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Pharmacy Retail - China - November 2016

“Pharmacy retailing is growing continuously and is expected to expand further, thanks to the solid consumer needs, pharmacies’ business expansions as well as the medical reform. The government is still exploring the best medical system for the country, leaving opportunities and challenges for different players at the same time. Offline pharmacies today are seeking growth by acquisitions, while online pharmacies face more uncertainties under the new regulation despite their innovative instincts.”

Jessica Jin, Associate Director of Research

This report looks at the following areas:

  • Professionals resource becomes the key in battle-field
  • How well are online pharmacies competing with offline?

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Offline
          • Online
          • Executive Summary

              • The market
                • Continuous growing market with positive regulation changes
                  • Figure 1: Best- and worst-case forecast of total value sales of pharmacy retailing, China 2011-21
                • Overall moderate store expansion but rapid growth of chain pharmacy
                  • Figure 2: Annual growth rate of store number, China 2011-16
                • Key players
                  • Big players endeavour to gain more shares
                    • Figure 3: Leading companies in pharmacy retailing by value share, China 2014-15
                  • Active acquisitions to become bigger chain pharmacies
                    • Innovation centres on e-commerce
                      • The consumer
                        • Accelerated self-education
                          • Figure 4: Source of health information, July 2016
                        • Physical pharmacy still leads although online is catching up
                            • Figure 5: Types of pharmacies visited in the last six months, July 2016 vs 2014
                          • Different sales opportunities for online and offline
                            • Figure 6: Products purchased from pharmacies, online vs offline, July 2016
                          • Online pharmacies are led by big platforms
                            • Figure 7: Online pharmacies visited in the last six months, July 2016
                          • Online is not perceived better, even in terms of convenience
                            • Figure 8: Attitudes towards online and offline pharmacies, July 2016
                          • TCM is losing appeal
                            • Figure 9: Attitudes towards medicine and purchase habit, July 2016
                          • What we think
                          • Issues and Insights

                            • Professionals resource becomes the key in battle-field
                              • The facts
                                • The implications
                                  • How well are online pharmacies competing with offline?
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • Continuous growing market with positive regulation changes
                                          • Overall, moderate store expansion, but rapid growth of chain pharmacy
                                          • Market Size and Forecast

                                            • Continuous growing market with positive regulation changes
                                              • Figure 10: Best- and worst-case forecast of total value sales of pharmacy retailing, China 2011-21
                                            • Overall moderate store expansion but rapid growth of chain pharmacy
                                              • Figure 11: Best- and worst-case forecast of total store number of pharmacy retailing, China 2011-21
                                              • Figure 12: Annual growth rate of store number, China 2011-16
                                              • Figure 13: Share of chain store number and revenue per store of pharmacy retailing, China 2011-15
                                          • Market Drivers

                                            • Aging population
                                              • More people turn to pharmacies for chronic disease medication
                                                • Positive regulation changes
                                                  • Capital investment favouring the health market
                                                    • Proliferation of e-commerce
                                                      • B2C
                                                        • O2O
                                                        • Key Players – What You Need to Know

                                                          • Highly fragmented market
                                                            • More capital involvement
                                                              • Active acquisitions
                                                              • Market Share

                                                                • Still a highly fragmented market
                                                                  • Figure 14: Leading companies in pharmacy retailing market by value share, China 2014-15
                                                                • Intensive mergers and acquisitions
                                                                  • GuoDa Drugstore (国大药房)
                                                                    • Yixintang Pharmaceutical (一心堂药业)
                                                                      • Laobaixing Pharmacy (老百姓大药房)
                                                                        • Yifeng Pharmacy (益丰大药房)
                                                                        • Competitive Strategies

                                                                          • Build a professional team
                                                                            • Strengthen consumer adhesiveness
                                                                              • Develop online channel but with cautious
                                                                              • Who’s Innovating?

