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Single, small chain into the winter! Joining the new regulations and strong supervision, the giant of 10,000 stores accelerates the concentration of the industry

 Last Update: 2022-12-04
 Source: Internet
 Author: User

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Retail pharmacies have issued new rules, and the living space of "small" pharmacies has intensified and contracted!

Recently, the Gansu Food and Drug Administration issued the "Provisions on the Establishment of Pharmaceutical Retail Chain Enterprises in Gansu Province (Trial)", clarifying that if a chain enterprise intends to increase the number of franchised stores, it shall apply to the licensing authority of the single pharmacy to change the operation mode of the "Drug Business License" of the single pharmacy to "retail (franchise chain)", and submit the cooperation agreement, the authorization letter of the single pharmacy and other certification materials
that comply with the "seven unification" management.

In fact, in addition to Gansu, Guangdong, Hebei, Xinjiang and other places have also issued similar regulations for pharmacies to join this year, supporting chain pharmacies to strengthen franchise supervision
.

Industry insiders pointed out that on the one hand, the regulations strengthen the industry supervision of pharmacy franchise, which is conducive to the more standardized development of chain pharmacies; But on the other hand, the "seven unified" management standards mean higher requirements and operating standards, which will undoubtedly be more difficult
for single and small chain pharmacies trying to seek new ways out through "pharmacy franchise".

The time is approaching the end of the year, and since the beginning of this year, the retail pharmacy industry can be described as turbulent!

1.
New regulations for drug online sales

On September 1, the Measures for the Supervision and Administration of Online Sales of Drugs was officially promulgated
.
This means that when the scale of online drug sales platforms such as JD Health, Ali Health, Pinduoduo, Meituan, and SF has grown from zero to 200 billion, online drug sales that have been developed for many years have entered the "regulatory era"
.

2.
Professional pharmacy spread

With the continuous promotion of the "dual-channel" policy, the out-of-hospital drug market has received more and more attention, and DTP professional pharmacies have continued to emerge; In the latest three quarterly reports released this year, the sales data of the major chain out-of-hospital prescription markets have begun to emerge.

3.
There are 6 stores in 10,000 stores

In June this year, ordinary people took the lead in becoming a private listed chain pharmacy with more than 10,000 stores; At the end of June, Sinopharm Group followed with a total of 10,569 retail stores; In October, the number of stores in Yifeng and Dashenlin exceeded 10,000
.

The concentration trend of the retail pharmacy market is becoming more and more obvious, large pharmaceutical chain pharmacies will further benefit from the "Matthew effect", the head concentration advantage is further increased, just when the merger and acquisition war is raging and the wave of joining is in the ascendant, news such as the cancellation of small and medium-sized chains and the suspension of newspapers are also constantly coming out.
.
.
In the out-of-hospital market track of specialization, diversification and other all-round competition, is it advancing or retreating? There is
not much time left for "small" pharmacies.

This year's more than 10,000 stores "mushroomed"

The top 6 enterprises compete for the national market

Despite the changing pharmaceutical market environment, the performance of pharmacy chains has increased
significantly.
With the release of three quarterly reports by leading retail enterprises, in addition to Gaoji Medical, which first exceeded 10,000 pharmacies through the acquisition of pharmacies, according to statistics, five new chain pharmacies with more than 10,000 pharmacy stores combed through pharmacy stores this year, namely Sinopharm Holdings, Yifeng, Laomin, Dashenlin, and Jointown
.

Dashenlin: At the end of October, the number of stores in Dashenlin nationwide had exceeded 10,000
.
It is reported that the key market of Dashenlin is located in South China (Guangdong, Guangxi, Hainan), and its stores account for nearly 69% and revenue accounts for more than 73%.

In addition, Dashenlin also has stores in 12 provinces and cities in Jiangxi, Zhejiang, Fujian, Jiangsu, Shandong, Henan, Hubei, Hebei, Heilongjiang, Shaanxi, Sichuan and Chongqing
.

While the sales scale and the number of stores continue to rise, with the pharmacy network layout nationwide, it is not surprising
that the non-net profit of Dashenlin in the first three quarters was 917 million yuan, ranking first among all listed chain companies.

