Vietnam Pharmacy Retail Market, By Market Structure (Unorganized, Organized), By Product Type (Over-the-Counter Products, Prescribed Drugs, Non-Pharmaceutical Products, Medical Equipment), By Therapeutic Area (Cardiovascular, Pain Relief/Analgesics, Vitamins/Minerals/Nutrients, Anti-Infective, Anti-Diabetic, Others), By Drug Type (Generic, Patented), By Pharmacy Location (Street/Mall Based, Hospital Based), By Region, Competition, Forecast & Opportunities, 2019-2029F

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

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).

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