Summary of the Key Points in Plain Language
This article clearly explains the “rollercoaster market” experience of Pianzihuang over the past five years: In 2021, the officially priced Pianzihuang tablets, which were 590 yuan each, were speculatively driven up by scalpers to 1600 yuan, leading to a frenzy across the market with everyone trying to buy them despite price restrictions. Now that the official guidance price has been raised to 760 yuan, many online and offline channels are secretly selling them at lower prices, with transaction prices actually falling below the official mark. As a result, revenue and net profit in the first half of this year have decreased by nearly 15% and 24% respectively. Essentially, the previous cycle of “the higher the price, the more people buy” that supported Pianzihuang’s high price has broken down. The artificial demand created by hoarding and expectations of price increases is now deflating. Whether the new price of 760 yuan can hold holds depends entirely on whether real consumers are willing to pay that amount.
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Detailed Explanation in Layman’s Terms
1. Why has the official price increased by nearly 30%, but the actual purchase price become cheaper?
Many people might think “Pianzihuang’s price has dropped,” but in reality, the company can only set a “suggested retail price” and cannot control the actual transaction price paid by consumers.
Five years ago, the 590 yuan official price was already the lowest possible price; it was impossible to buy at that price, and everyone had to pay extra to get the product. Now, with the official price clearly listed at 760 yuan, channels are willing to sell at a lower price to move goods. This anomaly, where the listed price remains high while the actual transaction price drops, indicates that the forces that previously drove up the price have weakened. It’s like the trendy bubble tea shops around you: initially, scalpers would add a 5 yuan surcharge to the official 20 yuan price, but now that the official price has risen to 25 yuan, delivery platforms offer coupons for 18 yuan, and no one is interested in the previous hype.
2. The frenzied buying five years ago wasn’t because more people suddenly needed the medicine
Many people think the out-of-stock situation was due to a sudden surge in demand from liver disease patients, but that’s not the case. Only about half of the buyers were actual patients; the other three factors were the main drivers of the price surge:
- People buying it as gifts, treating it as a luxury health product;
- Distributors hoarding the product, knowing they could resell it for a profit later;
- Ordinary consumers fearing further price increases and buying it in advance.
These factors created a vicious cycle: difficulty in obtaining the product → price increase → greater belief in future price increases → even more buying, which contradicts the common sense that higher prices would reduce demand. However, this cycle has a critical flaw: if even one person believes the price will fall, everyone will start selling, and the cycle reverses.
3. Why has performance dropped by 24%? Does that mean no one wants Pianzihuang anymore?
The significant drop in profits this half-year suggests this, but it’s an exaggeration. The company still sold 2.3 billion yuan worth of Pianzihuang, with a gross margin of over 60%, indicating that the core medical demand remains strong. The main reason for the decline is that distributors previously hoarded the product as an investment, hoping for price increases. For example, a pharmacy owner who bought 100 tablets at once could earn a profit by selling 5 per month and holding the rest for price increases. Now that expectations of price increases have faded, no one dares to hoard, so sales have plummeted. At least half of the performance decline is due to distributors clearing their inventory.
4. The nickname “Moutai of Medicines” was a misunderstanding
The financial market once compared Pianzihuang to Moutai, suggesting they both had historical significance, scarce ingredients, and unlimited price potential. However, their demand patterns are vastly different. High-end liquor can be used for business events, gifts, and investment, and its value increases over time. Pianzihuang, being a medicine, cannot be treated the same way; its value depends on its medical use, not its potential for investment.
5. The 760 yuan price now depends on real consumer demand
Even if raw material prices drop and distributors clear their inventory, a temporary improvement in performance won’t be a true sign of stability. The profit increase from lower raw material costs has nothing to do with consumers’ willingness to pay 760 yuan. A rebound in sales after distributors clear inventory merely restores previous levels, not indicating improved demand. The real test will come when no one believes prices will continue to rise; only then will we know if consumers will still pay 760 yuan for Pianzihuang based on actual need. The high price in the past was supported by speculation and hoarding; now, it must stand on its own merit.