After four or five years of business and consumer education, the pharmaceutical O2O market has gradually matured. The two giants Of the United States and Hungry Have "close to the flesh" on this battlefield, but after scrambling for offline pharmacies, they have begun to part ways, one towards the "24-hour pharmacy", a cultivation of professional services, who can "kill" a blood road?
Author | Zhang Chao Edited | Luo Lijuan
"Stay up the latest night, eat the most expensive health products; beer plus goji berries, cola plus ginseng, whiskey and ginseng", or the portrayal of contemporary young people's "punk health".
Whether it is a paragraph or a reality, it reflects that people are paying more and more attention to health, health and medical issues today.
Especially after the epidemic that has swept the world so far in 2020, health care has become a topic of great attention in the whole society. People are gradually accustomed to buying common medicines and simple medical devices through the Internet, coupled with policy support, the long-dormant Internet medical care has once again ushered in the opportunity to stand on the limelight.
According to data from iiMedia Research, from 2016 to 2020, the transaction scale of China's pharmaceutical e-commerce increased from 95 billion yuan to 195.6 billion yuan, more than doubling in four years, and is expected to reach 226 billion yuan in 2021.
Image source: Ai Media Consulting
Companies that smell business opportunities are rushing into the Internet medical industry. Especially in the subdivision of "selling drugs", in addition to the traditional medical institutions that actively develop online services, there are also startups that break through with differentiated services and flexibility, as well as Internet manufacturers that have strong access to the two magic weapons of resources and funds, and the competition is very fierce.
Internet medical wind has risen, and capital has also heard the wind. According to Zhiyan Consulting, from January to December 2020, There were 11 cases of financing in China's big health pharmaceutical e-commerce, with a total amount of 2.4 billion yuan; only half a year later, the market attracted a large number of funds to enter, and the report released by iiMedia Research (Ai Media Consulting) showed that in the first half of 2021, there were 12 investment and financing incidents in China's pharmaceutical e-commerce industry, and the cumulative investment and financing amount reached 9.71 billion yuan.
A number of companies such as WeDoctor, Dingdang Fast Medicine, and Zhiyun Health have also submitted listing applications to seek public fundraising.
It's not necessarily a good thing that the wind rises too fast, and sometimes it can be a tornado, coming and going in a hurry, and it can be destructive.
The pharmaceutical e-commerce industry in 2021 is like this - the highlight of the first half of the year did not continue to the second half of the year, the stock prices of many listed companies fell sharply, and many unicorns folded on the road of "ringing the bell".
With the opening of the new era of pharmaceutical retail, new and old forces competing on the same stage, who can "kill" a blood road?
1
The ups and downs of the pharmaceutical O2O market
The giant's dedication to the outlet is unquestionable.
A few years ago, Ma Yun said, "Don't refuse to talk to you about health, the industry that is bound to explode in the future must be a big health industry." He even asserted, "The next richest man must be in the field of big health." ”
Great health is indeed a land of anointing. According to the "Review and Prospect of China's Big Health Industry M&A Activities in the First Half of 2013 to 2021" released by PwC, thanks to the release of medical consumption demand and the guidance of policies to the medical system policy, the size of China's big health market has reached 13 trillion yuan, and it has now jumped to the second largest market in the world.
This huge industry of 10 trillion yuan includes traditional sub-fields such as pharmaceutical circulation and retail, medical services, and consumer medical care; with the blessing of the mobile Internet, Great Health has run out of emerging tracks such as "Internet + medical health" (that is, "Internet medical treatment").
And Ali, Meituan, JD.com and a number of Internet companies are making a strong layout, it is the Internet medical field.
If divided according to the application scenarios, the entire Internet medical treatment can be roughly divided into three categories: medicine (online registration, online consultation, telemedicine, Internet hospitals, chronic disease management and other Internet medical services), medicine (pharmaceutical self-operated and pharmaceutical e-commerce), insurance (Internet medical insurance). Ali is mainly in the field of "selling drugs", based on the Internet platform for drugs, related equipment and other transactions.
Subject to factors such as drug control and control, the early pharmaceutical e-commerce is commonly B2B and B2C models, the former is mostly a government-led non-profit drug bidding and procurement platform, or a self-built platform for pharmaceutical companies; the latter is a platform built by pharmaceutical companies or third-party e-commerce companies.
Until 2014, a number of start-up companies such as Dingdang Fast Medicine, Fast Prescription Drug Delivery, and Drug Delivery force have obtained financing, begun to build online platforms, develop instant drug delivery services, and set off a pharmaceutical O2O war.
