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Online pharmacy marketplace NetMeds is looking to set up offline stores to cater to tier II, III and IV markets.
According to Pradeep Dadha, founder and CEO, a pilot project is under way to ‘understand and evaluate’ the offline model. “In three months we should be able to come up with the specifics of our foray,” he told BusinessLine in a telephonic conversation.
NetMeds sells prescription and over-the-counter drugs, medical devices as well as other health and personal care products.
While there are close to 8.5 lakh independent pharmacy retailers in India, nearly 4.5 lakh are concentrated in tier I and II cities, he said, highlighting the opportunity in smaller markets.
Focus on warehousing
NetMeds is also looking to strengthen its technology platform and warehousing facility to boost online sales. The company currently has 13 warehouses.
“We raised close to $35 million recently and a significant portion of this would go towards creating awareness about e-pharmacies among consumers and strengthening our technology and warehousing facility,” said Dadha.
The company has served close to 2 million customers and witnessed 26-27 per cent growth on a month-on-month basis, he added.
Going forward, the company plans to tie up with several manufacturers to provide medicines at ‘affordable rates’. Typically, a consumer lands a 15-20 per cent discount on medicines bought through e-pharmacies.
Growth potential
The Indian e-pharmacy industry, estimated to be close to $142 million (approximately ₹1,000 crore), currently accounts for only about 1 per cent of the total pharmaceutical market, which is pegged at around ₹1.25 lakh crore.
The e-pharmacy market, which was at a nascent stage due to lack of awareness among consumers, has gained traction and has been witnessing a significant pace of growth in the last two-to-three years.
“Given the way the retail landscape in the country is shaping up, we expect e-pharmacies to account for nearly 15 per cent of the total industry in three-five years. This will be supported by improving awareness, accessibility and better affordability,” said Dadha.
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