July 13, 2024
Taxable Retail Market
Ict

Taxable Retail Market is Poised to Grow Owing to Advancements in E-commerce

The taxable retail market comprises over-the-counter drugs, medical devices and diagnostic kits that are available for sale without a prescription. Some key products in this market include pain relievers, cold and cough medicines, antacids, wound care products, contraceptives and contact lenses. The easy accessibility and affordability of these products make taxable retail an attractive option for self-care. Advancements in e-commerce such as same-day delivery are driving the growth of online pharmacies and medical product retailers in this market.

The Global taxable retail market is estimated to be valued at US$ 19.15 BN in 2024 and is expected to exhibit a CAGR of 8.0% over the forecast period 2024 to 2031.

Key Takeaways

Key players: Key players operating in the taxable retail market are Allergan, Novartis, Pfizer, Takeda Pharmaceutical Company, Cook Medical, Medtronic, Johnson & Johnson, AstraZeneca, GlaxoSmithKline, Sanofi, Merck, Abbott Laboratories, Bayer, Astellas Pharma, Aurobindo Pharma, Ferring Pharmaceuticals, Salix Pharmaceuticals, Eli Lilly, Bristol-Myers Squibb, Boehringer Ingelheim. These players are focusing on expanding their OTC drug and medical device portfolios through mergers, acquisitions and new product launches.

Key opportunities: Growing prevalence of chronic diseases is expected to drive demand for OTC medicines and medical devices for self-management. Increased health awareness and spending power in emerging economies also presents lucrative growth opportunities.

Technological advancements: Technologies such as artificial intelligence and 3D printing are finding increasing applications in developing personalized and affordable OTC products. Digital diagnostic devices and smart contact lenses are examples of recent innovations in taxable retail. E-commerce platforms now offer virtual consultation and home delivery of medicines and equipment.

Market drivers: Rising online penetration in healthcare and shift towards preventive care are the major market drivers. Growing geriatric population susceptible to age-related illnesses also supports the self-care market. Strong demand from emerging economies and availability of generic alternatives further fuels the market growth.

Taxable Retail Market is Estimated to Witness High Growth Owing to Advancements in E-commerce

The key driver that will lead to high growth of the Taxable Retail Market Size is advancements in e-commerce such as same-day delivery. This has been driving the growth of online pharmacies and medical product retailers. Technologies like AI and 3D printing are also finding increasing use in developing personalized and affordable OTC products that can be conveniently delivered to customers. Digital diagnostics and smart devices further enhance the ease of self-care. Rising internet usage in healthcare along with a shift towards preventive management of chronic diseases through OTC drugs and devices are the major market growth drivers. A growing and aging population prone to illnesses also presents strong ongoing demand. Overall availability of low-cost generics and emergence of new opportunities in developing countries will support an expected CAGR of 8% for the taxable retail market until 2031.

Challenges in Taxable Retail Market
Some of the key challenges faced by the taxable retail market are increasing pricing pressure, patent expirations, rise of e-pharmacy platforms and changing regulatory landscape. Pharmaceutical companies are finding it difficult to sustain high profit margins due to rising R&D costs and entry of generic drugs after patent expirations. This is putting downward pressure on prices. Further, the growingpreference for online purchasing of medicines is forcing retailers to adopt omnichannel strategies to engage with customers. Frequent changes in regulations relating to drug approvals, pricing policies and data privacy are also major hurdles.

SWOT Analysis
Strength: Wide product portfolio and scale of operations for major players. Presence of large established brands helps sustain revenue.
Weakness: Heavy reliance on few blockbuster drugs exposes companies to revenue declines post patent expirations. High marketing and R&D costs impact profitability.
Opportunity: Emerging markets in Asia Pacific and Latin America offer sizable growth potential. Scope for launch of new specialty drugs to offset revenue losses.
Threats: Intense competition from generic drugs squeezes margins. Regulatory interventions and price controls can dent revenue growth.

Geographical Regions
North America currently dominates the taxable retail market and accounts for over 35% share in terms value. This is attributed to high per capita healthcare spending and presence of large pharmaceutical companies in the US. However, Asia Pacific region is expected to witness fastest growth during the forecast period owing to rising income levels, healthcare reforms and increasing accessibility of medicines. China and India are emerging as high potential markets within Asia.

Europe has traditionally been the second largest region for taxable retail sales. However, the region is facing economic challenges which may moderate growth prospects over the next few years. On the other hand, Latin American countries like Brazil and Mexico are likely to offer new avenues driven by expanding health insurance coverage and growing health awareness.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it