Reliance Industries Ltd. are set to show its presence in the retail market of India as they aim to get into the pharmaceutical industry with full strength. Reliance Retail Ventures Limited (RRVL) which is a subsidiary of the Reliance Industries Ltd. informed that on Tuesday they have gone into an agreement and acquired a majority stake of the online pharmaceutical company known as Vitalic Health Private Limited. The deal was acquired for a cash consideration of about Rs. 620 crore.
Reliance Industries Ltd notified late night on Tuesday that the deal comprises of 60 percent of the equity capital of Vitalic Health Private Limited and 100 percent equity holding of its subsidiaries. The subsidiaries of Vitalic Health Private Limited are namely, Tresara Health Private Ltd, Netmeds Market Place Ltd, and Dadha Pharma Distribution Pvt Ltd.
Vitalic and its subsidiaries together are known as Netmeds.
The deal is done says after Amazon launched its own pharmaceutical unit known as Amazon Pharma. This move by the oil to the telecom conglomerate will extend the tussle between the organizations and fuel a rivalry.
The COVID-19 pandemic, which forced the country to put the lockdown into effect overnight had driven the citizen to go for online shopping. Although there have been several retail online websites like Amazon and Flipkart, the online pharmaceutical Industry though having a lot of companies had not grown much.
Reliance and Amazon both see a great opening in the Indian market for the companies to invest in. Amazon’s CEO Jeff Bezos while speaking at a company event in New Delhi claimed that the 21st century would be the Indian century. He also expressed his desire and aim to invest in the Indian markets. The top tech giant opened Amazon Pharma with its headquarters in Bangalore. For now, the company would send pilots to deliver to the rest of the country. More offices would soon be opened up across India to facilitate easier and faster delivery.
Recently as said by their CEO, Amazon has gone into a spree of investments in India. First, they opened up a food delivery service in Bangalore for selected zip codes. Then they acquired a permit from the West Bengal government to sell alcohol in the state of West Bengal. They also started to sell auto insurance in the country and has shown the intention of growing its services and said that they have plans to offer coverage on health, flight, and cabs in the future.
Mukesh Ambani, the richest man of India, last year opened up JioMart. This made his way into the online retail market where he became the direct competitor of Amazon and Walmart’s Flipkart. The new sector reported selling more than 400,000 orders a day last month. The figure is not only impressive but also is a lot more than the reported per day sales of Grofers and BigBasket.
In the online pharmaceutical sector, there are other companies already like 1mg, Medlife, PharmEasy. 1mg has recently raised over $ 170 million, attracting the customers and delivering to more than a thousand cities across the country.
Amazon Pharmacy had informed that they aim to sell over-the-counter medications and prescription drugs. Not only this but also they would also offer basic health devices and traditional herbal health medicine. Reliance through its Smart Point outlets was planning to set up pathology labs by creating deals with local entrepreneurs.
Isha Ambani, director of Reliance Retail Ventures Limited said, “This investment is aligned with our commitment to provide digital access for everyone in India. The addition of Netmeds enhances Reliance Retail’s ability to provide good quality and affordable health care products and services, and also broadens its digital commerce proposition to include most daily essential needs of consumers.” She also added that she was impressed by the journey of Netmeds and how in a short time they became a pan India presence and hopes to accelerate the growth with their investment and partnership.
Dadha Pharma of Chennai promotes Netmeds. They boast of serving over 5.7 million customers in more than 670 cities and towns across the country. The company Vitalic Health Private Limited and it’s subsidiaries were incorporated in 2015. They mainly excelled and focuses on the sector of pharma distribution, sales, and business support services. Netmeds, a subsidiary of Vitalic, has its own online platform that connects consumers with the pharmacist and provides doorstep delivery of medical products.
Founder and CEO of Netmeds, Pradeep Daddha commented on the deal, “It is indeed a proud moment for “Netmeds” to join the Reliance family and work together to make quality healthcare affordable and accessible to every Indian. With the combined strength of the group’s digital, retail, and tech platforms, we will strive to create more value for everyone in the ecosystem, while providing a superior Omni Channel experience to consumers.”
All India Organization of Chemists and Druggists (AIOCD) had already written a letter to Jeff Bezos, the CEO of Amazon, the Indian prime minister, the union home minister, senior ministers and the vice president of Amazon and country manager of the company Amit Agarwal and informed that the online pharmaceutical business is illegal in India. They had also produced facts on how this sector is not only against the law but also against the interest of the citizen. They also informed of several court proceedings currently active against the companies that do the business.