The biggest e-commerce player in China is planning to take over massive online pharmacy business. The company’s subsidiary, Alibaba Health Information Technology Ltd is about to sign a $2.5 billion deal. This deal has made Alibaba Group Holding Ltd one of the stakeholders in China’s exploding health care industry and the larger share of the revenue from this sector is ensured. After the government’s approval to sell prescribed drugs online, the Chinese giant will go ahead with the online sale. Jack Ma, founder of the company has big plans to diversify his e-commerce business.
The main reason behind this boom in health care is increased the disposable income of the Chinese citizens. They are spending more on health and wellness products. As the internet of things is growing, the sensors in handheld devices are providing them more information about their own body. This is naturally going to trigger a demand for medicines and health care.
The Alibaba group will acquire Chuanyum Logistics Investment Ltd from Ali JK investment by issuing shares and convertible bonds along with another deal in worth HK$19.4 billion ($2.5 billion). The data from initial public offerings, last year pointed out that the parent company already owns 38 percent shares in its health arm. The Tmall business by the same group will be integrating these products within itself.
As of now China only allows the selling of over-the-counter medicines in an online space. The new move will definitely open up the economy further and reshape the $149 billion market.