India’s e-pharmacy industry has caught the attention of big conglomerates following its impressive growth amid the Covid-19 pandemic. Though medical and diagnostics stores were allowed to function during the lockdowns, many customers logged on to e-pharmacy and e-diagnostics sites as they preferred to stay indoors for fear of the virus.
Following Reliance Group and Amazon, the salt-to-software conglomerate Tata Group has now firmed up plans to enter the sector. Its subsidiary Tata Digital Limited has acquired a majority stake in digital health company 1MG Technologies. The financial details of the deal were not available. Tata Digital had invested one billion rupees in 1MG via debt a few months back, Business Standard reports.
Incorporated in 2015, 1MG is a leading player in the e-health space and offers products such as medicines, health & wellness products, diagnostics and tele-consultation. The New Delhi-headquartered company had recently shared that it had seen a four-fold increase in sales of Covid-related products and a five-fold increase in vitamin supplements in April this year, as against the preceding month. It also witnessed a 20-fold growth in product categories such as pulse oximeters, oxygen cans, face shields and PPE kits.
Tata Digital, a 100% subsidiary of Tata Sons, is now being positioned to be a super app, a digital ecosystem catering to consumer needs across categories including groceries, medicines and other products. The company CEO, Pratik Pal, said, “The investment in 1MG strengthens Tata’s ability to provide superior customer experience and high quality healthcare products & services in e-pharmacy and e-diagnostics space through a technology led platform.”
The overall e-health market is around $1bn and is expected to grow at 50% CAGR driven by increased health awareness among consumers and greater convenience. Market experts believe that even after the pandemic, the e-pharmacy sector will grow as more and more people become comfortable ordering medicines online.
The industry is witnessing consolidation with big players entering the fray. Reliance Retail had last year acquired a 65% stake in Vitalic Health and its subsidiary Netmeds for a cash consideration of approximately 6.2 billion rupees.
In another development, Mumbai-headquartered PharmEasy acquired smaller rival Medlife, and the consolidated entry will serve two million customers every month. PharmEasy last month acquired a unicorn status, the first in the e-pharma space after it raised $320 million from TPG Growth and Prosus Ventures.
E-commerce giant Amazon has also launched a pharmacy vertical to deliver medicines to consumers across the country. The Amazon Pharmacy service offers prescription, over-the-counter and traditional Ayurveda medication, as well as basic health devices.
Meanwhile, standalone medical store promoters have expressed concern over the booming e-pharma sector and fear that their livelihoods will be threatened. All India Organization of Chemists and Druggists, a trade body representing 850,000 chemists, said the deep discounting policy followed by e-pharma firms will create a monopoly. It will kill the offline stores business and lead to job losses.
They also warned that it will lead to the sale of sub-standard medicines and misuse of antibiotics.