Pharmaceutical logistics is gradually opening up, increasing opportunities for third-party logistics companies to enter the game. Express and express companies fighting in the Red Sea have already aimed at the new business field of medicine.

(1) Pharmaceutical logistics is a large market with a scale of 100 billion, with relatively larger profit margins, and is a new business direction worthy of deployment;

(2) The current pharmaceutical logistics market structure is not yet completely stable, the concentration is still not high, and there are still great opportunities for integrated logistics;

(3) The express and express companies that have entered the bureau may catch up with the logistics of pharmaceutical companies in terms of revenue scale, and there is a possibility of leveraging the pattern.

1. Overview of the pharmaceutical logistics market

1.1 Market Size

In addition to the storage and transportation of drugs, pharmaceutical logistics also includes the transportation and distribution of high-precision medical instruments and medical peripheral auxiliary equipment. It is a relatively professional logistics market segment. Due to the high standard requirements in the process of qualification and storage and transportation, the pharmaceutical logistics market has always been in a semi-closed state. Basically, vertical logistics companies directly under the pharmaceutical companies control most of the high-quality logistics businesses in this field, while ordinary logistics companies generally do not. Will take the initiative to layout this segment of the market.

According to the circulation properties of medicine and related instruments, the transportation cost is higher than that of ordinary goods. Therefore, pharmaceutical logistics has a large-scale logistics market. The data shows that the logistics cost of pharmaceutical ex-factory is about 0.5% of the sales revenue of the production enterprise. Therefore, the main cost of pharmaceutical logistics is in the end sales distribution and warehousing links.

The scale of the domestic pharmaceutical market exceeds 2 trillion yuan, and the cost of pharmaceutical logistics accounts for about 10% of pharmaceutical sales. Therefore, the domestic pharmaceutical logistics market has a scale space of more than 100 billion yuan. For LTL express companies, the pharmaceutical logistics industry with low concentration and considerable scale and profit margin is a business direction worthy of exploration and layout.

 

Scale of pharmaceutical circulation market in 2014-2018
Data source: Qianzhan Research Institute

1.2 Major Players in Pharmaceutical Logistics

With the gradual advancement of marketization of pharmaceutical logistics, the competition in this field is also becoming increasingly fierce. According to the nature of enterprises undertaking pharmaceutical logistics business, the market participants of pharmaceutical logistics can be roughly divided into four categories.

The first category belongs to the logistics subsidiaries directly under the large pharmaceutical enterprises. These logistics companies are all the logistics departments of the former production companies. After independence, they still have unique resource advantages. They are backed by traffic exports, and most of them are state-owned assets. They are the first batch of third-party logistics companies to undertake pharmaceutical logistics business in China, such as : Sinopharm Group Pharmaceutical Logistics Co., Ltd. (hereinafter referred to as "Sinopharm Logistics"), Jiuzhoutong Pharmaceutical Group Logistics Co., Ltd. (hereinafter referred to as "Jiuzhoutong Logistics"), etc.

The second category is a professional logistics company that is vertical to the pharmaceutical industry. This type of logistics company mainly provides logistics and distribution of raw material storage and finished product sales for pharmaceutical companies, including cold chain constant temperature and storage and transportation services for general medicine and equipment, but the overall scale is small and the dispersion is strong, such as: Beijing Huaxin Logistics Co., Ltd., Shanghai Kangzhan Logistics Co., Ltd., etc.

The third category belongs to the traditional integrated logistics enterprises. Such enterprises mainly serve the traditional general logistics and transportation business. In order to expand the diversity of business, achieve differentiated competition and full-category business coverage, and improve industry competitiveness, they have begun to lay out the pharmaceutical logistics market. Taking advantage of the network, it provides pharmaceutical companies with a network of warehousing and distribution services for medicines, medical equipment and other goods, such as SF Express, China Post, etc.

The fourth category belongs to the logistics enterprises directly under the e-commerce platform. The advantages of such enterprises are mainly reflected in terminal distribution. With the continuous growth of pharmaceutical e-commerce sales, e-commerce pharmaceutical logistics will gradually increase in the proportion of pharmaceutical logistics in the future, and become the main force in terminal pharmaceutical distribution, such as Jingdong Logistics, etc. .

 

Pharmaceutical logistics classification
 

1.3 Market Competition Pattern

With the entry of traditional logistics enterprises, the competition in the pharmaceutical logistics market is rapidly intensifying. Judging from the current state of competition in the pharmaceutical logistics market, logistics subsidiaries of pharmaceutical companies with advantages in resources and flow entry still occupy a dominant position. The pharmaceutical logistics market is similar to the traditional logistics market, and it is also a fragmented field with low market concentration. Although the logistics subsidiaries of pharmaceutical companies have dominated the pharmaceutical logistics market by taking advantage of the parent company's dominant position in the seller's market, they have not yet reached an absolute dominant proportion in terms of market share.

According to the data, the four pharmaceutical logistics companies of Sinopharm, China Resources Pharmaceutical Logistics, Shanghai Pharmaceuticals and Jiuzhoutong Logistics belong to the leading representatives in this field, occupying only about 30% of the pharmaceutical logistics market share, and not occupying a complete dominant proportion. The remaining market share is occupied by professional pharmaceutical logistics, third-party network-wide integrated logistics companies, and even regional networks and some high-quality private line companies.

With the gradual opening of the pharmaceutical logistics market, market competition will continue to intensify, especially in the fields of medical devices and medical peripheral products. Judging from the current trend, pharmaceutical logistics with resource advantages, network-wide logistics with network and operational capabilities, and e-commerce logistics with traffic advantages will play a leading role in the future pharmaceutical logistics pattern.