Tue, Apr 18, 2017 - Page 12 News List

Drugstore chains set for record revenue

MAJOR CONTRIBUTOR:More than 90 percent of the sales by drugstore chains were made in brick-and-mortar stores, as regulations restrict the online sale of medicines

By Lauly Li  /  Staff reporter

Total revenue of drugstore chain operators is expected to surpass NT$200 billion (US$6.59 billion) for the first time this year, driven by increasing demand for cosmetics, skincare products and health supplements, the Ministry of Economic Affairs said yesterday.

“Female consumers’ increasing purchases of cosmetics and skincare products is expected to be the main growth driver to raise the revenues to a record high this year,” the ministry’s Department of Statistics Deputy Director-General Wang Shu-chuan (王淑娟) said by telephone.

Wang said the ministry expects an increase in the sales of medical equipments, medicines and health supplements this year, as the nation’s aging index exceeded 100 for the first time in February, suggesting that demand for medical goods will increase.

She said drugstore chain operators, such as Watsons (屈臣氏) and Cosmed (康是美), have been opening new outlets nationwide to grab a larger share of the market, which is expected to positively affect their sales performance this year.

Drugstore chain operators last year increased the number of outlets by 69 to 1,733 , she added.

Wang’s remarks came as the latest ministry statistics showed that the revenues of drugstore chain operators last year reached NT$196.2 billion, growing 4.2 percent from the previous year’s NT$188.3 billion.

The annual growth surpassed the 10-year average growth of 3.2 percent, the data showed.

Wang attributed the growth to the sales of cosmetics and skincare products, which amounted to 47 percent of the total revenue last year.

Sales of medicines, medical equipments and dietary supplements accounted for 26 percent of the total revenue, the statistics showed.

The data showed that 92.1 percent of sales took place at brick-and-mortar stores, while online sales accounted for only 1.8 percent.

Wang said the reason behind the low contribution from online stores was due to the regulations in the Pharmaceutical Affairs Act (藥事法) that forbid sales of medical products on the Internet.

The consumer behavior of trying cosmetics at brick-and-mortar outlets also suppressed online purchases, she said.

However, Wang said given the rising popularity of online shopping for daily necessities via mobile devices, drugstore chain operators have been allocating more marketing resources to their online stores to compete with other e-commerce portals, such as PChome Online Inc (網路家庭).

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