Vietnam's pharma retail boom: Long Chau, Pharmacity, An Khang gain from stricter tax & anti-counterfeit measures

The Vietnamese pharmaceutical market, valued at USD 7 billion, is witnessing intense competition among modern pharmacy chains. The landscape is shifting, offering opportunities only to those players with sufficient strength and speed.

According to the Drug Administration of Vietnam under the Ministry of Health, the domestic pharmaceutical market is valued at around USD 7 billion, with average drug spending reaching USD 70 per capita, ten times higher than in 2000. Data from Viet Dragon Securities (VDSC) indicates that there are currently around 50,000 pharmacies nationwide. Meanwhile, ABS forecasts that Vietnam’s retail pharmaceutical market will grow at a compound annual growth rate (CAGR) of approximately 15.8% over the next four years.

Demographic trends, rising incomes, and increased demand for pharmaceuticals and health supplements—especially in the post-COVID-19 period—have fueled rapid expansion among local pharmacy chains. Once fragmented and traditional, the retail pharmaceutical sector is gradually shifting toward modernization and consolidation.

In the race to dominate the retail pharmacy space, three major players stand out: Long Châu is accelerating, while Pharmacity and An Khang are stepping back for restructuring.

Statistical data highlights the breakneck pace at which modern retail pharmacy chains are expanding in Vietnam. Long Châu Pharmacy, a subsidiary of FPT Retail (FRT), is at the forefront of Vietnam’s pharmaceutical retail market, leading in both store expansion and growth rate. From just 8 outlets in 2017, Long Châu has skyrocketed to 2,117 stores as of June 2025—an increase of more than 260 times in just eight years.

Beyond rapid expansion, Long Châu has also delivered remarkable business performance, contributing significantly to FRT’s consolidated revenue. In 2024 alone, the chain recorded a 59% year-on-year revenue increase, reaching VND 25.32 trillion and accounting for 63% of the company’s total revenue.

In 2025, the pharmacy chain continues to serve as the company’s main growth driver, with a revenue target of VND 32.4 trillion, up approximately 28% from the previous year. Based on an estimated pharmaceutical market size of VND 200 trillion, Long Châu's market share is projected to approach 20% of the entire industry.

Pharmacity, once one of the largest modern pharmacy chains in Vietnam, experienced a period of rapid expansion, reaching over 1,100 stores nationwide as of September 2022. However, following this aggressive growth phase, the chain entered a restructuring process to improve operational efficiency. Its store count has since been streamlined to around 950 outlets, with a focus on high-performing urban locations.

In a similar vein, An Khang Pharmacy—owned by Mobile World Group (MWG)—initially expanded at a remarkable pace, scaling up to 527 stores in a short period. At one point, the management even announced an ambitious target of 2,000 stores nationwide by the end of 2023. However, intense market competition and high operating costs forced a strategic pivot. An Khang shifted to a comprehensive restructuring approach, downsizing to 326 outlets, primarily concentrated in Ho Chi Minh City and several southern provinces.

For the past two years, the chain has maintained this store count, adopting a cautious strategy focused on operational optimization, technology system improvements, and waiting for the right moment to resume expansion.

A "Golden Opportunity" for Modern Pharmacy Chains

Vietnam’s modern retail pharmacy chains still have significant room for growth, particularly as consumers increasingly value product quality and transparency. In the past, buying medicine or health supplements from traditional pharmacies was relatively informal, with limited regulatory oversight. Today, however, the market is undergoing tighter control across the entire supply chain—from manufacturing to distribution. Regulatory authorities have stepped up enforcement through stronger measures such as tax audits, counterfeit crackdowns, and quality inspections to protect consumer rights and establish a fair, transparent legal framework for compliant businesses.

Chains like Long Châu, An Khang, and Pharmacity adhere to a range of tax obligations, including corporate income tax, value-added tax (VAT), and import duties on pharmaceuticals. They must also comply with strict regulations on product origin and documentation to ensure authentic products and professional services. Most medicines are sourced directly from pharmaceutical manufacturers with clear provenance and proper invoicing.

By contrast, many traditional pharmacies are struggling to adapt to the new regulatory environment. Numerous stores have yet to implement proper invoice retention, product traceability, or price disclosures in line with legal requirements. This not only exposes them to legal risks but also erodes consumer trust. As transparency and competition increase across the market, a lack of operational professionalism may gradually force traditional players out of the game.

According to Mr. Doan Van Hieu Em, CEO of An Khang Pharmacy, the current landscape presents a “second golden opportunity” for the retail pharmaceutical sector. He noted that between 2018 and 2021, amid post-pandemic consumer spending and healthcare demand, An Khang had a chance to break through but did not fully capitalize on it, as the company prioritized its core businesses over expanding into pharmaceuticals.

Mr. Hieu Em emphasized that the situation has now changed, and the “second golden opportunity” is here. Retail chains with robust quality control and well-established systems, like An Khang, are expected to gain more consumer trust. Over the past two years, An Khang has remained relatively quiet to focus on restructuring and operational optimization, and it now sees this as the right moment to reaccelerate.

Sharing this view, SSI Securities stated in a recent report that the government’s recent clampdown on counterfeit products and the elimination of flat tax schemes for businesses with annual revenue over VND 1 billion are expected to accelerate the shift from traditional to modern retail channels. Modern pharmacy chains and supermarkets are likely to be the key beneficiaries of this transition.

In addition, recent policies targeting e-commerce platforms are helping to create a more level playing field for legitimate businesses. Under the amended Law No. 56/2024/QH15, effective from April 1, 2025, e-commerce platforms will be required to declare and pay taxes on behalf of individual sellers operating on their platforms. This means that stores selling imported or untaxed goods online will now face higher tax obligations, thereby narrowing the price gap with fully compliant businesses.

Given these regulatory developments, SSI Research expects modern retail businesses to benefit from a fairer competitive environment, with less pressure to engage in price wars. Companies poised to benefit from this shift include Mobile World Group (MWG), FPT Retail (FRT), Digiworld (DGW), and Masan’s Winmart chain (MSN).

According to Markettimes

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