Organised Pharma Retail in India

Topics: Retailing, Shopping mall, Pharmaceutical industry Pages: 29 (8924 words) Published: October 21, 2008
Executive summary
The retailing arena in India has historically been dominated by traditional formats and only 2% of retail flows through organized sector vis a- vis USA where 85% retail sales come from Organized sector like Super markets. However, In recent years, a large number of business houses have invested in setting up stores/ malls and have built businesses within retail. Many Corporate houses have already announced their retail plans, which includes many Pharma companies too. Imagine walking into a one-stop shop for your entire healthcare needs. Going by an ORG-Marg study on the emerging scenario of Pharma retailing in the country, small chemists are likely to close shop with the emergence of big retail Pharma chains promoted by Pharma companies themselves, thereby marking the end of unorganised Pharma retailing in the country. The emergence of organised Pharma retailing would result in elimination of intermediaries and customers will thus be benefited by the margins saved. The Major players involved in the organised Pharma retail chains are Lifespring, The medicine shoppe, Apollo Health and lifestyles limited and Subhiksha. According to these big retail players, organised Pharma retail chains have great prospects in India. The Value added services offered by them differentiate them from the neighbourhood chemists. However, a research study done to find out the response of consumers to such a concept reveals that, although all the unique facilities and services offered by these retail chains are desired and respected by the consumers, the old concept of neighbourhood chemist is still dominant. Hence unless and until these retail chains make their presence everywhere by way of franchising or rapid expansion, they will not get the acceptance they desire. Thus it is evident that in the near future, once these organised retail chains expand their geographic coverage, they are bound to get success. But on the other hand, the unorganised chemists, which are in big numbers, are also getting united and started counterattacking the organised retail chains through an integrated approach. This will eventually be beneficial to the ultimate consumer who will get various facilities and services at a cheaper rate and will also lead to improved healthcare standards of the country.

Indian Pharmaceutical Industry: An Overview
The Indian pharmaceutical industry is a success story providing employment for millions and ensuring that essential drugs at affordable prices are available to the vast population of this sub-continent.”

Richard Gerster
The Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously. Playing a key Indian Pharma role in promoting and sustaining development in the vital field of medicines, Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world. The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control. The pharmaceutical industry in India...
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