Online sales help firms stay healthy

"Opening up online sales of prescription drugs is a pleasant surprise for many of them, although many are still trying to figure out how to capitalize on this move," he said.

Just after the release of the statement by the administration, J1, a medical e-commerce platform of China Resources (Holdings) Co Ltd, became the first online drugstore to complete financing in China. It declared completion of Around financing of 300 million yuan - including 110 million yuan for the early stage - by Shanghai International Group Venture Capital.

The capital will mainly be used for its data management center, online-to-offline system and call center to speed up the shift of J1 from an e-commerce service provider to a health management service provider.

"Since the launch of the website in October 2011, home-use medical devices, common drugs, vitamins and health tonics are among the most popular products at J1," said He Tao, J1's general manager.

"Prompted by the new policy, J1 is defined as a manager for customers' long-term medication, "He said.

As for Shi, though 7LK's current core businesses are in medical devices, family planning products and contact lenses, he said he will start focusing on pharmaceuticals.

"Turnover from drugs now accounts for 20 percent of our total revenue," he said.

Other e-commerce platform giants are also targeting the market.

Yhd, a Shanghai-based online supermarket controlled by Wal-Mart Stores Inc, has been given permission to sell over-the-counter medicines online.

Alibaba Group Holding Ltd paid $170 million in January for a stake in CITIC 21st Century, a Hong Kong-listed company that focuses on medical product data accumulation.

E-commerce company JD.com Inc is also awaiting approval of its pharmaceutical practice.

"Leading e-commerce players like Alibaba and JD have existing customer bases and a ready infrastructure going for-ward," Liu said.

However, Yu Zhibin, deputy director of the Chinese medicine department of the China Chamber of Commerce for Import and Export of Medicines and Health Products, said that unlike other products, medicine is a much more highly regulated category.

"Customers' purchasing process and selection criteria will be different, and delivery requirements more strict," Yu said.

Compared with traditional chain pharmacies, which have experience with medical logistics, third-party logistics companies do not have a dedicated drug distribution system.

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