Outlying pharmacies see success in sales

A pilot program undertaken in August to encourage pharmacies across the country to sell infant formula should expand to less-developed provinces, said an official in the organization that led the program.

Xu Jing, director of the International Brand Management Center, said the program was launched on Aug 14 as a trial run requested by the central government.

The center is a department of the China Association of International Trade, under the Ministry of Commerce.

In June, nine State-level ministries and administrations, including the China Food and Drug Administration and the Ministry of Commerce, issued advisory opinions aimed at enhancing the safety of infant formula.

The advisories said that the production and distribution of infant formula should be as strictly monitored as medicines and that there should be a trial run to sell the formula in pharmacies.

The trial run would provide people with a choice to buy the formula from a business that is regulated more strictly than an ordinary supermarket, and that can better ensure the safety of products, the Food and Drug Administration said on its website in June.

Most provinces took part in the trial run, but not all of them have seen satisfactory sales of infant formula from pharmacies, said Xu, the brand center director.

"The trend we have observed is that the less developed an area is, the more infant formula sells from its pharmacies," he said. "In such areas, the pharmacies lack strong competitors, such as developed e-commerce, supermarkets or maternity shops. Also, infant formula brands of poor quality are seen more often."

On the other hand, pharmacies in more developed cities like Shanghai and Beijing, where there are many supermarkets, maternity shops and online vendors, have a more difficult time. The pharmacies find competition much harsher, Xu said.

"Our next step is to develop the pharmacy channel in third- and fourth-tier cities, or even rural townships," he said. "We are having experts develop a special infant formula that suits Chinese children and that will be exclusively offered to pharmacies."

"Pharmacies are well-suited to sell specialized, high-end or functional formula products, as such products need stricter quality control," said Song Liang, a dairy industry analyst.

- Wang Qingyun