According to the “China Retail Pharmacy O2O Development Report” released by Minenet, the “online drug purchase” model has gained significant traction due to the COVID-19 pandemic and online prescription drug sales policies, with O2O becoming a mainstream retail pharmacy online business approach. By the end of 2021, approximately 200,000 pharmacies had adopted the O2O method, accounting for one-third of the total number of retail pharmacies in China. In 2021, O2O sales of retail pharmacies amounted to RMB 20.2 billion (USD 2.9 billion).
Market Share and Growth
The report indicates that since 2019, the share of O2O in the overall market of brick-and-mortar pharmacies has risen from 0.8% to 3.5%, with a compound growth rate of 115.3% over the past three years. In contrast, the compound growth rate of retail physical pharmacies during the same period was only 3.2%. Minenet predicts that by 2030, O2O retail pharmacies will account for 19.2% of the overall market of physical pharmacies, with a market capitalization of RMB 144.4 billion (USD 20.8 billion). If online medical insurance becomes fully accessible, the share could rise to 32.1%. In terms of drug scale, retail pharmacy O2O is expected to catch up with or surpass business-to-customer (B2C) online pharmacies.
Performance of Listed Companies
Notably, among all retail pharmacies, O2O sales of listed companies have doubled in the past two years. Compared with 2020, listed companies such as Yifeng Pharmacy, LBX Pharmacy, and Jianzhijia Health-Chain all saw increases of more than RMB 200 million (USD 28.8 million) in 2021. The report also highlights that third-party platforms have enabled more retail pharmacies to launch O2O with more convenient tools.-Fineline Info & Tech
