[Direct IPO in Beijing] Report on May 31 (article/Han Wenjing)
Three years of losses over 2 billion pharmacists help, also can not resist the yearning for the capital market.
Goldman Sachs and China International Capital Corporation (CICC) are its co-sponsors.
With the increasingly fierce competition in the C-end market of pharmaceutical e-commerce, Pharmacists Bang has become a unicorn born in B2B market, with revenue exceeding 10 billion in 2021.
However, the unicorn is still difficult to hide losses during the period. From 2019 to 2021, the revenue of Pharmacists gang is 3.25 billion yuan, 6.06 billion yuan and 10.09 billion yuan respectively, while the loss in the same period is 1.046 billion yuan, 572 million yuan and 500 million yuan respectively.
Before listing, Pharmacists bang had conducted several rounds of financing, including Baidu, Fosun Pharmaceutical, Shunwei Capital and other investors. Star fund support, pharmacists can help tell a good B2B pharmaceutical e-commerce story?
Capital halo enveloped, the founder has no medical industry background
According to public information, pharmacists Gang was established in 2015 and is a digital comprehensive service platform for out-of-hospital pharmaceutical industry.
At present, the competition in China's out-of-hospital digital pharmaceutical distribution service market is concentrated, and the top five participants occupy more than 63.5% of the market share. In terms of market size in 2021, the market share of pharmacists gang will reach 18.5%, ranking first.
It's worth noting that Zhang Buzhen, the founder and CEO of Pharmacists, has no background in the pharmaceutical industry. In 1999, Zhang buzhen joined Soufun, has been the company's CTO.
After working in Soufun for more than ten years, Zhang Buzhen officially resigned from Soufun in 2014, said goodbye to the long-cultivated real estate field, turned to the Internet medicine field and established the pharmacists Gang in 2015.
In terms of equity structure, MIYT Holdings owned by Zhang Buzhen was 20.33% before the IPO.
Although the founder does not have a background in the pharmaceutical industry, this does not affect the popularity of pharmacists in the capital market, the company was once listed on the Hurun Global Unicorn List. Under the background of constant growth of the off-hospital market and strong development of e-commerce channels, the value of pharmacists' gang in the user side has gradually become prominent.
Since its establishment, the pharmacists have experienced several rounds of financing, among which there is no lack of star capital. Fosun Pharmaceutical in its A round and B round of financing when the continuous lead investment, in the C round and D round of financing, Shunwei Capital, Tiger Global Fund is also prominent in the list.
In April 2022, Baidu, Sun Life Insurance and other companies participated in the E2 round financing of $85.2 million for Pharmacists, with each of them contributing $30 million.
The proceeds from the IPO in Hong Kong will be used to further build a digital pharmaceutical platform, develop innovative businesses and invest in research and development in data and AI.
So far, it has not come out of the deficit dilemma, with a loss of more than 2 billion yuan in three years
Pharmaceutical e-commerce market has broad prospects. The market size of China's out-of-hospital digital medicine distribution service market is expected to grow from 148.5 billion yuan in 2021 to 321.3 billion yuan in 2026, according to Frost Sullivan.
At present, China's pharmaceutical e-commerce is mainly composed of B2B platform, B2C platform and O2O platform. Pharmacists Bang belongs to B2B pharmaceutical e-commerce platform, mainly serving pharmaceutical terminal enterprises or institutions, and its purchasers are hospitals, primary medical institutions, retail pharmacies, etc.
The revenue sources of Pharmacists' gang mainly include self-operated business, platform business and other innovative business. In 2021, the gross margin of the three businesses will reach 5.2%, 83.7% and 51% respectively, and self-operated business accounts for 95% of the total revenue of the company.
According to the prospectus, pharmacists Gang's business model is centered on platform business and proprietary business, with a range of other innovative businesses. The company's total GMV reached 27.5 billion yuan in 2021, according to Frost Sullivan.
In terms of platform business, in order to solve the problem of mismatch between supply and demand in China's out-of-hospital pharmaceutical market, Pharmacists Bang started to operate platform business based on mobile Internet in 2015, and built a digital platform for registered drug sellers and buyers to conduct transactions. As of December 31, 2021, pharmacists Gang has more than 2.4 million SKUs, attracting about 4,700 sellers and about 430,000 buyers to conduct transactions on the platform business.
As the platform gathers more and more upstream and downstream participants, in order to further improve the performance ability and buyer services, Pharmacists Bang began to develop its own business in 2019 and generate income from product sales.
However, there is a big difference in the gross margin of the company's three major businesses. The company's main self-run business will achieve revenue of 9.59 billion yuan in 2021, but the gross margin is only 5.2%, and the gross margin of self-run business is less than 500 million yuan. The gross margin of the platform business, which mainly collects commissions, is over 80%, and the gross margin will reach 410 million yuan in 2021.
In 2021, the revenue of Pharmacists Gang exceeded 10 billion yuan, but it still failed to get rid of the curse of money burning, and accumulated losses exceeded 2 billion yuan from 2019 to 2021. Behind the losses, pharmacists gang's sales and marketing expenses are rising, reaching 604 million yuan, 726 million yuan and 1.064 billion yuan from 2019 to 2021 respectively.
The pharmacists explained that the increase in salaries and benefits was mainly due to the hiring of more sales and marketing staff, and the increase in contract performance expenses as the business expanded.
Had been "boycotted" by pharmaceutical companies, negative haunt
In April 2019, 13 pharmaceutical companies, including Yangzijiang Pharmaceutical, Harbin Pharmaceutical Group, Jiuzhoutong, Taiji Group, Yunyao Group and Jilin Aodong, issued a circular requesting distributors to suspend supply to pharmacists' platform. The main reason is that pharmacists help customers sell their products at a low price for a long time, which affects their market prices.
At that time, pharmacists also responded on their official account, saying that what they provided was a platform and technical services, and that the platform did not sell drugs itself. "It is up to the platform sellers to decide how and how much drugs are sold. The right to sell drugs belongs to the sellers, and the pricing is also determined by the sellers.
After the collective "closure" of pharmaceutical enterprises, the pharmacists' gang accelerated the cooperation of pharmaceutical enterprises. Has reached cooperation with more than a dozen pharmaceutical enterprises. Interestingly, two years later, pharmacists Gang and Harbin Pharmaceutical Group, which had banned it, announced a comprehensive upgrade of their strategic cooperation.
Perhaps affected by this incident, in order to strengthen the relationship with suppliers, pharmacists Gang launched the "brand First promotion" business in 2020. Conduct market analysis to help pharmaceutical companies better understand and capture downstream needs, identify products tailored to those needs, and partner with pharmaceutical companies to promote their products through digital marketing solutions.
With the help of the first brand business, on the one hand, pharmacists help bring incremental demand for pharmaceutical enterprises; Pharmacists, on the other hand, help buyers meet their needs and achieve low-cost transactions. As of December 31, 2021, the company has worked with approximately 560 pharmaceutical companies to promote more than 1,000 SKUs, and contributed 8.5% of our proprietary GMV in 2021.
In addition to the "closure" incident, the pharmacists' gang has also been exposed by the media for releasing toxic drug information in violation of regulations and selling fake and inferior drugs. At the time of The listing of Pharmacists in Hong Kong, the competition pattern and outlook of the non-hospital market have also aroused heated discussion in the industry. Whether Pharmacists can maintain the sustainable development and growth of business is worth the test of the capital market.