Online-pharmacies have been gaining a strong foothold in India for the past couple of years. Days after e-commerce giant Amazon.com Inc launched an online drug sales service in India, comes news that Indian conglomerate Reliance Industries Ltd has acquired a majority stake in online pharmacy Netmeds for about 6.2 billion rupees ($83.08 million) in cash.
According to a report in reuters, “The oil-to-telecoms conglomerate said (here) late on Tuesday its investment represents about 60% holding in Vitalic Health Pvt. Ltd. and 100% direct ownership of its subsidiaries.”
Vitalic and its subsidiaries, collectively known as Netmeds, were incorporated in 2015. Netmeds is a licensed e-pharma portal that offers authenticated prescription and over the counter (OTC) medicine along with other health products in India.
The COVID-19 crisis, which spurred a wave of online shopping, has led to increased competition between Amazon, Walmart-owned Flipkart, Reliance’s upstart online grocery service, JioMart and a range of other smaller players for a share in the world’s second most populous country.
The Online Pharmacy setment in India has been experiencing large-scale growth for the past few years (Review of online Pharmacies and drugstores in India). Consumers on platforms like Netmeds get access to more than 70,000 prescription drugs for chronic and recurring ailments as well as enhanced lifestyle drugs and thousands of non-prescription goods for wellness, health and personal care.
Pradeep Dadha, founder and chief executive of Netmeds, said in a statement:
“It is indeed a proud moment for ‘Netmeds’ to join Reliance family and work together to make quality healthcare affordable and accessible to every Indian. With the combined strength of the group’s digital, retail and tech platforms, we will strive to create more value for everyone in the ecosystem, while providing a superior Omni Channel experience to consumers”
Terms of the deal were not clear but according to a recent tweet by an industry analyst explains:
Note that they acquire FULL ownership of Netmeds. And also 60% of the parent, but an option to buy out 100% in four more years. pic.twitter.com/mZrc7PKcwr
— Deepak Shenoy (@deepakshenoy) August 18, 2020
The Indian Government does not have clear regulations for online sales of drugs and medicines, which presents an opportunity for conglomerates like Reliance Retail and Amazon to carve out a larger share of the market opportunity.