The pharmaceutical industry is one of the major industries in China. The online pharmacy was implemented in China in 2005. In 2008, only 10 online pharmacy shops were permitted to sell drugs at that time. According to China food and Drug Administration (CDFA), in 2017, 659 online pharmacies obtained the permission. Not only the numbers but also the sales are booming (see our services for e-commerce here). Figures in Sinohealth’s study, the B2C e-pharmacy sales in 2016 increased by 93% year by year and reached almost CYN 28 billion. In 2016, China became the world’s second largest pharmaceutical market.
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About the Chinese pharmaceutical market
If there is one thing to avoid in China, it is the fact to get ill. Because the costs of sickness and drugs are extremely high. Chinese are very careful about their health especially after all scandals news and several rumors in China. They don’t trust a lot in what they are eating and even the pollution represents a threat to some of them.
As the average revenue and the middle class in China are growing, the demand for healthcare goods and services is getting huge. The new generation in particular. The older generation wants to save money for their children, so they only spend a little bit of money on themselves. New generations look often themselves much lot and they also care for their family. Spending money on the body or health care is a necessity and a normality to them.
The pharmaceutical market was covered by nationwide pharmacy chains. Hospitals were the main place to get drugs and they counted on drug sales for revenue. New rules from the government allow china’s e-commerce giants to get a hand in pharmaceuticals by directing prescription drug sales away from hospitals into retail. It aims to enable patients to choose between hospitals and retail pharmacies for prescription drug purchases.
Be sure to catch e-pharmacy’s evolution
The fast-growing e-commerce market of China is linked with many new regulations in this area and different new competitors entering the space. As John Wong said, “each one is trying to grab a piece of the business”. The competition in this market is growing, allowing an important place for discount online pharmacy. As this market is on a fast evolution stage, prospects are very rosy. The increase is averaging roughly 30% every year.
E-commerce is also creating opportunity and way for new pharmaceuticals brands to sell their product in China. The online pharmacy can promote new brands and new product to customers, creating their needs. With so many discounts online, users will be more attracted and able to spend the time to discover them. Tmall and Jingdong are the most reliable platforms for a major part of Chinese consumers
Moreover, the Chinese traditional medicine place is getting less high. Chinese consumers prefer products which came from abroad. The retail store for that type of product isn’t that much so they often go to e-commerce platforms for seeking.
The future of the pharmaceutical industry is online
The fact to be present on a trusted e-commerce platform reassures consumers to purchase their drugs. Figures in China report, almost 200 000 persons are said to have died in 2001 as a consequence of having taken counterfeit drugs in China. With the e-commerce development, Chinese people change their drugs purchasing habits. There are different reasons why the e-commerce is getting important :
- Because of the very complex distribution chain in China, drug prices used to be very high. Selling on online platforms allow customers to get fairer prices. Information is also more transparent through that way.
- 80% of Chinese people already did research on the web for their health care. They participate in a discussion on the network and are asking for advice or recommendation of drugs online. They can have access to different propositions and compare them. For the ones who don’t like to face sellers, internet and e-pharmacy represent also a good way for them to get information and to purchase their need.
- The delivery service in China is very developed. Nowadays in China, to purchase online is as convenient (even more) as going to a drugstore. Customers have no restriction with the time constraint.
Owing to the high intensity and under pressure work environment in China, Chinese people seek for how to save time and to be more productive. Also, the vitamins and dietary supplements are very popular in China.
What you should take care of
As rumors run very fast on the internet, every brand has to take care of their reputation online. It is good to put a maximum of indication for medicine, even the possible side-effects. The e-commerce in China is based on transparency as the Chinese consumers are very actives nowadays on search engines.
Firms which want to sell their products online must ensure enough visibility and reliability. Platforms such as Tmall represent a good sales channel but the competition is also important for it.
Need some more information about this market? Do not hesitate to contact our team. We are specialized in digital marketing in China and we can help you with your project development in China.
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