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Forecast Period
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2025-2029
|
|
Market Size (2023)
|
USD 9.17 Billion
|
|
CAGR (2024-2029)
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6.2%
|
|
Fastest Growing Segment
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Street/Mall Based
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|
Largest Market
|
Southern Vietnam
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|
Market Size (2029)
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USD 13.20 Billion
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Market Overview
Vietnam Pharmacy Retail Market was
valued at USD 9.17 billion in 2023 and is expected to reach USD 13.20 billion
by 2029 with a CAGR of 6.2% during the forecast period. According to the
Vietnam Population Forecast by the General Statistics Office (GSO), the
population aged over 65 currently totals 7.6 million and is projected to
account for 17.5 percent of the total population by 2049. This demographic
shift is expected to drive increased demand for medications and healthcare
products in Vietnam. Additionally, rising incomes and growing urbanization are
anticipated to further support the expansion of the country's pharmacy market.
Consumer activities and shopping have
rebounded strongly, according to the latest data from the Ministry of Industry
and Trade. December 2023 saw a surge in service trade, fueled by preparations
for major year-end celebrations and the New Year 2024. Consumer demand remained
strong, showing a consistent upward trend compared to the previous year. As a
result, total retail sales of goods and consumer services in December 2023 are
estimated at USD22.51 million, marking a 2.6 percent increase from November
2023 and a notable 9.3 percent rise compared to December 2022. For the whole
year of 2023, total retail sales of consumer goods and services at current
prices are projected to reach USD247.84 million, reflecting a 9.6 percent
increase from the previous year. Retail sales of goods alone were estimated at USD192.4
million, making up 78 percent of the total and showing an 8.6 percent rise from
the previous year. Inflation has decreased from its peak of 4.9 percent to a
current range of 3.4-3.6 percent. KBSV anticipates that these positive trends
will bolster economic demand.
Key Market Drivers
Increasing
Healthcare Awareness
Vietnam's pharmacy retail market is significantly
driven by the rising awareness about healthcare and wellness among its
population. As the Vietnamese people become more informed about health issues,
the demand for pharmaceutical products and services has grown. This heightened
awareness is fueled by increased access to health information through various
media channels, including the internet, social media, and educational
campaigns. Health consciousness has shifted from merely addressing illnesses to
preventing them through proactive measures and maintaining overall wellness.
Improved healthcare education has led to a greater
understanding of chronic diseases, preventive care, and the importance of early
intervention. Consequently, consumers are seeking out pharmacies for not only
medications but also for health supplements, vitamins, and other wellness
products. This trend is further supported by the government's efforts to
promote health literacy and preventive care through public health campaigns and
educational programs.
At the 2024 annual general meeting of
shareholders, Nguyen Bach Diep, Chairwoman of FPT Retail, unveiled plans to
expand the Long Chau pharmacy chain by adding 400 new stores, increasing the
total number to 1,900. Each new pharmacy will require an average investment of
approximately USD31,500 and is projected to break even within three months.
This expansion is part of a broader strategy to develop the medical ecosystem.
Diep aims to roll out the Long Chau Healthcare Platform strategy, which will
focus on preventive medicine, diagnostics, testing, treatment, pharmacies, and
home monitoring.
The growing awareness also influences consumer
behavior, as people are more inclined to purchase high-quality, branded
medications and health products. This shift has resulted in an increase in both
the frequency and volume of purchases at retail pharmacies. Additionally, the
rise of health-conscious lifestyle choices, such as dietary supplements and
fitness products, contributes to the expanding market for pharmacy retail.
Expansion
of Middle Class
The expansion of Vietnam’s middle class is a crucial
driver of the pharmacy retail market. As economic growth accelerates, a larger
segment of the population is experiencing increased disposable income, which
directly impacts their spending on healthcare products. The middle class is
more likely to invest in health and wellness products, ranging from
prescription medications to over-the-counter drugs and health supplements.
This economic shift enables consumers to afford
higher-quality pharmaceuticals and wellness products, as well as to seek out
more comprehensive health services. The middle class's growing purchasing power
also encourages pharmacy retailers to expand their offerings, including premium
and branded products that cater to this demographic's preferences. Furthermore,
increased disposable income allows consumers to prioritize health expenditures,
contributing to the overall growth of the pharmacy retail sector.
The rise of the middle class is also associated with
increased urbanization and lifestyle changes that impact health, such as higher
stress levels and dietary changes. This demographic shift drives demand for
various healthcare products, making it a significant factor in the expansion of
pharmacy retail outlets and services.
