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Recently, the Jiangxi Provincial Drug Administration issued the "Opinions on Supporting the Development of Pharmaceutical Retail Chain Enterprises (Trial)" (hereinafter referred to as the "Opinions"), launching 15 measures to support and encourage the development of
pharmaceutical retail chain enterprises in the province.
pharmaceutical retail chain enterprises in the province.
As mentioned in the Opinions, the 15 measures focus on improving the drug retail chain rate and standardization level, focusing on supporting large wholesale enterprises and large pharmaceutical retail chain enterprise groups to integrate single pharmacies through various forms, allowing pharmaceutical retail chain enterprises to implement "multi-warehouse coordination", and supporting the transfer of drugs
between stores of the same retail chain enterprise as needed.
between stores of the same retail chain enterprise as needed.
In addition, the Opinions also propose to support pharmaceutical retail chains to set up 24-hour vending machines in large public places, and support supermarket chains to sell Class B over-the-counter drugs to facilitate the purchase of drugs
by the public.
Support pharmaceutical retail chain enterprises to carry out remote pharmacy services and prescription business for licensed pharmacists, and encourage pharmaceutical retail chain headquarters to set up remote pharmacy service centers
.
Support the electronic management of data of pharmaceutical retail chain enterprises, encourage chain enterprises to use the "Internet +" sales method to sell drugs, implement a chronic disease prescription retention system, and achieve convenient services
.
by the public.
Support pharmaceutical retail chain enterprises to carry out remote pharmacy services and prescription business for licensed pharmacists, and encourage pharmaceutical retail chain headquarters to set up remote pharmacy service centers
.
Support the electronic management of data of pharmaceutical retail chain enterprises, encourage chain enterprises to use the "Internet +" sales method to sell drugs, implement a chronic disease prescription retention system, and achieve convenient services
.
With the support of local policies, the head chains are more convenient
when expanding in scale.
However, the industry has begun to observe that some small and medium-sized chain pharmacies that originally had only a few stores quickly "huddled" in just a few years to achieve rapid development of expansion to dozens or hundreds of stores, although the number of stores and business volume increased rapidly in a short period of time, but did not really achieve profit growth, and even many stores were in a loss state
.
when expanding in scale.
However, the industry has begun to observe that some small and medium-sized chain pharmacies that originally had only a few stores quickly "huddled" in just a few years to achieve rapid development of expansion to dozens or hundreds of stores, although the number of stores and business volume increased rapidly in a short period of time, but did not really achieve profit growth, and even many stores were in a loss state
.
The market is not without worry: whether small and medium-sized chains and independent pharmacies are expanding in a short period of time to improve their operations, or are they just being acquired for the sake of doing large-scale?
"Big fish eat small fish"
Small and medium-sized chains blindly expanding?
The "Opinions" issued in Jiangxi Province clearly mentioned a series of large-scale chain favorable support policies:
1.
Support pharmaceutical wholesale enterprises in applying for drug chain retail "Drug Business Licenses" in accordance with the business mode of batch and zero, and encourage pharmaceutical wholesale enterprises to establish pharmaceutical retail chain enterprises
by relying on existing retail pharmacies or by merging individual retail pharmacies.
Support pharmaceutical retail chain enterprises to integrate other pharmaceutical retail chain enterprises or single pharmacies
in the form of mergers, reorganizations, franchises, etc.
Support pharmaceutical wholesale enterprises in applying for drug chain retail "Drug Business Licenses" in accordance with the business mode of batch and zero, and encourage pharmaceutical wholesale enterprises to establish pharmaceutical retail chain enterprises
by relying on existing retail pharmacies or by merging individual retail pharmacies.
Support pharmaceutical retail chain enterprises to integrate other pharmaceutical retail chain enterprises or single pharmacies
in the form of mergers, reorganizations, franchises, etc.
2.
Encourage large pharmaceutical retail chain enterprise groups to integrate single pharmacies through various forms, standardize the operation and management of pharmacies, increase the allocation of drugs for daily use in pharmacies, and ensure the security
of drug supply at last-mile terminals.
Relax the application requirements for Class B OTC drug retail enterprises in rural and remote areas, and adjust the business area from not less than 20 square meters to not less than 15 square meters, so as to ensure that residents in remote areas have access
to basic medicines.
Encourage large pharmaceutical retail chain enterprise groups to integrate single pharmacies through various forms, standardize the operation and management of pharmacies, increase the allocation of drugs for daily use in pharmacies, and ensure the security
of drug supply at last-mile terminals.
Relax the application requirements for Class B OTC drug retail enterprises in rural and remote areas, and adjust the business area from not less than 20 square meters to not less than 15 square meters, so as to ensure that residents in remote areas have access
to basic medicines.
3.
