Linyi Kuaiyao Drives Digital Transformation for Over 50,000 Pharmacies Through Full-Platform Partnerships with Meituan, JD Health, and Others

The number of retail pharmacies in China is continuously increasing.

According to the "Annual Statistical Data on Drug Supervision and Administration (2022)" released by the National Medical Products Administration, there were 643,900 enterprises holding drug operation licenses across China as of the end of 2022.Over the past decade, the number of pharmacies in China has increased by more than 200,000.。

However,The number of pharmacies with revoked business licenses is also increasing.. Taking Guangdong Province, which has the highest number of Drug Operation Licenses, as an example, a total of 3,842 Drug Operation Licenses were cancelled from 2019 to September 2021. To this day, a large number of pharmacies are still applying for license cancellation and store closure, exiting the market.

Driven by policies such as volume-based centralized procurement, the separation of prescribing from dispensing, and the outflow of in-hospital prescriptions, alongside factors like heightened consumer health awareness and growing demand, the new retail pharmaceutical sector has once again become a focal point of the pharmaceutical market. Consequently, transitioning to new retail has become an urgent imperative for the development of traditional pharmacies.

“"However, the new retail model for pharmacies is not simply a shift from offline to online. How to seize opportunities and achieve true digital and intelligent transformation through technology to develop new retail has become an urgent issue for traditional pharmacies," said Zhang Chao, General Manager of Linyi Fast Medicine, a domestic enabler of new retail for pharmacies.. Data also show that a number of pharmacies, after attempting the O2O model, ultimately withdrew from their O2O operations due to difficulties in achieving profitability.¹。

Linyi Fast Medicine is a technology innovation company that leverages digital technologies to transform the traditional business models of China’s pharmaceutical industry, helping conventional pharmacies achieve digital and intelligent transformation and develop new retail. Currently, Linyi Fast Medicine“Linyi Cloud,” a SaaS integrated platform tailored for pharmacies, to build an online service system for them, including online order systems, electronic prescription circulation, intelligent membership management, online stores, online consultations, medication guidance, lectures by renowned physicians, aggregated delivery, and live streaming. It integrates online and offline channels to help pharmacies reduce costs and expand sales channels.

Centered around Linyi Cloud, Linyi Fast Medicine has successively launchedThe Linyi Business School team, which provides managed operation services; the Yaohecai F2B trading platform, which empowers pharmaceutical companies’ new retail channels; and allied pharmacies collectively establish a pharmaceutical industry ecosystem, delivering comprehensive end-to-end services to clients, including new retail pharmacies, supply chain solutions, and internet hospitals., facilitating innovative development models for pharmacies and helping pharmaceutical companies optimize their business structures, ultimately enhancing overall efficiency and providing patients with more specialized medical services.

Linyi Fast Medicine was established in Hefei, Anhui Province, in 2019, with Zhang Chao as its primary founder. Prior to founding the company, he served as General Manager of Anhui Provincial Pharmacy Chain Co., Ltd., bringing over a decade of experience in pharmaceutical e-commerce and pharmacy management.

At that time, there were 544,000 enterprises holding drug operation licenses across China. The offline pharmacy sector was booming, with fierce competition. Meanwhile, the pharmaceutical e-commerce and new retail industries were growing at a rapid pace, making digital transformation one of the key strategies for many traditional pharmacies to survive. In this regard, Zhang Chao stated, “Initially, we also aimed to transition from offline pharmacies to new retail. However, we encountered numerous challenges during the transformation process. The first hurdle was software technology; at the time, software solutions on the market were expensive and offered low levels of customization, making them unsuitable for all traditional pharmacies.”

“Develop a highly adaptable and powerful SaaS software suite to help traditional pharmacies transition to new retail, accelerating the construction of a comprehensive and advanced intelligent pharmaceutical service system.”. With this vision, Zhang Chao joined forces with the core team to co-found Linyi Fast Medicine, aiming to address the pain points traditional pharmacies face in developing new retail models through innovative technology. The company provides the industry with user-friendly and efficient integrated SaaS software, along with a suite of services for transformation and upgrading.

