SUPPLY CHAIN MANAGEMENT AND ENABLING HYPERLOCAL DELIVERY AT E-PHARMACY

Abstract

India's pharmaceutical industry will be worth $60 billion by 2022, making it the world's sixth biggest, because to an increase in chronic illnesses, increased per capita income, and higher healthcare spending. Retail pharmacies (about 800,000 offline pharmacies) are the most common distribution method in India, accounting for 85 percent of total pharmaceutical sales. In India, E-Commerce has grown into a large business, but E-Pharmacy is still in its infancy. The growth of e-pharma will reach US$2.72 billion by 2023, thanks to an ageing population, increased internet penetration and smartphone use, as well as the convenience of obtaining pharmaceuticals online. The global addressable market for e-pharma was valued $9.3 billion in 2019, and is expected to grow at a CAGR of 18.1 percent to $18.1 billion by 2023. An expansion in the target audience as a result of more efficient last mile delivery via partnerships with local pharmacies and a trend toward a mix of offline and online channels for a better hyperlocal delivery ecosystem will drive this growth. Local pharmacies may make more money by cooperating with e-pharmacies, pharmaceutical corporations can learn more about medication sales, medical practitioners can reach a bigger audience, and the government can generate more money through taxes and compliance fees. Market place, hybrid (offline/online) inventory driven, and hybrid (offline/online) franchise-led are the three basic operational models in this category, depending on how the supply chain is formed. Each of these models is lucrative in different ways and necessitates different amounts of asset investment. E-pharmacies can increase their margins by better optimizing these models. Discounts (up to 35%) might outweigh chain income, resulting in financial burn (of 30 percent). By purchasing directly from pharmaceutical firms and marketing other items and services (private label supplements, FMCG, and so on), the businesses hope to make more money (diagnostics, etc.). As the company grows, discounts are projected to decrease, and decreased shipping costs may assist accelerate the road to profitability. Others may participate in India's online pharmacy business, in addition to the global retail e commerce giants. Consolidation options for e-pharmacies include brownfield expansion by purchase by a big horizontal operator, greenfield development through the creation of a vertical arm by one of the e-commerce firms, and tie-ups with other corporations. Hyperlocal enterprises that can use logistics, vertical players like e-grocers expanding their product lines, and conglomerates banding together to develop their own capabilities are all instances of this. In such a competitive environment, long-term viability will be determined by giving better value to the consumer, with quick delivery being an important component that may be handled by entering the hyperlocal delivery ecosystem.