The report titled “Indonesia Pharmacy Retail Market Outlook to 2025 By Market Structure (Organized & Unorganized); By Region (West Java, East Java, Central Java, Jakarta, North Sumatra & Others); By Product Categories (Prescribed, OTC, Non-Pharmaceutical Products & Medical Equipment); By Therapeutic Areas; and By Product Type (Patented & Generic Drugs)” provides a comprehensive analysis on the status of the pharmacy retail sector in Indonesia. The report covers various aspects including the number of pharmacies & market size, production scenario of pharmaceutical products in the country, target audience, growth facilitators, issues & challenges faced by the industry, and more. The Indonesia Pharmacy Retail report concludes with projections for the future of the industry including forecasted sales revenue by 2025, market segmentations, Covid-19 impact, and analysts’ take on the future.
Indonesia Pharmacy Retail Overview and Size:
Indonesia pharmacy retail sector is in the growing phase with the presence of over 40,105 drugstores and pharmacies along with revenue CAGR of 8.1% during 2014-2019. Increasing incidence of lifestyle related ailments such as Diabetes, Obesity, hypertension, and various heart related diseases and prevalence of communicable diseases such as TB, influenza among the growing population are the main reasons behind positive growth in pharmacy retail revenue due to the increased sale of private-label goods. Another major driver is the aging population. The UN has predicted that the percentage of Indonesians, over 60 years old will reach 25% in 2050 or nearly 74 million elderly people.
Indonesia Pharmacy Retail Segmentations
By Market Structure: Unorganized market dominated the pharmacy retail industry in Indonesia in 2019 on the basis of revenue and number of stores. The presence of major pharmacy retail chains is limited to urban areas; hence the organized segment generates less revenue.
By Type of Product: In terms of consumer preferences, sales for over the counter (OTC) drugs are growing faster than that of prescription drugs but the latter has the dominant market share. Increasing the trend of self-medication and rising health awareness has led to the rapid growth of the OTC segment.
Further Segmentation of Product Sales by Hospital and Mall/Street Based: Prescription medicines continue to dominate the hospital pharmacies as people usually buy doctors prescribed medicines from hospitals and use standalone pharmacies for self-medication. The rising tendency in Indonesians to self-treatment, increasing awareness for healthy lifestyle coupled with easy availability and distribution have allowed unorganized independent stores to sell products majorly for self-medication purposes.
By Type of Drugs: Indonesia is a very brand-conscious market, where people prefer branded/original medicines or branded generics (patent) regardless of the premium prices. As a result of the same patent, medicines recorded higher revenue as compared to generics. With the implementation of JKN, the sale of prescribed generic drugs has increased over the year which is a major driver for the growth of this segment.
By Therapeutic Area: The trend for growth of anti-anti-analgesics, anti-diabetic and cardiac care medicines reflects the rise in the number of diabetes and heart disease patients in the country, and the increasing focus of pharmaceutical companies on the therapy areas. Shift from communicable to non-communicable diseases in Indonesia will not be as apparent compared to other countries, due to the high incidence of tuberculosis.
By Type Region: West Java has the major share of the total pharmacies and drugstores in Indonesia in 2019; also it dominates the segment in terms of revenue. This can be attributed to more number of hospitals located in the region. East Java has witnessed an increase in foreign investment in the pharmacy sector. The high rate of urbanization in Central Java has enabled the growth of online retail pharmacy products.
Competitive Landscape of Indonesia Pharmacy Retail
The pharmacy retail market in Indonesia is highly fragmented with top 5 major organized chains (Kimia Farma, Apotek K-24, AS Watsons Group, Guardian Pharmacy, and Century Apotek) accounting for 8.3% of the revenue share in 2019. Both private as well as public pharmacy retail companies have entered the market over the past five years to tap the potential in this sector. These players compete on parameters such as proximity, value-added services, availability of drugs, promotional offers, and tie-ups with major healthcare institutions. In order to increase their revenue, the players offer their products through online portals.
Indonesia Pharmacy Retail Future Outlook & Projections
The Pharmacy Retail industry is expected to recover from the Covid-19 pandemic and witness growth by 2025. The increasing demand OTC products and an increasing number of telemedicine companies such as Halodoc, Alodokter, SehatQ, GoApotik, and others are expected to fuel the sales of medicines. The adoption of generic medicines is also expected to increase over the forecast period. The Pharmacy Retail market is expected to witness investment in promotional and marketing activities and also strategic partnerships or acquisitions of smaller players and independent pharmacies.