With growing awareness of preventive medicines and nutritional wellness, the pharmaceutical industry in India is steadily becoming a highly profitable market.
The Indian Retail Pharmacy industry is widely fragmented throughout the country. The total Indian retail pharmacy market has been growing at an average of 18% per annum over the last few years and is anticipated to grow by even higher numbers in the future. India constitutes 17% of the world's population and currently 2% of the global nutraceutical market revenue comes from India. This gives us a fair idea of the untapped market potential available for exploring. The Indian consumer is increasingly growing aware of the importance of nutrition in disease prevention and management. The awareness and demand for nutraceutical as a strong emerging market in India is on a rise.
Health Consciousness- Raising Awareness
Currently, there is a huge opportunity in the business of pharmacy. Earlier people visited a pharmacy or a medical store only when they used to be sick but today there is an evolving trend. People have suddenly woken up to the fact that remaining healthy overall is important. So, from the curative phase, we have come into the wellness phase where a person is more inclined to take better care of his health to prevent diseases. The wellness space is for people who actually want to be very active, healthy and also want to use all those products, which can bring about a change, increase in their wellness lifestyle quotient, and make them better looking, feel better, or more active. All these things have transformed into a world of opportunity for this business.
A large part of the revenue that comes in was due to sales in metros and tier I cities. However, with growing awareness about the importance of preventive medicine and health and wellness, consumers from tier II and tier III cities too, are beginning to recognise the health risks that keep rising due to nutritional deficiencies. Purchasing products from reputed online retailers or directly from manufacturers also increase consumer confidence in product quality, while cost benefits to sellers are also passed on to consumers. Hence, opting for a franchise outlet of a reputed pharmaceutical brand could be a great business investment.
Pharmaceutical Business Model
The minimum area requirement of a pharmaceutical franchise outlet remains between 500-700 sq ft. as it is as of yet a growing requirement in India. The initial investment falls at around Rs. 25-30 lakhs, with up to Rs. 10-15 lakhs being allocated to fast-moving inventory. The average amount for interiors, furniture, IT and licensing falls at Rs. 7-10 lakhs. A store of this size can make do with 3-4 employees, whose average salaries would amount to Rs. 70,000 to 90,000 in a metro or tier I city. The miscellaneous expenses of a store of this kind would range from Rs. 60-70,000 a month.
The ROI for a pharmaceutical franchise outlet amounts to 15% in the current Indian economy. However, with a growing health consciousness population and rising R&D in the sector, this percentage is all set to rise.