Core Viewpoint - Yangtianhe Pharmacy has announced the termination of its cooperation with certain O2O platforms, highlighting the challenges faced by retail pharmacies in the current O2O business environment [2][4]. Group 1: Company Actions - Yangtianhe's decision to withdraw from O2O platforms was publicly announced by its regional manager and later confirmed by the vice president, specifically targeting the JD O2O platform [2]. - The company emphasizes that it does not oppose innovation or the e-commerce model but is against the monopolistic rules set by platforms [2][3]. - Yangtianhe currently operates over 4,000 stores across 19 provinces in China, with its franchise model at the core of its business [2]. Group 2: Industry Challenges - Retail pharmacies are experiencing a loss of operational autonomy due to high commission rates and competitive pressures from O2O platforms [3][4]. - The average commission rate charged by platforms can reach 15%, which is higher than the maximum VAT rate for retail pharmacies, significantly squeezing profit margins [3][4]. - Delivery costs for O2O services are often higher than traditional B2C models, further impacting profitability for pharmacies [3][4]. Group 3: Market Trends - The O2O pharmaceutical market in China reached 29.1 billion yuan in August 2025, with a year-on-year growth of 29.6%, indicating a strong market demand despite challenges [4]. - Some industry experts believe that the O2O model will continue to thrive due to changing consumer habits and the integration of online medical insurance payment systems [4][5]. - The trend suggests that O2O business will increasingly concentrate among leading companies, creating a "stronger stronger" market dynamic [6]. Group 4: Recommendations for Improvement - Experts suggest that e-commerce platforms should lower commission rates and improve transparency in their fee structures to support retail pharmacies [8][9]. - Retail pharmacies are encouraged to enhance their operational capabilities, including maintaining a diverse product inventory and optimizing store layouts to meet consumer demand [9][10]. - The future of retail pharmacies may involve more specialized operations focusing on O2O, private traffic management, and regional distribution services [10].