Online Pharmacy Market in India: Challenges and Opportunities of a Rapidly Growing Industry
Everything we could possibly want is now a click and a tap away. Even the pharmacy. So there’s no surprise, then, that the online pharmacy industry in India is booming.
According to recent data from the India Brand Equity Foundation, India’s online pharmacy market is already a billion-dollar industry and is expected to grow at a compound annual growth rate (CAGR) of 38% from 2023 to 2028.
A major contributing factor here is a rapid change in consumer behaviour and preferences which have evolved significantly in the last decade or so. Moreover, internet awareness and adoption have spread equally rapidly across India’s hinterland, which is turning to online options for information and purchases.
This change in behaviour has also been supported, in no small part, by the COVID-19 pandemic acting as a catalyst in accelerating the shift toward online healthcare services and giving a boost to online pharmacy delivery services.
Techmagnate, a leading SEO company in India, frequently releases trend reports detailing search patterns of consumers in various industries. Their data speaks directly to the evolving customer trends across the country.
Sarvesh Bagla, CEO & Founder of Techmagnate, weighed in. “People often begin their online journeys with a simple Google search and the search for medication is no different.
The distinguishing factor - especially for medicines and pharmacy needs - is that remote towns and villages may not have easily accessible or fully stocked pharmacies. Online pharmacies can prove to be a saviour in these cases, which also explains why search volumes have also increased alongside.”
Growth of Online Pharmacies in India: A Post-COVID Surge
The COVID-19 pandemic dramatically changed consumer behaviour, with social distancing becoming a way of life and people aiming to be as ‘contactless’ as possible.
The post-pandemic consumer, with still-fresh memories of ‘lockdown’ and ‘quarantine’, is more comfortable with a shift away from traditional in-person doctor-patient interaction to digitally getting their medical resources sorted, medications included.
According to a report by RedSeer Consulting, the online pharmacy market in India saw a demand spike of 2x to 3x during the lockdowns in 2020, driven by new customers. This shift represented, simultaneously, a timely solution for consumers and also a lasting change in their behaviour.
In the post-pandemic period, the trend toward online pharmacies has continued, with many consumers finding convenience in home delivery oriented pharmacies and digital ordering. The ongoing adoption has been so robust that, as per PwC India, the online pharmacy market is projected to maintain strong growth, moving from approximately USD 1.2 billion in 2022 to an estimated USD 7 billion by 2027.
This sustained interest reflects a growing comfort with online healthcare solutions as well as an increasing focus on preventive health, wellness, and quick access to essential medicines.
TechSci Research further supports these figures, projecting the online Indian pharmacy market to surpass USD 7 billion by 2027, fueled by increased digital adoption, consumer comfort with online services, and the integration of telemedicine and diagnostic services.
This consistent double-digit growth is also reflected in online pharmacy related search trends, showcasing how customer behaviour is evolving. From a digital marketing perspective, this brings pharmacies an opportunity to leverage these trends to create a stronger digital presence.
Online Pharmacies and Key Growth Drivers
The surge in the online pharmacy sector can be attributed to several key factors, chief among them being India’s rising internet penetration and smartphone use. The India Brand Equity Foundation (IBEF) reported that as of early 2024, India had over 700 million internet users, primarily driven by affordable data plans and extensive smartphone adoption.
Affordable smartphone access has brought digital solutions into the hands of millions who may not have previously had a direct route to healthcare services.
Digital payment systems have also played a crucial role in building trust among consumers. The rapid adoption of UPI (Unified Payments Interface) and digital wallet platforms has made online transactions more secure and accessible, leading to greater comfort in purchasing healthcare products online.
This shift in consumer behaviour has contributed to the strong foundation upon which online pharmacies are building their services.
Furthermore, technology continues to enhance the online pharmacy experience through AI-driven tools and data analytics. These technologies enable platforms to provide personalized recommendations, reminders for prescription refills, and insights based on user history.
Trends Shaping the Online Pharmacy Market in India
When it comes to search trends in the online pharmacy market, one prominent trend that is noteworthy is the rise in non-brand searches, indicating a significant shift in consumer awareness and demand patterns.
According to Techmagnate’s search trends report, the total search volume for online pharmacy-related keywords increased by 22.54% in FY’24 and has largely been driven by the growth in Non-Brand queries.
Non-brand keywords can include searches like “near me pharmacies” or “online medicine delivery near me”.
This shift aligns with the broader trend of price sensitivity among Indian consumers and the growing acceptance of generic drugs as an affordable, reliable option.
To evaluate what search buckets and search keywords are being used most by the consumer, downloading a search trends report, like the one created by Techmagnate, can be invaluable for online pharmacy brands.
On a different front, even though non-brand searches are more popular, Techmagnate’s search trends report also answers what online pharmacy brands are being searched for the most.
These searches include terms like “apollo pharmacy near me” or “netmeds pharmacy near me.”
Another trend influencing the online pharmacy landscape is the rise of vernacular searches, which reflects regional growth and diversification of the user base.
With ubiquitous internet access in inner towns and villages, searches in local languages have seen considerable growth.
Geographically, as seen in Techmagnate’s report, major cities continue to lead in online pharmacy searches, with Delhi and Bengaluru at the forefront due to higher digital penetration and consumer awareness. However, smaller cities are emerging as high-growth areas as well, showcasing the sector’s expansion beyond urban centers.
