Jiuzhoutong: Building a complete medical health management platform, medical reform, helping business grow rapidly

Among the top ten enterprises in the field of pharmaceutical circulation in the country, there is only one private enterprise. This is the Jiuzhoutong that has gradually grown up from the “Nine Provinces Wanted” Wuhan City.

A complete logistics system throughout the country, a highly intelligent warehousing, sorting and transportation system. The hospital business has achieved a scale of 20 billion yuan from scratch. Since its listing in 2010, Kyushu has achieved asset scale and operating income for 8 years. And the profit level has increased several times. According to the current development speed, the company is about to enter the sales scale “100 billion clubs”.

The Securities Times “Quality Development of Listed Companies is in Action” The large-scale interview activity entered Jiuzhoutong recently, visited the company's logistics and storage base in Wuhan Dongxihu District, and interviewed the company's director and general manager Gong Yihua. Gong Yihua said that the core competitiveness of Jiuzhoutong will not be limited to the logistics field. To build a complete medical health management platform and integrate the whole process of drug trading into the platform system will become a competitive advantage for Kyushu. According to the development goals, Jiuzhoutong will still be expected to maintain a growth rate of more than 20% in the next few years.

Highly intelligent warehousing logistics

There are tens of thousands of medicines in the three-storey warehouse of Kyushu, which has no staff. The robot quickly sorts and leaves the warehouse, dozens of shuttles are constantly coming and going, and the medicines are sent to the conveyor belts that are on standby. Each conveyor belt corresponds to a transportation direction, and the logistics fleet outside the warehouse is ready to go.

On the other hand, on the big screen of the dispatching command center, the transaction volume of the Kyushu Tongyun warehouse distribution platform, the video monitoring of each link and the utilization of the logistics fleet are presented in real time. Every logistics vehicle in transit is in the big screen. The map shows the location in real time, and they are equipped with the latest Beidou navigation system.

The above scenario is what the Securities Times reporter saw when visiting the Jiuzhoutong Wuhan Logistics Base. It is not the largest logistics base of Jiuzhoutong, but it is the epitome of the most advanced logistics and storage technology of Kyushu.

More than 290,000 varieties of products, more than 7,000 upstream suppliers, more than 100,000 downstream customers, this is the "open daily" of Kyushu. As a large-scale pharmaceutical distribution enterprise, it is particularly important to control the import and export of huge quantities of goods upstream and downstream. The layout of logistics and warehousing has become one of the core competitiveness of Jiuzhoutong.

Judging from the “hard power” of logistics, Jiuzhoutong has built 31 provincial-level subsidiaries and 81 municipal-level molecular companies in most regional central cities and provincial capital cities, and established a marketing network covering more than 95% of the country's administrative regions. It has become one of the most widely covered companies in the nationwide pharmaceutical business enterprise.

“Jiuzhoutong is one of the few companies in the industry that can complete the planning, design, implementation, on-line and operation of the pharmaceutical logistics center.” Gong Yihua said that the company has a large technical team to do this work, and the future will It will make the logistics base more intelligent. "Our next-generation warehouse, the Henan logistics center under construction, will also use robots on a large scale."

Medical reform is beneficial to terminal business

With the introduction of national medical reform policies, the standards of the pharmaceutical circulation industry are more standardized, which is more advantageous for large enterprises. Gong Yihua pointed out that in 2017, the company's terminal business grew rapidly, and pharmacies and chain businesses were growing at a rate of 50%.

Judging from the customer structure of Kyushutong, the company's customers are mainly divided into three major segments, one is commercial customers, including peer companies, large chain pharmacies, etc.; the other is terminal customers, such as grassroots clinics, pharmacies and other single terminals; Hospital customer. Currently, the sales of the first two types of customers account for about 80% of the company's sales.

Why has Jiuzhoutong’s terminal business grown significantly in the past year? This is not unrelated to the health reform policy that the country is pursuing.

“The 15% discount on the drug price reduction policy has resulted in a large revenue reduction for the hospital. In addition, the drug occupation ratio has been controlled, and the interest of the large hospitals in selling drugs has been greatly reduced, thus transferring these drugs to the hospital.” Gong Yihua introduced. Last year, Jiuzhoutong also established a hospital pharmacy management company and began to undertake professional hospital pharmacies.

The implementation of the "two-vote system" of another medical reform policy will also have a greater impact on the business of Jiuzhoutong. Gong Yihua analyzed that the “two-vote system” has reduced the circulation. The upstream manufacturers are more inclined to work with large-scale drugs with broad network coverage, strong logistics and distribution capabilities, standardized business practices and strong financial strength due to cost, risk and operation considerations. With the cooperation of circulation enterprises, this is a rare opportunity for Jiuzhoutong, which is relatively lacking in clinical resources of hospitals.

In addition, the "two-vote system" makes it difficult for most small and medium-sized pharmaceutical companies to obtain direct entrustment from upstream manufacturers. Only a subsidiary that is controlled by a large pharmaceutical business company can make another ticket. This will implement a vertical merger and reorganization of Kyushu. Perfecting the city-level marketing network is an opportunity.

According to Gong Yihua, the current medical reform policy is beneficial to the overall development of Jiuzhoutong. In addition to the aforementioned New Deal, the core purpose of the “graded diagnosis and treatment” policy is to alleviate the current relative monopoly of large hospitals and gradually sink medical resources, while Kyushutong’s strengths are in retail and primary health care institutions.

