Branded drugstore chains have been rising quickly in recent times in a retail market that’s about 95% dominated by brick-and-mortar drug shops. Vietnam at present has about 50,000 such shops current all over the place from city to rural areas.
Due to fragmentation and open area, the pharmaceutical retail market attracts many huge gamers, probably the most highly effective enlargement in the present day are Pharmacity (invested by Mekong Capital) and Lengthy Chau (below FPT Retail). ).
Each have ambitions to dominate Vietnam’s drug retail market, Pharmacity at present has 620 shops, aiming to develop to 1,000 shops this yr. Whereas Lengthy Chau ranks second when it comes to measurement, it at present has about 300 shops, aiming for 350-400 shops this yr.
Within the newest transfer, Pharmacity’s mum or dad firm, Maroon Bells, has issued greater than VND1,000 billion of convertible bonds to fund its upcoming enlargement.
As for FPT Retail, Lengthy Chau is sort of a gamble when the retail marketplace for telephones and laptops turns into saturated. FPT Retail’s administration mentioned that it has discovered a “success system” for Lengthy Chau since 2020. That can also be the time when this retail chain has a few years of expertise within the race with Pharmacity.
Final yr, Pharmacity achieved a income of 1,912 billion dong; Lengthy Chau reached 1,191 billion VND. These figures are far forward of different opponents comparable to Phano Pharmacy with VND 619 billion, Medicare and Watsons which might be extra targeted on private care merchandise than medication at VND 330 billion and VND 209 billion, respectively.
With the continued enlargement of about 100 shops within the first 6 months of this yr, Lengthy Chau’s income recorded VND 1,336 billion (surpassing final yr). Most notably, Lengthy Chau reported a revenue of 1 billion dong.
Lengthy Chau’s revenue is stunning when trying on the scenario of branded pharmaceutical retail chains. As of the tip of 2020, besides Phano Pharmacy, no chain has made a revenue, even a heavy loss. In truth, Phano’s revenue additionally steadily decreased to four billion dong, very skinny revenue margin.
Chains that push to develop level of sale should pay a heavy worth, sometimes Pharmacity. Pharmacity’s loss final yr was about VND 421 billion, bringing the entire collected loss to over VND 1,000 billion. Lengthy Chau final yr additionally misplaced 113 billion dong. However as seen, Lengthy Chau proved to be comparatively efficient. FPT Retail administration mentioned that about 90% of the not too long ago opened shops can break even after 6 months. The pharmacy chain goals to be worthwhile from 2023.
Not solely competing with one another, branded drugstore chains are additionally within the battle for positioning within the minds of consumers. Vietnamese individuals are used to small drug shops positioned in the beginning of the road that may present a comparatively full vary of primary wants. The shift from GT to MT channel is value ready for within the pharmaceutical retail trade.
Traditionally, Lengthy Chau is a pharmacy model with greater than 20 years of expertise; Phano Pharmacy was established within the interval of 2007, Pharmacity is youthful but in addition has 10 years of life. It’s no exaggeration to say that Vietnam is in a interval of robust improvement of the MT pharmacy chain with ample monetary sources, robust manufacturers, expertise and the shift in client habits to assist…
However it should even be mentioned that many “huge males” within the retail trade who had an thought for the pharmaceutical distribution trade needed to cease the sport early or falter. Cellular World Funding Joint Inventory Firm (MWG) acquired An Khang pharmacy chain on the finish of 2017, however within the following years, it hardly expanded to deal with Bach Hoa Xanh. Or like Vingroup as soon as began distributing medication by VinFa however then needed to shut early to deal with the VinFast mission. Thus, to essentially dominate the pharmaceutical distribution market won’t be an in a single day story.