Ever ordered medicine online because it was more convenient than leaving your home when you were sick? Or simply stocked up on your go-to health products by ordering from an online store, which allowed you to go about your day uninterrupted? If yes, then you have participated in the online pharmacy trend.
Online pharmacies are dedicated online stores that sell healthcare products, which include categories such as eye care, medical products and nutritional products.
At ECDB, our expertise in all matters of eCommerce allows us to explore a range of sub-markets in the industry, one exciting of which is the online pharmacy market. Due to the international orientation of this industry, the eCommerce data on specialist pharmacies provides a perspective on pharmacy leaders from around the world.
Global healthcare eCommerce is growing steadily
Pandemic and healthcare – healthcare eCommerce seemed like a godsend during the global health crisis. The online pharmacy boost can be seen in the steep revenue growth between 2020 and 2022, when the market grew at a CAGR of 18%.
During this time, healthcare eCommerce solved global problems. The exact benefits of this market varied by region.
In mature eCommerce markets like Europe or North America, online healthcare added a layer to the provision of pharmaceuticals and nutritional products that were hard to come by during store closures and general caution. But the need for online solutions remained after 2022, which was driven by developments such as the increasing scarcity of physical pharmacies.
In emerging markets like Latin America and Asia, access to health products is a huge factor in the success of online pharmacies. That is why the top online pharmacies are made up of players from very different backgrounds.
Top online pharmacies come from all over the world
The top 10 ranking of specialist online pharmacies by eCommerce net sales includes players from all over the globe. The top two stores are operated by large U.S. companies with a long standing in the industry, while others are up-and-comers from smaller eCommerce regions.
Leader walgreens.com generated over US$2 billion in online net sales in 2023, followed by its competitor cvs.com with about US$1.6 billion. The two domains exist in a competitive market dominated by Amazon and Walmart, but the current downsizing of physical pharmacy networks is putting more emphasis on the online offering of specialists.
In mature eCommerce markets like the United States and Germany, online pharmacies are offsetting the reduction of physical pharmacies, as a current increase in pharmacy closures creates so-called “pharmacy deserts” in various regions. In countries where eCommerce is still expanding, online pharmacies support nascent structures, which is the case in Brazil (drogaraia.com.br), Mexico (fahorro.com) and Romania (drmax.ro).
But the development of online pharmacies depends on more factors than consumer demand: Regulatory concerns about remote ordering of pharmaceuticals are highly prevalent in online shopping, to prevent the circulation of substandard or counterfeit products. As a result, it is not always up to the eCommerce market itself whether online pharmacies can flourish. Online pharmacies need to be licensed, trusted, and financially viable for continued success.
Latin American online pharmacies surged since 2020
How the online pharmacy ranking has evolved in recent years is a reflection of the post-pandemic development of consumer demand and regulation. Some governments approved the online pharmacy industry during Covid and kept it in the years after due to lasting benefits for providers and consumers, where before the structure was unregulated or minute.
The ranking positions of online pharmacies between 2020 and 2024 show that the two shops from Latin America, drogaraia.com.br and fahorro.com, made the biggest jumps in this period. Drogaraia went from 18th to 6th place and Fahorro from 25th to 9th place.
Fahorro’s online revenue increased by more than 200% between 2019 and 2020, from US$50.3 million to US$195.6 million. The company’s explosive rise is evidence of how the pandemic provided a boost for these types of businesses, which meet specific needs in an emergency situation. Brazil’s drogaraia.com.br saw a similar, but less extreme development, with a 127% increase from 2019 to 2020.
Increasing accessibility in North America and Europe
The remaining pharmacies in the top 10 stayed closer to the list: The two leaders walgreen.com and cvs.com remained steady, while the German online pharmacies shop-apotheke.com and docmorris.de traded places between third and fifth. Germany’s online pharmacy industry serves markets across Europe, making it one of the biggest influences on the continent.
Europe’s prevalence in the field gains weight from Russia’s apteka.ru and Sweden’s apotea.se. Online pharmacies are popular in Russia due to their remote accessibility, and Sweden’s online pharmacies seamlessly reach customers in the country through warehouse automation and technological integration of hybrid channels.
In Central and Eastern Europe, the Dr. Max Group is well represented. It is ranked among the top 10 online pharmacies with drmax.ro, where it has moved from 12th to 9th place since 2020.
What’s next for online pharmacies?
Of all the product categories in the healthcare market, pharmaceuticals drive market revenues. The revenue split is clearly skewed toward pharmaceuticals from 2022 onward. By 2028, pharmaceuticals are expected to account for nearly 50% of market revenues. Pharmaceuticals have a huge revenue potential, given the guaranteed need for medicines in the future and the likelihood of more favorable regulatory conditions enabling online distribution of medicines.
Along with the increased accessibility of online pharmacies across the globe, the industry is expected to expand in the coming years. Global conditions such as the decline in the number of physical pharmacy locations and changes in consumer habits are contributing significantly to the growth of online sales.
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