Description
Pharmacy Retail Market in India
The pharmacy retail market in India has witnessed significant growth over the past few years, owing to favourable demographic factors and an epidemiological transition. In terms of revenue, the pharmacy retail market in India was valued at INR 996.68 Bn in 2016 and is projected to reach INR 2,330.20 Bn by 2024, expanding at a CAGR of 10.08% during the 2019-2024 period.
The market is majorly occupied by unorganized local players. However, the unorganized sector is anticipated to face intense competition from organized players and online retailers.
Market segmentation based on retail channel:
Based on the retail channel, the market is segmented into organized sector, unorganized sector, and online retail. The unorganized sector accounted for the largest market share (~93.00%) in 2018.
The market share of the organized sector, which consists of licensed and registered players, is estimated to increase steadily over the forecast period.
The online retail segment is projected to expand at a CAGR of ~33.95% during the 2019-2024 period, owing to strong digital infrastructure in the country.
Market segmentation based on drug type:
The generic drugs segment dominated the retail pharmacy market in India, followed by the OTC drugs and patented drugs segments. The low price of generic drugs attributed to its leading share.
The OTC drugs segment is predicted to be the second-leading segment of the pharmacy retail market with a share of ~22.40% in 2024. The inclusion of various medicines under the OTC category, coupled with a preference towards self-medication is predicted to drive the growth of the OTC drugs segment.
The market share of the patented drugs segment is estimated to increase by 5.4% from 2018 to 2024, owing to the launch of various patented drugs in the Indian market.
Market segmentation based on therapeutic area:
In terms of revenue, anti-infectives was the largest therapeutic segment of the India pharmacy retail market in 2018, followed by the cardiac, gastrointestinal, and anti-diabetic segments. The cardiac therapeutic segment is estimated to surpass the anti-infectives segment during the forecast period.
The cardiac segment is anticipated to account for a share of ~14.11% in 2024. The changing disease profile in the country and increasing cases of chronic non-communicable diseases are anticipated to contribute to the growth of cardiac, anti-diabetic, dermatological, and neurological therapeutic segments.
Market influencers:
Increased affordability, improved accessibility and epidemiological transition are expected to fuel the pharmacy retail market in India during the forecast period. The rise in per capita income and penetration of health insurance coverage has bolstered Indian consumers’ affordability. A significant increase in the number of Indians covered under health insurance has helped propel consumer spending on pharmaceuticals.
With the rise in public healthcare expenditure, pharmaceuticals have become more accessible, thereby fueling the pharmacy retail market, especially in rural areas and tier-II cities. Furthermore, the launch of various patented drugs by international pharmaceutical companies resulted in an incremental increase in pharmaceutical sales.
The growing incidence of chronic diseases like hypertension, diabetes, cardiovascular diseases, and cancer, which requires prolonged medication, is expected to further drive the growth of the pharmacy retail market in India during the forecast period.
The sluggish economic growth in the country, owing to factors like agrarian crisis, retail inflation, and lack of fiscal stimulants, have had a negative impact on the profitability of the pharmacy retail market. Index of industrial production (IIP) growth rate of the pharmaceutical industry has experienced a declining trend; the growth rate declined from 30.4% in FY 2017 to 1.6% in FY 2019.
Furthermore, uncertainty in drug pricing has posed a substantial challenge in the pharmacy retail market by way of affecting investors’ sentiments. The implementation of GST has further burdened pharmacy retailers with a low inventory stock and consequent reductions in profitability.
Emergence of online retailers
The e-pharmacy market in India has evolved from its nascent stage to a promising market with strong growth potential. The influx of investments and a rise in Internet subscribers have helped shape up the e-pharmacy market in the country. Online players like Netmeds, 1mg, PharmEasy and MedLife have recently emerged in the Indian pharmacy retail market.
Along with core online players, various traditional offline companies have expanded their retail operations in the online platform to offer value-added services to customers.
Companies covered
• Apollo Pharmacies Limited
• Emami Frank Ross Limited
• Global Healthline Private Limited
• Medlife
• MedPlus Health Services Private Limited
• Netmeds Marketplace Limited
• Noble Medichem Pvt Ltd. (Noble Plus)
• RWL Healthworld Limited (Fortis Health World)
• Wellness Forever Pharmacy
• 91Streets Media Technologies Private Limited (PharmEasy)
