Medicine and healthcare have turned into billion-dollar markets globally. Many loopholes have crept into these businesses making an average man cautious about the medicine brands he is purchasing and causing many senior or vulnerable citizens to fall prey to the malpractices in this trade. There was an urgent need to get certified online applications that could guide people on their diagnoses, prescriptions and even delivering medicines to their doorsteps. PharmEasy is one such leading digital healthcare platform that focuses on simplifying healthcare. Read on further to know how this healthcare application functions.
About PharmEasy
PharmEasy is a leading provider of a vast array of medicines and health products that are offered through its network of retail partners spread throughout India. Customers can conveniently place their orders online via the website or mobile application. PharmEasy ensures that all orders are delivered within 24-48 hours, guaranteeing a fast and reliable service for all customers. PharmEasy offers convenient access to a broad range of prescription and over-the-counter medications, as well as other consumer healthcare products. The platform also provides comprehensive diagnostic testing services and teleconsultations, all of which can be delivered straight to the user’s home, making it an ideal one-stop shop for all their healthcare needs.
Core Values
PharmEasy’s core values are centered around putting the customer first and ensuring that they receive the best possible experience. These values include providing convenient access to quality healthcare products and services, offering transparency and trustworthiness in all interactions, fostering a culture of continuous learning and improvement, embracing innovation and technology to enhance the customer experience, and fostering a sense of empathy and compassion towards customers and their healthcare needs. Additionally, the company is committed to operating with integrity, honesty, and ethical behavior at all times.
Initial Journey
In 2014, PharmEasy was founded by Dharmil Sheth and his friend, Dr. Dhaval Shah, with the vision of creating an online pharmacy that leverages technology to improve healthcare. Today, the company serves almost 98% of Indian pin codes and is focused on achieving their goal of doorstep delivery for all healthcare-related needs. The healthcare industry in India has undergone a significant digitization shift, with e-pharmacies like PharmEasy playing a major role in enabling services such as scheduling appointments and delivering medicines and reports. These initiatives have helped propel the growth of the “health commerce industry” in India at an unprecedented rate.
Business Model
To place an order, customers must upload their prescription, which will be sent to a drugstore in their vicinity. PharmEasy then uses web technology to provide customers with top-notch healthcare products at budget-friendly rates. The company offers high-quality products that customers can generally find in medical stores and reputed pharmacies.
PharmEasy offers two options for customers to place orders, either through its website or mobile app. By using the mobile app, customers can avail of discounts of up to 20%, thereby enhancing brand visibility and attracting new customers to PharmEasy.
After receiving the medical prescription, PharmEasy sends it to a local drugstore for packaging. Subsequently, a delivery agent is assigned to collect the medicines from the drugstore while adhering to various guidelines and precautions. Finally, the delivery agent delivers the order to the customer’s specified address, entered into the PharmEasy India mobile app or website.
Revenue
PharmEasy generates a significant portion of its income by featuring sponsored results from various pharmaceutical entities, which can be seen on the organization’s homepage. The company heavily relies on advertising as a key revenue stream, while also leveraging modern marketing tactics that require minimal investment to promote its products, services, and overall brand. Additionally, attractive discounts offered by the company also contribute to its revenue. PharmEasy also earns a commission on healthcare products and medications sold through its platform, as well as through delivery charges applied to orders.
PharmEasy witnessed substantial growth in its revenue in FY2020, with figures reaching ₹637 crores, almost double the previous year. However, during the same period, the company’s losses before tax amounted to approximately ₹100.7 crores.
Funding and Investors
PharmEasy has secured a total funding of $1.6 billion to date, with its latest Pre-IPO round worth $354 million led by VestinWolf Capital Management, and a previous Series F funding round worth $500 million led by Arokiaswamy Velumani. The company plans to raise around $200 million at a 15-25% lower valuation than its previous year’s valuation of $5.1 billion. Reasons behind this move include market volatility, low investor sentiments, and funding winter. PharmEasy’s DRHP filing revealed that over 20 senior employees, five founders, and new investors have purchased secondary shares at a valuation of $5.6 billion, while the company’s valuation as of February 2022 is $5.4 billion. The company has yet to decide on its IPO round and pricing.
Challenges Faced
PharmEasy’s success story did not happen overnight and the e-pharmacy faced its fair share of challenges. One of the primary obstacles was delivering products without a valid prescription. It was mandatory to have a valid prescription to supply medicines, and some customers hesitated to upload their prescriptions due to potential consequences. Additionally, the location tracking was difficult for PharmEasy’s delivery agents in the early days. However, the company has since overcome these challenges and has experienced significant growth since its establishment in 2014.
Acquisitions and Mergers
PharmEasy’s parent company, API Holdings Pvt Ltd, has acquired Aknamed, a Bangalore-based healthcare supply chain management company. According to regulatory filings, Aknamed has approved the sale of 975,937 equity shares to API Holdings for around $42 million. Additionally, API Holdings reportedly bought out the stakes from the top 5 promoters of Aknamed, including its co-founders. PharmEasy has previously acquired Thyrocare and Medlife. In June 2021, API Holdings acquired 66.1% stakes in Thyrocare for around $620 million, while in September 2020, the Competition Commission of India approved the merger of Medlife with PharmEasy, valued at $250 million.
Final Thoughts
With the ultimate goal of providing affordable healthcare to one and all, PharmEasy, after taking baby steps towards success has now emerged as a digital healthcare giant in India. It has many more projects and ideas in the pipeline, meanwhile, we are basking in the comfort provided by this healthcare platform.
