Professional Documents
Culture Documents
September 2009
Executive Summary
Drivers &
Drivers:
–
–
PLE
Increase in healthcare spending
Growth in pharmaceuticals sector
Challenges:
–
–
Fragmented industry
Long distribution and supply chain
M
– Changing disease profile – Counterfeit drugs
Challenges
A
– Consumer attitudes – FDI regulations
S
– Attractive margins
– Growth in OTC Segment
Loyalty Schemes
Value Added Services
Trends Tie-ups with Retail firms
Rural Expansion
Entry of Government in Pharmacy Retailing
Entry of Private Labels
Organized Retailers starting Pharmacy Chains
Company 1 leads in the organized pharma retail market with highest number of outlets
Competition 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
E
600
L
a% Y
unorganized sector
P
400
•Growth in this market is driven by increasing X
M
200
healthcare spending, growth in organized
retailing and attractive margins
SA
•The entry of organized players is changing the
face of the pharmacy business in India
The organized space of pharmacy retailing is
0
2009 2011
Drivers Challenges
Growth in pharmaceuticals sector Fragmented industry
Attractive margins
Consumer attitude
Loyalty Schemes
E
Company 2 600
L
• Almost all players have expansion plans Company 3 350
P
• Organized pharma retail chains operate in three Company 4 130
models: Company 5 112
Fully owned stores
– Company 1 prefers fully owned model
Franchise model
– Company 2 operates in this model SAM Company 6
Company 7
Company 8
Company 9 35
110
92
50
Company 10 30
Combination of owned and franchise stores
– Company 3 prefers a combinational model Company 11 25
Company 12 14
• Franchisee model has enabled loss making stand-
Company 13 12
alone stores to be absorbed by organized retailers
Company 14 10
This is likely to trigger consolidation in this sector
Company 15 6
• Retail outlets of players like Company 4 sell only its
Company 16 6
products No. of Stores
• Leading players are targeting rural areas and are 0 200 400 600 800
tying-up with organized retail players for expansion