Netmeds has opened Netmeds Pharmacy, a physical store in Nanded in Maharashtra. Netmeds claims that 65% of its online business comes from non-metros.

The Nanded store is a franchise, with more stores slated to open in Chennai, Bangalore, Mumbai and Delhi, and Tier 2 and 3 cities like Surat, Ahmedabad, Pali, Rajasthan and Balurghat, West Bengal. Netmeds did not mention a timeline for this expansion. The company claims that the franchise model will create jobs in the local communities and help the retail economy.

Netmeds founder & CEO Pradeep Dadha said, “We believe that the neighbourhood chemist shop and the local pharmacist will continue to play an important role in the overall healthcare landscape…. licensed Netmeds stores will combine the company’s impeccable reputation in the pharmaceutical sector…”

Multiple online companies have adopted the “omnichannel” mode of operations where they start off selling goods online but slowly move into the offline retail world. However, the more interesting scenario here is the lack of regulation in India for online pharmacies. Netmeds will see value in having an offline presence, even if through a franchise, to tell the regulator that it indeed is now available offline.

Draft e-pharma policy

India does not currently regulate the e-pharma space. But it is looking into the space as a result of many offline chemist unions which state that online sales of drugs is illegal and can lead to misuse. In September, the Union government released a draft policy regulating the operations of online pharmacies as amendments to the Drugs and Cosmetics Act. The draft policy mandated registration of the online pharmacies with a central licensing authority, and codified the requirements from such businesses.

E-sale of meds, offline chemist associations’ protests

  • Last month, 6 online pharmacy companies, including Netmeds, appealed before the Madras High Court that the interim stay on the online sale of medicines should apply to unauthorised companies only. The appeal was filed in response to an interim injunction passed by the court in the same month which ordered a stop to the online sale of medicines after the Tamil Nadu Chemists’ and Druggists Association (TNCDA) sought a stay on the online sale of medicines, asserting that no company had the license to do so.
  • In October, the Delhi HC issued notice in a petition appealing for closure of online pharmacies which sell drugs and prescription medicines through websites and apps. The petition was moved by the offline pharmacy association South Chemists & Distributors Association.
  • In September, the All India Organisation of Chemists and Druggists (AIOCD) had organized a nationwide strike against the government’s rules on online pharmacies, as part of the Bharat Bandh against the Flipkart–Walmart merger on September 28.

Our Netmeds coverage, and online pharmacy coverage.