Indian e-pharma market expected to reach $2.7B by 2023: EY
A report by EY on ‘E-pharma: Delivering Healthier Outcomes’ states that e-pharma players are expected to reach a combined market size of $2.7 billion by 2023 from the current size of $360 million in the next four years.
The report added that factors such as increasing internet penetration and smartphone ownership along with the ease of ordering medications through an ecommerce platform, increase in chronic diseases, rising per capita income, and resultant healthcare spend are the key growth drivers for the e-pharma industry.
Ankur Pahwa, Partner and National Leader – Ecommerce and Consumer Internet, EY India, said,
“Today, India is adapting to ecommerce rapidly with mobile-first consumer behavior and improving digital payments infrastructure. Online pharmacies, one of the verticals of ecommerce, are starting to gain momentum and have tremendous growth potential. The e-pharmacy market is expected to grow at a substantial pace in the next four years on the back of the renewed focus of the government and households on healthcare spending and the faster adoption of internet among users. It will not only create value for customers but also generate a host of B2B opportunities going forward.”
Nearly 35 percent of the domestic pharmaceutical market relates to chronic medications and the remaining 65 percent to acute medicines. Out of this, e-pharmacies are expected to target 85 percent of the chronic market and 40 percent of the acute medicine market (up from 25 percent in 2019) by 2023.
An emerging market, e-pharma has with large opportunities that are gaining interest from some key players in ecommerce, consumer tech, fintech and hyperlocal space, and from investors, both in India and globally.
According to EY analysis, some of the e-pharma startups that raised funding in the last two years include Medlife ($47 million), Practo ($55 million), NetMeds ($49 million), 91 Streets Media ($36 million), 1MG Technologies ($15 million), and Corner Store ($11 million).
Ankur said, “In the near future, global ecommerce players will use their international experience and local omnichannel presence to make inroads into the e-pharma segment. Fintech and healthtech players can look to expand offerings by getting into the segment.
He added that hyperlocal players like foodtech, grocery, and delivery-only companies can also add this segment to their existing portfolio to build efficiency on the delivery side.
"Even Indian players with deep omnichannel presence especially in emerging tier 2/3 towns with growing healthcare spends can add this vertical stream and can make a deep impact in the e-pharma sector,” said Ankur.