After fast growth, e-pharmacies eye customer loyalty2 min read . Updated: 31 Dec 2020, 05:54 AM IST
Acceptance of e-pharma firms by drug regulator and the govt lifted a crucial overhang for investors
It took a pandemic to realize the potential of telemedicine and e-pharmacies as a technological revolution in the healthcare space. After years of being under a regulatory quagmire because of lobbying by brick-and-mortar pharmacies, the segment witnessed a massive shift as India went into a lockdown in March to curb the spread of covid-19.
There was a radical change on four fronts that prompted the adoption of these platforms, according to Prashant Tandon, 1MG founder and chief executive officer.
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People were wary of visiting hospital setups and health clinics, prompting doctors and hospitals to adopt telemedicine as it was safer for them and their patients. Besides, health regulators realized the importance of these services during a pandemic. They recognized e-pharmacies as an essential service provider during the lockdown. Telemedicine practice guidelines were also published.
The fourth and final change came from the government, which announced the National Digital Health Mission on Independence Day.
“These are seismic shifts in a sector that had moved at a very slow pace for decades. Within three months we saw things that had taken years to move," Tandon said. Sales of 1MG doubled from the previous year, said Tandon.
Sales were increasing rapidly for e-pharmacy and telemedicine firms, while acceptance by the drugs regulator and the government lifted a crucial overhang for investors and led to greater interest from corporate giants. Reliance Retail Ventures, which is trying to increase its presence in the online retailing segment, acquired Netmeds for ₹620 crore in an all-cash deal. Likewise, e-commerce major Amazon Inc. announced the launch of its own e-pharmacy venture with a pilot in Bengaluru. The Tata Group, too, is in talks to buy a controlling stake in 1mg.
Tandon, however, did not reveal whether he was in discussions with Tata Group. “We continue to enjoy strong investor interest and are very comfortably positioned in the ecosystem from a financing perspective. Our leadership position in the ecosystem, which is now at its inflection point, means that we have some very interesting choices available to us. It is a good position to be in," he said.
The merger of e-pharmacy startups PharmEasy and Medlife added to the excitement. “This space and category is as large and important as any other category to build a large consumer business. This is one of the reasons for large players to be on the lookout and figure out synergies with the existing players," PharmEasy co-founder Dharmil Sheth said.
The segment, comprising e-pharmacies, virtual doctor consultations, online booking of home collection-based diagnostic services, private label medical devices, and the sale of vaccines, is now set to witness massive growth.
A November report by online doctor consultation platform Practo and Telemedicine Society of India, said there was a four-fold jump in the number of people using online consultations between March and November, while in-person appointments with doctors slumped 32%. General physicians, dermatologists and gynaecologists were the most sought after, it said.
Home collection for diagnostics also saw strong growth. India’s largest diagnostic chain Dr Lal PathLabs saw collection numbers grow 16 times since April. Having benefited from the pandemic in terms of strong sales growth, e-pharmacy firms now expect to see customers sticking with one platform, a significant change in behaviour for online retail segments, which have been marred by discounting and the inability to find loyal customers.