Big companies join e-pharma pie aiming for $2.7bn by 2023

The key players have launched the race from AMAZON to Reliance, which plans to raise the share of the pharmaceuticals industry online by $2.7 billion by 2023. In the last week, with Covid 19 global numbers still flattening, the market has experienced two major mergers and acquisition deals — Reliance Retail has been taking a greater share in e-pharmacy networks based in Chennai and PharmEasy is merging with smaller opponent Medlife. And the unveiling of the electronic pharmacy offerings of giant e-commerce firm Amazon. The Center also announced the National Digital Health Mission (NDHM) that plans to establish a digital health ecosystem in the on-line payment area along with the Unified Payments Interface.

Reliance Industries has announced its subsidiary Reliance Retail Ventures Ltd that, for a valuation of cash of about Rs 620 Crore, it acquires a majority equity stake in Vitalic Health Pvt Ltd, Netmeds Parent Group, and its subsidiaries. It represents 60% of Vitalic’s equity capital, while its subsidiaries, Tresara Health Private Ltd, Netmeds Market Place Ltd and Dadha Pharma Distribution Pvt Ltd, hold 100% of the direct equity. In fact, papers filed with the Indian Competition Commission (CCI) reveal that PharmEasy and Medlife, electronic pharmacies, have demanded merger. In addition to retail drugs, basic healthcare equipment and Ayurveda medicines from approved retailers, Amazon said in Bengaluru last week it launched Amazon Pharmacy to order its customers prescription-based drug.

While NDHM may be a combat zone for the wider online health industry, analysts agree that the obstacles encountered by traditional pharmacies have enabled online competitors to thrive once they have been completely introduced. Nonetheless, the online formats will be scale-up to counter pharmacists, who account for approximately 85% of India’s overall pharmaceutical revenues, and consolidation takes place in this region.

In comparison with the US, Europe and China, the Indian e-pharmaceutical industry regulation is the least strict, according to an EY survey. Moreover, unlike the United States, which has a 90% share of the industry in the top three pharmacy distributors, India is a competitive market of over 8 lakh pharmacies – which gives online pharmacies an ability to grab their inventory while facing large conventional dealers. In the Indian pharmacy area, companies currently mainly operate three business models – the marketplace, the hybrid inventory-led (offline/online) and the hybrid franchise-led (offline/online) – based on the structure of the supply chain. Other players in the sector include online wellness start-ups, including 1 mg, Practo, Myra and conventional chemists such as Apollo Pharmacy, in addition to companies such as Netmeds, Medlife and PharmEasy.

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