Since resigning as chairman of Jointown in November last year, Liu Baolin has rarely appeared in public, but he is still concerned about and supports the development of Jointown's business, and personally grasps the construction of the online big health platform, in his own words, is the biggest "product manager".
The platform, which is expected to be built at the end of this year, will not only open up the whole process of medical consultation and drug purchase services, but also provide third-party services for internet hospitals in major hospitals. Liu Baolin said that in the Internet business, he still insists on "making the hardest money", not competing with hospitals for resources, but making a bigger market by earning small profits from distribution fees and platform fees.
After the new management of Jointown took over the baton, it proposed the "Ten Thousand Stores Alliance" strategy, which mainly used Jointown's own advantages as the largest OTC drug distributor in China to expand the terminal retail market by absorbing single pharmacies to join. The franchise approach is lower in cost and less capital invested than the M&A model adopted by other pharmaceutical retailers.
Liu Baolin believes that the offline "Wandian Alliance" and the online platform he mainly grasps are complementary to each other, which is expected to make Jointown the largest distributor in the pharmaceutical terminal retail market and the enterprise with the largest number of alliance retail pharmacies. In this way, Jointown will also run the advantages of the industrial chain from the midstream to the downstream.
From barefoot doctors to "red hat" enterprises operating in the sea, at the helm of the largest private pharmaceutical commercial enterprises, to resigning to hand over the baton to professional managers, the survival and development trajectory of Liu Baolin and his enterprises is an important witness to the development history of China's pharmaceutical industry.
The biggest "product manager"
Economic Observer: This year, Jointown put forward a new strategy of "Ten Thousand Stores Alliance" to lay out offline retail pharmacies, what are your ideas for this piece of business?
Liu Baolin: Our company was originally based on wholesale, and the competition was fierce for the off-campus market, which accounted for about 30% of the industry. In the past, we did not realize the terminal market, but now we are determined to start with terminal pharmacies, so we launched the "Ten Thousand Stores Alliance" project. After the new leadership team comes up, it is necessary to focus on the construction and development of this terminal business, and the goal is very clear, that is, to achieve the first retail in the country in the terminal market and to develop into the largest retail pharmacy distributor in China.
We originally had hundreds of directly operated stores and more than 1,000 franchise stores. Through this project, more than 3,000 alliances of good pharmacist pharmacies have been added in half a year, and the progress is rapid. We will quickly achieve more than 10,000 and gradually become the company with the largest number of retail pharmacies in China. In the future, we will definitely double the first position and pull away.
The strategy we have adopted is mainly to cooperate with monomer pharmacies, and there are 200,000 monomer pharmacies in the country. Single stores have significant advantages, they are mostly mom-and-pop shops, low labor costs, hard work, high efficiency. No special management is required, and there is higher efficiency than chain pharmacies. But their biggest drawback is that they have no bargaining power and no systematic supply chain system, which happens to be Jointown's strength. We are the largest OTC drug distributor in China, we can give them competitive drug varieties, give them good pharmacists' business brands, plus management systems, which are the most interesting to them, so we have a very good docking effect. We take the franchise approach, and the cost of input is not too high. In fact, the individual pharmacy does not need us to take out the money at all, because the benefits of working with us are very obvious.
Economic Observer: You resigned as chairman of Jointown in November last year, on what basis were you considered?
Liu Baolin: The change of office is mainly because I am older, and if I change it when I can't move at all, it will be too late. At present, the company is running very normally, and I think this time is the best time to change the term. The new chairman is a doctor of law, very experienced in risk control, and has done risk control in Sany Heavy Industry for more than 10 years, and has a high evaluation of him. He also did risk control on our side for more than three years, did a good job, had ability, and had ideas, so he was chosen.
We currently have a complete supply chain system in the industry, and it is still difficult for anyone who wants to compete with us for such a large market overnight. So we must look at the future of the enterprise from the perspective of development, and in the current pharmaceutical market environment, I think the risk control of the enterprise should be placed in the most important position. The new chairman is very experienced in risk control, he is also very young, very smart, willing to learn, for how the accounts receivable are formed, why the account period is so long, why the price is high and low, he understands very deeply and is trustworthy.
