Aman Priyadarshi claims his startup Plazza is building India’s first instant health app. The likes of Swiggy Instamart, Blinkit and Zepto have shown the way, and he is among a handful of entrepreneurs looking to branch off to create quick commerce offshoots.
The quick commerce battleground seems to be shifting from groceries and even electronics to medicine delivery and healthcare. Swiggy launched an epharmacy on Instamart through a partnership with Pharmeasy, while Flipkart Minutes is looking to leverage sister company SastaSundar to get a foot in the door.
Tata 1mg and Apollo 24/7 are also in various stages of piloting instant medicine delivery, with 1mg teaming up with fellow Tata company BigBasket for the service in select cities.
Many believe it’s the biggest untapped segment as of now in the quick commerce space, where average order value is the current big focus for players.
Like groceries, one can say that medicines and healthcare are part of the essential bucket for most households in India, and by going after this key segment, quick commerce players are hoping healthcare will also drive platform affinity besides average order value.
But even as the likes of Swiggy, Flipkart Minutes and Tata BigBasket look to capitalize on this whitespace, Priyadarshi and others say there’s a window of opportunity for new players to deliver consumer delight and value in the healthcare space through quick commerce.
Plazawhich launched on November 29, 2024, is currently limited to a single location in Bengaluru, and Priyadarshi, a former Kenko Health and Zomato executive, says the existing model for pharmacies is broken and outdated, and there’s an opportunity to not just disrupt medicine. delivery, but also go beyond that.
And he also believes that having a mixed focus on grocery and medicines is perhaps not ideal, which is why a dedicated quick commerce pharmacy has the room to grow in India and increase the penetration of online pharmacies.
“It’s like in the real world, even a large Kirana outlet will not have the bandwidth and workforce to manage pharmacy operations in the same space. You will need a more knowledgeable and qualified workforce in dark stores and the capacity for over 1.5 Lakh SKUs,” he says.
But will have the upper hand in the quick commerce pharma race?
Quick Commerce Enters New Era
If the rise of Flipkart in the early 2010s led to the emergence of vertical ecommerce marketplaces, can we really be surprised that the quick commerce era has also spawned similar counterparts? Swiggy Instamart, Blinkit, and Zepto are the new influencers.
Plazza is looking to bring the quick commerce magic to the pharmacy and healthcare side, while Swish, Slikk, Zing and perhaps dozens of others in stealth mode are looking to specialize in 10-minute food delivery.
Myntra is trying its hands at 30-minute deliveries for apparel and lifestyle products, and Nykaa is piloting the same with beauty. Essentially, quick commerce is easily the most pervasive trend in Indian consumer tech today.
Accel and RTP Global-backed FirstClub is looking to target the premium category and build a brand that has a significant presence in the physical retail space, rather than as an app-only service.
This quick commerce wave is wholly expected in some ways after the past year (FY24) when the three largest platforms — Blinkit, Zepto and Swiggy Instamart — all exceeded $1 Bn in GMV. But can this model be extended to pharmacies and healthcare in the same way.
Put another way: while many might appreciate the convenience of having medicines on their doorsteps in a matter of 10-15 minutes, is it really possible to go beyond this?
In fact, access to medicines and drugs is just one part of the healthcare value chain — albeit a significant part — and existing quick commerce apps have already built capacity in terms of over-the-counter (OTC) medicines. OTC drugs, supplements and nutraceuticals are
The big push today is for prescription-based medicines, which the likes of Swiggy Instamart, Flipkart Minutes and others are trying to target.
The Dawn Of Quick Pharmacies
“Prescription-led purchases of medicines are driven by doctors and healthcare providers, who typically guide patients to preferred brands and retailers around their clinic or hospital. This doctor-led distribution is embedded in the customer or patient’s mind. Breaking through this is difficult, which is why even the likes of Pharmeasy have found it challenging to scale up profitably” says the founder of a Bengaluru-based healthcare startup.
Plazza’s Priyadarshi also acknowledged that it will take a lot more to change customer and healthcare provider behavior.
The key to success is incentivizing these two sides of the healthcare industry to embrace the quick commerce model and not just for medicines but also for services like testing, consultation and monitoring all of which are critical in the healthcare chain.
These are also reasons why the grocery quick commerce model cannot simply be copy-pasted for pharma and healthcare. Plus, there’s the point Priyadarshi made about the need for a qualified workforce to manage pharmacy operations, but even beyond this, the Plazza founder says that the workforce in the retail pharma channel is heavily exploited and overworked.
“Being a pharmacist is a dignified job but not a good job. You are still doing things the old way and the supply chain is heavily outdated. A large pharmacy has anywhere between 5-6 pharmacists that do everything from opening to closing and managing customers,” the Plazza founder and CEO told Inc42.