But in that stage when Internet medical care is just starting out, the instant delivery service is not developed, the national health awareness needs to be improved, and a group of enterprises that take the lead in eating crabs can be imagined. A number of small players such as drug delivery, fast medicine, and fast prescription drug delivery fell before the arrival of the pharmaceutical O2O outlet due to reasons such as broken funds or poor management.
In the past two years, the domestic Internet medical development situation is good, urban logistics and distribution capabilities are getting stronger and stronger, and pharmaceutical O2O has finally ushered in development opportunities, and at this time, the two big mountains that each entrant can't get around are - Meituan and Hungry.
Ele.me Pharmaceutical Health Channel was launched in 2017, in less than a year, it has provided drug delivery services for nearly 10 million users, covering more than 30,000 pharmacies in more than 500 cities; in 2018, Ele.me began to pursue logistics speed and launched the "24-hour 24-minute rapid delivery" service nationwide; in 2020, Ele.me enhanced the synergy with various applications of Ali Ecology, and jointly launched the "Map Find Medicine" service with AutoNavi to connect nearly 100,000 online pharmacies to AutoNavi; last year, Ele.me further deepened its cooperation with offline pharmaceutical chain enterprises, and joined hands with NUS Pharmacies to "move" offline pharmacies to online and comprehensively deepen its business layout.
Meituan's exploration of the "door-to-door delivery" service was earlier, dating back to 2015. At that time, the Meituan mobile App added the "drug" section to the takeaway option to test the water delivery service; after that, meituan saw the speed advantage and channel advantage of Dingdang Fast Medicine in the pharmaceutical field, and chose to cooperate with it to build a pharmaceutical O2O platform; in 2020, Meituan takeaway made important progress in delivery speed, achieving an average delivery time breakthrough to 23 minutes; in 2021, Meituan continued to increase cooperation with offline pharmacies, not only increasing the list of pharmaceutical chain enterprises, but also launching the "Ascendas Plan". Encourage more offline pharmacies to settle on the platform through subsidies.
Meituan takeaway added a new pharmaceutical sector
From the perspective of the development rhythm of the two companies, the early work of Meituan and Ele.me is basically the same, that is, to carry out dual education for merchants and consumers, in addition to carrying out business and grabbing offline stores, there is also a very important job, that is, to greatly improve the speed of medical services; next, the two sides will spare no effort to help offline pharmacies to open stores online.
The jingle fast medicine that showed its advantages earlier was born from the traditional medicine giant Renhe Pharmaceutical, and it should not be underestimated in the field of pharmaceutical O2O. Different from the self-built pharmacy development model of Meituan and Ele.me, Dingdang Fast Medicine inherits the advantages of Renhe Pharmaceutical in the supply chain, thus highlighting the opportunities for heavy encirclement and attracting market attention. However, compared with Meituan, Ele.me's powerful LBS system, huge distribution team and traffic base, there is still a gap.
2
Tough "selling drugs" business
Giants scramble, players change, is pharmaceutical O2O really a good business?
From the essence of business, the "drug delivery door-to-door" service of Meituan and Hungry Mo is the "express delivery" work of the pharmaceutical industry, which solves the five major pain points of consumers in the use of drugs: "urgent", "lazy", "night", "special" and "private".
A big reason why consumers choose to buy medicines online and have riders deliver them to their doors is that they think their time is worth more than the expenses they need to pay for running errands for riders. The greater the value difference between the two, the stronger the willingness of consumers to pay.
Medicine is a relatively low-frequency consumer industry, access to online channels, not only can greatly extend the coverage of store sales time, but also expand the sales radius.
Taking the 24-hour pharmacy as an example, according to Wang Zhe, the head of Ele.me's pharmaceutical business, wang Zhe revealed to all-weather technology that in the past, the willingness to open for 24 hours was not high for the comprehensive consideration of labor costs and sales performance; with the development of pharmaceutical O2O, more and more pharmacies joined the "24-hour service" camp, "The original pharmacy can only serve the residents of the surrounding three or four hundred meters, and now it can cover residents in the range of 3-5 kilometers." At present, the coverage rate of Ele.me's 24-hour drug sales service has reached more than 90%. ”
However, for the platform, "selling drugs" is not as easy as imagined, and it plays the role of e-commerce platforms and delivery service providers in the pharmaceutical sales process. This also means that the revenue structure generated by Meituan and Ele.me in this business is relatively simple.
Wang Zhe introduced that Ele.me's income from the B-end in the pharmaceutical business is mainly divided into two categories: commissions and delivery service fees, which decide whether to charge according to the delivery method chosen by the pharmacy itself.
