Amazon, Reliance Set To Clash On E-Pharmacies

CIOReviewIndia Team | Monday, 17 August 2020, 04:33 IST

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Amazon, Reliance Set To Clash On E-PharmaciesTouted to become the next big arena of battle-ground for billionaires like Jeff Bezos and Mukesh Ambani, e-pharmacy is diversifying with fast market growth due to the intervention of a huge number of smartphone users.

In the previous week, Amazon India launched ‘Amazon Pharmacy’ in Bengaluru, and is expected to conduct pilots in other cities, Reliance Retail, through its SMART Point Outlets, has plans of scaling-up the grocery and pharmacy division. Using the biotechnology subsidiary – Reliance Life Sciences, Reliance Industries Ltd (RIL) is in the path of setting up the pathology labs via partnerships with local entrepreneurs.

The CEO of an Indian e-pharmacy firm, on anonymity condition, said, “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.” He stated that more retailers are in the queue to join the sector while the government focuses on healthcare and schemes like Ayushman Bharat and the National Digital Health Mission. He said, “That is a huge market and opportunity to large retailers like Amazon and Reliance Retail.”

‘Amazon Pharmacy’ will be offering both on counter and prescription-based drugs, basic health devices, and traditional Indian herbal medicines. It is said in a statement by Amazon, and there is no timeline for launch. “Retail will scale up rapidly due to new commerce and pharmacy platform,” RIL in its March quarter analyst presentation.

E-pharmacies like Medlife, Netmeds, Temasek-backed PharmEasy, and Sequoia Capital-backed 1mg are the online platforms giving consumers option to buy medicines. The aforesaid companies are further working on incorporating telemedicine and diagnostics facilities on their platforms, getting even larger margins and additional revenues.

Predicted to disrupt the pharmaceutical distribution model as e-pharmacies, due to their nature, the sector can directly deal with drug manufacturers and not have three-four middlemen in the supply chain, meaning greater cost saving.

The co-founder of PharmEasy, e-pharmacy firm, Dharmil Sheth, said, “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.” He also added that the sector provides greater margins when compared to grocery retail.

Amazon partnered with the US-based firm, Giant Eagle Pharmacy, in November, for allowing users of its artificial intelligence-based virtual assistant Alexa for requesting prescription refills.

The e-pharmacy segment is considered a disruptive industry for quite a time, with experts predicting strong growth.

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