This decrease is due to the following reasons:
Selling expenses were $429,867 and $5,235,924 for the three months ended September 30, 2011 and 2010, respectively, a decrease of $4,806,057 or 91.79%. The decrease was primarily due to the decreased commission caused by the decreased sales generated from the e-commerce business. Selling expenses for the ecommerce business amounted to $416,938 and $5,235,924 for the three months ended September 30, 2011 and 2010, respectively. Selling expenses for the distribution business amounted to $12,929 and $0 for the three months ended September 30, 2011 and 2010, respectively. For the three months ending September 30, 2010, the Company did not invest in the joint venture with Beitun.
General and administrative expenses were $223,771 and $64,987 for the three months ended September 30, 2011 and 2010, respectively, an increase of $158,784 or 244.33%. The increase was primarily due to the increased professional expenses, including legal and accounting expenses as a result of being a public company since February 2011. General and administrative expenses for the e-commerce business amounted to $223,165 and $64,987 for the three months ended September 30, 2011 and 2010, respectively. General and administrative expenses for the distribution business amounted to $606 and $0 for the three months ended September 30, 2011 and 2010, respectively. For the three months ending September 30, 2010, the Company did not invest in the joint venture with Beitun.
Our cash and equivalent amounted to $774,648 as of September 30, 2011. We had net working capital of $323,288 at September 30, 2011. We do not have any bank-loans. The Company believes that the Company has sufficient cash for its operation in the next twelve months.
Looking forward, Jianmin Gao, CEO of Consumer Capital Group Inc., stated, the Company cooperates with a Chinese bank named Fuxin bank in China to issue cobranded debit cards. The Company then authorizes certain vendors the right to issue cobranded debit cards. The Company charges each participating vendor a percentage of transactions with the vendor. Each vendor will receive a percentage of future transactions of the cards issued by the vendor. Cardholders will receive certain amounts of cash refund from participating vendors and certain virtue money to be spent on the Company's ecommerce website www.ccmus.com. Further, the Company hires dealers to develop vendor's network as well as manage the issuance of the cobranded debit cards. The Company has signed dealer agreements with large companies like China Unionpay during the nine months ended September 30, 2011. China Unionpay is the only card management company like Vis and Master in China. It has installed millions of POS machines all over China.
The Company has just completed testing the system in November 2011. The Company will further develop the debit card business and it will become the Company's main business in 2012."
About Consumer Capital
Consumer Capital provides an online marketing and retail platform for manufacturers and distributors to promote and sell products and services directly to Chinese consumers, who can earn discounts through CCG's rewards and incentive programs. CCG's online platform eliminates the extended network of intermediaries in the manufacturing-distribution-retail chain by providing manufacturers with direct access to the members of its website. Furthermore, the Company's website provides customers with access to certain Western products that are generally unavailable in China, such as handbags and eyewear made by U.S. companies and food and beverage products from Spain, Germany, and France. Sellers use the Company's website to advertise and sell their goods, manage customer data, and track orders and shipments. Consumers use the website to shop online and pay for products and services. Consumer Capital does not buy, hold, or sell any inventory. CCG employs a system that escrows payments for the goods until the consumer indicates that the order was satisfactorily fulfilled. The Company's website is located at: www.ccmus.com
CCG is also engaged in the meat distribution business as a result of its acquisition of Beitun Trading Inc. in November 2010.
Safe Harbor Statements
This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon the current plans, estimates and projections of Consumer Capital's management and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Therefore, you should not place undue reliance on these forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in China, general economic conditions, geopolitical events and regulatory changes, availability of capital, changes in the agricultural industry, and the Company's ability to maintain its competitive position. Additional information regarding risks can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the SEC.
Mr. Kevin Fickle, President
NUWA Group LLC.
Mr. Jack Gao, President
Consumer Capital Group
SOURCE Consumer Capital Group Inc.