Pharmacy Retail Market - India

September 2009

Executive Summary
Market
The market is valued at INR XX bn in 20--; Estimated to reach INR YY bn in 20- The market is fragmented and dominated by the unorganized sector There are U pharmacies in India with about V distributors

Drivers:

Drivers & Challenges

Increase in healthcare spending Growth in pharmaceuticals sector Changing disease profile Consumer attitudes Attractive margins Growth in OTC Segment

Trends

Loyalty Schemes Value Added Services Tie-ups with Retail firms Rural Expansion Entry of Government in Pharmacy Retailing Entry of Private Labels Organized Retailers starting Pharmacy Chains

LE P M A S

Challenges:
Fragmented industry Long distribution and supply chain Counterfeit drugs FDI regulations

Competition

Company 1 leads in the organized pharma retail market with highest number of outlets Leading organized players include Company 1, Company 2, Company 3 and Company 4 Primarily organized retail chains operate either as a company owned or as a franchisee outlet
PHARMACY RETAIL MARKET INDIA.PPT

Market Overview Drivers & Challenges Trends Government Regulations Competition Key Developments

PHARMACY RETAIL MARKET INDIA.PPT

The market is highly fragmented and dominated by the unorganized sector

Market Overview
There are U pharmacies in India today, with about V distributors Market is fragmented and dominated by the unorganized sector Growth in this market is driven by increasing healthcare spending, growth in organized retailing and attractive margins The entry of organized players is changing the face of the pharmacy business in India

Overall Market Size & Growth

INR bn
600 400 200 0

The organized space of pharmacy retailing is dominated by p-q big players Primarily, organized retail chains operate either as a company owned or managed stores or as a franchisee outlet

LE P M A S

a% X

2009

2011

Revenue split Organized vs Unorganized

Organized v%

In India, pharmacies/drug stores are the dominant distribution channel generating b% of the overall pharmaceutical sales

u% Unorganized

Source: PHARMACY RETAIL MARKET INDIA.PPT

Pharmacy chains are expanding operations using various store formats

Store Format Description

Hospital Pharmacies

They are housed in hospitals & dispense a limited number of medicines They cater mainly to the requirements of patients admitted in hospitals

Standalone Stores

Stores are located near the residential areas Some of these stores offer home delivery The target customers are middle and upper class households

Malls/Shop-in-Shops

These are located in supermarkets, malls or departmental stores Company 1has a tie-up with Company 2 for its daily stores in South India

Townships

Pharmacy chains are planning to set up shop in townships Company 3 has signed an agreement with Company 4 to set up a medicity inside the upcoming project T near Pune

Source: PHARMACY RETAIL MARKET INDIA.PPT

Drivers & Challenges

Drivers
Growth in pharmaceuticals sector Increase in healthcare spending Changing disease profile Growth in OTC segment Attractive margins Consumer attitude

Challenges
Fragmented industry Long distribution and supply chain Counterfeit drugs FDI regulations

PHARMACY RETAIL MARKET INDIA.PPT

Trends
Loyalty Schemes

Value Added Services

Tie-ups with Retail firms

Trends `

Rural Expansion

Entry of Government in Pharmacy Retailing

Entry of Private Labels

Organized Retailers Starting Pharmacy Chains

PHARMACY RETAIL MARKET INDIA.PPT

Company 1 leads the overall market

Competition Overview
Company 1 leads in the organized pharma retail market with highest number of outlets Sector has witnessed the entry of new players Almost all players have expansion plans Organized pharma retail chains operate in three models: Fully owned stores
Company 1 prefers fully owned model

Organized Pharmacy Distribution

Company 1 Company 2 Company 3 Company 4 Company 5 Company 6
740 600 350 130 112 110 92 50 35 30 25 14 12 10 6 6 0 200 400 600

Franchise model
Company 2 operates in this model

Combination of owned and franchise stores

Company 3 prefers a combinational model

LE P M A S

Company 7 Company 8 Company 9 Company 10 Company 11 Company 12 Company 13 Company 14 Company 15 Company 16

Franchisee model has enabled loss making standalone stores to be absorbed by organized retailers
This is likely to trigger consolidation in this sector

Retail outlets of players like Company 4 sell only its products Leading players are targeting rural areas and are tying-up with organized retail players for expansion
Source:

No. of Stores 800

PHARMACY RETAIL MARKET INDIA.PPT

Thank you for the attention

The Pharmacy Retail report is part of Research on Indias Healthcare Industry series. For more detailed information or customized research requirements please contact: Gagan Uppal
Phone: E-Mail: +91 22 4098 7530 gagan.uppal@netscribes.com

Gaurav Kumar
Phone: E-Mail: +91 33 4064 6214 gaurav.kumar@netscribes.com

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PHARMACY RETAIL MARKET INDIA.PPT