After the IPO was pressed the pause button, although it was still possible to update the prospectus and seek listening opportunities, Dingdang Health Technology Group Co., Ltd., the company of "Dingdang Fast Medicine", had no new actions as of February 10, 2022.
At the same time, in the face of continuous losses, their own services to be improved under the internal worries, Dingdang Fast Medicine is also facing a pinch from the Internet giants, under the market environment with serious homogenization competition, Dingdang Fast Medicine still faces many shortcomings in strategy, operation and other aspects, perhaps only by consolidating the foundation and practicing basic internal skills is the best solution to pave the way for IPO.
Continuous losses Insufficient supply of self-hematopoietic blood
According to the Dingdang Fast Medicine Prospectus, dingdang health ranks third in China's digital retail pharmacy market in terms of revenue in 2020, with a market share of 1.2%, second only to Ali Health (11.4%) and JD Health (7.7%). After submitting a seemingly excellent answer sheet, it ushered in the failure of the first battle of the IPO, and the company's success was destined to be re-examined by the public.
Back in 2014, Yang Wenlong, the founder of Renhe Group, glimpsed the opportunity of O2O and set up a drug door-to-door delivery platform Dingdang Fast Medicine. At the beginning of its establishment, Dingdang Fast Medicine mainly used the word "fast", promised "28 minutes of delivery", and adopted an asset-light model of cooperating with offline pharmacies to provide delivery services.
However, Yang Wenlong found that the inefficiency of pharmacies' self-dispensing may not meet the promise of 28-minute delivery of Dingdang Fast Medicine, so in 2016, he began to turn assets into heavy, building his own smart pharmacy offline, building his own drug distribution system and team. In response to the industry's doubts about the asset-heavy model, Yang Wenlong once responded that when the delivery volume reaches a certain level, the cost of self-built teams will be lower than the cost of cooperation with third parties.
According to the prospectus data, as of March 31, 2021, Dingdang Fast Medicine has set up 286 smart pharmacies, covering 14 cities including Beijing, Shanghai, Guangzhou, Shenzhen and Tianjin. This is far from the strategic layout goal of "thousands of cities and thousands of stores" proposed by Dingdang Fast Medicine.
On the one hand, the expected high delivery volume has not yet been fulfilled, on the other hand, the high cost of accelerated expansion has also become a burden on Jingle Fast Medicine. According to the Prospectus, from 2018 to 2020 and Q1 2021, the performance costs of Dingdang Fast Medicine were 97.5 million yuan, 200 million yuan, 283 million yuan and 96 million yuan, accounting for 16.7%, 15.7%, 12.7% and 12.4% of the revenue, respectively.
In terms of sales and promotion costs, the related investments in 2018-2020 and Q1 2021 were 140 million yuan, 280 million yuan, 441 million yuan and 175 million yuan, accounting for 24.1%, 21.8%, 19.8% and 22.5% of the revenue, respectively.
The high cost means that it is not easy to make money, and from the data, the Q1 revenue in 2021 increased by 56% compared with the same period in 2020, but it was significantly lower than the compound growth rate of 95.2% in 2018-2020. The data shows that from 2018 to 2020 and Q1 2021, the revenue of Dingdang Fast Medicine was 585 million yuan, 1.276 billion yuan, 2.229 billion yuan and 780 million yuan, respectively.
In addition to the slowdown in revenue growth, losses are a topic that Jingdang Fast Medicine can't get around. According to the prospectus, from 2018 to 2020 and Q1 2021, the losses of Dingdang Fast Medicine were 103 million yuan, 274 million yuan, 920 million yuan and 767 million yuan, respectively, with a cumulative loss of 2.064 billion yuan.
In addition, the gross profit margin of Dingdang Fast Medicine is also constantly declining. Gross profit for the first quarters of 2018, 2019, 2020 and 2021 was RMB240 million, RMB470 million, RMB766 million and RMB237 million, respectively, with gross profit margins of 41.1%, 36.8%, 34.4% and 30.4%.
