China Nepstar Chain Drugstore to Implement SAP ERP Solution

by Lucia Qian

China Nepstar Chain Drugstore Ltd., the largest drugstore chain in China based on the number of directly operated stores, today announced that it has entered into a license agreement with SAP AG, a global leading Enterprise Resource Program ("ERP") provider, to purchase the full SAP ERP system. Concurrently, China Nepstar has retained Abeam Co., a world-class system integrator with strong SAP implementation experience, to implement its ERP system.

Mr. Jiannong Qian, Chief Executive Officer of China Nepstar, commented, "China Nepstar's company-wide migration to SAP's state-of-the-art ERP system will further improve our management and cost controls as well as enhance our operating efficiencies. The implementation of the SAP ERP system is part of our strategy to support China Nepstar's rapid expansion and future growth in the Chinese market."

The SAP ERP system will integrate the Company's company-wide accounting and operating systems. The integration is expected to lower operating costs, improve inventory management and enhance data analysis capability. Particularly, it is expected to benefit store level data analysis to facilitate product procurement and sales promotion planning.

China Nepstar selected SAP ERP system following a rigorous review of competing software in light of the Company's business needs and growth outlook. SAP ERP system has already been installed by many established international and Chinese retailers such as Walmart, MatsuMoto Kiyoshi, and China Suning Corporation.

The Company plans to install the SAP ERP system in phases commencing in the fourth quarter of 2008. The installation is expected to be completed in 2009.