Apollo Pharmacy, the retail pharmacy chain under Apollo Hospitals Enterprise Ltd, is looking to grow its private label business by expanding its product portfolio with 35 more health and wellness products soon.
The company also plans to add generic medicine portfolio to the product basket in the near future, said sources close to the development.
The company, which already has over 200 Stock Keeping Units (SKUs) in around 80-100 products under its private label, has around 30-35 products under pipeline, and another 10-15 products in the planning stage, said sources from the company.
The existing product portfolio includes personal care, skin care, body care, health food, nutritional supplements, hygiene products like handwash, adult diaper and lifestyle related products like face moisturiser. The new products would also be in the same category, but cater to different market requirements,.
The private labeling business accounted to around 1.8 per cent of the total Apollo Pharmacy retail business of around Rs 650 crore, last year. It is growing at almost 10 per cent every month and is expected to double its share in the overall retail chain business in the current fiscal, said sources on condition of anonymity. The products are outsourced from third party manufacturers. The margins for private label products are around 45 to 50 per cent higher when compared to the same products of external brands. This also helps the retail chain to offer these products in around 20-30 per cent lower price than the competitor, said a source.
Further, the company is also planning to commence generic pharma business, starting from outsourcing and marketing over the counter (OTC) products. Plans are in the preliminary stage and might take shape in 2012, said another source from the company. Apollo Pharmacy has around 1,300 outlets operational at present. It plans to open around 250 outlets across the country in current fiscal, out of which more than 150 are already launched in the first two quarters of the fiscal. It has also shut down around 75 non-performing outlets in this fiscal, as part of restructuring the business.
It has to be noted that according to earlier reports Apollo Hospitals Enterprise Ltd has been considering hiving off the pharmacy business to a separate subsidiary, for the last couple of years, as one of its options to grow the retail pharmacy business.
At present, the private labeling business of Apollo Pharmacy has brands including Apollo Pharmacy, under which it sells cotton buds, toothbrush, mouth wash, hand sanitiser and adult diapers, B +ve under which lip balm, body wash, face wash, glycerin soap, all purpose cream, sunscreen lotion and moisturiser are sold. It also has a baby care brand Baby Best and a healthcare brand Doctor Choice under which it sells cotton crepe bandage, hot and cold gel pack, knee support, pregnancy test card, glycerin and adhesive bandage.