The Indian retail juggernaut’s still emerging operations has identified certain business verticals where it would look for equity JVs for the requisite brand support, and wellness is one among them.

The development comes even as the domestic retail chain has rolled out Reliance Wellness stores in Hyderabad and is working on expanding the network to cover more markets. It plans to roll out over 300 wellness stores in three years. “This is market speculation and we have no comments at this stage,” a Reliance spokesperson said, when contacted.

This marks Boots’ return to Indian market after it exited a joint venture with Nicholas Piramal following the sale of its OTC medicines business to Reckitt Benckiser in 2005.

The still-at-works JV will help Reliance offer an array of activities from dispensing pharmacies to health and beauty services to healthcare check-ups under its wellness vertical.

The format currently offers products across categories such as allopathic, ayurvedic and homeopathic pharmaceuticals, personal care, beauty solutions and healthcare products. Reliance Wellness also has OTC health foods, self-help medical and fitness equipment in its portfolio. The wellness vertical at Reliance Retail is spearheaded by Ninu Khanna, who also looks after the company’s FMCG business.

Boots, UK’s biggest pharmacy chain, operates around 3,100 dispensing outlets worldwide.

Its current international operations are spread across Norway, Netherlands, Thailand and Switzerland. In UK, it also runs health and beauty destination stores across highstreets and edge-of-the-city centres. Interestingly, Boots also has a significant eye-care business apart from manufacturing and marketing health and consumer products under Boots, No 7 and Soltan brands.

Alliance Boots was formed through the merger of Boots Company with Alliance UniChem. However, a private equity consortium led by KKR acquired Alliance Boots earlier this year for around $22 billion. It was the first FTSE100 Index company to be acquired by private equity funds.

In this context, it may be mentioned that Reliance was earlier rumoured to be in talks with VisionCare for an alliance in the eye-care market. Meanwhile, it is believed that Reliance Retail’s equity JV strategy – with the company holding majority or at least 50% stake in each of them – will be restricted to certain sectors. Sources said key business verticals like hypermarket chain, consumer durable and fashion apparel will be fully-owned operations.

Under this agreement Nepstar, the largest drugstore chain in China, will install TransCard POS equipment in all its Shenzhen outlets to enable customers to make purchases with, and recharge, their TransCards. The TransCard service is said to add a unique convenience to a customer’s shopping experience at Nepstar stores in Shenzhen, and has the potential to generate more sales for these outlets.

TransCard is similar to the Oyster card used in London and the Octopus card used in Hong Kong, is a rechargeable contact-less stored value smart card used to transfer electronic payments via online or offline systems in Shenzhen. At present, it is mainly used by cardholders to pay for public transportation in Shenzhen.

TransCard was launched in Shenzhen in April 2006, with the support of the Shenzhen municipal government. By the end of 2007, over two million cards had been sold, driving 1.8 million transactions per day. Currently, one in every five residents in Shenzhen holds a TransCard. Shenzhen Tong TransCard, the issuer and operator of the TransCard service, estimates that an additional four million cards will be sold in 2008.

Nepstar is the operator of one the largest drugstore chains in Shenzhen, with 311 outlets as of December 31, 2007. The Company planned to begin the installation of TransCard POS readers in its outlets in May and expects to equip 100 stores with the TransCard POS readers by the end of June. All of Nepstar’s Shenzhen stores are expected to provide TransCard service by the end of September 2008.

Jiannong Qian, CEO of China Nepstar, said, “The Shenzhen TransCard program is another example of our dedication to offering customers the best possible service and convenience. Our ability to leverage China Nepstar’s broad network of stores and develop partnerships with key public vendors, such as Shenzhen Tong TransCard, to increase traffic flow to our stores is a testament to the brand strength we have built and our constant drive for innovation. We are seeking similar opportunities with municipal transit authorities in other cities in China where we have already established an extensive presence. Our goal is to fully integrate China Nepstar

into the daily life of urban residents throughout China.”

The stores of the 22 large chain medical companies, including Hubei Longtai Drugstore, Hubei Jinyaotang Drugstore, Wuhan Jianghan Drugstore, Wuhan Hansen Drugstore, cover Wuhan and nine other cities in Hubei Province, have more than 40% of the market in Wuhan.

According to a representative from Hubei Longtai Drugstore, most of the retail drugstores in Wuhan rely on the supply of medical distribution channels. Medicines are distributed through a lengthy supply chain of national general distributors, provincial general distributors, regional general distributors, and regional distributors before reaching the retail stores, which increase the costs of the products.

After the establishment of the alliance, the medicine purchases for more 2,000 chain drugstores belonging to 22 companies will be made by a professional agency. With this new platform, the retail prices of medicines sold in these stores are expected to be reduced by 3% to 5% as a result of simplifying the distribution process.

In addition, the alliance will be further expanded in the future and the number of member retail medical companies will ultimately reach over 30 with their stores covering 17 cities across the province.