Economic Observer: According to previous media reports, you are still participating in the construction of the company's online platform, what is the current progress?
Liu Baolin: We want to build a big health platform, this platform and the "Ten Thousand Stores Alliance" are complementary, online and offline combination, this platform can be built at the end of this year. At present, the existing big health platforms in the market are divided into two categories, doing medical treatment and doing supply chain. The platform we are doing is to integrate the two pieces together to open up the whole process of medical treatment. The platform provides medical and health services, through family doctors for common diseases, chronic diseases and other patients to provide diagnosis and treatment services, at the same time on the platform can also buy the "Wandian Alliance" pharmacy drugs, and timely delivery to home. Now I am single-mindedly doing this piece of business, personally grasping, making needs for the team, and I am the biggest "product manager".
Unlike other platforms such as WeDoctor, our platform also does third-party business to form differentiated competition with them. Now the state encourages major hospitals to do Internet hospitals, we can provide a platform for these hospitals, docking with the hospital system, doctors prescribe, pharmacies prescribe drugs, we are responsible for distribution. Diagnosis and treatment fees, medicine costs or in the hospital, we only earn delivery fees and platform service fees, we do not grab business with the hospital, the hospital is also willing to cooperate with us.
I've always insisted on making the hardest money, the hardest money. Because we don't earn this money, we can't make anything else, and the easy money is quickly taken away by others. We do OTC distribution, OTC requirements are very high, the price is low, the output is large, and it is returned at every turn, which is the hardest, and the profit is only a few points. This money is difficult to earn, but after we have done this business, we have provided efficiency and cost savings, and the threshold has become higher, and others are reluctant to do it. Doing the Internet I am also this theory.
Key points
The Economic Observer: Since you stepped into the pharmaceutical industry, what are the key nodes in your career development?
Liu Baolin: The first key point was in 1985. Before that, I was a doctor, first as a barefoot doctor in the village, then to the schistosomiasis medical station, and later to the Jiahegou Pumping Station Hospital as the person in charge. The primary medical work made me deeply feel that the lack of medical care and medicine in rural areas is very serious. In 1985, I officially "went to the sea" and opened a pharmaceutical wholesale department in my hometown of Swan Town, Yingcheng City, Hubei Province (more than 90 kilometers from Wuhan). At that time, the system did not allow private participation in the drug business, and it was necessary to lease the business license of the contract supply and marketing cooperative, which was "wearing a red hat" in the words of the time. This was my first step into the industry.
At that time, I was selling barefoot doctors in county hospitals, township health centers, and rural areas, so I was very familiar with the primary medical system in rural areas. This strategy, similar to that of "rural encirclement of the city", has continued into the business model of our business today.
The second key node was the official establishment of Jointown in 2000. At the end of 1999, the state liberalized the drug business, and I saw the opportunity to come to Wuhan with my brother. Wuhan itself is very commercially developed, the so-called "goods to Hankou work", do the circulation industry attaches great importance to the traffic location. The name "Jointown" is also taken from the meaning of Wuhan "Nine Provinces Tongqu". At that time, we obtained a formal pharmaceutical business license through the acquisition of China Pharmaceutical Materials Supply and Marketing Zhongnan Company, which could not have been bigger without the license. China Pharmaceutical Supplies Supply and Marketing Zhongnan Company was a central enterprise, at that time it had serious losses, but at that time a private enterprise to acquire a central enterprise can be described as "risking the world's great disobedience", the government leaders were very shocked, at that time the interior has not been completely liberalized, no higher than the degree of openness along the coast. But fortunately, the director of the Hubei Provincial Food and Drug Administration at the time was a doctor who returned from studying abroad, and his mind was relatively open, so he allowed us to buy.
Then came 2006, when we established our focus on the OTC market. Before 2006, our company's customers were involved in township hospitals, county hospitals to provincial hospitals, mainly in the hospital business. However, in 2006, the state issued the "Guiding Opinions on the Development of the Pharmaceutical Industry "Eleventh Five-Year Plan"", proposing to break the policies of "using medicine to support medicine", government pricing of medical insurance drugs, and standardizing drug bidding and procurement, and the drug business has undergone earth-shaking changes. The industry has become a "dual track", as a pharmaceutical trading enterprise, either through the collection of bidding into the hospital (county and above public hospitals), or do the out-of-hospital market. In this context, as a private enterprise, we decided to do a more market-oriented field of out-of-hospitals, abandoning hospitals and mainly doing business in primary medical institutions, private hospitals, private clinics, and retail pharmacies. The drugs needed by these institutions are mainly OTC drugs, and to this day, we are still the largest OTC drug distributor in China.
