Reliance Industries recently bought a majority stake in Netmeds, and the Tata group is reportedly in talks to pick up a majority stake in e-pharma company 1mg.

Amazon in talks to investm 100 million in Apollo PharmacyImage Credit:
Atom E-pharmacy Thursday, December 10, 2020 - 13:30

India’s e-pharmacy space has seen significant consolidation in the last year, with many large conglomerates foraying into the space. Latest is global e-commerce giant Amazon that is reportedly eyeing a potential $100 million investment in Apollo Pharmacy, as per an Economic Times report. Amazon will be taking on Reliance Industries and the Tata group. It is pertinent to note that Amazon already runs a medicine delivery service ‘Amazon Pharmacy’

Mukesh Ambani-led Reliance Industries recently bought a majority stake in Netmeds, an online pharmacy platform, while the Tata group is reportedly in talks to pick up a majority stake in another online pharmacy company 1mg.

This deal would give Amazon access to Apollo’s front-end business with over 3,700 pharmacy stores that can be used to deliver medicines home. Apollo is also reportedly looking to add 350 more pharmacy stores every year, the company said at the end of FY20.

Amazon, however, has already forayed into e-pharmacy with Amazon Pharmacy, which was rolled out in Bengaluru in August 2020 in partnership with Cloudtail, which has its own pharmacy license. Amazon has a 24% stake in Cloudtail.

“As a part of our commitment to fulfill the needs of customers, we are launching Amazon Pharmacy in Bangalore allowing customers to order prescription based medication in addition to over-the-counter medicines, basic health devices and Ayurveda medication from certified sellers. This is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home,” an Amazon spokesperson said at the time of launch.

Sources told ET that Amazon is looking to pick up a minority stake in Apollo Pharmacy as it did with other retail deals in India in the past. The idea is reportedly to have an omnichannel model through the deal where it can pick up products from Apollo’s stores and deliver it to customers.

Amazon is eyeing India’s e-pharmacy space at a time when the industry has been seeing a lot of activity. Apart from India’s largest conglomerates foraying into this space, startups in the space also saw consolidation with Pharmeasy acquiring rival Medlife earlier this year.

Amazon’s India rival Flipkart too, partnered with 1mg to deliver prescription medicines on its platform.

However, these deals come at a time when rules governing this sector are yet to be notified. The All India Organization of Chemists and Druggists (AIOCD) has been opposing deals in the e-pharmacy space. They have alleged that these deals and partnerships are against the law.

It wrote to Mukesh Ambani during the Netmeds acquisition alleging e-pharmacies are illegal under the Drugs and Cosmetics Act. It had also written to Amazon CEO Jeff Bezos and India head Amit Agarwal and said that e-pharmacies are not recognised under the Act. It also wrote to Walmart and Flipkart alleging the same.

AIOCD says that the sale of drugs online is still under consideration with the Union government and that the home delivery of medicines was not allowed under the Act until the pandemic. Post the pandemic as well, it was allowed only for neighbourhood shops as per the government notification.