Pharma retailers in expansion mode, to infuse Rs 600 cr

HYDERABAD: 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.

Leading the pack is the national level player Subhiksha. “We are planning to invest Rs 250 crore. The plan is have 1,300 new outlets across the country and this would enable us to reach out to many have access to a better target audience,” Subhiksha MD R Subramnian said. The company claims to have the lowest price and cost structure.

Some of the others in the sector are also planning to increase the number of outlets in order to have a wider geographical presence. Delhi-based pharma retail store 98.4 Degrees, for instance, plans to invest Rs 100 crore. “We are looking at having one outlet each within a radius of 15 km. This will help us shore up revenues,” said 98.4 Degrees executive (marketing) Neeraj Arrya.

Another north-based pharma retail company Guardian Lifecare has lined up investments of around Rs 150 crore, a chunk of which will be used for expansion in rural areas. “The brand Aushadhi is being marketed extensively in rural areas. We plan to increase the number of outlets from 80 to 500 over the next two years,” said Guardian Lifecare CMD Ashutosh Garg.

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. The firm is also open to tie-ups to expand business, said Med Plus CEO Madhukar Gangadi.

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, a senior industry analyst said.

“Some of the players are also planning to start their own brand products like Med Plus. We may soon have big wigs like Apollo selling bandages and other associated medical products in their own brand name,” the analyst said.