Where a pharmaceutical retail chain enterprise of the same legal person acquires another pharmaceutical retail chain enterprise by acquisition, merger, franchise or holding, it may directly change the stores of the acquired pharmaceutical retail chain enterprise and cancel the "Drug Business License"
of the headquarters of the acquired pharmaceutical retail chain enterprise.
Where a pharmaceutical retail chain enterprise of the same legal person acquires another pharmaceutical retail chain enterprise by acquisition, merger, franchise or holding, it may directly change the stores of the acquired pharmaceutical retail chain enterprise and cancel the "Drug Business License"
of the headquarters of the acquired pharmaceutical retail chain enterprise.
.
.
.
.
.
.
.
.
.
.
.
In fact, many places have issued relevant policy measures or opinions
on supporting chain integration and supporting the chaining, scale and standardization of retail pharmacies.
As early as the beginning of 2022, the Guangdong Provincial Food and Drug Administration issued the Measures for the Supervision and Administration of Drug Retail Chain Operation in Guangdong Province, which supports the chaining, scale and standardization of retail pharmacies, and supports single pharmacies to join chain enterprises
.
on supporting chain integration and supporting the chaining, scale and standardization of retail pharmacies.
As early as the beginning of 2022, the Guangdong Provincial Food and Drug Administration issued the Measures for the Supervision and Administration of Drug Retail Chain Operation in Guangdong Province, which supports the chaining, scale and standardization of retail pharmacies, and supports single pharmacies to join chain enterprises
.
Some insiders have analyzed that compared with small and medium-sized chains and single pharmacies, each leading chain cooperates with colleges and universities in terms of talent control, attracting a large number of professional students to graduate and find employment, so it has great advantages
in the number of licensed pharmacists, the number of employees and the ability to match professional pharmacists in single stores.
Under the requirements of large-scale expansion and standardized management, the concentration of pharmacy operations to the head of large-scale chains is the trend
of future industry development.
in the number of licensed pharmacists, the number of employees and the ability to match professional pharmacists in single stores.
Under the requirements of large-scale expansion and standardized management, the concentration of pharmacy operations to the head of large-scale chains is the trend
of future industry development.
However, at a time when the industry is ready to align with the top large chain brands, the expansion of small and medium-sized chains has attracted attention
in the industry.
in the industry.
The new media center of "Medical Economic News" has visited and investigated
a number of leading retail chain brands, such as Yifeng, Dashenlin, Beijing Tongrentang, etc.
According to the results of the visit, in addition to Tongrentang, many chain brands said that the current sales growth of enterprises mainly comes from store expansion, of which directly operated stores are the mainstay, and the proportion of directly operated stores of some enterprises exceeds 90%; In addition to opening stores normally, enterprises have also acquired small and medium-sized chains to achieve rapid regional expansion
.
a number of leading retail chain brands, such as Yifeng, Dashenlin, Beijing Tongrentang, etc.
According to the results of the visit, in addition to Tongrentang, many chain brands said that the current sales growth of enterprises mainly comes from store expansion, of which directly operated stores are the mainstay, and the proportion of directly operated stores of some enterprises exceeds 90%; In addition to opening stores normally, enterprises have also acquired small and medium-sized chains to achieve rapid regional expansion
.
Some insiders have also found that the rapid expansion of some small and medium-sized chains is not for market survival and store profitability, and the reason why they try their best to swallow up small chains and single pharmacies in the region is only to negotiate with large chains and strive for better merger and acquisition bids
after rapidly expanding the scale of stores.
after rapidly expanding the scale of stores.
On the other hand, head chains such as Da Shenlin, Yifeng, and Yixintang can be described as "rich and powerful"
.
In the first three quarters of 2022, the total operating income of Dashenlin reached about 14.
82 billion yuan, with a net profit of about 923 million yuan; the total operating income of Yifeng Pharmacy was about 13.
35 billion yuan and the net profit was about 917 million yuan; and the total operating income of Yixintang was about 12.
03 billion yuan and the net profit was about 675 million yuan
.
.
In the first three quarters of 2022, the total operating income of Dashenlin reached about 14.
82 billion yuan, with a net profit of about 923 million yuan; the total operating income of Yifeng Pharmacy was about 13.
35 billion yuan and the net profit was about 917 million yuan; and the total operating income of Yixintang was about 12.
03 billion yuan and the net profit was about 675 million yuan
.
For these leading chains, store sales account for the majority of their financial performance, and if they want to improve their performance, they must quickly increase stores to increase sales
.
With its own capital capacity, it is obviously a better and faster choice
to choose mergers and acquisitions to achieve rapid expansion.
.
With its own capital capacity, it is obviously a better and faster choice
to choose mergers and acquisitions to achieve rapid expansion.
For large chain brands, each merger and restructuring requires a lot of manpower and time to visit, review, negotiate and accept, and the size of the acquisition target has also become one of
the important factors to consider.
Then there was the phenomenon of small and medium-sized chains acquiring single pharmacies, and large chains acquiring small and medium-sized chains
.
the important factors to consider.
