Pharma retail takes off in degrees — supply chain critical

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With an increasing number of corporate firms foraying into pharma retailing, a strong need is increasingly being felt for improving the existing facilities for this sector – ranging from uniform taxation to a proper supply chain.

Participants at a two-day conference on “Winning with Intelligent Supply Chains”, organised by FICCI, stressed on the need to streamline supply chain to ensure that the right drugs reach customers.

The pharma retailing sector, coming after FMCG, food and entertainment, is “bringing about a new revolution in India,” declared Sunil Menon of Fortis Health World Limited.

However, he cautioned against the “problem of counterfeit drugs that is flooding the market,” adding that there is “need to improve the supply chain and an imperative need for barcode.”

On the issue of supply chain, JS Shinde, general secretary, All India Chemists and Druggist Association, said, “The supply chain in the pharma sector is long and fragmented. There is absence of end-to-end integrated systems and lack of technology for smooth flow of supplies.”

According to him, since most of the pharmacies are still self-owned and only recently has organised retailing begun, it would take time for supply chain to be smoothened out.

With corporate groups including Dr Morepen, Medicine Shoppe, Apollo Pharmacy, 98.4° from Global Healthline Pvt. Ltd, and CRS Health from SAK Industries foraying into the retail segment, it is expected to grow rapidly.

According to a survey, healthcare is not only rising among the Indian middle and upper classes, there is also growing awareness about keeping good health, which is responsible for this phenomenon. Although corporate companies are putting in major investments in this segment, it would be some time before they are able to displace the position of the neighbourhood chemist, due to the sheer reach and size of the latter, the participants at the FICCI conference felt.

At the same time, they agreed that a higher degree of attached credibility combined with value-added services that are being provided by the retail outlets in pharmaceutical sector, would attract consumers. Apart from providing an upscale shopping ambience at no extra cost, most of these branded outlets are providing value-added services as well.

“We are planning to introduce value-added services for the consumer, including home delivery, prescription records, and reminder services. In addition, our health stores consist of a state-of-the-art pharmacy, a special diabetic care section, self-diagnostic equipment, natural foods, babycare products, skincare and toiletries, among other things,” Rahul Chadha, managing director of SAK Consumer Retail Services (SAK CRS), told the conference.

The outlook is that branded outlets will catch on—in tune with international trends—but would coexist with, and not result in the phasing out of, the local chemists, primarily because the former category would cater largely to the upper and middle end of the population.

The Indian pharmaceutical market is the world’s 13th largest in terms of value and the 4th largest in terms of volume. The total market size is US$5.7 billion and includes all pharmaceutical products, fast-moving healthcare products and some FMCG products sold through chemists across the country.

As Menon said, “The changes in the next five years in this business will be more than what has happened in the past 55 years. Earlier, shopping was considered a headache that involved running from pillar to post. Now, retailing has changed it to leisure and pleasure, and it’s become more of an outing for the entire family.”

– Sri Krishna

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