Corporate giants eye Pharmacy Retail in India

Corporate biggies who entered retail industry are looking optimistic on Pharmacy retail. Without doubt, the current Pharmacy retail industry in India is one of the most disorganized and has the highest profit margins which are spread over several levels of middlemen. This industry has been speculated to have an annual turn over of well above $10 billion in India.

Anil Ambani’s
Reliance (R-ADAG) and also the Big Bro Mukesh Ambani’s Reliance Industries could well become the first giant players to enter Pharmacy retail. They are likely to be joined with two other multinationals namely, Zuellig Pharma, Hong Kong-based pharmaceutical distribution company, and US-based Cardinal Health.

Aditya Birla’s Subiksha also has a Pharmacy division to claim their pie. Other players are Fortis Healthworld, Medicine shoppe, Apollo Health and possible entrant Pantaloon.

Late last month,
Manipal group based in Bangalore, India also announced MCC, Manipal Cure & Care which offers health care products and planned to open chain of stores throughout India. They have a slightly different business model which could be a worry to even the Pharma biggies. They plan to have their own generic brands which are expected to be at a price much lower than the present branded drugs. They are also poised to sell Health Insurance at their stores.

When every other corporate retailer is in the foray, Why not Walmart ???

It will be interesting to see how the
All India Organization of Chemists and Druggists (AIOCD) takes these new entrants. Currently they have series of middle men who work at different margins before a drug reaches the customer. Entry of giants will cause a serious imbalance in that structure. When a good number of medicine introductions are biopharmaceuticals these days, conventional retailers may need higher investments for the transport n storage facilities.

Advantages of this development could be stricter regulations and significant reduction in corruption n counterfeit drugs. General public stands to gain in that case. On the contrary it can cause serious damage to the earnings of lakhs of small-scale retailers across the country.

Seeji, Pharm House.