Ordinary people: In June this year, ordinary people took the lead in becoming a private listed chain pharmacy
with more than 10,000 stores.
In terms of the expansion of the number of stores, as of the third quarterly report, the people have added 2214 stores
.
Become a frontrunner in store expansion in the industry
.
At the same time, in the first three quarters, the people completed 10 acquisition projects involving a total of 813 pharmacies, and 872 new franchised stores, becoming the industry's "franchise + acquisition" double champion
.

It is reported that the key markets of ordinary people are located in central and eastern China, including 10 provinces
such as Hubei, Hunan, Jiangxi, Henan, Zhejiang, Jiangsu, Shanghai, Shandong, Anhui and Fujian.

。

Yifeng: It is also beneficial to achieve rapid growth in the number of stores by virtue of the model of "self-construction + acquisition + franchise"
.
In October this year, Yifeng stores posted a happy news showing that the number of the company's
stores nationwide exceeded 10,000.

It is worth noting that Yifeng built 817 net stores in the first three quarters, becoming the top 1 self-built chain, achieving stable growth in performance
.
In terms of store layout, the three provinces of Hunan, Hubei and Guangdong account for more than 52% of the stores, and 10 provinces and cities such as Hunan, Hubei, Shanghai, Jiangsu, Jiangxi, Zhejiang, Guangdong, Hebei, Beijing and Tianjin are the core areas
.

In addition, the chain pharmacies under the old pharmaceutical circulation giants Sinopharm Holdings and Jointown have exceeded the scale of
10,000.

Sinopharm: At the end of June this year, the total number of retail stores of Sinopharm Group reached 10,569, including 9,137 large pharmacies and 1,432 specialty pharmacies in China
.
It is understood that during the period from January to September 2022, NUS Pharmacy achieved operating income of 16.
661 billion yuan in the first three quarters, ranking first
among national chain pharmacies.

Relying on the accumulation of strong distribution channels in the early years, Sinopharm has distributed its stores in 20 provinces in China, forming a pharmacy network covering coastal urban agglomerations in East China, North China and South China, and gradually entering the northwest, Central Plains and inland urban agglomerations
.
Specifically, the key markets of NUS Pharmacy are located in northern regions such as Beijing-Tianjin-Hebei, Northeast China, Shanxi and Inner Mongolia
.

Jointown: As of the end of September this year, Jointown's Good Pharmacy has 10,016 directly operated and franchised pharmacies, covering 31 provinces, municipalities and autonomous regions across the country, mainly distributed in Shanghai, Jiangsu, Hubei, Henan and other provinces and cities
.

During the reporting period, Jointown also leveraged distribution channels to accelerate the "BB/BC warehouse and distribution integration", and at the same time increased the promotion of key projects such as "Power Health" and digital transformation to accelerate the transformation and upgrading
of the company's main business and business model.

It can be seen that the above-mentioned "10,000 stores" giant chain chain is full of firepower, on the one hand, they have "entrenched" the base camp and accelerated their outward expansion
.
From the beginning of Guangdong, the forest is scattered down the coast and extends upwards inland; Yifeng and the common people based in Hunan infiltrated into the surrounding areas; NUS Pharmacy has accelerated its expansion from north to south; Jointown "10,000 Store Alliance" layout nationwide
.

The second batch of "big" chain teams are chasing!

How do "small" pharmacies survive the winter?

It is worth mentioning that there are many chain pharmacies that chase after the first batch of "broken 10,000" pharmacies
.
As of the end of September 2022, the number of Yixintang directly-operated stores was 9,164, and according to the rate of its store addition, the number of stores may exceed 10,000 by the end of the year or early next year
.
At present, Yixintang market is mainly concentrated in the southwest region (Yunnan, Sichuan, Chongqing, Guizhou), with stores accounting for nearly 79%.

