In the past decade, e-commerce has grown exponentially. Today, the online marketplace offers almost everything, including medicines. Under the e-pharmacies format, patients fill out their prescriptions online and get medicines delivered to their doorsteps. The global e-pharmacy market, estimated at $69.7 billion in 2019, is expected to grow 17 per cent y-o-y to $244 billion in 2027. India’s share in the global market is comparatively small. At $9.3 billion in 2019, it is expected to increase at a CAGR of 18 per cent to $18 billion by 2023.
In developed countries such as the US and Europe, e-pharmacy is a flourishing market and part of the more structured medical services market. Medicines are prescribed by physicians and tracked through barcoding to ensure systematic supply.
The market in India, on the other hand, is highly unstructured and fragmented, with over eight lakh pharmacies. Urban consumers have access to retail pharmacies every few kilometres. While the density is much less in rural areas, most villages have a friendly neighbourhood chemist shop. Amid relatively easy access to medicines and chemists physically, therefore, the need for online services is not that strong.
Several factors, however, could boost growth in the online pharmacy segment.
Drivers for e-pharmacy
Increasing internet penetration – Internet penetration has grown at a rapid pace in India due to the availability of smartphones at affordable prices and deployment of 4G. With the Digital India Program underway, the number of internet users is set to reach approximately 600 Mn by 2025.
Increasing preference for online shopping – Online shopping has gained a lot of popularity due to the pandemic. The convenience of getting products delivered at home is increasingly driving people to explore it for new categories, which was not the trend before. Online shopping for essentials and medicines is growing at a fast pace.
Government support – The Jan Aushadhi Program is an essential part of the government’s initiative to ensure the general population in the country has access to quality and affordable medicines. This, coupled with the Digital India Program, will allow Jan Aushadhi stores to be accessed through an application on mobile phones, which would benefit consumers significantly.
Growing awareness of counterfeit drugs – The highly advanced and stringent tracking mechanism under e-pharmacy eliminates middlemen and the risk of counterfeit and sub-standard drugs.
Market scenario
The Indian e-pharmacy industry is still in its nascent stages. Some of the well-known names in the market are Netmeds, EasyMedico and MedLife. The segment is dotted with startups such as 1mg, Practo, and Myra. Even traditional chemists such as Apollo Pharmacy have introduced their e-pharmacy segment.
Promising growth prospects in online pharmacy have attracted some big names such as Amazon and Reliance Retail. In August 2020, Reliance Retail acquired a majority stake in startup Netmeds. PharmEasy also took a step toward consolidation by merging with Medlife. E-commerce giant Amazon too has launched online drug delivery services.
The National Digital Health Mission (NDHM), aimed at improving the country’s digital health ecosystem, will also boost growth in the online pharmacy segment.
Challenges
Need for technical infrastructure – E-pharmacy needs a strong technical infrastructure to be successful. Even though smartphone and internet penetration rates are increasing, the rural population remains largely out of reach and unaware. Government initiatives to expand online payment mechanisms and banks across the country are positive but more programs are required to ensure the onboarding of rural population on the e-commerce bandwagon.
Poor connectivity in rural areas – Rural areas need a robust technological infrastructure for proper availability of online services. Besides, there is a substantial gap in terms of knowledge or awareness, for instance of smart devices. Internet connectivity is still missing in remote villages in the country.
Need for regulations – The e-pharmacy space is largely unregulated, indicating scope for fraud and, therefore, lack of trust. Sale of drugs online should be regularised and monitored as the health of people is involved. The regulations should address all legitima...
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