State-owned pharmaceutical companies tap direct-sales channel

Shandong Freda Pharmaceutical Group Co Ltd said on Saturday that its sales model has been extended to include direct sales. This makes the company being the fifth State-owned company in China to involve direct sales and the first in Shandong province.

The company got the direct sales license from the Chinese Ministry of Commerce in May, making it the 52nd company that can do direct sales business in China.

Direct sales is where goods are sold directly to consumers outside of a fixed retail environment.

Ma Yunpeng, general manager of Shandong Freda, said the company's new sales model which is named as Kangzhuang Dadao (Healthy Makeup Avenue) consists of experience-oriented shops, O2O and direct sales.

"Kangzhuang Dadao has more ways to reach consumers," Ma talked about the company's advantages in the field of direct sales.

"Shandong Freda is owned by Lushang Group whose businesses cover sectors like, retail, real estate, hotels and tourism, media, education and finance. This backs up our direct sales with complete industrial chains," said Ma.

Huang Xiaodong who is responsible for the company's direct sales business said although the direct sales business has seen a fast development in China in recent years, it is left behind by countries like Japan and South Korea.

"As a State-owned company, we will put efforts on developing the direct sales in a sound way," said Huang.

Since China's Regulations on Direct Sales issued in 2005, the number of direct sales companies has increased to over 60 by May. These companies create jobs for more than 30 million people and their sales reached 160 billion yuan in total last year.