The pandemic—and the resultant adoption of technology—have brought about a quantum shift in the Indian healthcare sector, with the advent of new players vying for a piece of the $2-billion health-tech market. Recently, Flipkart too forayed into the space with Health+, joining the likes of Amazon Pharmacy, Reliance Industries’ NetMeds, Tata Group’s 1mg, and Temasek-backed PharmEasy.
While the Walmart-owned platform has introduced value-added services such as tele-consultation and e-diagnostics, other platforms are expanding their service offerings as well. MediBuddy, which just secured $125 million in funding, and Tata 1mg are strengthening their partner networks and have built an omnichannel presence with services that go beyond just providing medicines— expanding into physical consultations, hospitalisation services and even establishing fulfilment centres, in certain cases.
Within the health-tech universe, the e-pharmacy segment was worth $700-750 million in 2021, and is expected to reach $2.1-2.5 billion by the end of 2023, according to Saumya Krishna, partner, Kearney.
Tata 1mg’s healthcare products portfolio includes ayurvedic and homoeopathic formulations, besides nutritional supplements. Given that some e-pharmacies are able to deliver medicines faster through empanelled local pharmacies, Antony Prashant, partner, Deloitte India, says an expansion into higher margin, non-medicinal products like FMCG items is inevitable, similar to offline pharmacies.
Both Flipkart Health+ and Tata 1mg deliver medicines and healthcare products across 20,000 pincodes in the country, while MediBuddy claims to be covering a majority of India’s pincodes.
“Tata 1mg is strengthening its network of fulfilment centres, having opened over 25 centres in the last few months, with the goal of maintaining its growth trajectory of near to or over 100% in the next few years,” says Gaurav Agarwal, co-founder, Tata 1mg. The platform fulfils a few million orders per month, and currently clocks a revenue growth rate of 100%, he says.
MediBuddy has 90,000 doctors, 7,000 hospitals, 3,000 diagnostic centres, and 2,500 pharmacies as partners, and has seen 70% growth since the pandemic. It serves 35,000 customers each day and plans to expand to 1,00,000 patients per day in the next few months. “We wanted to create an omnichannel presence for all healthcare needs; hence we built a strong network channel,” says Satish Kannan, co-founder and CEO, MediBuddy.
Krishna of Kearney says there is significant potential for e-pharma platforms to expand into wellness and nutraceutical products, especially with the emergence of several online-first and direct-to-consumer (D2C) brands. However, a key issue, according to the analysts, especially for ayurvedic products, is counterfeit medicines; these firms are addressing this with stringent certifications for partner clinics.
However, Prashant further adds that the biggest challenge is the limited penetrability beyond urban settings, due to a lack of trust and low awareness of benefits. “E-pharmacies that follow a marketplace model rely on empanelled pharmacies for the availability of the prescribed brand, so they have limited scope for increasing margins, thanks to multiple layers in the value chain,” he points out. Whereas platforms following an inventory model have to maintain fulfilment centres, and have to be located closer to demand centres.