Business Intelligence on Retailing, Franchising, and Consumerism in China

Hubei: 22 Chain Medical Stores To Set Up Collective Purchase Platform

The largest retail drugstore alliance in Hubei has been established and 22 chain medical companies in the province will jointly set up a collective purchasing platform.

The stores of the 22 large chain medical companies, including Hubei Longtai Drugstore, Hubei Jinyaotang Drugstore, Wuhan Jianghan Drugstore, Wuhan Hansen Drugstore, cover Wuhan and nine other cities in Hubei Province, have more than 40% of the market in Wuhan.

According to a representative from Hubei Longtai Drugstore, most of the retail drugstores in Wuhan rely on the supply of medical distribution channels. Medicines are distributed through a lengthy supply chain of national general distributors, provincial general distributors, regional general distributors, and regional distributors before reaching the retail stores, which increase the costs of the products.

After the establishment of the alliance, the medicine purchases for more 2,000 chain drugstores belonging to 22 companies will be made by a professional agency. With this new platform, the retail prices of medicines sold in these stores are expected to be reduced by 3% to 5% as a result of simplifying the distribution process.

In addition, the alliance will be further expanded in the future and the number of member retail medical companies will ultimately reach over 30 with their stores covering 17 cities across the province.

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