From E-Pharmacy to Healthcare Giant: The Rise of PharmEasy

In a world where access to quality healthcare is often a luxury, PharmEasy has emerged as a pioneer in modernizing the healthcare sector in India. Founded by Dr. Dhaval Shah and Dharmil Seth, PharmEasy is a leading e-commerce platform that connects patients with nearby pharmacies, offering a range of affordable healthcare solutions. With a mission to make healthcare accessible to everyone, PharmEasy has revolutionized the traditional pharmacy model by leveraging technology to deliver medicines, medical equipment, and even online doctor consultations to patients across several modern cities in India. In this blog, we will explore the unique aspects of PharmEasy's business model and how they have transformed the healthcare landscape in India.

BUSINESS MODEL

In today's fast-paced world, where everything is just a click away, e-pharmacies have become a boon for people who need regular medication or other healthcare accessories. PharmEasy, an Indian e-pharmacy, has taken this concept to the next level by providing a platform that is not only user-friendly but also affordable and reliable. Let's take a closer look at their business model to understand how they are changing the healthcare landscape in India.

Buyer-centric approach: PharmEasy's business model is focused on providing a seamless experience to its customers. They have a user-friendly website and mobile app that makes it easy for customers to search for medicines and healthcare products. Customers can also upload their prescriptions and get them delivered right to their doorstep. Moreover, the company offers up to 20% discount to customers who order through their mobile app, making it more convenient and affordable for customers to access their products.

Collaboration with suppliers: PharmEasy collaborates with a wide range of local suppliers and medical shops, which enables the company to maintain a large inventory of medicines and healthcare products. By partnering with local suppliers, they are not only able to offer a wide range of products but also ensure that the products are authentic and of high quality. This also helps the company to keep their inventory updated in real-time and avoid any stock-outs.

Revenue model: PharmEasy generates revenue from various sources, including commissions from local suppliers, featured brand displays, and promotions. The company earns commissions from its suppliers for every order placed through their platform, which acts as a win-win for both parties. Additionally, pharmaceutical companies pay to have their products showcased on the PharmEasy app as featured brands, which increases their visibility and brand recognition.

Distribution network: PharmEasy's vast distribution network allows them to reach a broad range of pin codes all over India. They have a dedicated team of delivery executives who ensure timely delivery of the products. The company also uses third-party logistics partners to handle the last-mile delivery, making the process more efficient and cost-effective.

Safety measures: Due to strict rules and regulations set by the Indian government, PharmEasy doesn't deliver Schedule H drugs, which are considered to have a high potential for abuse. However, the company has implemented strict safety measures to ensure that the products they deliver are authentic and of high quality. They have a team of pharmacists who verify every order and prescription before it is dispatched, and the products are stored in temperature-controlled facilities to maintain their efficacy.

Revenue Model

PharmEasy's revenue model is centered around advertising, commission, discounts, and delivery charges. By displaying sponsored results, offering discounts, and earning commission on product sales, the e-pharmacy generates significant revenue while providing top-quality healthcare products and services to its customers. Additionally, delivery charges also contribute to the brand's overall earnings. With its innovative revenue model, PharmEasy has established itself as a leader in India's e-pharmacy industry.

Acquisitions

PharmEasy, a leading e-pharmacy platform in India, has been aggressively expanding its presence in the healthcare industry by acquiring various companies. One of its recent acquisitions is Aknamed, a healthcare supply chain management company based in Bangalore. PharmEasy acquired the majority stakes of Aknamed for an initial investment of Rs 308 crores ($41.90 mn) and will soon acquire it completely in a deal estimated to be around Rs 1000 crores ($136.04 mn). Prior to Aknamed, PharmEasy had acquired Thyrocare, a Mumbai-based diagnostics and preventive care laboratory, for a deal size of Rs 4564 crores ($620 mn) on June 26, 2021. Another significant acquisition made by PharmEasy was that of Medlife, an online medicine supplier from Bangalore, which it merged with in May 2021. This marked the first major consolidation in the sector after the entry of Amazon and Reliance. The company acquired majority stakes in Medlife valued at $250 million, and the promoters of Medlife received a 19.95% stake in the entity. Overall, PharmEasy has been strategically acquiring companies to expand its reach and offerings in the healthcare industry.