The lockdown and fear of contracting Covid-19 is making Indians wary of visiting hospitals and pharmacies and this has given a boost to the online medicine business.
In the past few years, the market has also benefited from the growing penetration of the internet and smartphones.
To tap this emerging market, online retail giant Amazon has launched an internet pharmacy in Bangalore on a trial basis and plans to scale it up to other cities. The Amazon Pharmacy service will offer prescription, over-the-counter and traditional Ayurveda medication, as well as basic health devices.
“This is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home,” a company spokesperson said.
In India, it will be pitted against homegrown players such as Netmeds, Pharmeasy and 1mg. About 50 startups sell medicines in India and they deliver them to the patient’s doorstep.
Regulatory hurdles
Amazon’s e-pharma foray in India is fraught with challenges. It faces regulatory hurdles, the ongoing war between online and offline pharmacies and the Indian government’s delay in the finalization of the rules.
The offline pharma retailers body All India Organization of Chemists and Druggists has written a letter to Amazon chief executive officer Jeff Bezos, saying that its launch of an online pharmacy business was in violation of various drug laws and a recent court verdict.
It pointed out that the government had only allowed the sale of medicines online during the lockdown as it amounted to an emergency, and that home delivering medicines would be in contempt of the court’s decision.
India’s e-pharma sector is expected to touch US$16 billion by 2025, from $1.2 billion at present, and cover 57 million households in five years, says research firm RedSeer Consulting.
Market consolidation
The online pharmacy space is also seeing consolidation, with Reliance Industries, owned by India’s richest man Mukesh Ambani, close to buying out Netmeds for $120 million. There are also reports that PharmEasy and Medlife are exploring a possible merger.
At the same time, 1mg is rumored to have held talks with PharmEasy for an acquisition.
Earlier this year, Bezos pledged to make major investments in India. The e-commerce giant has invested $6.5 billion and sees major growth potential in the fast-growing economy.
In May, Amazon announced its entry into online food delivery in India. Customers are now allowed to order from select restaurants and cloud kitchens.