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Another tech firm joins drug retail market

Viettel Commerce will sell drugs, functional food, cosmetics and medical equipment at its Viettel drugstore chain.

Viettel Commerce, a subsidiary of Viettel Group, a technology and telecom carrier, has sent a letter inviting partners to quote prices on drugs, functional food, cosmetics and medical supplies. The document said the products will be sold at Viettel drugstores.

Analysts say that drug and cosmetics retail has great potential. Viettel has great advantages to sell drugs as it has a large network of sale points throughout the country. At present, its network only provides Viettel products and tech devices.

Drugstores will also attract more clients to Viettel’s distribution network. If all Viettel stores distribute drugs and medical equipment, the group will become the distributor with the largest coverage in Vietnam.

Viettel is the third technology product retailer to join the drug distribution market. The other two are MWG and FPT Retail. 

MWG estimated that the drug retail market has a value of $8.2 billion. Most revenue goes to drugstores in hospitals, while the remaining $2.2 billion is for drugstores outside hospitals. This is not a high figure, but it is still an opportunity and there's room for tech retailers to jump in.

FPT, a rival of Viettel, has been expanding its Long Chau drug distribution network and competing with rivals on price. Long Chau does not use single prices for all cities and provinces, but sells drugs at lower prices in markets where people have low average income. 

According to a representative of Long Chau, the drug retail chain has over 700 drugstores in 63 cities and provinces and is the chain with the largest coverage.

Prior to that, in 2017, MWG, a mobile phone and tech retailer, acquired Phuc An Khang drugstore chain and renamed it An Khang. Since then, MWG has been developing the chain as it can see great potential in the post-Covid period.

MWG now has 500 drugstores, and the revenue remains low but this business field has room for growth as demand is high.

Doan Van Hieu Em, CEO of MWG, said there is similarity between the current drug retail and mobile phone distribution sectors of 10 years ago. He believes that when modern drugstore chains join the market, the traditional retail channels will shrink. 

An Khang chain expects revenue of VND2 trillion this year, and the figure will be higher next year if it has 2,000 stores.

Thai Khang

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