Amazon & Reliance will Plunge into e-Pharmacy Segment

The CEO of Amazon – Jeff Bezos and Chairman & MD of Reliance Industries Limited (RIL) are planning to diversify into the segment of e-Pharmacies, hoping to leverage the best opportunities from this fast-growing market that is fuelled by a vast network of smartphone users. In fact, e-Pharmacies will soon become the next big arena of battle.

While Amazon India launched ‘Amazon Pharmacy’ in Bengaluru last week and will conduct pilots in other cities, Reliance Retail through its SMART Point outlets, plans to scale-up its grocery and pharmacy platforms. RIL, through its biotechnology subsidiary, Reliance Life Sciences, is already in the process of establishing pathology labs through partnerships with local entrepreneurs.

“e-Pharmacies is a large market and the retail segment is a fragmented one. However, the market is now ripe for consolidation; thus, large retailers like Amazon and Reliance are keen on this market,” says the CEO of an Indian e-Pharmacy firm, on condition of anonymity. He said more retailers are waiting to join the sector amid government focus on healthcare and schemes like Ayushman Bharat, and National Digital Health Mission.

“That is a huge market and opportunity to large retailers like Amazon and Reliance Retail,” asserts the executive. “Amazon Pharmacy will offer both over-the-counter and prescription-based drugs, basic health devices and traditional Indian herbal medicines,” said Amazon in a statement, without giving a timeline for the launch. Meanwhile, RIL said in its March quarter analyst presentation that “retail will scale up rapidly led by new commerce and pharmacy platform”.

e-Pharmacies such as Medlife, Netmeds, Temasek-backed PharmEasy and Sequoia Capital-backed 1mg are online platforms where consumers can buy medicines. TheY have also been working on integrating telemedicine and diagnostics facilities on their platforms, fetching even higher margins and additional revenues. The sector is also expected to cause a disruption in the pharmaceutical distribution model as e-Pharmacies can directly deal with drug manufacturers instead of having three-four middlemen in the supply chain, leading to greater cost efficiency.

“This category is extremely large, with a high frequency of purchase, and fits in a consumer’s life cycle very well as medicines are a vital purchase in a person’s life, especially for chronic patients,” avers PharmEasy’s Co-Founder, Dharmil Sheth.

In November, Amazon partnered with US-based firm Giant Eagle Pharmacy to allow users of its Artificial Intelligence based virtual assistant Alexa to request prescription refills. The segment has been considered a disruptive industry for quite some time, with experts anticipating strong growth.

According to an EY report, the addressable medicine market for e-Pharmacies is likely to reach $18.1 billion by 2023 from $9.3 billion in 2019, a compounded annual growth rate of 18.1 percent. “The most important thing to recognize is that what we see from the players is the tip of the iceberg. The next 9 to 10 months will see a rapid evolution and transformation in these services,” says Pramod Sudhindra, Digital Leader – Life Sciences, EY India.

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