Parichit Mainra
The times they are a-changin’
It does not take a philosopher to understand the relevance of the seemingly paradoxical statement – change being the only constant. In fact, there is no need to go too far into the past. It was not too long ago when online shopping was unheard of. Those who are entwined in the web have tasted a different life – of convenience and informative. From groceries to vegetables and clothes to furniture, just about everything is a click away. Now, add medicines to the list.
The trend of shopping online has led to a sharp rise in the number of niche e-commerce start-ups. Though a late bloomer, the e-pharmacy sector has seen unprecedented growth in last few years. It has taken people a while to believe that the faceless supplier is just as trustworthy as the pharmacist down the road. Slowly, but surely, things are turning around for this sector.
The potential of access
Most of India’s population resides in Tier II cities and rural areas, where, let alone medicines, access to even good healthcare is a rarity. Indian entrepreneurs are gearing up to fill this vacuum in possibly one of the largest medicare markets in the world and getting immediate results. “We already have presence in Tier II and Tier III cities and we are getting a lot of traction from there. We have seen double-digit growth in Tier II and Tier III cities and rural markets. [The online pharmacy] 1 mg has also tied up with the state-run Common Service Centres as part of an effort to extend healthcare services to rural areas. People from rural areas can now order over-the-counter products and medicines without any hassle,” Tanmay Saksena, COO of 1 mg, said.
India is the world’s third largest pharmaceutical market by volume. It is valued at around $28 billion but is pegged to grow to reach $55 billion by 2020. E-pharmacies will make up about one per cent of the business, according to a report by the Federation of Indian Chambers of Commerce and Industry. While emphasising that this is a conservative estimate, Saksena said, ”We are expecting exponential growth in the healthcare market, supported by broader and deeper penetration of the internet and smartphones. With an increasingly high number of Indians gaining access to the digital platform, the digital technology is going to be the next big thing in the healthcare sector.”
From manufacturers to customers
The government cleared its policy position on e-pharmacies with Drugs (Sale and Distribution) Rules in 2017 and tried to regulate this market. The policy gave fresh impetus to the industry. This new policy can be read as the result of pressure exerted by the financial muscle of venture capitalists which had started investing in this space. Whatever the impulse of the government to usher policy clarity, brick-and-mortar pharmacies, doctors and pharmaceutical companies are closely watching how legitimising e-pharmacies will impact their business.
Through advance computing, deep-learning algorithms and artificial intelligence, a customer searches for a drug online. They are spoilt for choices as generic drugs are manufactured by many companies at different prices, and now the customer can choose what they want. This might worry drug manufacturers, as they may lose customers because India is a price-sensitive market.
But, they also understand that change is the only constant in a market like India. Yuvraj Chopra, a senior director in global pharmaceutical giant Actavis, said, “There is no scope but to adapt to the new changes. The use of artificial intelligence and big data by e-pharmacies will help manufacturers focus on therapies which are more suitable for particular segment of the population.
“Manufacturers will produce products which are in high demand, thus reducing the price of production, and this reduction will be passed to the consumers.”
Price is definitely a clincher. The generic antibiotic ofloxacin, used in the treatment of bacterial infections, can be easily procured online within a price range of ₹5.9 per tablet to ₹19.5 per tablet depending on the brand purchased. The knowledge of this huge price difference is a blessing for consumers.
Rohit Arora, a 29-year-old IT professional from Gurugram, said, “I usually do not purchase medicines online, because I fear that the medicines may not be dispensed as prescribed or may be past the expiry date. But, after uploading my prescription, I received a call from a doctor who checked with me if the medicines that I ordered were correct. Also, they were way cheaper than what was available in the market.”
With an increasing number of people gravitating towards online stores, there is enough reason to worry for the mom-and-pop pharmacy stores. But, they have not lost hope. Indians value the relations they have with their customers, and the latter trust them. Krishan Monga, proprietor of Jagdamba Medicos of Faridabad, said, “We have built a relationship with consumers over the years. Our customers value this relationship. People of this country are not robots and love human interaction, on top which they value our advice. After all, we have been in the business for over 30 years, while e-pharmacies are very new players. We are not that concerned, as we offer home delivery of medicines.”
The way ahead
Rajiv Singhal, general secretary of the All India Organisation of Chemist and Druggist (AIOCD), said that to compete with their online rivals, traditional pharmacies are adapting new technologies. In the next two to three years, five lakh of AIOCD’s 8.5 lakh members will be using computers for business. Singhal added, “We have been serving people of the country for decades, and we do not believe that e-pharmacies will be a threat. An e-pharmacist cannot sell Schedule H1 drugs, and if they are doing it, then they are doing so illegally.”
Changing market dynamics govern traditional markets. The pharmacy business now has to climb the mountain of conflict as e-commerce giants are also looking at providing online pharmacy services. Backed by imperishable funding, these giants are capable of bleeding any business dry.
