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HONG KONG, May 18, 2015 - (ACN Newswire) - Shanghai Pharmaceuticals Holding Co. Ltd., ("Shanghai Pharmaceuticals" or the "Company" and, together with its subsidiaries, the "Group"; stock code: 601607.SH; 02607.HK), announced on 17 May that the Company has entered into a strategic cooperative framework agreement with Beijing Jingdong Century Trading Co., Ltd. ("Jingdong"). Pursuant to the agreement, both parties will establish comprehensive strategic cooperative partnership in three areas including strategies, capital and businesses with a view to grasping market and business opportunities, and achieving resources sharing and complementation of strengths.
A Strong Alliance which Opens Up New Front and Successively Links Up the Leading Pharmaceutical Enterprise and the Leading E-Commerce Company
Shanghai Pharmaceuticals and Jingdong disclosed that both parties will establish comprehensive strategic cooperative partnership in e-commerce of prescription drugs and jointly build up an online sales platform and offline storage and delivery network of prescription drugs. In addition, the two parties will also enter into comprehensive strategic cooperative partnership in the areas of non-prescription drugs (including OTC, healthcare products and medical devices, etc.).
In terms of capital, both parties will make further investment in Shanghai Pharmaceuticals Grand Health Cloud Commerce Co., Ltd. ("Shanghai Pharmaceuticals Health Cloud"). Shanghai Pharmaceuticals will inject its 100% shareholdings of Shanghai Zhongxie Pharmaceutical Co., Ltd. ("Zhongxie Pharmaceutical") into Shanghai Pharmaceuticals Health Cloud while Jingdong will contribute in cash and related resources. Shanghai Pharmaceuticals Health Cloud was established by Shanghai Pharmaceuticals and its e-commerce management team in March this year.
The cooperation between Shanghai Pharmaceuticals and Jingdong in e-commerce of prescription drugs will take the form of sole exclusive partnership. Specifically, Jingdong will be the sole cooperating partner of Shanghai Pharmaceuticals in the area of prescription drug e-commerce, while Shanghai Pharmaceuticals Health Cloud will be solely entitled to the interests arising from the sale of prescription drugs through the e-commerce platform operated by Jingdong. Subject to the laws and regulations, both parties will also share the relevant data and resources in the business of prescription drug e-commerce.
Shanghai Pharmaceuticals will provide Shanghai Pharmaceuticals Health Cloud with a wide spectrum of offline retail resources and drugs, which will support the business development of Shanghai Pharmaceuticals Health Cloud. Jingdong will give comprehensive support to Pharmaceuticals Health Cloud in order to construct an online platform and an offline network of prescription drug e-commerce, including e-commerce trading platform, storage and logistics solutions, etc.
Join Hands to Build a Business Ecosystem of Pharmaceutical E-Commerce and Mobile Medical Services and Create a Demonstrative Business Model of "Internet+" Pharmaceutical E-Commerce
In March 2015, Shanghai Pharmaceuticals announced the investment in and establishment of Shanghai Pharmaceuticals Health Cloud, which is the first domestic prescription drug e-commerce company combining both online solutions and offline retail resources. Venturing into pharmaceutical "Cloud Commerce" through prescription drugs could be regarded as the first strategic move of Shanghai Pharmaceuticals in its development of e-commerce.
Comparing with other e-commerce models, the core of Shanghai Pharmaceuticals Health Cloud's model is building the three platforms, including "electronic prescription", "drug data" and "patient data" to provide online solutions, while another key feature is integrating the abundant offline retail resources of Shanghai Pharmaceuticals to create three layers of retail outlets. With the three major online data platforms, realizing to provide all-encompassing services covering prescription drug diversion, drug purchase, health management and old case consultation appointment. Of which, the "electronic prescription" platform will connect to the HIS system or self-built self-funded prescription system; the "drug data" platform will have access to the drug inventory, delivery and other information of the retail outlets of Shanghai Pharmaceuticals and its partners to ensure speedy and accurate delivery of drugs; while the "patient data" platform will keep track and record on the healthcare big data of consultation, medication and diagnostic history of patients. The three layers of offline retail network include various entitative pharmacies, such as professional direct-to-patient (DTP) pharmacies owned by Shanghai Pharmaceuticals, cooperative/entrusted pharmacies of hospitals and independent retailers.
