INDIA –The Confederation of All India Traders (CAIT), has raised the issue of malpractices practiced by e-pharmacy giants in the digital space and urged the central government to take action against them.
The trade body alleged that primarily Pharmeasy, Medlife, 1Mg, Netmeds (now owned by Reliance group), Amazon and Flipkart are conducting business practices in contravention of provisions of the Drug and Cosmetics Act, 1940 and misusing the e-commerce space by selling at low prices with 30 to 40 percent discount and free shipping.
It’s a case of capital dumping in e-pharmacies by foreign giants which is proving extremely detrimental to the future of the lakhs of crores of small chemists across the country, the trade body said in a statement
Retail chemists provide last-mile connectivity, and emergency provisioning is provided by brick-and-mortar retailers, who also provide a living for millions of retail pharmacies, their families, and employees.
“The retail chemists are the last mile connectivity and emergency provisioning is ensured by brick-and-mortar retailers who in turn also provide a livelihood to millions of retail pharmacies, their families and employees,” it said.
The CAIT also stated that e-pharmacies such as Pharmeasy and Medlife engaged in deep discounting on their platforms, offering a flat 30% discount.
CAIT National President B.C. Bhartia and Secretary General Praveen Khandelwal stated that the proliferation of e-pharmacy is causing significant difficulties for retail chemists and distributors as a result of anti-competitive practices such as capital dumping and deep discounting, which leads to predatory pricing.
Retail chemists and distributors, as well as brick and mortar medicine retailers, are the first points of contact for needy patients across the country.
Due to their unmatched and often unsustainable pricing, e-pharmacies with financial backing from large foreign players/funds have begun to disrupt brick and mortar retailers.
CAIT has demanded that, in addition to general e-commerce, where rules and policies are being flouted at a high magnitude level, e-pharmacy has become another trade that these heavily funded companies are attempting to capture and monopolize at the expense of uprooting thousands of chemists and medicine traders across the country.
As a result, the government’s immediate intervention is required to put a stop to this threat.
The sole purpose of predatory pricing is to eliminate market competition. E-pharmacies engaged in predatory pricing immediately following the lockdown.
Lofty discounts disturbs market
CAIT argued that E-pharmacies offering a 25% discount on medicines and a staggering 75% discount on wellness products, disturbs a market that had begun to expand following the recent Covid-19 pandemic.
While a 25% discount on medicines can distort the market, a 75% discount on a market that is just getting started is daylight robbery because it not only erodes the customer base of traditional retailers but also creates unhealthy competition that is unsustainable in the long run.
CAIT has reiterated its demand for the issuance of a new press note in place of Press Note 2 of the FDI policy in order to make Indian e-commerce trade free of all glitches and a competitive level playing field for all stakeholders.
It also demands for the formation of a Regulatory Authority to monitor and regulate e-commerce business in India.
To further capture the market, customers who receive free shipping will receive a 20% cashback. “This effectively translated to a whopping 40 to 45 percent discount with free shipping,” they claimed.
Liked this article? Sign up to receive our regular email newsletters, focused on Africa and World’s healthcare industry, directly into your inbox. SUBSCRIBE HERE