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Have you noticed that there are more and more pharmacies on the street?
In some streets with a strong commercial atmosphere, in the middle of various shops, there is always a pharmacy mixed in, and even in some streets, there will be a series of several pharmacies open side by side.
And this phenomenon is not a local phenomenon in some places, but appears in many provinces across the country.
This begs the question, is the pharmacy business really so good? Do we really need so many pharmacies?
Let's take a look at 2 stats first:
1. By the end of 2022, the number of retail pharmacies in mainland China was 623,000.
2. According to the size of 1.4 billion people, a pharmacy can cover 2,200 people.
From this point of view, it seems that the ratio of 1:2200 seems quite acceptable.
From a business point of view, a storefront, which can cover an area of 2,200 people, can theoretically ensure that it can make money.
But the new problem is that at present, the more than 600,000 pharmacies are not evenly distributed in all corners of the country, but there will be a "pharmacy street", and several pharmacies are crowded on one street.
The answer may be beyond your imagination, because for some pharmacies, what they really make money is not selling medicines, but selling stores.
This is related to the current development trend of pharmacies.
Pharmacies are different from clothing stores and jewelry stores, and they have certain rigid attributes, so they have been a good deal since their birth.
Many capital giants and the first batch of players are very optimistic about this business, so in the development of these years, some leading enterprises in the field of pharmacies have also been born, such as Yifeng Pharmacy, People's Pharmacy and so on.
For these leading enterprises, doing pharmacy business and expanding revenue is not how to improve the quality of products or service levels, for them, the only way to make more money is: open more stores.
Opening a store by yourself is one thing, and the acquisition and acquisition of pharmacies that have already opened will save a lot of trouble, and you can continue to open by changing the name of the store, and even save money on decoration.
If this is the case, there will be no "pharmacy street" situation, the key is that the business of pharmacies is simply "too good".
Over the years, the "good news" about the pharmacy industry has been endless.
In 2014, a draft for comments stated that it was possible to liberalize the online sale of prescription drugs. This means that retail pharmacies can sell prescription drugs, which increases the revenue capacity of individual pharmacies.
Once prescription drugs are released, it may be a big market of two or three hundred billion yuan, which is absolutely attractive to the capital side.
In addition, "pharmaceutical separation" has always been a hot topic in China.
After that, the food delivery industry began to rise, and pharmacies also joined the ranks of food delivery, how many people around you have bought medicine through food delivery?
This also opens up another income for pharmacies: online sales.
With the blessing of multiple benefits, large enterprises have begun to make crazy acquisitions and mergers and acquisitions, especially the pace of leading enterprises is even faster.
In this period, for these heads, it is a typical "horse race" buying and buying stage.
Whoever can win more stores, who can get more good store locations, who can get the favor of capital, and who can seize the future.
And for local pharmacy chains, this is undoubtedly a happy annoyance.
If you don't sell stores, sooner or later the pharmacies of these leading companies will open next door to you and seize your business with stronger strength.
But once you sell a store, these leading companies will wave cash and tell you: Brother, I want all the stores you have.
As a result, the status quo of "selling drugs is better than selling stores" was born, and some companies will open many pharmacies in a short period of time, waiting for the mergers and acquisitions of leading enterprises, and the merger and acquisition prices they give can often make these companies very satisfied.
Even, there was a case in the industry one year when someone frantically opened his chain pharmacy from 30 to 130 in a year, waiting for mergers and acquisitions.
Therefore, in recent years, in all parts of the country, there has been a rare scene of "pharmacy street".
From the perspective of the planning of domestic leading enterprises, they basically maintain an expansion plan of at least 600 to more than 1,000 companies a year (including mergers and acquisitions, acquisitions and franchises).
So, aren't these leading companies afraid of accompanying money?
The answer is obvious, in the short term, it is difficult to accompany the business of pharmacies.
On the one hand, the separation of medicine is a relatively clear direction in China, and it is still advancing in an orderly manner, and each promotion will release a lot of profit space.
On the other hand, the arrival of the aging population in the mainland also means that the demand for pharmacies will further increase.
Of course, this is all in the big picture.
For those pharmacies on the "pharmacy street", because of competition, the decline in revenue of a single store is inevitable, which is acceptable at the enterprise level, but it is not a good thing for the store manager who makes money purely from this pharmacy.