Although Mediland Pharm (ASX: MPH) revealed its operations have been impacted by the coronavirus outbreak, it stated it is taking the opportunity for expand its online business and hand sanitiser sales.
The company hopes to improve its fortunes by leveraging the virus in order to sell more of its own hand sanitiser product that complies with regulations set by medical authorities.
Currently, Mediland is a leading retailer of cosmetics, jewellery, health and wool products, serving the inbound Chinese tourism market in Australia and New Zealand.
Mediland’s stores in Sydney, Melbourne, the Gold Coast and Auckland have been closed for the duration of the outbreak, although the company claims that only minimal fixed costs have been incurred.
One positive aspect for Mediland is that the flagship store it acquired in 2009, Ian’s Health Lounge in Sydney’s CBD, remains open for business.
Mediland’s coronavirus response strategy
Mediland declared that it had instituted several measures in response to the novel coronavirus outbreak “to ensure the company continues to be viable” by substantially reducing costs, expanding its sales through its on-line platform and launching new products including a hand sanitiser to meet the unprecedented demand in China, Australia and New Zealand.
The company admitted that its local operations and revenues have been “adversely affected” by the outbreak which has left management with no choice but to implement “rigid cost control measures to ensure a stable cash forecast position until the situation resolves”.
Furthermore, Mediland has admitted that the outbreak is an opportunity to focus on, and expand, the newly established online business.
The online platform allows customers based in China, Australia and New Zealand to purchase more than 100 different products including Mediland’s own branded products and infant formula.
In a bid to improve its stagnant performance as a result of the impact on commerce in Asia, Mediland said it recognises the outbreak as an opportunity to recoup the losses made so far.
To prevent the spread of the virus, the US Centers for Disease Control (CDC) recommended regular hand washing and the use of hand sanitisers with at least 60% alcohol.
Mediland’s own brand of hand sanitiser complies with this guideline, as it contains 75% alcohol and comes in two convenient sizes to enable portability when travelling, the company said.
Furthermore, Mediland’s MediLife product contains a range of vitamins including vitamin C and other ingredients, designed to promote a healthy immune system and to improve general wellbeing.
According to reports, growing demand for vitamin supplements is being fuelled by health authorities recommending that people consume additional vitamins to reinforce the immune system and mitigate the rate of infection.
It is recognised that the immune system plays a key role in protecting the body from viral and bacterial infections and Mediland is hopeful of seeing its vitamin-boosted product obtain strong uptake as a result of the outbreak.
“The board has been very impressed by management’s prompt actions in the face of this unprecedented situation to significantly reduce costs, and to focus on opportunities to generate revenue through the online platform,” said Mediland’s chairman Dr Peter French.
“Recognising the surging demand for products to assist in preventing the spread of disease in China, the company has rapidly produced an effective hand sanitiser and is also developing supplements that contain ingredients that may assist the immune system, in addition to its current MediLife supplement product.”
“We thank our shareholders and customers for their ongoing support and look forward to resuming normal business operations once the outbreak has been controlled,” said Dr French.