Decoding the entry of big tech in e-pharma
By Rachita Kumar and Harry Kapoor
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Have you ever ordered your medicines online? 💊
Looks like the e-pharmacy space got much accelerated by the pandemic. E-Pharmacy had over 3M users pre-pandemic but added ~6M new users since March.
And now we are seeing full action in the space ⚔️
Amazon and Reliance (and maybe Flipkart) are not just competing in the e-commerce space, but now in the e-pharmacy segment as well.
Amazon announced its entry into the space. Reliance acquired Netmeds, and Medlife is merging with Pharmeasy. There are also rumours of Flipkart entering the space by buying stake in Pharmeasy.
The e-pharmacy market has not had an easy ride over the years - regulations haven't been favourable, the pharma sector is highly fragmented and investors haven't been comfortable funding discounts unlike in the case of e-commerce.
Then what is attracting these biggies into this segment? 🏥
For one, the market opportunity is large, growing, and untapped. At $18.5 billion last year, India’s retail pharma market has been growing at annual rates of 15-20% for many years now. India’s e-pharmacies had managed to convert just around 2% of the market till 2019. There is high stickiness and high average order value at > Rs1000
But most players are eyeing a wider health-tech play with e-pharmacy becoming a good customer acquisition channel. 🩺
Will be interesting to see how competition shapes up in this sector since it's still a long way to go!
Some Interesting reads:👇
- https://the-ken.com/story/reliances-netmeds-acquisition-e-pharma/
- https://ajuniorvc.com/india-online-medicine-unicorn-pharmeasy-netmeds-reliance/