China Loses Drugstores as Online Healthcare Market Grows
Lin Zhiyin
DATE:  6 hours ago
/ SOURCE:  Yicai
China Loses Drugstores as Online Healthcare Market Grows China Loses Drugstores as Online Healthcare Market Grows

(Yicai) May 21 -- The number of pharmacies in China dropped in the fourth quarter of last year, with drugstores struggling due to the rapid growth of healthcare e-commerce.

Some 14,100 brick-and-mortar pharmacies closed in China in the three months ended Dec. 31, while only 10,700 opened, according to figures from health industry data and consulting service platform Zhongkang CMH. Their total number fell 0.5 percent from a quarter earlier.

In addition, five of the eight pharmaceutical companies listed on the Chinese mainland reported a drop in net profit last year.

In comparison, Alibaba Health Information Technology's net profit surged 62 percent to CNY1.4 billion (USD193.9 million) in the fiscal year ended March 31 from a year earlier, while its revenue rose 13.2 percent to CNY30.6 billion (USD4.2 billion), the online healthcare unit of the Chinese e-commerce giant announced on May 19.

JD.Com's digital health services and resources subsidiary also recently reported its net profit soared 94 percent to CNY4.1 billion last year from the previous year, while its operating income rose 11.6 percent to CNY59.9 billion.

The market shift is mainly due to changes in patients' purchasing habits and doctors' diagnosis and treatment behaviors, fierce industry competition, and increased compliance requirements, industry experts told Yicai. These factors have also led pharmaceutical firms to redouble their efforts to lay out e-commerce channels, they noted.

Ten years ago, academic research was mostly done offline because doctors were mainly concentrated on such work, an insider from a multinational pharmaceutical company said to Yicai. Now, doctors are increasingly using their spare time for online diagnosis and treatment, showing them the opportunities brought by online channels, the person added.

Drug sales in China's retail pharmacies market climbed 0.8 percent to CNY501.9 billion (USD69.5 billion) last year from the prior one, Zhongkang CMH data showed. Sales via e-commerce channels rose 4.6 percent to CNY64.5 billion, higher than the 0.3 percent growth rate of brick-and-mortar stores, including online-to-offline pharmacies.

Editor: Martin Kadiev

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Keywords:   pharmacies