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    Home > Medical News > Medical World News > The General Administration of Market Supervision has made a big blow, and the price war of medical e-commerce is expected to be curbed!

    The General Administration of Market Supervision has made a big blow, and the price war of medical e-commerce is expected to be curbed!

    • Last Update: 2021-08-07
    • Source: Internet
    • Author: User
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      Before the July 6 hearing, the State Administration for Market Regulation publicly solicited opinions on the "Provisions on Administrative Penalties for Pricing Illegal Acts (Revised Draft)".
    Relevant units and individuals can submit their opinions and suggestions before August 2, 2021

    .
    It is worth noting that, compared with multiple previous revisions, the biggest highlight of this revised draft is the new content of "price violations in new business formats", which directly refers to the common big data killings on e-commerce platforms.
    Familiarize themselves with issues such as price wars through subsidies

    .
    From the perspective of the industry, the State Administration of Market Supervision and Administration's heavy efforts to rectify price violations on e-commerce platforms is to adapt to the needs of the economic development of the times

    .
    The ascendant medical e-commerce as a sub-sector is also difficult to stand alone.
    The protracted “price war” on the online pharmaceutical retail track is expected to be curbed.
    The new regulations will further maintain the normal price order in the market and protect consumers and operators.
    Legal rights

    .

      Punishment measures will deter e-commerce platforms.
    According to

    data, the "Regulations on Administrative Penalties for Price Illegal Acts" were approved and implemented by the State Council in 1999, and were revised three times in 2006, 2008, and 2010, gradually increasing penalties for price violations , Severely crack down on price violations

    .
    Under the same main tone in the past, the revised draft for comments has also added the content of "price violations in new business formats", which has attracted great attention in the industry

    .
    In accordance with the requirements of the revised draft for comments, if e-commerce platforms violate Article 14 of the Price Law and have one of the following circumstances, they shall be given a warning, and may be fined from 1‰ to 5‰ of the total sales of the previous year, resulting in illegal gains.
    If the circumstances are serious, the illegal income shall be confiscated; if the circumstances are serious, the business shall be ordered to suspend business for rectification, or the business license shall be revoked

    .
    Some analysts pointed out that this new measure has a strong punitive nature and will
    have a greater deterrent effect on enterprises
    .
    "For some platform companies, in the face of burning hundreds of millions of yuan or billions of dollars, they don’t care about fines of millions or even hundreds of millions of yuan, but it is unacceptable to suspend business for rectification and exit the market completely.

    .
    (1) E-commerce platform operators use big data analysis, algorithms and other technical means, based on the preferences and transaction habits of consumers or other operators, and based on factors other than costs or legitimate marketing strategies, to deal with the same goods or services Different prices are set under the same trading conditions; (2) In order to exclude competitors or monopolize the market, operators of e-commerce platforms that do not have a dominant market position use subsidies and other forms to dump at prices below cost, disrupting normal production and operation Order, damage the national interests or the legitimate rights and interests of other operators

    .
    (3)
    Other improper price behaviors of competitors on the e-commerce platform as prescribed by administrative
    regulations and departmental rules
    .
    Based on
    the special commodity attributes of
    drugs , the frequency of consumption by consumers It is not high, which makes the problem of "big data killing familiarity" not prominent in the field of pharmaceutical e-commerce, but at the same time, online use of platform subsidies to fight a "price war" is no stranger to the pharmaceutical retail industry
    .
    Just in June of this year, in the face of the market heights built by leading medical e-commerce companies such as Ali Health and JD Health by virtue of their first-mover advantages, the late Baidu Health launched the "Family Health Festival" and participated in the 618 for the first time, with 1 billion subsidies.
    The subsidy war of pharmaceutical e-commerce has intensified the "price war" of online channels

    .
    According to research data,
    among the driving factors for consumers to purchase
    drugs in online pharmacies , apart from "home delivery/you can buy products at home" (72.
    1% ) In addition to the most attractive option, "price concessions" (72.
    0%) are also the reason for more consumers to choose

