The stage has been set, and the decks have been cleared now. It’s Amazon, Flipkart vs Reliance in the ecommerce space as Reliance has just acquired online medicine biggie Netmeds for Rs 620 crore.
What is the purpose behind this mega acquisition? How will it help Reliance to beat Amazon and Flipkart?
Reliance Acquires Netmeds For Rs 620 Crore
Reliance Retail has confirmed their acquisition of 60 percent stake in Netmeds for Rs 620 crore. This brings a value of around Rs 1000 crore to Netmeds.
Netmeds was founded by Pradeep Dadha and offers online delivery of medicines, personal and baby care items, along with a facility for offline and online diagnostics to book doctors online.
The Singapore-based Daun Penh Cambodia Group, the Sistema Asia Fund, Tanncam Investment and the healthcare-focused investment company OrbiMed have so far invested in Netmeds.
Why Reliance Acquired Netmeds?
Netmeds is actually one of the largest online medicine portals and Reliance has jumped straight into the thick of action in this field by acquiring it. Certain popular players in this market, along with Netmeds, include: PharmEasy, Medlife, 1 mg.
Every online medicine provider in India is looking for a gig investor and a major investment round, and as mentioned, Netmeds was desperately in need of big funding because margins in this sector are very small.
However, the trigger was coronavirus and lockdown which inspired Reliance to go for this contract.
According to reports, over the past few months, online sales of medicines have increased by as much as 50 percent, and Reliance has known this is the time to jump into this sector.
Reliance had been looking for a good, solid partner to venture into the online medicine space as per MoneyControl and Netmeds proved to be the best bet.
Isha Ambani, Ceo, Reliance Retail Ventures said, "The inclusion of Netmeds strengthens the capacity of Reliance Retail to offer high quality and affordable healthcare products and services, as well as broadening its proposal for digital commerce to cover most everyday critical customer needs."
Amazon too had recently launched their online medicine service, which is facing protests from chemists all across the nation. It would be interesting to watch the battle unfolding between Reliance, Amazon and Flipkart to grab the top slot in Indian ecommerce market.