Jianke's Genuine Product Alliance Expands to 300 Members, Strengthening Industry-Wide Authenticity Assurance Mechanism
Capital winter, policy fluctuations, and slowing growth: 2016 was a challenging year for the pharmaceutical e-commerce and mobile health industries to advance together. However, “fundraising” and “cash burn” were no longer the keywords for pharmaceutical e-commerce in 2016, replaced by “profitability.” According to iResearch statistics, China’s pharmaceutical e-commerce sector has maintained rapid growth for six consecutive years. The market size of China’s B2C pharmaceutical e-commerce was RMB 100 million in 2009, exceeding RMB 14 billion in 2015, with a compound annual growth rate (CAGR) of 244.0%.
On December 20, pharmaceutical e-commerce platform Jianke.com held its Partner Conference in Guangzhou, revealing that its 2016 turnover reached RMB 1.5 billion, a year-on-year increase of 50%. Xie Fangmin, CEO of Jianke, disclosed that the first Authentic Product Alliance initiated by Jianke in the pharmaceutical e-commerce sector has grown to include 300 members. This number is expected to continue rising next year, with the goal of expanding from 300 to over 1,000 member companies, thereby enhancing the industry’s overall development potential through an authentic product guarantee mechanism.
Despite its rapid expansion and significant impact on brick-and-mortar pharmacies, online pharmaceutical sales still account for a small share of the vast overall pharmaceutical market. Data released by Sinohealth CMH shows that in 2015, online pharmacy sales accounted for only about 1% of total drug revenue.
Even so, the increase in the proportion of online sales in the pharmaceutical industry in 2016 was still significant. Data released by Sinopharm CMH showed that the sales volume of drugs in online pharmacies in 2015 increased by as much as 57.9% compared to 2014.
Xie Fangmin, CEO of Jianke, believes that it is entirely feasible for the online pharmacy sales channel to account for 15% of the total market share in the future. “The future landscape of China's pharmaceutical retail market will be characterized by a "three-pronged" structure: first, hospitals accounting for 40%; second, pharmaceutical e-commerce accounting for 30%; and third, offline brick-and-mortar pharmacies.”
In light of this, leading domestic pharmaceutical manufacturers have begun establishing e-commerce divisions. For instance, Shanghai Pharmaceuticals invested RMB 100 million to develop its pharmaceutical e-commerce operations, while Conba Pharmaceutical allocated RMB 270 million for strategic investments in the pharmaceutical e-commerce sector.
The surge in the proportion of online sales has made pharmaceutical e-commerce increasingly popular among pharmaceutical manufacturers. From 2015 to 2016, Baiyunshan Pharmaceutical General Factory achieved a year-on-year doubling of sales for a single product on Jianke, rising from 20 million to 40 million yuan. This has made Baiyunshan deeply aware of the powerful impact of e-commerce in expanding drug coverage.
On November 9, Jianke joined hands with nearly 30 renowned pharmaceutical companies from China and abroad, including Pfizer, Bayer, GPC Baiyunshan, and Yiling Pharmaceutical, to establish the first “Authentic Products Alliance” in China’s pharmaceutical e-commerce sector. The initiative garnered coverage and attention from over a hundred national media outlets, sparking widespread public discussion and positive industry response, thereby serving as a strong model and catalyst for the healthy development of the industry.
At the recently held Jianke Partner Conference, Jianke announced that the roster of its Authentic Product Alliance has expanded to include 300 members. “There are thousands of pharmaceutical manufacturers in China. We aim to establish a large-scale alliance with the goal of creating a tripartite guarantee system for authentic pharmaceutical e-commerce, comprising insurance underwriting, manufacturers’ commitment to authenticity, and Jianke’s commitment to authenticity. This integrated approach is designed to firmly embed the concept of ‘Buy Authentic Medicines, Go to Jianke’ in consumers’ minds,” pointed out Xie Fangmin, CEO of Jianke. He emphasized that online medication purchases differ from other forms of online shopping, making consumer trust paramount; the launch of the Authentic Product Alliance was driven precisely by this consideration.
Xie Fangmin also revealed that the Jianke Authentic Products Alliance will continue to expand its membership, aiming to grow from 300 member organizations to over a thousand, thereby enhancing the industry’s overall development potential through its authenticity guarantee mechanism.
As the year draws to a close, major pharmaceutical e-commerce platforms are successively releasing their year-end performance reports. At its 2016 Partners Conference, Jianke also unveiled its results for the year.In 2016, Jianke achieved a turnover of RMB 1.5 billion, representing a 50% year-on-year increase.It is reported that Jianke’s annual turnover in 2015 reached RMB 1 billion, ranking it second among online pharmacies nationwide. In recognition of this achievement, Jianke was awarded the trophy for the “Top 10 Pharmaceutical E-commerce Companies on the 2015–2016 China Pharmacy Value List.”
In addition, Jianke received numerous honors in 2016, including “Most Investment-Worthy Pharmaceutical E-commerce Enterprise of 2016,” “Most Influential Pharmaceutical E-commerce Brand of 2016,” and “Top 10 Pharmaceutical E-commerce Companies of 2016.” Mr. Xie Fangmin, CEO of Jianke, was named “Pharmaceutical E-commerce Industry Leader of China (2015–2016)” and one of the “Top 10 Pharmaceutical E-commerce Industry Leaders in China for 2016.”
Looking ahead to 2017, Xie Fangmin revealed that Jianke aims to achieve an annual revenue target of RMB 2 billion next year., and successively completed plans such as establishing the Central China branch and deploying the internet hospital project, gradually achieving the strategic goals of the Jianke Smart Health Platform.