Indian Pharmaceutical market is growing very rapidly, is the 3rd largest in terms of volume and 13th largest in terms of value. The Indian Pharmaceutical market increased at a CAGR of 17.46% in 2015 from US$ 6 billion in 2005 and is expected to expand at a CAGR of 15.92 per cent to US$ 55 billion by 2020.By 2020, India is likely to be among the top three pharmaceutical markets by incremental growth and sixth largest market globally in absolute size. Here are some of the statistics as a evidence of groth of overall Pharma industry.
FMCG, Food and beverages, Pharmaceuticals and Life science are few of the industries in which if you want to establish and grow, you have to be the champion in distribution management and an agile order management software is quintessential weapon for becoming the champion. Let’s understand the pain areas of tradition order management practice.
- Are you still following hybrid pen and paper based order booking?
- Do you often encounter errors, delays and customer complaints?
- Are you losing your credibility for not meeting the dead lines?
As GST is ready to roll out from April 2017 every industry has started to chalk out future strategies. In this blog we are trying to explain the impact of GST on Pharmaceutical industry. Before that let’s understand the dynamics of Indian Pharmaceutical industry.
- Indian Pharmaceutical industry represent 2.4% of the global pharmaceutical industry in terms of value and 10 % in terms of volume
- Expected to expand at a Compound Annual Growth Rate (CAGR) of 15.92 per cent from US$ 20 billion in 2015 to US$ 55 billion by 2020
At present scenario in FMCG (fast moving consumer goods) when multinational biggies are struggling with slowdown in sales and dipping revenues, one of the swadeshi herbal and ayurvedic brand is multiplying its revenue day by day. This swadeshi brand started couple of decades before but the way it has positioned its self has consternated its competitors and revived an ancient old segment of “Ayurveda”. There are various factors behind the success of this brand but its supply chain and sales and distribution strategy is the back bone of this impressive success.
I have tried to delve deeper myself to understand its supply chain and distribution strategy. In April 2012 it has officially announced its entry into the retail sector by launching 100 products to be expanded up to 800, including bodycare, healthcare, digestive, cosmetics, toiletries and others products. The national and multinational FMCG brands playing in this fast growing more than 1 trillion $ Indian market have started facing intimidation from home grown and an absolutely swadeshi competitor.
The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian economy. The market size of FMCG in India is estimated to grow from US$ 30 billion in 2011 to US$ 74 billion in 2018.
Food products is the leading segment, accounting for 43 per cent of the overall market. Personal care (22 per cent) and fabric care (12 per cent) come next in terms of market share.
In spite of many driving factors like rising income level, enhance awareness regarding brands, desire to experiment with brands, evolving customer life style, growth of modern trade, availability of online channels for shop etc. , this industry is experiencing sluggish growth rate at recent due to late arrival of monsoon, higher inflation rate and reducing demand trend in rural areas.
So the FMCG sector is very curiously awaiting for the applicability of goods and service tax (GST) which will bring significant change in the traditional supply chain structure. Currently industry players are holding depots, warehouses and carrying and forwarding agents to avoid 2 % CST or it’s better to say to avail input tax credit. The traditional supply chain has been designed by keeping the tax benefits in mind.