                                                                                • Health services by US retailers
                                                                                  • Service with high-tech
                                                                                    • Combination of online and offline
                                                                                    • The Consumer – What You Need to Know

                                                                                      • Consumers become more sophisticated
                                                                                        • Chain pharmacy is still dominant although online pharmacy upsurges
                                                                                          • Online is not perceived better yet, even in terms of convenience
                                                                                          • Health Information Source

                                                                                            • Modern tools accelerate self-education
                                                                                              • Figure 15: Source of health information, July 2016
                                                                                            • Public accounts have more audience in low tier cities
                                                                                              • Figure 16: Source of health information, public accounts, by city tier, July 2016
                                                                                            • Experts, virtual or face-to-face?
                                                                                              • Figure 17: Consumer segmentation by ways of consulting experts, July 2016
                                                                                          • Purchase Channel

                                                                                            • Online channel is catching up, but physical stores still dominate
                                                                                              • Figure 18: Types of pharmacies visited in the last six months, July 2016 vs 2014
                                                                                            • Rising usage of online channels
                                                                                              • Figure 19: Types of pharmacies visited in the last six months, by monthly personal income, July 2016
                                                                                            • Limitation of online pharmacies
                                                                                              • Figure 20: Consumer segmentation based on online vs offline pharmacies visited in the last six months, July 2016
                                                                                          • Products Purchased

                                                                                            • Different sales opportunities for online and offline
                                                                                              • Figure 21: Product purchased from pharmacies, online vs offline, July 2016
                                                                                            • Slight difference between male and female
                                                                                              • Figure 22: Product purchased from pharmacies by gender, online vs offline, July 2016
                                                                                            • Higher earners have broader needs
                                                                                              • Figure 23: Number of products purchased from online and offline pharmacies, by monthly personal income, July 2016
                                                                                          • Online Pharmacies Visited

                                                                                            • Comprehensive online retailers lead popularity
                                                                                              • Figure 24: Online pharmacies visited in the last six months, July 2016
                                                                                            • Hard to retain loyalty, and even harder among high earners
                                                                                              • Figure 25: Number of online pharmacies visited in the last six months, by monthly personal income, July 2016
                                                                                            • Diverse preference among different age groups
                                                                                              • Figure 26: Online pharmacies visited in the last six months, by age, July 2016
                                                                                            • Any difference by gender or by city tier?
                                                                                              • Figure 27: Online pharmacies visited in the last six months, by city tier and gender, July 2016
                                                                                          • Attitude towards Online and Offline

                                                                                            • Online is not perceived better, even in terms of convenience
                                                                                              • Figure 28: Attitudes towards online and offline pharmacies, online vs offline buyers, July 2016
                                                                                            • Any difference driven by the type of products purchased?
                                                                                              • High earners show more faith in online channel
                                                                                                • Figure 29: Attitudes towards online and offline pharmacies, by monthly personal income, July 2016
                                                                                            • Attitude towards Medicine and Purchase Habit

                                                                                              • TCM has a wide appeal, but its popularity is going down
                                                                                                • Figure 30: Attitudes towards Chinese medications, July 2016
                                                                                                • Figure 31: Types of product purchased from bricks-and-mortar pharmacies, by those who prefer TCM and who do not, July 2016
                                                                                              • Who is the target of TCM?
                                                                                                • Figure 32: Attitudes towards Chinese medications, by gender and age, July 2016
                                                                                                • Figure 33: Attitudes towards Chinese medications, by city tier, July 2016
                                                                                              • Purchase habit in online and offline pharmacies
                                                                                                • Figure 34: Purchase habit, July 2016
                                                                                            • Meet the Mintropolitans

                                                                                              • Easier adopted to new information source
                                                                                                • Figure 35: Source of health information, July 2016
                                                                                              • More positive attitude towards online pharmacies, but problems do not go away
                                                                                                • Figure 36: Attitudes towards online and offline pharmacies, July 2016
                                                                                              • Time-saving is key
                                                                                                • Figure 37: Attitudes towards medicines, July 2016
                                                                                            • Appendix – Methodology and Abbreviations

                                                                                              • Methodology
                                                                                                • Fan chart forecast
                                                                                                  • Abbreviations
                                                                                                    • Pictures of pharmacy stores in China
                                                                                                      • Outside appearance
                                                                                                        • Inside display

                                                                                                        Companies Covered

                                                                                                        To learn more about the companies covered in this report please contact us.

                                                                                                        Pharmacy Retail - China - November 2016

                                                                                                        US $3,990.00 (Excl.Tax)