India’s online pharma sector is now turning into a battleground for big players, with the US e-commerce giant Amazon and India’s oil-to-telecom conglomerate Reliance Industries throwing their hats into the ring. In the latest development Reliance Industries, owned by India’s richest man Mukesh Ambani, has acquired a majority share in online pharma firm Netmeds for 6.2 billion rupees (US$83 million).
Reliance Retail Ventures, Reliance’s retail arm, has acquired a 60% stake in Netmed’s parent company, Vitalic Health Pvt Ltd, and it will also get 100% direct equity ownership of Netmeds’ subsidiaries – Tresara Health, Netmeds Market Place and Dadha Pharma Distribution, Economic Times reports.
Netmeds is headquartered in Chennai and sells prescription and over-the-counter medicines along with other health products. In India, there are about 50 startups in this space, and other prominent players include PharmEasy and 1mg.
Reliance Industries’ move comes close on the heels of Amazon launching its internet pharmacy in Bangalore on a trial basis. Amazon Pharmacy offers prescription, over-the-counter and traditional Ayurveda medication, as well as basic health devices. The US e-commerce giant plans to soon enter other cities.
The Covid-19 pandemic has led to a spike in orders for online pharma firms as people prefer to stay indoors and avoid visits to pharmacies and hospitals for fear of contracting the virus. This has also led to a consolidation of the market with reports of PharmEasy and Medlife exploring a possible merger. At the same time, 1mg is rumored to have held talks with PharmEasy for an acquisition.
Amazon’s rival Flipkart is also planning a foray into the online pharmacy space. The e-commerce giant is building its team to run its online pharma business and is also reportedly in talks with PharmEasy.
After failing in China, India has become a key frontier for Amazon, but in almost all its businesses it is facing competition from Reliance Industries, which has the backing of its US rivals Facebook and Google.