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The market is fragmented and dominated by the unorganized sector There are U pharmacies in India with about V distributors Drivers: Drivers & Challenges – – – – – – Increase in healthcare spending Growth in pharmaceuticals sector Changing disease profile Consumer attitudes Attractive margins Growth in OTC Segment Trends Loyalty Schemes Value Added Services Tie-ups with Retail firms Rural Expansion Entry of Government in Pharmacy Retailing Entry of Private Labels Organized Retailers starting Pharmacy Chains LE P M A S Challenges: – – – – Fragmented industry Long distribution and supply chain Counterfeit drugs FDI regulations Competition Company 1 leads in the organized pharma retail market with highest number of outlets Leading organized players include Company 1. Company 2.Executive Summary Market The market is valued at INR XX bn in 20--. Estimated to reach INR YY bn in 20.PPT 2 . Company 3 and Company 4 Primarily organized retail chains operate either as a company owned or as a franchisee outlet PHARMACY RETAIL MARKET – INDIA.
•Market Overview •Drivers & Challenges •Trends •Government Regulations •Competition •Key Developments PHARMACY RETAIL MARKET – INDIA.PPT 3 .
pharmacies/drug stores are the dominant distribution channel generating b% of the overall pharmaceutical sales u% Unorganized Source: PHARMACY RETAIL MARKET – INDIA. with about V distributors •Market is fragmented and dominated by the unorganized sector •Growth in this market is driven by increasing healthcare spending. growth in organized retailing and attractive margins •The entry of organized players is changing the face of the pharmacy business in India Overall Market Size & Growth INR bn 600 400 200 0 The organized space of pharmacy retailing is dominated by p-q big players Primarily.PPT 4 . organized retail chains operate either as a company owned or managed stores or as a franchisee outlet LE P M A S a% X Y 2009 2011 Revenue split – Organized vs Unorganized Organized v% •In India.The market is highly fragmented and dominated by the unorganized sector Market Overview •There are U pharmacies in India today.
malls or departmental stores • Company 1has a tie-up with Company 2 for its daily stores in South India Townships • Pharmacy chains are planning to set up shop in townships • Company 3 has signed an agreement with Company 4 to set up a medicity inside the upcoming project T near Pune Source: PHARMACY RETAIL MARKET – INDIA.PPT 5 .Pharmacy chains are expanding operations using various store formats Store Format Description Hospital Pharmacies • They are housed in hospitals & dispense a limited number of medicines • They cater mainly to the requirements of patients admitted in hospitals Standalone Stores • Stores are located near the residential areas • Some of these stores offer home delivery • The target customers are middle and upper class households Malls/Shop-in-Shops • These are located in supermarkets.
PPT 6 .Drivers & Challenges Drivers Growth in pharmaceuticals sector Increase in healthcare spending Changing disease profile Growth in OTC segment Attractive margins Consumer attitude Challenges Fragmented industry Long distribution and supply chain Counterfeit drugs FDI regulations PHARMACY RETAIL MARKET – INDIA.
PPT 7 .Trends Loyalty Schemes Value Added Services Tie-ups with Retail firms Trends ` Rural Expansion Entry of Government in Pharmacy Retailing Entry of Private Labels Organized Retailers Starting Pharmacy Chains PHARMACY RETAIL MARKET – INDIA.
of Stores 800 PHARMACY RETAIL MARKET – INDIA.Company 1 leads the overall market Competition Overview • Company 1 leads in the organized pharma retail market with highest number of outlets • Sector has witnessed the entry of new players • Almost all players have expansion plans • Organized pharma retail chains operate in three models: Fully owned stores – Company 1 prefers fully owned model Organized Pharmacy Distribution Company 1 Company 2 Company 3 Company 4 Company 5 Company 6 740 600 350 130 112 110 92 50 35 30 25 14 12 10 6 6 0 200 400 600 Franchise model – Company 2 operates in this model Combination of owned and franchise stores – Company 3 prefers a combinational model LE P M A S Company 7 Company 8 Company 9 Company 10 Company 11 Company 12 Company 13 Company 14 Company 15 Company 16 • Franchisee model has enabled loss making standalone stores to be absorbed by organized retailers This is likely to trigger consolidation in this sector • Retail outlets of players like Company 4 sell only its products • Leading players are targeting rural areas and are tying-up with organized retail players for expansion Source: No.PPT 8 .
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