How this UOB-backed startup disrupts Vietnam’s retail pharmacy

In Vietnam, small pharmacies – like mom and pop stores – pride themselves on personal relationships. Pharmacists might live in the same neighborhood, asking personal questions to customers who frequent their drugstore.

Similar to the B2B ecommerce sector, mom and pop pharmacies in the country are fighting their own David vs. Goliath battle. Drugstore chains like Pharmacity (backed by Mekong Capital), Long Chau (part of FPT Retail), and An Khang (part of Mobile World Group) have suddenly gained ubiquity.

Image credit: Timmy Loen

Minh Tri Trinh runs an independent pharmacy in Binh Duong province, which is about 30 kilometers from Ho Chi Minh City. He says these three drugstore chains have all set up shop in his neighborhood. Several years ago, his store generated a daily revenue of about 6 million to 7 million dong (US$250 to US$300). Now, it’s down to about half that amount.

Nationwide, there are 60,000 of such independent pharmacies, according to industry estimates. They grapple with challenges such as product selection, inventory, pricing, and customers’ shift to online shopping.

Buymed, one of Vietnam’s most well-funded tech startups, is hoping to solve these pain points for small pharmacies to help them withstand pressure from larger chains. The startup is locally known as Thuocsi, which means “selling drugs at wholesale price.”

See also: 50 rising startups in Vietnam 

Buymed was born out of a vision to turn mom and pop pharmacies into primary care centers, similar to what CVS Pharmacy has done in the US. Doing this would provide residents in rural areas access to basic medical services, according to the company’s co-founder and CEO, Hoang Nguyen.

The startup connects local pharmacies to pharmaceutical manufacturers, distributors, and clinics via a B2B ecommerce marketplace.

Hoang believes that digitalizing the pharmaceutical supply chain can potentially lead to “a giant leap” for Vietnam’s healthcare system. “We know where the drug is, who supplies it, how to locate it, and how to transport it across the country,” he tells Tech in Asia in a recent interview.

“Sell first, buy later”

In May, Buymed announced its US$51.5 million series B round led by UOB Venture Management. It was the country’s largest tech deal in the first half of 2023.

According to Tech in Asia data, the startup has raised US$63.5 million across four rounds, valuing the company at around US$168.5 million. What’s more, the company raised this funding and got a valuation bump at a time when investors’ faith in tech startups has hit a new low.

Hoang, who made Forbes 30 under 30 Asia in 2020, established the company in 2018 alongside Peter Nguyen and Vu Vuong. He previously co-founded Dentalaborate, an on-demand platform in the US that helps dentists produce dental crowns in an hour.

Meanwhile, Vuong’s family operates one of the largest drug distributors in Vietnam’s central and highland regions.

What if the pie gets smaller?