India-based pharmaceutical firm Cipla reported less-than-stellar stats for its fourth quarter, and the company is blaming the poor performance on its shift away from a B2B business model.
Cipla revealed Thursday (Feb. 12) that it saw a 6.1 percent fall in export sales; overall, the company’s sales rose only by 2.2 percent Q4. While Cipla enjoyed a 14.2 percent growth in domestic sales, reports say the firm acknowledges the disappointing numbers and notes that they can be attributed to supply constraints as well as its depart from B2B operations.
The pharmaceutical firm began operating on a direct selling model, though the supplier is still awaiting performance results from its supply of generic Nexium to Teva Pharmaceuticals, the only company to gave gained approval so far to enter the treatment into the US market.
Plus, the firm said, cost savings in procurement are sure to give future quarters’ numbers a boost, preventing a net profit decline. Reports say Cipla expects that full-year growth in FY16 will be in the “mid-teens,” but investors may show concern thanks to Cipla’s recognition that its departure from business-to-business operations will cause an adjustment time for company exports.
Despite Cipla’s departure from India’s B2B space, other players in the industry are expanding operations. Walmart has played an especially large role since strengthening its e-commerce service support in the nation, while Chinese e-commerce giant Alibaba continues its B2B e-commerce operations within India.
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