KIT: Retail Pharmacy Sector

Strategic tools for the practising manager

Domestic pharma retail market is evolving as the old order is giving way to the new. Medicine stores are being replaced by pharmacy chains that allow shoppers to browse through a vast range of products.

Share of the organised market is about 3-4 per cent of the total 800,000 stores across the country. Approximately 2,000 organised pharmacy stores have been added in the last five years, and another 3,000-4,000 new stores could be added in the next five years.

Growth in pharma retail is fueled by high margins (25-35 per cent), 7-10 per cent price increase on prescription drugs and growing consumer awareness.

 

The new age pharmacies are offering value-added services. Most of them have introduced facilities like free home delivery of medicines, round-the-clock service, prescription reminder service, loyalty programmes with reward points, healthcare books and newsletters at the stores.

The hospital-basedpharmacy forms about one-sixth of the total pharma retail sector, and is projected to grow at a compound annual growth rate of 13.5 per cent. This sub-segment is expected to account for roughly 75 per cent share of the hospital pharmacy by 2015.