US e-tailer major Amazon is in early talks to invest in India’s second largest pharmacy chain Medplus.
Amazon, which considers India to be one of its key markets, is to foray into pharmacy space. The discussions between Medplus and Amazon are in early stage, said a FactorDaily report quoting sources close to the development.
The company is in active conversations with multiple potential pharma chains, added the source.
India’s pharma market has been growing at a fast pace with base of over Rs 1.2 lakh crores. However, the online pharma market is new, where e-commerce majors have their eyes set on.
In May, home-grown e-tailer Flipkart held talks with 1mg and PharmEasy. It is reportedly looking at potential acquisitions in the space to start its pharmacy business.
In India, the preventive health space is expected to cross $100 billion in next two years.
This would not be a first attempt by Amazon in the segment. US e-tailer, in 1998, had first made an attempt by launching an online pharmacy store Drugstore. However, it didn’t get success as anticipated. Nevertheless, last month, it acquired PillPack, an online pharmacy for about $1 billion.
Amazon eyes to build profitable business through investment in Medplus.
MedPlus was founded by Madhukar Gangadi, which opened its first pharmacy store in February 2006 in Hyderabad. It has a presence in more than 150 cities and claims to serve 250,000 customers on a daily basis through its 1,400 pharmacy and general stores.
Gangadi holds a majority stake of 90 per cent after buyout of stakes from its existing investors — US-based Mount Kellett Capital Management LP, TVS Capital Funds, and Ajay Piramal’s India Venture Advisors.
In January, the Hyderabad-based firm had raised around $115 million in debt financing from Goldman Sachs to buy out existing private equity investors. In the following month, it has launched BatchTag, an online platform to sell a range of products at factory prices.
Through BatchTag, the online version of factory outlet, it claims to save your money by 40-80 per cent on market operating prices.
Medplus the pharmacy chain, it also runs businesses such as diagnostics chain MedPlus Pathlabs; RiteCure, a distributor of medical and surgical supplies to hospitals; MedPlusMart.com, an online medical store; and MedPlusLens, an optical store. Most of them are co-located with the pharmaceuticals stores.
The firm claims to be profitable and has a turnover of over Rs 2,000 crore. As per company filings, MedPlus booked revenues of Rs 1,726 crore in 2015-16, recording profit of Rs 9 crore.