Xia Yu Appointed CEO of DeKai Pharma to Launch 'Thousand Cities, Thousand Stores' O2O Model

Recently, Xia Yu, former CEO of Souyao Song, joined Dekai Online Pharmacy as the CEO of Dekai Pharmaceutical. Xia Yu is one of the pioneers in China’s pharmaceutical e-commerce industry and participated in the early preparation and establishment of Jinxian.com. Jinxian.com was the second company in China to obtain an online pharmacy operation license and officially launched in 2007. In 2010, Xia Yu became the CEO of Baiji New Drug Network (the predecessor of Cardinal Health Online Pharmacy), tripling the business volume within three years. In August 2014, Xia Yu resigned from his position as CEO of Cardinal Health Online Pharmacy.



Since then, Xia Yu has shifted his career path multiple times, but his original commitment to pharmaceutical e-commerce has remained unwavering.

With around a decade of experience in the pharmaceutical e-commerce sector, Xia Yu has long aimed to build a nationwide pharmaceutical care service platform through offline chain pharmacies, with a focus on medications for chronic diseases. By leveraging pharmaceutical care interventions to address medication adherence issues among chronic disease patients, and by integrating online pharmaceutical e-commerce with offline physical presence to tackle patients’ medication economics concerns, his vision aligns perfectly with that of Bai Yu, Chairman of Kangfu Zhijia Medical Device Chain.

Kangfu Zhijia currently operates more than 100 directly owned offline stores, with sales volume exceeding RMB 400 million, making it the largest home medical device chain in China. It ranks first nationwide in sales of various retail home medical devices, including nursing beds, wheelchairs and electric wheelchairs, oxygen concentrators, products for managing hypertension, hyperglycemia, and hyperlipidemia (“three highs”), and mobility scooters. Its distinctive service lies in providing comprehensive after-sales support to patients. Early this year, Kangfu Zhijia acquired Dekai Pharmacy, which holds qualifications for online drug sales, thereby initiating its layout in the O2O model for medical devices and pharmaceutical e-commerce, with a plan to establish “a thousand stores across a thousand cities” nationwide within three years. With Xia Yu’s joining, Dekai will accelerate the implementation of the “thousand stores across a thousand cities” initiative.

Integrated Pharmacy for Pharmaceuticals and Medical Devices

As planned, Dekai Future will have at least one physical “integrated pharmaceutical and medical device” store in each city. The target for 2016 is to operate 50 directly-owned stores, strategically located near hospitals in major cities, while adopting a franchise model for rapid expansion in other prefecture-level and county-level cities in the future. In the initial phase, Dekai and Kangfu Zhijia will convert some of their existing stores into “integrated pharmaceutical and medical device” outlets.

De Kai’s rationale for establishing “integrated pharmaceutical and medical device” stores lies in the significant overlap between Kangfu Zhijia’s existing customer base and the population managing chronic diseases with medication. Compared to medical devices, pharmaceuticals represent a relatively high-frequency demand.

According to Xia Yu, the current ratio of medical devices to pharmaceuticals in Dekai’s online sales stands at 7:3, a proportion that is expected to reverse in the future. Dekai’s pharmaceutical offerings will primarily focus on chronic disease management. In Xia Yu’s view, consumers show relatively low reliance on online channels for medications treating common ailments such as colds, preferring instead to purchase them through traditional brick-and-mortar pharmacies. By contrast, medications for chronic diseases require a professional service ecosystem.

Moreover, this innovative business model addresses two key challenges: first, it overcomes the policy bottleneck that prevents medical device stores under the “Rehabilitation Home” brand from accepting insurance card payments; second, it enables integration with online channels. Xia Yu noted that many users inquire about products and services via websites or mobile apps. By linking these online inquiries with offline professional services, nearby stores can arrange home delivery. Starting January 1, 2016, the approval requirement for pharmacies to become designated medical insurance providers was abolished, resolving Dekai’s previous inability to accept medical insurance payments. This change will unlock a substantial potential market growth opportunity. In addition, leveraging its data and system advantages from e-commerce operations, Dekai plans to pilot the Direct-to-Patient (DTP) model.

User-Centric Solutions

Xia Yu stated that what Dekai is currently doing is a user-centric business model reconstruction. “The current B2C model is product-centric and merchant-centric.” Being user-centric means providing solutions that users need, from the perspective of pharmaceuticals.

Currently, when patients visit hospitals, doctors lack sufficient time to communicate with them and provide services such as medication guidance. Traditional brick-and-mortar pharmacies also offer similar services, but their limitation lies in narrow coverage and the inability to operate across regions. The internet can break through geographical barriers, enabling a sufficient number of licensed pharmacists to provide online medication guidance. “We can also refer chronic disease patients who have actual medical consultation needs to our partner healthcare institutions,” Xia Yu told VCBeat.

Currently, Dekai has 20 licensed pharmacists. This number is planned to increase to 100 next year, and a total of 2,000 licensed pharmacists will be required to achieve nationwide coverage across China.

This reflects Xia Yu’s proposition that pharmaceutical e-commerce should provide user-centric solutions. Currently, the focus is largely on post-consultation medication management, but in the future, pre-consultation, during-consultation, and post-consultation services can be integrated and coordinated.

“Current internet healthcare companies are too distant from users; pharmaceutical e-commerce is the closest to them,” said Xia Yu. He added that Dekai will also connect with offline medical institutions and leverage the network of senior physicians affiliated with pharmaceutical companies, while considering collaborations with internet healthcare firms.