Taobao Mall Takes Hit with Drug Sale Ban 中国规范网络售药或重创淘宝商城

By newsdoug on July 22, 2011

Alibaba’s Taobao Mall, the B2C portion of Taobao that was split off into a separate entity under a restructuring last month (previous post) looks set to take a hit, as China moves to clean up its unruly pharmaceuticals industry by banning the sale of drugs online. (English article) The campaign looks very much like similar ones that Beijing has launched from time to time, and in particular resembles a drive a few years back to stop hospitals from making bogus claims through advertisements. That campaign saw traditional and new media companies like Focus Media (Nasdaq: FMCN) and Sina (Nasdaq: SINA) suffer as hospitals and clinics, in search of more revenue as they were freed from state support, had become some of the biggest buyers of advertisements at the time. It’s hard to say how big the impact will be on Taobao from this latest drive to regulate drug sales, but I’m guessing such sales probably comprise a fair share of its transaction volume, probably somewhere in the 5-10 percent range. The loss of commissions from such sales won’t be devastating, but will certainly deal the company a setback, especially as it prepares for in IPO which I expect will come in the next year as Taobao investors, most notably Japan’s Softbank, clamor for some return on their investment. The ban could also have an impact on some other e-commerce sites, though many of the big ones, such as Dangdang (NYSE: DANG) and Vancl, seem to be steering clear of the drug sector and focusing on less controversial products like books and clothing. Still, this latest ban is just the latest reminder that nothing in China is certain, either online or offline, and these kinds of periodic “clean-ups” can hit just about anyone at any time.

Bottom line: Alibaba’s Taobao Mall will take a hit with China’s latest crackdown on online drug sales, taking away some of the company’s momentum as it prepares for an IPO as soon as next year.

中国正对网上售药进行治理，以规范药品行业，阿里巴巴旗下的淘宝商城料将受到影响。这与中国政府以往不时推出的行动很像，尤其是几年前，因为医院和诊所改制，不再得到国家资金支持，为寻找创收渠道，部分医院诊所成为广告商最大客户之一，而当时，政府发起禁止医院打广告夸大药效的行动，让分众传媒（Focus Media）<FMCN.O>和新浪<SINA.O>等媒体公司遭重创。很难说这次规范药品行业销售行动对淘宝的影响有多大，但我猜测，淘宝的交易额将受到一定影响，比例可能在5-10%左右。此类销售的佣金损失不会是毁灭性的，但肯定对淘宝商城不利，尤其是该公司正准备上市。我预计，由於淘宝投资者，尤其是日本软银，急於获取投资回报，公司将在明年上市。这一禁令也可能影响到其他电子商务网站，但当当网<DANG.N>和凡客诚品等许多大型平台正清除售药类别，重点发展图书和服饰等争议较小的产品。但此事提醒我们，在中国没有什麽是确定的，无论是线上还是线下，这些不时进行的“严打行动”可能在任何时间，影响到任何人。

一句话：中国近期严打网络售药，阿里巴巴旗下的淘宝商城或受创，在公司准备进行IPO之际，可能对其造成一定影响。