On Christmas Eve, Ali Health announced a trading dynamic: Alibaba Health (China) and Gansu Deshengtang entered into a capital increase agreement. According to this, Ali Health (China) will inject cash of RMB 188 million into the target company. After the capital increase agreement is delivered, Ali Health will hold a 10% interest in the target company.

By investing in the target company, Alibaba Health will work with the target company to explore and expand the new retail model for the target pharmacies where the target company has an advantage. It will reach more consumers in the pharmaceutical retail market and provide more, wider and more. Convenient medical services.

This is not the first time for Ali Health to invest in chain pharmacies. Since this year, Ali Health has successively participated in regional chain leaders such as Shandong Yuyu civilians, Anhui Chinese health, and Guizhou Yishu. The new retail retail map continues to expand.

Deshengtang's 20-year evolutionary history: from Gansu to the national market, from retail to pharmaceutical industry chain

In May of this year, Arterial Network interviewed Longyan, the founder of Deshengtang, and exchanged the development history, existing business layout and future development plan of Deshengtang for nearly 20 years. For the hot topics of the industry, such as capital, the pharmaceutical retail field was laid out. Longyan also expressed his views on retail pharmacies to undertake prescription outflows, new retail of medicines, and upgrades of retail pharmacies.

At that time, Longyan said that capital has entered the field of pharmaceutical retailing, which represents the recognition of the value of the pharmaceutical retail industry. Under a series of influencing factors such as policies and markets, chain pharmacies have become the “toon” favored by capital. Longyan judged that the trend of capital entering the pharmaceutical retail sector will continue for some time in the future, and will focus on regional leaders. “The future retail pharmacy industry may form a competitive landscape with capital as a link.”

Longyan told the arterial network that Deshengtang was founded in 1999 and started from Jinchang, Gansu. At that time, pharmaceutical retail was not fully liberalized, and Deshengtang was the first person to “eat crabs”. In 2001, pharmaceutical retail was liberalized and Deshengtang began to develop in a chain. In 2004, Deshengtang entered Lanzhou, Gansu Province, and established Gansu Deshengtang Pharmaceutical Wholesale Co., Ltd., which began the rapid expansion of the province. By 2009, Deshengtang stores had exceeded 100. This is the first stage of the development of Deshengtang.

In 2009, Deshengtang entered the Beijing market, established “Beijing Times Qianfang Pharmacy Co., Ltd.” and launched the “111 Medicine Pavilion” brand. The second phase of the development of Deshengtang started.

Regarding the reason why the "111 Medical Museum" brand was launched, Longyan said that there were too many "tangs" in the market at the time, and this name could be used to differentiate and develop. At the same time as the new brand was launched, Deshengtang began to test the online pharmacy business, and also used the “111 Medicine Museum” brand, which can achieve online and offline consistency and form a brand effect.

Now, Deshengtang's business covers pharmaceutical retail, pharmaceutical wholesale, medical services, Internet B2C, B2B, O2O, telemedicine , investment promotion and other fields. At the same time, it has its own hearing aid brand “Fiber” and male nourishing brand “Bullet Flying”. "Liuwei Dihuang Pills has realized the development of the pharmaceutical industry chain.

Longyan said that at present, Deshengtang has more than 600 chain stores and more than 4,000 employees trained in medicine in nearly 20 provinces and cities nationwide. In addition, it owns a hospital, a number of medical institutions, numerous quality projects and brands, and has established its own R&D and management centers in Beijing and Lanzhou.

From Gansu to the national market, from a retail pharmacy to the development of the pharmaceutical industry chain, what is the secret of Deshengtang's growth, why is Deshengtang able to stand out in many chain pharmacies?

“Cite a recent popular phrase called 'Do not forget the beginning of the heart, go forward', before the expansion and development, first ask yourself why you want to do this, and want to understand why. Deshengtang's mission is to provide customers with omnichannel. The medical health service allows health products to flow into thousands of households like water, making Deshengtang truly a 'healthy neighbor' of the community, and the mission must be reached, so we will continue to grow." Longyan said.

Previously, Deshengtang also introduced investment in coastal capital and Bangsheng Capital in August 2017. After the introduction of capital, two main things were done. One is to stick to the northwest market and gradually expand with Gansu as the core. The other is to set up a management and R&D center in Beijing to absorb the successful experience of other chain pharmacies and try new retail of medicine. The new gameplay method "institutionalizes" and "tools" good models.

Strengthening the offline layout, the new retail platform of Ali Health Medicine is constantly improving

Since the injection of Ali in 2014, Ali Health has gone through four stages of development: the capital injection start-up period, the business is mainly based on electronic supervision code and e-commerce service; the business adjustment period, test water Internet hospital, medical O2O, self-operated electricity supplier, etc. Business; business shaping period, business structure is gradually determined, forming four business lines of medical e-commerce, product traceability, smart medical care, and health management; after continuous deep cultivation, after several years of exploration, Ali Health has found its position in the industry, and has A stable source of income, followed by continued deep cultivation of the industry, upgrading existing businesses.

Looking back at historical data, we can see that self-operated business is the main reason for the growth of Ali's health performance. Its 2016 fiscal year revenue was more than 56 million yuan. After the on-line self-operated business, its fiscal year 2017 results increased to 470 million, and in 2018, it increased to 2.442 billion yuan. In the first half of FY 2019, it was 1.879 billion yuan, a year-on-year increase of 111.2%.

