Today, India has 5.5 million chemists and druggists who constitute the lion’s share of the pharma retail industry. Organized retail market accounts for just 2% of the industry but is registering year-on-year growth at 30% – 40%.

Organized Pharma retail, dominated by the likes of Apollo and Subiksha are foraying into rural level.  Hetero Drugs and Regenix Drugs are increasing their numbers the pilot phase, in a market that is ruled by mom-n-pop chemist stores.

Hetero Drugs has over 40 stores in Hyderabad and around 20 in tier-II pockets of the state. Hetero is looking at leveraging on its manufacturing strengths of generics in the long-term. The Regenix chain, under the Supermed brand, stocks pharma products and hospital consumable such as gloves, BP readers and stethoscopes.

The Bangalore-based healthcare major Manipal Group is also firming up plans for pharma retail. It already has a wellness retail format under the Manipal Cure & Care umbrella. Regional player MedPlus, based in Hyderabad has raised private equity from iLabs. Surgical consumable enjoy gross margins of up to 50% while the same for pure pharma products is around 20%. Supermed plans to set up 150 stores in two years by investing of Rs 25 crore in the first phase.

Limited investment capabilities and a regulatory environment keep way many corporation away from pharma retailing says Utkarsh Palnitkar, practice head of Ernst & Young healthcare. Further the high interest levels in this sector is seen due to rising consumer spending and demographics, lifestyle ailments, recognition of patents and expanding private healthcare services and medical insurance.