“CEO Doan Van Hieu Em: ‘An Khang Missed the Opportunity to Serve During Covid, But a Second Golden Chance is on the Horizon'”

In a swift meeting that commenced at 7:30 AM on May 28th, just before the signing ceremony for the deployment of An Khang pharmacy’s electronic authentication service via VNeID, Mr. Doan Van Hieu Em, CEO of An Khang, repeatedly emphasized a second “golden opportunity” that the top-three pharmacy chain in Vietnam in terms of scale could not afford to miss.

Thegioididong (TGDĐ) is always sensitive to opportunities, but I still wonder why An Khang couldn’t break through during the period of 2018-2021 when the pharmaceutical market boomed during the pandemic?

An Khang joined the TGDĐ ecosystem in 2018 when the corporation was focusing its efforts on other core businesses such as phones and electronics – sectors that had significant growth potential at the time. During the period of 2018–2019, the consumer market was extremely vibrant, with people spending vigorously, facilitating the expansion of the system. However, TGDĐ had not allocated significant investment to An Khang.

Entering 2020–2021, Covid-19 broke out. The demand for healthcare increased dramatically. But TGDĐ was then too large a chain to face the challenge of fighting the pandemic, pivoting – from offline to online sales – to ensure continuous operation for the entire system. The priority at this time was to maintain and preserve core business activities.

That time was indeed a great opportunity for An Khang Pharmacy, but TGDĐ was not really focused.

But the situation seems to have changed now?

Yes. Starting with 14 stores, An Khang now has more than 300 outlets nationwide. Although it has not received significant resources, the chain has grown steadily. However, compared to the large chains in the top 3, the number of An Khang stores is only about 1/5 to 1/10.

Up to now, TGDĐ sees that the second golden opportunity is appearing – and this time we cannot miss it. Before, shopping for products like milk and supplements was not standardized, they could be bought on social media, e-commerce platforms, or even through livestream and KOLs, anyone could sell goods while the goods were almost unchecked for quality. Now, everything is tightening up, from production to sellers, the management agencies have stepped in very strongly. This forces poorly managed units to change or leave the game.

In this context, retail chains with good quality control and a clear system like An Khang will be sought out by consumers.

You once shared that An Khang is on track to reach the breakeven point, how is that going specifically?

Currently, An Khang is operating 326 stores, with an expected revenue of about VND 2,200 billion in 2025. This is a very encouraging figure for a pharmaceutical chain that has not been fully invested in. However, due to high fixed operating costs – from premises, personnel, testing to pharmacist management – achieving profits across a large-scale chain remains a challenge.

Nevertheless, we have prepared well for the important milestone of reaching the breakeven point at the store scale in the second quarter of 2025. The operating efficiency of each store is being continuously improved, especially after the restructuring phase in the past two years. After reaching the breakeven point, we will consider expanding the scale again. Because with the current number of stores, some costs cannot be optimized to the fullest.

What are the difficulties in expanding the system?

There are many. Expanding a pharmaceutical chain is not as simple as expanding a phone or electronics chain. A drugstore requires a standard premises, must be redesigned according to the medical model, must have sufficient conditions for drug preservation as prescribed, and must be inspected and audited before operation. All of these processes take longer than in regular retail industries.

However, TGDĐ has been very successful in expanding the Thegioididong, Dien May Xanh, and Bach Hoa Xanh chains. With that experience, I believe that An Khang can accelerate very quickly when given the “green light”. What matters is that the opportunity must be clear – and I believe that this is the time.

What is the current scale of the pharmaceutical industry compared to electronics or phones?

Considering only the pharmaceutical retail channel – including drugs and dietary supplements – the industry’s scale has reached more than $8 billion per year. This figure is equivalent to or slightly lower than the total scale of the phone and electronics industries combined, which is currently fluctuating below $10 billion.

The pharmaceutical market currently has more than 60,000 small and medium-sized pharmacies. Meanwhile, large chains like An Khang, Long Chau, and Pharmacity are accelerating very quickly, but their total market share is still less than 15% of the industry’s value. There is still a lot of room for growth, as long as the chains do it right and systematically.

You’ve talked a lot about An Khang’s “golden opportunity”, so what do you see as the challenges?

Given TGDĐ’s potential, I don’t see many challenges, what matters is whether the opportunity has arrived or not. In the past two years, we have almost been “inactive” to restructure and optimize, waiting for an opportunity, and that time has come.

Developing a chain is something TGDĐ has done well in the past in many different fields. The biggest barrier is probably our own determination.

The issue of origin and quality of pharmaceuticals is very hot. How does An Khang control the “input”?

All of An Khang’s drugs are genuine, meaning we work directly with pharmaceutical companies to buy directly from their designated exclusive distributors. We do not buy from outside just because the price is cheaper.

For products that are dietary supplements, we have a team to inspect how the factory operates. Their goods, when coming to An Khang, have clear origins and invoices. When there is a problem, the manufacturer always stands behind An Khang to support handling.

In terms of sales policy, what sets An Khang apart?

One of our core commitments is “no fee for splitting doses” for common illnesses. This is something that An Khang has applied from the first day of integration with TGDĐ, not just a recent reaction to incidents related to counterfeit drugs.

When customers come to the pharmacy, if they only need to buy a few pills for colds, coughs, or runny noses, we will charge the exact price per pill, instead of grouping them into a “dose” and charging 2-3 times the price as many places still do. For us, business is kindness. Short-term profits may be more difficult, but in the long term, reputation and customer trust are the most sustainable values.

An Khang has just integrated with VNeID, what are your expectations?

We determine that if we bring the An Khang application to a national platform like VNeID, it must be effective, easy to use, and friendly to all users. We call this the “lúaisation” process – that is, how can we make it so that even the elderly in the countryside can easily look up and order medicine without having to go through complicated operations.

If we create a modern system that people cannot use, that is a failure. We have prepared the technology and operations so that after the signing ceremony, just within 1-2 weeks, users can buy An Khang drugs directly through VNeID smoothly.

Thank you, Mr. Em.