Urbanization
and Infrastructure Development
Rapid urbanization in Vietnam plays a significant role
in driving the growth of the pharmacy retail market. As urban areas expand and
more people move to cities, there is an increasing demand for convenient access
to healthcare products and services. Major cities like Ho Chi Minh City and
Hanoi are experiencing population growth, leading to a higher concentration of
retail pharmacies and drugstores.
Urbanization brings about changes in lifestyle and
health patterns, such as increased prevalence of chronic diseases and
lifestyle-related health issues. This shift in health needs drives demand for a
wide range of pharmaceutical products and services. Additionally, the
development of urban infrastructure, including commercial centers and shopping
malls, often incorporates pharmacy outlets, providing easier access for city
residents.
The expansion of retail spaces and modern commercial
environments in urban areas also supports the growth of pharmacy chains, which
are able to reach more consumers and offer a diverse range of products. The
integration of pharmacies into urban retail hubs enhances visibility and
accessibility, further contributing to market growth.
Government
Policies and Healthcare Reforms
Government policies and healthcare reforms are pivotal
in shaping the growth of Vietnam's pharmacy retail market. The Vietnamese
government has been actively involved in improving healthcare access and
quality through various initiatives. Policies aimed at increasing the
availability of medications, such as subsidies for essential drugs and support
for local pharmaceutical manufacturing, help make healthcare products more
affordable and accessible to a broader population.
Healthcare reforms, including regulatory changes and
improvements in pharmaceutical standards, contribute to a more organized and
transparent market. These reforms enhance consumer trust in retail pharmacies
by ensuring the safety and efficacy of medications. Additionally, government
efforts to promote the use of generic drugs help reduce costs and expand access
to essential medications.
The government's focus on expanding healthcare
infrastructure, including the development of modern pharmacies and drugstores,
supports the growth of the retail sector. Investments in healthcare initiatives,
such as disease prevention programs and health education, also drive demand for
pharmaceutical products and services, contributing to the overall expansion of
the pharmacy retail market.
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Key Market Challenges
Regulatory
and Compliance Issues
The Vietnamese pharmacy retail market faces significant
challenges related to regulatory and compliance issues. The pharmaceutical
industry in Vietnam is governed by a complex array of regulations, which are
constantly evolving. Ensuring compliance with these regulations can be
challenging for pharmacy retailers, particularly smaller businesses with
limited resources. Regulatory requirements encompass various aspects, including
drug registration, quality control, labeling, and advertising. Pharmacy
retailers must navigate these regulations to avoid legal issues and ensure that
their products meet safety and efficacy standards. Non-compliance can lead to
penalties, including fines and potential suspension of business operations,
which can severely impact a company's reputation and financial stability.
Additionally, the regulatory environment can be
unpredictable, with frequent changes in policies and procedures. Keeping
up-to-date with these changes requires constant monitoring and adaptation,
which can be resource-intensive. The complexity of the regulatory framework can
also create barriers for new entrants to the market, limiting competition and
innovation. Another aspect of regulatory challenges is the need to adhere to
international standards, especially for retailers dealing with imported
pharmaceutical products. Compliance with both local and international
regulations requires rigorous quality control processes and documentation,
adding to the operational burden for pharmacy retailers.
Counterfeit
Drugs and Quality Control
Counterfeit drugs represent a significant challenge in
the Vietnamese pharmacy retail market. The presence of counterfeit and
substandard medications poses serious risks to consumer health and undermines
trust in the pharmaceutical industry. Counterfeit drugs can lead to ineffective
treatment, adverse reactions, and increased health risks, making it a critical
issue for the market. Ensuring quality control and verifying the authenticity
of pharmaceutical products are major concerns for pharmacy retailers. Implementing
effective measures to prevent the sale of counterfeit drugs involves rigorous
checks, proper sourcing from reliable suppliers, and adherence to strict
quality standards. However, counterfeiters are increasingly sophisticated,
making it challenging to distinguish between genuine and fake products.
The proliferation of counterfeit drugs not only
affects consumer health but also impacts the financial performance of
legitimate businesses. Retailers may face legal liabilities and reputational
damage if they inadvertently sell counterfeit products. Additionally, the cost
of implementing anti-counterfeiting measures, such as advanced tracking systems
and security features, can be substantial, especially for smaller retailers. Addressing
the issue of counterfeit drugs requires coordinated efforts between government
authorities, pharmaceutical companies, and retailers. Strengthening regulatory
enforcement, enhancing supply chain transparency, and promoting public
awareness are crucial steps in combating this challenge.
