NEW YORK, Nov. 15, 2012 /PRNewswire/ -- Consumer Capital Group, Inc. (CCGN.OB) ("CCG" or the "Company"), primarily engaged in the development and operation of its retailing website "Chinese Consumer Market Network" which allows third-party merchants to sell their general merchandise products directly to consumers in the PRC and the U.S., as well as debit card business and meat distribution business, today announced that it released its financial results for the third quarter ended September 30, 2012.
"During the past quarter, we continued the restructuring of our sales team of our e-commerce business and development of our debit card business," said Jack Gao, President, Chief Executive Officer and Principal Executive and Financial Officer of CCG, "We had been testing and improving the debit card system as well as developing the vendor network through our agent during the past quarter."
Selected Third Quarter (Q3) 2012 Financial Results
The Company's net revenues for the three months ended September 30, 2012 decreased to $2,202,610 from $2,310,569 for the three months ended September 30, 2011, a decrease of $107,959 or 4.7%.
Cost of Sales
Cost of sales include costs of our products, shipping charges from the suppliers and to our customers, and costs of packing material associated with our meat distribution business. Cost and expenses associated with our e-commerce business, such as processing costs and transaction costs, are recognized as our selling expenses in our consolidated statements of comprehensive loss. Our cost of sales for the three months ended September 30, 2012 increased to $2,166,039 from $1,842,721 for the three months ended September 30, 2011, an increase of $323,318 or 17.5%. The increase was in line with the increase in revenues from the meat distribution business.
Our gross profit for the three months ended September 30, 2012 decreased to $36,571 from $467,848 for the three months ended September 30, 2011, a decrease of $431,277 or 92.2%. The decrease was primarily due to a decrease in sales from e-commerce business. Our gross profit margin for the three months ended September 30, 2012 decreased to 1.7% from 20.2% for the three months ended September 30, 2011. The decrease was primarily due to revenues from the meat distribution business accounting for a much higher percentage of our revenues, which has a lower profit margin than the e-commerce business.
Our operating expenses consist of selling expenses, and general and administrative expenses. Our total operating expenses for the three months ended September 30, 2012 decreased to $447,224 from $653,368 for the three months ended September 30, 2011, a decrease of $206,414 or 31.6%.
"Going forward, we will focus on improving business and control cost," remarked Mr. Gao, "We believe our debit card business will bring in revenue gradually and our e-commerce business will improve after the restructuring of our sales team."
About Consumer Capital Group, Inc.
We are primarily engaged in three different businesses: e-commerce services, meat distribution, and debit card business. We operate an online retail platform at www.ccmus.com for customers in China and another online platform at www.ccgusa.us for customers in the United State. Our online retail platforms allow third-party merchants to sell their general merchandise products directly to consumers in the PRC and the U.S. We differentiate ourselves from other e-commerce service providers by providing a variety of incentives to our existing customers in the PRC. Our member customers obtain bonus points for each purchase, which can be used to redeem cash value in their next purchase. When our customers' accumulated purchases exceed pre-set thresholds, they will be upgraded to a higher membership level and will be entitled to additional incentives such as special discounts and higher bonus points on subsequent purchases. Our member customers may also receive awards from our daily sweepstakes program. We employ a system that escrows payments to third-party merchants for the goods until the consumer indicates that the order was satisfactorily fulfilled.
Safe Harbor Statements
This press release contains forward-looking statements made within the meaning and under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, the Company's ability to maintain its competitive position. Additional Information regarding risks can be found in the Company's recent Annual Report on Form 10-K on the website of the U.S. Securities and Exchange Commission.
Mr. Kevin Ma
NUWA Group LLC.
Mr. Jack Gao, President
Consumer Capital Group
SOURCE Consumer Capital Group, Inc.