The e-tailer’s entry in e-pharmacy is already seeing opposition. The All India Organisation of Chemists and Druggists (AIOCD), a body with 8.5 lakh members, has written to Flipkart CEO Kalyan Krishnamurthy and Walmart president & CEO Doug McMillon, saying the partnership is against local laws.
TOI first reported last month that the local e-commerce arm of the US-based retail major was looking to enter the space amid action from Reliance, which acquired a 60% stake in Netmeds. While Flipkart has now brought 1MG onto its platform, it has been building its own team internally for the e-pharmacy business and held similar partnership talks with PharmEasy, which is acquiring smaller rival Medlife.
Owing to the traffic it gets, Flipkart is essentially trying to serve one more consumer need. Prescription medicines, lab tests and doctor consultations are in high demand amid the pandemic, as consumers try to limit their movement as much as possible. Consumer stickiness and average order size increasing to $15-20 are also some of the reasons large strategic players like Amazon, Reliance and now Flipkart are entering the space.
“We are forced to write to you as we discovered that Flipkart, which is owned by Walmart Inc, USA has partnered with an e-pharmacy by the name of 1MG.COM to sell ‘Prescription Medicines’ on its platform. This partnership is against the laws in our country,” AIOCD’s note to McMillon and Krishnamurthy said.
It has also started selling over-the-counter drugs which do not need prescription. “We hope that the above points make it amply clear to you that e-pharmacies are not legal in our country and indulging with them will attract unnecessary legal implications. We are sure that you will not like to get in those hassles,” the note from AIOCD added.
When contacted, a Flipkart spokesperson did not comment on its partnership with 1MG and the AIOCD writing to its senior executives. “As consumers increasingly look for preventive care in the wake of the pandemic, it was a natural step for us to scale up our portfolio and launch products across categories such as immunity boosters, respiratory care, diabetic care, digestive care and cardiac care, among others,” the spokesperson added.
1 MG co-founder and CEO Prashant Tandon did not comment on the matter.
A report by market research firm RedSeer in August said e-pharmacy platforms, including consultation and lab tests, are expected to clock $2 billion in gross sales by March 2021, with supply chain restoration and rise in new users. During the pandemic, 6 million new households tried online medicine, taking the total to 9 million households, a recent Ficci-RedSeer white paper said. The latest RedSeer report said e-pharmacies clocked $1.3 billion in gross sales at the end of March 2020.