Intense
Competition and Market Saturation
The pharmacy retail market in Vietnam is characterized
by intense competition and market saturation, particularly in urban areas. The
rapid growth of the market has attracted numerous players, including both local
and international pharmacy chains, leading to a highly competitive environment.
The high level of competition puts pressure on pharmacy retailers to
differentiate themselves and offer unique value propositions. This can involve
investing in advanced technology, providing superior customer service, or
expanding product ranges. However, the cost of these investments can be
significant, and smaller retailers may struggle to compete with larger,
well-established chains.
Market saturation is also a concern, as the
proliferation of pharmacy outlets can lead to diminishing returns and reduced
profitability. In densely populated urban areas, the concentration of
pharmacies can result in lower sales per store and increased operating costs.
Retailers must continually adapt their strategies to stay competitive, such as
by focusing on niche markets or offering specialized services. The competitive
landscape also affects pricing strategies, with retailers often engaged in
price wars to attract customers. This can erode profit margins and make it
challenging for pharmacies to maintain financial stability. Developing
effective marketing strategies and exploring new business models are essential
for navigating this competitive environment.
Key Market Trends
Digital
Transformation and E-Commerce Growth
The digital transformation trend is reshaping
Vietnam’s pharmacy retail market. With increasing internet penetration and
smartphone usage, consumers are turning to online platforms for purchasing
pharmaceutical products and health services. E-commerce has become a
significant channel for pharmacies, offering convenience and a wider range of
products than traditional brick-and-mortar stores. This trend is driven by the
growing preference for online shopping, particularly among younger, tech-savvy
consumers who value the ease of ordering medications and health products from
the comfort of their homes.
Digital platforms allow pharmacies to reach a broader
audience and provide services such as online consultations, home delivery, and
digital prescriptions. The integration of technology into pharmacy operations
includes the use of mobile apps and websites for order placement, payment
processing, and customer engagement. Many pharmacies are also adopting digital
tools for inventory management, customer relationship management, and data
analytics, which enhance operational efficiency and customer experience.
The rise of e-commerce in pharmacy retail is supported
by a growing trend towards telemedicine and remote healthcare services. The
COVID-19 pandemic accelerated this shift, as consumers sought safe alternatives
to in-person visits. E-commerce platforms and digital health solutions are
expected to continue evolving, offering innovative services such as virtual
health consultations, personalized medicine, and health tracking apps. As
digital infrastructure improves and consumer trust in online shopping grows,
the role of e-commerce in the pharmacy sector is likely to expand further.
Increased
Focus on Health and Wellness
There is a growing focus on health and wellness in
Vietnam, which is significantly influencing the pharmacy retail market.
Consumers are increasingly seeking products that support overall well-being,
including dietary supplements, vitamins, and natural health products. This
trend reflects a broader shift from reactive healthcare—treating illnesses
after they occur—to proactive wellness, where individuals take preventive
measures to maintain health and prevent disease. Pharmacies are responding to
this trend by expanding their product ranges to include a variety of health and
wellness items. This includes not only traditional medications but also a wide
selection of health supplements, organic products, and alternative medicine
options. Retailers are also offering educational resources and health
consultations to help consumers make informed choices about their wellness.
The emphasis on health and wellness is driven by
increased health awareness and lifestyle changes among Vietnamese consumers.
Factors such as rising disposable incomes, urbanization, and greater access to
health information contribute to this trend. As consumers become more
health-conscious, there is a growing demand for products that promote better
living, leading pharmacies to adapt their offerings and marketing strategies to
cater to these needs. This trend also influences the way pharmacies approach
customer service, with a greater emphasis on personalized health advice and
tailored product recommendations. Pharmacies are increasingly positioning
themselves as holistic wellness centers, providing comprehensive solutions that
address both medical and lifestyle needs.
Integration
of Advanced Technologies
The integration of advanced technologies is a key
trend shaping the pharmacy retail market in Vietnam. Technology is playing a
crucial role in enhancing the efficiency and effectiveness of pharmacy
operations. Innovations such as automated dispensing systems, electronic health
records, and artificial intelligence (AI) are transforming how pharmacies
manage their processes and interact with customers. Automated dispensing
systems streamline the medication dispensing process, reducing errors and
improving accuracy. These systems also enhance operational efficiency by
speeding up the fulfillment of prescriptions and managing inventory more
effectively. Electronic health records facilitate better communication between
pharmacies and healthcare providers, ensuring accurate and up-to-date patient
information.
