Ali Health Buys Full Ownership of Small Medical Company
Alibaba Health Information Technology or Ali Health, which is a subsidiary of Alibaba Group Holdings has announced that it has recently bought the full ownership of Guangzhou Wuqiannian Medicine Co. for 16.8 million yuan. Guangzhou Wuqiannian Medicine is a small company with a registered capital of 5 milllion yuan and is engaged in retail business for drugs, traditional Chinese medicine drinks and operating a chain of retail stores.
The company also holds the Internet Drug Transaction Service Qualification Certificate and is allowed to sell OTC drugs that are prescribed within the laws and regulations. The company had suffered a full year loss in 2015 after earning after tax a net profit of 1 million yuan, having a pre-tax net profit of -355 thousand yen and an after tax net profit of -356,000 yuan in 2014. By purchasing the company Ali Health ca help it engage in the online drug retail business by offering more products and services to end consumers.
Relying on Alibaba’s advantage in e-commerce, cloud computing and big data, Ali Health is a market pioneer in the online pharmacy service and pharmacy O2O, but due to the cautious regulation policy the penetration rate of the pharmacy e-commerce in China is only 0.35 percent. CIConsulting predicted that the compound annual growth rate of the pharmacy e-commerce will hit 50 percent in the next five years and the e-commerce scale is expected to hit 110 billion by 2020.