Online pharmacy market: Still in its infancy, but potential high

Infographic: TBS

​​​​​​In April 2020, when the country was under a strict nationwide lockdown, Mohammadpur resident Rajib Halder was at a loss.

His wife was pregnant, and due to severe health complications, she required two injections every day. But the injections she needed were very rare, and the local pharmacies did not have those. 

Under usual circumstances, Rajib would have to run from one pharmacy to another, either in Shahbag or Panthapath. But at that time, amid a lockdown, Rajib did not know how to get his hands on those injections. 

Then, he found an online pharmacy named BanglaMeds, which could solve his problems. He uploaded an authorised prescription on their website, and within 24 hours, they delivered the injections to Rajib's doorstep. 

Moumita Iqbal from Azimpur had a different kind of problem. She uses menstrual cups during her period, which is not very common among Bangladeshi women and generally not available in the brick-and-mortar pharmacies of the capital.

Though Moumita found a menstrual cup from a Facebook page, she was still in need of a liquid menstrual cup wash to clean her cup, but could not find it anywhere. 

She finally stumbled upon a menstrual cup wash at an online pharmacy called Shombhob Health. To her utmost amazement, she also discovered many other imported feminine hygiene and reproductive health products that she had not been even aware of previously. 

Through her conversations with the website's customer care executives, she got to learn more about the products and felt that finally she had found a safe and women-friendly place for all her healthcare needs. 

Although online pharmacies may not be very popular in the country yet, the pandemic left the doors wide open for them, and gradually they are making their presence felt.

Within the next few years, the online retail pharmaceutical market is expected to see tremendous growth, going from a market share of under 1% to as high as 5%, depending on market awareness and technology penetration.  

Where things stand now

The market size of Bangladesh's pharmaceutical sector stood at $3 billion in 2019, and is estimated to surpass $6 billion by 2025, according to a report from Dublin-based market insight and analysis firm Research and Markets. 

While there are more than 1,50,000 physical pharmacies or drug stores in the country, according to the Directorate General of Drug Administration (DGDA), there are also around 10 reliable online pharmacies, and hundreds of other Facebook-based sellers of medicines and healthcare products.

The online pharmacies currently have a market share of less than 1%, Chaldal's head of brand and communication Muhammad Nazimuddaula told The Business Standard. 

However, by 2024, the online retail pharmaceutical industry may be approximately worth between $150 to $250 million, or nearly 5% of the country's entire pharmaceutical industry, opined Gazi Musayab Raffan, co-founder of BanglaMeds, which was acquired by Chaldal in 2021. 

Meanwhile, Statista projects that revenue in the country's online pharmacy segment may reach $77.35 million in 2023.

We reached out to the e-Commerce Association of Bangladesh (e-CAB) to verify this information. However, the association's executive director Jahangir Alam Shovon said they did not have any data specifically for the online pharmacy market.

Change of culture in medicine purchase

When it comes to pharmacy business, the biggest challenge is to make sure that medicines not classified as Over the Counter (OTC) are being sold only against authorised prescriptions by specialist doctors, to prevent misuse. 

In Bangladesh, it is very easy to buy prescription medicines without prescriptions due to local pharmacies often being non-compliant. Also, most physical pharmacies in the country do not have licensed pharmacists. 

However, there are some online pharmacies that are determined to solve these problems. One such online pharmacy is Osudpotro, where customers can only order non-OTC drugs through prescriptions, and they also have certified pharmacists to check on the customers and resolve their queries, according to their CEO Ashfaqur Rahman. 

Prescriptions are mandatory for Shombhob as well while selling non-OTC medicines. "We ask our customers to share their prescriptions with us through the website, Messenger or WhatsApp," said the company's founder and CEO Azra Salim. 

The same is applicable to other leading online pharmacies like BanglaMeds (now Chaldal Pharmacy), Arogga, MedEasy, ePharma, Health OS, BioMed, LazzPharma etc. as well. 

"We are strictly following all rules and regulations applied by DGDA while selling medicines online," said Shakib Lohani, business development and marketing director at UniMed UniHealth, the parent company of BioMed. 

And online pharmacies cannot help but be extra cautious; if something unexpected happens due to medicines bought from physical pharmacies, it is generally impossible to trace the seller responsible. But it is extremely easy to trace online pharmacies.

Apart from prescription medicines, these websites also sell OTC medicines, women's health and beauty care products, men's products, baby care products, as well as medical devices and equipment under various categories. They also offer online consultancy with expert pharmacists and doctors. 

Stock of their own

There was a time when most online pharmacies would go for a similar model as food delivery, where a delivery guy would pick up medicines from a physical pharmacy and then deliver them to the customers, according to Gazi Raffan. 

