OVER the years, there has been a slow and steady demise of independently run pharmacy stores. On the other hand, large pharmacy chains are growing, especially in urban centres and towns, changing the local pharmacy retail industry.
Jefrey Parama Ganesaguru, chief executive officer and co-founder of local nutraceutical company Truelifesciences Holdings Sdn Bhd, hopes to turn the tide by helping to ensure the survival of these small pharmacy businesses.
“The pharmacy retail industry has undergone significant changes in the past 20 years with the entry of multinational pharmacy chains, and this trend has accelerated in the last decade when more multinational players entered the scene.
“This has also led to the creation of local pharmacy chains such as AA Pharmacy and Caring, which are made up of former independently operated stores,” says Jefrey.
But Jefrey believes that there is still a space for smaller players who are not part of a chain to continue growing.
“Large pharmacy chains with multiple stores are mainly concentrated in big cities and towns, while many second-tier towns are places where local drug stores still have presence.
“This is the market we are aiming to serve. Pharmacies here can still play a role in many local communities as an alternative to doctors and hospitals in getting guidance for health related issues,” he says.
Truelifesciences develops health products, most of which are retailed exclusively at independent, standalone pharmacy outlets.
This helps the outlets stand out with differentiated products on their shelves.
“This is the main part of our business model, which is designed to help the survival of these small outlets, which are typically owned and operated by trained pharmacists,” he adds.
When Jeffrey and his wife Karen See Siaw Hui, a trained nutritionist, started Truelifesciences in 2012, their aim was to provide a natural and safe health solution for his family members and close friends.
But his keen interest in healthy living led Jefrey to dedicate more time to learning about health and wellness discoveries made by other researchers around the world.
He worked with various field experts on natural remedies and personally tried out these formulations before introducing them to his friends who needed access to the latest innovation in nutraceuticals. He then brought them to the market.
Today, Jefrey says, all its 24 products are sourced, researched and formulated in-house before they are sent out to third-party manufacturers. The products are marketed under its own Truelifesciences brand.
Building trust The focus on independent pharmacies is not just out of noble intention or nostalgia, he says. It also fits into his goal of educating the public on quality living through positive changes in lifestyle, eating habits and through the intake of nutraceuticals.
The people behind these smaller stores hold on to their own values, and are usually better equipped to serve the local communities with more personalised health tips and advice. This helps to build trust among their regulars over time, as opposed to most of the large, sale-oriented multi-chain stores, he says.
According to Jefrey, the true value of the independent stores are the services and knowledge sharing between the pharmacists and the local communities.
“These pharmacists running their own stores have gone through many years of training and have vast experiences. It will be a waste if these are not shared for the benefit of the public,” he says.
Indeed, trust is key for Truelifesciences. The local market has seen the entry of many new supplements and nutraceutical distributors in recent years as the pharmaceutical industry continues to grow. And building trust with the local pharmacists requires a track record and proven ability to supply the products at consistent quality.
Through its good working relationship with pharmacists, Truelifesciences has so far penetrated more than 600 local independent pharmacies in Malaysia.
There is still ample room to grow though, says Jefrey, as there are more than 2,200 standalone pharmacies throughout Malaysia.
To further promote the idea of healthy living in the markets it operates in, the company has a dedicated team to manage its own community health magazine that is circulated to most independent pharmacies, clinics and private hospitals.
The mission, he adds, is to share basic information on being healthy.
It has wide readership not only in Malaysia, but also in Vietnam, Singapore and Thailand, as well as on its online portal.
Going regional After seven years in the business, Jefrey says Truelifesciences is ready to look outside the country. It is considering markets within Asean which will provide it with the best opportunities for its expansion plan.
As it is, Truelifesciences is already distributing its products to some 150 stores in Vietnam and also established clients in Singapore with 45 clinics.
The company currently has subsidiaries in Singapore, Vietnam and, most recently, an associate company in Thailand, which was established just a few months ago.
Growing the market for its products is important to create brand awareness, he says. And he is open to having others share in the company’s growth story.
Jefrey says Truelifesciences is ready to explore potential partnerships, including offering a minority stake to investors to raise funds for market expansion plans and accelerate its product development process. It is open to approaches from both strategic and financial investors including regional private equity firms with healthcare related portfolios.
However, the company has yet to start any discussion on getting investors on board.
Currently, Jefrey and See are the only shareholders of Truelifesciences. Its growth so far has been internally funded.
But Jefrey sees the potential in having equity partners on board the business as it seeks additional funding to grow its market size.
Apart from funding, he also notes that the company faces other challenges in expanding its operations locally as well as regionally. These include the lack of talent, research capabilities and the high development and production costs.
As the company starts to venture into overseas markets, Jefrey says Truelifesciences has to be agile and flexible in order to pass the relevant needful processes with the local authorities in different jurisdictions, to ensure that its products can be commercialised in new markets.
Most recently, Truelifesciences has received approval from the local authority in Thailand to launch two new products under the nutraceutical category.
Its achievements have enabled the company to continue growing with the times. Although Jefrey notes that its top line growth has slowed as the company utilised more of its resources to grow in size and market reach, Truelifesciences is still registering double digit growths.
From its humble beginnings in 2012 where the company recorded first year revenue of just RM600,000, Jefrey is expecting sales to top RM20mil this year.
Nutraceutical and supplement products, he adds, conventionally make up around 30% of the total sale of an average pharmacy store.
Over the longer term, Jefrey says there are also plans for Truelifesciences to move into the manufacturing of generic drugs and medicines. Should this happen, it will turn the company from a nutraceutical manufacturer into a bona fide pharmaceutical company.
Jefrey is confident of the growth prospect for Truelifesciences, even as he acknowledges that trying to introduce products that were extracted from natural ingredients hasn’t been easy despite having valid clinical studies to prove its effectiveness. It really does boil down to creating trust for the brand and its products and finding an effective way to market them, he notes.
Nonetheless, its success at maintaining the unique advantages of community-focused pharmacists has certainly paved the way for it to do more in meeting the demands for quality healthcare products.