Yield Growth (BOSS.C) enters China’s hemp market

On April 11, 2019 Yield Growth (BOSS.C) engaged Pontier Services to “set up Urban Juve hemp beauty products” for sale through China’s most popular messaging app, WeChat.

“Yield Growth has developed a portfolio of cannabis-based “wellness formulas” – under the Urban Juve brand – with a dedicated range of skin and body care formulations.”

If you’ve been to China – or have Chinese friends – you’ll know that WeChat is Facebook, Twitter, G.mail, Skype, Instagram – all rolled into a Visa Card.

“Canadian companies that want to tap into the huge Chinese market need to think e-commerce and learn how to market through the huge social media WeChat platform”, stated The Vancouver Sun.

“If you want to do business with China, you have to be on WeChat,” confirmed Prizm Digital’s Janice Liu.

According to TechCrunch, “WeChat has proven to be an effective channel for acquiring e-commerce users, with more than one billion monthly active users worldwide.”

As someone who spends a lot of time in China, I concur with Ms. Liu’s and TechCrunch’s assessment.

In villages, towns, 3rd-tier cities and Beijing – Chinese nationals use We Chat to communicate and pay for items.  Even street food vendors in the mountains of Yunnan Province typically accept WeChat payments.

Yield Growth’s idea is to initiate a marketing campaign with A.I-enabled pop-up kiosks to “rotate through luxury shopping malls” and other major locations in Hong Kong for three months beginning in June 2019.

According to New Frontier Data, Chinese hemp sales totaled $1.1 billion in 2017, approaching 1/3 of the $3.1 billion global market, with sales forecasted to grow to $1.5 billion (up 36%) by 2020.

“Urban Juve anti-aging serum is the best serum I’ve tried in years,” stated Elle Canada, “One drop coats my entire face and gives me the softest, silkiest skin of my life. Is it due to the brand’s signature hemp root oil? It doesn’t matter to me — it works.”

The Boston Consulting Group (BCG) states that the over-the-counter (OTC) health and wellness market is already worth around $18 billion a year in China.

BCG believes that the total value of China’s emerging health and wellness market will climb to nearly $70 billion by 2020.  BCG’s data was based on a survey of 2,600 consumers (18-65) “from a number of large, medium and small cities across China.”

BCG is right.  Chinese women love beauty products.  For example, here’s my 52-year-old Chinese wife who now lives in Yi Chang, Hubei – with a $6 “facial mask” she applies every single evening.

The Hong Kong pop-up kiosks will introduce Urban Juve’s brand story, Ayurveda philosophy and proprietary hemp root oil care products to China – using WeChat to drive “sampling and sales transactions.”

It’s a super-smart idea.

Asian consumers are famously quick to adopt foreign brands.

“The use of pop-up kiosks in shopping malls to promote online sales is an innovative way to reach the modern consumer,” states Penny Green, CEO of Yield Growth.  “We are excited to launch Urban June’s hemp products in the fast-growing Chinese market this summer through WeChat.”

Hong Kong and mainland China are two different animals, and may require differentiated marketing campaigns – but Yield Growth is up for the challenge.

“We fully intend to do pop ups in Mainland China and possibly in other locations worldwide,” confirmed Green in an e.mail communication with Equity Guru, “China is the biggest hemp market in the world and a substantial portion of that is through ecommerce.”

The initial locations for the kiosks this summer will be 3 luxury shopping malls in Hong Kong, University of Science and Technology, Science Park and the Park Yoho residence clubhouse.

In the same April 11, 2019 press release, Yield Growth announced it will “not be proceeding” with the property acquisition in Chilliwack because “its condition to closing on the purchase was not fully satisfied.”

Online retail sales in China totaled about $1.33 trillion in 2018, an increase of 23.90% compared with 2017, according to the National Bureau of Statistics of China.

Full Disclosure:  Yield Growth is an Equity Guru marketing client and we own the stock.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

Yield Growth Corp

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