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Burgeoning Chinese healthcare market open to FDI, logistics providers
CHINA is opening up its healthcare industry as the ruling State Council permits foreign investment in hospitals licenses online drug delivery, reports the UK's Transport Intelligence.
In addition, China's Food and Drug Administration allowed online drug operators to sell prescription drugs, with Walmart's Yhd.com platform, receiving official permission to sell over-the-counter drugs online.
Walmart says there are more than 10 pharmaceutical retailers that have set up "store fronts" on its online platform. But the Walmart licence does not permit sale of prescription drugs.
The goal is to provide more than 200,000 over-the-counter drugs by the end of the year. By receiving the non-prescription online licence, its platform is expected to be ahead of e-commerce competition such as JD.com, which is waiting for similar approval.
Large e-commerce companies such as Yhd.com and JD.com already have established distribution channels. Unlike the US where the top three pharma distributors have 90 per cent of market, China's top three have about 20 per cent.
Ti estimates China's pharmaceutical logistics market to be about GBP7.6 billion (US$12.3 billion), a 14.3 per cent increase from 2012. Boston-base Bain & Company consultancy estimates China's healthcare industry will be valued at US$900 billion by 2020.
UPS has opened a contract logistics 6,500-square metre non-bonded warehouse near Beijing Capital International Airport and can provide four-hour delivery within the Beijing area and next-business-day delivery to major cities throughout China.
UPS said it also has warehouses inc Shanghai and Chengdu that enable it support order fulfillment for delivery and give customers better warehousing and distribution access to smaller cities throughout the country."
FedEx expanded its Shanghai hub to provide additional space for health-related products while DHL operates two life sciences and healthcare competency centres - Beijing and in Shanghai.
FedEx and UPS will also be able to take advantage of licences to deliver domestically. But they will likely face competition with local pharma distributors such as Sinopharm and US-based Cardinal Health, which is also active in China.
In addition, China's Food and Drug Administration allowed online drug operators to sell prescription drugs, with Walmart's Yhd.com platform, receiving official permission to sell over-the-counter drugs online.
Walmart says there are more than 10 pharmaceutical retailers that have set up "store fronts" on its online platform. But the Walmart licence does not permit sale of prescription drugs.
The goal is to provide more than 200,000 over-the-counter drugs by the end of the year. By receiving the non-prescription online licence, its platform is expected to be ahead of e-commerce competition such as JD.com, which is waiting for similar approval.
Large e-commerce companies such as Yhd.com and JD.com already have established distribution channels. Unlike the US where the top three pharma distributors have 90 per cent of market, China's top three have about 20 per cent.
Ti estimates China's pharmaceutical logistics market to be about GBP7.6 billion (US$12.3 billion), a 14.3 per cent increase from 2012. Boston-base Bain & Company consultancy estimates China's healthcare industry will be valued at US$900 billion by 2020.
UPS has opened a contract logistics 6,500-square metre non-bonded warehouse near Beijing Capital International Airport and can provide four-hour delivery within the Beijing area and next-business-day delivery to major cities throughout China.
UPS said it also has warehouses inc Shanghai and Chengdu that enable it support order fulfillment for delivery and give customers better warehousing and distribution access to smaller cities throughout the country."
FedEx expanded its Shanghai hub to provide additional space for health-related products while DHL operates two life sciences and healthcare competency centres - Beijing and in Shanghai.
FedEx and UPS will also be able to take advantage of licences to deliver domestically. But they will likely face competition with local pharma distributors such as Sinopharm and US-based Cardinal Health, which is also active in China.
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