To date, Linyi Fast Medicine has assembled a comprehensive team with composite backgrounds in pharmaceuticals and e-commerce, encompassing professional talent in fields such as technology R&D and operations.

 Linyi Fast Medicine Team Members. Image source: Linyi Fast Medicine

Since its official launch in August 2020, Linyi Fast Medicine has expanded to 279 cities across China.Provided new retail pharmaceutical technology solutions to over 50,000 pharmacies under more than 400 chain companies, and established partnerships with all major platforms including Meituan, JD Health, Baidu Health, and Ali Health.。

Furthermore, in terms of upstream and downstream collaboration, Anhui Linyi Fast Medicine Technology Co., Ltd. has successively established partnerships with well-known top-100 pharmaceutical retail chains across China, such as Fengyuan Chain, Hubei Tianji, Shenzhen Nanbei Pharmacy, Zhongyou Health, and Beijing Tongrentang, as well as with pharmaceutical manufacturers including Sanjiu Group, Yunnan Baiyao, Kunming Pharmaceutical Group, Kuaihua Pharmaceutical, and AstraZeneca. By integrating upstream supply chain enterprises and downstream retail terminals, the company is gradually building a comprehensive closed-loop commercial platform for the pharmaceutical industry.

Centered on pharmacy development scenarios and new retail demands,Linyi Fast Medicine has established a multi-dimensional, digital and intelligent service system for the pharmaceutical industry., driving the development of new retail in pharmacies through innovative technologies. On this basis, leveraging the R&D and resource integration capabilities of Linyi Fast Medicine, it connects downstream pharmacy sales terminals with upstream pharmaceutical supply chains, ultimately promoting the digital and intelligent transformation of the pharmaceutical industry.

 Linyi Fast Medicine Data Dashboard. Image source: Linyi Fast Medicine

Among them, the “1+1+1+N” pharmaceutical ecosystem model is the core to ensuring the implementation of this service system, namely “1 Core: Linyi Cloud SaaS Software Cluster + 1 Team: Linyi Business School + 1 Platform: Yaohecai (F2B) + N Resource Links”。

Linyi Cloud SaaS Software Suite: Providing a Complete Technical Solution for New Retail in Pharmacies, including the O2O order system, B2C order system, ERP inventory management system, SCRM membership management system, electronic prescription circulation system, aggregated delivery system, Linyi Micro Mall, and Yaohecai F2B trading system. By establishing a proprietary standard product library, we achieve data interoperability among various independent SaaS software solutions within the Linyi Cloud ecosystem, break down information silos across the upstream and downstream supply chain, and consolidate massive datasets into a big data center. This enables us to provide pharmacies with insights on drug sales trends and customer medication preferences, facilitating precise pharmacy services; meanwhile, it offers pharmaceutical companies visibility into market distribution and real-time sell-through data, allowing them to respond promptly to market fluctuations.

Linyi Business School: Providing pharmacy managed operations and guidance training services, including integrated resource operations, user relationship management, and professional operational support, to address the shortage of talent in new retail pharmacies and enhance their independent operational capabilities. Notably, the Linyi Fast Medicine operations team can enable one individual to manage 300 new retail pharmacies. Practical data also shows that through training and mentorship, online sales of pharmacies can be multiplied, while platform expenditures and online operational costs for pharmacies are reduced by more than 5%.

Yaohecai Trading Platform: A Supply Chain Channel Platform Based on the F2B Business ModelDownstream pharmacies, by integrating with the Linyi Cloud software, engage in joint drug procurement on the platform, enabling direct distribution from pharmaceutical manufacturers to pharmacy terminals. Furthermore, the F2B platform can automatically preset rules to constrain non-compliant behaviors, thereby maintaining products' market lifecycle and value stability. It also supports intelligent product selection for pharmacies and ensures flexible return and exchange policies, reducing operational risks for merchants. Building on this foundation, the resource base of 50,000 pharmacies will accelerate scaled direct sales for pharmaceutical companies, enhance supply chain efficiency, and reduce circulation costs.

