Retail giants are expanding the reach of the pharmaceutical market in Vietnam, fueling the race for market dominance.
Mobile World Investment Corp (HoSE: MWG) had a 49 percent stake in the pharmacy chain Phuc An Khang in 2017. At the end of 2021, the company acquired nearly 1.3 million additional shares to bring its ownership to 100 percent.
MWG Chairman 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 a profit,” the chairman added.
MWG’s pharmacy chain currently has 201 stores nationwide with average monthly sales of VN500 million (US$22,000) per store.
FPT Retail is another name that has accelerated the expansion of its pharmacies.
The company acquired Long Chau pharmacy chain to found FPT Long Chau Pharmaceutical JSC in 2018.
In 2021, FPT Retail began ramping up store rollouts to increase the number of drugstores to nearly 500, with sales of approximately VN4 trillion (US$175 million).
FPT Retail Chairman Nguyen Bach Diep described the expansion as the long-term growth engine for the company and said more pharmacies would open in the near future.
Lately, Long Chau has announced that it is the first pharmacy chain to distribute the anti-Covid-19 drug Molnupiravir in Vietnam.
Despite their large number of drug stores, MWG and FPT Retail still pale in comparison to Pharmacity, which leads the market.
Pharmacity started in 2011 with a few dozen stores. It has started to take off since Mekong Capital put money into it in May 2019.
After three years, the pharmacy chain has grown multiple times to 837 stores and aims to have 5,000 stores by 2025 with 35,000 employees on the payroll.
Pharmacity estimates that Vietnam’s pharmaceutical industry is approximately $7.4 billion in size and pharmaceutical spending has increased by 14 percent per year over the past decade.
DigiWorld, a distributor specializing in technology products, also announced that it would focus more on pharmaceuticals by 2022 and aim to be one of the three largest pharmaceutical distributors in the country.
According to SSI Research, Vietnam’s healthcare demand is expected to recover in 2022 and grow at an annual rate of 13 percent. Likewise, domestic health spending will return to normal and soon surpass pre-pandemic levels.
Meanwhile, the IQVIA Institute has classified Vietnam as a country with an emerging pharmaceutical industry. According to an Asia News Network report, a growing middle class, rising per capita income and rising healthcare demand are driving the growth of the domestic pharmaceutical industry.
@ Vietnam News/Asia News Network