Subhiksha, 98.4 Degrees, Guardian Lifecare and Med Plus plan to invest around Rs 600 crore over the next two years.
The $5-billion domestic pharma retail market is on an expansion mode. A host of companies — Subhiksha, 98.4 Degrees, Guardian Lifecare and Med Plus are — pumping in around Rs 600 crore over the next two years. The fund infusion would help in wider market penetration and augment revenues.
At present, the Indian pharmacy market is highly fragmented and is currently estimated to be around Rs 25,000-30,000 crore. Of these, organised pharmacy retail makes up only about 3-4%, but is expected to grow to 10% in the next two years or so.
However, unlike pharma retail chains in the west and developed markets which has equal focus on beauty segment, Indian pharma retail chains are mostly dedicated to medicines and health related products.
At present, top players in the organised pharma retail market in India include the Nicholas Piramal group, Guardian, 98.4, Fortis Healthstore, Subhiksha retail, Medical Shoppe and Apollo pharmacy among others.
According to R Subramnian , MD Subhiksha, the company is is planning to Rs 250 crore by opening 1,300 new outlets across the country. The company claims to have the lowest price and cost structure.
Delhi-based pharma retail store 98.4 Degrees, for instance, plans to invest Rs 100 crores in order to have a wider geographical presence. Acording to executive (marketing) Neeraj Arrya, the company is planning to have one outlet each within a radius of 15 km.
Guardian Lifecare, north-based pharma Retail Company has lined up investments of around Rs 150 crore. concentrating on expansion in rural areas. The brand Aushadhi is marketed extensively in rural areas.
Accordong to Ashutosh Garg, CMD for Guardian Lifecare, the company plans to increase the number of outlets from 80 to 500 over the next two years.Med Plus, a south-based pharma retail major, plans to pump in around Rs 50 crore. It will set up around 700-800 retail units by the end of this fiscal.
Med Plus is also moving out of its current geography and is expanding in Uttar Pradesh and J&K. According to Madhukar Gangadi, Med Plus CEO, the firm is also open to tie-ups to expand business. More organised players are entering into the retail pharma segment, which is getting to be a money spinner. According to a senior analyst, the margins improve with large scale sourcing for multiple stores rather than sourcing for just one store. Some of the players are also planning to start their own brand products like Med Plus.
To counter the apparent threat from the corporate promoted retail chains, independent pharma companies have joined hands and formed co-operatives.