India’s online pharmacy sector is expected to experience steady revenue growth, with operating losses projected to drop to below 10% in the next fiscal year, down from over 30% in fiscal 2023. This growth will be fueled by high-margin products, operational efficiencies, and continued funding support. A recent CRISIL report indicates that while cash losses will continue over the next two years due to high operational costs and intense competition, the sector’s revenue will steadily rise.
E-pharmacies are aiming for sustainable growth by focusing on high-margin segments, such as wellness products and medical equipment, which are expected to make up around 40% of sales in the coming fiscal year, up from 30% currently and under 15% in 2023. The report also highlights a shift away from aggressive discounting, which will help reduce key operational costs and narrow losses. CRISIL expects these efforts to help e-pharmacies move closer to profitability by lowering expenses related to discounting, delivery, distribution, and employee costs.
Despite the growth prospects, the e-pharmacy sector still faces significant challenges, including high initial investments in technology, inventory, and supply chain inefficiencies. The market also experiences high customer acquisition costs due to substantial spending on marketing and discounts. As e-pharmacies expand, they will continue to incur losses and will likely need an additional Rs 2,300 crore in equity funding over the next two fiscals, following over Rs 9,200 crore secured since fiscal 2020. The Indian online pharmacy market is projected to reach a value of approximately three billion US dollars by 2024, with an expected annual growth rate of 13.33% from 2024 to 2029.
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