12/20/2021 Database Update: Audit of Veterinary Drug Retail Sales on Russian Online Marketplaces (November 2021)
In January–November 2021, the retail sales of veterinary drugs through the top online marketplaces in Russia amounted to 673.3 million rubles (retail prices, VAT included), having increased 3.2 times from January–November 2020. The sales through marketplaces accounted for 3.5% of the total veterinary retail sales against 1.2% in January–November 2020. In physical terms, the sales declined 2.7 times from 2020, if calculated in minimum dosage units (MDU). The sales volume was 4.7 million MDUs.
This year’s growth rates of the Russian pharmaceutical retail market are in no way comparable to those in 2020. The panic and the associated rush demand have more or less subsided. With the inflation rates at a high level, the purchasing power leaves much to be desired, even despite the impressive income growth in Q2 and Q3. In addition, conventional pharmacies are under severe pressure from various online projects, which have been adding more and more services, including express delivery, which in some situations is critical for the consumer.
The Russian State Duma of the 8th convocation intends to continue working on the draft law that introduces restrictions for the pharmaceutical retail market and wholesale companies. At the same time, it is willing to revise certain provisions, including the maximum amount of marketing bonuses. While it may seem industry-specific, both the stability of the Russian pharmaceutical retail and the pricing policy at all stages of the movement of goods directly depend on that provision.
From January to October 2021, the sales of veterinary drugs in the Russian retail market amounted to RUB 18.5 billion (retail prices, VAT included), up 5% from January–October 2020. The most important factor for the growth rates was the inflation rate, as well as higher demand for premium segment products in certain regions. In minimum dosage units (MDU), the growth rate was –5.1%, with the sales volume of 144 million MDUs.
From January to October 2021, Russian manufacturers produced RUB 489.1 billion worth of pharmaceutical drugs (manufacturer’s prices, VAT included), down 21.2% from the same period in 2020. In physical terms, the growth rate was –16.8% due to the so-called “high base effect”, essentially meaning that large volumes of drugs used for the treatment of coronavirus were produced last year. The total production volume in January–October 2021 was 3.34 billion packages, or 61.1 billion minimum dosage units (MDU). Notably, the growth rate is higher if calculated in MDUs compared to packages, albeit still negative, –6.3%.