2022 China’s Pharmaceutical B2B E-commerce Industry Report

Source:iResearchNovember 18,202211:32 AM Overview

The size of China’s pharmaceutical B2B e-commerce market grew rapidly from 2016 to 2021. In 2019, the B2B transaction scale exceeded 100 billion yuan. Purchasing medicine online has been a primary choice since the outbreak of Covid-19 in 2020. In such circumstances, pharmaceutical B2B e-commerce is growing rapidly and its market size reached 207.2 billion yuan in 2021. Traditional pharmaceutical companies actively expand their B2B businesses. New pharmaceutical companies are playing an increasingly important role in the secondary market. It is expected that with improving market and policy environment, China’s pharmaceutical B2B e-commerce market will reach 375.8 billion yuan by 2025.

Pharmaceutical B2B e-commerce is in the midstream of the pharmaceutical distribution industry chain. It connects the upstream and downstream of the industry chain in a new digital way, cutting circulation costs and improving efficiency. Based on the initiators, pharmaceutical-commercial B2B e-commerce can be divided into government-led pharmaceutical B2B e-commerce, traditional pharmaceutical wholesale companies’ B2B transformation, and third-party pharmaceutical B2B e-commerce platform. Different models have different market characteristics and product systems. efficient pharmaceutical distribution

From the perspective of the macro environment, policy regulation, the Covid-19 pandemic, and technology application are still unstable, which brings uncertainty to the development of pharmaceutical B2B e-commerce. B2B companies should keep improving themselves to gain long-term and steady growth; From the perspective of industry, the first players have now seized a lot of resources and the market concentration will increase. The Matthew Effect will be increasingly prominent. From the perspective of service, relying on their own capabilities and supported by digital intelligence, the B2B platforms will provide diverse services combining ‘pharmaceutical purchase and sale + X’ to better serve upstream and downstream purchase and sale needs.

Size of the Pharmaceutical B2B e-commerce Market in China

The size of China’s pharmaceutical B2B e-commerce market expanded rapidly from 2016 to 2021. In 2019, the B2B transaction scale exceeded 100 billion yuan. As purchasing medicine online has been a primary choice since the outbreak of Covid-19 in 2020, pharmaceutical B2B e-commerce has been developing rapidly and its market size reached 207.2 billion yuan in 2021. Currently, pharmaceutical B2B e-commerce mainly serves pharmacies, clinics and private hospitals. In the future, as the Guideline to Promote High-quality Development of the Pharmaceutical Distribution Industry During the 14th Five-Year Plan Period released by the Ministry of Commerce has contributed to the concentration of the pharmaceutical circulation industry, B2B e-commerce will experience high-quality development. At the same time, as the out-of-hospital market grows fast and its purchase volume surges, the size of the pharmaceutical B2B e-commerce market will expand. It is expected that with improving market and policy environment, China’s pharmaceutical B2B e-commerce market will reach 375.8 billion yuan by 2025.

Industry Chain of Pharmaceutical B2B E-commerce in China

The upstream of China’s Pharmaceutical B2B E-commerce industry chain includes pharmaceutical companies, medical apparatus and instrument manufacturers, etc. With the popularity of the Internet and the support of payment, logistics and technology platforms, drug circulation gradually shifts to online B2B platforms, enhancing both speed and efficiency. The midstream consists of government-led B2B, B2B transformation of traditional pharmaceutical wholesale companies as well as third-party B2B platforms. The demand side of the downstream includes multiple terminals such as hospitals, clinics and pharmacies. Head pharmaceutical B2B e-commerce companies in the industry chain mostly rely on scale effect to seize the advantages of upstream varieties and downstream resources, realizing the entire industry chain.

Industry Map of Pharmaceutical B2B E-commerce in China

Upstream of the Industry Chain: Transformation and Development of Pharmaceutical Companies

In recent years, since the Chinese government has attached great importance to the healthcare industry, policies related to pharmaceutical circulation have a profound influence. Policies on centralized procurement, mass procurement, consistency evaluation, and medical insurance cost control have been introduced successively, influencing upstream pharmaceutical companies. In this round of reform, pharmaceutical companies will adjust R&D strategies and product structures, actively increase layout in the field of innovative medicine, and expand product lines with better efficacy and higher market acceptance. At the same time, falling profits will force pharmaceutical companies to optimize their sale and promotion models. Digital and professional promotion might be the mainstream.

Midstream of the Industrial Chain: Business Models of Pharmaceutical B2B E-commerce 

Based on the initiators, pharmaceutical-commercial B2B e-commerce can be divided into government-led pharmaceutical B2B e-commerce, the traditional pharmaceutical wholesale companies' B2B transformation and third-party pharmaceutical B2B e-commerce platforms. Among them, the government-led pharmaceutical B2B e-commerce is non-profit and mainly exists as an administrative platform of the government, providing a trading place for both sides of supply and demand. Traditional pharmaceutical wholesale companies transforming to B2B companies have first-mover advantages in medicine, warehouse, customer accumulation, and so on. They build Internet platforms to sell medicine online, adopting the business model of pharmaceutical + e-commerce. In addition, many emerging companies have built B2B platforms to enter the pharmaceutical sector, forming another major business model of "e-commerce + pharmaceutical".

