"On one hand, there is an explosive growth in health demand, while on the other hand, the retail market is experiencing weak growth. This phenomenon is not normal." At the 9th Health Products Trade Fair hosted by Zhongkang Technology on March 21, Li Junguo, Vice President of Zhongkang Technology, said that in the face of this dilemma of "two extremes," the most realistic path for the current pharmaceutical retail market is to upgrade product categories around health needs.
As the national economy and social operations gradually return to normal, the development of the health industry faces multiple changes under the new environment. On the one hand, the continuous deepening and adjustment of medical reform policies are driving the continuous transformation of the pharmaceutical retail market structure, such as the normalization of centralized procurement, the gradual implementation of outpatient co-payment, the full implementation of individual billing reform, and the pilot program for online medical insurance payment. The pharmaceutical retail market faces both challenges and opportunities. On the other hand, the concept that "everyone is the first person responsible for their own health" is changing, with the public's health concepts and needs shifting from reducing disease to pursuing a high-quality healthy life. The awareness of personal health management is further deepening, and the structure of pharmaceutical retail categories is being further reshaped.
Data shows that the growth of various categories in the pharmaceutical retail market in 2023 was less than satisfactory. According to CMH data, the national retail pharmacy market size in 2023 was 539.4 billion yuan, a slight decrease compared to 2022. Only biological products in the pharmaceutical market and traditional Chinese medicine decoction pieces in the non-pharmaceutical market performed relatively well, while other categories were lackluster.
"Declining customer traffic, declining traditional marketing momentum, and extreme price wars are troubling many practitioners in the pharmaceutical retail sector," said Li Junguo. He believes that the reasons cannot be overly attributed to external objective factors. He proposed that the supply side, consisting of upstream manufacturers and pharmacy terminals, must establish a comprehensive product matrix covering diversified health needs. In the past, the retail market was mainly driven by "push" forces; in the future, it will shift to being driven by "pull" forces. The first requirement is the adaptability of products to advance from pharmaceutical retail to health retail.
"Entering 2024, the pursuit of high cost-effectiveness is the main trend of consumption in the new era. In terms of pharmaceutical and health consumption, whether it can bring real health improvement to consumers is the foundation and core of measuring cost-effectiveness." Li Junguo said that upstream suppliers and downstream pharmacies must work together to build a business model of "product selection + supporting patient education + assessment and monitoring + health advice" in order to gain market opportunities from survival to development in the current situation.
With rising living standards, evolving health awareness, and technological advancements, people's health needs are becoming increasingly diverse and rapidly evolving. "This is an industry with no end in sight for wealth," says Li Junguo, who remains confident in the future of the pharmaceutical retail market. He reminds the industry that it must keep pace with these changing demands by adapting its products and marketing methods, and continuously researching new products and innovating marketing models.
The conference also invited many industry leaders and experts to conduct in-depth discussions on cutting-edge industry topics, focusing on the latest developments in digital intelligence-enabled transaction scenarios, and providing accurate data analysis and forward-looking market judgments.
In her keynote speech at the opening ceremony, Zhang Yuan, Vice President of Baiyang Pharmaceuticals, provided an in-depth analysis of the complex challenges currently facing pharmaceutical marketing, pointing out that brand marketing needs to shift its mindset from a product-centric model to a user-centric model. She stated that consumers need more than just products; they require a comprehensive solution and a range of professional services.
You Yongping, General Manager of the Premium Children's Medicine Company of Sunflower Pharmaceutical Group, introduced how to create blockbuster products that meet consumer demand. He pointed out that service and products are the key to winning the market, and that a customer-centric marketing loop should be built to uphold the brand's original mission.
Xu Tong, deputy general manager of the OTC business unit of China Resources Jiangzhong, said that the public's awareness of self-health is awakening, and the big health and medical industry faces both challenges and opportunities. If companies build a good brand, they can weather the cycles.
The Xiding Conference, hosted by Zhongkang Technology, has been successfully held eight times since 2016. This year's conference, themed "Accelerating Industrial Transformation and Winning with Category Upgrading," focused on creating seven high-potential category-themed pavilions. Over 1,000 well-known brands participated, showcasing more than 25,000 product specifications, covering a wide range of popular categories including medical aesthetics, personal care, traditional Chinese medicine, tonics, health foods, special medical dietary supplements, prescription drugs, over-the-counter drugs, traditional Chinese medicine preparations, biological agents, home medical devices, and family planning products. The total number of attendees exceeded 30,000, setting a new record.
