Entrepreneur

From One Outlet To A 115-Store Empire—6 Secrets Behind Caring Pharmacy’s Rapid Expansion

Back in 1994, 5 pharmacists who were coursemates in Universiti Sains Malaysia decided to co-found a pharmacy together.

The result? The first CARiNG outlet was opened in Taman Muda, Cheras.

Today, CARiNG Pharmacy has a total of 115 stores nationwide, with plans to open 10 to 12 stores in the coming financial year (from June 2018 and May 2019). It’s reportedly also the fastest-growing pharmaceutical retail chain locally.

On the financial side, in the first quarter of this year, they recorded a profit after tax of RM4.33 million—a big step up from the RM1.1 million recorded last year. They also had a fourfold net profit increase from 2016 to the first quarter of 2017.

CARiNG Pharmacy is a successful local example of the franchising model, and we take a look at some of the reasons why they’ve managed to come so far in the past 20 years.

1. They saw a gap in community pharmacy services and filled it.

According to their History section on their webpage, the founding team had a vision of providing optimal community pharmacy services in a time when it wasn’t very well-known.

To do this, their pharmacy had the following traits which formed the backbone of their successful concept:

  1. Full-time pharmacist services 12 hours a day, 7 days a week.
  2. Easily accessible pharmacist counseling services, free blood pressure checks, and other health checks at a minimum fee.
  3. A modern, open concept to maximise interaction with customers and merchandise.

In short, it was all about giving their customers easy access to their services, along with certain perks to keep them coming back.

2. They chose strategic locations and went to where the people were.

After opening up 13 high street outlets, the team knew it was time to expand into a different location and market. Their next area to conquer was shopping malls.

At the launch of one of their new mall outlets / CARiNG Pharmacy

Starting with One Utama, they started making their way into several major malls around the city centres. They didn’t stop there.

In 2008, the first CARiNG@Tesco was established in Tesco Mutiara Damansara, Petaling Jaya. This entry into hypermarkets was a first for a pharmacy chain in Malaysia.

They’re also breaking into East Malaysia and plan to open their very first outlet there in May, at Kota Kinabalu, Sabah.

3. They weren’t afraid to shut things down when they didn’t work.

Although they had their eye on expansion, they’re careful with managing their resources.

Last year, they closed eight underperforming outlets and opened the same number in other locations. They also relocated a store around the same financial year.

Redistribution of resources—rather than working to save sinking ships—ensures that they have the energy to be focused on maximising the “good” locations they already have. This strategy is particularly important as they’re going up against many other established international and local pharmaceutical chains that may have a lot more stores around and about.

4. They knew the strength joint venture model and capitalised on it.

CARiNG Pharmacy uses the joint venture (JV) concept of offering equity to individual pharmacists who are committed and in long service with the company, as a career opportunity.

Image Credit: CARiNG Pharmacy

One of the major benefits of the JV model is allowing the people working for you to have increased ownership over a business. This means that they’re more willing to go all out, as they now have a stake in the company.

According to Loo Jooi Leng, their marketing director, “To be successful, a JV requires a great deal of trust among the companies involved as well as a high degree of clarity about the direction of the venture.”

At the moment, around 60% of the stores are held in joint ventures with the resident pharmacists, though CARiNG retains majority control.

5. They watched retail trends and moved to match them.

With their focus on community phamacy services, CARiNG has traditionally been a very face-to-face and in-store business.

However, with the rise of e-commerce, Malaysians are slowly getting used to the idea of buying their medical products online, and CARiNG has had to evolve in order to keep up with that. A past report stated that their online sales only contributed an average of only 1% to the group’s revenue.

“We strive to get higher sales contribution from our online sales for the coming years within the group’s revenue. One of the key strategies is to improve customer trust within our funnel,” said Jooi Leng.

He added that one of the things they’re keeping their eye on at the moment is mobile payments.

“The retail industry has been talking about mobile payment for a long time, but 2018 may finally be the year when it reaches critical mass.”

To prepare for this, “Our customers are able to pay with their phones using Samsung pay, Alipay and few more local mobile wallets or e-wallets, especially to target Generation Z or millennials.”

6. They used tech and partnerships to reach and retain their customers.

As a company, they have to remain sensitive to their customers’ wants and needs.

An example would be their partnership with Collectco, a startup that allows users to shop online or return goods at selected collection points like pharmacies and mini-markets.

“Buy online and pickup in store, consumers want this service—and they also want the ability to return online purchases to physical stores,” said Jooi Leng. Of course, CARiNG Pharmacy also gets a side benefit from this partnership.

The bonus of this method: Consumers who come to collect or return products often end up buying something new once they get into the store.”

They’ve also introduced the new CARiNG Regular Membership Programme in January 2018. Working with Capillary Tech, they’re building a single solution that connects, engages and rewards the customer.

“[We’re] providing a single solution that lets the company connect dots across devices and between online and physical stores by launching a CRM programme, mobile app and brand new e-commerce web site,” said Jooi Leng.

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Most of the time, a company doesn’t get staying power and growth by just doing the same old thing that has always worked. It’s important to identify what are your strongest points that your consumers actually come to you for, and build on those on top of adapting new strategies as times change.

Jooi Leng summed up his company’s stance below.

“In order to get more traffic and sales, there are always tweaks, adjustments, and tactics we can execute to improve by developing a fluid plan for improving the revenue generation.”

  • You can find out more about Caring Pharmacy on their website here

Feature Image Credit: Caring Pharmacy

 

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