Morepen Laboratories Limited announced
the acquisition of Lifespring, a chain
of health & beauty stores at a consideration of Rs.12
crores from Total Care Pvt. Ltd. Morepen would have a
95% stake in Total Care Pvt. Ltd. and the existing management
would retain the remaining 5% of the stake. Lifespring
will operate under the umbrella branding of Dr.
Morepen, which will now expand its franchise
into a retail format. Lifespring
is an internationally styled, health and personal care
retail store offering a range of nearly 15,000 domestic
and international branded products under one roof. Lifespring
currently has six stores in Delhi at high retail density
areas and has an annual sale of Rs. 7.5 crores. Lifespring
was launched in August 2000 by Total Care Pvt. Ltd., a
company that was incorporated by Tenzo Private Holdings
Ltd, an OCB based in Mauritius at 65% stake, along with
an Indian business house that had 35% stake. Tenzo is
100% owned by Bodiam International, an established group
in organized retailing in Australia, Fiji Islands and
Papua & New Guinea.
"Pharma retail is ready to take
off in India and the Indian healthcare retail market offers
several opportunities. Acquisition of the Lifespring
chain will give a significant boost to Dr.
Morepen’s charter expanding its basket
of goods as well as offering an on ground experience of
health and beauty products on the lines of the Boots model
which is doing extremely well." said Mr.
Sushil Suri, CMD, Morepen Labs.
Retail today is the largest private industry in the World
economy, estimated at $6.6 trillion. With very clear strategy
of reaching the consumer directly with the total health
offerings Dr.Morepen Lifespring provides an excellent
opportunity not only to increased visibility for Morepen’s
existing product range but also serve as a platform to
launch new and innovative healthcare products. Morepen
would carefully determine the product and customer segments
that it wants to target and develop a distinctive health
& beauty store format that offers customers a superior
and sustainable value proposition versus competition.
Lifespring is the first health and beauty
store chain launched in North Indian and currently has
six stores in Delhi at South Extension, Rajouri Garden,
Basant Lok, Greater Kailash, Karol Bagh & I.P Extension.
The Store consists of three sections Personal
care and Beauty, OTC
and prescription Medicines and optical
center. The pharmacy at the
store offers a little more than a regular chemist, manned
by trained & knowledgeable pharmacists, who are at
customers’ service at all times to advice them on
products & prescriptions. A large range of herbal
medicines, vitamins, dietary supplements, as well as Health
foods is also available here. The customer friendly environment
makes the Lifespring chain of Health and Beauty
stores a perfect example for captive retailing
(organized retailing with much attention on the environment
the goods are sold in).
Internationally, retail is the largest private industry
in the world economy at $6.6 trillion with financial companies
at $ 5.1 triliion and pharmaceuticals and diagnostic together
at only $0.3 trillion. Over 50 of Fortune 500 companies
and about 25 of Asian top 200 companies are retail companies
and the level of consolidation within each country has
significantly grown over last decade. Though India has
the largest retail outlet density in the world today,
close to 12 million outlets with sales amounting to $180
billion that accounts for 10-11 %GDP and generates 6%
of total employment it is still far behind USA which generates
$2325 billion sales at a GDP of 9.4% and is responsible
for generating 16-17% employment.
Global trends are driving significant value creation
in organized retail, as organized retailers have wrested
share from traditional retailers, Balance of power is
shifting from manufacturers to retailers and International
markets are presenting strong growth options. Profits
in retail have also been steadily rising and have generated
18% of shareholders returns between 1994 and 1999.
The retailing arena in India has historically been dominated
by traditional formats and only 2% of retail flows through
organized sector vis a- vis USA where 85% retail sales
come from Organized sector like Super markets. Even small
Asian countries like Taiwan, Malaysia, Thailand get 81%,
55% and 40% respective retail sales from organized sector.
Over the last 4-5 years there are clear signs of emerging
revolution in Indian retail. There is an increased demand
for better products & retailing from India’s
first generation of demanding and cash rich consumers.
This is in line with economic development driving channel
modernization. Many factors like rising income, media
exposure changing socio-economic structures and booming
awakening in rural marketing are the prime factors responsible
for this. The Indian healthcare retail market offers several
opportunities despite the lukewarm success of recent entrants.
In recent years, a large number of business houses have
invested in setting up stores/ malls and have built businesses
within retail. Many Corporate houses have already announced
their retail plans, which includes many Pharma companies
too. Keeping the International model in mind, organized
retail in India is on the verge of take off. A study of
Mckinsey by 2010, a top 3 grocery retailer with 10% of
the organized market share could be $ 3-4 billion in revenue.
Today, India’s body and healthcare segment is valued
at over Rs.1, 15,000 crores. The Indian organized retail
market is expected to grow to 5% by the year 2005. This
coupled with a reduction in excise duty by 16% and import
duty by 28% would further result in large international
product range being available in the major categories
of personal care. Thus providing immense scope for growth
in the health and beauty retail in India.
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