Forget kapda aur makaan. After food and groceries, Indians are said to be spending the maximum amount on healthcare and beauty.

According to healthcare industry estimates, the total private expenditure on health is increasing by 27 per cent per annum.

Little surprise then that people are entering the organised healthcare retailing segment to tap the Rs 30,000 crore (Rs 300 billion) combined health and beauty retail market.

Of this, the retail pharmacy segment is Rs 16,000 crore (Rs 160 billion).

A host of new players are setting up health stores even as the existing companies expand their network.

In the last six months, Delhi has seen a couple of health retail brands open shop.

While CRS Health was opened by the Rs 150 crore (Rs 1.50 billion) Sak Group, Global Influence, a pharma export company set up 98.4.

Among the existing retail chains hoping to enter new markets are Health n Glow, Mumbai-based The Medicine Shoppe and Dialforhelp run by Cadila Healthcare Ltd.

Even Ahmedabad-based Planet Health, owned by the Rs 100 crore (Rs 1 billion) Sagar Drugs &Pharmacy, was launched last December and hopes to open 200 franchisee stores.

The USP (unique selling proposition) of these new-look, feel-good ambience stores goes beyond selling genuine prescription medicines in a market where 30 per cent of thedrugs are spurious.

The idea is to sell the concept of total health -- from branded medicines, diagnostic kits, energy drinks to herbal foods and shampoos.

Says Rahul Chadha, director, Sak Customer Retail Services, "CRS Health attempts to make shopping an experience, backed by services like prescription reminders, home delivery and well-being events like blood pressure camps and sugar tests."

The company which opened its first store in June has three outlets in Delhi. It has chalked out plans to open 150 stores by 2008 at the cost of Rs 120 crore (Rs 1.20 billion).

Similarly, 98.4, which has four stores in Delhi plans to set up 10 more by April 2004.

"Our focus will be to provide much more than what a local pharmacist offers," says Gautam Thadani, director of Global Healthline, a subsidiary of Global Influence.

Dialforhelp has nine company-owned stores and 16 franchisee stores in Mumbai. "We plan to open 300 franchisee stores in Mumbai alone," says Satish Dandekar, CEO, Dialforhelp.

While Health n Glow, a JV between the RPG group and a Hong Kong-based MNC, has 21 stores in Hyderabad, Chennai and Bangalore, it is looking at new cities.

"We'll soon discuss our national expansion strategy," says Rahul Bhalchandra, business head, Health n Glow.

But what's pushing the companies to opt for the total health solution store format rather than go in for a plain chemist shop? The margins in retail pharmacy are limited to 15-18 per cent.

To boost profitability, the companies are increasingly looking at selling specialised services like medical consultations or premium products.

While CRS Health will focus on food, Lifespring plans to launch a complementary retail brand that will focus on the beauty market.

"We will broaden our service by introducing fitness and beauty salons," says Arvind Nagarajan, CEO, Total Care Ltd.

Planet Health stocks fitness guru Anjali Mukherjee's food products and has tied up with 200 hospitals in Gujarat to build a loyal customer base, says Rohit Patel, its managing director.

With new age stores ready to multiply, traditional chemists are feeling the pressure.

Admits Sandeep Nangia, president of Retailers & Distributors Chemist Association, Delhi, a body that is lobbying for a common price parity between organised retail and regular chemist shops, "Chemist stores will definitely be affected. What we aredoing is educating the chemists to improve infrastructure and ambience and improve customer service."