New Delhi, July 14, 2020: The Indian pharmaceuticals market is the third largest in terms of volume and 13th largest in terms of value, globally. The growth in this space will be primarily driven by the high burden of disease, good economic growth leading to higher disposable income, improvements in healthcare infrastructure & improved healthcare financing, to name a few. India is expected to be among the top three pharmaceutical markets by incremental growth and the sixth largest market globally in absolute size by the end of 2020.
On the other hand, India E-Pharmacy market is at its nascent stage, but like other categories, it has the potential to be a very large industry segment in the near future. The advent of online pharmacy retailers in the Indian market during Covid period will further increase the penetration of the organized pharmacy segment in the country. Most e-pharmacies have seen a surge in demand, thanks to customers beginning to recognise them as a safer, faster, and cheaper mode than physical stores. It is expected that the E-Pharmacy model could account for 15%-20% of the total pharma sales in India over next 10 years, largely by enhancing adherence and access to medicines for a majority of the under-served population. Currently, many E-Pharmacy players such as Medlife, Netmeds, 1MG and Pharmeasy operate in this segment and offer varied value added services to the consumers. Though, the market competition is majorly concentrated among these major players, but we have witnessed the entry of many new entrants into this market in recent months owing to its rising popularity of the segment in the retail pharmaceutical industry.
Challenges for Retail Pharmacy Market in India
Low Industry Margins: Retail pharmacy is a highly fragmented and competitive industry with ~800,000 registered retail outlets across the country. Drugs are bought in smaller quantities by these retail stores from drug distributors at high prices which in turn reduces their profit margins.
Sustainability of the Industry: Due to increased competition and rising pressure on price controls, the sustainability of the retail pharmacy industry is at risk due to the already lower profit margins. Technology adoption can help this industry to increase productivity and provide value-added services to consumers.
Drug Abuse: Allegations of medicine sales without prescriptions are levied at some of the retail pharmacies. This has led to significant number of cases of drug abuse in the country.
Counterfeit Medicines: Retail pharmacies in India are alleged to sell sub-standard and fake medicines, thereby increasing the risk of adverse effects.
Tracking & Documentation: Sale of drugs also happens without providing bill / invoice for the purchase, affecting the amount of tax collected. Poor documentation of prescription drug sales is therefore impacting the drug recall process and poor inventory management.
Competition Overview
The competition in E-Pharmacy space of India has consolidated in last 2-3 years. The industry majors such as Medlife, Netmeds, Pharmeasy & 1 MG are seeing surge in their number of orders each month and are looking forward to expand their distribution reach further to Tier 2 & Tier-3 cities and rural regions as well.
Medlife and Pharmeasy have the widest reach amongst all the e-pharmacy players, delivering medicines to approx 25,000+ pin codes across the country. Netmeds supplies drugs to all major cities in India with presence in approx 19,000+ pin codes as of FY’2020.
The major parameters of competition are the product portfolio of companies along with various value added services & discount option offered by various players. The e-pharmacy players in India are undertaking various activities for marketing in order to gain competitive advantage and to increase customer retention. Therefore, players are allocating high portion of their total expenses to marketing activities. Advertising is mainly done through digital media platforms such as Whatsapp, Facebook, Instagram and other social media platforms. Many players are also offering discounts in the range of 15-70% to attract more and more consumers on their platforms.
Future Growth
Online pharmacies account for 1.5-3% of the total pharmacy sales in India. The country has over 502 million smartphone users and 653 million mobile broadband subscribers and it is expected this will further augment the penetration of these platforms in the coming years specifically among young consumers. Going forward, players might develop their hybrid models and could partner further with offline pharmacies and pharmaceutical manufacturers to avail the benefits of both the worlds- offline and online and will be able to expand their product portfolio to other segments as well to increase their revenue generation capability and to offer a one stop solution to every healthcare needs of the consumers.
The report would be beneficial for various stakeholders who are interested to understand the overall ecosystem, competition framework & challenges faced by the major E-Pharmacy companies in India.
Key Target Audience:-
Pharma/Medicine Manufacturers
Medicine Distributors/Wholesalers
Health Supplements and OTC Products Manufacturers
3PL Logistic Players
Government Organization catering to the Pharmaceutical Industry
E-Pharmacy Players
Offline Pharmacy Players
Hospitals
Industry Associations
Time Period Captured in the Report:-
FY’2015-FY’2020
Companies Mentioned:-
Medlife Wellness Retail Private Limited
Netmeds Marketplace Limited
Pharmeasy (91 Street media Technologies Private Limited)
1 MG Technologies Private Limited
Key Topics Covered in the Report:-
Operating Analysis of Medlife, Netmeds, Pharmeasy, 1 MG (Including GMV, Number of Orders (Per day), Average Ticket Size, Month-on-Month growth Rate (On the basis of GMV), Cancellation Rate, Refund
Policy, Logistic Charges, Number of Warehouses , Number of Application Downloads (As of 31st May, 2020) (Monthly Average), Partnerships, Unique Selling Proposition, Business Strategies, Strength, Weakness)
Financial Analysis of Medlife, Netmeds, Pharmeasy, 1 MG (Including Total Revenue, Growth of Revenue (%), Total Expenses, Earnings before Tax & Extraordinary Items, Earnings after Tax (Net Income), Growth of Net Income (%), EPS, Advertisement Expenses)
Heat Map Analysis of Value Added Services (Including Online Consultation, Diagnostic Labs, Appointments with Doctors, Health Blog)
Services Analysis of Players (Including Delivery Timings, Refund Status, Express delivery, Subscription model, Private Label Goods, Diagnostics Services, Live Doctor Consultation, SKU Details (Top Categories), Payment Services
Competition Analysis (Market Share on the basis of GMV)
For More Information on research report, refer to below link:-
Corporate Comm India (CCI Newswire)
