E-pharmacies: what’s new and where the sector could head
“Most of the online pharmacies… have been rechristened as an e-health platform”, the specialist explained, offering services beyond their traditional remit. Regarding their operational strategy, they noted that “most of them have gone into backward integration through a wholesale alignment, whether through strategic investments or through a buyout”.
In addition to the aforementioned inventory-led approach, there has also been a massive onset of a “hybrid” model in the past year, which also employs partnerships with local pharmacies. This not only boosts presence in local markets, but also allows for temperature-specific products to be shipped. The specialist detailed how GMV, EBITDA and profits vary across these two models.
Although this is “still an evolving space for most of the players”, e-pharmacies’ four main revenue streams are e-diagnostics, e-consultation, private-label medicine and pharmacy. “Then e-consultation is another thing which has emerged very well over the last, say, seven to eight months… I’d say COVID was a boon for that segment.” The development of these four streams over the past two years, margins and future potential were also outlined.
Metrics relating to consumers were also on the agenda, including customer acquisition costs and customer lifetime value, as well as how average order value has trended this year.
To access all the human insights from Third Bridge Forum’s Indian online pharmacies – unit economics & profitability analysis Interview, click here to view the full transcript.
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