In recent news from October 21, 2025, it was reported that Guangdong Nanshoufeng Health Pharmacy, with a registered capital of one hundred million Chinese yuan, has closed down all forty-five of its stores and has been officially announced for deregistration by regulatory authorities. The company is accused of withholding employee salaries and failing to pay taxes. Scholars estimate that around eighty percent of pharmacies nationwide are currently operating at a loss, signaling a period of overall contraction in the retail of pharmaceuticals.
Against the backdrop of the economic downturn in China, pharmacies across the mainland are struggling to stay afloat due to mounting debts. On September 5 and 18, the Meixian District Civil Affairs and Human Resources and Social Security Bureau of Meizhou City in Guangdong Province issued announcements stating that Nanshoufeng chain pharmacies owed wages to over ten employees, including Liu Zhengfang and Lai Xiaoyan.
According to news from the Chinese medical and pharmaceutical trading platform Suyao, small and medium-sized chain pharmacies such as Nanshoufeng Health Pharmacy, Yinchun Pharmacy in Xi’an, and Beijing Jingmenghuikang Medicine have encountered situations of salary arrears, closures, and deregistration, reflecting the structural pressures faced by the pharmaceutical retail industry during its transformation period.
An industry insider in Guangzhou, Mr. Chen, informed reporters that over the past three years, many pharmacies have relied on franchising and promotions to sustain their operations. However, with the squeeze on profit margins due to online channels and centralized procurement policies, small and medium-sized chains are struggling to cope with high rent and inventory pressures, forcing them to exit the market. He stated, “Nowadays, online platforms have transparent pricing, squeezing profit margins, and retail pharmacies without sufficient cash flow cannot sustain their operations, leading to a reduction in the number of pharmacies.”
In August, the Guangdong Provincial Drug Administration reported on 35 retail enterprises voluntarily applying to cancel their drug business licenses, including Nanshoufeng. Business records show that the company not only owes salaries but also owes a total of 307,000 yuan in value-added tax, urban maintenance and construction tax, and stamp duty.
The Meixian District Social Affairs Department has included Nanshoufeng Company on the wage arrears monitoring list and initiated the procedure for dealing with unresponsive businesses. An official from the Guangdong Provincial Drug Administration Office stated in response to inquiries that pharmacies in some regions of the province are facing significant operational pressures. The closure of many pharmacies is related to increased operating costs, decreased customer base, and other factors. “Some enterprises applying for deregistration is a normal exit, but many businesses are indeed affected by market changes, such as a decrease in customers,” the official added.
Industry data indicates that around 40,000 pharmacies in mainland China closed in 2024, with a projected further reduction of 50,000 to 100,000 pharmacies in 2025. According to the China Pharmaceutical Commerce Association, by the end of 2023, there were approximately 640,000 pharmacies nationwide, with an average of 4.6 pharmacies per thousand people.
A resident in Guangdong, Ms. Lin, posted on social media: “Three pharmacies near my home have already closed down.” Mr. Liu, a resident in Shanghai, commented, “Within a 500-meter radius, there are over a dozen pharmacies.”
A woman named Li in Wuhan, who lost her job due to a pharmacy closure, shared with reporters: “I heard from my friends in Quanzhou, Fujian, that many pharmacies there have shut down as well. With over six to seven hundred thousand pharmacies nationwide, more than eighty percent are operating at a loss. In some areas, pharmacies sell cooling tea, tonics, shampoo, and even provide scalp checking services.”
A pharmaceutical retail practitioner, Mr. Liu, who was originally involved in medical device sales but switched to pharmaceutical retail following his company’s closure, pointed out that one of the reasons for decreased foot traffic in traditional stores is due to online platforms offering medical insurance payments and the expansion of unmanned pharmacies, intensifying competition.
A social observer in Beijing, Mr. Deng, expressed that the situation in pharmaceutical retail mirrors that of other industries, primarily stemming from operational environment and structural adjustments. He stated, “The retail sector is transitioning from relying on ‘traffic flow’ to ‘service-oriented,’ and individual pharmacies with limited funds will be the first to exit.”
Mr. Deng believed that pharmacies should return to providing professional services, offering chronic disease management and health consultations, and utilizing digital tools to enhance operational efficiency. He emphasized, “Relying on selling cooling tea, shampoo cannot solve the problem,” questioning, “Who goes to a pharmacy to buy shampoo?”
Regarding the frequent closures of pharmacies, comments in the Douyin comment section included remarks such as “There are too many pharmacies, losses are normal.” Some people pointed out that “Pharmacies are a highly profitable industry, yet their services are lacking.” The majority of discussions highlighted that the high density of pharmacies coupled with declining consumer purchasing power are the main pressures exerted on the industry.
Observers anticipate that with increasing operating costs, pharmaceutical retail will accelerate its concentration in large chains and online platforms, and the trend of closures will continue to extend.