india pharmacy retail market report2020|hyperlocal delivery pharmacy india
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DESCRIPTIONThe pharmacy retail market in India is majorly comprised of organized and unorganized pharmacy retailers and the market is predominantly occupied by unorganized pharmacies. There has been a recent trend of hyperlocal delivery in online pharmacies. The revenues generated through the online pharmacy sales were registered at INR ~ million in FY2015. Tier 2 cities have accounted for ~% of the market share in the overall online pharmacy market in India whereas demand from Tier 1 cities stood as the highest at ~%. Medidart is the leading player in this domain which has registered promising revenues share of INR ~million during FY2015.
India Pharmacy Retail Market Report - 2020
The pharmacy sector in India has been rapidly evolving over the years from FY2010-FY2015 with a constant establishment of new pharmacies across the country. There has been intense competition amongst stores and consolidation among providers of pharmacy products. In pharmacy retail, notable changes have been observed in organized pharmacies.
The pharmacy retail market in India has witnessed revenues worth INR ~ Billion in FY2015 and has grown at a CAGR of 19.4% for the period FY2010-FY2015.
With an increase in penetration of organized players, the market has become highly competitive hence; innovative marketing strategies and new business models are being introduced in the market in order to sustain profits.
This market has been segmented on the basis of various sectors such as organized & unorganized, hospital based & standalone, prescribed drugs, OTC drugs & private label products and generic and patented.
With rising awareness among people, there has been a noticeable shift of customers towards organized players such as Apollo, MedPlus and other organized pharmacies which offer high quality medicines and drugs.
The total number of pharmacy stores in India stood at ~ during FY2015 due to increasing government expenditure on healthcare as well as surge in per capita healthcare expenditure. New trends such as hospital based pharmacies and wellness stores concept have also contributed in the expansion process and growth of the overall market.
The pharmacy retail market in the India has witnessed an unprecedented growth in the recent years on account of improvement in medical awareness through the efforts of media. The surge in growth has been complemented by improvement in accessibility of pharmacy stores, diversification of products and an increase in health consciousness amongst the people. The organized pharmacy retail market in India is comprised of several companies such as Apollo Pharmacies which posses a large product portfolio of pharmaceutical products.
These companies have faced stiff competition from the unorganized market, as they command a higher share of the industry in terms of both revenues and number of pharmacies.
The sale of OTC drugs is expected to drive the market as enhanced self medication trend has developed in the population of India. More number of people has been purchasing medication on the basis of self attained knowledge from internet and other media sources which have significantly reduced the need for specialized prescriptions for many medical requirements.
The retail pharmacy market is likely to enhance since there is an increase in government spending on health care sector along with initiatives taken to increase health related awareness in rural regions of the country. In the future, the market is expected to reach INR ~ billion by FY2020.
Standalone pharmacies include both organized and unorganized standalone pharmacies and it has been dominating the pharmacy retail market in India since the past many years, registering a share of 92.7% with 827,405 pharmacies in FY2015.
Hospital based pharmacy; on the other hand, formed 7.3% of the overall market sales with 64,783 pharmacies in the fiscal year 2015. The demand of medicines and other pharmaceutical products in a hospital based pharmacies is primarily driven by in-patients and out-patients of the hospital which comes for consultation. In the absence of competitors in the hospital premises, hospital based pharmacies have monopoly over the others.
India pharmacy retail market is majorly driven by small and unorganized pharmacy stores in the country. In the present scenario the market is highly dominated by the unorganized players with their contribution in revenue by ~% in FY2015. The organized chains of pharmacies are quite new in the business. They will require a couple of years to create their own customer base along with expanding their market share.
Due to the wide availability of unorganized pharmacies, these retailers have witnessed a higher number of customers which have in turn bolstered their sales revenues.
The increase in personal disposable income of the population has contributed significantly to the growth of the market as there has been elevation in focus on personal healthcare. Changing lifestyle and increasing stress levels have been observed as the key growth drivers of the pharmacy retail market in India as they driven sales of medicines. This trend has developed due to a huge increase in urbanization and working population in the country.
The growth of the Indian OTC market has been one of the fastest in the world.
The Indian OTC market is extremely competitive at present. Both organized and unorganized players have added new sections of OTC drugs in their stores due to the trend of self-treatment by the young Indian population.
Additionally, in order to drive sales, many organized retailers have also established their online presence. This has resulted in an increased reach of the retailers which has in turn driven their sales revenues.
There are several aspects that need to be considered for establishing a retail pharmacy in India. In the below mentioned case, a land area of ~ square feet is required to set up a pharmacy store in a semi-urban area. The area for standalone pharmacy is taken on a rental basis where the promoters contribution is ~% of the total investment. There is an initial cost of furnishing, required furniture and the computer software such as LIS and PIS is also taken into account.
Based on the sales realization and the operating expenses, the pre-tax profit would amount INR ~ per year. This would generate return on investment of ~% and pre-tax profit on sales of ~%.
Apart from the above mentioned quantitative factors, in order to successfully operate a pharmacy store in India, owners must establish a strong procurement network which can comprise of wholesalers, distributors or manufacturing companies.
Online pharmacies have changed the global pharmaceutical distribution chain quite significantly. The era of online pharmacies began more than a decade ago with the launch of drug distributing websites in Canada in the late 1990s. Online Pharmacies have been a preferred method of buying medicines in overseas countries such as Europe, USA and others but in India; this segment is at its miniscule stage and is growing at a tremendous rate.
The population is becoming more Tech savvy and wishes to purchase almost every product through online means, since it saves a lot of time and also provides flexibility in terms of making payments and other factors.
In India a limited numbers of online pharmacies are operational through different means. Apollo Pharmacy has installed fax machines in clinics of doctors, from where prescriptions are faxed to Apollo stores, which then deliver the medicines to customers at the desired location.
The online pharmacy Retail market in India has mainly emerged in the current fiscal year FY2015. This has posted the revenues originated by online pharmacies at INR ~ million during FY2015. Medidart has been the leading player in this category which has accounted for approximately ~% of market share in the overall online pharmacies market during FY2015. Some of the other players that have their presence in the market are namely Medplus.com, buydrug.in, online pharmacy and several others.
The major demand for online pharmacy products has emerged from Tier 1 cities which have accounted for ~% of the overall GMV during FY2015. The domination of urban class population in these cities alleged with higher tech savvy population, supported by better distribution networks in these cities have helped the market to generate higher amount of revenues especially from these cities.
Online pharmacy products are majorly been demanded by males, which have accounted for ~% of all the orders placed, while on the other side, females have accounted for ~% volume of the orders placed in FY2015. Cash on Delivery was the most preferred mode of payment which accounted for a share of ~% in the overall payment made in FY2015. This mode is more prevalent as customers are unsure about the quality of the products that are being delivered to them and are reluctant to pay the money in advance.
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