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Business trends

Bezos and Ambani battle for India's online pharma crown

Entry of giants Amazon and Reliance rocks brick-and-mortar establishment

Amazon's Jeff Bezos, left, and Mukesh Ambani of Reliance Industries have taken their companies into India's growing online pharmacy market. (Nikkei montage/photos by Reuters)

TOKYO -- The battle lines are drawn in India's online pharmacy sector as Jeff Bezos' Amazon.com and top Indian billionaire Mukesh Ambani's Reliance Industries stake out positions in a growing market.

With the coronavirus pandemic keeping many of India's 1.3 billion people indoors, demand for online shopping has surged. When Amazon began offering drug deliveries in some parts of India in mid-August, it was quickly followed by Reliance, the country's biggest conglomerate.

The newcomers have shaken India's mostly brick-and-mortar drugstore establishment.

Amazon now sells over-the-counter and prescription drugs in such places as Bengaluru, a southern city known as the Silicon Valley of India. Customers order by attaching a photo of their prescriptions, with discounts available for some medications.

Reliance Industries, which aims to build a digital empire on top of a group that spans energy, retail and telecommunications, on Aug. 18 announced its entry into the sector with the acquisition of the operator of Netmeds.com.

A woman leaves an Indian pharmacy in March. The coronavirus pandemic has only stoked demand for online services.  (Photo by Akira Hayakawa)

The Netmeds addition broadens the scope of e-commerce operations for the group, said Isha Ambani, a director at Reliance Retail Ventures and daughter to Mukesh Ambani. Netmeds.com is backed by century-old drugmaker and retailer Dadha Pharma.

Faced with such outsize competition, smaller rivals PharmEasy and Medlife have agreed to merge. Other online players include MedPlusMart and hospital chains.

India's online pharmacy market is projected to grow sevenfold to $3.6 billion in 2022 from a little over $500 million in 2018, research firm Frost & Sullivan says. The pandemic could accelerate this expansion.

Amazon's entry into drug distribution alarms existing players, much as the American giant's presence has done to sellers of other goods.

The All India Organization of Chemists and Druggists, a group of small pharmacies and 850,000 wholesalers, claims that Amazon's expansion is unlawful because the e-commerce company has no licensed local pharmacies. The association sent a letter of protest to Bezos, Amazon's CEO and the world's richest person, according to local media.

Ambani, whose own wealth has surged this year, seeks to expand the ability of Reliance Industries to serve the country's online market, which the conglomerate has helped to grow with its cut-price wireless internet service. 

Its digital arm Jio Platforms in July secured $4.5 billion from Google, adding to a list of new investors that includes the biggest names in U.S. technology: Facebook, Intel and Qualcomm.

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