Reliance has bought a majority stake in online pharmacy Netmeds for $83 million. The acquisition has brought the Indian conglomerate in direct competition with Amazon online pharmacy market in India. Amazon launched a similar healthcare service last week.
Reliance has been fighting Amazon and Walmart-backed Flipkart for a share of the India’s fast-growing e-commerce market.
Mukesh Ambani’s daughter Isha, director of Reliance’s retail subsidiary RRVL, says this acquisition will expand Reliance’s “digital commerce proposition to include most daily essential needs of consumers”.
“We are impressed by Netmeds’ journey to build a nationwide digital franchise in such a short time and are confident of accelerating it with our investment and partnership,” Isha Ambani added.
As India is struggling to control the spread of Covid-19, a huge demand has been created in healthcare startups.
Reliance has acquired 60 per cent stake in Vitalic Health Pvt. Ltd. and 100 per cent direct ownership of its subsidiaries, collectively known as Netmeds.
Through its website and app, Netmeds serves more than five million customers across India. Services provided by it include prescription order and over-the-counter medicines as well as health supplements.
On August 14, Amazon Pharmacy made its debute in India. The internet pharmacy has been launched by Amazon as the online drugs business has been given a major boost during the coronavirus pandemic.
The Amazon Pharmacy service offers prescription, over-the-counter and traditional Ayurveda medication as well as basic health devices.
According to a forecast by the consulting agency RedSeer, by 2025, size of India’s digital health market will be $25 billion. The current size of the market is is only $4.5 billion.
India is yet to finalize regulations for online drug sales, or e-pharmacies, but growth of online sellers such as Medlife, Netmeds, Temasek-backed PharmEasy and Sequoia Capital-backed 1mg has threatened traditional drug stores.
Many trader groups are against e-pharmacies, saying they would lead to sale of medicines without proper verification.