Giving a major fillip to branded pharmacies, Fortis HealthWorld, owned by the promoters of drug giant Ranbaxy Laboratories Ltd, said it will open 1,000 HealthWorld stores across 400 towns over the next five years.
The move, which involves investment of Rs 800 crore, adds Fortis to a slew of companies eager to get into this segment, which is estimated to generate annualsales of Rs33,000 crore.
Reliance Retail, Pantaloon Retail and Punjab-based Alchemist Ltd are also slated to enter the field, while existing players Apollo Pharmacies and Morepen Laboratories’ Lifespring are expanding aggressively.
The pharmacy sector has traditionally been dominated by an estimated 3,50,000 neighbourhood chemists.
Designed along the lines of US chains such as CVS and Walgreens, HealthWorld’s first set of stores will roll out in the Delhi-NCR region in the next two months, and provide prescription and over-the-counter drugs, health supplements, personal care products and even Ayurvedic and homoeopathic formulations.
“We want to become a one-stop shop for all healthcare needs, leveraging the synergies of Fortis’ chain of hospitals and the diagnostic expertise of SRL Ranbaxy,” said Shivinder M. Singh, group managing director, Fortis HealthCare.
The stores will house a pathology lab collection centre in addition to staying open round-the-clock and providing free home delivery. The stores will come in three formats, ranging from 500 to 2,000sq. m. “By the end of 2008, we’ll have put up 250 stores,” said Ashish Kirpal Pandit, CEO of the venture.
Pandit says that the stores won’t compete on price. “There will be no discounts on drugs. We are not in the price game.’
But with several major companies entering pharma retailing, “they will have to maintain competitive prices”, said Hitesh Gajaria, who tracks pharmaceuticals at BSR & Co., a member firm of KPMG in India.
The Mukesh Ambani-owned Reliance Retail is developing its plans. Pantaloon Retail has formed a 50:50 joint venture with Manipal Health Systems, dubbed Manipal Cure & Care. The JV’s first store will come up in Bangalore. Apollo Pharmacies is looking to scale up from 500 stores to 1,500 in the next three years, said Anjali Kapoor Bissell of Apollo. Morepen’s Lifespring is going from 10 to 70 stores in the next three years; investment Rs35 crore.