Amazon is eyeing a nearly $100 million investment in India-based Apollo Pharmacy to gain a major foothold in the country's thriving drug market and take on rivals such as Tata Group and Reliance Industries.
While Tata Group is reportedly in talks to pick up a majority stake in online pharmacy firm 1mg, Reliance acquired a majority stake in e-pharmacy Netmeds in August this year. The deal, if it comes to fruition, will help Amazon access Apollo's front-end pharmacy business with over 3,700 stores.
Meanwhile, the Big Four accounting and advisory firm PwC (PricewaterhouseCoopers), which was taken on board to carry out due diligence, has concluded the process.
"The due diligence just got done and it seems to be a $100-million investment," a source told the Economic Times. The likely investment in Apollo could help Amazon gain access to an omnichannel model whereby it can choose products directly from retail stores and deliver them to consumers.
The US-based online retailer could position the potential investment on similar lines to its previous stake purchases in retail chains such as Shoppers Stop and Future Coupons, where it had also acquired a minority shareholding along with exclusive rights to index products from those retailers on its platform, another source told the publication.
Meanwhile, the growth of e-pharmacies has left many Indian trader groups feeling threatened, who say online drugstores can contribute to medicine sales without proper verification and the entry of large players can cause unemployment in the sector.
Amazon's plan to further expand in India also comes close on the heels of its launch of an online pharmacy to deliver prescription drugs in the United States, increasing competition with drug retailers such as Walgreens, CVS Health, and Walmart.