Is India Getting A 10-Minute Medical Revolution With Swiggy & PharmEasy?

Around 2020, in India, the idea of 10-minute delivery as a business model started gaining some traction. But, this was something that faced both bouquets and brickbats.

Logistics was a concern in terms of whether there would be timely delivery in urban areas, where there’s traffic congestion or other delays. Some wondered whether the infrastructure could be maintained in the long term if there were quick turnaround times needed. Others were worried about the safety of drivers having to meet the deadlines.

But, in 2024, it seems like delivery from online platforms in short periods of time has become the status quo. There are even ideas floating around about trying to get food delivery in 10 minutes. So far, it’s mostly about groceries and other items.

But, in October 2024, quick commerce is going a step further. Food delivery platform Swiggy has a quick commerce services section called Instamart. It was announced that Swiggy would be partnering with online medical delivery platform PharmEasy. For the time being, the initial pilot would take place in Bengaluru. ?

This would allow Swiggy to offer 10-minute deliveries of medicine, including prescription drugs, which?could be pretty helpful, if medicines and other items are required for time-sensitive issues. To have medicines delivered in 10 minutes in those scenarios could be a major deal in India.?

Maybe, customers would have to upload prescriptions or consult with an available doc on the app, but, that might mean an additional level of tech know-how in terms of scanning and learning how to reach out.

This might be a win-win.?If Swiggy went the e-pharmacy route on its own, it might have to start from scratch, in terms of the regulatory oversight for selling and distributing prescription meds.?But, a partnership with PharmEasy might mean circumventing a lot of the existing red tape in a positive way, because PharmEasy most likely already have their licenses and regulatory compliances in place.

And as of June 2024, Swiggy is said to have close to 600 open dark stores that help with fulfillment. PharmEasy is said to have set up dedicated storage within Swiggy’s dark stores. So, this is an interesting shop-in-shop model. Shopception. It may be an interesting way for PharmEasy to not have to deal with intensive capital expenditure that way and use Swiggy’s network. And Swiggy gets to maximize its real estate.

Unfortunately, food delivery, which was Swiggy’s initial premise, might have razor-thin margins. Though, its food delivery aspect turned profitable in Q4 of FY23. But it’s said that for Swiggy, its quick commerce section might be a better growth opportunity and with stronger financial metrics. So, with pharmaceuticals as one of Instamart’s offerings, it might be a new lucrative segment. It’s said that revenue in the online pharmacy market would reach close to a billion dollars by the end of 2024. Might be a way to increase Swiggy’s AOV and offset operational costs.?So, Swiggy’s move to leverage its Instamart success and network could get to the centre of the e-pharmacy revolution.?Yet, the e-pharmacy sector in India might have low industry margins as well.

There’s a new trend of online platforms using distinctive and personalized push notifications to encourage you to order. Would it be legal for Swiggy to know when you need refills for certain medications and notify you in interesting and humorous ways?

While prescription meds might be cheaper in India than in the US, they still may carry higher margins than typical grocery or food items. Unless someone tries to emulate Mark Cuban’s Cost Plus Drugs in India, which might change the game a bit. But, even without the influence of a US Shark, there might be some challenges.

Dealing with medicines means there needs to be super careful handling and solid inventory management. It’s not like accidentally giving a customer mint instead of coriander; it’s much more sensitive. It’s said that a lot of medicines may be sensitive to temperature variations. So, Swiggy would have to pay more focus to how they store them, because potency is a big deal.

Sure, the e-pharmacy sector in India seems to have some established players. Tata 1mg, for instance, has the financial backing of The Tata Group Apollo has an extensive offline presence. But, Swiggy seems to have an interesting setup with Instamart that just might give them a competitive edge. Speed’s an interesting differentiator for consumers with urgent medical needs. So, this might bolster Tata 1mg or Apollo to have to re-evaluate their delivery time, even as they’ve cultivated some degree of customer loyalty. Of course, with a 10-minute delivery of medications, there could be errors in terms of whether correct medications are sent.?So, it’d be interesting to know whether the dark stores could somehow have pharmacist oversight.

There’s an IPO on the horizon for Swiggy. And in October 2024, Swiggy increased its platform fee from ?7 to ?10 for food delivery.

So, would the Swiggy-PharmEasy partnership do no harm to the food delivery platform’s operations?

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