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Can online pharmacies take on local 'chemists'?
If a recent surge in advertising is much to go by, online pharmacies seem optimistic about taking on the friendly neighbourhood chemist. The question is - can they get buyers to trust them?
In May of 2017, Google India released a TVC titled 'Pharmacy Near Me' that focuses on the app which immediately pulls up the nearest pharmacy listed, complete with contact details and ends with the home delivery of something as simple as bandages. This TVC still appears on TV. But now, online pharma brands like Netmeds and Medlife have become visibly more active and have also begun to advertising on television.
While Medlife launched four TVCs under the title #LafadduMatBano, Netmeds launched its TVC, with MS Dhoni as brand ambassador, during the Ireland vs India T20I series. The TVCs for Medlife have been conceptualised by Soho Square, Bengaluru while Netmeds' TVC was made in-house.
While these brands seemingly advertising together may seem coincidental, it also appeared as if there was a sudden trend of online pharma brands that went active at the same point in time.
The size of the pharma business is Rs 20 billion and online pharmacies occupy just 1.5 per cent of the pie. According to sources, Medlife is looking to do a business of Rs 1000 crore in the year 2018-19 and would be spending around 10-12 per cent on marketing.
Charu Gupta
Anand Pathak
When discussing the reason for online pharma brands being active at the same point in time, Charu Gupta, marketing head, Medlife, has this to say, "The market has moved a bit ahead. Medlife started a few years back and now is the right time because everyone is noticing that the market is maturing. Other e-commerce brands have seen success; mobile and fashion brands have been there for the last five to six years now. So, now is the time when everyone seems to be advertising."
Anand Pathak, director of sales and marketing, Netmeds, is glad that the competitors are active since it helps the category to grow. "When we started in 2015, we were the only player spending on above the line (ATL) and building the category is very difficult when just one single company does that. It is a positive sign in the industry that the category is showing maturity and is going to the next level," he says.
Pathak also adds, "The evolution of e-commerce has already happened and it has been done by Flipkart, Snapdeal and others. So, the next big thing happening in the healthcare space is the online pharmacy and that's what we and our competitors are trying to do - to shape the online pharmacy domain in India."
Speaking about the challenge after doing consumer research, Gupta says, "When we talk to customers and ask them why they don't buy medicines online, despite receiving discounts of 30-50 per cent, they were still a bit hesitant and that's because of trust."
The questions that were put to consumers were those that included - What do you not trust about the system - and the answers the brand received were in the form of more questions like - Will the medicine arrive on time; even if it arrives, will it be genuine; will it be from authorised suppliers; and will I be able to return them in case a doctor changes my prescription? "These were the common challenges people had and we are trying to solve these problems," Gupta adds.
According to Pathak, who somewhat agrees with the competition, "We are already in those days where people are transacting online, but in the online pharma space, trust is the biggest thing that people are worried about. Three years ago this was a very niche category, but now, there has been growth and people are migrating from offline to online."
While the core TG for Medlife is male and female, 35+, SEC A and B, the brand is also talking to 25+ audiences because they are the caretakers who buy medicines online. For Netmeds, the core TG is male, 25+, Sec A and B.
Currently, Medlife is advertising via TV, digital, outdoor, print mediums, and even planning to do on-ground events. The brand's ads are quite visible on the rear of auto-rickshaws as well as busses. Netmeds is currently advertising on TV, digital and in print.
We spoke to brand and ad experts to get their views on whether or not people would find it difficult to trust online pharmacies and continue to go to their local chemists. Here's what we uncovered:-
Samit Sinha
Bikram Bindra
Samit Sinha, managing partner, Alchemist Brand Consulting, says, "I think, in any case, people who buy pharma products have more trust in the brands rather than the chemist. It is just a switch from going to the neighbourhood chemist and buying meds to getting them delivered to your home. It was a long time ago that you had a trusted doctor or a compounder who would give you some powder and you took it on faith. It still might be happening in some places, but in any case, that's not a market that Netmeds or Medlife is going to address."
He adds, "The markets these online pharma stores are going to target are chemists and diagnostics. Of course, there are offline chemists who do give discounts for their regular customers and that's clearly an attempt to keep them loyal. While I think it will be much more convenient to buy medicines online, if you are going to have a Crocin, you will have it and it doesn't matter where it comes from."
Bikram Bindra, vice-president and strategic planning head, Grey Group Delhi, says, "The relationship between a pharmacist and the average consumer in India, is quite an intriguing one; with the chemist often acting as an expert, a quasi-doctor who also doles out medicines basis symptoms that are called out. However, the category of online pharmacies isn't talking to the average man on the street but a new-age consumer who walks into a chemist knowing what he/ she wants and has a rather transactional relationship with this retail channel. This person is also a classically internet savvy, short on time metro dweller who likes the convenience of all things online. For this audience, the convenience, authenticity and availability of the products are far greater payoffs that the brands can offer with discounts being a slightly lower order payoff."
Adding about whether the communication will become only discount-oriented in the future, Bindra opines, "The peg of discounting by large e-retailers like Flipkart and Amazon, has only been one pillar of their marketing strategy. They have always supplemented it with work that has been more brand-out; about the range of offerings and the emotional payoff of their services. That should ideally be the way this category should shape up too, in the times to come."