Apollo Hospitals Enterprise Ltd (AHEL) is looking at increasing the contribution of private labels to its pharmacy business. Private labels account for around 6.5 percent of the pharmacy business at present and the company is envisaging taking this up to 20 percent in the next five years.
Adding new products to the private label portfolio, with a focus on health and wellness products, and tie-ups with international brands are some of the strategies meant to achieve this aim. AHEL has already tied up with UK-based health and wellness stores major Holland & Barret International and would look at similar tie-ups in the future. If the regulations would be clearer on online pharmacy retail, it would also venture into that model for further growth. However, it is not planning to enter the segment till regulations become clear.
The focus on expanding the product line up would be strategically centered around the health and wellness category, including vitamins, minerals, nutraceutical products, pain management products, and products that address the threat of noncommunicable diseases. The second area for growth would be the medical devices business, which includes thermometers and smaller devices that could be sold through pharmacy outlets. Hygiene products such as hand sanitizers and adult diapers are another area of focus for future growth. The company would be looking at expanding its product portfolio in these categories to achieve the target.
Currently, it has around 200 products that are served in over 300 stock keeping units (SKUs). While the roadmap is expected to take the private label business toward rapid growth, the segment has achieved a 6.5 percent
share in AHEL's pharmacy business over a period of almost 10 years and achieving the set target would require the company to work harder.