Analysts in the field reckoned that under such backdrop, it is obvious that Shanghai Pharmaceuticals and Jingdong have the strategic intention to bank on each other's abundant online and offline resources and future development path to commence cooperation in the short run. The strategic emphasis and maneuvers of both parties to create a business ecosystem of pharmaceutical e-commerce and mobile medical services may give the market enough imaginary space for subsequent development.
Shanghai Pharmaceuticals stated that, as a national pharmaceutical industrial group, Shanghai Pharmaceuticals has overwhelming advantage in terms of offline resources and cooperation with hospitals/pharmaceutical companies, while as an emerging internet company, Jingdong has obvious strengths in technology, product validation, users' experience, brand image, etc. The cooperation with Jingdong will be multi-level, covering strategies, capital and businesses, which would facilitate the implementation and deepening of the e-commerce strategy. The cooperation is also likely to give impetus to the creation of a new business model and lay a solid foundation for the future sustainable development of the related stakeholders, namely Shanghai Pharmaceuticals and its partners.
"Pharmaceutical industrial group's moving online will not only benefit itself, but will also deliver real benefit to the general public. Through informatization, the traditional vertical industrial channel can be opened up, which places hospitals, patients and suppliers on the same platform. This will bring huge benefit to the general public in terms of 'getting high-quality, affordable and convenient medication'", Shanghai Pharmaceuticals said.
Developing Pharmaceutical E-Commerce in a Solid Manner and Ensuring Users' Confidence through Self-Operated Logistics Network
Jingdong stated that under the backdrop and trend of the state's strenuous efforts in promoting medical reform and the separation of prescribing and dispensing, the strategic cooperation will combine Shanghai Pharmaceuticals's long-accumulated high-quality resources in the pharmaceutical field with the strength of Jingdong in internet technology and supply chain management. The new arrangement will merge online and offline resources and facilitate both parties to jointly build up a practicable pharmaceutical e-commerce model, which can deliver better shopping experience that combines both online and offline channels and more outstanding and convenient medical services to consumers, while achieving win-win commercial value and social benefit.
The extensive storage and delivery system of Jingdong, which covers 2,000 counties and districts, will complement the existing professional delivery capability of Shanghai Pharmaceuticals and explore a meaningful way of cooperation to tackle obstacles such as high delivery cost of drugs and fragmented market.
The quality and delivery channels of drugs are public livelihood issues critical for the health and life of patients. Since its establishment, Jingdong has always considered business integrity as its lifeblood and foundation. Its adamant effort over the past 12 years has won Jingdong the confidence of consumers, and its image of "genuine quality" has deeply rooted in consumers' hearts. The combination of the core competitive strength of Jingdong in self-operated business model and the supply chain of Shanghai Pharmaceuticals can realize quality control starting from the product sources. Through whole-process monitoring and control of goods, it is now possible to comprehensively monitor and keep track of each segment of the logistics and delivery processes, which would help eliminate the concern of consumers and the government over clearing the way for online drug purchase and is a task every enterprise with social responsibility should bear.
In view of the robust development of "internet+" pharmaceutical industries, especially a series of policies promulgated recently to promote the development of pharmaceutical e-commerce, this strategic cooperation will inject the vigor of online business to the pharmaceutical industry and will effectively consolidate the related resources, lower the cost of consultation and drug purchase, improve consultation experience and give more convenience to patients.
Topic: Press release summary
Source: Shanghai Pharmaceuticals
Sectors: Daily Finance, BioTech, Healthcare & Pharm
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From the Asia Corporate News Network
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