    .
    Some market participants pointed out that as an emerging drug sales channel, online medical e-commerce Physical retail pharmacies have different profit models

    .
    Physical pharmacies usually categorize drugs and adopt a model of "low gross customer acquisition and high gross profit".
    While some low-margin drugs are used to attract consumers, another part of high-margin drugs is used to increase overall profit margins.
    At this stage, it is usually adopted to increase the penetration rate of online pharmaceutical sales by means of "low gross profit and high sales volume"

    .
    But in fact, as the pharmaceutical retail market expands and competition continues to intensify, some pharmaceutical e-commerce platforms that rely on price competition have seen violations of sales below cost, resulting in an unfair business environment.
    These behaviors are expected to be in the new regulations.
    It was fully contained after the release

    .
    It can be seen that both the previous anti-monopoly investigations of Ali and Meituan, or the current "Regulations on Administrative Penalties for Pricing Illegal Acts (Revised Draft for Comment)", both show the clear position of the State Administration for Market Regulation to clearly strengthen platform economic supervision.

    .

      The scale of online drug sales is growing rapidly.

    Under the combination of policies such as prescription outflow, centralized drug procurement, and medical insurance payment reform, the pharmaceutical retail market is further expanding

    .
    The latest data disclosed by Mi Nei.
    com shows that in 2020, the sales scale of physical pharmacies and online pharmacies (including drugs and non-pharmaceuticals) in China will reach 716.
    9 billion yuan, a year-on-year increase of 12.
    5%

    .
    In terms of the types of retail pharmacies, online pharmacies (including drugs and non-pharmaceuticals) accounted for 22.
    2% of sales, and the development trend is extremely rapid; while the proportion of physical pharmacies (including drugs and non-pharmaceuticals) sales continues to decline, 2020 The annual sales of physical pharmacies accounted for 77.
    8%, a decline of 6.
    5 percentage points from 2019

    .
    Specifically, by 2020, online pharmacies with a sales scale of 159.
    3 billion yuan will have a year-on-year growth of 59.
    0%.
    Compared with the growth rate in previous years, the market growth rate has increased significantly

    .
    From the perspective of the industry, the main reason for the growth is the impact of the epidemic in early 2020, the limited diagnosis and treatment of medical institutions, and the inability to purchase masks and other products in nearby offline pharmacies, which further changed the consumption patterns of patients and fostered online buying habits.

    .
    And if you only look at the scale of drug sales in online pharmacies, the growth shows multiple bright spots: in 2020, drug sales in online pharmacies reached 24.
    3 billion yuan, accounting for 1.
    5% of the national drug market, and a year-on-year increase of 75.
    6%, nearly seven percent.
    The compound annual growth rate reached 51.
    9%

    .
    With the gradual opening of the prescription drug online sales policy, the outflow of prescriptions under supplementary medicine has accelerated, and some pharmaceutical companies have begun to deploy online channels.
    The "fourth terminal" represented by pharmaceutical e-commerce may usher in a new round of outbreaks again

    .
    There is a view that pharmaceutical e-commerce companies rely on sophisticated big data analysis to properly use their price competition strategies and win certain profits in a way that seems to be losing money

    .
    But no matter how precise and incredible this way of competition is, it will ultimately move people to win customers through price cuts

    .
    For pharmaceutical e-commerce, efficiency, cost and experience are the three key points.
    How to achieve a balance under the premise of compliance is the focus of the future to stabilize the market

    .
    For physical pharmacies, the layout of e-commerce is to provide consumers with omni-channel sales services, and to upgrade the consumer experience through technological innovation, not to focus on e-commerce

    .
    Some analysts pointed out that market price competition is not blindly pursuing low prices.
    In the future, price competition in pharmacies must abandon the existing rough price structure.
    By constructing a more reasonable price system, coupled with its own professional advantage services, Get a place in the market

    .
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