Retail giants have begun to ramp up investments in the pharmaceutical market, fueling the race for market dominance.
Mobile World Investment Corp (MWG) held a 49 per cent stake in Phuc An Khang pharmacy chain in 2017. In late 2021, the company acquired nearly 1.3 million additional shares to raise its ownership to 100 per cent.
Chairman of MWG Nguyen Duc Tai underlined the acquisition as a strategy to boost pharmaceutical sales and prepare for new growth opportunities after the pandemic.
“The pharmaceutical market is beginning to shift from curative to preventive medicine. It’s time to make profits,” added the chairman.
MWG’s pharmacy chain currently has 201 stores nationwide with average monthly revenue of VND500 million (US$22,000) per store.
FPT Retail is another name that has been accelerating the expansion of its pharmacies.
The company bought out Long Chau pharmacy chain to establish FPT Long Chau Pharmaceutical JSC in 2018.
In 2021, FPT Retail began to step up store rollout to lift its number of drugstores to nearly 500, raking in around VND4 trillion (US$175 million) in revenue.
Chairman of FPT Retail Nguyen Bach Diep described the expansion as the long-term growth engine for the company, and said more pharmacies would be opened in the near future.
Lately, Long Chau has announced that it is the first pharmacy chain to distribute the anti-COVID-19 medication Molnupiravir in Viet Nam.
Despite their large number of drugstores, MWG and FPT Retail still pale in comparison with Pharmacity, which is leading the market.
Pharmacity started off with several dozen stores in 2011. It has begun to take off since Mekong Capital poured money into it in May 2019.
After three years, the pharmacy chain has increased multifold to 837 stores, and is aiming to expand to 5,000 stores by 2025 with 35,000 employees on the payroll.
Pharmacity estimates that the Vietnamese pharmaceutical industry has a size of around $7.4 billion and pharmaceutical spending has increased by 14 per cent annually over the past decade.
Digitalworld, a distributor specialising in technology products, also announced that it would focus more on pharmaceuticals in 2022 and aims to be one of the three largest pharmaceutical distributors in the country.
According to SSI Research, Vietnamese healthcare demand in 2022 is expected to recover and grow by 13 per cent annually. Likewise, domestic health expenditure will return to normal and soon surpass the pre-pandemic levels.
Meanwhile, IQVIA Institute has classified Viet Nam as a country with an emerging pharmaceutical industry. It said that an expanding middle class, mounting income per capita and a rising healthcare demand are the driving forces behind the growth of domestic pharmaceutical industry. — VNS