Summary of the Key Points
This news article discusses a phenomenon where many pharmaceutical brands, whether they are established companies transitioning to online marketing or newly founded "lightweight" businesses, are experiencing explosive sales through online "product recommendation" strategies, with annual revenues reaching 1 billion yuan or more. Their approach involves sharing user experiences and medical expertise on platforms like Douyin and REDnote, presenting the products as miracle solutions for specific issues such as hair loss and acne, and then directing users to e-commerce platforms for purchase. However, this success comes at a high cost of marketing investment (for example, Mandy spends over 40% of its revenue on marketing each year). At the same time, established pharmaceutical companies face numerous challenges in transitioning to online sales, and these new brands also have to contend with stricter regulations and the challenges of being early entrants in the market.
How Do Pharmaceutical Brands Use Product Recommendations to Sell Their Products?
In the past, pharmaceutical products were mainly sold through hospital prescriptions and offline pharmacies. The new approach combines "content-based product recommendations" with e-commerce conversions:
- Case 1: Rebranded Established Product: Zhiyuan Pharmaceutical's metronidazole gel (in small tubes) was launched in 2002, but its annual sales were only in the tens of millions of yuan for the first decade. After a rebranding and the promotion of its effectiveness in treating acne caused by staying up late and hormonal changes, its annual sales exceeded 200 million yuan within two years, thanks to user sharing and medical advice on these platforms.
- Case 2: New Brand with a Lightweight Model: Yaodaimai, a company without its own manufacturing facilities, relies on brands like "Shi Silv" (for dermatology) and "Weige" (for urology) and uses the same marketing strategy to generate annual GMV (Gross Merchandise Value) of over 100 million yuan for individual products.
- Core Strategy: The focus is not on stating that the product is a medicine for treating diseases, but on emphasizing its ability to solve specific problems (such as hair loss or acne). Real user experiences (e.g., "hair growth after 3 months of use") are used to attract attention, leading users to purchase on platforms like JD.com and Alibaba.
Which Pharmaceuticals Can Succeed in Online Sales?
Not all pharmaceutical products are suitable for online marketing; they must meet the criteria of being considered "consumer goods":
1. Low Price: The price per purchase should not exceed 200 yuan; products priced above 400 yuan usually require a doctor's prescription. Products priced around 20-60 yuan are the most popular, as they fit into the "impulsive purchase" category.
2. Large Target Audience: The market for these products is vast, such as the 340 million people affected by hair loss, the over 100 million with acne, or the billion-dollar urology market, which can support the scale effects of online marketing.
3. High Repeat Purchase Rate: Products for hair loss and acne often require long-term use, so users are likely to make additional purchases, allowing the initial marketing investment to pay off.
4. User Decision-Making Power: Users should be able to make decisions independently, such as buying acne treatment products without a doctor's prescription. Both OTC (over-the-counter) and prescription drugs can be sold online with the option of online consultations.
Why Is It So Difficult for Established Pharmaceutical Companies to Transition to Online Sales?
New brands can quickly gain momentum, but established companies face significant barriers:
1. Price Disparity: Established companies have complex distribution channels with multiple intermediaries and hospital entry fees, increasing costs by 40% compared to online sales. For example, a product sold for 40 yuan offline may only be sold for 28 yuan online. Lowering prices could disrupt offline sales, while not lowering them could make online sales less competitive, and advertising may drive traffic to cheaper competitors.
2. Internal Organizational Resistance: Different departments within established companies (hospital sales, e-commerce, retail) often have separate KPIs and may compete with each other, making it difficult to coordinate online efforts.
3. Mindset Barriers: Established companies are accustomed to traditional marketing methods (e.g., using hospitality and networking) and are unfamiliar with online marketing strategies, which can slow down their adoption of new approaches and cause them to miss optimal opportunities.
Can These Product Recommendation Brands Continue to Succeed?
Despite current success, they face several challenges in the future:
1. Stricter Regulations: Platforms may restrict product recommendation content due to concerns about disrupting the community ecosystem, and national regulations on pharmaceutical marketing are becoming more stringent.
2. Barriers to Entry: Leading brands have already established a strong presence in popular markets, making it more expensive for new entrants to gain a foothold.
3. Sustainability of High Marketing Costs: High marketing expenses (e.g., 40% of revenue for Mandy) may become unsustainable if advertising costs increase or if consumer interest fades.
In summary, online product recommendations for pharmaceutical products represent a new trend, but it's not a guaranteed path to success. New brands must navigate regulatory challenges and competition, while established companies need to overcome transformational difficulties. Only those that can adapt to these changes will be able to thrive in the long term.
(The entire article is written in plain language, making it easy for non-financial professionals to understand.)