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, Hospit
Published Date: November - 2024 | Publisher: MIR | No of Pages: 320 | Industry: Consumer Goods and Retail | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request Customization| Forecast Period | 2025-2029 |
| Market Size (2023) | USD 9.17 Billion |
| CAGR (2024-2029) | 6.2% |
| Fastest Growing Segment | Street/Mall Based |
| Largest Market | Southern Vietnam |
| Market Size (2029) | USD 13.20 Billion |
Market Overview
The Vietnam pharmacy retail market? It was worth a cool USD 9.17 billion in 2023 and is looking to hit USD 13.20 billion by 2029. That's a growth of around 6.2% each year! What's fueling this? Well, according to the General Statistics Office (GSO), Vietnam's getting older. There are already 7.6 million people over 65, and they reckon that'll be 17.5% of the whole population by 2049. More older folks naturally means more demand for medicines and all sorts of health goodies. Plus, folks are earning more and moving to cities, which should give the pharmacy market an even bigger boost.
Good news! The Ministry of Industry and Trade says we're spending again, and shopping is back in a big way! December 2023 was especially busy, with everyone getting ready for parties and New Year 2024. People kept buying stuff, which is great news compared to last year. Because of all this, total retail sales in December hit around USD22.51 million – that's 2.6 percent more than November, and a whopping 9.3 percent jump from December 2022! Looking at the whole year, we're talking about USD247.84 million spent on goods and services in 2023, a 9.6 percent increase. Of that, USD192.4 million was just on stuff you can hold (goods!), which is 78 percent of everything and up 8.6 percent from last year. Plus, inflation's cooled down from almost 5 percent to somewhere between 3.4 and 3.6 percent. KBSV thinks all this good stuff will keep the economy humming along.
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 retailers, 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.
Key Market Challenges
Regulatory and Compliance Issues
Navigating the Vietnamese pharmacy scene can be tricky, mainly because of all the rules and regulations you have to follow. The pharmaceutical world in Vietnam is controlled by a whole bunch of rules that seem to be always changing! Making sure you're doing everything by the book can be really tough, especially if you're a smaller pharmacy that doesn't have a ton of cash or manpower. These rules cover everything from getting drugs approved to keeping things top-notch quality-wise, and even how you label and advertise your products. Pharmacy owners have to stay on top of all this to steer clear of legal troubles and make sure their medications are safe and effective. Messing up could mean getting slapped with fines or even having your business shut down temporarily, which nobody wants because it can wreck your reputation and bank account.
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
Okay, so counterfeit drugs are a real problem in Vietnamese pharmacies. It's scary because fake and low-quality medications put people's health at risk and make it hard to trust anyone in the business. These bogus drugs don't work, can cause nasty side effects, and just generally make you sicker. That's why it's a huge deal for pharmacies to make sure everything they sell is legit. They have to be super careful about where they get their drugs, checking everything and sticking to strict rules. But the counterfeiters are getting sneakier, which makes it harder than ever to tell the real stuff from the fakes.
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.
The market's getting pretty crowded, which is a real worry. All these pharmacy outlets popping up everywhere could mean less profit for everyone. Think about itin cities packed with people, having pharmacies on every corner just means fewer sales per store and higher bills to pay. To keep up, retailers need to be quick on their feet, maybe by zeroing in on specific niches or offering specialized services. And let's not forget the price wars! Everyone's trying to undercut each other to get customers, which eats away at profits and makes it tough for pharmacies to stay afloat. To survive, pharmacies really need to get creative with their marketing and maybe even try out some new ways of doing business.
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 retailers. 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
Lately, there's been a real buzz around health and wellness in Vietnam, and it's shaking up the pharmacy scene! People are way more interested in taking care of themselves, snapping up things like dietary supplements, vitamins, and natural health products. It's all about staying healthy before getting sick, you know? Pharmacies are catching on fast, filling their shelves with all sorts of goodies besides just medicine. Think tons of health supplements, organic stuff, and even alternative medicine options. Plus, some retailers are even offering educational resources and health consultations to help us all make smarter choices about our well-being.