In the past seven or eight years, we have begun to turn around and do the business of the hospital, mainly affected by the basic drug system, the price of essential drugs is relatively low, and the main institutions used are at the grass-roots level, we have advantages, so slowly in this area we have become The largest essential drug distributor in China. In general, we are a supplement to the state-owned drug circulation enterprises, and we do it in areas that they do not do and do not want to do.
In the development process of the enterprise, I feel that as a private enterprise, every step of development is closely related to the national policy, and the operation of the pharmaceutical industry must keep up with the policy, and listen to the party so that it will not lose its way. Running a business is like a person playing a game of stepping on a wooden board on the water, if you step slowly, you will fall down, and when the speed of the step is fast, the next foot has reached a new stepping point. When faced with challenges, we must constantly change ourselves, constantly innovate, and change the original model and technology, otherwise the enterprise will be eliminated.
At present, The reform of China's medical system has reached the deep water area, and although some results have been achieved, there is still a long way to go, and further reform is needed. We believe that with the concerted efforts of the Medical Insurance Bureau, the Health Commission, the Drug Administration and other departments, medical and pharmaceutical problems will be better solved in the future. Seeking truth from facts should be the direction of the development of the medical system reform, and the reform of the medical system is beneficial to the people, that is, it is beneficial to our enterprises.
Two hours and an overnight stay
Economic Observer: In the fight against the new crown epidemic in Wuhan, Jointown has been greatly affirmed. In the context of the time, how did Jointown achieve efficient material supply?
Liu Baolin: We did a little bit during the epidemic, which is actually very related to the experience we gained in SARS. At the time of SARS in 2003, we were one of the largest suppliers of anti-epidemic materials in Beijing, and our unloading trucks were lined up from Fengtai Corner to the World Park. I sat in the command of our Beijing branch and transferred all the pharmaceutical materials such as Banlan root, antiviral drugs, proprietary Chinese medicines, and disinfectants from various branches to Beijing.
When the new crown case in Wuhan first began, the Wuhan Municipal Health Commission issued several notices on its official website, which shocked me a lot. By January 20, President Xi Jinping proposed on the news network that we should pay attention to the epidemic in Wuhan, and I sent a notice overnight to let all employees return to work. On the 23rd, our employees just returned to work, Wuhan was locked down, many colleagues were sealed outside the city, and we could not enter at once, and our pressure became the greatest. In accordance with the practice of the SARS period, we transferred all the drugs from all over the country to Wuhan and supplied them to pharmacies. At that time, almost every household in Wuhan went to the pharmacy to sweep the medicine, and all the medicines were swept away.
In this epidemic, Chinese medicine has played a great role. On January 21st, I concentrated all the Chinese medicines from all over the country in Wuhan, and hundreds of automated decoction machines were transferred to Wuhan, and there was no special medicine at that time, and I thought that Chinese medicine would definitely play an important role. Later, we also provided Traditional Chinese Medicine supply and decoction services to thousands of patients under the responsibility of Academician Zhang Boli.
After the distribution of Red Cross supplies in the two hours that were widely reported by the media, we actually worked all night behind the scenes. I got the call at 9 p.m., it was almost 10 o'clock when I got to the scene, and more than 500 of us sorted out there all night to ensure that all the supplies would be delivered within two hours the next morning.
During the wuhan anti-epidemic period, I basically did not sleep much, our private enterprises are doing their best, and no one talks about money and cost. In the history of Wuhan, because it is located along the Yangtze River, the terrain is flat, and the floods are frequent, there is a tradition of private people actively participating in disaster relief, and in this epidemic, civil society has continued the spirit of helping and supporting each other, which is very valuable.
![Jointown founder Liu Baolin brothers retired: "second generation of medicine" Liu Dengpan became vice chairman[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)