Small firms all set to pep up pharma retail
Organised pharma retail, dominated by the likes of Apollo and Subiksha, is set for more action at the regional level.
By J Padmapriya, |
BANGALORE: Organised pharma retail, dominated by the likes of Apollo and Subiksha, is set for more action at the regional level. Players such as Hyderabad-based API firm Hetero Drugs and Chennai-based Regenix Drugs are ramping up numbers, after the pilot phase, in a market that is ruled by mom-n-pop chemist stores.
India has 5.5 million chemists and druggists who constitute the lion���s share of the retail industry. Organised retail market accounts for just 2% of the industry but is registering year-on-year growth at 30%-40%. Interestingly, both Hetero and Regenix have a pharma industry background. While Hetero Drugs is an API manufacturer, Regenix is owned by former Grandix Pharma promoter Dr A Ramamoorthy. Grandix had sold its manufacturing facility to global generics player Actavis while its marketing rights were bought by Strides Arcolab.
India has 5.5 million chemists and druggists who constitute the lion���s share of the retail industry. Organised retail market accounts for just 2% of the industry but is registering year-on-year growth at 30%-40%. Interestingly, both Hetero and Regenix have a pharma industry background. While Hetero Drugs is an API manufacturer, Regenix is owned by former Grandix Pharma promoter Dr A Ramamoorthy. Grandix had sold its manufacturing facility to global generics player Actavis while its marketing rights were bought by Strides Arcolab.
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It is believed that 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, is ramping up and has also raised private equity from iLabs.
South India will be the focal point for their growth plans. Hetero Drugs, whose pharmacy goes under the same banner, has over 40 stores in Hyderabad and around 20 in tier-II pockets of the state. Hetero, which has set up a subsidiary to drive the new venture, is looking at leveraging on its manufacturing strengths of generics in the long-term.
The Regenix chain, under the Supermed brand, will stock pharma products and hospital consumable such as gloves, BP readers and stethoscopes. This, promoter Dr A Ramamoorthy says, will help the company shore up margins in a sector where they are wafer-thin.
Typically, surgical consumable enjoy gross margins of up to 50% while the same for pure pharma products hover around 20%. ���We will be located in areas where there is a catchment of neighbourhood household population as well as nursing homes and clinics,��� he says.
Supermed, which kicked off early this year, looks at setting up 50 stores at the end of first year and 150 stores in two years. The company is looking at an investment of Rs 25 crore in the first phase.
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Commenting on the trend of new entrants, Ernst & Young healthcare practise head Utkarsh Palnitkar says, ���Due to limited investment capabilities and a regulatory environment, big corporations avoided this market. Now, the high interest levels in this sector is due to rising consumer spending and demographics, lifestyle ailments, recognition of patents and expanding private healthcare services and medical insurance.���Start a SIP with as low as ₹500 with ET Money App!
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