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JD Pharmacy Outperforms During the Epidemic
COVID-19 and China
Image credit: National Cancer Institute/Unsplash

► Due to JD Pharmacy’s performance, JD.com’s stock price has soared. 
► China’s pharmaceutical retail market is estimated to be worth CNY 2 trillion.

Over the past three months, JD.com’s (JD:NASDAQ) stock price has risen by 12%, which has aroused widespread market attention. 

On May 14, Mizuho Financial Group (MFG:NYSE) one of Japan’s largest investment banks, released a research report that upgraded JD.com’s stock rating and raised its target price from USD 37 to USD 58. On the same day, JD.com’s stock price rose more than 4% in early trading in the US stock market.

James Lee, an analyst at Mizuho, wrote in the report, "Online pharmacies have significant opportunities, and coronavirus has a pulling effect on essential goods." The report is optimistic about the reform of China’s pharmaceutical retail industry and believes that the industry is seeking opportunities as drug sales are shifted from hospitals and clinics to retail stores. The total potential market is estimated to be worth CNY 2 trillion (USD 282 billion).

At the same time, the coronavirus crisis has accelerated consumers’ online demand for household necessities, which may benefit JD.com for a while. Although China has begun to return to normal, the need for such products has not declined. The rise in demand for medicines and daily necessities caused by the epidemic has created an appreciable potential market for JD.com.

JD Health disclosed in October 2019 that the revenue of JD Pharmacy had exceeded those of the four major drug retail chain public companies, and its retail business segment had become the country’s largest pharmaceutical retail channel. As the largest retail pharmacy with the most significant income in the country, JD Pharmacy takes 'medical and medicine linkage' as its core concept, on the basis of retail, combined with online hospitals, introduces doctors and professional pharmacists to complement services offered in the gap between 'diagnosis' and 'drugs,' hence providing patients with a comprehensive, convenient and professional drug-buying experience and medication service.

During the epidemic situation, JD Pharmacy fully exerted its supply chain capabilities, while ensuring the circulation and supply of medicines around the country, and solving the problems of re-examination and continuation of chronic diseases for patients throughout the country. JD Pharmacy cooperated with more than 70 pharmaceutical companies to launch the 'Chronic Care Program' and 'Hubei Broken Drugs Registration Public Welfare Project' to solve the problem of drug purchases for chronic patients nationwide in Hubei. Besides, it also invited 52 academics, chairpersons, and dean-level experts, who conducted 41 popular science lectures in the live form to help users acquire health knowledge and reduce anxiety.

May 2020 counts as the 4th anniversary of JD Pharmacy. In the past four years, the firm's business scope has expanded from the initial drug retail to the deep field of pharmaceutical and Internet medical services. As of April 2020, the compound annual growth rate of the transaction volume of JD Pharmacy was 268%; the number of new users increased by 65% year-on-year. The relevant person in charge of JD Health said that in the future, JD Pharmacy would continue to focus on full life cycle management, including an all-category, all-scenario retail system layout. The company will work with partners to develop all retail channels and service scenarios, and continuously enrich the professional service-oriented pharmaceutical retail ecology to make health services ubiquitous.

Editor: Luke Sheehan

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