Alibaba Health’s net loss narrows by 92 per cent as coronavirus fuels more online drug purchases in mainland China
- Net loss for year ended March 31, 2020 narrows to 6.59 million yuan from 81.95 million yuan a year ago
- Company’s total revenue rises 88.3 per cent to 9.6 billion yuan from 5.1 billion yuan
Alibaba Health Information Technology said on Wednesday it would strengthen partnerships with upstream pharmaceutical companies to further expand its direct online drug sales, after reporting a narrower net loss for the full year of 2019, thanks to wider adoption of online drug purchases during the coronavirus pandemic.
The flagship health care platform of Alibaba Group Holding said its net loss for the year ended March 31, 2020 narrowed 92 per cent to 6.59 million yuan (US$919,488) from 81.95 million yuan a year ago. The improvement came as total revenue rose 88.3 per cent to 9.6 billion yuan from 5.1 billion yuan, the company said in a stock exchange filing after market close.
Direct online sales accounted for more than 80 per cent of Alibaba Health’s revenue last year. Through its two direct online stores, it sells prescription and over-the-counter drugs, health supplements and skincare products to 48 million active customers, who can also access its online consultation service.
“During the Covid-19 pandemic, the direct business was negatively affected by inadequate transport capacity and temporary shortage of some medicines,” it said. Still, revenue for this business segment nearly doubled and rose to 8.13 billion yuan.
Alibaba Health said the pandemic, which caused the lockdown of numerous provinces across China, had benefited its business, as it had “fuelled consumers’ virtual behaviour of seeking medical advice and medication online”. The coronavirus outbreak, which has largely been brought under control compared to a peak seen in January and February, has led to more than 4,500 deaths and over 80,000 confirmed cases as of Wednesday.
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This has in part grown the number of Alibaba Health’s annual active customers on its Tmall pharmaceutical platform by 30 million. The total number of its annual active customers stands at more than 190 million now. The gross merchandise volume generated by the platform reached 83.5 billion yuan. Tmall is a business-to-consumer online retail website operated by Alibaba, which also owns the South China Morning Post.
During the peak of Covid-19, Alibaba Health partnered with Tmall to provide medicine delivery services to patients with chronic diseases throughout China. In March, it started a partnership with GlaxoSmithKline to debut the pharmaceutical giant’s products for chronic obstructive pulmonary disease on its platform.
“The group has accelerated its cooperation with upstream pharmaceutical companies. The Alibaba Health platform … has provided value-added services for pharmaceutical companies, and will continue to expand its business model on that basis,” the company said.
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The loss amounted to 0.06 Hong Kong cents per share, down from 0.74 Hong Kong cents a year ago. Alibaba Health closed down 5.2 per cent at HK$18.08 on Wednesday.
