SHANGHAI: Alibaba Group Holding Ltd founder Jack Maand other investors will pump up to 10 billion yuan ($1.61 billion) into Chinese drugmaker Guangzhou Baiyunshan Pharmaceutical Holdings Co Ltd to help fuel its online expansion.
Yunfeng Capital, an investment vehicle co-founded by Ma, will invest 500 million yuan via a private placement, Baiyunshan said in a statement late on Monday. China Life Insurance Co Ltd will invest around 2.5 billion yuan.
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| (Yunfeng Capital, an investment…) |
Baiyunshan said the online drug market was worth 4.3 billion yuan in 2013, but only accounted for a fraction of the wider medicine market. "It's a long way below the US level of around 30 per cent. So there's plenty of room to grow," Baiyunshan said.
Baiyunshan's shares rose 10 per cent in Shanghai on Tuesday, the maximum permitted amount, and around 19 per cent in Hong Kong.
Reuters reported last week that China will allow online sales of prescription drugs as early as this month, a policy that will open up the country's huge drug market to online pharmacy operators and retail chains.
Baiyunshan, which had sales of 17.6 billion yuan in 2013, is best know for a treatment known as "Golden Spear", a Viagra rival, and its hugely popular Wanglaoji herbal tea beverage.
The drugmaker said the capital would be used to fund research and development, help meet increasingly tough regulations as well as help the firm grow online. It will also help refinance the firm's beverage unit, which makes Wanglaoji.
E-commerce giant Alibaba, which analysts say controls 40 per cent of the online medicine market, partnered with Yunfeng last year to buy Internet drug platform CITIC 21CN. That has since been renamed Alibaba Health Information Technology Ltd.
Alibaba did not immediately respond to requests for comment.
Other investors in the private placement included Guangzhou Pharmaceuticals Holdings Ltd and the Guangzhou state assets development body.
Wal-Mart Stores Inc's online platform Yihaodian, JD.com Inc and online pharmacy 800pharm.com are also looking to take a chunk of the online pharmacy market.
Source: http://articles.economictimes.indiatimes.com/2015-01-13/news/58024211_1_drug-market-online-sales-medicine-market
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