Organised pharma retail now becomes the domain of small players

Organised pharma retailing is now witnessing active participation of the regional players apart from the big brands like Apollo and Subhiksha. The firms like Hyderabad-based Hetero Drugs and Chennai-based Regenix Drugs are on expansion spree. The sector is dominated by mom-n-pop stores where organized retailing constitutes meager 2% of the market size but clocking a rapid growth at 30-40%. Both of these companies are in manufacturing drugs. Hetero Drugs is an API (Active Pharmaceutical Ingredients) manufacturer, and the promoter of Regenix, Dr. A. Ramamoorthy, is the ex-owner of Grandix Pharma. The retail arm of Regenix will be known as Supermed, while Hetero Drugs will retail under the same brand name. Apart from pharma products, Supermed will stock hospital consumable such as gloves, BP readers and stethoscopes. Supermed is looking forward to set up 50 stores at the end of this year and another 150 stores in two years. In the first phase, the company is going to invest Rs.25 crore. It is reported that Banglore-based healthcare company, Manipal Group, is planning to venture in pharma retail. The group is already running wellness retail format under the brand name Manipal Cure & Care. Another Hyderabad-based company, MedPlus, in its bid to expand has raised fund through private equity from iLabs. All these companies will direct their expansion drive in South India. According to Utkarsh Palnitkar, Head of Healthcare Practice, Ernst & Young, rigid regulations and investment constraint have kept the big corporate houses away from this sector. However, the situation has been changed now due to rising spending power of the Indian consumers, growing lifestyle ailments, recognition of patents, and emergence of more private healthcare services and medical insurance.