The latest report from MBS – MB Securities JSC (MBS) reveals that Vietnam’s pharmaceutical industry, valued at $6 billion to $7 billion in 2022, is experiencing rapid growth, with prescribed drugs contributing over 70 percent of its revenue.
Beyond the prescribed drugs segment, the retail market, encompassing nearly 60,000 pharmacies, is valued at almost $2 billion.
MBS underscores the crucial role of modern chain stores, representing only about 4 percent or approximately 2,400 of these pharmacies, in this dynamic landscape. MBS identifies three primary factors propelling growth in Vietnam’s retail drug market.
Firstly, the market is ripe for leadership, with no single dominant entity at present. Secondly, a growing aging population, combined with heightened health awareness post-pandemic, is fueling demand.
Lastly, Vietnam’s ranking among the top 30 countries for high PM2.5 air pollution levels is driving the demand for health supplements and functional foods.
Dongwha Pharm Group’s acquisition of Trung Son Pharma for about $30 million further illustrates the market’s potential and robust foreign investment interest.
In the retail sector, Pharmacity and Nhà Thuốc FPT Long Châu are leading a competitive landscape:
- Pharmacity, once the largest chain with over 1,100 stores, has undergone 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 compared to Pharmacity’s 936.
Long Chau, managed by FPT Retail, has shown remarkable growth, expanding to nearly 1,600 stores over two years, with an average revenue increase of 174.7 percent from 2020 to 2022.
By December 2023, the chain had solidified its market presence with an impressive quarterly growth rate of 23.4 percent since 2020.
MBS predicts a promising future for Long Chau, anticipating it to reach 1,617 stores by the end of 2023, a 72 percent increase from the previous year.
Vietnam’s pharmaceutical market, valued at $7 billion, presents abundant opportunities and competitive dynamics, capturing significant attention from both domestic and international investors, paving the way for sustained growth and innovation.