Indonesia's Retail Pharmacy Landscape: Why Global Investors Should Take a Closer Look (L.E.K. Consulting)

Summary

• Indonesia has a population of more than 280 million people, and its retail pharmacy market is highly fragmented.p.1
• Indonesia has only about 170,000 doctors (six per 10,000 people) as of 2023, physician density approximately 60% below the global average.p.1
• Indonesia counts approximately 31,000 licensed pharmacies, yet the top five banners run only about 10% of them.p.2
• Internet penetration reached 79.5% in 2024, driving uptake of telehealth with 30-35 million active users.p.3
• Over 60% of pharmacy purchases are made without a physician visit.p.5
• Some consumer-health categories such as vitamins and herbal products are growing at more than 12% CAGR.p.5
• Successful investors are advised to achieve a majority stake in a leading banner or a franchise roll-up to 1,000-plus stores.p.6

Key insights

1. Nearly half of the population lives in rural areas, yet only roughly 5% of health facilities are located there.p.1
2. Indonesia has only two pharmacists per 10,000 inhabitants, the third-lowest ratio in ASEAN.p.2
3. Kimia Farma Apotek is the largest chain with more than 1,300 outlets, followed by Apotek K-24 with more than 700.p.3
4. Chains that embrace e-prescriptions, delivery and loyalty-linked apps are already enjoying double-digit same-store growth.p.4
5. BPJS-covered prescriptions cannot be dispensed at private pharmacies, which limits the role of retail pharmacies in reimbursed volumes.p.4
6. Pharmacies must look to consolidating independents, raising consumer awareness and expanding consumer-health portfolios for growth.p.4
7. Respiratory, central nervous system and dermatology are areas where consolidation could unlock faster branded growth.p.6