Tata-owned 1mg is set to open its first physical store in Gurugram next month, while rival PharmEasy The franchise has started expanding into the offline channel through the store, people informed about the matter. He added that both the companies have taken different approaches to going offline and it will be interesting to see how it pans out.
This will put both 1mg and PharmEasy, which are known for their online presence, in direct competition with established offline brands, such as Apollo Pharmacy And medplus,
“1mg will open about a dozen stores in the next three to four months. They will see how it works out, but they want to expand it across India with around 500 stores in the next three years, if everything goes according to plan,” said a person familiar with the matter.
PharmEasy is offering its name and branding to pharmacy retailers to set up these stores, for which the company will receive a commission on sales. PharmEasy will also use its distribution network to supply products to these stores, people informed about the matter.
“They (FarmEasy) have started it in non-metros and there are plans to scale it up widely. The initial response has been encouraging and it is being tested more in these markets. But they do not want to open their own store, but do so through a franchise model,” said one of the people.
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Siddharth Shah, co-founder of PharmEasy and Prashant Tandon, co-founder of 1mg, declined to comment for this story.
PharmEasy’s franchise-store model is aligned with its comprehensive strategy of bringing in new users and providing them with full-stack healthcare services both online and offline. company
acquired Diagnostic chain Thyrocare Technologies for Rs 4,546 crore in June and
Aknamed. like other acquisitions, a cloud-based hospital supply chain management startup. Its parent, API Holdings,
Filed for an IPO of Rs 6,250 crore with the Securities and Exchange Board of India earlier this month.
“It will work on take-rate model on all sales and they (retailers) will get to buy from PharmEasy for assured supply. If it works out, it will be scaled up massively and could be big for the company in the long run,” said a second person aware of the matter. It also plans to introduce a click-and-pick model in the long term, where consumers can pick up medicines from the nearest store after ordering online through the PharmEasy platform.
Even for 1mg, its expansion into offline channels is in line with the original Tata Digital’s plan, which has a ubiquitous presence of its online businesses. Last week, online grocer BigBasket, also owned by Tata, said it has
Set up your own physical repository Named Fresho for fresh supplies and it will open 200 such stores by the financial year 2023.
In an interview with ET in JulyShah, co-founder of PharmEasy, had said that the company wants to offer key elements of healthcare—information, consultation, testing and treatment—to all customers in India and the Thyrocare acquisition was part of that plan.
Retailers such as Flipkart and Amazon India are also experimenting with different models and partnerships to reach new users through an offline presence as well as serve their existing users with faster deliveries.
In online pharmacy and broader e-healthcare businesses, PharmEasy and 1mg compete with Reliance Industries’ Netmeds, Amazon India and recently entrant Flipkart, which
acquired majority stake Kolkata based online pharmacy in Sastasundar.
PharmEasy in its draft IPO papers said it will use Rs 1,259 crore from the proceeds for organic growth initiatives, besides allocating Rs 1,500 crore on inorganic growth opportunities through acquisitions and other strategic initiatives. It plans to use Rs 1,929 crore to repay or prepay loans.