In the days where everything is switching to online mode, the medicine industries are also left no behind this web of online trend. Selling medicine online could be harmful but useful as well. Online pharmaceutical store claims of having several benefits and they also provide period delivery of medicine who need daily dose of it.
In this line only there comes PharmEasy, an E-pharmaceutical store who is delivering medicine to various parts of India.
Its History
The inception of the company dates back to 2015 when Dharmil Sheth and Dhaval Shah founded it in Mumbai with the aid of initial seed funding from their parents. The company strived to widen its reach beyond the local market, but their online pharmacies faced the hurdle of being illegal.
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The Chemist Association and various traditional pharmacies organized and participated in a street protest against them. Nevertheless, investors displayed keen interest and the company received Series A funding. In 2020, PharmEasy joined hands with API Holding, the parent company.
Recently, it was disclosed that the company is in the process of acquiring Thyrocare.
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The initial days of PharmEasy
The inception of PharmEasy, an online pharmacy, is credited to the vision of its founder, Dharmil Sheth, and his colleague, Dr. Dhaval Shah, who recognized the immense potential of technology in the healthcare arena.
Since its establishment in 2014, the company has gained a formidable presence, catering to approximately 98% of India’s pin codes. PharmEasy aims to offer doorstep delivery of all healthcare-related products, which it continues to pursue successfully.
India’s healthcare sector has undergone a paradigm shift towards digitization, enabling patients to schedule appointments with doctors, receive reports, and obtain medicines through online means. E-pharmacies such as PharmEasy have played a pivotal role in effectuating this transition. As a result, India’s “health commerce industry” is presently experiencing exponential growth, a trend largely attributed to the impact of e-pharmacies.
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Business execution process
PharmEasy is a leading provider of medicinal products and healthcare equipment, catering to numerous Indian towns and cities. Comparable to Grofers, PharmEasy employs pin codes to locate nearby pharmacies for the convenience of its customers.
Ordering from PharmEasy’s website or mobile app is effortless, and loyal customers are eligible for exclusive discounts of up to 20% for orders placed through the mobile app. Notably, the mobile app incentivizes new customer acquisition, further enhancing PharmEasy‘s brand recognition.
The company generally follows a 3-way chain to execute their business which are:
- Buyers– They are first person who views and chooses the product they want to buy from PharmEasy app or website.
- Suppliers– Here comes the second person in the process, PharmEasy has collaborated with wide range of local supplier of medicine. This help is cost cutting, faster delivery and the supplier also gets to earn some good revenue and they shop also get a goodwill bonus.
- Distribution Channel – This is last and final step in the 3-way chain in PharmEasy. The company has tied up with every local distribution channel from warehouses to delivery boy. Everything is made sure that the medicine are on time and accurate as this is the question of life of a person.
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Revenue generation
PharmEasy’s primary source of revenue stems from displaying sponsored results of various pharmaceutical entities on its homepage. This e-pharmacy has been leveraging advertisements quite effectively and they play a significant role in generating revenue for the business.
- The brand has adopted new-age advertising strategies that allow products, services or businesses to be advertised with minimal investments.
- Additionally, attractive discounts also contribute to the company’s revenue. Apart from advertisements, PharmEasy earns commissions from its customers for healthcare products and medicines sold on the platform.
- Delivery charges levied on products also add to the company’s revenue stream.
- Overall, PharmEasy has diversified its revenue streams through various channels, ensuring continuous growth and profitability.
The company has achieved impressive growth, having nearly doubled its revenue from Rs 340 cr in the past financial year to approximately Rs 737 cr in FY20. Furthermore, according to the financial reports of FY21, PharmEasy has set yet another record by experiencing a 220% increase in revenue, amounting to Rs 2,360 cr from Rs 737.4 cr in FY20.
