The ecommerce major is looking to take on Reliance Retail, Tata Group and Flipkart
The deal may give Amazon the exclusive rights to list Apollo Pharmacy on its platform
Amazon launched its online pharmacy service ‘Amazon Pharmacy’ in August 2020
In a bid to boost its epharmacy business, Amazon is looking to invest about $100 Mn (INR 737 Cr) in Apollo Pharmacy to take on Reliance Retail, Tata Group, Flipkart and all other companies operating in online medicines.
With this, the ecommerce giant will gain access to Apollo’s front-end pharmacy business with over 3,700 outlets. This retail store network can effectively be used as pick up locations for medicines and delivering it to the customers.
According to sources aware of the development, PricewaterhouseCoopers (PwC) has completed the due diligence. Amazon could now model the potential investment on similar lines to its earlier stake purchases in retail chains such as Future Coupons and Shoppers Stop, under which it not only acquired minority stake but also won exclusive rights to list products from the retailers on its platform.
If Amazon gets the exclusive rights, Dunzo may be at a losing end as it follows the same omnichannel model, which Amazon is looking at. The Google-backed company too sources its over-the-counter medicines from Apollo Pharmacies and delivers them to the customers.
Amazon declined to comment on the report by ET, while Apollo Pharmacy did not respond to the queries shared with them.
Amazon launched its online pharmacy service ‘Amazon Pharmacy’ in August 2020, starting off the journey from Bengaluru. The same week, Reliance Retail formally entered the segment by acquiring 60% equity stake in epharmacy startup Netmeds for INR 620 Cr ($83 Mn).
Flipkart too is looking to enter the segment by partnering with an epharmacy startup, reports suggest that it may partner with 1mg. The ecommerce company has already expanded its allopathy and homeopathy offerings in a bid to offer more healthcare services and over-the-counter drugs to its customer base.
Meanwhile, Tata Group may acquire a majority stake in Gurugram-based startup 1mg to enter the epharmacy segment and expand its offerings. The sector not only witnessed the entry of their major enterprises, but also the merger of PharmEasy and Medlife.
Between 2014 to 2019, out of the total $2 Bn invested in Indian healthtech startups, 22.4% (462 Mn out of $2 Bn) was poured into online pharmacy startups such as Medlife, 1Mg, Pharmeasy and Netmeds, who are also the top players in the sector before the entry of these enterprises, according to ‘India’s Healthtech Landscape In A Post-Covid-19 World’ report by Inc42 Plus.