In recent years, with the increasing per capita disposable income, the aging of the population and the development of medical insurance policies, the public's health awareness has been continuously improved, at the same time, the new crown pneumonia epidemic in 2020 has changed the consumption habits of more patients, and in this context, China's big health market has continued to grow.
On March 16, Dingdang Health, a pioneer and leader in China's real-time digital medical services, submitted a second form to the Hong Kong Stock Exchange and continued to launch an impact on the IPO. It is understood that Dingdang Health was established in 2014, mainly by creating real-time drug retail and medical consultation led by online to offline solutions, and is committed to providing users with an optimized real-time home drug purchase experience.
According to the Frost & Sullivan Report, Dingdang Health ranks third in China's digital retail pharmacy industry by revenue in 2020, and is also one of the largest product and service providers in China's real-time home digital pharmacy industry.
Online and offline integrated business models to establish market leadership
As the first company in China to provide self-operated, Internet-based healthcare home-based services, Dingdang Health redefines the way drugs and healthcare products are procured by integrating online and offline operations.
In terms of online operation, Dingdang Health organically connects the offline operation of the company's smart pharmacy through artificial intelligence and big data related technologies such as intelligent site selection, intelligent distribution, intelligent consultation, etc., to achieve high operational efficiency, and is committed to meeting the real-time health needs of users by providing online diagnosis and treatment and chronic disease and health management services.
With high-quality products and services, Dingdang Health has established a good reputation and the scale of its business has continued to expand. According to the latest A1 prospectus, in 2019, 2020 and 2021, Dingdang Health recorded about 26.4 million, 40.5 million and 60.3 million sales orders respectively through a combination of online direct sales models and offline channels, and sales orders from online direct sales accounted for 90.8%, 92.9% and 92.5% of the total sales orders in the same period respectively.
At the same time, Dingdang Health has built a professional team of nearly a thousand doctors and hundreds of pharmacists to provide online diagnosis and treatment services for its users. In 2019, 2020 and 2021, Dingdang Health recorded a total of approximately 2.2 million, 4.4 million and 6.8 million online consultations, respectively.
In terms of offline operation, Dingdang Health has established a national network of smart pharmacies in key cities in China, and used advanced technology to accurately select the location of each pharmacy. At the same time, a professional distribution team has been established to provide users with seamless real-time drug purchase services within 7 × 24 hours and 28 minutes in the area covered by the delivery service.
As of the last practicable date, Dingdang Health's national pharmacy network includes hundreds of smart pharmacies in more than a dozen cities across China. The company has assembled a team of more than thousands of riders to deliver products sourced from more than 6,000 pharmaceutical and pharmaceutical distribution companies to users through its pharmacies.
Dingdang Health's pioneering and unique integrated online and offline operation model has laid its market leadership position, built a solid competitive barrier for it, and will continue to drive its business growth in the future.
Continuous optimization of business model, revenue showed continuous growth
While developing at a high speed, Dingdang Health is constantly upgrading and optimizing its business model to meet the changing needs of users. Currently, the company is able to offer a real-time, professional, omni-channel and data-driven portfolio of drug purchase services and provide users with 24-hour medication guidance for medical professionals.
In 2019, 2020 and 2021, the average monthly nightly order volume of Dingdang Health smart pharmacies continued to rise. Dingdang Health recorded a total of about 26.4 million, 40.5 million and 60.3 million sales orders from online direct channels and offline channels, respectively, with a compound annual growth rate of about 51.1% from 2019 to 2021. In 2019, 2020 and 2021, a total of 2.2 million, 4.4 million and 6.8 million online consultations were provided to users, respectively. Rich products and quality services continue to provide users with excellent drug purchase experience, and promote the continuous growth of Dingdang Health's business.
In addition, Dingdang Health actively plays the synergy between online diagnosis and treatment services and fast medicine services, and successfully increases the willingness of users to purchase the company's products. According to the latest prospectus, in 2019, 2020 and 2021, the conversion rate of online diagnosis and treatment products on the self-operated online platform was 69.9%, 68.8% and 77.5% respectively, and the higher conversion rate intuitively showed the good development momentum of Dingdang Health.
Financially, in 2019, 2020 and 2021, Dingdang Health's revenue was approximately RMB1,276 million, RMB2,229 million and RMB3,679 million, with a CAGR of approximately 69.8% from 2019 to 2021, while adjusted net losses for the same period were approximately RMB123 million, RMB149 million and RMB330 million, respectively.
In 2019, 2020 and 2021, Dingdang Health's gross profit was RMB470 million, RMB766 million and RMB1,162 million, corresponding to gross profit margins of 36.8%, 34.4% and 31.6% respectively. It can be seen that the gross profit margin decreased slightly, but due to the increase in sales of the company's prescription drugs, the gross profit margin of prescription drugs was lower, coupled with the acquisition of pharmacy network and other factors, which jointly affected the decline in gross margin.
Actively engaged in social welfare, stand out in the industry and win many awards
It is worth mentioning that since its inception, Dingdang Health has always paid attention to people's livelihood issues, enthusiastic about social welfare, and given back to the society in a variety of ways. In order to help prevent the epidemic, Dingdang Fast Medicine quickly responded to the call of the state and took the lead in launching the "antigen detection" 28-minute delivery service to home, and professional doctors and pharmacists also provided post-test health guidance services, focusing on creating an integrated health service closed loop of "medical testing" interconnection.
Recently, the prevention and control of the new crown epidemic in Shenzhen is in a critical period. Dingdang Fast Medicine actively exerts its own advantages, through contactless distribution, so that citizens can solve the problem of daily medication and various chronic disease medications without leaving home, reduce the hidden dangers of cross-infection of citizens, and add impetus to Shenzhen's fight against the epidemic. In addition, Dingdang Fast Medicine also responded quickly and generously after the emergence of the epidemic, donating love materials to frontline workers in the fight against the epidemic.
In addition to professional drug delivery personnel, Dingdang Fast Medicine's doctors, pharmacists, store clerks, customer service and other personnel will continue to be on duty during the Spring Festival to provide the public with "consultation and drug purchase" services without leaving home. Since 2016, it has insisted on "not closing during the Spring Festival" for six consecutive years.
With its leading position in the industry, excellent service and good performance of social contribution, Dingdang Fast Medicine stands out from many enterprises and has won many awards. It has won the "2021 China E-commerce Top 100 List", was selected as a specialized new "Little Giant" enterprise, was awarded the top 30 most investment value enterprises in China in 2021, the "2021 China New Economy Most Investment Potential Unicorn" award, the "2021 Global Unicorn List", the "Ona Award - 2021 Annual Responsibility Excellent Enterprise", the Annual "Business Innovation" Award of China Pharmacy, and won the New Consumer Venture50 List. This is also the second consecutive year that Dingdang Fast Medicine has been listed on venture50. In the future, Dingdang Health will adhere to the business direction of serving great health, pioneering and innovating, achieving the stable and healthy development of various businesses, and making greater contributions to social development.
In the medium and long term, with the improvement of people's health awareness and the continuous recurrence of the new crown pneumonia epidemic, there is still an opportunity for sustained growth in the digital health market. According to the Frost & Sullivan Report, the real-time home digital pharmacy industry is expected to continue to increase from RMB15.7 billion in 2020 to RMB138 billion in 2030, with a compound annual growth rate of 24.3%. As a pioneer and leader in this field, Dingdang Health is expected to continue to benefit from the dividends brought by the growth of the industry in the future, which in turn will bring about an increase in profitability, which is worth looking forward to.
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