Global ecommerce behemoth Amazon, which has been looking at 360-degree expansion of its portfolio, is ready to dive into the Indian healthtech market and is eyeing acquiring online pharmacy MedPlus.
According to reports, talks between Amazon and Medplus are in the preliminary stage. A source close to the matter was reported as saying that it’s too early to call it a deal, but it is confirmed that “Amazon is serious about building a definitive pharmacy play in India.”
Another source revealed that Amazon is in active conversations with “at least two pharma chains” for potential acquisitions. The source confirmed that one of them is Medplus.
An email query sent to Amazon didn’t elicit any response till the time of publication.
On the international front, Amazon has already made a bet on healthtech and ventured into the pharmaceuticals market by acquiring PillPack, an online pharmacy, for about $1 Bn.
Amazon also hired renowned Harvard surgeon and writer Atul Gawande as the chief executive of its healthcare joint venture with Berkshire Hathaway and JPMorgan.
MedPlus: Going Strong In Indian Healthtech Sector
Madhukar Gangadi launched MedPlus in 2006 when he realised the existing gaps in the Indian pharma industry. He found that around 30% of the fake medicines sold across the world came from India and decided to launch MedPlus in order to provide a reliable source of medicines to the Indian consumers.
Today, there are around 1400 MedPlus pharmacies throughout India, serving over 2,50,000 customers daily and employing over 10,000 people. It also runs businesses such as an optical store, MedPlusLens; MedPlus Pathlabs; RiteCure, a distributor of medical and surgical supplies to hospitals; and online pharmacy store MedPlusMart.com, launched in 2015.
Till date, MedPlus has raised $210.28 Mn with last being a debt round of $117.67 Mn.
Through MedPlusMart, customers can buy medicines, OTC products, FMCG and nutrition products, and can also gain information on medicines, store their health records, view their prescription history, and redeem rewards.
Amazon: Continuous Bets In India
As Amazon India is expected to reach $70 Bn in gross merchandise volume (GMV) and $11 Bn in net sales by 2027, the company is continuing to invest in Indian startups, beyond its ecommerce business.
Recently, Amazon India head Amit Agarwal talked about startups and said, “All the startups that are running… people should be very proud of what they’ve achieved.”
In December 2014, Amazon made its first Indian investment of $10 Mn in Bengaluru-based gift card technology and retail startup QwikCilver Solutions. Then it acquired Noida-based payment gateway firm EMVANTAGE Payments Pvt Ltd for an undisclosed amount in February 2016.
Amazon was also one of the investors in Chennai-based financial marketplace BankBazaar, which raised nearly $110 Mn. During a recent interview to Livemint, Agarwal said, “BankBazaar is the kind of investment that hopefully can converge in the future.”
In November 2017, the company announced a collaboration with global crowdfunding platform Kickstarter and China-headquartered hardware accelerator HAX to aid the acceleration process of startups in India, thereby propelling the Indian Startup Ecosystem.
In April 2018, SAIF Partners and Sequoia India-backed online lending platform Capital Float raised $22 Mn in a follow-on Series C funding round from Amazon Inc.
Recently, reports surfaced that Amazon has started talks with Future Retail Ltd to acquire a 10% stake in the company that owns the Indian hypermarket, supermarket and home segments — Big Bazaar, Easy Day, Foodhall, among others.
Also, Amazon recently led a $12 Mn funding round in online-only insurance startup Acko.
Meanwhile, the Indian ecommerce industry has been disrupted by Walmart’s acquisition of a 77% stake in Flipkart, and traders have been protesting against the deal.
The All India Organisation of Chemists and Druggists (AIOCD) is taking a strong stand against Amazon’s plans to acquire MedPlus. Reports cited Jagannath Shinde, president of the AIOCD, as saying that the 8.5 lakh chemists and pharmacists who are members of his organisation were against online sales of drugs in India.
“Yes, we know that Amazon is trying to get into online pharmacy. We are planning an agitation from August 1 to 14. If the government doesn’t listen to our demands, we will go into a work-to-rule mode opening our shops only eight hours a day,” he said.
“Amazon and Flipkart will burn capital to acquire customers. What will happen to the more than one crore of people employed by pharmacies,” he asked.
The Indian healthcare market, which is worth $100 Bn, is likely to grow at 23% CAGR to reach $280 Bn by 2020, as per a Deloitte 2016 report. With Amazon ready to acquire MedPlus, India’s healthtech industry too should be ready for the disruption.
[The development was reported by FactorDaily.]