Health and Beauty Specialist Retailers in Ecuador

2021 DEVELOPMENTS

Chemists/pharmacies and drugstores/parapharmacies chains expand rapidly

Chemists/pharmacies and drugstores/parapharmacies saw growth in outlet numbers accelerate significantly during the latter part of the review period as multiple large chains pursued aggressive expansion strategies in Ecuador. The most dynamic players in this regard included Farmacias Comunitarias, Farmacias Economicas and Pharmacy's, all of which opened several new stores over 2020-2021.

Easing of the pandemic supports moderate recovery for beauty specialist retailers

The beauty specialist retailers channel was especially hard hit by the fallout of COVID-19 in 2020, registering the steepest contraction in current value terms within health and beauty specialist retailers. These types of outlets were forced to close during lockdown periods, and saw trade collapse when they were permitted to reopen as Ecuadorians became less concerned about personal appearance and grooming while staying at home much more than usual due to social distancing and remote working.

Health specialists work to boost sales of non-essential product types

Chemists/pharmacies and drugstores/parapharmacies weathered the impact of COVID-19 better than other types of health and beauty specialist retailers over 2020-2021, as many of the product types carried by such outlets are considered necessities, and they were not forced to close during lockdown periods. Some of these players have recently attempted to capitalise on their comparatively favourable situation by pursuing strategies aimed at boosting sales of non-essentials that consumers would usually be more inclined to purchase in other types of specialist stores, such as beauty and personal care items, vitamins and dietary supplements etc.

PROSPECTS AND OPPORTUNITIES

More independent chemists/pharmacies expected to join chains

It is expected independent chemists/pharmacies will continue losing ground to large chains over the forecast period as leading players invest in strengthening their presence across Ecuador. Together with financial pressures arising from the pandemic, increasing competition is likely to see more independent outlets join chains, either through acquisition or by becoming franchisees.

Increased budget-consciousness will limit expansion of beauty specialist retailers

While beauty specialist retailers should see current value sales increase throughout the forecast period, growth is expected to slow steadily towards 2026. Given the non-essential nature of products sold by these types of outlets, heightened budget-consciousness arising from the economic fallout of the pandemic will continue to constrain the development of the channel in the short-to-medium term.

Challenging economic conditions likely to encourage aggressive price promotions

With many Ecuadorians having recently suffered a drop in purchasing power due to the pandemic and the economic crisis that preceded it, price competition in health and beauty specialist retailers looks set to intensify over the forecast period. This is particularly the case in the largest channels of chemists/pharmacies and drugstores/parapharmacies, where it is expected players will attempt to draw more consumers into their outlets by regularly running aggressive discount campaigns, buy-one-get-one-free promotions etc.