Drug retail market expands with new players
The drug retail market is worth $5 billion
On December 18, 2017, The Gioi Di Dong (Mobile World), a big mobile phone distribution chain, opened its first drugstore called An Khang, officially setting foot in the $5 billion market.
The Gioi Di Dong has taken over Phuc An Khang distribution chain. Though The Gioi Di Dong has big influence with powerful financial capability, it is just a ‘newcomer’ in the drug distribution market.
Nguyen Duc Tai said that The Gioi Di Dong is now just an ‘apprentice’ in the field and has to be cautious with every step in the specific market.
However, he stated that The Gioi Di Dong will open 50-100 drug stores in 2018.
Tai is optimistic about his decision because he believes the risk is low. “The scale of drugstores is small compared with The Gioi Di Dong’s capability. Even if we fail, this won’t affect our general business,” Tai said.
Giant retailers who have been eyeing the drug retail market for years have finally joined the game with ambitious plans to remap the market.
Besides The Gioi Di Dong, FPT Retail, also a big hi-tech product distributor, has jumped into the drug market. The company invested in Long Chau drugstore chain and began doing business in early 2018.
In mid-August 2017, Digiworld, a digital product distributor, joined forces with Vinamedic to distribute functional food.
IBM , a market survey firm, predicted that the Vietnamese drug retail market was worth $4.7 billion in 2017. The figure is expected to reach $7.7 billion by 2021 and $16.1 billion by 2026, which means 11 percent growth rate annually.
Also according to IBM, Vietnamese spending on drugs will rise from $56 per head in 2017 to $85 in 2020.
Realizing the great potential of the market, a series of drug retail chains have been set up, namely Phano, Pharmacity, Sapharco and Vistar.
However, according to FPT Securities, traditional drug retailers have a big weak point – the lack of distributors and suppliers. Meanwhile, these are two important links to expand market share.
About market performance in 2018, chair of CVI Pharma Phan Van Hieu said the market will still be controlled by traditional drugstores.
“I don’t think the drug retail market is easy, even for big guys like The Gioi Di Dong and FPT Retail,” he said, adding that there are many barriers in the drug market.