After raising billions of dollars in record time for Reliance Jio, Mukesh Ambani is out for shopping startups to strengthen the presence of its retail business in India. On Tuesday, Reliance Industries Limited (RIL) has confirmed that a majority stake in online pharmacy company Netmeds has been acquired by its Retail unit for Rs 620 crore (US$83.13 million).
The acquisition of the online pharmacy startup will put Reliance Retail Ventures into a direct competition with Amazon which ventured into this space just last week.
For the last few days rumours about the acquisition of Vitalic Health Pvt Ltd and its subsidiaries – collectively known as Netmeds – by Reliance were making rounds on the internet. By confirming the equity acquisition of 60% in Netmeds, Reliance has indicated that Healthcare business is one of the top priorities for the company to have a strong foothold in retail business across India.
Undoubtedly, the investment is aligned with Reliance’s commitment to providing digital access to everyone in India.
“The addition of Netmeds enhances Reliance Retail’s ability to provide good quality and affordable healthcare products and services, and also broadens its digital commerce proposition to include most daily essential needs of consumers,” said Isha Ambani, Director – Reliance Retail Ventures.
Vitalic was incorporated in 2015 to focus on pharma distribution, sales and support service business. Later the company ventured into the online pharmacy business with the name of Netmeds to provide doorstep delivery of medicines, health products.
Promoted by Dadha Pharma, Netmeds is a Chennai based company. Reliance seems to rely on the century-long experience of the Dadha family which dates back to 1914.
For the last month, there has been a lot of action in the e-pharmacy business in India. The eCommerce behemoth Amazon India ventured into the market with the launch of Amazon Pharmacy. The company has started offerings its services in Bengaluru and plans to tap other cities as well soon. Reports suggest that Walmart acquired Flipkart is also exploring options and may soon launch similar offerings.
As big players have jumped into ePharmacy business, small players have also started consolidating their efforts to counter the cash-rich behemoths like Reliance and Amazon. The merger of PharmEasy and Medlife is one of the significant development in this space. It is estimated that the combined valuation of both the entities is estimated to the tune of $1.2 billion.
So far, Netmeds has raised a total of $99 million (Rs. 742 crore) in four investment rounds. The company also acquired 3 startups to strengthen its market presence.
The ePharmacy business is estimated to become a $18.1 billion market in India by 2023. It is also estimated that e-pharma players in India are expected to attain a combined market size of US$2.7 billion by 2023.