E-pharmacy market in India is expected to increase at a higher CAGR of around 40-45 percent as reported by KPMG-FICCI report. As compared to Global E-Pharmacy markets that are expected to increase at a CAGR of around 15-20 percent. E-Pharmacies would continue to grow in India, with increase in internet and mobile phone penetration. Internet users rose by around 47 million to reach 624 million in January 2021.
The sector is attracting huge investments from national and international market leaders. Medicine spending in India is expected to grow between 9-12 per cent over the next five years.
E-commerce is witnessing substantial growth due to increasing internet penetration and smart phone availability. Additionally, growing awareness among the population about counterfeit drugs is driving people towards digital and organised channels which are offering medicines. Market size of the global e-Pharmacy market was estimated to be USD 0.8 Billion in 2020, prescription drugs constituting 68 per cent and over the counter (OTC) drugs constituting 32 per cent revenue share.
Country’s largest conglomerates and multinational e-commerce companies investing and get a foothold in this sector.
In April 2020, Reliance Retail invested approximately USD81 million (INR 620 crore) to get a majority stake in Chennai- based e-pharmacy company Netmeds.com In December 2020, US-based private equity firm TPG is looking to acquire a 7% stake in the parent company of Mumbai-headquartered online pharmacy Pharmeasy, just as competition in the sector is heating up with the entry of giants such as Reliance Industries, Tata Group and Amazon.
In May 2021, PharmEasy has acquired Medlife for an undisclosed amount, the e-pharmacy unicorn said on Tuesday. The deal will make PharmEasy the largest player in the domestic online pharmacy sector, with the combined entity set to serve 2 million customers a month.
In June 2021, Tata Digital, a 100 per cent subsidiary of Tata Sons acquired a majority stake in digital health start-up 1MG, continuing its series of investments in the online commerce ecosystem. While Amazon had launched its pharmacy vertical to deliver medicines to consumers across the country.
Thus, there is an explosion in teleconsultation platforms by health-tech start-ups, and e-pharmacy companies, etc. In the future, multiple agencies are likely to play the role of platform providers.
Still there are certain challenges,
Cyberthreats and data security - Potential risk of data breaches as online platforms depends heavily on valuable insights derived from customer’s personal data.
Lack of strong legal and regulatory framework - There is a need to establish a legal framework for e-pharmacies, distinctive from the legal regime for offline sales.
Need for technology upgradation - E-Pharmacies need to constantly focus on utilizing the latest technologies (AI, ML, AR/ VR) to deliver the best services.
It is anticipated that e-pharmacies holds tremendous growth potential and will continue growing in India. Some of the key factors such as growing internet penetration and digital payments infrastructure, rise in industry investments and medicine spending, as well as government initiatives will fuel growth of this sector.
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