The person in charge of meituan's drug operation told All-Weather Technology that the company mainly provides digital services such as system settlement, user analysis, and instant delivery services for online pharmacies, so the platform revenue is mainly composed of two parts: technical service fees and delivery service fees.
If the "drug delivery to the door" service wants to run through, in addition to meeting consumer demand and solving the pain points of medication, from the perspective of cost and income, it is also necessary to meet the characteristics of wide coverage, high frequency of customer units, and high unit price of customers. In the last few, the pharmaceutical category is not dominant, but why can it enter the eyes of the giants?
The financial report shows that the year-on-year revenue growth rate of Meituan in recent years has begun to slow down, with 223.1%, 161.2%, 92.2% and 49.5% in 2016-2019, respectively. Although Ele.me did not publish revenue data, according to Trustdata statistics, from 2018 to 2019, the meituan takeaway market share has remained above 60%, Ele.me is close to about 30%, and the market share of the two has not changed much, so it can be judged that the revenue growth rate of Ele.me may also be slowing down.
This forced Meituan and Ele.me to find more and more potential markets to expand service content, retain platform users, and achieve performance growth through the "high frequency band and low frequency" method.
Analysys analysis medical industry analyst Zhang Jingwen pointed out that the main advantage of the development of pharmaceutical O2O business by takeaway platforms such as Meituan and Ele.me has perfect supporting facilities, a huge network of riders and an efficient distribution decision-making system, and conventional drug distribution only needs to be fine-tuned to be able to quickly put into operation; at the same time, a large number of users have been accumulated on the platform, which can bring traffic to medicine and reduce the resistance to attracting new customers; moreover, the takeaway platform has accumulated experience and team reserves for merchant cooperation. It can be copied to pharmaceutical O2O at a smaller cost, and platform-based operation can also bring rich SKUs.
After years of layout, meituan and Ele.me have begun to take shape in the development of the pharmaceutical O2O industry.
According to the "Annual Report on Drug Supervision and Administration Statistics (2020)" released by the Department of Comprehensive and Planning Finance of the State Drug Administration and the Information Center of the State Drug Administration, by the end of 2020, there were 573,300 enterprises with "Drug Business Licenses" in the country. Among them, there are 241,000 retail pharmacies, accounting for 42.03% of the number of operating enterprises, and the number of retail chain enterprises and stores is 319,200, accounting for 55.68%. According to relevant policies and regulations, retail chain pharmacies are allowed to sell drugs online, and single retail pharmacies are not allowed to sell drugs online.
Annual Report on Drug Supervision and Administration Statistics (2020)
All-weather technology learned from Meituan and Ele.me that at present, the two companies are mainly O2O models, and the number of pharmacies that have been "moved" online is about 200,000, accounting for more than 60% of the total number of pharmacies that can be online in the country; Meituan also has a small part of B2C business, that is, a small number of pharmacies in addition to providing instant delivery services, but also through trunk logistics services to national users.
However, the pharmaceutical O2O industry is still facing some problems, such as high delivery costs, low consumption frequency, low profit margins, and orders are "small and scattered".
"It is difficult to say that this is a good profitable track," in Zhang Jingwen's view, pharmaceutical O2O is still an extension of the service of offline pharmacies, in order to achieve longer-term development, it is necessary to strengthen the linkage with offline pharmacies, carry out private operations, and expand services horizontally; at the same time, analyze patient drug scenarios and tap deeper patient needs.
3
The two giants are competing misplaced
After completing the layout of the instant delivery network and third-party pharmacy cooperation, Meituan and Ele.me have also begun to develop in depth, cutting into the upstream and downstream of the pharmaceutical O2O industry chain and expanding service scenarios.
Previously, the news of Meituan's application for the trademark of "Meituan Professional Pharmacy" went away. Some media regard this as a signal that Meituan will develop in the direction of self-operated pharmacies, believing that it will open up a second growth point in addition to pharmaceutical O2O, and change from a "light" model to a "heavy" model.
However, the relevant person in charge of the above-mentioned Meituan drug operation explained to all-weather technology that "this is an oolong"; the so-called "professional pharmacy" is the opposite concept of "ordinary pharmacy", which refers to a pharmacy that obtains the right to distribute products from pharmaceutical companies or can provide prescription drugs and professional guidance and services for patients.
