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We sell our products to wholesalers, independent retailers and through our smart retail micro marts. We also have a group purchase program through which we sell to entire residential communities, organized through social media.

Wholesalers

Currently, we have 177 wholesalers located in 71 cities in China.

Our wholesaler customers mainly consist of large fruit wholesale companies. Typically these wholesalers place orders with us after the fresh products have departed the countries of origin. Once these products arrive at port of destination in China, third party logistics companies will deliver these products to each wholesaler’s designated location where the products are inspected and accepted by the wholesalers.

Retailers

We currently service 115 retailer customers located in 19 cities in China with daily deliveries of fresh products using services provided by third party logistics companies. Our retailer customers are mainly located in coastal cities in southeastern China. They place orders through our WeChat mini-program, Lohas City, and the payment is made when the order is placed. Our retailer customers mainly consist of retail stores who sell to end consumers as well as direct delivery service providers that distribute our products to institutional customers such as business offices.

Smart Micro Marts

We offer fresh, natural and healthy food choices in our smart micro marts. The products in the smart micro marts are kept fresh daily using a replenishment network of temperature-controlled delivery vehicles. All fresh products remain stored in a temperature-controlled environment, which is monitored and controlled from a central location, until purchase. Our end-to-end control of our supply chain and daily replenishment system means that the products purchased at our smart micro marts meet or exceed our customers’ expectations for safety, freshness and quality.

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Our smart micro mart delivers a simple and elegant purchase experience. Once the user scans the QR code on the unit using a mobile phone, our WeChat mini-program, Lohas City, is launched on the mobile phone and the door is unlocked. The user then opens the door and selects products. The smart mart detects which item was removed and adds it to the mini-program’s shopping cart. If the user decides to put an item back, that item instantly disappears from the shopping cart. To complete the transaction, the user simply closes the door. The transaction completes with a mobile payment.

The smart micro marts are constructed with a customer-facing digital screen that projects promotional messages. LOHAS sells this advertising space as an additional revenue source. Purchase data collected through the smart micro mart and throught the Lohas City app helps is analyzed and used to inform our business intelligence and decision-making.

Group Purchase Program

Results of market research and our pilot program have provided encouraging data for the development and commercialization of our group purchase program. .In late 2018, we began offering the community group purchase program that takes advantage of social proof group buying behavior. Within each group, a LOHAS distributor coordinates group purchases through social media services such as WeChat by placing orders and advancing payments on our “Lohas City” mini program there. Such coordinated purchases help us to further optimize our supply chain, remove intermediate warehouses storage and transportation from our cold supply chain, and speed up delivery.

In addition, group purchases provide our customers with cost savings while resulting in large orders for us. Orders are placed using our application and physical delivery typically occur within hours. This convenient home delivery solution brings products directly to the buyers’ doorsteps if they are at home, or to “smart storage lockers” if they are not at home. Similar to the way Amazon.com has deployed storage and pick up units in the U.S., our lockers are individually assigned to customers, and products are kept fresh until locker is opened and items are retrieved.