FPT Long Chau has emerged as a leader in Vietnam’s
pharmacy industry, excelling in market dynamics, digital innovation, and
community health. With a network of over 1,700 pharmacies and millions of
customers served monthly, the company is now concentrating on analyzing
customer preferences to deliver personalized recommendations. At the recent
Retail Asia Forum in Ho Chi Minh City, Nguyen Do Kuan, the Chief Operating
Officer of FPT Long Chau, highlighted how their business leverages technology
to streamline operations and efficiently handle high transaction volumes.
Processing more than 12 million transactions monthly
across various channels, including online platforms and physical stores, FPT
Long Chau demonstrates the significant benefits of technology integration in
enhancing operational efficiency. Operating nationwide, the pharmacy chain
maintains fair healthcare distribution by ensuring consistent pricing and
quality standards across both urban and rural areas.
AI and machine learning are increasingly being used to
analyze customer data and predict purchasing patterns, allowing pharmacies to
offer personalized recommendations and targeted promotions. AI-driven chatbots
and virtual assistants are also being employed to handle customer inquiries,
manage orders, and provide health advice, improving customer service and
engagement.
Growth
of Specialized Pharmacies and Drugstores
The growth of specialized pharmacies and drugstores is
another prominent trend in Vietnam’s pharmacy retail market. Specialized
pharmacies focus on niche areas such as chronic disease management,
dermatology, or pediatric care, offering tailored products and services to meet
specific health needs. This trend reflects a shift towards more personalized
and targeted healthcare solutions. Specialized pharmacies provide a range of
services beyond traditional medication dispensing, including expert
consultations, personalized treatment plans, and specialized health products.
For instance, pharmacies that focus on chronic disease management may offer
specialized medications, health monitoring tools, and lifestyle support for
conditions such as diabetes or hypertension.
The rise of specialized pharmacies is driven by
increasing consumer demand for expert advice and targeted healthcare solutions.
As the population becomes more aware of specific health conditions and
treatment options, there is a growing preference for pharmacies that offer
specialized knowledge and products. This trend also supports the broader move
towards personalized healthcare, where treatment and health management are
tailored to individual needs.The expansion of specialized pharmacies is also
supported by advancements in pharmaceutical research and the development of new
treatments. As more specialized products and therapies become available,
pharmacies are able to cater to a wider range of health needs, contributing to
their growth and market presence.
Segmental Insights
Product Type
Insights
In the Vietnam pharmacy retail market,
prescribed drugs dominate as the leading segment. This dominance is driven by several
factors. Firstly, regulatory requirements necessitate a doctor's prescription
for these medications, ensuring that they are used under professional
supervision and are dispensed through licensed pharmacies. This regulatory
framework creates a structured market where prescribed drugs have a significant
presence.
The growing prevalence of chronic
diseases such as diabetes and hypertension drives consistent demand for
prescription medications. These conditions require ongoing treatment, making
prescribed drugs a staple in pharmacy sales. Additionally, advancements in
healthcare infrastructure and medical research contribute to the introduction
of new and specialized prescribed drugs, further solidifying their market
position.
Consumer behavior also plays a role, as
patients tend to trust medical professionals and adhere to prescribed
treatments over over-the-counter alternatives. This reliance on medical
expertise reinforces the importance of prescribed drugs in the market. Collectively,
these factors make prescribed drugs the dominant segment in Vietnam’s pharmacy
retail sector, reflecting their critical role in managing health conditions and
adhering to regulatory standards.
Pharmacy
Location Insights
In the Vietnam pharmacy retail market,
the hospital-based segment is the dominant Pharmacy Location segment. This
dominance is largely due to the integral role hospitals play in providing
comprehensive healthcare services. Hospitals, as primary centers for patient
care, generate significant demand for pharmaceutical products, including
prescribed medications and specialized drugs. Hospital pharmacies serve as
crucial points of distribution for medications prescribed by healthcare
professionals. They are responsible for supplying a wide range of
pharmaceuticals to manage various medical conditions, from acute illnesses to
chronic diseases. The proximity of hospital pharmacies to patient care ensures
a steady flow of prescriptions and a high volume of medication sales. Moreover,
hospital-based pharmacies benefit from strong collaborations with medical
staff, enhancing their ability to offer specialized and often high-cost
medications that are not readily available in retail outlets. This close
integration with healthcare services fosters trust and reliability in the
medications provided, further cementing the dominance of the hospital-based
segment. Overall, the critical role of hospitals in healthcare delivery and the
continuous need for medications in these settings establish hospital-based
pharmacies as a leading segment in Vietnam’s pharmacy retail market.
