Vietnam's pharmaceutical market: burgeoning $7 billion industry
Vietnam's pharmaceutical market: burgeoning $7 billion industry
According to the latest report by MB Securities (MBS), Vietnam's pharmaceutical industry, valued between $6 billion - $7 billion in 2022, is a burgeoning sector with over 70 per cent of its revenue originating from prescribed drugs.
Beyond the prescribed drugs channel, the retail market, involving nearly 60,000 pharmacies, is worth nearly $2 billion.
MBS highlights that modern chain stores, though only representing about 2,400 of these pharmacies (approximately 4 per cent), are pivotal in this landscape. MBS also identifies three primary factors fuelling growth in Vietnam's retail drug market.
Firstly, the market is ripe for leadership, with no single entity currently dominating. Secondly, an increasingly ageing population, coupled with a heightened awareness of health issues following the pandemic, is driving demand.
Finally, Vietnam's position among the top 30 countries for high PM2.5 air pollution levels is spurring the need for health supplements and functional foods.
The market's potential is further evidenced by Dongwha Pharm Group's acquisition of Trung Son Pharma for about $30 million, signalling robust foreign investment interest.
In the retail sector, Pharmacity and Long Chau are at the forefront of a fierce competition.
Pharmacity, once the largest chain with over 1,100 stores, has faced structural changes following the departure of founder Chris Blank in 2022.
As of February 2023, Long Chau has emerged as the leader, surpassing Pharmacity with 1,009 stores to Pharmacity's 936.
Long Chau, under FPT Retail's management, has demonstrated remarkable growth. Over two years, the chain has expanded to nearly 1,600 stores, with an average revenue increase of 174.7 per cent from 2020 to 2022.
By December 2023, the chain had solidified its market presence with an impressive quarterly growth rate of 23.4 per cent since 2020.
MBS forecasts a bright future for Long Chau, expecting it to reach 1,617 stores by the end of 2023, a 72 per cent increase from the previous year.
Vietnam's $7 billion pharmaceutical market, rich in opportunity and competitive dynamics, continues to attract significant attention from both domestic and international investors, setting the stage for continued growth and innovation.
