Quanyuantang Delivers Strong Pandemic Response with Omnichannel New Retail Strategy, Achieving 50% Revenue Growth

Amidst the sweeping tide of the “Internet + Healthcare” era, Quanyuantang has undoubtedly emerged as a standout player. In 1902, Li Xichen, a renowned physician in western Sichuan, founded Quanyuantang in Chengdu, opening its doors to medical practice and marking the beginning of the Quanyuantang story. Having weathered the test of time, Chengdu Quanyuantang Pharmacy Chain Joint Stock Co.,Ltd. was established in 2012, breathing new life into the century-old brand. In 2014, Quanyuantang seized the momentum by boarding the “fast train” of pharmaceutical e-commerce. Currently, pharmaceutical e-commerce has become Quanyuantang’s core business, with a comprehensive multi-platform operational ecosystem established across Tmall, JD.com, Vipshop, Pinduoduo, and other platforms, totaling 19 official stores.

In 2018, Quanyuantang began to strive to create a closed-loop market for pharmaceutical circulation, taking pharmaceutical e-commerce as the entry point and comprehensively laying out the new retail business of chain pharmacies.By integrating innovative online and offline technologies from new retail, Quanyuantang Smart Pharmacies have established a new business model characterized by “small storefronts, extensive product categories, high-frequency interactions, and quality service.” Over 200 Quanyuantang Smart Pharmacies are now located in Chengdu, Guangzhou, Shenzhen, Chongqing, Xi’an, Changsha, Foshan, and other cities.

E-commerce and new retail are not the only solutions Quanyuantang has brought to the pharmaceutical industry. By leveraging organic growth, inorganic expansion, and integrated development, and relying on diverse business formats including e-commerce, retail, empowerment services, wholesale, manufacturing, logistics, PBM, and big data, Quanyuantang has constructed an ecological strategic framework encompassing the entire pharmaceutical industry chain. Quanyuantang has also evolved from a county-level pharmacy chain into an industry hallmark of new retail and the new economy.

As customer demands shift from mere medication purchases to health services and online pharmaceutical consultations, and consumption patterns transition from visiting nearby pharmacies to placing orders via mobile phones with delivery services, the demand for new retail in the pharmaceutical industry has begun to surge. Meanwhile, as the dividends of online traffic have diminished in recent years, growth among offline chain pharmacies has slowed, and brand manufacturers face further compression of their operational space due to policies such as the “4+7” centralized procurement and Diagnosis-Related Groups (DRGs), new retail in the pharmaceutical sector has emerged as a potent solution to break through the development bottlenecks facing pharmaceutical e-commerce, offline pharmacies, and brand manufacturers.

Pharmaceutical new retail, with the aim of better serving customers, drives the integration of online and offline channels. By leveraging advanced technologies such as big data and artificial intelligence, it enables the online internet capabilities and offline physical pharmacies to form a truly synergistic force.Thereby achieving the optimization and upgrading of e-commerce platforms and physical retail stores in the business dimension.

Specific measures for new retail in the pharmaceutical industry include community-based internet healthcare services, O2O medication purchasing platforms, intelligent drug-search kiosks, prescription drug circulation platforms, 30-minute home delivery of medications, 24/7 operations, professional pharmaceutical care consulting services, digital consumer health records, intelligent demand forecasting for medications, and smart logistics and warehousing systems.

Chen Zhouhua, CEO of Quanyuantang, believes that there are two cores in the new retail of medicine.First, it is essential to meet consumers’ evolving and upgrading demands; second, as the essence of new pharmaceutical retail remains “retail,” operational efficiency must be continuously improved.“Starting from the two core elements of new retail in the pharmaceutical industry and extending to offer more services is the key for pharmaceutical new retail enterprises to build their core competitiveness.”

Since initiating its strategic expansion into new retail pharmaceuticals in 2018, Chengdu Quanyuantang Pharmacy Chain Joint Stock Co., Ltd. has delivered impressive performance in this sector. By leveraging the “catfish effect,” Quanyuantang is enhancing personnel and space efficiency in pharmacies while spurring the industry to embrace change and accelerate its transformation and upgrading.As of 2019, Quanyuantang operated more than 200 directly-owned new retail stores across seven cities in China, providing new retail enablement services to over 10,000 pharmacies. To date, this business has expanded to cover more than 110 cities across 22 provinces and municipalities nationwide. The company’s new retail pharmacy transaction volume ranks among the top five in China, with its O2O market share reaching as high as 50% in Chengdu and 45% in Chongqing.

During the COVID-19 pandemic, staying indoors became the new normal for people. At this time, the advantages of pharmaceutical new retail enterprises were fully demonstrated.Compared with traditional offline pharmacies,New retail in the pharmaceutical sector possesses data-driven insights, enabling rapid response to market demands. Meanwhile, through online sales channels, new retail pharmaceutical enterprises can deliver supplies and medications directly to customers’ residential communities.Compared with pharmaceutical e-commerce enterprises,Pharmaceutical new retail enterprises are supported by offline pharmacies, enabling the rapid delivery of supplies and medications through nearby stores. Consequently, these enterprises have become a critical force in ensuring the supply of epidemic prevention materials and pharmaceuticals during the pandemic.

As a leader in China’s new pharmaceutical retail sector, what measures has Quanyuantang implemented to ensure the stable supply of protective materials during the pandemic? What development opportunities has the pandemic brought to the new pharmaceutical retail industry? With these questions in mind, VCBeat conducted an exclusive interview with Chen Zhouhua, CEO of Quanyuantang.

