China’s online-to-offline (O2O) medicine retailer Dingdang Kuaiyao has closed its Series B round, raising RMB 600 million (USD 89 million), KrASIA’s parent company 36Kr reported on Wednesday. SB China Capital, China’s oldest investment bank CICC’s private equity arm, and China Merchants Bank’s investment vehicle contributed funds.
Dingdang Kuaiyao—which is also known as Dingdang Medicine Express (Beijing) Technology Co., Ltd.—guarantees that its deliveries of over-the-counter medication reach clients within 28 minutes, provided that orders are placed in the downtown areas of the ten cities where it operates.
Dingdang operates its own pharmacies, which package shipments for its logistics fleet. It has made 50 million deliveries since the service went online in Feburary 2015. To keep procurement costs low, Dingdang has partnered with more than 600 pharmaceutical companies, including GlaxoSmithKline and Bayer.
The company has also been adding a diverse range of products to its inventory, including Chinese herbal medicines, small-sized medical equipment, cosmeceuticals, as well as personal and family care items.
This asset-heavy business model burns through Dingdang’s cash quickly. The company said it will use its new funds to add more pharmacies where it already has a presence, and also expand its services to other locations in China.
In December 2016, the company raised RMB 300 million in its Series A fundraising round, and then received “several hundred million yuan” from SB China Capital as an investment in January 2018, according to the company’s website.
Alibaba and JD.com also have their own O2O medicine retail businesses. The Alibaba Health platform promises delivery within 30 minutes in the downtown areas of Beijing, Guangzhou, and Shenzhen between 9:00 a.m. and 9:59 p.m. On the other hand, JD.com sells medication like other consumer goods on its platform, which take at least half a day to be delivered.
To compete with deep-pocketed competitors, Dingdang has also been leveraging listings on Meituan to reach a large consumer base, apart from its own platforms.
Dingdang would be the first recommendation when people search the key word “medicine” on Meituan, KrASIA confirmed on Thursday.
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