Then there was the phenomenon of small and medium-sized chains acquiring single pharmacies, and large chains acquiring small and medium-sized chains
.
The "capital game" grows wildly
The M&A chaos needs to be rethought
Capital intervention and the prevalence of mergers and acquisitions also disrupted the determination
of the bosses who had decided to stick to the front line.
Is it to continue to not forget the original intention, serve the local people, and become bigger and stronger? Or follow the trend and exchange the fruits of hard work for real money?
of the bosses who had decided to stick to the front line.
Is it to continue to not forget the original intention, serve the local people, and become bigger and stronger? Or follow the trend and exchange the fruits of hard work for real money?
The new media center of "Medical Economic News" once interviewed a person in charge of a small chain brand in a rural area, he said: "In order to fight against the increasing number of chain pharmaceutical companies in the surrounding areas, he attracted the individual pharmacies in the surrounding areas to establish an alliance brand, relying on the local 'emotional brand' and professional knowledge of Chinese and Western medicine to establish regional civic traffic, villagers will prefer their pharmacies when they are sick, but there are more and more large chains around, relying on the channel advantages of DTP pharmacies, dual-channel pharmacies, and medical insurance payment, constantly eroding their customer flow market.
" During this period, there were constantly medium and large chain brands that wanted to discuss acquisitions, and little by little broke the determination
to become bigger and stronger.
”
" During this period, there were constantly medium and large chain brands that wanted to discuss acquisitions, and little by little broke the determination
to become bigger and stronger.
”
In fact, there will be a market where there is demand, and as long as the demand is there, there will be such "professional" chain people to operate store expansion and seek mergers and acquisitions
.
.
The industry view is that based on objective factors such as the acceleration of domestic aging, the full liberalization of the two-child policy, and the improvement of residents' consumption level, the national demand for medicine is still strong, the demand for health care products and professional services continues to increase, and the overall scale of the pharmaceutical retail market is expected to continue to increase
.
Chain pharmacies have the dual attributes of retail and medicine, and under the national industrial structure adjustment and capital boost, the industry has been sharply reshuffled, and the Matthew effect has been
prominent.
At this critical juncture, if we want to seize the opportunity and maintain a favorable position, we can only practice our internal skills
.
.
Chain pharmacies have the dual attributes of retail and medicine, and under the national industrial structure adjustment and capital boost, the industry has been sharply reshuffled, and the Matthew effect has been
prominent.
At this critical juncture, if we want to seize the opportunity and maintain a favorable position, we can only practice our internal skills
.
Experts say that in essence, M&A expansion is also a win-win business
for the healthy development of the retail pharmacy industry.
The acquired chain pharmacy is often not ready for a real chain operation, and the large chain pharmacy that acquires it needs to make up its mind to manage and operate the whole process in full accordance with the modern enterprise system, rather than simply expanding the store
.
for the healthy development of the retail pharmacy industry.
The acquired chain pharmacy is often not ready for a real chain operation, and the large chain pharmacy that acquires it needs to make up its mind to manage and operate the whole process in full accordance with the modern enterprise system, rather than simply expanding the store
.
On the other hand, the large-scale realization of retail chains to move closer to large head brands is also conducive to the improvement of industry concentration, helping a series of supply chains and sales chains such as supply, warehousing, and distribution to be more standardized and integrated
.
For the pharmaceutical retail market, the advantages of large chain pharmacies lie in the product channels and modern management processes of upstream manufacturers, and individual enterprises even play the role of wholesalers or manufacturers in the supply chain (such as China Resources Department, Sinopharm Holdings, Shanghai Medicine, etc.
).
The disadvantage of small and medium-sized pharmacy chains is the lack of product lines and the outdated
management model.
Where there is demand, there will be a market
.
.
For the pharmaceutical retail market, the advantages of large chain pharmacies lie in the product channels and modern management processes of upstream manufacturers, and individual enterprises even play the role of wholesalers or manufacturers in the supply chain (such as China Resources Department, Sinopharm Holdings, Shanghai Medicine, etc.
).
The disadvantage of small and medium-sized pharmacy chains is the lack of product lines and the outdated
management model.
Where there is demand, there will be a market
.
The "professional" chain expansion itself does not violate laws and regulations, so to reduce this chaos, it is necessary to rely on the joint efforts of the head chain enterprises, in the process of mergers and acquisitions, do more field research, understand the actual operating conditions of the target enterprises, can not blindly for the sake of expansion and mergers and acquisitions, and then cause market chaos
.
While this is not conducive to the healthy development of the industry, for the head chain that implements mergers and acquisitions, the acquired stores will also affect the profit margin of its performance - increase revenue without increasing profit
.
.
While this is not conducive to the healthy development of the industry, for the head chain that implements mergers and acquisitions, the acquired stores will also affect the profit margin of its performance - increase revenue without increasing profit
.