In addition to self-operated business, the injection of pharmaceutical business of Ali E-commerce platform is also an important reason: In June 2017, Ali Health completed the acquisition of Tmall “Blue Hat” health food business; in early August 2018, Ali Health completed the acquisition of Tmall Including medical equipment and health supplies, adult family planning, contact lenses, medical and health services category e-commerce platform business. At the same time, Ali Health expanded to provide outsourcing and value-added services for the Tmall platform nourishing health category, and has achieved a full range of coverage for the Tmall Medical Museum.

According to official data, as of March 31, 2018, the total annual commodity transaction of Tmall's medical device business has reached RMB 20.561 billion, involving 85.5 million active buyers and more than 3,300 settled businesses, including Omron, Yuyue and Johnson. Well-known brands such as Bausch & Lomb and Durex.

The total transaction volume of Tmall Pharmaceuticals products operated by Ali Health and the health food category e-commerce platform service business acquired by Ali Health totaled more than RMB 30 billion, and e-commerce platform service revenue reached RMB 171 million, a year-on-year realization of 324.1. %growth of.

This shows that Ali Health has mastered more than 50 billion yuan in the import of medical equipment and health care products, and is the most important traffic distribution platform and portal for domestic pharmaceutical e-commerce and health consumer goods.

In addition to the pharmaceutical B2C business, Ali Health is also actively deploying the offline pharmaceutical retail market and continuing to explore the development path of new pharmaceutical retail. In May 2016, Ali Health led the establishment of the China Pharmaceutical O2O Pioneer Alliance with 65 retail chain pharmacies. In the past few months, Ali Health has cooperated with the O2O Pioneer Alliance's offline head chain pharmacy. It has combined rookie and hungry hummingbirds to provide 24-hour emergency drug delivery services in four cities in Beiguang and Shenzhen.

At the same time, Ali Health has successively invested in regional leading chain pharmacies such as Shandong Yuyu civilians, Anhui Chinese health, and Guizhou Yishu. Among them, Saitama civilians are rooted in the Shandong market, with more than 1,000 stores, with sales of 2.86 billion yuan in 2017, ranking 11th in the top 100 pharmaceutical retailers; Chinese health rooted in the Anhui market, with more than 500 Guosheng pharmacies The store is one of the largest pharmaceutical retailers in Anhui; Guizhou is rooted in the Guizhou market and is also a regional chain leader.

From online to offline, Ali Health has established a complete new retail retail layout, which can provide users with integrated services to the store and home, greatly enriching the pharmaceutical retail ecosystem, and building a closed loop of online and offline services.

More than just pharmaceutical retail, Ali still has to be smart medical

In the planning of Ali Health, smart medical care is undoubtedly one of the most important business lines. In this business line, its affiliated hospital, intermediate grafted medical artificial intelligence technology layer and service provider, C-side users, Internet hospital Medical AI solutions and health management are the main products, and a complete closed loop of smart medical services has been established.

On March 29, 2017, Alibaba Cloud released the “ET Medical Brain” and officially entered the field of medical AI. ET Medical Brain can serve as a doctor in the fields of patient virtual assistant, medical imaging, precision medicine , drug extraction, new drug research and development, and health management. Assistant. In September of this year, with Alibaba Cloud, ET Medical Brain upgraded to 2.0. In October of this year, Ali Health and the Beijing Municipal Science and Technology Commission announced the establishment of the country's first medical AI open innovation application platform, and also launched a third-party artificial intelligence open platform for the medical AI industry.

In addition, in mid-October news, Ali Health, Alipay, and Yuhang First Hospital lasted for half a year. After system development and joint debugging, they were officially connected in the Yuhang First Hospital and ran through the medical insurance clinic. In the one and a half months of the trial run, more than 1,000 pens were “brushed to the doctor”, and 200 patients completed the file in the hospital by brushing their faces.

In mid-November, Ali Health announced that it has signed a strategic cooperation agreement with Ali King's subsidiary, Alipay, to set up an independent medical health service channel exclusively on the Alipay client, and fully manage and operate the medical health business and industry partners in the channel.

At the same time, the performance announcement revealed that Ali's own artificial intelligence products are also fully implemented: the launch of the country's first commercial CT lung disease comprehensive testing AI products, and landing cooperation institutions. In cooperation with the National Metabolic Disease Research Center, the company developed the “Rui Ning Sugar” Diabetes Drug Assistance Decision System and organized the “Rining Sugar Help” artificial intelligence contest.

Ali Health revealed in the announcement on November 20: The continued increase in profitability of the Group will help us continue to invest in medical big data , medical artificial intelligence and other related fields in the future, and increase Internet medical and smart medical care. The investment and layout of innovative business. This is also evidence that Ali Health will continue to go deep into medical care and go deep into the hospital.

As stated in this announcement, Alibaba's mission is to “make health at your fingertips” by connecting participants in the Chinese healthcare market with the goal of “making big data power the health and changing the health of the Internet”. Provide fair, inclusive and accessible medical and health services to 1 billion people. After the pharmaceutical retail business gradually formed, Ali's healthy star sea was smart medical care.

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