Mumbai: Easing of foreign direct investment norms in pharmacy retailing in India can lead to exponential growth in the sector, which may reach a size of Rs43,000 crore in the next two years, says a report.
“Pharmacy retail is growing at the rate of 20-25% annually. The organised pharma retail market size has the potential to grow to $9 billion by the year 2011,” the report titled ‘India Retail Research 2009´ said.
The size of India’s pharmacy retail market is estimated at $4.5 billion, which is dominated by 12-15 big players.
“Pharmacy chains are highly regulated and there is restriction on FDI investment in the retail sector. However, if government removes the restriction, there exists huge potential to grow,” the report said.
Pharmacy chains in India also need to obtain drug selling licence to run the pharmacy, as per the provisions of the Drugs and Cosmetics Act, 1940.
Apollo Pharmacy, Religare Wellness, Lifespring, MedPlus, 98.4, Medicine Shoppe, Dial for Health and LifeKen are the major players in pharmacy retail chain.
“Companies are now focusing on rural areas and non-metros in a big way because the rural market still remains unexplored to a large extent and there exists a tremendous scope of tapping the potential of these areas,” the report observed.
Chains like Apollo, Guardian Lifecare and MedPlus plan to expand in Tier II and Tier III cities like Jaipur, Surat, Chandigarh and Ludhiana, it added.
There are more than 3,500 organised retail pharmacy outlets in India. This is expected to grow nearly three times to 10,000 outlets by end of next year, the report said.
The Indian arm of global chain Medicine Shoppe International aims to open 1,000 stores by 2010, primarily growing through its Sub Franchisee network.
Medicine Shoppe is currently operational in Mumbai, Navi Mumbai and in several cities of Maharashtra, Gujarat, Goa, Delhi, Uttar Pradesh, West Bengal, Andhra Pradesh and Karnataka.
Religare Wellness, which runs 112 stores, plans to expand its presence to over 100 cities.
Fortis Healthworld, too, hopes to have a chain of 1,000 stores in 400 cities across India by 2012, the report said. Hyderabad-based MedPlus will also ramp up its store count to 1,000 from 600 at present.
“Increasing brand awareness and quality consciousness among consumers would lead to shift to organised retailers because of value-added services such as diagnostics, lab facilities and other value added services,” the report said. Further, consolidation in the industry will deem profitable for many and lead to good pharmacy practices.