Vietnamese folks are getting more and more into health and wellness these days! It's all thanks to increased health awareness and how we're changing our lifestyles. Things like having more money to spend, living in cities, and being able to easily find health info online are fueling this trend. Because we're thinking more about our health, we're looking for products that help us live better. This is pushing pharmacies to change what they offer and how they market to us. Pharmacies are also focusing more on giving us personal health advice and recommending products that are just right for us. They're starting to see themselves as wellness hubs, giving us complete solutions for both our medical needs and our lifestyle choices.
Integration of Advanced Technologies
Vietnam's pharmacy scene is really being reshaped by new tech! It's making pharmacies work smarter and better. Think about itautomated dispensing systems whizzing meds out faster and with fewer mistakes. Plus, we've got electronic health records that help pharmacies and doctors talk to each other, keeping your info spot-on. And don't forget artificial intelligence (AI) – it's changing how pharmacies do pretty much everything and how they connect with you, the customer. Automated systems don't just make things faster; they also keep a better handle on what's in stock. Those electronic records? They mean everyone's on the same page when it comes to your health.
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 retailers, 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
We're seeing more and more specialized pharmacies and drugstores pop up in Vietnam. These aren't your typical corner drugstores; they're focusing on specific areas like managing chronic illnesses, skin problems (dermatology), or even taking care of kids (pediatric care). Basically, they offer products and services designed just for those particular health needs. This trend shows we're moving towards healthcare that's more personalized and targeted to you. These specialized pharmacies offer more than just filling prescriptions. Think expert advice, treatment plans made just for you, and specialized health products you won't find everywhere. For example, a pharmacy specializing in chronic disease management might offer special meds, tools to keep track of your health, and even help you make lifestyle changes if you're dealing with diabetes or high blood pressure.
People are increasingly turning to specialized pharmacies because they want expert advice and healthcare that's tailored to them. As we all learn more about specific health issues and how to treat them, we're choosing pharmacies that really know their stuff and offer specialized products. This shift is part of a bigger movement toward personalized healthcare, where treatment and health management are designed around your individual needs. Plus, new breakthroughs in pharmaceutical research and the development of cutting-edge treatments are helping specialized pharmacies grow. As more of these SP and therapies become available, pharmacies can meet a wider variety of health needs, boosting their growth and presence in the market.
Segmental Insights
Product Type
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 Vietnam, when you think pharmacies, think hospitals!
The hospital-based pharmacies are the big players in the pharmacy game, and here's whyHospitals are the heart of healthcare. They're where people go for everything from a simple check-up to serious medical treatments, so it's no surprise they need a ton of medicine. Think of hospital pharmacies as crucial hubs, dishing out all sorts of drugs – everything from everyday pills to specialized treatments. Because these pharmacies are right there in the hospital, they're always busy filling prescriptions.
Plus, they've got a secret weaponstrong relationships with the doctors and nurses. This allows them to offer complex, expensive medications you might not find anywhere else. This close connection builds trust and makes hospital pharmacies the go-to place for reliable meds. Bottom line? Hospitals are central to healthcare in Vietnam, and because people constantly need medicine while there, the hospital-based pharmacies are the top dogs in the market.
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 is lucky to have great infrastructure and a really strong retail scene. Down in Southern Vietnam, they've got a solid system for getting things where they need to go, and you'll find tons of modern pharmacies—both local shops and big international chains. This means it's super easy for lots of people to find the medicine they need. Plus, because the area's economy is booming, folks have more money in their pockets, so they're spending more on keeping healthy and feeling good. The dynamic business environment down South also helps new ideas pop up and keeps pharmacies competing, which only makes the market even stronger. All in all, with a thriving economy, tons of people living there, and top-notch infrastructure, the Southern region is a major player in Vietnam's pharmacy world.
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 retailers 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 StockCompany
- Sanofi-Aventis Vietnam Company Limited
- OPC Pharmaceutical Joint Stock Company
- Imexpharm Pharmaceutical Joint StockCompany
- B.Braun Vietnam Company Limited
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