Downstream of the Industry Chain: General Structure 

To B sales accounted for over 70% of pharmaceutical circulation Influenced by the Covid-19 pandemic in 2020, the number of visits to healthcare institutions reduced. Thus, the growth rate of To B sales dropped to 2.7%. However, as the pandemic is gradually under control, the growth rate has increased to 9.9%, indicating that offline healthcare demand is rigid and is rising. Healthcare institutions have always been a dominant To B sales channel, which is mainly because public hospitals are the main places where people get medical treatment.  In addition, as retail pharmacies are very convenient, their sales accounted for a higher proportion in 2020.

Development Trends in the Pharmaceutical B2B E-commerce Industry 

China's pharmaceutical B2B e-commerce industry is developing rapidly. Due to the pandemic, people have developed the habit of buying medicine online. Relevant policies have stimulated the out-of-hospital market's demand for purchasing, providing favorable conditions for the development of the industry. However, the macro environment is still unstable. The future of policies and regulations, pandemic control and new technology application are not clear. Uncertain factors related to industry development will exist for a long time. Pharmaceutical B2B e-commerce platforms should improve their capabilities, increase product categories, enhance services and strengthen supply chain logistics construction to gain long-term development.

Table of Contents of the Full Report

Abstract


1 Overview of Pharmaceutical B2B E-commerce in China
1.1 Three Business Models of Pharmaceutical E-commerce in China 
1.2 Definition of Pharmaceutical B2B E-commerce in China
1.3 Policy Background of Pharmaceutical B2B E-commerce in China  
1.3.1 Pharmaceutical Circulation Policies Are Increasingly Standard 
1.3.2 Multiple Methods Promote Online Pharmaceutical Circulation  
1.4 Development Background of China’s Pharmaceutical B2B E-commerce Industry
1.5 Technology Background of Pharmaceutical B2B E-commerce in China
1.6 Logistics Background of Pharmaceutical B2B E-commerce in China
1.7 Development of Pharmaceutical E-commerce in China
1.8 Pain Points of the Traditional Pharmaceutical Circulation Industry  
1.9 Core Value Pharmaceutical B2B E-commerce


2 Status Quo of Pharmaceutical B2B E-commerce in China
2.1 Size of the Pharmaceutical B2B E-commerce Market in China
2.2 Investment and Financing Related to Pharmaceutical B2B E-commerce in China
2.2.1 Traditional Companies Actively Expand Pharmaceutical B2B E-commerce Layout
2.2.2 Third-party Pharmaceutical B2B E-commerce Companies Are Increasingly Important in the Secondary Market
2.3 Industry Chain of Pharmaceutical B2B E-commerce in China
2.4 Industry Map of Pharmaceutical B2B E-commerce in China

2.5 Competition Between Pharmaceutical B2B E-commerce Companies in China  
2.6 Analysis of the Upstream of the Industry Chain
2.6.1 Upstream of the Industry Chain: R&D of Pharmaceutical Companies
2.6.2 Upstream of the Industry Chain: Marketing Models of Pharmaceutical Companies  
2.6.3 Upstream of the Industry Chain: Transformation and Development of Pharmaceutical Companies


2.7 Midstream of the Industry Chain
2.7.1 Midstream of the Industry Chain: Wholesale Companies
2.7.2 Midstream of the Industry Chain: Value of Pharmaceutical B2B E-commerce
2.7.2.1 Supplier: Promote Channels and Product Marketing to Enhance Industrial Value

2.7.2.2 Purchaser: Purchasing Chain Optimization Through Digital Technologies
2.7.3 Midstream of the Industrial Chain: Business Models of Pharmaceutical B2B E-commerce
2.7.3.1 Government-led Pharmaceutical B2B E-commerce
2.7.3.2 B2B transformation of Traditional Pharmaceutical Wholesale Companies
2.7.3.3 Third-party Pharmaceutical B2B E-commerce Platforms
2.7.4 Midstream of the Industry Chain: Characteristics of the Pharmaceutical B2B E-commerce Market
2.7.5 Midstream of the Industry Chain: Pharmaceutical B2B e-commerce Layout
2.8 Analysis of the Downstream of the Industry Chain
2.8.1 Downstream of the Industry Chain: Overall Structure
2.8.2 Downstream of the Industry Chain: Public Hospital
2.8.3 Downstream of the Industry Chain: Pharmacy
2.8.3.1 Number of Retail Pharmacies Keeps Growing
2.8.3.2 Prescription Outflow is a Long-term Trend  


3 Case Study of Pharmaceutical B2B E-commerce in China
3.1 Jointown
3.2 SCJUCHUANG.COM
3.3 111


4 Development Trends in China’s pharmaceutical B2B e-commerce Industry
4.1 Development Trends in the Pharmaceutical B2B E-commerce Industry—Macro Environment
4.2 Development Trends in the Pharmaceutical B2B E-commerce Industry--Industry
4.3 Development Trends in the Pharmaceutical B2B E-commerce Industry--Service



Contents

Guideline to Promote High-quality Development of the Pharmaceutical Distribution Industry During the 14th Five-Year Plan Period was released by the Ministry of Commerce, proposing clear requirements for the high-quality development of pharmaceutical circulation in China during the 14th Five-Year Plan .In this context, the pharmaceutical distribution industry has accelerated its digital transformation, and pharmaceutical e-commerce has been growing rapidly. The B2B model, which is adopted by more than 90% of pharmaceutical e-commerce, is developing quickly. Advances in industry, policy, technology, and logistics lay a good foundation for the development of pharmaceutical B2B e-commerce, promoting cost reduction and efficiency enhancement in the supply chain of pharmaceutical distribution.

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