Priyadarshi reckons that in one small pocket like Bellandur in Bengaluru, home to around 20-25 pharmacies, one sees around 1,500 walk-ins every day and it’s an INR 4 Cr to INR 5 Cr market on the basis of monthly revenue. All of these can be catered to by a couple of stores and by eliminating the doctor-led distribution, which forces patients to choose certain brands and manufacturers.
Reading and authorizing prescriptions are a challenge, but that can be largely solved by technology and safeguards built around customer behavior and other indicator data such as location and order frequency. The challenge, according to the healthcare founder quoted above, will be building a tech stack that understands drug inventory better than ever before, and removing the reliance on doctor-preferred brands.
Swiggy, Flipkart’s Pharma Flip
While these are early days for dedicated quick pharmacies, Swiggy and Flipkart have looked to capitalize on this gap. Swiggy, fresh under the spotlight from its recent mega IPO and the Q2 FY25 results this past week, is clear that having the right mix of categories across grocery, non-grocery and now pharma will be the key to garnering long-term customer loyalty.
In the earnings call after the Q2 results, Amitesh Jha, CEO of Swiggy Instamart, told analysts that categories like pharma are generally because as a use case they are more repetitive. “It also gives a very high recall value as well [for Instamart] because it is one of the things that you essentially need. I will come back to my whole view of how the offline market around you has a hardware store to a pharmacy to an FMCG store. Within this assortment, can you essentially cover all of them?”
A key piece of the puzzle are Swiggy’s megapods or the mega dark stores. Chief financial officer Rahul Bothra told Inc42 before Swiggy’s listing that the company is in the process of operationalising ‘mega dark stores’ with an area of 8,000-10,000 sq ft in several pockets of Bengaluru.
Swiggy cofounder and CEO Sriharsha Majety also said at the time that while speed is essential for quick commerce, having the right assortment of products and SKUs will be a key differentiating factor in the longer run.
Incidentally, the larger dark stores will allow Swiggy to stretch into more categories and grow the SKU count on Instamart. Such a setup allows Swiggy Instamart the bandwidth to carry lakhs of SKUs on the medicine side, but the company is also adding large appliances, fashion products and electronics to its dark stores. So medicines will have to share space with these categories for now.
At the moment, Swiggy’s pharma operations inside the dark store are managed by Pharmeasy, according to those working with these dark stores. Currently, Swiggy Pharma is only live in Bengaluru, and it’s not clear when Swiggy will take it to other cities.
On the other hand, Flipkart Minutes has started enlisting local chemists and pharmacies in Bengaluru and other metros and delivering them through its last mile delivery partners. Going forward, SastaSundar will be a key part of Flipkart’s healthcare offerings, which are bundled under Flipkart Health+.
Medicines get a dedicated space inside the megapods, and all due diligence such as prescription checks and sanctity of medicines happens through a dedicated person stationed inside these stores.
Pharmeasy’s prescription tech is being used to read and analyze prescriptions with the dedicated resource double-checking the order.
The question is will Swiggy continue to rely on Pharmeasy if and when this vertical scales up. Doing this without a partner might not be easy. The high margins in pharma delivery are diluted if Swiggy and others have to enter into licensing deals with existing epharmacies.
The All India Organization of Chemists and Druggists (AIOCD) has already raised concerns about the quick delivery model, especially around prescription verification, warning of potential risks such as poor drug storage and lack of quality control.The body cited the example of the Swiggy- PharmEasy partnership as being risky.
India does not have a regulatory framework for online pharmacies and incumbents such as PharmEasy, NetMeds, 1mg and others have faced concerns in the past from chemist organizations around operating without a license.
But the fact is that quick commerce has given new wings to the epharmacy business, as now startups have the logistics knowhow as well as demand forecasting and planning data needed to pull this off.
The Game Beyond Medicines
But Plazaa’s Priyadarshi says that the game is not AOV; but streamlining everything from consultation to appointments to tests to the eventual delivery of medicines through a single window. He believes that whoever owns this entire funnel will be the eventual winner, because this creates a virtuous loop that is so familiar to the healthcare customer.
In some ways, medicine delivery is just a go-to-market strategy for quick commerce players. Even Swiggy has admitted that the ultimate goal is to own the online experience for customers looking for that familiarity of the physical market.
So customers getting medicines in 10 minutes might start expecting tests and consultations in a similar time frame. Priyadarshi says that tests will be live on Plazaa within the next few weeks and customers will be able to get tests inside their homes in a matter of minutes, unlike say a few hours right now.
Will Swiggy, Flipkart and others also move towards this direction? It’s not unlikely but for now, the quick commerce focus is squarely on pharma deliveries within the healthcare piece. These platforms have to first overcome the very challenges that existing epharmacies face before looking beyond this.