EZZ Life Science continues sales momentum as trading on Douyin takes off

EZZ Life Science’s (ASX: EZZ) quarterly results for the period ended 30 September 2022 (Q1 FY2023) saw a significant rise in sales as a result of new product releases, and trading beginning on China’s Douyin e-commerce platform.

The genomic life science company continued its strong sales momentum achieved in Q4 FY2022, closing Q1 FY2023 with approximately $6 million in cash inflows from customers, up 31% from the previous quarter.

Receipts from customers increased by $2.5 million year-on-year.

This was attributed to the New South Wales-based company’s venture to begin selling on one of the China’s largest e-commerce platforms, Douyin, in June 2022.

EZZ’s sales on Douyin generated $1.8 million of revenue in the quarter, making up 38% of the company’s total.

Before the pandemic, EZZ relied on e-commerce platform Tmall to drive its success within the mainland China market, but with the early success it’s had on Douyin, the company anticipates it will continue to drive its strong sales growth in the future.

In September, EZZ called on James Hudson, on a part-time basis, to help guide the company in areas of media engagement, public relations, and stakeholder engagement.

Mr Hudson previously held roles as director of corporate affairs and marketing for Alibaba Group in Australia and New Zealand.

As at 30 September 2022, EZZ’s cash balance sat at around $9.2 million, placing the company in a comfortable position to continue its strategic plan to accelerate growth opportunities.

EZZ buys in for major shopping events

As anticipated by EZZ, Q1 FY2023 saw operating cash flows turn negative as a result of increased advertising expenses and manufacturing spending as the company prepares for two major shopping events taking place in Q2.

The company ramped up its advertising expenses on Douyin and increased spending on inventory in preparation the 11.11 Global Shopping Festival in China and Black Friday in Australia and New Zealand.

Despite operating cash flows turning negative, EZZ is confident the investment will pay off and be realised in the next quarter.

Also in Q1 FY2023, EZZ partnered with Australian national pharmacy retailer Priceline to run a number of in-store promotions for its hair care range, with social media influencers to help promote the products.

New product releases

In September, EZZ had the opportunity to showcase its products at China’s biggest pharmaceutical trade show, PharmChina, which attracts more than 2,000 exhibitors and 100,000 industry professionals from across the life sciences, pharmaceutical and health care industries.

The company was able to showcase its existing and new products, which include EZZ Bone Growth Chews, EZZ Men’s Performance, as well as two other non-core products.

EZZ’s Bone Growth Chews are designed for people of all ages, containing calcium and vitamin D to support growth and maintenance of strong bones.

The Men’s Performance capsules were created to support sperm health and motility.