What Is ODM And OEM?

Provide product design and technology to OEM companies, and hand over the production of one's own products to OEM companies for production. To sum up, OEM products are the intellectual property rights owned by the customer, and the manufacturer is only responsible for production and manufacturing, commonly known as "OEM"; ODM products refer to the intellectual property rights of the product owned by the manufacturer, commonly known as "OEM". OEM was first popular in developed countries in Europe and America, and was a commercial choice made by international corporations to reduce production costs and increase product added value. Until now, most Chinese companies are engaged in contract manufacturing, and we can even see that most parts of the world have products made in China. As is well known, China is a manufacturing powerhouse, and many well-known brands in the world are produced by Chinese companies on behalf of them. The proportion of products produced and exported by China in the form of OEM accounts for 60%.

In the fiercely competitive medical industry, a drug takes as little as 5 years from research and development to market launch, as many as 20 years, with an average of 10 years. If we take the route of developing new drugs, we not only need to invest a lot of time and energy, but also spend tens of millions to establish our own production line. Outsourcing the research and development and production processes and focusing on marketing can easily generate profits. Working hard in the industry is not as fast as OEM, which is why more and more pharmaceutical companies with brand awareness and strong premium ability have embarked on the path of OEM. Although OEM is a shortcut to wealth, due to the difficulty of quality control and the uneven quality, once there is a problem, the brand power will also be damaged. In recent years, there have been increasing doubts about OEM pharmaceutical companies on social media platforms, and complaints about related products have become more prominent. The "trust crisis" faced by brands is also becoming increasingly apparent

At present, the pharmaceutical market is saturated and there is an excess of varieties. Against the backdrop of the "Red Sea" market, where large businesses acquire small businesses and large chains acquire small individual stores, industrial sales are becoming increasingly difficult. With the pharmaceutical retail industry entering the era of low profits, the development of OEM and other products has gradually become a new profit growth point for pharmacies, and has become a "hot commodity" that pharmacies are eager to pursue.
It is understood that both global international pharmaceutical retail companies, domestic listed chains, top 100 pharmacies, and alliances under capital integration have started or planned to develop their own OEM brands. Looking at the current market development, OEM cooperation models have become increasingly frequent in the pharmaceutical industry in recent years. Leading pharmaceutical retail enterprises such as People's Daily, Yixintang, Jianzhijia, and Yifeng are all intensifying their efforts to shape their own brands. In fact, there have been plans to gain an advantage in the fierce industry competition in the future.

From the market perspective, channels and terminals are also calling for OEM products, and the pharmaceutical circulation capital chain requires OEM products. OEM merchants are more popular among channels and terminals due to their policy flexibility, high market protection, and ability to maintain the price system and interest chain of various links in the channels and terminals.
Especially for some varieties that require high market and price system protection and have high sales volume, they are more suitable for OEM branding, such as gastrointestinal products, facial features products, and cold clearing and detoxifying products. For example, there are many popular categories such as cefuroxime granules, amoxicillin and clavulanate potassium (4:1), mecobalamin capsules, Jinguoyin throat tablets, acarbose tablets, etc.