FUTURE MARKET TRENDS FOR PHARMACY RETAIL IN MEXICO
Written by: Gargi Sarma
Mexico has a sizable and growing middle class, a business-friendly environment, increasing demand for healthcare services, and relatively expensive prescription pricing. The huge and expanding middle class, a conducive business climate, a rise in the demand for pharmaceutical products and healthcare services, and more quality certifications are all factors that have contributed to the expansion of the Mexican pharmaceutical market.
With a projected value of over $7 billion in 2020, Mexico will have the second-largest pharmaceutical market in Latin America behind Brazil. Antibiotics account for more than half of the industry's production in the nation, while other goods including analgesics and antiparasitics are also produced there.
Market Trends in Mexico's Pharmaceutical Retail Sector?
There are a number of significant developments that may be seen in the Mexican pharmaceutical retail industry's current market trends. First, with rising expenditures in e-commerce platforms and online ordering systems, pharmacists' online presence has significantly risen. Additionally, the use of telemedicine services and other digital health solutions is expanding and provides easy access to healthcare. Additionally, there is a growing emphasis on health and well-being, which has increased the range of products available beyond conventional pharmaceuticals. Additionally gaining popularity are pharmacogenomics, digital marketing tactics, and personalised medicine. Finally, the importance of sustainability and eco-friendly practices is rising, with pharmacists launching programmes to cut waste and encourage green behaviour. These market trends are a reflection of the industry's dynamic nature, as well as how it has adapted to changing consumer needs and technology developments.
Comparison of Mexico with other countries in regard to the pharmaceutical industry
Thailand
Several significant developments may be seen in the pharmaceutical retail industry's current market trends in Thailand. First off, there is a growing trend towards online pharmacies and e-commerce sites, which make it easier for clients to acquire prescription drugs and healthcare items online. Patients can receive virtual medical consultations through telemedicine services, which are also growing in popularity. The demand for health and wellness items, such as vitamins, supplements, and natural cures, is also rising. Additionally, the availability of genetic testing services and personalised medicine is growing, enabling customised treatment modalities. Additionally, pharmacists are spending money on digital marketing plans to contact and interact with clients successfully. Last but not least, eco-friendly and sustainable practises are becoming more and more important, with an emphasis on minimising packaging waste and encouraging environmentally sound decisions. These market developments in Thailand's retail pharmaceutical industry show how the sector has adapted to shifting consumer demands, scientific progress, and the rising significance of holistic healthcare approaches.
Segmentation of the Thai Pharmacy Retail Market
Organised and Unorganised Segment: Pharmacy stores in Thailand were led by the unorganised segment in terms of revenue in 2019 according to market structure (organised and unorganised segment). It competes in the OTC, generic, and health supplement markets and often does not offer home delivery services. On the other side, the organised sector has developed a strong presence throughout all of Thailand, which has led to increased customer traffic at these stores. Additionally, well-organized chains have mobile applications, a strong presence, more extensive product listings, and home delivery services. They also have a better brand value.
Product Categories (Medical Equipment, OTC, Prescription Drugs, and Non-Pharmaceutical Products): Due to the greater price and margins associated with prescription medications, they dominated the market in terms of revenue in 2019. OTC & Non-Pharmaceutical items were continually expanding in terms of revenue share among the other product groups. The least amount of money was generated by medical equipment.
Drug type (including generic and patented): Generic drugs dominated Thailand's pharmaceutical market in terms of revenue due to the country's large volume of patient consumption and expanding public healthcare programmes. On the other hand, patented medications are condition-specific.
India
SPER Market Research claims that a substantial shift in customer behaviour has led to the emergence of the India Online and Offline Pharmacy Retail Market. They have been successful in making shopping from the comfort of home simple. The question is, does this spell the death of traditional brick-and-mortar pharmacies? No, it seems like this is a fanciful world. For more than 20 years, the concept of internet pharmacies and the sale of medicines online has been rather vague. After the first two years of the epidemic, online pharmacies swiftly gained popularity, although they still can't completely replace offline/physical pharmacies. A substantial shift in consumer behaviour has resulted in the emergence of a potential market for e-pharmacies. They have been successful in making shopping from the comfort of home simple. The question is, does this spell the death of traditional brick-and-mortar pharmacies? No, it seems like this is a fanciful world. For more than 20 years, the concept of internet pharmacies and the sale of medications online has been rather murky. After the first two years of the epidemic, online pharmacies swiftly gained popularity, although they still can't completely replace offline/physical pharmacies.
Trends that are boosting growth in India
Vietnam
In 2021, the Vietnam Pharmacy Retail market had a value of USD 7.45 billion, and during the forecast period, it is anticipated to grow at a CAGR of 6%. The main ones include the ageing Vietnamese population, the entry of retail corporations into the pharmacy sector, and the rising demand for retail chains of contemporary pharmacies. Additionally, as different ailments are becoming more prevalent, there is a greater need for pharmacies and other locations where people can get medications. This is thus anticipated to boost the expansion of Vietnam's retail pharmacy market. Market participants in Vietnam have launched a number of activities to spread knowledge about illnesses and their treatments as well as details on the presence of cutting-edge medical equipment and methods in hospitals.
Ageing of the population: Vietnam has reportedly started to age gradually, according to the Ministry of Health. In 2014, there were 10.2% more people over the age of 60 than there were in 1989 (7.1%). The United Nations predicts that in Vietnam, the population over 65 would nearly quadruple by 2040. These elements support the expansion of the retail pharmacy business.
