A recent Hangzhou Daily report titled “Huadong Medicine: Creating a healthcare business landscape driven by Internet+” has drawn wide interests from traditional pharmaceutical companies. Nowadays “Internet+” has become a buzzword and the way of thinking that is bringing radical changes to the existing business models. Huadong Medicine as a renowned pharmaceutical company in the health industry is constantly making breakthrough innovations, and launching new projects.

Here are some excerpts from Hangzhou Daily published on May 6, 2015: 

What changes will it bring to Huadong Medicine when Internet+ meets TCM? To answer that, let’s take a look at a group of data: Last year, Huadong Medicine’s e-commerce platform made RMB 12,465 million before tax sales, which accounted for 80% of the total sales of its commercial distribution business, and was up 19.4% from the previous year. Meanwhile, Huadong Medicine continues to thrive in greater healthcare industry through its core establishments of Health Stores, Medical Plastics Hospital, Chinese Herb Incense Culture Schools and Medical Daycare Clinics.

According to the State Council’s “Opinions on Growing Health Service Industry”, Chinese health service industry will grow into a RMB 8 trillion plus business by 2020. With such a growing pie, Huadong Medicine is leveraging Internet+ to set the trend in intelligent health. 

Huadong Medicine’s O2O Roadmap: This year, 52 years old Song Xiaolan came across a health experience center named Yue Xing You Pin at the intersection of North Zhongshan Road and Stadium Road next to the Huadong Pharmacy. Since it is a Huadong Medicine brand, she decided to explore what the center is about

Huadong Medicine is traditionally known as a pharmaceutical company that makes and sells medicines, but this health experience center displays a range of smart products such as fitness wristbands, smart massage pillows, smart blood pressure monitors, and automatic cabinets etc. Aren’t they the latest trendy goods sold on the Internet? Yes, they are, but they are also healthcare related products. On the ground floor, a lifting chair caught Ms. Song’s eyes. It is a ThyssenKrupp lifting chair imported from Germany. She buckled up and pressed the button, and the lift system sent her smoothly to the second floor. “I’ve seen this kind of lift online, but I’ve never thought it could be true.” Mrs. Song couldn’t help but try it herself.

Huadong Medicine is entering the “Big Health” industry. These domestically most advanced homecare and smart healthcare products can collect health data and automatically upload them to the cloud where they can be used for health monitoring and self-diagnosis. As part of Huadong Medicine’s O2O (online-to-offline) Roadmap plot, there are already 8 Yue Xing You Pin health experience centers in Hangzhou, Huzhou, Rui’an, etc., and the number will increase to 25 by 2019 according to plan.

How to do “24-hour delivery”

An open and collaborative approach opens the door to e-commerce for Huadong Medicine. What’s the chemical reaction between Internet+ and a pharmaceutical business? An example is the preparation of decoction for customers. Traditionally, people bought medicinal herbs and decocted them at home, and home decocting could be very inconvenient. Since 2013, Huadong Medicine has been working with some Chinese medicine hospitals in Jiangsu to decoct for customers and deliver the decoction in 24 hours.

During this 24 hours, your e-prescription will be sent to the largest Chinese medicine preparation service provider in Zhejiang – Huadong Hospital Decoction Center, where the decoction will be made ready as prescribed and delivered to you through professional couriers. Initially Huadong Medicine had a delivery team of a dozen staff. Later they worked with China Post to create a logistics system, which was deemed a breakthrough in centralized management of decoction services. 24-hour delivery is now very popular.

In addition, Huadong Medicine’s e-commerce platform is seamlessly integrated with the company’s ERP, logistics and finance systems and shares data with the company’s procurement platform, suppliers and medical care provider partners to optimize the supply chain. As of December 2014, Eastpharm.com has 1,577 registered clients and 2,448 registered suppliers, selling more than 30,000 products in a variety of categories, i.e. TCM, Western medicine, raw materials, cosmeceuticals and medical devices, etc.

The landscape of healthcare business driven by Internet+ 

“Internet+” is quite a buzzword after this year’s NPC and CPPCC sessions. With new technologies such as big data, cloud computing and mobile internet continuing to challenge the old ways, Huadong Medicine is embracing the opportunities arising from Internet+. The Healthcare business has become its fourth core business sector after Western medicine, TCM and medical devices businesses. The new sector’s preliminary industrial system, consisted of health experience centers, aesthetic medicine, Chinese incense culture and daycare centers, has been formed.

[Hangzhou Daily, May 6, 2015]