Retail Pharmacies

Topics: Retailing, Shopping mall, Department store Pages: 13 (4248 words) Published: March 22, 2011
Retail pharmacies; the next big battle ground?
February 16th, 2007 · 5 Comments

The pharmacy retail trade, which is highly fragmented and until now dominated by small chemists, is bracing up for a quick revamp. Big industry houses like Ranbaxy (Fortis), Reliance Retail, ADAG ( Reliance Health Venture), together with other big multi-verticle, multi-format, retailers like Pantaloon (Tulsi) and Subhiksha as well as other regional healthcare players like Apollo Pharmacy (Apollo Hospitals Group), Medicine Shoppee (international drug retail chain), Dial fo Health (Zydus Cadilla), Planet Health (Sagar Drugs & Pharmaceuticals), Life Spring (Morepan), Health & Glow (Dairy Farm), LifeKen (Lifetime Healthcare), 98.4 (Global Healthline), Body Shop (now acquired by French beauty major L`oreal), Guardian Pharmacy (Guardian Lifecare), are rolling out their plans to set up thousands of pharmacies and healthcare stores in the coming three to four years.

Even, the traditional chemists, numbering over 5 lakh, in the face of formidable competition, are also trying to organise themselves under the banner of their trade association- All India Chemists and Druggists Organization (AICDO), which for decades has been fighting to protect their business interests, by registering itself as a company.

The pharmacy trade in the country generates an estimated business of Rs. 32,000 crore, apart from about Rs. 18,000 added by hospital pharmacies and exports. Almost all the chemists beside selling allopathic medicines also offer OTC and alternate medicines, surgicals, rehabilitation aids and bodycare products like soaps, tooth pastes, hair oils, shampoos, cleansing lotions and neutraceuticals, among others, for sale which according to rough estimates generate an additional turnover of about Rs. 15,000 crore.

Take a look at retail plans of some of the existing/ local players, not counting the likes of Wal-Mart, which does formidable drug retail business in the US: Apollo is ramping up its present network of over 120 pharmacies to 1,000 phamacies by 2009. Subhiksha’s tally of over 500 now now, is set to increase to 1,200 within a year. Fortis, healthcare services arm of the pharma giant Ranbaxy Group, which has set aside Rs. 800 crore will roll out 1,000 phamacies in 400 towns, within a cople of years. 250 of these will go on stream during the current year, itself.

Ambani brothers are also gung-ho on the pharmacy business. While, Anil Ambani owned Reliance Health Venture has set aside Rs. 1,200 crore for investment in pharma retailing, elder brother Mukesh Ambani is on the verge of buying a generic drug manufacturing company to meet the requirement of pharmacies to be set up within Reliance Retail outlets.

To understand the frantic pace at which even regional healthcare players are planning their moves in this sector, one will have to just look at the expansion plans of some of these players.

Bangalore based LifeKen, owned by Lifetime Healthcare Pvt Ltd, which now has over 60 stores in Chennai and Bangalore has plans ramp up the tall to 200 stores within a year and to 700 stores in the next three years. On the other hand North based Global Healthline owned “98.4,” which set up its first shop in Gurgaon in 2003, is investing Rs. 100 crore to set up 300 shops by 2011. It will follow ‘concentric circles’ expansion strategy, initially concentrating on the northern region. Ahmedabad based, Planet Health, wants to expand its network international class deluxe pharmacies from 14 to 150 within a couple of years. Another North India based retailer Guardian Pharmacy, Guardian Lifecare Pvt. Ltd, has over 50 shops is also looking at expanding its network. Medicine Shoppee, a master franchisee of the $75 billion Cardinal Health Inc., is planning to have 700 franchisee shops by 2010. Tags: Retail Analysis

Anil Dogra // Mar 5, 2007 at 9:31 am
I do not think the impact of organized retailing on the stand alone chemists will be too much. May be 20...
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