Reliance and Amazon are set to clash as they both are going into the e-pharmacy market. Jeff Bezos, currently the richest man in the world and Mukesh Ambani who ranks three spots behind him are both aiming to exploit the sector of e-pharmacy in India. With the introduction of Androids and cheap data prices that led to the boom in the smartphone sector of this country, e-pharmacy is the next growing market as predicted by the industrialists.
Amazon India eyeing the market and analyzing its potential has crept into the Indian market by launching Amazon Pharma. The company’s headquarters was set up at Bangaluru. There are no other offices, although it is predicted that they will open up soon enough to facilitate distribution. For now, the company will conduct delivery from its headquarters to other cities.
Reliance Retail already has its Smart point outlets. Through this, they are planning to scale up its grocery and pharmacy platform. Reliance also has a biotechnology subsidiary called Reliance Life Sciences. Through this subsidiary, Reliance has already started setting up pathology labs creating a partnership with local entrepreneurs.
Amazon Pharmacy will sell both over-the-counter and prescription-based drugs. They will also offer basic health devices and traditional herbal health medicine. Although the advancement, there has been no confirmation from Amazon about the timeline of launch.
Reliance, however, said in its March quarter analyst presentation that retail is expected to scale up rapidly with the introduction of new commerce and pharmacy platform.
Indian e-pharmacy already consists of a lot of companies that already provide the service of selling medicine through the online market. Startups like 1mg, Netmeds, Medlife, and PharmEasy are the current players in this market to which Reliance and Amazon’s will add themselves. They offer their services to most parts of the country. 1mg has recently raised over $ 170 million, attracting the customers and delivering to more than a thousand cities in the country. These companies also aim to add features like telemedicine and diagnostic facilities to their list to attract a wider scale of consumers.
They offer discounts to lure in customers and increase the market share. Amazon in its new pharmacy unit is claiming to offer a 20% discount on all orders. Amazon has expanded its tentacles in various sectors in India. With Jeff Bezos, speaking at a company event in New Delhi said the 21st century as the Indian century and expressed his intention of investing in India. There might be more sectors in which Amazon will enter in its coming months. In May, Amazon launched its food delivery service in Bangalore. A month later, they went in and acquired a permit from the West Bengal government to deliver alcohol in the state of West Bengal. They also recently started selling auto-insurance in India. They have shown the intent of growing its services and said that they have plans to offer coverage on health, flight, and cabs in the future.
On the other hand Mukesh Ambani last year launched JioMart. The online retail service was a direct competitor of Amazon and Flipkart. The service is now operational in more than 200 cities across India. They also had put forward a report of selling more than 400,000 orders a day last month, which surpassed the daily figures of grocery delivery services Grofers and BigBasket.
The growth in this sector might also disrupt the pharmacy chain of the country. With their distribution model, they can contact directly to the drug companies rather than having middlemen in the supply chain. This would be a lot more cost-efficient for the companies.
As reported by Livemint, Dharmil Sheth, co-founder of e-pharmacy firm PharmEasy said that the online medicine category is large with a high frequency of purchases. He also said that as medicine is a vital part of people’s lives, online medicine fits in very well with the consumer’s life cycle. He added that the pharmacy sector provides greater margins as compared to grocery retails.
While the launch of the new Amazon’s e-pharmacy wing, a spokesperson said, “This is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home.”
Amazon had started to move into this sector since 2017. They bought US-based home delivery medications startup PillPack. A few months back they introduced Amazon Pharmacy branding in PillPack’s service. At the beginning of this year, Amazon also trademarked the ‘Amazon Pharmacy’ name in other countries like UK, Canada, and Australia. This proves the company’s serious intent to extend the service to other countries. Like its US competitor Walmart, Amazon also sees potential in the growing Indian market. They have already invested $ 6.5 billion in the country.
The Indian Government is also looking into providing the citizen with more and better health care facilities. With COVID-19 pandemic hitting the country hard, the government is looking into ways how they can better the service. There are already several schemes that the government had put out to assist the citizens of the country. Ayushman Bharat scheme provides free access to health care for 40 percent of people in the country. There are other plans and schemes of the Indian government as well as state governments to help the residents, especially the economically challenged citizens, of this country.
The medicine market for e-pharmacy is estimated to reach $ 18.1 billion by 2023 from $ 9.3 billion in 2019 as suggested by an EY report. This projects an annual compound growth rate of 18.1 percent.
Pramod Sudhindra, digital leader-life sciences at EY India, as reported by Livemint, said that the next nine to ten months will see a rapid transformation in the pharmaceutical market of the country.
Amazon also aims to buy a 9.9% stake in Reliance’s retail arm.
Amazon India operating “illegal e-pharmacy”?
All India Organization of Chemists and Druggists (AIOCD), is an organization with more than 850,000 members across the country. They have written to both Jeff Bezos, CEO of Amazon and Amit Agarwal, senior vice president, and country manager against the tech behemoth’s entry into the Indian pharmaceutical market.
The letter was also sent to the Prime Minister of the country, Narendra Modi and the Union Home Minister, Amit Shah which highlighted that Amazon India is operating “illegal e-pharmacy”. This practice according to the AIOCD is not only against the law but also against the country’s public health interest.
They also notified the tech conglomerate that home delivery cannot be undertaken by an online pharmacy and the company’s doing so is facing court proceedings.
The organization mainly says that the online pharmaceutical companies are not recognized by the Drug and Cosmetics Act of the Indian constitution making the sale of prescription drugs illegal by the companies. They also demand a major change in the Drug and Cosmetics Act that would allow the sale of medicine and home delivery.
Amazon’s tech-based wing is facing tremendous scrutiny and investigations in the US and Europe. There have been antitrust cases launched against them.