The acquisition of Netmeds could see Reliance Industries adopting the strategy it is pursuing in JioMart where it is bringing in local grocers under a single online platform.
Reliance had on August 18 announced the acquisition of a majority stake in Vitalic Health Pvt Ltd and its subsidiaries for Rs 620 crore in an all-cash deal. The investment represented around 60 per cent holding in the equity share capital of Vitalic and 100 per cent direct equity ownership of Vitalic’s subsidiaries that include Tresara Health Pvt Ltd, Netmeds Market Place Ltd and Dadha Pharma Distribution Pvt Ltd.
While Vitalic and its arms are in pharma distribution, sales and business support services, its subsidiary runs the online pharmacy platform — Netmeds — which enables people to connect with pharmacists and step up delivery of medicines and health products.
The acquisition done by Reliance Retail is expected to enhance its ability to provide good quality and affordable health care products and services apart from strengthening its digital commerce proposition to include the most daily essential needs of consumers, analysts said.
Reliance Retail’s entry will lock it in direct competition with Jeff Bezos-led Amazon and five others which are in the e-pharmacy business. Amazon Pharmacy was recently launched in Bangalore, with plans to scale it up to other cities in the future.
It will enable customers to order prescription-based medication, in addition to over-the-counter medicines, basic health devices and Ayurveda medication from certified
sellers.
However, the top body of chemists and druggists — the All India Organisation of Chemists and Druggists (AICOD) — has written to Bezos saying that e-pharmacies are “illegal” and not allowed under the country’s laws.
While Reliance has not announced its plans, analysts said it may follow the same approach as in online grocery by bringing in standalone chemists under its platform in the coming months. Thus, medicines could also be one of the product category apart from electronics, apparel and footwear in JioMart.
“In the medium-term, it is possible that RIL may go for the aggregator model for the pharmacy stores (similar to kirana format in grocery) which could further expand the reach for RIL,” analysts at Credit Suisse said in a note.
