Flight of Pharma retail from unorganised to organised

With the emergence of several organised pharmacy retail chains, this sector has witnessed tremendous growth of franchise business opportunities for interested investors. Ownership of pharmacy franchise can be an ideal choice for those who would like to partner with recognised brand name. However, the key to success of this business include the brand name of the product, service, image and professional methods to satisfy a consumer. Both domestic and foreign pharma players have fair share in Indian pharma market. 

Market overview

As per report by All India Organisation of Chemists and Druggists (AIOCD), the Indian pharmaceutical market posted annual sales of Rs 53.69 billion in fiscal 2011-2012. There are approximately 700,000 pharma retail outlets, out of these only 20 to 30 per cent is from all the organised retail companies and rest is dominated by traditional/local chemists. Modern pharmacy market has seen a significant growth with large scale investments made by Indian pharma companies in the past few years. Whereas the recent govt decision to liberalise foreign direct investment (FDI) in the retail sector will open doors for many international players to set up pharmacy retail chains via different business models including franchising. There are plenty of opportunities for the pharmacy players to grow in Indian market.

Growth drivers

Indian pharma industry is showing a strong upward trajectory. As per estimates, presently the Indian pharmaceutical market is US $ 11 billion and it is expected to touch US $ 74 billion (in sales) by 2020. This growth has been fuelled by increase in the average income levels, changing disease profiles towards chronic disorders and raising awareness for healthcare. The pharma retailers are seeking expansion of their urban network and rural penetration.

Attractive margins and discounts provided to consumers and the value proposition offered by supermarkets and malls are driving the growth of organised pharmacy retail chains in the country.

Pharma sector gets more organised

At present Indian pharma sector is relatively unorganised. With entry of branded pharma retail chains the industry is expected to get more and more organised in the future. At present, there are a few big players such as Guardian Lifecare’s (Guardian Pharmacy), Ranbaxy’s (Fortis), Reliance Retail’s (Reliance Health and Pharma), Apollo Hospitals Group’s (Apollo Pharmacy), Zydus Cadilla’s (Dial for Health), Morepan’s (Life Spring), Surya Pharmaceutical (Viva), Lifetime Healthcare’s (LifeKen), MedPlus who dominate the organised pharmacy retailing.

Key players in pharma franchising

Some of the above mentioned companies have opted for franchise business model for retailing their products. As these brands continue to expand their retail presence across India via franchising, they look for competent franchise partners for the same. Offering excellent business opportunities for interested investors, these brands are ensuring high degree customer and franchisee satisfaction.

Apollo Pharmacy

A subsidiary of Apollo Hospitals Enterprises Ltd is India’s first and largest branded pharmacy network, with over1500 store across India. It is accredited with International Quality Certification.  An Apollo pharmacy franchisee who fulfils all the financial requirements and other qualifications as per the company’s franchisee qualification criteria can expect ample training and support that will provide complete know how of pharmacy retail business.

Fortis Healthworld

This Pharmacy chain is promoted by pharma player Ranbaxy. It operates both company owned stores as well as franchisee owned stores. Currently the company is planning to set up more than 900 stores across the country by the end of this year. The potential franchisee will need an area of about 500 sq ft along with an investment of more than Rs 50 lakh for each outlet. A franchisee can also avail added services like diagnostic facilities, free home delivery services, healthcare products etc with additional investment.

MedPlus Health Services

MedPlus health Services operates a chain of retail pharmacies has more than 980 pharmacies throughout India. It offers an excellent opportunity for entrepreneurs who are looking for a low-cost franchise business. Currently, the company is seeking franchisees in the tier III and tier IV towns across India.

Thulasi Pharmacies

Thulasi Pharmacies, started in the year 2001 presently has 29 branches, including franchised stores, in several cities across southern India. It aims to become the market leader in southern India by 2015 and a nationwide pharmacy chain by 2020.

98.4 Pharmacy

It is a brand of Global Healthline and operates in Delhi /NCR region. With franchise model in place, it expects to have as many as 300-400 stores by 2014.

Viva Pharmacy

Owned by Surya Pharma, Viva Pharmacy entered the organised retail space in the healthcare domain through a chain of chemist stores under the brand name Viva.  Initially the company opened company owned stores, now it is extending the network through franchisee owned model.

Future scope

The Indian pharma retail market is considered significantly big market but still it has tremendous scope to grow in the future. Currently, there are only 20-30 percent organised pharmacy retail chains in India and most of them exist in the urban areas. There is still a wide gap between demand and supply of pharma products, especially in tier II and rural areas. Thus, it provides a huge scope for pharmacy retailers to expand their distribution channels across the length and breadth of the country, to rake in more profits.