Overall, when Dingdang Fast Medicine is accelerating its expansion, the expected scale effect has not yet been achieved, but the investment in the front line has increased, resulting in insufficient self-hematopoietic ability, and after the profit cycle becomes longer, it remains to be seen whether it can truly refine the core competitiveness.
Face competitors on all sides
Judging from the financial statements of a number of Internet medical companies, the core revenue is basically concentrated in the income of "pharmaceutical e-commerce" or "pharmacy", and Dingdang Fast Medicine is no exception, in addition, Dingdang Fast Medicine also urgently needs to find a second growth curve.
Yang Wenlong once said that Dingdang Fast Medicine is not just a drug hypermarket. In 2019, Dingdang Fast Medicine tried to go deep into the chronic disease and health management scenarios, and announced that it began to create a new health ecology of "medicine + medicine + insurance + maintenance". In the prospectus, Dingdang Fast Medicine reorganized its business, and the ecological chain became "medicine + medicine + chronic disease management".
However, it is not just Jingle Fast Medicine that is targeting Internet medical treatment. Because it can be based on drugs and radiate outward to the chain of insurance, consultation, payment, etc., more companies are aiming at this health entrance and trying to enter the pie.
Compared with other companies, Dingdang Fast Medicine does not have obvious advantages. Take the online consultation as an example: from the Prospectus, as of March 31, 2021, Dingdang Fast Medicine's own medical team has 16 full-time and 58 part-time doctors, and more than 800 doctors cooperated with third-party medical institutions. In April and May 2021, the company recorded a total of 961,600 consultations for online medical services, a significant increase.
In contrast, according to the data of Tianyancha, as of the end of 2020, WeDoctor has opened more than 7,800 hospitals in China, including more than 95% of tertiary first-class hospitals, with more than 270,000 doctors, 222 million registered users, and an average monthly paid user of 25.4 million.
According to Ai Media data, Alibaba Health's Tmall pharmaceutical platform has set up 3,000 practicing pharmacists on duty online to provide consumers with free professional medication guidance and consulting services for a long time.
According to the "2020 China Pharmaceutical E-commerce Development White Paper", Jingdong Health Internet Hospital has achieved 120,000 consultation services per day in 2020, with a user follow-up rate of nearly 50%, and 25% of patients directly purchasing drugs after consultation.
According to iResearch data, ali health, Meituan, and Jingdong health utilization rates are all above 30%, in the first echelon; while Dingdang Fast Medicine can only be in the second echelon, and the market share of Dingdang Fast Medicine is being eroded by other companies.
In 2016, Jingdong launched Jingdong Pharmacy, with the help of Jingdong logistics on the Jingdong platform, Dada Distribution, etc., its instant drug purchase business developed smoothly, and then "Jingdong Health" landed on the Hong Kong Stock Exchange; Ali also acquired offline pharmacies in 2016, and launched Ali Health Pharmacy, relying on Taozhi merchants, Cainiao Logistics, Ele.me and so on to develop rapidly.
After becoming the hegemon of local life in 2017, Meituan also actively entered the field of health. Meituan's financial report shows that the Q3 financial report of 2020 shows that Meituan's single-quarter drug orders increased by more than twice as much as a year-on-year, and as of the end of the third quarter, there were about 100,000 pharmacies stationed on the Meituan drug purchase platform.
It is worth noting that many offline pharmacies have also begun to dabble in this way, compared with Dingdang Fast Medicine, which does not seem to have an advantage. The prospectus shows that its share of offline retail revenue fell from 9.3% in 2018 to 7.8% in 2020. In 2020, in terms of offline retail, Dingdang Fast Medicine generated an average of 560,000 yuan in revenue per store, while the people's big pharmacy, which started with offline business, had a revenue of 1.9 million yuan.
In fact, in the field of medical health, Dingdang Fast Medicine is also facing competition from ping an health, yuanxin technology, Sipai health, Zhiyun health and other enterprises, under the attack of many companies, the time left for dingdang fast medicine may have been very urgent.
