China’s domestic healthcare market attractive to logistics providers such as UPS
Article by Cathy Morrow Roberson from Transport Intelligence - Published on June 15th 2013
While much of the focus has been on the export market, the domestic market holds great opportunities for logistics providers such as UPS. In 2011, China’s government adopted a national strategy to expand and improve the country’s healthcare system. With a population of over 1.3 billion, the potential is great and opportunities abound for all involved in the healthcare industry.
While the opportunities are great, the competition is strong and fragmented. Domestic express providers such as SF Express and STO Express have been working towards expanding their reach across China by acquiring regional providers.
Sinopharm manages its logistics network through its subsidiary, Sinopharm Logistics, which manages eight major regional hubs in Shanghai, Beijing, Guangzhou, Shenyang, Xi’an, Xinjiang, Wuhan and Chengdu. Sinopharm Logistics provides such services as warehousing, distribution and delivery of medical devices, pharmaceuticals and clinical trials. It has its own fleet of over 300 vehicles.
While Sinopharm is one of the largest domestic manufacturers/distributors of healthcare solutions, its market share remains relatively small in the fragmented market. In fact the three largest Chinese distributors, including Sinopharm, comprise less than 30% of the domestic Chinese market.
A challenging strategy for UPS to undertake for sure but one that could provide many benefits if successful. The company has invested in specialized healthcare distribution centers in China and has also received government approval from the Chinese government to provide domestic express transportation in several cities. A good start as it sets its eyes towards inland China and plans its national healthcare logistics network in China.