Nearly 5,000 stores include:

Shuyu civilians: 4633, the main market is located in Shandong Province, the area accounts for more than 90% of self-operated stores;

Jianzhijia: 3691, Yunnan stores accounted for 64%, followed by Hebei, Chongqing and Liaoning regions, with stores accounting for about 27%;

Neptune: 3800+ stores, mainly distributed in 74 first- and second-tier cities across the country;

Quanyi Health: The total number of directly operated stores is 2600+, and it has entered the market
in Jiangsu, Zhejiang, Sichuan, Hebei and other provinces through mergers and acquisitions.

Gansu Zhongyou: 3500+ homes, the main market is located in Gansu, Ningxia, Shaanxi, Qinghai and other northwest regions
.

However, in the face of the hot "increase" of the first and second echelons, the situation of single pharmacies and small and medium-sized chains can only be said to be cold and warm.

According to the high-quality development and construction goal of "retail chain rate close to 70%" proposed by the Ministry of Commerce by 2025, the number of independent pharmacies will be reduced to about 180,000 in the next three years, compared with about 250,000 today, a sharp decrease of about 70,000.

So how to reduce the number of 70,000? There are already signs this year:

In October, the Jiangxi Provincial Food and Drug Administration issued a notice agreeing to Jiangxi Angtai Kangsheng Pharmacy Chain Co.
, Ltd.
to apply for the cancellation of the "Drug Business License"
.
It is reported that Jiangxi Angtai Kangsheng Pharmacy has 15 chain stores;

In August, the Guangdong Provincial Food and Drug Administration issued a notice that the "drug business license" of 16 enterprises, including Zhanjiang Kaida Pharmaceutical Chain Co.
, Ltd.
, has been cancelled according to law;

In July, the Jilin Provincial Food and Drug Administration announced that Jilin Jianli Hailanjiang Pharmaceutical Co.
, Ltd.
cancelled the "Drug Business License"
.
According to the data, the company previously had 44 branches, all of which have been cancelled;

In July, the Guizhou Provincial Food and Drug Administration announced the cancellation of the "drug business license" of Panzhou Sante Pharmaceutical Chain Co.
, Ltd.
, which previously had 126 branches in and around Liupanshui;

In June, the Henan Provincial Food and Drug Administration announced the cancellation of the "Drug Business License" of Henan Dongchen Pharmaceutical Chain Co.
, Ltd.
, which has 59 stores;

.
.
.
.
.
.

In addition, regulatory authorities in some regions do not allow designated pharmacies to sell non-medical insurance drugs or non-drugs, but health food, cosmetics and ordinary food have always been high-hair products
of pharmacies.
In the face of an increasingly compressed market environment, some retail pharmacies have adopted the practice of "rather than not making money, it is better to voluntarily apply for the termination of medical insurance agreements":

In January, the Songyuan Social Medical Insurance Administration of Jilin Province issued an announcement that nine retail pharmacies voluntarily applied to withdraw from the designated medical insurance point, and the above nine retail pharmacies will cancel the medical insurance designated service agreement of the above nine retail pharmacies from January 10, 2022;

In January, the government website of Baofeng County, Pingdingshan City, Henan Province announced that six designated retail pharmacies with medical insurance services submitted the application form for termination of medical insurance services of designated medical institutions, and are now disqualified;

In August, Guangdong Huizhou Municipal Medical Insurance Bureau issued a public announcement that 109 designated retail pharmacies, including Zhengkang Pharmacy in Zhongkai High-tech Zone, Huizhou City, intend to terminate their service agreements;

.
.
.
.
.
.

Industry insiders pointed out that the additional increase brought by the outflow of prescriptions is obvious, which is of great strategic significance
for increasing market share, expanding business scale and promoting the development of pharmacies.
For the head chain, they have a thick enough family base to operate a professional pharmacy that cannot be achieved overnight and needs a long-term layout, but the small chain does not have this strength
.
Under such circumstances, the answer to how small pharmacies that voluntarily apply to terminate their medical insurance agreements will develop in the future seems to be gradually clear
.

Under the influence of factors such as industrial policy, capital clustering, and industry competition, the concentration of the pharmacy industry will continue to increase in the future, and the competition will become more and more fierce, for most "small" pharmacies, the bottleneck of the existing business model will only become narrower and narrower, and this winter award will be even colder
.

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