E-commerce giant Amazon has rolled out an online pharmacy service, starting with Bengaluru, at a time when the rest of the startups in the sector are folding into larger rivals and being acquired.
“As a part of our commitment to fulfill the needs of customers, we are launching Amazon Pharmacy in Bangalore allowing customers to order prescription based medication in addition to over-the-counter medicines, basic health devices and Ayurveda medication from certified sellers.This is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home, " an Amazon spokesperson said in response to Moneycontrol’s queries.
Online news portal Entrackr first reported the development.
Amazon’s plans to deliver medicines are a natural extension of its wide logistics network and customer reach. In the US, Amazon acquired online pharmacy PillPack to deliver medicines to its customers, in a $750 million deal in 2018.
Amazon India could explore similar acquisitions of e-pharmacy startups as well, although Moneycontrol could not independently ascertain whether Amazon has held discussions with players in the space.
Except its comment, Amazon did not respond to Moneycontrol’s queries.
Online pharmacies have seen orders spike as much as 50 percent in the last three months during the COVID-19 pandemic as people have stayed at home due to social distancing. The surge in orders has improved their economics somewhat and reduced their customer acquisition cost.
Despite this, most e-pharmacy startups have been eyeing merging with larger rivals. Moneycontrol first reported on July 20 that PharmEasy, the market leader in the space, is in talks to acquire Medlife
for about $200 million. Reliance Industries Limited (RIL), India’s largest company is in talks to acquire Netmeds for $80-100 million. 1mg, another player in the space, backed by investors such as Sequoia,
has also held conversations with these players, according to media reports.
According to experts, the pandemic has brought some new customers online, and perhaps permanently, to ordering from e-pharmacies. The widened market could be an opportunity for Amazon.
It remains to be seen how soon will Amazon roll out the service to the rest of the country, and whether it will internally prioritize this business as an important vertical and engine of growth.
Amazon also rolled out online food delivery in Bengaluru in May, putting it at loggerheads with incumbents Swiggy and Zomato, but has not scaled the service to other parts of India.