$2.7bn by 2023, big players enter race for e-pharma pie
FROM AMAZON to Reliance, major players have entered the race to scale up, consolidate and corner a share of the online pharmacy market, which is expected to swell seven-fold to $2.7 billion by 2023.
In just the last one week, with Covid numbers yet to flatten across the world, the market saw two significant merger and acquisition deals — Reliance Retail picking up majority stake in Chennai-based e-pharmacy
Netmeds, and PharmEasy moving to merge with smaller rival Medlife. And the launch of e-commerce giant Amazon’s online drug delivery services.
At the same time, the Centre announced the
National Digital Health Mission (NDHM), which envisages a digital health ecosystem on the lines of the Unified Payments Interface in the online payment space.
On Tuesday, Reliance Industries announced that its arm, Reliance Retail Ventures Ltd, has acquired a majority equity stake in Vitalic Health Pvt Ltd, the parent company of Netmeds, and its subsidiaries for a cash consideration of around Rs 620 crore. This investment represents 60 per cent holding in the equity capital of Vitalic and 100 per cent direct equity ownership of its subsidiaries, Tresara Health Private Ltd, Netmeds Market Place Ltd and Dadha Pharma Distribution Pvt Ltd.
Further, documents filed with the Competition Commission of India (CCI) show that online pharmacies, PharmEasy and Medlife, have requested a merger.
Last week, Amazon said it was starting Amazon Pharmacy in Bengaluru to let its customers order prescription-based medication in addition to over-the-counter medicine, basic health devices and Ayurveda medication from certified sellers.
While the NDHM may prove to be a shot in the arm for the broader online healthcare market, once it’s fully rolled out, experts are of the view that inherent challenges faced by physical pharmacies have given a chance for online counterparts to flourish. However, to challenge the pharmacies, which account for nearly 85 per cent of India’s total pharmaceutical sales, the online versions will need to scale up, and this is where consolidation comes into play.
“In smalltown India, the network of chemists is still very primitive. Further, the full range of products that is needed today is available with a very few pharmacies. These include over-the-counter drugs, localised prescription medicines, nutraceuticals, health supplements, alternative medicine products, basic medical devices, etc. Digital pharmacies try to solve these problems from a customer’s point of view. All of these things mean that the existing pharmacy network is poised for disruption,” said Arvind Singhal, chairman, Technopak, a management consultancy.
“Like every other e-commerce business, you need a significant amount of investment to build the delivery infrastructure. This is where consolidation is being forced by the investors,” he said.
According to a report by EY, e-pharma presents a total addressable market size of around $9.3 billion as of 2019 and is estimated to grow at a compounded annual growth rate of 18.1 per cent to reach $18.1 billion by 2023, when the actual market size will reach $2.7 billion.
The growth, it said, will be driven by an increase in the targetable acute medicine market as a result of more efficient last-mile delivery through collaboration with local pharmacies and partnership with hyperlocal delivery companies resulting in a shorter delivery time.
Further, even as a delay in notification of draft e-pharmacy rules and rigorous opposition from offline chemists have kept a check on investments in the sector, existing companies have flourished amid the lack of a strict regulatory environment.
According to the EY report, Indian regulations for the e-pharmacy segment were the least strict, when compared to the US, Europe and
China.
Further, unlike the US, where the top three pharmaceutical distributors have a 90 per cent share in the market, India’s is a fragmented market with over 8 lakh pharmacies — this gives online pharmacies an opportunity to capture their space without opposing large traditional retailers.
Currently, companies in the Indian e-pharmacy space mainly operate three business models — marketplace, inventory-led hybrid (offline/online) and franchise-led hybrid (offline/online) — depending on the way the supply chain is structured.
In addition to companies like Netmeds, Medlife and PharmEasy, other players in the segment include online healthcare startups such as 1mg, Practo, Myra as well as traditional chemists such as Apollo Pharmacy.
In just the last one week, with Covid numbers yet to flatten across the world, the market saw two significant merger and acquisition deals — Reliance Retail picking up majority stake in Chennai-based e-pharmacy Netmeds, and PharmEasy moving to merge with smaller rival Medlife. And the launch of...
indianexpress.com
iPhone 12 will be Made in India as Apple supplier hires 10,000 local employees for production
Wistron, Apple’s Taiwanese manufacturer, has started the hiring processes for the local production of iPhone 12 components in India. The Made in India iPhone 12 will be out by the middle of next year, a report by Business Standard stated. Wistron has planned to invest over 2,900 crores in India to ramp up the efforts for the local production of iPhone.
The setup for iPhone production at the Narasapura plant is located in Kolar district, about 70 km from Bengaluru, New Indian Express noted. Wistron was allotted 43 acres by the Karnataka Industrial Areas Development Board (KIADB) when it announced its plans for production in 2017. As per the report, the manufacturing company at Kolar is supposed to generate 10,000 jobs. Wistron has already hired 2,000 locals.
Sources familiar with the matter told the New Indian Express that the hiring will take place in a phased manner. As of now, walk-in interviews of diploma graduates are being conducted. More interviews with experienced people, as well as freshers, will be held soon. Wistron has started trial production and by September it will start the commercial production of iPhones in Kolar.
It is not clear which product will be assembled in the manufacturing unit. However, reports in the past have stated that Wistron’s manufacturing units at its new plant in southern India will assemble printed circuit boards (PCBs) for iPhones.
PCB is a bed for key components such as processors, memory, and wireless chipsets that are the heart of an electronic device. Once assembled or populated with components, PCBs account for about half the cost of a smartphone, Reuters noted.
The local production of iPhones will save on the 22 per cent import taxes and create new job opportunities for the locals in India. The iPhone 12 will be the seventh iPhone model to be manufactured in India, giving a boost to the government's 'Aatmanirbhar Bharat' initiative. Apple has so far produced a number of iPhone models locally including the iPhone SE (first generation), iPhone 6S, iPhone 7, iPhone XR, and iPhone 11. The local production of iPhone SE (second generation) is also slated to begin shortly.
Last month, Wistron’s rival Foxconn started producing iPhone 11 at its Chennai plant. It was the first time Apple manufactured a top-of-the-line model in India. After beginning the production of iPhone 11 in India, Apple is looking at the local production of iPhone 12 and assembly of iPhone SE (second generation) models. iPhone 12 is slated to release sometime in October.
Apple, which still makes most of its iPhones in China, has gradually moved to expand production in Washington and Beijing as per a report by Reuters.
As per reports, Wistron, Apple’s Taiwanese manufacturer will hire 10,000 local employees for the production of iPhone 12 in India.
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