E-pharmacy: The Growth Story of 2020
The year 2020 has been a year of increased accessibility and reorganization for the e-pharmacy sector in India. This space has become very competitive recently with the Reliance Industries acquiring a controlling stake in Chennai-based e-pharmacy platform NetMeds and Tata Group reportedly eyeing 1MG, another leading e-pharma player. With a buzz around global online retail giant Amazon eyeing a massive investment in home-grown Apollo pharmacy, this sector will continue to generate news and attracting big-ticket investment even in 2021, say experts.
“With private equity / VC funding into the space growing 10X in the last four years, it is likely that the e-pharmacies space in the country is poised for a long runway of growth,” says Charu Sehgal, Partner, and Lifesciences and Healthcare Industry Leader, Deloitte India.
Harsha Razdan, Partner and Head, Consumer Markets and Internet Business, KPMG in India says from an opportunity spectrum, the online pharmacy business has a lot to offer in a country like India. “Rural markets are expected to grow faster than urban, and a viable mode that can provide aspirational or urban products in non-urban markets will gain traction. Further, online pharmacies will also help consumers get access to the ‘hard-to-find’ medicines along with the reduced risk of counterfeit/sub-standard drugs,” he adds.
Sehgal of Deloitte India says the online pharmacy has also created a lot of first-time online buyers of medicines. “It is not surprising that e-commerce players are finding this space attractive now, especially after Covid-19 – this pandemic has created a lot of first-time online buyers of prescription and OTC drugs who are willing to stick to e-pharmacy purchases post the pandemic,” says Sehgal.
An industry report indicates that around 60-70 percent of medicines order volumes across most e-pharma platforms are from chronic patients.
As per a FICCI report, pre-Covid 3.5 Millon households were using a pharmacy in FY 20. During Covid-19, the number of households increased to 9 Million. But the fact is that overall, the pharmacy market in India remains highly unorganized with only a handful of large retail pharmacies across smaller towns and cities. That is why it has been reported that in 2019, virtually 99 per cent of the medicine sales were 'off-line'. That is why the scope of growth and expansion of online pharmacy is extremely promising.
Reliance retail’s investment in NetMeds and the buzz around Amazon’s investment interest in Apollo Pharmacies are signs of building up a model for omnichannel to best suit the customer experience. It is about having individual customer touchpoints, over a variety of channels that seamlessly connect, which allow customers to pick up where they left off one channel and continue the experience on another, experts add.
Sehgal of Deloitte points out: "While India still has a majority of its drug sales via brick-and-mortar standalone outlets /chains, the omnichannel medical retail will be shaped by the need for greater consumer control, the superior quality of service and customized offerings.”
According to RedSeer survey, over 70 per cent of users are willing to use e-pharmacy post-covid-19 due to the positive experience coupled with stronger adoption among low-income households. That is an encouraging sign in itself.
