With 35,000 strong retailers, Maharashtra State Chemists and Druggists Association (MSCDA), has become torch bearer for the pharmaceutical trade in the country as it recently floated its first organised retailing company in Mumbai.
Called Green Cross Healthcare Pvt Ltd, this corporatisation bid is seen an effort to equip the domestic retail trade to face the challenges of the post-GATT era which is marked with the competition. The trade is currently faced with competitions from organized retail chains like Medicine Shoppe, Health & Glow, Life Springs and Subiksha.
Under corporatisation, 100-300 member shops of the association in a town or a city in the state will be encouraged to merge together to form a single whole company and these shops will act as chain stores run by the jointly formed company. MSCDA would encourage such organised retailing in the state.
"MSCDA members would float regional societies or companies, which will manage the running of all retails shops in that region in an organized manner. Every member will be a share holder in the company," said J.S. Shinde, general secretary, MSCDA.
Green Cross currently has a membership of 50 retailers and its aim is to have more than 400 members within the next two years, said Prasad Danave, director, Green Cross Healthcare.
"Any of the current MSCDA members in the city owning a computerised shop with a space of 250 sq ft, willing to employ at least one pharmacist for a day shop and three pharmacists for a D/N shop and willing to partially air condition his shop can become the share holder of the company," said Danave.
There would be immense logistical benefits under organised retailing resulting in immense monetary savings, said MSCDA officials.
The members will be connected online with the umbrella company. The sales from every member will be updated online. The purchasing of drugs from pharmaceutical companies will be on a centralized fashion. The retailing company will have a central depot from where the individual members would pick up their products. In the end, there will be only one accounting from the central company and profits would be distributed in proportion to the sales of the member shops, said Shinde.
"As a pharmaceutical company will have to deal with a single entity compared to hundred individual retailers, the bargain becomes easy for the pharma company. Moreover, with our unity, our bargain capacity against the pharma company is synergised. Similarly, with organized retailing, the professionalism and the quality of services of the member shops increase," he asserted.
Organised retailing has been primarily conceptualised for metros and towns in Maharashtra, as the competition from corporate retailers would be more in these places.
The trade association has already started the process of organized retailing or 'corporatisation' among its members on a regional basis.
The association has already floated its company in Thane titled Guardian Remedies Pvt Ltd with 21 members. In a similar fashion, the wholesalers in state would be encouraged to form organised wholesalers' chain. A company called "Pavansut" for organised wholesale retailing with more than 49 members of MSCDA has been established in Chandrapur district of the state.
"Going with the concept, profit making is not our aim. Our aim is to protect the future generation of our shop fraternity, who will be left jobless if such a step is not initiated. Year after year our margins are shrinking. We would benefit from the economies of scale from this exercise. We would wish to offer all the services like insurance scheme and discounts, which any other corporate retail chain would offer," said Shinde.
The MSCDA would hire professional agencies from outside to help its members to duplicate a chain of pharmacy. The shops have to be initially equipped with a cold chain and computers. MSCDA expects to fulfil the task with financial help from private and government owned financial institutions.