Amazon enters online pharmacy space in India; to compete with Netmeds, 1mg

E-commerce giant Amazon has forayed into the online medicine segment and launched Amazon Pharmacy. The service has been started in areas with select pin codes in Bengaluru, while the company is learnt to be mulling scaling it up to other cities across India in the near future.

The service would allow customers to order prescription-based medication in addition to over-the-counter medicines, basic health devices and Ayurveda medication from certified sellers.

"As a part of our commitment to fulfill the needs of customers, we are launching Amazon Pharmacy in Bangalore,” said an Amazon India spokesperson confirming the development. “This is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home," the spokesperson said.

Amazon’s foray into the online medicine segment puts it in direct competition with established local players including NetMeds, 1mg, PharmEasy and Medlife. Amazon has launched the service at a time when there is a tremendous demand for such services which are delivering essential medicines to patients amid the Covid-19 pandemic. An increasing number of people are buying products online and avoiding visiting the stores due to fears of catching the virus.

However, it is not going to be easy for Amazon to tap the e-pharmacy space due to the regulatory hurdles and the ongoing war between online and offline pharmacies and the delay in finalisation of e-pharmacy rules by the government.

Recently, the All India Organisation of Chemists and Druggists (AIOCD), representing more than 850,000 pharmacy outlets across the country wrote a letter to Prime Minister Narendra Modi with a request to ban the activities of e-pharmacies in the country.

Last December, the health ministry came up with revised draft regulations for online sales of drugs. It said e-pharmacies cannot stock drugs and will have to operate through retail chemist shops for doorstep supply of medicines just like food-delivery platforms Swiggy and Zomato. The draft regulations also make retail pharmacies eligible to deliver medicines at a customer's residence.

The Indian e-health sector is expected to become a $16 billion opportunity by FY2025, growing from $1.2 billion, at a compound annual growth rate of 68 per cent, according to a report by research firm RedSeer Consulting. It is expected to touch 57 million households, driven by positive reception from both consumers and providers along with supportive government regulations and investments.

According to RedSeer, the overall Indian healthcare industry is set to grow at 17 per cent CAGR until FY2025 to reach $353 billion (7 per cent of the expected nominal gross domestic product).

In May, Amazon also announced its entry into online food delivery in India. Customers are now allowed to order from select restaurants and cloud kitchens that have cleared the company’s hygiene certification bar.