e-pharmacies pop the growth pill
last week, online pharmacy PharmEasy acquired a controlling stake in the publicly listed diagnostics business Thyrocare. this is the first time a startup has made a play for a listed business in India, and helps PharmEasy stake its claim as India’s largest digital wellness player.
the move follows many significant developments in the e-pharmacy sector over the past year. the pandemic has forced many traditional industries to change the way they function, and healthcare services are chief among them.
where there’s big money to be made, there’s always big money rushing in. the Indian healthcare system’s transition online is no different. PharmEasy became India’s first e-pharmacy ‘unicorn’ with a $350 million funding round in April. it raised a further $300 million to fund the Thyrocare deal.
it has plenty of competition. the Tata Group, which is on an acquisition spree to put together a ‘super app’, has acquired 1MG last month. Reliance acquired Netmeds last year. Amazon is pushing to grow its online pharmacy business, which it also introduced to India last year. many hyperlocal delivery apps such as Dunzo and Swiggy have dedicated healthcare sections amongst their offerings.
the investments flowing in are a sign that the market is maturing. thus far, these companies were building habits and growing the market. now it’s time for the next step.
that step is monetising the market. it is about more than just delivering medicines. which is why the acquisition of an established diagnostics chain makes great business sense for PharmEasy. not only does it get a profitable business, but also the data it generates. that can be used to understand a customer’s condition and push recommendations based on their needs, capturing the life cycle end to end.
1MG also has its own diagnostics service. many digital healthcare startups such as Practo and Myra which offer online consultations and more are also focused on data collection. data is, after all, the new oil which, in this case, can be used to upsell customers on elective procedures, supplements, and more.
the sector received a boost from the relaxation of doorstep delivery regulations in March last year. for example, Schedule H drugs couldn’t be home delivered before the pandemic-enforced lockdowns made it essential. but there are still many looming uncertainties over licensing, FDI, and other criteria.
for now, companies are pushing the boundaries to get enough people onboard that regulators have to follow. flush with cash, 1MG is now looking to introduce one-hour delivery of medicines in several major cities. a major step because most deliveries are scheduled in advance.
the healthcare sector, forced by the pandemic, is evolving and there is a lot more to come.