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Despite various challenges, India’s ePharmacy sector is expected to maintain robust growth, projecting an annual growth rate of around 18-20% to reach around $3.4 billion in market size by 2030, with new technologies and integration of more services into their offerings, says Prashant Tandon, CEO and co-founder of Tata 1 mg.
In an electronic interaction with Pharmabiz, he said, "Several structural drivers will underpin this expansion, including increased internet and smartphone penetration, growing consumer comfort with digital healthcare services, and the expanding prevalence of chronic diseases necessitating ongoing medication management. Quick commerce will significantly influence growth by facilitating urgent medicine deliveries, shifting acute care demand from offline to online platforms."
There are several significant trends emerging in the sector, including that companies increasingly integrating pharmacy services with diagnostics and online doctor consultations, seeking to be ‘one-stop shops’ for their customers’ health needs. Another major trend is the adoption of omnichannel strategies, with online-first players establishing physical stores to cater to consumers preferring in-person transactions/needing immediate product access.
Quick commerce is also emerging as a notable trend and its increased penetration is set to further bolster customer experience and drive wider adoption of online pharmacy services, especially for urgent medicine needs. He added that the consumers are now sticking with ePharmacies for reasons much beyond discounting – especially around convenience, comfort, availability, accessibility, etc.
Technological advancements have played an important role in driving the growth of India’s ePharmacy industry, with companies developing several capabilities tailored specifically to the unique needs of the sector, including secure and user-friendly digital flows for prescription validation. Additionally, supply chain technologies such as temperature-controlled logistics systems have enabled the storage, handling, and timely delivery of sensitive medications.
"Sector specific intricacies such as “look Alike, Sound Alike” medicines, reduction of dispensation errors etc are all driven through technology. Beyond these sector-specific technologies, ePharmacy players have also adopted broader eCommerce capabilities. These include advanced demand forecasting models, sophisticated inventory management software, and intelligent planning software for optimized deliveries," he said.
With the rising adoption of artificial intelligence, ePharmacies can unlock the potential of their vast customer data to enhance their offerings. Players will be able to drive more personalization, introducing targeted marketing and providing customized health recommendations, ultimately improving customer experience and deepening engagement.
The growing burden of chronic diseases, rising incomes making healthcare more affordable for many consumers, and potential for collaborations with insurance providers are some of the opportunities that would work in favour of the segment. ePharmacies can go beyond simply dispensing drugs, and players can offer end-to-end condition management programs, serving those patients’ entire healthcare needs. There is also untapped market potential in Tier 2/3+ cities. As smartphone adoption deepens, healthcare awareness rises, and digital platforms gain trust, a larger addressable audience in these geographies is emerging. By focusing on these regions, ePharmacies can meaningfully extend their reach and grow their customer base, he said.
Commenting on the regulatory challenges, Tandon said that there is a strong track record of compliant operations and positive impact on the ecosystem for the ePharmacy model in India.
"In general, in a regulated sector, innovative models do face regulatory scrutiny and often it takes time for the ecosystem to appreciate the nuances of the model. However, I do believe that we are past that debate at this stage. Today, each pharmacy is omni channel, consumers get the medicines they need, where and how they need them and everyone knows that the models operate with the requisite licenses in pharmacy locations, registered pharmacists dispensing medicines upon a valid prescription and fully abiding with data laws as applicable," he said.
One of the key challenge has been that the ePharmacy model, while fully compliant, is governed by different Acts and Rules, instead of a single comprehensive framework. One needs to understand and comply with the Drugs & Cosmetics Act, IT Act, Marketplace norms, Retail & eCommerce related guidelines, Data privacy laws etc to fully cover the ePharmacy model. Besides, the trade association trying its best to prevent competition to come up also poses a challenge.
"Consequently, this sector took a lot more resilience and attracted less capital than such an attractive sector otherwise would have," he added.
He said that the industry has always engaged with the government in a proactive and positive mode – seeking progressive regulation to ensure this sector can develop well in India. A good starting point is the new Drugs & Cosmetics Act & Rules, in line with the future needs of the ecosystem.
"Another ask is that the health ministries and regulator be equipped with a much deeper understanding of technology, data sciences, AI etc to help India’s nascent ehealth sector grow better and create the models that would serve not just Indian citizens, but the Global South which is looking at Indian digital health capabilities to show the right model for healthcare delivery," said Tandon.
India’s ePharmacy industry has grown significantly, achieving an annual growth rate of around 20% over the past five years. Currently valued at approximately $1.4 billion, the market still represents only around 5% of the overall retail pharmacy sector in the form of organized ePharmacy. Key companies in this space include Tata 1mg, PharmEasy, Netmeds, Apollo 24/7, MedPlus, Flipkart Health+, and Amazon Pharmacy.
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