Delhi NCR-based epharmacy and telemedicine startup 1MG is considering introducing hyperlocal delivery options within 60 minutes, according to reports.
The startup, where Tata Digital now owns a majority stake, is currently delivering medicines within 4-5 hours in select few locations around Delhi NCR and will soon extend it to other locations in the country, reported ET.
Founded in 2015 by Prashant Tandon, Gaurav Agarwal, and Vikas Chauhan, 1MG offers medicine delivery, health & wellness products, B2B distribution of medicines & other healthcare products, diagnostics services as well as telemedicine services. It operates three diagnostics labs, and claims to have a supply chain covering over 20,000 postal codes. Tata Digital, the digital services subsidiary of Tata Sons, has announced a majority stake acquisition in the company in June.
“They (1mg) are keen to bring the one-hour delivery to consumers. There is a lot of demand for it, which has only increased after the pandemic as people need various medicines and healthcare-related products in quick time. They are working on expediting the launch,” a person aware of the matter was quoted as saying.
According to experts in the sector, hyperlocal delivery of medicines is a low margin long term play which may require massive investments to realise. Of course, in April, the Tata Group infused INR 100 Cr ($13.3 Mn) in 1MG through a venture debt investment. The company was valued at INR 1,770 Cr or $240 Mn in the debt round.
This would be the first major operational rollout for the startup since the Tata Digital deal. The Tata Group said it is working to create a digital health ecosystem that combines epharmacy, tele-diagnostics and teleconsultation.
Over the multiple lockdowns in India, epharmacies have emerged as an essential service leading to the majority of Indians depending on platforms such as 1MG, mfine, Pharmeasy, Practo and others for doctor consultations and medicine deliveries.The clarity around epharmacy and telemedicine regulations brought a massive shift in terms of the consumer mindset. “Patients have started to realise a lot of value in healthtech. Patients now realise that they don’t have to expose themselves to undue risk if healthcare can come directly to them,” 1MG cofounder Tandon told Inc42 last year.
According to a BofA Securities consumer survey in May 2021, pharmacies Medlif and Pharmeasy lead in market share with 22% and 18% market share respectively followed by 1MG with 13% market share. Soon after, pharmacy unicorn firm PharmEasy announced merger with its rival Medlife, almost eight months after receiving competition watchdog Competition Commision of India’s (CCI) approval. This is the largest consolidation deal in India’s online pharmacy sector, which has stakeholders like Reliance Retail, Amazon Pharmacy, 1MG, and others.
The companies had joined hands to fend off tough competition from other players like Reliance Jio (NetMeds), Flipkart and Amazon that had entered the Indian epharmacy segment in 2020. Amazon, on the other hand, had launched Amazon Pharmacy vertical to offer medicine delivery services pan India. Reliance Industries’ retail unit had acquired a 60% equity stake in epharmacy startup Netmeds for $83 Mn (INR 620 Cr). The Mukesh Ambani-led company got 100% equity ownership of Netmeds subsidiaries.
During RIL’s Q4 FY21 earnings call, the company said that hyperlocal delivery in pharma is a big focus for the company. “We continue to grow the catalogue and we are testing hyperlocal solutions here (with NetMeds). Just as we have hyperlocal capabilities across the rest of the digital commerce orders through our store network, we are looking to service Netmeds orders through stores. A pilot is underway in Bengaluru,” said Dinesh Thapar, group chief financial officer, Reliance Retail.
In 2019, Medlife had acquired Bengaluru-based express medicine delivery startup Myra Medicines.
Tata Digital also acquired online grocery platform BigBasket earlier this year, and the 1MG acquisition followed a $75 Mn investment in health and fitness startup Curefit. It was reportedly in talks to acquire a stake in hyperlocal delivery platform Dunzo, which Dunzo denied.