The pharmacy retail market in India has witnessed significant growth over the past few years; myriad factors are responsible for this uptick in demand. The pandemic has been a significant catalyst for change, driving major changes in consumer preferences and an alternate perception of what it means to have good health. As per a recent report by Research and Markets.com the pharmacy retail market in India was valued at Rs 996.68 billion in 2016 and is projected to reach Rs 2,330.2 billion by 2024, expanding at a CAGR of 10.08 per cent during the 2019-2024 period. India’s status has thus changed and it is en-route to being viewed as the pharmacy of the world.
India’s pharmacy sector has come a long way. A decade ago, the country was mostly dotted with stores popularly known as chemists cum general stores and people visited them with doctor’s prescriptions in hand when ill health struck. Most of these stores sold over-the-counter medication along with other FMCG products in cramped and dimly lit spaces. The average consumer spending on healthcare back then was about eight per cent; today it has risen 20 per cent. This has happened in large part due to consumers putting increased value on preventive healthcare products and services.
In the last 1.5 years, the entire domain has changed due to the pandemic; investment in good health has now become a prime concern. As a result, pharmacies have become more than just stores; they have turned into healthcare partners who provide what is deemed as FMHG (Fast Moving Health providing Goods). Overall, there has been a renewed faith in Ayurveda, Herbal products and Nutraceuticals during the pandemic and the concepts of physical and mental well-being have been in sharp focus.
Below are three most prominent changes that are driving growth in the sector.
Organized pharmacy retailing
Today, the pharmacy retail space is transforming from an unorganized cluster to an organized retail landscape. And with the entry of corporates, organised pharmacy retailing in India will receive a further boost. Now more than ever before, investors are interested in this sector due to the massive changes being brought on by digitization, IoT, Machine Learning and other technologies. Transparency in operations, manufacturing, material management, and supply chain will be crucial for pharmacy chains to be profitable. Availability of the right drug at the right time is particularly important in the area of pharmacy retail. Organised pharmacy retail brings in computerised operations, which enable proper management of inventory. Organised retailers can therefore effectively stock and manage a wider range of SKUs (Similar Kind Units).
Consumers have greater choice
The modern day pharmacy is more than just a brick and mortar druggist; they have evolved to become lifestyle and wellness stores that offer consumers an array of options. There is an expansion into newer categories such as herbceuticals, sports nutrition and nutraceuticals. Consumers thus have a gamut of choices that suit different lifestyles and diets requirements such as Keto, diabetic-friendly, fortified foods, immunity boosting products etc. The demand for such products has already been on the rise and this has been reflected in the increasing availability of gluten-free cereals, cold pressed juices, immunity boosting edibles etc. The focus of major industry players will thus be to move towards more personalized products and services that encapsulate the true meaning of wellness — self-care for the mind, body, and soul.
Value added services
Apart from providing an upscale shopping ambience at no extra cost, most of the branded pharmacy retail outlets are providing value-added services like home delivery, prescription records, reminder services, state-of-the-art pharmacy, special diabetic care sections, self-diagnostic equipment, natural foods, baby care products, skin care and toiletries, among many other things. The overall value proposition for the branded outlet would have to include a number of value-added services to become more attractive than the neighbourhood chemist.
Advances in the medical field such as predictive genetic testing will also push people towards taking preventive health care more seriously. Armed with more information about future risks for illness and diseases, an increasing number of people will look towards including fortified foods that are rich in micronutrients into their diet. This will also lead to a blurring of lines between medicinal products and food items because more and more wellness products will blend the benefits of nutraceutical-style supplements with conventional fortified foods.