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Regional Insights
In the Vietnam pharmacy retail market,
the Southern region, particularly Ho Chi Minh City, stands out as the dominant
area. This dominance is driven by several key factors. The Southern region,
being the country’s economic and commercial hub, boasts a high population
density and significant economic activity. Ho Chi Minh City, as the largest
city and a major business center, attracts many residents and expatriates,
creating a high demand for pharmaceutical products and services.
The region benefits from advanced
infrastructure and a well-developed retail network. Southern Vietnam has a
robust distribution system and a high concentration of modern pharmacies,
including both local and international chains. This extensive network ensures
that pharmaceutical products are readily available to a large population. Additionally,
the Southern region's economic growth has led to an increase in disposable
incomes, allowing consumers to spend more on healthcare and wellness products.
The region's dynamic business environment also fosters innovation and
competition in the pharmacy sector, further strengthening its market presence. Overall,
the combination of economic prosperity, high population density, and advanced
infrastructure makes the Southern region a dominant force in Vietnam's pharmacy
retail market.
Recent Developments
- In 2023, South Korea's Dongwha Pharm announced it has signed
an agreement to acquire a 51% stake in Trung Son Pharma, a prominent pharmacy
chain in Vietnam. Trung Son Pharma offers a diverse range of products,
including prescription and over-the-counter medications, cosmetics, health
supplements, health and beauty (H&B) products, medical devices,. The
partnership with Dongwha Pharm is set to expand Trung Son Pharma's retail
presence to 460 stores by 2026.
- FPT Digital Retail JSC, commonly known as FPT Retail, is
swiftly expanding its Long Chau pharmacy network to solidify its status as
Vietnam’s largest medicine retailer, even as competitors scale back or slow
their growth. Despite economic challenges, FPT Retail inaugurated 560 new
pharmacies in 2023, increasing the total number of Long Chau outlets to 1,497.
This expansion has positioned Long Chau as the leading pharmacy chain in the
country, significantly enhancing its market share.
- In
2023, Fundiin and Pharmacity have established the first-ever Buy Now Pay Later
(BNPL) partnership in the pharmacy retail sector. Fundiin is Vietnam's leading
BNPL provider, while Pharmacity is a prominent regional drugstore chain. This collaboration
offers consumers a flexible payment option, providing exceptional convenience
in accessing healthcare services. It allows customers to receive the care they
need without immediate financial strain, enabling them to pay later and
alleviate financial concerns.
Key Market Players
- FPT Digital Retail Joint Stock Company
- Eco Pharmaceutical Joint Stock Company
- Pharmacity Pharmaceutical Joint Stock Company
- ABC Pharmacy
- DHG Pharmaceutical Joint-Stock Company
- Matsumoto Kiyoshi Vietnam Joint Stock
Company
- Sanofi-Aventis Vietnam Company Limited
- OPC Pharmaceutical Joint Stock Company
- Imexpharm Pharmaceutical Joint Stock
Company
- B.Braun Vietnam Company Limited
|
By Market Structure
|
By Product Type
|
By Therapeutic Area
|
By Drug Type
|
By Pharmacy Location
|
By Region
|
|
|
- Over-the-Counter Products
- Prescribed Drugs
- Non-Pharmaceutical Products
- Medical Equipment
|
- Cardiovascular
- Pain Relief/Analgesics
- Vitamins/Minerals/Nutrients
- Anti-Infective
- Anti-Diabetic
- Others
|
|
- Street/Mall Based
- Hospital Based
|
|
Report Scope:
In this report, the Vietnam Pharmacy Retail Market has
been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- Vietnam Pharmacy Retail
Market, By Market Structure:
o Unorganized
o Organized
- Vietnam Pharmacy Retail
Market, By Product Type:
o Over-the-Counter Products
o Prescribed Drugs
o Non-Pharmaceutical Products
o Medical Equipment
- Vietnam Pharmacy Retail
Market, By Therapeutic Area:
o Cardiovascular
o Pain Relief/Analgesics
o Vitamins/Minerals/Nutrients
o Anti-Infective
o Anti-Diabetic
o Others
- Vietnam Pharmacy Retail
Market, By Drug Type:
o Generic
o Patented
- Vietnam Pharmacy Retail
Market, By Pharmacy Location:
o Street/Mall Based
o Hospital Based
- Vietnam Pharmacy Retail
Market, By Region:
o Southern
o Northern
o Central
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents
in the Vietnam Pharmacy Retail Market.
Available Customizations:
Vietnam Pharmacy Retail Market report with the
given market data, TechSci Research offers customizations according to a
company's specific needs. The following customization options are available for
the report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
Vietnam Pharmacy
Retail Market is an upcoming report to be released soon. If you wish an early
delivery of this report or want to confirm the date of release, please contact
us at [email protected]