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Wholesale Moves in China
US pharmaceutical companies have long prospered by following a sales model in which a stream of sales representatives, confident that at least one of them will gain access, call on the very same doctors. But recently there has been an explosion in the number of reps as well as a raft of new pressures: busier physicians, the proliferation of new drugs, and greater competition among the companies that produce and market them. Physicians, reps, and pharmaceutical companies are quickly losing patience with a system that is increasingly inefficient and costly.
The take-away: The rationalization of China's wholesale industry should increase the profit margins of consumer products companies and ease the passage of goods to their final destination. Moreover, changing trends and a relaxation of the ban on foreign ownership are opening up business opportunities in Chinese wholesaling for foreign retailers and foreign trading and consumer products companies.
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© 1992-2003 McKinsey & Company, Inc
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