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E-commerce: Will e-pharmacies become the norm?

Juilee Dandekar, Sector Expert - Healthcare, Business Research & Advisory, Aranca points out that e-pharmacies need to be aligned with the specific dynamics of the Indian market to make them more relevant to the Indian consumer

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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

  1. 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.
  2. 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.
  3. 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, wil