However, as with any large-scale growth, the expenses of the company ballooned to Rs 2,980.9 cr in FY21 from Rs 1,084.4 cr in FY20, which marks a 147.8% increase. Unfortunately, while the company has shown significant growth in revenue, it has also accumulated losses, rising around 91% to Rs 641.3 Cr in FY21 from Rs 335.2 Cr in FY20.
| PharmEasy Financials | FY21 | FY20 | FY19 |
| Revenue | Rs 2,360 Cr | Rs 737.4 Cr | Rs 363 Cr |
| Expenses | Rs 2,980.9 Cr | Rs 1,084.4 Cr | – |
| Profit/Loss | Loss of Rs 641.3 Cr | Loss of Rs 335.2 Cr | Loss of ~Rs 100 Cr |
| EBITDA | – | – | – |
PharmEasy – Strategies for Acquiring Customers
Ensuring customer acquisition is a crucial aspect of any business and is founded on trust and mutual confidence. It is an intricate rapport between how the company caters to its users and how the users benefit from the offered services.
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PharmEasy, having successfully surmounted initial setbacks and hurdles, has been seamlessly acquiring new customers. The commendable user-retention rate is a testament to PharmEasy’s ability to gratify customers and maintain their satisfaction.
PharmEasy has made a strategic move by acquiring Aknamed, a healthcare supply chain management firm based in Bangalore.
– According to regulatory filings, Aknamed has agreed to sell 975,937 equity shares at a price of Rs 3,155.94 to API Holdings, Parent Company of PharmEasy, in order to raise approximately Rs 308 crores (around $42 million).
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– In addition, PharmEasy has purchased the stakes from the top 5 promoters, including co-founders, who held around 50.67% stakes in Aknamed. With this acquisition, Aknamed will function as a subsidiary of API Holdings Pvt Ltd, the parent company of PharmEasy.
– Prior to this, on June 26, 2021, PharmEasy had acquired 66.1% stakes in Thyrocare, an Indian diagnostic and preventive care laboratory based in Mumbai, in a deal worth Rs 4,546 crore. The acquirer in this deal was Docon Technologies Pvt Ltd, a subsidiary of API Holdings.
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PharmEasy- 3 Companies that it has acquired
- : PharmEasy, a healthcare company dedicated to streamlining India’s industry supply chain, recently made strategic acquisitions to fortify its position in the market. On September 14, 2021, the company acquired the majority stakes of Aknamed for an initial investment of Rs 308 crores ($41.90 mn). PharmEasy intends to purchase the rest of the stakes in the coming months, estimated at around Rs 1000 crores ($136.04 mn).
- Thyrocare: Prior to this, on June 26, 2021, PharmEasy secured an acquisition deal for 66.1% stakes in Thyrocare Technologies, a fully automated diagnostic laboratory and a pioneering venture in India. The acquisition was valued at an estimated Rs 4564 crores ($620 mn). PharmEasy’s strategic moves reflect its commitment to enhancing the healthcare ecosystem in India.
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- Medlife: Medlife, an online pharmaceutical entity based in Bangalore, India, provides home delivery services of medicines. The Competition Commission of India approved the merger of Medlife (Online Pharmacy) with PharmEasy on September 22, 2020, marking the first major consolidation in the pharmaceutical sector after Amazon and Reliance entered the market.
As per the agreement, PharmEasy’s parent company will acquire complete equity of Medlife while the promoters of Medlife will receive a 19.95% stake in the newly formed entity. Although the merger talks began in August 2020, the CCI approval was granted in September 2020.
However, it was not until May 2021, after eight months of CCI nod, that PharmEasy finally announced the merger with its rival Medlife. Medlife’s operations ceased from May 25, 2021, and fully merged into the PharmEasy platform. PharmEasy acquired majority stakes in Medlife that were valued at $250 million.
| Acquiree Name | Date | Deal Value |
| Aknamed | September 14, 2021 | $144 mn |
| Thyrocare Technologies | June 26, 2021 | $605.70 mn |
| Medlife | May 25, 2021 | $250 mn |
Future Plans and Aim
PharmEasy’s forthcoming plans include raising around Rs 6,250 crore through a proposed fresh issue of shares by the end of 2021. As of February 2022, the pharmacy unicorn is contemplating the possibility of an IPO round. However, given the market’s volatility, the healthcare giant is reassessing the timing of its IPO launch.
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