The Undisrupted Bright Future of Pharmacy and Medical Supply Businesses

0
Share
1,579 views

Recently, the rise of digital transformation has disrupted every single industry. The fall of newspaper, magazine and television are the living proof of today. The Institute for the Future made a prediction that within 10 years, every company – regardless of sector – will have to become a digital company in order to survive. Inevitably, the disruption now includes the pharmacy and medical supply businesses.

The disruption occurred because of the change in consumer behavior. E-commerce has grown rapidly in the past ten years. So, it has been a trend that people tend to buy things from URL than IRL, IN REAL LIFE. In 2018, Jeff Bezos, the CEO of Amazon, became the wealthiest man on earth. Bezos’s net worth was as much as 160 billion USD. Also, in the first quarter of 2019, Alibaba extended its annual customer base up to 654 million users. It increased by 18 million users from a previous year. And most recently, Shoppee, an e-commerce business from Singapore paid billions of Baht to hire a world-class soccer player, Christiano Ronaldo, a Portuguese international athlete, to do a funny dance to Shoppee’s theme song for less than ten seconds.

In Europe, the pharmacy business has transformed to digital. The popularity of Farmakom, a digital platform, is on the rise. Farmakom, a tech startup from Italy, helps pharmacy owners access the database of the medicines and medical supplies online and works as a helping hand to run an e-commerce. Now, over 250,000 orders have been made by over 160,000 customers since its launching in 2016. Until today, it has generated over 11 million Euros.

However, the success of Farmakom cannot be copied in Thailand. It is because the legal restriction. According to Medicine Act B.E. 2510, in section 19, licensees of modern drugs are prohibited from producing or selling modern drugs in premises other than those prescribed in the license. It means that pharmacists are not able to sell drugs outside their licensed pharmacies, which excludes the internet. The reason is medicines and pharmaceutical products are not commodities that can be easily bought at a store. They have to be sold only by the professionals with advices from experts. 

In spite of legal obstacles, the pharmacy and medical supply businesses in Thailand have bright future ahead. According to a report from the Ministry of Commerce, the number of the registration of pharmacy and medical supply businesses in Thailand had been growing steadily from 2015 – 2017. In 2017 alone, 1,171 business on pharmacy and medical supply were newly registered. In 2016, the total revenue of the pharmacy and medical supply businesses in Thailand was as high as over 500,000 million Baht. It grew over 70% more than the total revenue in 2012, which was around 280,000 million Baht.

The main reasons behind the growth are these two factors; changes in consumer behavior and the emerging ageing society, where people become more concerned with their health. Even though the economic recession is happening around the globe, the economy from each country still manages to grow. It helps create more middle-class population, who are financially healthy and want to spend their money wisely. Additionally, the beginning of ageing society makes people be more concerned with their heath too. Moreover, the changes in consumer behavior also made Thai people buy medicines and pharmaceutical products more from stand-alone pharmacies than shopping at department stores.

Apart from the positive signs, the growth of pharmacy and medical supply businesses in Thailand has some setback. The first problem is inequality. According to the report done by Ministry of Commerce, over 50% of pharmacy and medical supply businesses are located in Bangkok, which equal 4,598 businesses. For other regions like the North, the South and the Northeast, the percentage are 6.95%, 5.13% and 8.08% respectively. The reason why Bangkok have more pharmacy and medical supply businesses than other provinces is the size of population and the transportation. The density of population leads to the establishment of pharmacy and medical supply businesses to serve the people in need. And the advancement of transportation makes distribution of medicines and pharmaceutical products easy. 

This growth has created a gap between Bangkok and other provinces. While the capital city always has ‘more than enough’, the others are suffering from ‘having too little’. Although 95% of Thai population are covered by Universal Healthcare Scheme (locally known as But Thong in Thai), the accessibility to medicines and pharmaceutical products from outside Bangkok is still a problem that the government needs to solve as always. 

Furthermore, the number of foreign investments might be a concern, especially for the percentage of domestic investment. Although, the statistics show that over 50% of investment were still from Thailand, the percentage of foreign investment was as high as over 46%, which was mostly from the United States of America.   

According to a report from Department of Business Development, Ministry of Commerce, the current trend of consumer is influencing the owners of pharmacies to newly position their businesses from medicine vendors to service providers of health enhancing products. Because of the expertise of pharmacists, the consumer found that buying heath related products from pharmacies is more reliable. DBD also stated that the pharmacy and medical supply businesses will continue to grow in the near future because the Thai government is running a policy to promote Thailand as a medical hub of Southeast Asia. Hospitals in Thailand has earned lots of income from medical tourism businesses. The booming of medical tourism in Thailand helps the business of pharmacy and medical grow steadily.

In conclusion, pharmacy and medical supply businesses are now not yet disrupted by digital transformation. They having a bright future ahead with more product demand from the public, thanks to the health-conscious consumer, ageing society and the rise of medical tourism. Also, there are room of improvement such as decentralizing the growth to other provinces and more domestic investment in the pharmacy and medical supply business. As the medical hub of Southeast Asia and a potential medical hub of Asia, the rise of pharmacy and medical supply businesses are open for new players and new investors.




Related Posts