N Resource Links: Empowered by three core platforms: Linyi Cloud, Linyi Business School, and Yaohecai (F2B),Anhui Linyi Fast Medicine Technology Co., Ltd. will launch resource-linking services such as the “Ten-Million-Yuan Store Alliance Pharmacy” and the “Internet Hospital.”“Ten-Million-Yuan Store Alliance Pharmacy” refers to the nationwide deployment of 500–1,000 Linyi Fast Medicine Alliance smart pharmacies. These pharmacies will operate under an independent-entity alliance model, sharing resources while maintaining autonomy, with the goal of achieving annual sales of RMB 10 million per store and total annual sales of RMB 5 billion.

“Internet Hospital” refers to a self-developed mini-program platform that aggregates high-quality domestic internet hospital services for follow-up consultations and prescription renewals, thereby addressing the challenge of electronic prescription circulation between online and offline channels for partner pharmacies. This initiative helps pharmacies enhance their professional light consultation services and provides patients with higher-quality, more convenient medical care.

In addition, Linyi Fast Medicine has also created a new diversified, multi-channel model for retail pharmacies.Partnering with community pharmacies across China to transform them into “24-Hour Smart Pharmaceutical and Health Stations” serving the health needs of local residents, effectively driving foot traffic to stores, continuously strengthening medical insurance services, boosting sales of reimbursable pharmaceuticals, and introducing health management services to establish and track community health records.

To date, Linyi Fast Medicine has developed into5 Core Businesses: Linyi Business School, Alliance Pharmacies, Linyi Cloud, Pharmaceutical Supply Chain, Internet Hospital, by aggregating pharmaceutical companies across China and collaborating with upstream partners to provide empowerment, thereby accelerating the realization of a closed-loop pharmaceutical industry chain.

Anhui Linyi Fast Medicine Technology Co., Ltd.’s comprehensive technical solutions have also gained market recognition and attracted investor interest. In 2021, the company completed its Series A financing round, raising tens of millions of yuan. By 2023, Anhui Linyi Fast Medicine had successfully achieved profitability. Meanwhile, the company has been certified as a High-Tech Enterprise and an Anhui Province Big Data Enterprise.

“Statistical Analysis Report on the Operation of the Pharmaceutical Distribution Industry in 2022” shows that the sales scale of China’s pharmaceutical distribution market maintained steady growth in 2022. Among them, the retail pharmaceutical market achieved sales of RMB 599 billion, a year-on-year increase of 10.7%. In the future, with the growing population of medication users and increasing demand for medications, both the market size and the number of pharmacies will continue to grow.

In response, Zhang Chao also stated, “In the future, as new retail in pharmacies continues to develop, strategies reliant on price wars and scale-driven market competition will become unsustainable.”Leveraging new technologies to deliver specialized pharmaceutical services will be key for pharmacies to achieve a commercial closed loop integrating medical care and medication, thereby breaking out of the fiercely competitive “red ocean.”, and this is also the future strategic direction of Linyi Fast Medicine: to continuously lead the digital and intelligent transformation of the pharmaceutical industry through technological innovation.”

Therefore, based on the business model of "integrated SaaS technology + supply chain + operations," Anhui Linyi Fast Medicine Technology Co., Ltd.Plan to launch the “Linyi Health” platform to conduct businesses such as digital management of chronic diseases, health check-ups, and general health content dissemination.. Furthermore, Linyi Fast Medicine is continuously innovating and upgrading its software technology and operational services, while introducing professional physicians to provide free online consultation services. This multi-pronged approach strengthens the pharmacy’s professional medical service capabilities, delivering precise, science-based medication guidance and diagnostic and treatment services to patients, ultimately achieving a closed-loop ecosystem encompassing medical care, pharmaceuticals, testing, and insurance.

To accelerate the company's growth, Anhui Linyi Fast Medicine Technology Co., Ltd. is currently planning its next round of financing to increase investment in software development, supply chain optimization, and the promotion of its F2B trading platform.

References:

1. First Pharmacy Cai Zhi. “A Batch of Pharmacies Exiting O2O?”