Dis-Chem has been gaining market share in the pharmacy, health, and nutrition sectors, while Clicks have performed better in small electrical appliance sales.
Dis-Chem and Clicks are the biggest brands in the South African healthcare and fast-moving consumer goods (FMCG) retail market.
Clicks has been listed on the JSE since 1996 and have prominent retail brands, including Clicks, GNC, The Body Shop and Claire’s.
It has over 850 stores across southern Africa and boasts the largest retail pharmacy chain with over 640 in-store pharmacies.
Dis-Chem, founded in 1978 by pharmacists Ivan and Lynette Saltzman, follows a “pharmacy first” approach.
It has 194 stores, including retail pharmacy stores, primary healthcare clinics, Baby City, Dis-Chem Direct, e-commerce, and ancillary services.
More recently, Dis-Chem invested in medical insurance company Kaelo to enhance its primary healthcare status and disrupt the medical aid industry.
Therefore, Dis-Chem primarily focuses on the pharmacy and healthcare market, while a larger portion of Clicks’ sales comes from FMCGs.
Despite the different focus areas, Dis-Chem and Clicks have many overlapping offerings, and they are fierce competitors.
Dis-Chem has started to win market share – measured as total revenue – from Clicks over the last few years. However, a more segmented view gives a better view of their growth.
Dis-Chem’s pharmacies are the biggest driver of traffic in its stores. It has nearly 400 full-time pharmacists and fills over 2 million scripts monthly.
It has a pharmacy in all its stores and, compared to Clicks, Dis-Chem has a larger store format with an average size of 1,297 square metres.
Dis-Chem’s main differentiating factor is its “pharmacy first” approach, where all other operations are clearly defined as secondary.
Clicks, in comparison, are less focused on its pharmacy operations and describe itself as a retail-led healthcare group.
It has a smaller store format and a greater diversity of products. It also focuses on a large geographical footprint, which it actively expands.
Different revenue categories give a good idea of how successfully Dis-Chem and Clicks have implemented their respective strategies.
Pharmacy market share
Between 2018 and 2022, Dis-Chem outperformed Clicks in the pharmacy market.
Dis-Chem currently owns 52% of the combined market share and has gained significant market share over the past two years.
Health and nutrition market share
Dis-Chem has also made impressive gains in the health and nutrition category.
It has increased its market share in this category by 5% since 2018 and holds a marginally smaller market share than Clicks at present.
Personal care and beauty market share
Clicks have a strong position in the personal care and beauty segment, with 59% of the combined Clicks/Dis-Chem market share.
However, it has lost 4% of its market share in this category to Dis-Chem over the past four years.
The “other” category – mainly small electrical appliances – is dominated by Clicks.
Clicks have increased its market share relative to Dis-Chem to hold 76% of the combined market in this category.
The last word
These four charts reveal interesting trends, and investors can argue that both groups have reached their goals.
Clicks hold a wide range of products and own a significant portion of each market. It still generates more revenue than Dis-Chem – R39 billion versus R30 billion.
However, Dis-Chem has significantly improved its revenue share through acquisitions and organic growth. It is also busy closing the revenue gap.