China's retail prescription medicine sector has seen rapid growth in the past few years, thanks to enhanced ties among parties related to the industry and digital tools, which are further pushing the sector forward on a healthy track, said a report by Boston Consulting Group.
According to the report, between 2015 and 2020, the compound annual growth rate of online retail sales of prescription medicines reached 53 percent. Specifically, the growth rate between 2019 and 2020 was as high as 79 percent. In 2020, the market volume reached 25 billion yuan ($3.7 billion).
In the future, with the rise in online consultations, it is expected that online sales of prescription drugs will maintain robust growth, the report said.
Chen Baiping, BCG managing director and partner, and leader of BCG's Health Care Practice in Greater China, said: "In the past three years, China's retail prescription medicine industry experienced rapid growth. However, the overall market structure has not undergone profound changes."
Chen said, currently, there is still a lot of room for improvement in the proportion of retail prescription medicine in total sales and the market size, reflecting a certain gap between China and developed countries, while the number of retail pharmacies per capita has almost reached the level of developed countries. Therefore, he said he believes the growth rate of the sector will remain at a high level in the following years and prospects in the industry are promising.
According to the report, in the future, Chinese retail pharmacies will gradually enter a new era supported by omnichannel services. Under such a background, based on offering professional drug-related services, retail pharmacies should provide customers with diversified, personalized and intelligent services to increase the span and depth of customer service.
Specifically, Chen suggested that retail pharmacies should integrate their diagnosis, treatment, drug delivery and health management services to form omnichannel service competence.
In addition, he said that retail pharmacies should dock and integrate online and offline new retail business platforms.
In March, when Shanghai was hit by the COVID-19 pandemic, many pharmacies stopped offering cough suppressants, antivirals and antibiotics, and as many areas were blocked, delayed logistics led to a series of problems such as drug shortages and order stagnation.
Under such circumstances, Shanghai-based online pharmacy 111 Inc created a system, giving full play to the emergency-handling capability of its national intelligent supply chain system. For example, it integrated its online and offline resources and established self-pickup stations, so that customers could better access their needed pharmaceuticals.
Between March 1 and May 31, 111 Inc had offered drug services to 35,000 patients in Shanghai, involving nearly 50,000 orders, covering nearly 400 ailments.
The company also offered drug supply services to over 1,000 offline pharmacies in Shanghai and organized free online diagnosis and drug delivery services to elderly residents in blocked areas in the metropolis.
Liao Jieyuan, founder, chairman and CEO of digital healthcare company WeDoctor, said: "China's online retail prescription drug sector has entered a standardized development stage. During the process, online enterprises are able to offer patients high-quality, digital medical services that equal those of offline organizations. This is vital to retail prescription drugs."