However, things are completely different now. BanglaMeds, under Raffan's leadership, first started stocking medicines, and now some other pharmacies have also joined the bandwagon.  

"We have and maintain our own stock of medicine. On rare occasions, such as during emergencies, we purchase medicines from outside [only which are not available in stock]. But it is not like other medicine and food delivery services," claimed Shakib Lohani. 

Meanwhile, some online pharmacies also have a hybrid business model, running both offline and online. For example, Osudpotro has several physical outlets in Dhaka, which the company uses to deliver online orders for those respective areas. 

Shombhob also follows the same model, and in a sense, the physical shops work as their warehouse to store their stocks. 

"We source our medicine directly from the manufacturers and importers/distributors," said Azra Salim, adding that physical shops can give their customer's the message of Shombhob's reliability and authenticity. 

Lazz Pharma, the country's largest medicine chain shop with nearly 70 branches across the country, also has a website from where their customers can order medicines and get home deliveries. 

"We don't have any separate set-ups for our online section. We can put all our stocks in our physical shops, and if any online order comes through, we can simply take medicines from these physical shops," said Lazz Pharma's General Manager Anwar Hussain. 

And online pharmacies cannot be directly registered with the DGDA. In order to launch online pharmacies legally, companies also need to have their physical pharmacies registered, said Md Ashraf Hossain, a director at the DGDA.  

Who are the potential customers? 

The lack of proper market research is felt further when the industry insiders are queried about their potential customers. 

According to Raffan, the majority of e-commerce customers and medicine buyers are not the same. While the online market is dominated by young people under 40, people start buying medicine after the age of 35 and onward. 

"So, many of our customers are not typical e-commerce customers. They still prefer offline. Making older people, who are not tech-savvy, buy from online pharmacies is a major challenge for now," said Raffan. 

Lohani, meanwhile, was a lot more specific. "The age categories of 20-30 and 40-63 usually order more medicines from our online pharmacy," he said. 

However, Nazimaddaula thinks otherwise, saying that people of all ages and professions are their potential customers.

And the same mindset is shared by Azra. While she shared that the key demographic of her website shows people aged between 30 and 50 buying medicines online the most, she also mentioned that targeting the potential women customers could do the trick for them. 

"In our society, women tend to take care of their entire family. So, we are looking to attract them through telemarketing, SMS marketing and online consultations," she shared. 

According to her, if women customers are educated about online purchase of medicines, they will be recurring customers and buy medicines for not only themselves, but also their children, parents, spouses, and other elderly family members.

Anwar Hussain shared that most of Lazz Pharma's online customers live abroad, and order medicines from the website for their parents. 

"In the past, they would simply send their drivers or caretakers to our outlets to buy medicines. But many people didn't have trust in them, so nowadays they are taking advantage of our home delivery system, and placing orders online," Anwar said. 

Business yet to pick up pace 

It was during the coronavirus pandemic when the market for online pharmacies saw a solid growth. 

During the pandemic, almost everything like groceries, clothing, stationeries and even household items were delivered to people's doorsteps through e-commerce sites. However, there weren't many online pharmacies in operation. 

"Due to the pandemic, people felt the extreme need of getting medicines home delivered, and that's when the online retail pharmacy market became wide open. This is when Chaldal and other e-commerce sites also shifted their focus on this untapped market," said Chaldal's Nazimuddaula. 

At that time, BanglaMeds was the biggest player in the market, and they were processing 250-300 orders a day, according to Raffan. However, Raffan's BanglaMeds is now owned by Chaldal, and the company didn't want to share the current figures with us. 

Anwar Hossain informed that each of LazzPharma's physical branches looks after the online deliveries of surrounding areas separately, so they don't have the exact number of how many online orders they process every day. 

"But I can give you a rough idea. One of our biggest branches is in Kalabagan, which sells medicines worth Tk20,000-25,000 through online orders. Still, it's nothing compared to our offline sales," he said. 

Across all the physical branches, LazzPharma's daily turnover is more than Tk1 crore. 

Elsewhere, other online pharmacies, despite tremendous efforts in the past few years, are far from reaching the three-figure mark in terms of total orders processed every day. 

BioMed is currently processing 20-25 orders daily, while Shombhob is doing 30-40 orders every day, with the average basket value being around Tk1,000-1,300. 

Also, the current ratio between Shombhob's online and offline shops is 60-40. But Salim believes there will grow a massive gap in the ratio once their online business properly kicks in.

"Online pharmacies in Bangladesh are still in the beginning phase. We have to work on market awareness first, sharing knowledge and educating our potential buyers. Only then can we expect a sustainable future," she added.