According to the India Brand Equity Foundation (IBEF), cities like Lucknow and Jaipur have reported a significant increase in online pharmacy usage, driven by growing internet accessibility, digital payments, and consumer awareness in these regions.
This regional growth is a positive indicator for the market’s future, as it demonstrates the potential for further expansion and the ability of online pharmacies to meet the needs of consumers across various parts of India.
Challenges Facing the Online Pharmacy Industry in India
Despite the sector’s rapid growth and immense potential, the online pharmacy market in India faces significant challenges. Regulatory uncertainty remains a primary concern.
The Indian government has issued draft guidelines for the industry, but a standardised regulatory framework is still lacking.
This ambiguity can create operational challenges, especially for smaller players or those unfamiliar with the legal landscape. Without clear regulations, the industry also faces risks related to:
- medication authenticity
- prescription compliance
- and consumer safety
i.e. issues that are paramount to establishing trust in online healthcare.
Another critical challenge is data security. Online pharmacies handle sensitive personal and health information, making data protection a top priority.
The evolving landscape of cyber threats means that companies must implement strong security measures to protect user data. Compliance with data privacy laws, such as the proposed Data Protection Bill, adds further complexity.
Breaches or misuse of data not only bring financial consequences but can also severely damage a company’s reputation, eroding consumer trust.
Logistics are also a persistent challenge in the Indian online pharmacy landscape. Medicines often require specific storage conditions, including temperature control, to maintain efficacy.
Ensuring these standards during transit, particularly to rural or remote areas with limited infrastructure, is challenging and costly.
For online pharmacies looking to establish reliable delivery networks, the fragmented logistics landscape in India can create further hurdles, especially as competition for timely delivery increases among both online pharmacies and traditional retail pharmacies.
Online pharmacies must also contend with competition from both offline pharmacies and retail giants entering the market.
Major e-commerce players are now eyeing the healthcare sector, leveraging extensive distribution networks to offer competitive prices and services. In response, smaller online pharmacy players are under pressure to innovate and differentiate their services to retain market share continuously.
Lastly, unstable consumer trust is a significant barrier that online pharmacies must overcome. Indian consumers are often wary of buying medication online, especially given concerns about authenticity and quality.
To build trust, online pharmacies need to establish transparent supply chains and partner with reputable pharmaceutical companies to reassure customers about the reliability of their products. These steps can be supported by digital presence and brand communication that is transparent and trustworthy.
Opportunities in the Indian Online Pharmacy Market
The online pharmacy sector offers several promising avenues for growth, particularly in underserved and rural regions of India. Census of India reports that approximately 69% of India's population lives in rural areas, where healthcare facilities are sparse, highlighting the critical role of accessible alternatives like online pharmacies.
Another promising avenue for growth lies in the wellness and preventive healthcare market. As more Indians adopt a proactive approach to health, online pharmacies have expanded their product offerings to cater to this demand.
Products such as vitamins, herbal supplements, and diagnostic devices are now increasingly common on these platforms, enabling online pharmacies to evolve from mere medication suppliers to holistic health hubs.
Health-adjacent categories are growing as well. According to Techmagnate’s report, the “Beauty and Personal Care” keyword bucket has grown by 50%, going from 56.91L searches in FY’23 to 85.37L searches in FY’24
Partnerships with healthcare providers and diagnostics centers also present opportunities for online pharmacies to expand their reach.
By forging collaborations with hospitals, diagnostic labs, and wellness centres, online pharmacies can create a more integrated ecosystem of services that enhances the customer experience and helps build loyalty.
The Future Of Online Pharmacies In India
The future of online pharmacies in India will be shaped by impressive growth and technological advancements.
Market forecasts from TechSci Research suggest that the online pharmacy industry will continue expanding at a fast-paced rate, with a projected annual growth of over 38% over the next five years.
This sustained increase will likely be driven by rising consumer demand, digital adoption, and healthcare-focused technology.
The integration of Artificial Intelligence and Big Data is expected to revolutionize online healthcare in India.
This technology-driven approach could improve medication adherence, empower consumers with insights into their health, and create more engaging and supportive healthcare experiences online.
According to RedSeer Consulting, personalised medicine and data-driven healthcare will become defining features of the online pharmacy market in India as the industry matures.
As the India Brand Equity Foundation highlights, a growing number of online searches for healthcare information are conducted in local languages, with Hindi queries alone seeing a 35% growth in recent years.
This trend suggests that adopting vernacular language content could enhance user experience and make online pharmacies more accessible to non-English-speaking populations. Online pharmacies focusing on regional needs and local languages can build trust and appeal to a broader, more diverse consumer base.
With continued investment in technology and targeted regional strategies, online pharmacies have the potential to reshape how people in India access and manage their healthcare, making it more convenient, affordable, and personalised.
With the right digital marketing and study of search trends and consumer behaviour, online pharmacies can evolve and create a much more cohesive ecosystem in India.
In the long run, India’s online pharmacy players have the potential to redefine healthcare delivery in ways that can improve public health and align with the country’s goals of achieving universal healthcare access.
To learn more about online pharmacies and their evolving customer landscape, download Techmagnate’s report.
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