Pharma chains embrace shift of portfolios

Modern pharmacy chains are entering a new phase of competition with more selective expansion plans.

- By Thanh Van

In late May, Pharmacity raised growth capital from LeapFrog Investments, the pioneering profit-with-purpose investment firm, to ramp up its expansion across Vietnam. The deal marks LeapFrog’s second investment in the country.

Biju Mohandas, partner and global lead for Healthcare at LeapFrog Investments, said, “Vietnam has been on our radar for some time. The fundamentals are compelling, with an increased focus on wellness, and rising incidence of non-communicable disease. All these factors are driving growth of the Vietnamese retail pharma market — estimated at 9 per cent compound annual growth rate (CAGR) over the next five years.”

There is also a pronounced shift in how consumers engage with their health, Mohandas said.

“People are increasingly taking ownership of their wellbeing and seeking consistent quality and adequate choices for their medications and supplements. This is well suited to the growth of formal retail pharmacies, which currently represents less than 6 per cent of the market, presenting significant opportunity for consolidation of a largely fragmented sector,” he added.

Founded in 2011, Pharmacity has grown its network 10-fold to more than 1,100 stores, with strong coverage across the major cities and increasingly into Tier II and III cities. The company remains on track to open a further 500 new stores over the next three years, significantly strengthening its national footprint.