Apollo Pharmacy to expand private labels

Apollo Pharmacy, the retail pharmacy chain under Apollo Hospitals Enterprise Ltd, is looking at growing its private label business by expanding its portfolio with around 35 more health and wellness products soon. The company also plans to add generic medicines portfolio to the product basket in the near future, said sources close to the development.

The company, which already has more than 200 stock keeping units (SKUs) in 80-100 products under its private label, has 30-35 products in the pipeline, and another 10-15 in the planning stage, they sources.

The existing 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,.

Private labeling accounted for 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 45 to 50 per cent higher when compared with the same products of external brands. This also helps the retail chain to offer these products at 20-30 per cent lower price than the competitor.

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 company source.

Apollo Pharmacy has around 1,300 outlets operational at present. It plans to open around 250 outlets across the country in current fiscal, of which more than 150 have already been 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.

According to earlier reports Apollo Hospitals Enterprise is considering hiving off the pharmacy business into a separate subsidiary as one of the options to grow the retail pharmacy business.

At present, its private labeling business has brands including Apollo Pharmacy, under which it sells cotton buds, toothbrush, mouth wash, hand sanitiser and adult diapers, and under B+ve 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.