e-Pharmacy Market

Global Industry Analysis (2018 – 2021) – Growth Trends and Market Forecast (2022 – 2026)

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Increasing e-Commerce Base and Communication Technology Advancements Portend Well for Global e-Pharmacy Market

Technological diffusion and adoption have been rapidly improving patient outcomes over the past decade. e-Pharmacy is completely transforming the way medicines have been delivered, offering an efficient alternative to the traditional distribution channel that involves physical pharmacy stores. The global e-pharmacy market is expected to flourish during the forecast period 2022 - 2026 as it promotes optimal distribution strategy of medicinal products in terms of time, and cost. The growing reach of e-commerce in developed, and developing economies has enabled e-pharmacy companies to tap a wider user base. Younger population is mainly reliant on e-commerce portals for personal care, and consumer health goods. e-Pharmacy is more likely to experience higher adoption across healthcare systems, thereby boosting the global e-pharmacy market in the near future.

Moreover, heightening demand for telehealth, and e-prescription technology are translating into wider adoption of e-pharmacy worldwide. e-Pharmacy is a technological advancement that is generating huge demand for access models that assist consumers, and patients with the convenience of consumer health, and medicinal product delivery to their doorstep. It also creates awareness among buyers regarding the appropriate medicinal regimen.

Challenges Thrown by COVID-19 Pandemic Underscore Significance of e-Pharmacy

The COVID-19 outbreak and all the challenges that it has brought in to the world have imposed sharp changes in consumer perceptions. As a result, e-pharmacies that were earlier facing much reluctance are now increasingly being viewed as a safe, and sustainable alternative to conventional brick and mortar pharmacies. The strong performance of online pharmacies in countries where pandemic has hit hard is unprecedented, especially in economies like India. Although medical stores are categorised under essential services, e-pharmacies emerged as one of the leading beneficiaries of the pandemic-induced lockdown in India. As per The Federation of Indian Chambers of Commerce & Industry (FICCI) report on e-pharmacies in India, the COVID-19 pandemic has given major push to online pharmacies to thrive – getting patients from across 22,000+ pin codes the access to medicines during lockdown via their strong supply chain. The channel had ~3 million users before the pandemic; more than 6 million new consumers have been on boarded since then.

Industry Trends Leading the Future

Deepening penetration of cloud technology in the medical world, and expanse of telemedicine will have a direct impact on the industry dynamics. Next-gen technologies like virtual reality (VR), Artificial Intelligence (AI), and machine learning (ML) will further transform wellness experiences. The most important factors are the people’s awareness, knowledge, and self-management skills. The advent of the Internet of Things (IoT) and other next-generation technologies has worked to the advantage of the healthcare industry, delivering an array of healthcare solutions. The global e-pharmacy market is observing a progressive growth trail on the back of this. Digital proliferation, smartphone penetration, connected/smart devices, smart sensors, and machine learning are the salient aspects that lunge smart logistics.

Online-offline pharmacy collaboration is a long-term growth lever for e-pharmacy market. As online business is only a platform to book orders, ultimately licensed premises of their own, or in collaboration with existing brick and mortar shops can distribute medicines. Using technology and access to inventory of multiple stores simultaneously, e-pharmacies can aggregate supplies of essential medicines and make them available to consumers across geographies.

Growing Digitalisation to Accelerate e-Pharmacy Expansion in Asia Pacific

Developed countries from North America, and Europe are at the forefront of e-pharmacy market as they have a clear advantage of a sizeable, and relatively aware customer base with technology access. Moreover, the US, Canada, and most of the European Union (EU) countries allow online sales of at least some non-Rx products. However, e-Pharmacy has immense incremental opportunity in LMICs working upon last mile delivery access. This will significantly help the remote population where there is limited presence of retail pharmacy. Moreover, digital payments, and growing presence of online pharmacies may bring in more transparency in the pharmacy market, thereby making medicines more affordable.

Governments of Asian countries are providing a strong breeding ground for e-pharmacies to flourish; Indian government has especially taken initiatives like Jan Aushadhi Programme, and Common Services Center (CSC) to enable digital support to rural areas. In fast-developing economies like India, a significant market shift might take time as offline channel is well-established, and effectively regulated. However, experts suggest market penetration to reach to ~25-30% by 2025, up from the current 5-6%.

Legal and Logistical Challenges Likely to Hamper Pace of e-Pharmacy Market Growth

Many parts of the world still lack any specific regulations governing e-pharmacies. For instance, all online pharmacies in India are operating as per the Information Technology Act, 2000 (IT Act); Pharmacy Act, 1948; Drugs and Cosmetics Rule, 1945 (D&C Rule), and the Drugs and Cosmetics Act, 1940 (D&C Act). Consumers are also reluctant to buy drugs online even in many developed countries as medicines should only be taken under medical supervision. The middle-and-low-income countries are struggling with logistical challenges. In India, the absence of barcoding system at manufacturers’ level is creating a chaos in the supply chain, and lack of bulk packaging system leaves lesser scope for automation. Another serious challenge is the lack of cold chain infrastructure, making it extremely costly to serve rural areas.

Entry of Deep Pocket Players and M&A Highlight Competition in Global e-Pharmacy Market

In May 2021, an Indian online pharmacy startup, PharmEasy announced its merger with a competitor Medlifea amid an increased activity in the online pharmacy space. The flourishing e-pharmacy landscape is attracting e-commerce biggies such as Reliance, Amazon, and Flipkart since last year. Earlier in 2020, Reliance Retail bought a majority stake in online pharmacy NetMeds. During the same time, online Amazon pharmacy was launched in India. In September, 2020, Flipkart collaborated with online pharmacy brand 1mg, integrating the latter’s platform into its Android app.

Amazon Pharmacy, DocMorris, CVS Health Corporation, Express Script Holding Company, Walgreen Company, Optum Rx Inc., Giant Eagle Inc., Walmart Stores Inc., Rowland Pharmacy, The Kroger Company, PhramEasy, NetMeds, and 1mg are some of the most prominent players actively participating in the global e-pharmacy market landscape.

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