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October 07, 2006

The race for organized pharma retailing

Business Today has an article on how major business houses (like the Reliance ADAG Group) as well as start-ups are racing each other to get into the organized pharmaceutical retail business.
Apart from Reliance, there is Kishore Biyani's Future Group that is entering this sector, as is Lifeken. Medicine Shoppe flagged off operations a few years ago, and the Apollo Hospitals group has been in this area for the past 10 years. Emerging firms, like Care Hospital of Hyderabad, also have aggressive plans in this space.

In early August, Pantaloon Retail India, a part of the Future Group, and Manipal Health Systems, a part of the south India-based Manipal Group, signed a memorandum of understanding (MoU) to form a 50:50 joint venture. The Bangalore-headquartered JV will operate pharmacies (selling medical products) and provide medical services across the country under the 'Manipal Cure & Care' retail brand. The initial investment is pegged at Rs 10 crore.

Apollo, for its part, already has 350 outlets (only retail and not including those attached to its hospitals) and has plans to have in place 1,500 in all in three years. "We will also be open to making acquisitions provided we get the right fit and in regions where we are planning to expand," says Shobhana Kamineni, Director (Procurement), Apollo Hospitals Group."

Arun Natarajan is the Founder of Venture Intelligence, which tracks private equity and venture capital in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.