Post on Medial

65k distributors for ~10L pharmacies: India’s not for beginners 😅😅 I learnt about this when analysing one of India’s largest pharma distribution players, which is also listed (SastaSundar). .. Imagine how smaller pharmacies even keep track of their inventory management with so many distributors in the mix. Also, imagine being a pharma sales rep in India. Your target list is probably longer than the Constitution! The lack of standardization must create so many inefficiencies in the system. .. Moreover, just compare things with foreign nations. 🇺🇸 92% of the market with just 3 distributors. 🇯🇵 90% of the market with just 4 distributors. 🇩🇪 70% of the market with just 3 distributors. 🇦🇺 90% of the market with just 3 distributors. 🇸🇦 85% of the market with just 10 distributors. .. Meanwhile India? The top player probably accounts for 5% of the market. Combined, the top 3 hold less than 10% market share. Ideally, this presents a solid case for consolidation among players, with ample opportunities for bigger distributors to pursue mergers and acquisitions to grow wider and deepen the penetration in the game. Especially so as India evolves as an economy, that would probably become imperative to ensure an efficient pharma distribution supply chain. .. However, that too is easier said that done. After all, many of these distributors are likely small, family-run businesses. And that creates two big issues. 1> It is too big a change for most of them to operate as a joint enterprise. The very thought of shared ownership can be a big issue for most 2> An avg such distributor caters to just 50-70 retail pharmacies, which are also served by other distributors. This makes it too small a scale for a consolidated enterprise .. Thus, technology HAS to be the key to taming this chaos. Imagine a real-time inventory tracking system accessible to all distributors and retailers. That alone could revolutionize the supply chain. But again, there is a big issue. Pharma distribution is a very low-margin business. And for any tech-led solution to be feasible, the task of making those distributors pay would be a tough task. And that makes me wonder, what the solution could be? .. Or maybe 'chaos' is an inherent part of India's business landscape? Maybe the system functions better than we assume, driven by informal networks and relationships. What do you think?