E-pharmacies are back in business as demand surges for lockdown essentials

Despite initial hiccups, e-pharma companies have seen an upsurge in business since the government announced a 21-day lockdown in the country due to the Covid-19 pandemic. Having overcome the early supply chain challenges, companies claim that business is now back on track with adequate stocks to meet market demand.

“The e-pharmacies had to face the brunt because of supply chain issues. However after the initial breakdown, the business has now started picking up pace, and we have doubled from the last couple of weeks,” Dharmil Sheth, co-founder of Pharmeasy told TechCircle. The Mumbai-based Pharmeasy is backed by Temasek Holdings and last raised a $220 million funding round in 2019. 

When the 21-day lockdown was announced, the supply of medicines stopped and there was a sudden rise in demand for the services of e-pharmacies, Sheth said. 

However, the sector continues to face challenges in back-end operations due to restrictions on inter-state transport.

Supply chain disruptions

“We are currently tackling first and last mile delivery issues. First-mile more so, because of restrictions on inter-state transport that is impacting delivery of consignments to our fulfilment centres,” Ananth Narayanan, CEO of Bengaluru-based MedLife, backed by Mauritius-based Wilson Global Opportunities said.

Aggregators such as 1MG purchase stocks from multiple manufacturers and it takes around up to three working days to get supplies into the warehouse. With the current restrictions, the time-lag has gotten extended.

The restrictions on inter-state and inter-city movements caused maximum disruption of services during the first week of the lockdown, though the companies hope to be back at 70-80% of their capacity within a week.

“On the back-end supply of medicines, most distributors are not able to function due to the lack of staff and working capital. Distribution markets in cities are mostly shut. And even if they open, it's for a short duration with large queues to cater to. This is particularly true for smaller tier-2 cities such as Indore, etc.,” said Tanmay Saksena, COO, at Gurugram headquartered 1mg.

He added that direct supply from manufacturers and speeds of carrying and forwarding agencies have also slowed down over the last two weeks due to staffing issues and restrictions on movement.

The Home Ministry and ministry of commerce had set up a task force to address the challenges faced by e-pharmacies. 

“The last-mile continues to be a challenge considering unavailability of delivery personnel in full strength. We are working with the government and hope to resolve issues with respect to movement of men and medicines soon, across the country,” Narayanan of Medlife said.

Further, the Ministry of Health and Family Welfare had issued a government order earlier this week laying down criteria for doorstep delivery of medicines. The order imposes licensing norms and geographical restrictions on the delivery of medicines, adding to the sector’s challenges.

What is flying off the shelves

The spike in demand after the lockdown was not restricted to sanitisers and disinfectants. Consumers also placed orders for antibiotics and cold-flu-fever medicines as well.

E-pharma companies also noted that the lockdown created panic-buying among people and consumers rushed to stock basic medicines and take antibiotics without consulting doctors.

Demand continues to be high for products such as masks, sanitisers, fever/flu related medicines, immunity boosters among others.

"The country has seen an unprecedented upsurge of over 1,400 percent in sanitation products, and over 500 percent in disinfectants in the last two weeks alone,” Pradeep Dadha, founder and CEO of Netmeds, said in an email to TechCircle.

“We have ensured that Netmeds.com has adequate stocks of hand sanitizer at government-approved rates as per the directive issued by the centre,” he added.

Staffing challenges

“It is important to understand what services are required to keep essential services running. For example warehouse cleaners, packaging material, printing stationery,  billing papers, etc are the things which fall under the non-essential category. But since it is necessary for us to run operations, we need to identify these as well for the government in order to ensure things are moving smoothly and fairly,” Sheth of Pharmeasy said. 

Pharmeasy is currently working with only 50 percent of their staff and are looking for small time partnerships with businesses such as restaurants to on-board their staff for a temporary period.

As a measure to ensure that staff are protected from infection, companies have taken measures to ensure that basic protection and insurance cover is provided.

Pharmeasy has provided 50 percent of its staff with insurance and the next half will be done soon, whereas Medlife is providing the necessities like face masks and hand sanitizers, we have assigned doctors to each of their fulfilment centres.

“We have recently announced an extension of medical insurance cover for our employees to include Covid-19. Apart from the standard coverage, the new offering has earmarked Rs 1 lakh for treatment associated with coronavirus for our contract employees,” Narayanan added.