Internal and external troubles are constant
Although with the development and continuous penetration of digital technology, the Internet medical treatment has ushered in new opportunities, but the environment in which Dingdang Fast Medicine is located, internal and external troubles are also becoming more and more serious, if the existing problems cannot be solved, the prospects are difficult to say optimistic.
The industry's view is generally that O2O drug sales focus on fast, daily, privacy varieties, so success or failure, the core of the need to see whether the service capabilities can be done to the extreme.
Caijing Network Technology combed the black cat complaint platform and found that as of February 10, 2022, there were 360 complaints about Dingdang Fast Medicine. The above complaints involved quality problems in the goods, non-delivery of orders, overtime delivery of drugs, suspected counterfeit sales, and large differences in selling prices.
In addition, Dingdang Fast Medicine has also been punished by the relevant departments many times. At the end of 2021, the Shenzhen Municipal Market Supervision and Administration Bureau issued a fine, and the decision showed that Dingdang Smart Pharmacy (Guangdong) Co., Ltd. Shenzhen Futian Tianmian Xincun Store had drug violations, and the store involved was warned and fined 1,000 yuan according to relevant regulations.
On December 10, 2021, Dingdang Smart Pharmacy (Guangdong) Co., Ltd. Shenzhen Fuyong Fanghua Store had drug violations, and the store involved was warned and fined 1,000 yuan according to relevant regulations.
On November 22, 2021, the Shenzhen Municipal Bureau of Market Supervision and Administration issued the administrative penalty decision on the case of Dingdang Smart Pharmacy (Guangdong) Co., Ltd. Shenzhen Baoan Tangwei Store for failing to display the drug in accordance with the regulations (Shenzhen Jianbao Penalty [2021] Fuhai No. 528), and fined the store involved 1,000 yuan.
According to the media quoting industry insiders, although the amount of punishment is not large, it shows that there are huge problems in the internal management and risk control of Dingdang Fast Medicine.
According to incomplete statistics, Dingdang Fast Medicine and its pharmacies have been punished about 20 times in total.
At the same time, the promise of "28 minutes to home" also made the media question, believing that although the advertising slogan is not a mandatory requirement, the common cognition and user expectations formed by such publicity will increase the time pressure and psychological pressure on riders, and it is easy for them to be more inclined to make some "urgent" choices.
According to China Economic Network, in February last year, Ms. Li (pseudonym) was injured by a rider wearing Dingdang fast medicine overalls, resulting in a fracture of her right ankle, and after 10 months of communication and negotiation, the two sides reached a settlement at the end of last year and paid a lump sum for the entire medical care.
Previously, the article "Takeaway Riders, Trapped in the System" had revealed the dilemma faced by takeaway riders: due to the shorter and shorter delivery times, takeaway riders became more and more difficult, had to speed, run red lights, retrograde, and the number of traffic accidents rose sharply.
Compared with catering, patients with chronic or mild medical evidence may not have so high requirements for immediate delivery of drugs, while patients with acute illness may be more suitable for directly dialing the 120 emergency number. For Jingle Fast Medicine, it may be necessary to think about whether "28 minutes to home" will become a time pressure to be injected on the rider, thereby increasing the safety risk.
summary:
According to iMedia Research data, the overall revenue of China's big health industry will exceed 7 trillion yuan in 2020, 8 trillion yuan by 2021, 8.32 trillion yuan in 2022, and the estimated market size of China's big health industry will reach 9 trillion yuan in 2024.
It is foreseeable that Internet healthcare will be a golden track for a long time to come. However, at present, in addition to the good profit performance of e-commerce and informatization in Internet medical care, the profit model in other fields still needs to be explored, in addition to the overall industry also needs to solve the problem of development and trust.
However, in the stage of the melee between new and old players, the top priority of Dingdang Fast Medicine is to consider "stopping the bleeding" and then strengthening its own moat, otherwise whether the capital story can continue to be written will be a mystery.
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