ChinaDistributionStrategyEasternChina:Shanghai,Nanjing,ChangzhouInterimReview:Shanghai0Note:RailwayMedicalCollegeSource:BainInterviewsSource:BainInterviewsSource:BainInterviewsShanghai:HospitalEnvironment(GeneralHospital)Nanjing:HospitalEnvironment(GeneralHospital)Changzhou:HospitalEnvironmentPercentofTotalHospitalDrugSalesAverageDrugSales/Hospital(RmbBn)Source:HospitalInterviews;BainEstimateSource:BainInterviewsNote:*RailwayMedicalCollegeSource:BainInterviewsSource:BainInterviewsSource:MinistryofHealth,MinistryofLabor,HospitalInterviewsEasternChina:DrugRetailEnvironmentSource:BainInterviewsPercentofTotalDrugStores/SalesAverageAnnualDrugSales/Outlet(RMBMM)ChinaDistributionStrategyNanjing:DrugStoreKeyPlayersChinaDistributionStrategyChangzhou:ChangzhouPharmaceuticalRetailOperationsChinaDistributionStrategyNote:*ExcludingoutsidecitysalesbyShanghaiPharmaceuticalCompany’s38distributionbranchesacrossChina,whichsellmainlydrugsmanufacturedbyShanghaiPharmaceuticalGroupanditsassociatedcompanies**NotincludingdistributorsspecializedincertainbrandsSource:BainInterviewsNanjing:PharmaceuticalDistributionStructure(Non-TCMPharmaceuticals)Changzhou:DistributionStructureNote:*Onlyincludesalespurchasedfrommanufacturers;**50%ofsalesinShanghaiSource:BainInterviewsPercentofTotalSalesChinaDistributionStrategyShanghai:DistributorProfileSource:BainInterviewsNanjing:DistributorBackgroundSource:HospitalInterviewsSource:BainInterviewsChinaDistributionStrategySource:BainInterviewsShanghai:DistributorProductMixNanjing:DistributorProductMixAverageAnnualThroughput(Rmb)1998PercentofTotalSales%ofSalesAverageAnnualThroughput(Rmb)1998EasternChina:ProductRequirementsEasternChina:ProductRequirements(BasicServices)EasternChina:HospitalPerceptionsofBayer(Prices)Shanghai:RetailPriceComparisonsEasternChina:TypicalMarginStructureEasternChina:MarketingImportanceEasternChina:Hospital/DrugStorePerceptionsofBayer(ProductDifferentiation/Knowledge)EasternChina:PhysicianExpectations(RelationshipBuilding)Bay