In China, two channels play a crucial role in drug sales and distribution, contributing significantly to the overall revenue generated by the pharmaceutical industry. The two channels hold significant importance:
Public healthcare institutions, encompassing municipality-level and county-level public hospitals, urban community health service centers and township hospitals
Retail pharmacies, encompassing both offline and online pharmacies
In 2023, the combined drug sales of the two major channels in China totaled 1,886.5 billion yuan, representing a 5.2% increase compared to the previous year. Notably, public healthcare institutions accounted for 70.7% of the overall sales, with retail pharmacies contributing to the remaining 29.3%.
China's Drug Sales in the Two Major Channels, 2016-2023Data source: Menet
Over the years, public healthcare institutions have maintained their stronghold as the primary contributors to China's drug sales, with their market share consistently ranging between 70% and 78%. However, from 2016 to 2023, a steady growth from 22.5% to 29.3% can be seen in the market share of retail pharmacies.
China's Drug Sales Proportion by Channels, 2016-2023
Data source: Menet
Performance of Public Healthcare Institutions
Among the public healthcare institutions, municipality-level public hospitals dominate the market with the highest sales revenue of 869.1 billion yuan. County-level public hospitals, urban community health service centers, and township hospitals followed with sales revenues of 286.3 billion yuan, 87.9 billion yuan, and 89.8 billion yuan respectively. It is noteworthy that despite urban community health service centers having the lowest sales figures, they exhibit a remarkable growth rate of 13%.
China's Public Healthcare Institutions Sales Revenue in 2023
Data source: Menet
Performance of Retail Pharmacies
The retail pharmacies market in China comprises both offline and online pharmacies. In 2023, the total sales of these two segments reached 553.3 billion yuan, showing a 6.2% year-on-year growth. Of this total, offline pharmacies accounted for 487.0 billion yuan, marking a 3.6% increase compared to the previous year. Offline pharmacies have constantly been the primary channel for consumers to purchase medications, maintaining a steady growth in sales. However, in recent years, their growth rate has slightly declined due to the impact of COVID-19 and the competition from online pharmacies.
China's Offline Pharmacies Sales Revenue, 2016-2023Data source: Menet
In 2023, the sales revenue of the online pharmacies market reached 66.3 billion yuan. Despite having a relatively small overall market share compared to other channels, it demonstrates tremendous growth potential, with a notable year-on-year growth rate of 30.8%. The online pharmacies sector experienced rapid expansion in 2020 due to the pandemic, with growth rates surpassing 50%. Subsequently, as the pandemic situation stabilized, the growth rate moderated but still remained above 30%.
China's Online Pharmacies Sales Revenue, 2016-2023Data source: Menet
