The pharmacy retail market is valued at INR 216 bn in 2009 and estimated to reach INR 432 bn in 2011. The market is fragmented and dominated by the unorganized sector. The report provides a snapshot of the pharmacy retail market. Market overview gives a quick picture of the market with estimated market size, growth rate and revenue split between the organized and unorganized sector. An analysis of drivers reveals that growth in pharmaceuticals sector, increase in healthcare spending, changing disease profile, consumer attitudes, attractive margins and growth in OTC segment is driving growth in this sector. The key challenges identified include fragmented nature of Industry, lengthy supply chain, counterfeit drugs and FDI Regulations. The report identifies the current market trends including loyalty schemes, value added services, tie-ups with retail firms, rural expansion, entry of Government in pharmacy retailing, entry of private labels, organized retailers starting pharmacy chains. The competitive landscape profiles the major players in this sector including the business description, number of stores and expansion plans for each player. The report also provides details of the key developments in this sector.

1. Pharmacy Retail Market - India
September 2009

2. Executive Summary
The market is valued at INR XX bn in 20--; Estimated to reach INR YY bn in 20- -
Market The market is fragmented and dominated by the unorganized sector
There are U pharmacies in India with about V distributors
LE
Drivers: Challenges:
– Increase in healthcare spending – Fragmented industry
Drivers &
Challenges
–
–
MP
Growth in pharmaceuticals sector
Changing disease profile
–
–
Long distribution and supply chain
Counterfeit drugs
A
– Consumer attitudes – FDI regulations
S
– Attractive margins
– Growth in OTC Segment
Loyalty Schemes
Value Added Services
Trends Tie-ups with Retail firms
Rural Expansion
Entry of Government in Pharmacy Retailing
Entry of Private Labels
Organized Retailers starting Pharmacy Chains
Company 1 leads in the organized pharma retail market with highest number of outlets
Competition Leading organized players include Company 1, Company 2, Company 3 and Company 4
Primarily organized retail chains operate either as a company owned or as a franchisee outlet
PHARMACY RETAIL MARKET – INDIA.PPT 2

3. •Market Overview
•Drivers & Challenges
•Trends
•Government Regulations
•Competition
•Key Developments
PHARMACY RETAIL MARKET – INDIA.PPT 3

4. The market is highly fragmented and dominated by the
unorganized sector
Market Overview Overall Market Size & Growth
•There are U pharmacies in India today, with
about V distributors INR bn
LE
•Market is fragmented and dominated by the 600
a% Y
unorganized sector
P
400
•Growth in this market is driven by increasing X
M
200
healthcare spending, growth in organized
retailing and attractive margins
SA
•The entry of organized players is changing the
face of the pharmacy business in India
The organized space of pharmacy retailing is
0
2009 2011
Revenue split – Organized vs Unorganized
Organized
dominated by p-q big players
v%
Primarily, organized retail chains operate either as
a company owned or managed stores or as a
franchisee outlet
•In India, pharmacies/drug stores are the
dominant distribution channel generating b% u%
of the overall pharmaceutical sales Unorganized
Source:
PHARMACY RETAIL MARKET – INDIA.PPT 4

5. Pharmacy chains are expanding operations using various
store formats
Store Format Description
• They are housed in hospitals & dispense a limited number of medicines
Hospital Pharmacies • They cater mainly to the requirements of patients admitted in hospitals
• Stores are located near the residential areas
Standalone Stores • Some of these stores offer home delivery
• The target customers are middle and upper class households
• These are located in supermarkets, malls or departmental stores
Malls/Shop-in-Shops • Company 1has a tie-up with Company 2 for its daily stores in South India
• Pharmacy chains are planning to set up shop in townships
Townships • Company 3 has signed an agreement with Company 4 to set up a
medicity inside the upcoming project T near Pune
Source:
PHARMACY RETAIL MARKET – INDIA.PPT 5

6. Drivers & Challenges
Drivers Challenges
Growth in pharmaceuticals sector Fragmented industry
Increase in healthcare spending Long distribution and supply chain
Changing disease profile Counterfeit drugs
Growth in OTC segment FDI regulations
Attractive margins
Consumer attitude
PHARMACY RETAIL MARKET – INDIA.PPT 6

7. Trends
Loyalty Schemes
Value Added Services
Tie-ups with Retail firms
Trends ` Rural Expansion
Entry of Government in Pharmacy Retailing
Entry of Private Labels
Organized Retailers Starting Pharmacy Chains
PHARMACY RETAIL MARKET – INDIA.PPT 7

8. Company 1 leads the overall market
Competition Overview Organized Pharmacy Distribution
• Company 1 leads in the organized pharma retail
market with highest number of outlets Company 1 740
• Sector has witnessed the entry of new players
LE
Company 2 600
• Almost all players have expansion plans Company 3 350
P
• Organized pharma retail chains operate in three Company 4 130
models: Company 5 112
Fully owned stores
– Company 1 prefers fully owned model
Franchise model
– Company 2 operates in this model SAM Company 6
Company 7
Company 8
Company 9 35
110
92
50
Company 10 30
Combination of owned and franchise stores
– Company 3 prefers a combinational model Company 11 25
Company 12 14
• Franchisee model has enabled loss making stand-
Company 13 12
alone stores to be absorbed by organized retailers
Company 14 10
This is likely to trigger consolidation in this sector
Company 15 6
• Retail outlets of players like Company 4 sell only its
Company 16 6
products No. of Stores
• Leading players are targeting rural areas and are 0 200 400 600 800
tying-up with organized retail players for expansion
Source:
PHARMACY RETAIL MARKET – INDIA.PPT 8

9. Thank you for the attention
The Pharmacy Retail report is part of Research on India’s Healthcare Industry series.
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PHARMACY RETAIL MARKET – INDIA.PPT 9