Reliance Industries (RIL) subsidiary Reliance Retail Ventures (RRVL) has acquired 60 percent equity stake in Vitalic Health that owns online pharmaceutical distribution Netmeds for Rs 620 crore or $83 million in cash.
This investment represents ~60 percent equity stake in Vitalic and 100 percent direct equity ownership of its subsidiaries, viz: Tresara Health Private, Netmeds Market Place and Dadha Pharma Distribution.
Incorporated in 2015, Vitalic and its subsidiaries are in the business of pharma distribution, sales, and business support services. Its subsidiary also runs an online pharmacy platform – Netmeds – to connect customers to pharmacists and enable door step delivery of medicines.
Isha Ambani, director of Reliance Retail Ventures, said, “The addition of Netmeds enhances Reliance Retail’s ability to provide affordable health care products and services, and also broadens its digital commerce proposition to include most daily essential needs of consumers.”
Pradeep Dadha is the founder and CEO of Netmeds.
Netmeds offers a pan-India solution for the online purchase and delivery of prescription medicines to over 20,000 pin codes. Netmeds has served over 5.7 million customers in more than 670 cities and towns.
The deal follows Amazon’s move last week to start online drug sales in Bengaluru, and comes amid intensifying competition in India’s e-commerce sector, which also includes Walmart’s Flipkart and a range of smaller players.
Reliance, India’s most valuable company, has raised more than $20 billion in recent months by selling stakes in its digital arm, Jio Platforms.
Netmeds gives it a foothold in a sector that is forecast to grow to 250 billion rupees by 2022, according to consultancy Frost & Sullivan.
The growth of e-pharmacies has left many Indian trader groups feeling threatened, who say online drugstores can unwittingly contribute to medicine sales without proper verification, and that the entry of large players can cause unemployment in the industry.
“It is not only about the pharmacies. It is also about the back end. There are tens of thousands of people employed in the pharmacy business,” Yash Aggarwal, legal head of South Chemists and Distributors Association in New Delhi, said on Wednesday.
The group had written to Amazon last week, opposing the e-commerce giant’s move.
