À medida que o mercado se expande, more players are entering the field, and favorable policies are continuously emerging, accelerating the transformation of the pharmaceutical O2O market.
Recently, leading express delivery company SF Express officially entered the pharmaceutical O2O market. SF Express’s local delivery service has launched an integrated logistics solution for “Internet + Healthcare,” covering two core medical consumption scenarios: pharmaceutical new retail and online hospitals. The aim is to enhance quality and efficiency through a multi-platform, full-link coverage model.
Instant delivery, as a crucial model for the pharmaceutical O2O sector, is a key focus for pharmacies in new retail. According to the latest data from Zhongkang CMH, the pharmaceutical O2O market grew by 32% from January to August 2023, with sales reaching 8 billion yuan. Platforms such as Meituan, Ele.me, and JD dominate the market, while major listed chain pharmacies like Lao Baixing Pharmacy, Yifeng Pharmacy, and Yixin Tang continue to strengthen and optimize their online channels.
At the same time, policies are further accelerating the industry’s development. As reported on November 6, Shanghai has begun pilot programs for prescription medicine payments through food delivery platforms. Relevant departments in Shanghai have been in contact with Ele.me and Meituan, with dozens of pharmacies included in the pilot.
It is reported that in Shanghai, when ordering drugs with the “medical insurance payment” label through Meituan or Ele.me apps, the page will show that payment can be made from the personal electronic medical insurance card account. Atualmente, only some pharmacies with the “medical insurance payment” label accept medical insurance.
With the accelerated market growth, competition in the pharmaceutical O2O market is intensifying. As the largest third-party instant delivery platform in China, SF Express’s full entry will significantly impact the pharmaceutical O2O market.
Intensifying Competition
With Douyin and Kuaishou opening up to selling medicine and SF Express entering the pharmaceutical instant delivery market, the rapid development of pharmaceutical new retail is inevitably challenging traditional offline stores.
According to public information, SF Express’s newly launched pharmaceutical delivery solution covers the core medical consumption scenarios of pharmaceutical new retail and online hospitals.
From the perspective of pharmaceutical retail enterprises, SF Express’s local delivery service connects multiple systems, addressing the challenges of multi-channel operations. It adapts to operations across various platforms, including delivery platforms, in-store platforms, and pharmaceutical e-commerce platforms. The solution features a multi-capacity model with warehouse and delivery connections, assisting pharmacies in replenishment, inventory management, and eliminating intermediary steps to enhance efficiency.
Regarding the intensified competition in pharmaceutical logistics, a pharmaceutical distributor in South China told reporters that major pharmaceutical logistics companies such as Sinopharm Logistics, China Resources Pharmaceutical Logistics, Shanghai Pharmaceutical Logistics, and Jiuzhoutong Logistics still hold dominant positions. No entanto, the expansion of socialized logistics enterprises, especially those represented by SF Express and JD Logistics, cannot be ignored.
Por outro lado, the increased involvement of large enterprises in pharmaceutical new retail is intensifying the survival pressure on all parties in the ecosystem. SF Express’s internet hospital services directly connect to online diagnostic platforms, offering a one-stop service for “online consultations + urgent medication delivery,” providing a more convenient and efficient healthcare experience.
The entry of giants like SF Express into the pharmaceutical O2O market is accelerating the shift of traditional pharmacies from a product-centric to a patient-centric operational model. When industry growth slows, focusing on customer traffic and value becomes crucial. A pharmacy operator in Guangdong said that while traditional chain pharmacies may face challenges, they are better equipped to handle them. Community pharmacies may face even greater impacts.
Crowded Market
Despite the accelerating online challenges, traditional pharmacies are actively responding. For the pharmaceutical retail industry, which requires ongoing development, the path for internet giants entering the market is not without obstacles.
In March 2023, the State Council General Office forwarded the National Development and Reform Commission’s notice on “Measures to Restore and Expand Consumption,” emphasizing the vigorous development of “Internet + Healthcare” and optimizing various medical service facilities.
In addition to the continuous improvement of online processes, pharmaceutical delivery at the service end has become a key focus for optimization. According to the “China Retail Pharmacy O2O Development Report” released by Minet, it is estimated that by 2030, the scale of retail pharmacy O2O will account for 19.2% of the total market share, reaching 144.4 billion yuan. A multinational pharmaceutical executive indicated that digital healthcare has immense potential for future development, and companies must determine how to use digital healthcare to provide more convenient services in the diagnosis and treatment process.
With digital transformation becoming a prevailing trend, full-channel layout has become a consensus among many retail pharmacies. Listed companies that entered O2O early have seen their O2O sales double in recent years. As the model matures, most retail pharmacies view O2O as an inevitable industry trend. Embracing digitalization helps businesses find new growth points in the supply chain, meet consumers’ immediate needs, and provide more precise health management services.
Pharmaceutical companies that have acted early and invested continuously have seen their O2O sales double in recent years, with companies like Yifeng, Lao Baixing, and Jianzhijia showing growth exceeding 200 milhão de yuans. Yifeng Pharmacy’s 2022 financial report shows that it has more than 7,000 direct-operated O2O stores; Lao Baixing Pharmacy also had 7,876 O2O stores by the end of 2022.
Industry insiders point out that SF Express’s entry into the pharmaceutical O2O market is related to its current business situation. According to SF Holding’s Q3 earnings report, SF Holding’s revenue in Q3 was 64.646 billion yuan, with a net profit attributable to the parent company of 2.088 billion yuan, a year-on-year increase of 6.56%. No entanto, both revenue and net profit for the first three quarters and Q3 showed a year-on-year decline.
According to publicly available financial data, the decline in SF Express’s revenue is primarily attributed to supply chain and international business. Due to a continued decline in international air and sea freight demand and prices, business revenue decreased by 32.69% ano após ano.
Specifically, SF Express’s business consists mainly of express logistics and supply chain and international business. The revenue proportion of the express business has been decreasing over the past three years. Em 2020, 2021, and 2022, the express business revenue accounted for 58.2%, 48.7%, and 39.5% of SF Express’s total revenue, respectivamente. This ratio increased to 45.1% in the first half of this year.
As traditional express services’ profitability continues to erode and the express logistics industry enters a new stage of “value wars,” SF Express faces increasing performance pressure. In the midst of fierce competition, SF Express is exploring new growth opportunities.
No entanto, in the crowded pharmaceutical O2O instant delivery market, whether SF Express can capture market share from industry giants like Meituan and Ele.me remains uncertain. Industry insiders suggest that SF Express lacks advantages in traffic and pricing. Third-party platforms like Meituan and Ele.me have already cultivated consumer habits. “If SF Express can offer some subsidies on pricing, it might attract some merchants, but if it incurs long-term losses, such a business model will be hard to sustain.”
In addition to the aforementioned businesses, SF Express is also involved in cold chain logistics and live e-commerce, neither of which has exceeded 10% of its total operations. Both areas face strong competition from rivals like JD and Meituan, making SF Express’s path to success challenging.
In today’s competitive logistics industry, which has not yet reached its peak, business models are evolving. Traditional single services alone are no longer sufficient to maintain a competitive edge. To capture market share, companies need differentiated quality services. Whether logistics companies can capitalize on emerging new consumer trends to create new performance growth points is both an opportunity and a challenge.
