Reliance Industries' acquisition of a majority stake in Netmeds has put it in direct competition with e-commerce behemoth Amazon in the e-pharmacy segment.
Reliance Industries Ltd. (RIL) announced on August 18 that its retail arm, Reliance Retail, acquired a 60 per cent stake in Vitalic Health and subsidiaries, collectively known as Netmeds, for Rs 620 crore.
The deal also values the online medical store at around Rs 1,000 crore.
Incorporated in 2015 by Pradeep Dadha, Netmeds presently retails medicines, baby care, and personal items, as well as offers doctor bookings and diagnostics on its web portal and app. The e-pharmacy covers more than 20,000 pin codes across India.
Netmeds is promoted by Dadha Pharma, a Chennai-based company. Dadha family's pharmaceutical experience dates back to 1914 when they first ventured into the pharma retailing business and subsequently into drug manufacturing in 1972.
The RIL-Netmeds deal comes a week after Amazon made its foray into India's online pharmacy market by launching 'Amazon pharmacy' in Bengaluru and subsequently diversifying in other cities. Meanwhile, Reliance Retail will scale up its grocery and pharmacy platforms through its SMART Point outlets in several cities and neighbourhoods as part of its omni-channel play.
With this, e-pharmacies are set to become the next big domain with billionaires Mukesh Ambani and Jeff Bezos branching out in the segment, aspiring to harness a fast-growing market fuelled by a larger base of smartphone users.
The COVID-19 pandemic has only added to the appeal of the e-pharmacy segment, with people preferring to stay at home and order products online.
With the Amazon and RIL's entry, the e-pharmacy segment will get consolidated, aided by the government's renewed focus on healthcare and schemes like National Digital Health Mission and Ayushman Bharat.
The Indian e-pharma industry is estimated to be around $1.2 billion, as mentioned in a February report by RedSeer. It is expected to reach up to $16 billion in five years.