The person in charge revealed that Meituan does not do self-operated physical pharmacies, the current Meituan self-operated pharmacies are B2C model, the fundamental purpose is to meet consumer demand for some niche drugs, to fill the lack of drugs in online chain pharmacies, the overall direction of future business is still in the development of "24-hour pharmacies" and "user online medical services", such as medication consultation, vaccine appointments, etc.
In June last year, Meituan Bought Medicine, together with pharmacies and pharmaceutical companies, jointly launched the "Little Yellow Lantern" people's livelihood service plan. The project supports more 24-hour pharmacies across the country, especially in small and medium-sized cities, through the introduction of five major measures such as traffic tilting and night freight subsidies. According to Meituan's plan, in 2021, it will light up 10,000 24-hour pharmacies in all parts of the country, especially in small and medium-sized cities, covering more than 100 cities.
According to the "Annual Report on Drug Supervision and Administration Statistics (2020)", the total number of pharmacies in the country (excluding the number of chain enterprises) has reached 553892; but according to incomplete statistics, there are about 5,000 24-hour pharmacies in the country. According to this calculation, the number of 24-hour pharmacies in the country accounts for less than 1% of the total, and the market needs to be developed urgently.
Night pharmacies not only have great potential, but also create considerable value for the pharmaceutical O2O platform. The person in charge of Meituan's drug purchase operation revealed to all-weather technology that at present, Meituan's pharmaceutical night orders (10:00 p.m. to 8:00 p.m. the next day) account for more than 20% of the total number of Meituan pharmaceutical orders, "but the scale of this (night) pharmacy is still completely unable to meet everyone's needs." ”
Within Meituan, there is a concept - honeycomb, that is, in each city according to the street, distribution range and other different business divisions. Theoretically, each honeycomb will have 2-3 24-hour pharmacies to meet consumers' nighttime purchase needs, "so far, Beijing and Shanghai have not reached such a level, let alone third- and fourth-tier cities." The above-mentioned person in charge said.
At present, the business is facing many difficulties, and there are also large business barriers. However, from the perspective of social value and commercial value, "24-hour pharmacy" is the direction that the pharmaceutical O2O platform will not bypass.
Ele.me also launched the "Little Blue Lantern" program in 2021, working with more than 100 pharmacies in more than 100 cities across the country to provide 24-hour drug delivery and online consultation services for professional doctors. It is reported that as of June last year, nearly 300 cities across the country can enjoy Ele.me's 24-hour drug delivery service.
However, in terms of direction, Ele.me pays more attention to the development of professional service platforms. In Wang Zhe's view, there will be no essential difference between the tools and basic distribution services provided by the platform to pharmacies, and the next step is the time for the platform to cultivate internal strength, "Our focus is on the development in the direction of 'specialization', and will provide consumers with professional service guarantees." ”
Specifically, the improvement of this "specialization" is manifested in three aspects: first, the specialization of medical guidance services, such as the improvement of services such as disease guidance and medication guidelines; second, the specialization of services based on medical roles, such as pharmacist consultation, doctor recommendation, doctor consultation, etc.; third, the specialization of medical insurance services, such as the opening of medical insurance online payment capabilities.
At the same time that players are crowded in, there are also voices that question whether "door-to-door delivery" is a pseudo-demand, believing that this is not a just-needed scene. On the one hand, prescription drug sales regulations limit the size of the pharmaceutical O2O market; on the other hand, the demand for drugs is mainly concentrated in the elderly, who have more leisure time and are not urgent for the need for "door-to-door delivery".
However, the epidemic has promoted the improvement of national health awareness, and more and more young people have begun to accept the Internet to buy drugs, and even developed the habit of "one-stop" online medical treatment and drug purchase.
According to the research report of Caixin Securities, 97% of the respondents will or some of them will choose to buy drugs online, and the reasons for choosing drugs online are mainly for the choice of brands (67.10%), high security (61.10%), and low prices (51.20%).
The research report also pointed out that pharmaceutical e-commerce is the future trend, but considering factors such as drug consumption groups, consumption habits and offline pharmacies to open up online channels, pharmaceutical e-commerce is difficult to have a substantial impact on offline head pharmacies in the short term, and the two are expected to achieve coordinated development with the help of their respective advantages and jointly seize the market share of small and medium-sized pharmacies.
Image source: Caixin Securities
The trend of pharmaceutical O2O has made all parties see new hope. Whether it is a third-party platform such as Meituan and Ele.me, or a vertical platform such as Dingdang Fast Medicine, or a traditional pharmaceutical company, they all want to compete with the Central Plains and achieve hegemony.
In the future, who will the pharmaceutical O2O giant be, it is worth looking forward to.