Retail businesses entering the pharmacy: The participation of retail behemoths, rapid economic expansion, increased per capita income, an increase in the urban population, etc. are all contributing to the pharmacy retail market's rise. For instance, after purchasing the Long Chau pharmaceutical chain in 2017, FPT Retail rebranded it as the FPT Long Chau Pharma Joint Stock Company and opened a large number of additional stores in Vietnam. Similar to how the Gioi Di Dong grew into the pharmaceutical industry by acquiring the Phuc An Khang drugstore chain, they too took advantage of their experience operating retail chains. This then stimulated the retail pharmacy market in Vietnam.
Increasing demand for retail chains of modern pharmacies: Modern retail pharmacies are in greater demand due to their convenient location and practical business model. The American Chamber of Commerce's White Book of Healthcare Committee 2020 in Vietnam states that over the past ten years, the pharmaceutical retail chain business has seen a tremendous increase in terms of accessibility and quality. Modern pharmacy chains are replacing the prototype/model of traditional independent pharmacies on the market, which benefits customers by providing convenience, product and service variety, and consistent high quality.
In terms of the number of locations, Pharmacity is currently the largest pharmacy chain in Vietnam. However the pharmacy company eventually lost its top spot in sales and earnings. In particular, Pharmacity, a chain of pharmacies, only made around VND3.6 trillion in revenue in 2021, which is about VND350 billion less than Long Chau Pharmacy. Additionally, Pharmacity has consistently posted losses in recent years. In particular, this pharmacy lost more than 360 billion VND in after-tax earnings in 2021. Pharmacity's desire to rule the market is based on its dominant position and sizable financial cushion, which are backed not just by SK Group but also by Mekong Capital and TR Capital. Pharmacity is prepared to exchange profits for market share because of this.
The benefit of Long Chau is that it has 6-7 times more SKUs (the number of pharmaceuticals in stock) than other pharmacies, which helps the store's sales dominate the industry. Accordingly, by the end of 2021, the Long Chau chain's sales were close to VND 4 trillion, up 3.3 times from 2020. This will enable Long Chau to turn a modest profit and take the top spot in the retail pharmacy chain market with a 45% market share.?
The direction in which these companies will compete to increase their market share is unclear. However, in a competitive market like the one we currently find ourselves in, only companies with a sensible company plan, competent technology application, cost optimisation, systematic managerial abilities, and most importantly, only must have a sound financial base, can win.
The Pharmaceutical Retail Scenario in Mexico
The majority of OTC and pharmaceutical product sales are now being made by pharmacy chains in Mexico. Adapting to the needs of Mexican patients and consumers has been a key component of drugstore chain winners' winning strategies.
In Figure 4, Corporativo Fragua has the largest net sales value of any pharmacy in Mexico in 2021, reaching almost 85 billion pesos. Sales of 73.03 billion pesos put FEMSA division health in second place that year. Around 11 billion dollars worth of pharmaceutical items had already been sold in Mexico at that point.
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Retail Channels for OTC, Pharma, and Derma-Cosmetic Products in Mexico:
The retail market for OTC, pharmaceuticals, and cosmetics in Mexico is divided into three categories: chain pharmacies, independent pharmacies, and supermarket pharmacies.
Online markets like Mercado Libre, Amazon, and Linio provide additional shopping outlets for OTC and healthcare products. Additionally, some of the drugstore and grocery companies offer home delivery services through convenience stores like Oxxo, 7-Eleven, and Circle K as well as delivery services like Rappi.
Top 5 Mexican Pharmacy Chains: The largest drugstore chain businesses in Mexico are as follows-
About 30% of the country's physical establishments that sell prescription drugs and self-medication are owned by pharmacy chains.
Pricing in Pharmaceutical Retail in Mexico
Numerous factors may have an impact on the cost of medications in Mexico. The following are some significant elements relating to price in Mexican pharmacies:
Additionally, variables like supply, demand, and production costs may affect the precise pricing dynamics for a certain drug.
Technological Advancements in Pharmaceutical Retail Chains in Mexico
There have been a number of technological developments in Mexico's retail pharmaceutical industry that could have a big impact on healthcare. Here are a few noteworthy developments:
These technology developments in Mexico's pharmaceutical retail industry have the potential to improve patient access to healthcare, increase medication adherence, streamline procedures, and offer individualised treatment.
Factors Impacting the Pharmaceutical Retailers in Mexico:
Several factors are predicted to have an impact on the market trends for drugstores in Mexico. These possible tendencies are:
These patterns show a movement in healthcare towards the patient, utilising technology and innovation to deliver more individualised and accessible treatments. However, a number of variables, such as legal frameworks, technical developments, and market dynamics in Mexico, will affect how these trends are actually implemented and how far they go.
Conclusion:
In conclusion, digital transformation, price control, and growing emphasis on individualised healthcare are driving significant changes in the Mexican pharmaceutical retail business. To improve accessibility and convenience for clients, pharmaceutical merchants are utilising internet platforms, mobile applications, and telemedicine services. Drug costs are controlled by the government through mechanisms like the Maximum Price to the Public (PMPM), which guarantees the accessibility and affordability of necessary pharmaceuticals. Retailers are increasingly focusing on supply chain optimisation, service integration, and patient education programmes. As relevance grows, so does embracing sustainability and social responsibility. Overall, Mexican drugstores are adjusting to changing consumer preferences to give their clients more individualised, easily accessible, and ethical healthcare options.
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