Quanyuantang Expands New Retail Footprint in Guangzhou with Over 30 Stores, Strengthening Digital Healthcare Presence
VCBeat (WeChat ID: vcbeat) has learned that following the launch of its new retail strategy in Chongqing last month, Quanyuantang, a leading digital pharmaceutical and healthcare retail platform in China, has entered into a strategic partnership with Guangdong Meijiakang Pharmaceutical Chain Co., Ltd. this month. As a result, more than 30 stores located in Guangzhou and other areas have been integrated into Quanyuantang’s pharmaceutical new retail operational system.
Notably, this marks Quanyuantang’s second foray into Guangzhou, the hotbed of pharmaceutical retail, this year. This move signals Quanyuantang’s intensified penetration into the South China market, as it deploys its distinctive new pharmaceutical retail model in the “Ram City” to craft a digital health consumption lifestyle for local residents.
Policy dividends, such as the outflow of prescriptions, continue to be released, and the mature application of the “Internet + Healthcare” model has opened up significant growth potential in the pharmaceutical retail market. Quanyuantang seamlessly integrates new retail formats into the pharmaceutical retail sector, transforming pharmacies into key hubs for serving both online and offline customers with professional services. This shift has made healthcare consumption among the general public more specialized and digitalized. It is widely believed that Quanyuantang’s nationwide expansion strategy is driven by a “digital core.”
As a dynamic force in the pharmaceutical retail market of South China, Guangdong Meijiakang Pharmaceutical Chain Co., Ltd. was established in April 2015. The company integrates nearly 10,000 product categories, including Western and Chinese proprietary medicines, ginseng and deer antler tonics, health and wellness products, medical devices, personal care items, and household goods. Its primary business segments encompass pharmaceutical retail, traditional Chinese medicine (TCM) outpatient clinics, e-commerce platforms, and consulting and management services. Headquartered in Guangzhou, Guangdong Province—a forefront of China’s reform and opening-up—the company currently operates nearly 30 stores in Guangzhou’s Tianhe, Yuexiu, Haizhu, Baiyun, Liwan, and Panyu districts, as well as in Changsha, the capital of Hunan Province.
Furthermore, this collaboration explicitly stipulates that the management team of Meijiakang, which boasts extensive experience in offline pharmacy operations and management, will be integrated into Quanyuantang. This comprehensive integration, spanning from products to personnel, will support Quanyuantang’s strategic expansion across Guangzhou, enriching the regional structure of its new pharmaceutical retail layout. By leveraging big data and digital empowerment, Quanyuantang will establish an online-offline operational system for its smart pharmacies in the local market, thereby transforming the daily pharmaceutical and healthcare consumption scenarios and experiences for consumers in Guangzhou (the “Ram City”), and laying a solid foundation for Quanyuantang’s continued expansion in the South China market.
As early as the beginning of this year, Quanyuantang initiated the acquisition of stores and assets of a large pharmaceutical retail chain in Guangzhou, announcing its new retail layout in the city. Coupled with the strategic cooperation with Meijiakang and the establishment of self-owned stores, Quanyuantang is poised to exceed 50 stores in the Guangzhou market. During the 2018 Double 11 Shopping Festival, Quanyuantang’s Guangzhou stores partnered with Alibaba Health and other platforms to launch services such as “24-hour operation” and “30-minute emergency medication delivery,” which received positive responses. The impact of Quanyuantang’s new pharmaceutical retail model is now becoming evident in Guangzhou.
Li Can, Chairman of Quanyuantang, stated that Guangzhou, as one of the core urban agglomerations in China, constitutes a vital component of Quanyuantang’s new pharmaceutical retail strategy. Leveraging the resource-rich environment and the more mature “Internet + Healthcare” ecosystem in this vibrant Lingnan region, Quanyuantang will continue to capitalize on its advantages in online-offline digital integration within the pharmaceutical retail sector through acquisitions and self-built stores. The company aims to establish a health and lifestyle service circle for the Guangzhou-Foshan metropolitan area, delivering an enhanced health management service experience to its broad user base.
As one of the top three pharmaceutical e-commerce platforms and a pioneer in new retail pharmacy, Quanyuantang’s rapid nationwide expansion serves as a quintessential example of this era. The significance of its mergers and acquisitions lies in the swift implementation of business formats to better serve users.
With the advancement of healthcare reform measures such as zero-markup pricing, control over the proportion of drug costs, and diagnosis-related group (DRG) payment, the outflow of prescriptions from hospitals to retail channels is an inevitable trend, which will inevitably drive incremental growth for retail pharmacies. According to relevant data, the market size of the retail pharmacy terminal reached RMB 400.3 billion in 2017, representing a year-on-year increase of 9.0%.
For brick-and-mortar pharmacies, Quanyuantang has entered the pharmaceutical retail market with a systematic internet mindset and strategy, endowing it with special significance and driving self-disruption within the pharmacy model itself. Relying on core elements such as category expansion, supply chain integration, digital management, and professional pharmaceutical services, Quanyuantang’s stores have seen comprehensive improvements in sales per square meter and data operational capabilities. Pharmaceutical new retail has become an important industry-identifying label for Quanyuantang.
During the 2018 Double 11 shopping festival, Quanyuantang sustained its high-performance growth. By collaborating with five major platforms, including Ali Health, and leveraging its 72 smart pharmacies located in Chengdu, Guangzhou, Chongqing, and Xi’an, the company achieved the second-highest transaction volume among Ali Health’s new retail chain pharmacies nationwide and ranked first in per-store output. Its online and offline performance increased fivefold year-on-year, with online orders accounting for over 70% of total store transactions, thereby realizing scaled store operations and accelerated operational efficiency.
“Acquisitions plus self-built stores will be our combined strategy for offline layout.” Li Can revealed that the acquisition activities in the Guangzhou market will not cease. Next year, Quan Yuan Tang will build a new retail flagship pharmacy in Guangzhou with a stronger emphasis on experience and interactivity. Over the next three years, Quan Yuan Tang plans to open 1,000 stores in more than 50 core cities across China, thoroughly penetrating and mastering the new retail model for pharmaceuticals, and creating endless possibilities for the pharmaceutical and health consumption lifestyles of more users.