The Indian
pharmaceuticals market is the third largest in terms of volume and 13th largest
in terms of value, globally. The growth in this space will be primarily driven
by the high burden of disease, good
economic growth leading to higher disposable income, improvements in healthcare
infrastructure & improved healthcare financing, to name a few. India is
expected to be among the top three pharmaceutical markets by incremental growth
and the sixth largest market globally in absolute size by the end of 2020.
On the other hand, India E-Pharmacy market is at its nascent
stage, but like other categories, it has the potential to be a very large
industry segment in the near future. The advent of online pharmacy retailers in
the Indian market during Covid period will further increase the penetration of
the organized pharmacy segment in the country. Most e-pharmacies have seen a
surge in demand, thanks to customers beginning to recognise them as a safer,
faster, and cheaper mode than physical stores.
It is expected that the E-Pharmacy model could account for 15%-20% of
the total pharma sales in India over next 10 years, largely by enhancing
adherence and access to medicines for a majority of the under-served
population. Currently, many E-Pharmacy players such as Medlife, Netmeds, 1MG
and Pharmeasy operate in this segment and offer varied value added services to
the consumers. Though, the market competition is majorly concentrated among
these major players, but we have witnessed the entry of many new entrants into
this market in recent months owing to its rising popularity of the segment in
the retail pharmaceutical industry.
Challenges for
Retail Pharmacy Market in India
Low Industry Margins: Retail pharmacy is a
highly fragmented and competitive industry with ~800,000 registered retail
outlets across the country. Drugs are bought in smaller quantities by these
retail stores from drug distributors at high prices which in turn reduces their
profit margins.
Sustainability of the Industry: Due to increased
competition and rising pressure on price controls, the sustainability of the
retail pharmacy industry is at risk due to the already lower profit margins.
Technology adoption can help this industry to increase productivity and provide
value-added services to consumers.
Drug Abuse: Allegations of medicine sales without
prescriptions are levied at some of the retail pharmacies. This has led to
significant number of cases of drug abuse in the country.
Counterfeit Medicines: Retail pharmacies in
India are alleged to sell sub-standard and fake medicines, thereby increasing
the risk of adverse effects.
Tracking & Documentation: Sale of drugs also
happens without providing bill / invoice for the purchase, affecting the amount
of tax collected. Poor documentation of prescription drug sales is therefore
impacting the drug recall process and poor inventory management.
Competition
Overview
The competition in E-Pharmacy
space of India has consolidated in last 2-3 years. The industry majors such as
Medlife, Netmeds, Pharmeasy & 1 MG are seeing surge in their number of
orders each month and are looking forward to expand their distribution reach
further to Tier 2 & Tier-3 cities and rural regions as well.
Medlife and Pharmeasy have
the widest reach amongst all the e-pharmacy players, delivering medicines to
approx 25,000+ pin codes across the country. Netmeds supplies drugs to all
major cities in India with presence in approx 19,000+ pin codes as of FY’2020.
The major parameters
of competition are the product portfolio of companies along with various value
added services & discount option offered by various players. The e-pharmacy players in India are
undertaking various activities for marketing in order to gain competitive
advantage and to increase customer retention. Therefore, players are allocating
high portion of their total expenses to marketing activities. Advertising is
mainly done through digital media platforms such as Whatsapp, Facebook,
Instagram and other social media platforms. Many players are also offering
discounts in the range of 15-70% to attract more and more consumers on their
platforms.
Future Growth
Online pharmacies account for 1.5-3% of the total
pharmacy sales in India. The country has over 502 million smartphone users and
653 million mobile broadband subscribers and it is expected this will further
augment the penetration of these platforms in the coming years specifically
among young consumers. Going forward, players might develop their hybrid models
and could partner further with offline pharmacies and pharmaceutical
manufacturers to avail the benefits of both the worlds- offline and online and
will be able to expand their product portfolio to other segments as well to
increase their revenue generation capability and to offer a one stop solution
to every healthcare needs of the consumers.
The report would be beneficial for various stakeholders
who are interested to understand the overall ecosystem, competition framework
& challenges faced by the major E-Pharmacy companies in India.
Key Target Audience:-
Pharma/Medicine Manufacturers
Medicine
Distributors/Wholesalers
Health Supplements and OTC
Products Manufacturers
3PL Logistic Players
Government Organization
catering to the Pharmaceutical Industry
E-Pharmacy Players
Offline Pharmacy Players
Hospitals
Industry Associations
Time Period Captured
in the Report:-
FY’2015-FY’2020
Companies Mentioned:-
Medlife Wellness Retail
Private Limited
Netmeds Marketplace Limited
Pharmeasy (91 Street media
Technologies Private Limited)
1 MG Technologies Private
Limited
Key Topics Covered in
the Report:-
Operating Analysis of Medlife, Netmeds,
Pharmeasy, 1 MG (Including GMV, Number of Orders (Per day), Average Ticket
Size, Month-on-Month growth Rate (On the basis of GMV), Cancellation Rate,
Refund
Policy, Logistic Charges, Number of
Warehouses , Number of Application
Downloads (As of 31st May, 2020) (Monthly Average), Partnerships, Unique
Selling Proposition, Business Strategies, Strength, Weakness)
Financial Analysis of Medlife, Netmeds,
Pharmeasy, 1 MG (Including Total Revenue, Growth of Revenue (%), Total
Expenses, Earnings before Tax & Extraordinary Items, Earnings after Tax
(Net Income), Growth of Net Income (%), EPS, Advertisement Expenses)
Heat Map Analysis of Value Added Services
(Including Online Consultation, Diagnostic Labs, Appointments with Doctors,
Health Blog)
Services Analysis of Players (Including Delivery
Timings, Refund Status, Express delivery, Subscription model, Private Label
Goods, Diagnostics Services, Live Doctor Consultation, SKU Details (Top
Categories), Payment Services
Competition Analysis (Market Share on the basis
of GMV)
For
More Information on research report, refer to below link:-
Related Reports:-
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