By Fineline Cube China-based Alibaba Health Information Technology Ltd (HKG: 0241) released its 2022 financial report (for the year ended March 31, 2022), with revenues reaching RMB 20.57 billion (USD 3 billion), up 32.6% year-on-year (YOY). The growth was driven by the pharmaceutical self-operation business and medical and digital service business. However, the group recorded a net loss of RMB 266 million (USD 39.6 million) for the period, slipping from profits of RMB 342.6 million reported in 2020.
Business Breakdown
AliHealth’s self-operated pharmaceutical direct sales business generated RMB 17.91 billion (USD 2.67 billion) in revenues, up 35.5% YOY and the largest in the China market. The business scope includes B2C retailing, advertising services, and a B2B centralized procurement and distribution system. The firm boasts 110 million annual users and among the richest product lineups. The pharmaceutical e-commerce platform business, which sells medicines, nutritional food, and medical devices, alongside outsourced service businesses and new retailing provided via yao.tmall, brought in a combined RMB 1.99 billion (USD 296 million), up 1.6%.
AliHealth is doubling down on the Internet medicine and Internet health service sectors, providing users with online and offline integrated medical and health services including physical examination, nucleic acid testing, consultation, registration, vaccines, and traditional Chinese medicine access. During the period, its healthcare and digital service business chalked up RMB 670 million (USD 100 million) in revenues, up 98.9%.
Reasons for Loss
The firm’s loss during the year was due to:
- Increasing the market share of online B2C drug sales, accelerating the layout of prescription drug business, and increasing the corresponding market launch, which reduced the profit margin of the self-operated pharmaceutical business.
- Drug supply chain capabilities such as drug warehousing and logistics, and refined operation of self-operated pharmaceutical business, users revisiting and prescription experience, technology research and development of compliance, and safety of prescription drugs, etc.
- Increased investment in the construction of Tmall platform and Ali Health’s major drug brands.
- Increased resource allocation in innovative business.-Fineline Info & Tech