When the news of GNC’s bankruptcy was announced, it was well-acknowledged that GNC had a joint venture with China’s Harbin Pharmaceutical Group Holding Co., Ltd (“Hayao”) beginning in 2018.
Unlike GNC’s strategy of making dietary supplements as Fast Moving Consumer Goods, Hayao establishes pharmacy channels, allowing for professional specialists to provide customers with product introductions in a healthcare type setting.
The value of the cooperation between Hayao and GNC is that Hayao will leverage GNC’s brand image to enhance its own competitiveness in China. For GNC, gaining much needed investment from Harbin Pharma may be the only way for GNC to get out of its current financial woes. Harbin’s $760 million bid for GNC will likely hold up as the winning offer. Back in February of 2018, Harbin Pharma and GNC created a joint venture in China. Under the terms of the JV agreement, Harbin invested approximately $300 million in GNC, becoming the single largest shareholder in GNC.
For those not too familiar with Harbin Pharmaceutical, here’s some facts:
Harbin group owns two listed companies, one is Harbin Pharma, another is Ren Min Tong Tai, which has online pharmacies. For Harbin’s offline business, they are working with more than 1,000 medical institutions, 1,900 third-party retailors, 700 business partners, and covering 95% percent of the top-level hospitals and 90% percent of second level hospitals.
Harbin has 1,816 medicine approvals and 74 blue hats (health product registration).
Currently GNC has the following blue hat registrations:
Melatonin – Submitted on 2015
Coenzyme Q10 + Vitamin E – Submitted on 2013
Classical joint formula – Submitted on 2012
Green tea and L-carnitine – Submitted on 2013
For more information on Harbin Pharma, visit their English site HERE
(Sources: GNC, HPA-China, Harbin Pharma)