Following the outbreak, customer demand for protective supplies surged significantly. As a daily consumable, masks faced particularly acute supply-demand imbalances. It is understood that China’s normal daily mask production capacity stands at 20 million units, accounting for 50% of the global total. However, given China’s population of 1.405 billion (according to data from the National Bureau of Statistics), a daily output of 20 million units is clearly insufficient. Due to the inability of mask production capacity to keep pace in the short term, a widespread shortage of masks emerged across the country.

At the outset of the pandemic, Quanyuantang responded swiftly by establishing an emergency management task force. Frontline departments—including e-commerce, new retail, procurement, pharmaceutical services, and warehousing—remained at their posts, implementing multifaceted measures to ensure a comprehensive supply of protective materials and medications.

To coordinate supply chain resources, Quanyuantang’s procurement team actively communicated and coordinated with suppliers, expanded procurement channels, and even stationed themselves at factories to secure additional inventory.

After procuring masks, Quanyuantang leveraged big data technology to assess demand across different regions and allocate masks accordingly. To ensure timely and safe delivery, in the Chengdu and Chongqing areas, QuanyuantangDelivered through its proprietary logistics network,Company management also used their personal vehicles to deliver supplies, overcoming numerous challenges such as inconvenient transportation, to ensure timely delivery.

According to CEO Chen Zhouhua, online operations fully resumed shipments on the second day of the Lunar New Year. During the pandemic, except for stores located within residential communities and shopping malls,All stores remained open, with over 60% operating 24 hours a day to ensure 30-minute home delivery. Meanwhile, the company’s pharmaceutical care team launched a “Pneumonia & Influenza Health Protection Consultation Channel,” providing 24/7 online consultations on COVID-19 and pharmaceutical services.

The pharmaceutical care team is available 24/7 to provide clients with consultations on COVID-19 and pharmaceutical services.

In response to the long queues of people buying masks at pharmacy entrances, Quanyuantang urgently developedMask Reservation and Queuing System, while meeting customer needs through time-slot appointment scheduling to reduce crowd gathering and avoid the risk of cross-infection. During the pandemic, Quanyuantang cumulatively supplied nearly 10 million masks to the market. Targeting patients with chronic diseases requiring long-term medication, Quanyuantang launched"Chronic Disease Care Initiative", enabling chronic disease patients to purchase medications online without physical contact.

The pandemic has also driven substantial growth in the performance of new-retail pharmaceutical companies. Chen Zhouhua stated, “Since the outbreak of the epidemic,”Quanyuantang’s O2O order volume nearly doubled compared to the previous level.Among them, the Chengdu market maintained a steady growth trend, with O2O order volume doubling year-on-year. Other regional markets experienced explosive growth, with O2O order volumes in Chongqing and South China reaching 10 times and 5 times their pre-pandemic levels, respectively. Notably, the total O2O sales revenue in the Chongqing market increased by nearly 20-fold year-on-year.

In addition, Quanyuantang believes that safeguarding employees’ physical health and safety is the foundation for conducting business smoothly. In addition to providing employees with anti-epidemic supplies such as face masks, Quanyuantang has also launched an Employee Care Program,Complimentary Exclusive Insurance for Employees with Novel Coronavirus Pneumonia, and launchEmployee Internal Purchase Program, to meet the needs of employees' family members for purchasing epidemic prevention supplies.

Meanwhile, Quanyuantang also donated a batch of N95 masks to Chengdu Shuangliu International Airport and the Chengdu Public Health Clinical Medical Center, and supplied a batch of anti-epidemic materials to the centralized medical observation site for close contacts in Tianhe District, Guangzhou. In addition, Quanyuantang partnered with Dada Now to launch the “Rider Care Initiative” for food delivery riders, donating more than 10,000 masks to them. As a representative enterprise in the fight against the epidemic, Quanyuantang has received numerous honors and was selected forChengdu New Economy Enterprises’ “Anti-Epidemic” List。

This epidemic has allowed many people to experience the power of the internet. During the outbreak, a large number of customers shifted their medication purchasing channels from offline to online, significantly expanding the customer base.

This epidemic has served as a significant wake-up call for traditional pharmacies. Chen Zhouhua shared a set of data with VCBeat: previously, new retail pharmaceutical enterprises accounted for less than 10% of pharmacies across China. In the aftermath of the epidemic, over 66% of pharmacies have begun considering and preparing to launch O2O services, while more than 30% are gradually rolling out such services.It is foreseeable that the pharmaceutical new retail industry will usher in significant development opportunities in the post-pandemic era.

Opening new stores against the trend was another keyword for Quanyuantang during the pandemic, reflecting its “pragmatic sprint” posture. During this period, Quanyuantang accelerated its store expansion, opening nearly 20 smart pharmacies in Chengdu and Chongqing. This effectively supported epidemic prevention and control efforts while continuously safeguarding user health. Against the backdrop of widespread pessimism toward offline retail due to the pandemic’s impact, Quanyuantang stood out with remarkable resilience.

New retail in the pharmaceutical industry is an inevitable trend, and the pandemic has accelerated its development. As a benchmark enterprise in the pharmaceutical new retail sector, Chengdu Quanyuantang Pharmacy Chain Joint Stock Co., Ltd. will seize development opportunities and continue to advance its new retail business in 2020.“On one hand, we will continue to deepen our presence in the seven cities where we have already established direct-operated new retail pharmacies this year. On the other hand, we will intensify our efforts to empower traditional pharmacies by enhancing store personnel efficiency and sales per square meter through digital upgrades across multiple dimensions—including cloud data middle-platform management, O2O order integration, supply chain product assortment enhancement, and professional service support—thereby facilitating their transition to the new retail model.”

Meanwhile, addressing the supply chain issues exposed during the epidemic, Chen Zhouhua stated, “In the future, we will forge stronger collaborative partnerships with manufacturers and suppliers, and establish an emergency response system outside our standard operational framework to cope with unforeseen contingencies.”