Apollo 24/7, the online pharmacy arm of Apollo Hospitals, is facing stiff competition from quick commerce platforms that promise rapid delivery of home essentials, over-the-counter medicines and FMCG products in less than 20 minutes.
“We are seeing some pressure in certain markets where quick commerce players have entered,” said Madhivanan B, CEO, Apollo Healthco, during the company’s Q2FY25 earnings call.
He said that while online medicine delivery has remained relatively stable, categories like over-the-counter (OTC) products and health essentials are seeing increased competition from rapid delivery services.
Q-commerce platforms such as Swiggy Instamart, Zepto, and Zomato’s Blinkit are expanding into new sectors to boost average order values (AOVs) and drive profitability. Quick commerce platforms already offer OTC products, including pain relief sprays, cold and cough medications, and a variety of baby and personal care items through their rapid delivery services.
These players are now also getting into online medicine delivery. For instance, IPO-bound Swiggy recently partnered with PharmEasy to pilot 10-minute medicine deliveries through its Instamart dark stores in Bengaluru, with plans to expand to other cities. Tata’s e-pharmacy 1mg is reportedly teaming up with BigBasket (BB NOW) to start medicine deliveries in January.
Apollo Healthco segment includes Apollo’s offline pharmacy distribution business and the Apollo 24/7 online platform, which offers online medicine delivery, doctor consultations, and diagnostics services. It is the second-largest revenue driver for Apollo Hospitals Group after its core hospital segment.
In Q2FY25, Apollo HealthCo posted a 17% year-on-year revenue increase to ₹2,282 crore. It posted a net profit of ₹19 crore, recovering from a ₹68-crore loss in the same quarter last year. Madhivanan attributed this turnaround to cost optimisation and growth in operational revenue. “Last year’s growth was primarily driven by huge marketing expenditure in digital marketing. We realised that is not something which is sustainable in the long run,” he said.
The q-commerce challenge has hindered Apollo 24/7’s ability to meet its gross merchandise value (GMV) target of ₹4,000 crore for FY25. After recording a GMV of ₹2,687 crore in FY24, the platform initially projected 50% growth this year. However, with GMV reaching only ₹1,452 crore by H1FY25, achieving this target now appears unlikely.
In response to quick commerce competition, Apollo 24/7 has introduced a 19-minute delivery service in Delhi and Noida, which Madhivanan noted, is yielding promising results. The company intends to roll out this rapid delivery model to all cities.
Apollo 24/7 serves over 35 million users through a network of more than 6,000 pharmacies and is leveraging its 6,800 outlets and hospital network to expand in pharmacy, diagnostics, and doctor consultations. “Omnichannel is the way forward,” Madhivanan emphasised, adding, “If we don’t reach ₹4,000 crore, we will still close with a solid number without compromising profitability.”
Additionally, Apollo HealthCo recently established Apollo 24/7 Insurance Services, a wholly-owned subsidiary, to operate as a corporate insurance agency. Madhivanan expects IRDAI to approve its corporate agency licence in Q3, enabling Apollo 24/7 to offer customised insurance plans bundled with Apollo Care.