Gong Yihua introduced that the implementation of the grading diagnosis and treatment system, the more patients lead to the grassroots, means that the company's customer base is larger. However, he also pointed out that the implementation of the policy and the transformation of the role of the hospital will take some time.

Create FBBC mode in OTC field

Large-scale express logistics companies have entered the pharmaceutical field and were once considered by the market to be a major challenge to existing pharmaceutical distribution companies. In this regard, Gong Yihua explained his opinions to the reporter: First, based on industry barriers, it is not easy for other companies to enter large-scale; second, in addition to logistics, Kyushutong is still creating a unique competitiveness, namely the FBBC model.

"Countries such as pharmaceuticals and medical devices have very strict control. Kyushu Tongneng has achieved the scale of today, and has experienced nearly 30 years." Gong Yihua said that the construction of the pharmaceutical logistics center must ensure that it can pass the GSP certification. The whole set of requirements, this process is extremely complicated, "I believe that any logistics company outside the industry to enter this field, the establishment of this system is not a one-off event."

In addition, Gong Yihua believes that, unlike other logistics industries, the pharmaceutical circulation industry is an industry with very high upstream and downstream matching requirements, and the process of establishing a matching relationship is long. In addition, entrants also need to have three-party logistics qualifications issued by the state. SF is currently doing vaccines in the field of pharmaceutical logistics. If it is to be expanded to other fields, it needs to meet many conditions.

Kyushutong's positioning of its core competitiveness is not only in the field of logistics, so even if there are other logistics companies that challenge the industry structure, Kyushutong has long had a response.

“Jiuzhoutong is going to do a tripartite platform. The company is constantly improving the 'FBBC' model.” Gong Yihua said that “F” is the upstream pharmaceutical manufacturer, the first “B” is Jiuzhoutong, and the second “B” That is, terminal pharmacies and clinics, "C" is the consumer.

Kyushutong has to do more than just sell drugs to drug stores, and the company has to help pharmacies build the entire marketing system. “Now we have helped many pharmacies to replace the ERP and member management system and dock with the Kyushutong platform.” Gong Yihua said that the single pharmacy has extensive management of customers before, and using the management platform of Kyushutong, pharmacies can accurately grasp customer needs. , to take the initiative to serve, retain customers and orders. For consumers, in the future, they can directly purchase drugs through terminals such as mobile phones, and pharmacies can deliver them to the door; if the pharmacy is out of stock, Kyushu will transfer the goods in the warehouse to the consumers, and realize the nationwide linkage of the warehouse. , similar to the Jingdong model.

Chinese medicine and other high-margin products are growing rapidly

Those familiar with the pharmaceutical circulation industry know that the overall gross profit level of the industry is low, making it difficult to make money, and Kyushu is also the same. However, in addition to the low-margin drug sales business, Kyushutong now also has high-margin business including traditional Chinese medicine and medical equipment. Their rapid development is becoming a new profit growth point for listed companies.

Within Kyushu, the company described the business model as “two three four”, namely two platforms, three channels, and four major categories. The two major platforms refer to a unified logistics platform and IT platform. The three major channels refer to businesses, terminals and hospitals. The four major products refer to pharmaceuticals, medical devices, traditional Chinese medicines and consumer goods.

"In the field of traditional Chinese medicine, we are in the whole industry chain. In the past two years, the company's Chinese medicine business has maintained a growth rate of more than 50% every year. It is expected to be 4 billion yuan this year." Gong Yihua said that Jiuzhoutong is currently in the country. The 12 certified Chinese medicine production quality management standard bases (GAP bases) are the most domestic enterprises.

From the cultivation of Chinese herbal medicines to the production of decoction pieces and then to terminal sales, Kyushutong has realized the entire industrial chain layout in this field. In addition to the medicinal materials themselves, Jiuzhoutong has been involved in many fields such as Chinese medicine hospital marketing, Chinese medicine library chain, standard decocting service, and Chinese medicine e-commerce.

At present, Jiuzhoutong has one medicinal plant engineering research center, one Chinese medicine decoction processing engineering center, six standard decocting service centers, seven Chinese medicine decoction GMP production enterprises, nine Chinese medicine material road real estate area companies, and eight The Chinese herbal medicine GAP planting base covers more than 70 traditional Chinese medicine GSP marketing organizations in 90% of the administrative regions of the country, and operates more than 10,000 important varieties, covering more than 80,000 downstream customers.

In addition, in another rapidly growing business segment, the medical device sector, Kyushutong has also maintained a growth rate of 40% to 50% in recent years. In 2017, Kyushutong Medical Devices achieved sales revenue of 6.976 billion yuan. Gong Yihua expects that the sales revenue of the sector in 2018 is expected to exceed 10 billion yuan; the company's consumer goods business in recent years, the sales scale is also growing.

In addition to the above business, Kyushu has also opened up some new businesses in recent years, including investment in medical care, etc. Currently, it has invested in the Wuhan Social Welfare Institute, acquired a hospital for geriatric diseases in Huangshi, Hubei, and is working in Linyi, Shandong. Construction of Kyushutong Hospital.

"These emerging businesses are our explorations and attempts. We have not seen actual results yet, but we have already begun the layout of this path, and we may do some hospital acquisitions in the future," said Gong Yihua.