While the law for selling medicines online is still unclear, India’s top three online pharmacies — Medlife, NetMeds and 1MG — grew sales three-fold in the just concluded fiscal year, Economic Times reported.
Medlife said its sales grew to nearly Rs 700 crore in FY19, and is aiming Rs 1,400-1,500 crore in the current fiscal. The company clocked Rs 90 crore sales in March alone. NetMeds and 1MG declined to share financials, but told ET they had seen nearly threefold growth in sales in FY19.
“In terms of our pharmacy business, tier-2 and tier-3 towns have begun contributing to sales in a significant way now. Growth outside metros is way faster and is helping us expand our business. Metros still drive 70% of our sales, but next year it could be a 60:40 split between metros and smaller towns,” said Tushar Kumar, CEO, Medlife.
A RedSeer Consulting report said that India’s top four e-pharmacies including Medlife, NetMeds, 1MG and PharmEasy contributed 90% to online drug sales. The average order value has gone up to Rs 1,200 with customers ordering on an average 10 times per year. The firms continue to burn capital as competition forces them to offer discounts to customers.
Medlife, which is backed by the promoter group of a large pharma company, has so far invested a little over USD 75 million into the company. While PharmEasy has raised USD 138 million, its competitors 1MG and NetMeds have raised around USD 88 million and USD 100 million, respectively.
While these companies are able to raise money, the e-pharmacy industry is waiting for the Indian government to come up with regulations so they could operate without getting slowed down by regulatory pressures. In December last year, Delhi High Court, banned online pharmacy stores from selling medicines and asked central government to implement the order. The order came months after the central government accepted suggestions from public on forming rules for e-pharmacies.
The draft rules for e-pharmacy allows online sales of medicines except psychotropic drugs, tranquilisers and narcotics. Other rules mandate online pharmacy companies to keep the patient details confidential and be open to inspection every two years by a team of central government officers.