FPT Retail on Track to Become a Healthcare Company?

"Catching the Wave" of the Market

According to AmCham Vietnam, healthcare spending in Vietnam is predicted to increase at a 9.2% annual compound rate between 2009 and 2025, reaching an average of $262 per capita. Meanwhile, a VIRAC analysis shows that Vietnam's healthcare industry has grown significantly in recent years, with spending on healthcare products and services growing by 11% over the last decade.

This rise is mostly driven by demographic shifts and rising healthcare demand, as well as the Vietnamese government's healthcare programs. Over 31.6% of Vietnam's population is 45 and older, and the fast expanding middle class is predicted to account for almost 20% of the population by 2025.

With a fast growing middle class, an aging population, problems for public hospitals, and growing awareness of the necessity of high-quality healthcare services, businesses have chances to enter this promising market.

Recognizing this trend, FPT Retail's recent moves, from expanding the Long Chau pharmacy chain to building vaccination centers across the country and improving telemedicine services, demonstrate strategic orientations, establishing a strong position in the healthcare sector, and gradually becoming a healthcare company in Vietnam.

Closing the Healthcare Ecosystem Loop

At the 2024 Annual General Meeting, Nguyen Bach Diep, Chairman of the Board of FPT Retail, provided insights into the strategy of Vietnam's top retailer. According to her, FPT Retail is now focusing on becoming a healthcare firm, underlining that this is a vast and promising area.

According to the Chairman of FPT Retail, the human health lifecycle includes preventative medicine, diagnosis, treatment, medication, home care, and insurance. Drug shops, websites, applications, social networks, and phone hotlines are all touchpoints that individuals must use to access these services.

Long Chau of FPT Retail now offers numerous touchpoints, including vaccinations, pharmacies, and a home health assessment service called Long Chau 247, which is slated to launch in Q3 2024. In the future, the firm intends to provide remote doctor services and drug assurances. Long Chau also plans to join the diagnostic (market size $1 billion) and treatment (market size $10 billion) sectors, intending to further integrate the healthcare ecosystem.

Following this orientation, FPT Retail, with the strength of the Long Chau pharmacy chain covering all provinces of Vietnam, will provide services to users via applications, ranging from requesting doctor diagnoses to sending prescriptions to selected pharmacies, then providing appropriate medications based on test results and completing the visit. "Closing the healthcare ecosystem is Long Chau's aim for the future," Chairman Nguyen Bach Diep said.

Thus, looking at the measures FPT Retail is doing to establish and perfect the healthcare ecosystem, one may detect the shadow of the tech behemoth Amazon.

In early 2018, Amazon made its first foray into the healthcare business by forming a partnership with Berkshire Hathaway and JP Morgan to launch a healthcare program for the two firms' workers. Then they purchased PillPack, an online pharmacy business, formally joining the $3.5 trillion healthcare market.

However, this was just the start. Billionaire Jeff Bezos' business is still looking at home diagnostic testing, as well as introducing a new product that uses patient medical records and constructing an Amazon employee health center. Most crucially, in October 2018, Amazon with medical equipment maker Arcadia Group launched the "Choice" brand, which includes blood pressure monitors and glucose meters.

FPT Retail's concept for the healthcare industry may still be in its early stages and cannot compete with Amazon's extensive ecosystem. Furthermore, Vietnam's healthcare sector is seen as both promising and competitive, garnering substantial interest from domestic and foreign investors. Recent acquisitions and mergers of private healthcare systems in the market have demonstrated this fact.

To truly become a comprehensive healthcare ecosystem, FPT Retail may need more time, technology, capital, and especially a longer-term strategy for its ambitions.