A majority stake in Netmeds not only makes Reliance among the leading players in the online pharmacy space but also puts it in direct competition with Amazon as the latter had recently forayed into selling prescription drugs online with Amazon Pharmacy.
Mukesh Ambani has further upped the ante to take on e-commerce biggies in multiple segments. After grocery, Reliance Industries has ventured into the online pharmacy space with the acquisition of a majority stake in digital pharmacy startup Netmeds by its subsidiary Reliance Retail Ventures Limited (RRVL). Reliance Retail has acquired the stake in Vitalic Health and its subsidiaries, collectively known as Netmeds, for around Rs 620 crores in cash, the company announced on Wednesday. The deal would give Reliance Retail approximately 60 per cent stake Netmeds and 100 per cent direct equity ownership of its subsidiaries including Tresara Health Private Limited, Netmeds Market Place Limited, and Dadha Pharma Distribution Pvt Limited.
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A majority stake in Netmeds not only makes Reliance among the leading players in the online pharmacy space but also puts it in direct competition with Amazon as the latter had recently forayed into selling prescription drugs online under the name Amazon Pharmacy. 1mg, PharmEasy, Medlife, etc are other startups in the online medicine delivery space in India. The sector witnessed a massive scale amid the Covid pandemic apart from other markets including online grocery and online education.
Set-up in 2015, Vitalic Health has been in the business of pharma distribution, sales, and business support services. Mukesh Ambani’s daughter and RRVL’s Director Isha Ambani said that the deal broadens Reliance Retail’s “digital commerce proposition” to fulfill the daily essential needs of consumers. “We are impressed by Netmeds’ journey to build a nationwide digital franchise in such a short time and are confident of accelerating it with our investment and partnership,” said Isha Ambani.
Netmeds Founder and CEO Pradeep Dadha stressed on leveraging “the combined strength of the group’s digital, retail and tech platforms” for offering more value to consumers through a better omnichannel experience. The online portal delivers to more than 20,000 pin codes in India and claims of serving over 5.7 million customers in more than 670 cities. It sells over 70,000 prescription drugs for chronic and recurring ailments apart from lifestyle drugs and over-the-counter products for wellness, health, and personal care.
Crowded online pharmacy space
Currently there are more than 50 e-pharmacy startups in India, which were delivering medicines to 3.5 million households before Covid-19 struck. However, during the Covid period, the sector witnessed around 2.5X growth to about 8.8 million households, according to a recent whitepaper launched by FICCI. Online pharmacy space is expected to grow around 1.4X from its pre-Covid level and serve around 70 million households by FY25. Moreover, the value of the digital medicine delivery market in 2019 was around $20 billion including the market share for addressable medicines of around 47 per cent, as per the statistics portal Statista. This is expected to scale up to over 60 per cent by 2023 even as the chronic disease treatments continue to rise while customers prefer ease of home delivery of medicines.
RIL’s love for startups
The latest deal with Netmeds adds to Mukesh Ambani’s growing list of startups supported. Among the top 10 richest people on Earth, Ambani has been acquiring startups for quite some time now. Since September 2018, the group has either acquired or invested in multiple startups across sectors. Some of them included, Netradyne, Grab A Grub, C-Square Info Solutions, Reverie Language Technologies, Fynd, Haptik, Easygov, SankhyaSutra Labs, Vakt Holdings, and Embibe. According to a Bloomberg report, Ambani has his eyes further set on startups such as online furniture portal Urban Ladder and lingerie maker Zivame even as he builds a war chest to take on current e-commerce incumbents including Amazon and Flipkart with the investment of around Rs 1.52 lakh crore from leading technology companies including Facebook, Google, and others.
During the company’s 43rd AGM last month, Ambani had in fact invited startups to partner for the future growth of its businesses. “Jio Platforms along with its over 20 startup partners who are now part of our family has built significant world-class capabilities in several cutting edge technologies,” Ambani had said. 4G and 5G, cloud computing, devices and operating system, big data analytics, machine learning and artificial intelligence, virtual and mixed reality, blockchain distributed ledger, etc. were among the technologies for which he sought engagement with startups ahead.