Flipkart forays into healthcare, acquires online pharmacy platform

E-commerce giant Flipkart Group has forayed into the healthcare sector through the launch of Flipkart Health+. As part of this development, the group has signed definitive agreements to acquire a majority share in Sastasundar Marketplace Limited which owns and operates SastaSundar.com, an online pharmacy and digital healthcare platform, as it focuses on providing consumers access to affordable and convenient healthcare. The value of the transaction was not revealed by the firms.

Flipkart’s foray into the online healthcare segment puts it in direct competition with established local players including Reliance-owned NetMeds, 1mg, PharmEasy and Amazon Pharmacy. Flipkart is entering into this segment at a time when there is a tremendous demand for such services which are delivering essential medicines to patients amid the Covid-19 pandemic. An increasing number of people are buying products online and avoiding visiting the stores due to fears of catching the virus.

“The consumer internet ecosystem in India is growing rapidly as consumers recognize the opportunities and convenience that digital adoption is enabling in their lives. With growing awareness and focus on health heightened by the pandemic, there is a large opportunity and demand for affordable healthcare and ancillary offerings,” said Ravi Iyer, senior vice president and head - Corporate Development, Flipkart. “We are excited to enter this space through this investment in SastaSundar.com, a company that has established itself as a trusted partner for lakhs of consumers through genuine products, a technology-powered platform and a wide network. The synergies between the Flipkart Group and SatsaSundar.com, combined with our commitment to prioritize our customer’s needs, will help us grow and transform online healthcare in India.”

SastaSundar.com offers a digital healthcare and pharmacy platform supported by a network of more than 490 pharmacies. It aims to address the issues of access to affordable and quality healthcare in India by providing original products from authorized sources and delivering them across the country. By utilising artificial intelligence and data analytics technologies and integrating them with personal counselling through its network, SastaSundar.com provides consumers comprehensive solutions for a wide range of healthcare needs.

Flipkart Health+ will leverage the combined strengths of the Flipkart Group, which includes its pan-India reach and technology capabilities, with SastaSundar’s deep expertise to provide consumers end-to-end offerings in the health-tech ecosystem. It will endeavour to give millions of Indian consumers access to quality and affordable healthcare, starting with e-pharmacy and will add new healthcare services such as e-diagnostics and e-consultation over time. Flipkart Health+ will report to Ajay Veer Yadav, senior vice president and Flipkart veteran.

“At SastaSundar.com we are focused on developing innovative ways to provide access to affordable healthcare easily and conveniently, building a trusted network for authentic medicines, diagnostics and wellness,” said B.L.Mittal, Founder and Chairman, SastaSundar Healthbuddy Ltd. “Through this partnership with Flipkart, we see an opportunity to further grow and reach a larger consumer base, using complementary technologies and logistics infrastructure.”

This new venture builds on the Flipkart Group’s efforts to address the growing consumer internet ecosystem, providing end-to-end offerings from travel to healthcare as digital technologies continue to democratize access to products and services.

“This partnership with Flipkart is a strong validation of the capabilities we have built and will accelerate SastaSundar’s mission to provide affordable healthcare to all Indians in a convenient manner,” said Ravi Kant Sharma, founder and CEO, SastaSundar Healthbuddy Ltd.

Last year in August, Flipkart’s rival Amazon forayed into the online medicine segment and launched Amazon Pharmacy. The company is learnt to be scaling it up to cities across India. The service allows customers to order prescription-based medication in addition to over-the-counter medicines, basic health devices and Ayurveda medication from certified sellers. Last year, Reliance Retail, acquired the parent firm of online pharmacy Netmeds. This year in June Tata Digital bought online pharmacy 1mg. This month PharmEasy filed for an $843 million initial public offering.

The Indian e-health sector is expected to become a $16 billion opportunity by FY2025, growing from $1.2 billion, at a compound annual growth rate of 68 per cent, according to a report by research firm RedSeer Consulting. It is expected to touch 57 million households, driven by positive reception from both consumers and providers along with supportive government regulations and investments.

According to RedSeer, the overall Indian healthcare industry is set to grow at 17 per cent CAGR until FY2025 to reach $353 billion (7 per cent of the expected nominal gross domestic product).

However, experts said that it is not going to be easy for players such as Flipkart and Amazon to tap the e-pharmacy space due to the regulatory hurdles and the ongoing war between online and offline pharmacies and the delay in finalisation of e-pharmacy rules by the government.