10-Minute Medicine Delivieries: A Cure For Zepto, Blinkit, Instamart’s Losses?

Doesn’t the sky look grey and the air feels choking as you soon begin to battle a burning sensation in the eyes? It does, if you are living in a city that’s spilling over every day, getting more crowded than the people it can shelter, and teeming with more vehicles than it can hold on its roads.

India’s rapid rise to be an economic powerhouse has brought us the return gift of unabated pollution, and gave us the inseparable box of anti-histamines, nasal sprays, eye drops and tissues.

In fact, over-the-counter (OTC) drugs move faster than fast-moving consumer goods. Then how could we not list them for fast-delivery on a par with our pizzas and groceries?

Quick commerce platforms quickly read the consumer mind and found what they had been looking out for – a high-margin category beyond groceries in their quiver – and started piloting drug deliveries. 

For quick commerce big three – Zepto, Blinkit and Instamart – success in pharma delivery is the next milestone they aim to achieve. The quick commerce brigade is aiming for a 20%-30% slice of India’s ~$67 Bn pharma opportunity that’s  projected to reach $88.86 Bn by 2030. 

While Instamart was a first-mover in the medicine delivery segment, making its foray late last year, Blinkit and Zepto caught up with the trend with prescription medicines, besides OTC drugs. What sets the three companies different from each other is their strategy. 

But unlike dedicated players such as Plazza, these 10-minute medicine delivery players are currently still exploring the periphery of this segment. None of them has ventured deep into the pharmacy supply chain yet and therein lies a big challenge for the 10-minute medicine delivery market.

While Swiggy-owned Instamart announced a partnership with fellow Prosus portfolio company Pharmeasy for medicine procurement and prescription verification, Blinkit, insiders said, is moving to own the SKUs and have in-house prescription verification.

Further, sources told Inc42 that Zepto is hiring licensed pharmacists from Mumbai and Bengaluru to enable 10-minute deliveries for prescription medicines.

Zepto’s pharma category manager Akash Bhatnagar said in a LinkedIn post that the company will procure all medicines and deliver them directly from its dark stores. “This approach ensures that quality and authenticity remain fully under our control,” he wrote, but it’s not clear where the company is procuring its medicines from. 

“With an AOV (average order value) of over INR 1,000 in this class of medicines against an AOV of INR 500-600 in groceries, and almost double margins, medicines make an ideal foray for quick commerce platforms,” Alok Chawla, who founded Kiko Live to help retailers and pharmacy chains adopt quick commerce channels, told Inc42. 

In a market laden with compliance burdens, strict regulatory checks and cost-overhauls, this move, according to industry stakeholders, can disrupt the local pharmacy sector to some extent. 

This set off an alarm for medicine retailers. Days after Zepto announced the entry into medicine delivery, the All India Organisation of Chemists and Druggists (AIOCD) wrote to the home ministry calling for a ban on 10-minute medicine deliveries.

Inc42 spoke to company sources and industry analysts to look into the playbooks of Zepto, Instamart and Blinkit to grab a stake in the prescription drug market and combat the regulatory hurdles. 

Rx: Booster Dose For Acquisitions

The real moat in quick medicine deliveries will be  owning the SKUs and medicine supplies as opposed to tie-ups with pharmacies or epharma companies which are merely commission-based models.

Under India’s Drugs and Cosmetics Act, 1940, selling prescription drugs under various schedules requires licences that could be a challenge for the likes of Blinkit or Zepto in their bid to own inventories or gain control over end-to-end supply chain.

Besides direct margins as high as 10-20% in non-critical prescription drugs, the acquisitions allow controlling the licensed entity for prescription verification services. The acquisition drive, however, judders on regulatory differences across states. 

Chawla said his conversations with pharmacy chains and quick commerce platforms underscore that the market was ripe for consolidation with quick commerce startups dipping their toes into acquiring branded pharma retail chains with readymade, on-premise, licensed pharmacists and other regulatory approvals. 

“There is a huge unbranded pharma retail market where the quick commerce companies may target to easily leverage in-house capabilities of prescription drugs in terms of storage and pharmacy expertise,” said a senior analyst working with a Bengaluru-based consulting firm that tracks the epharma sector.

 

On the supply front, Chawla doesn’t see any major bottleneck in quick commerce dark stores being repurposed or co-located with pharmacy inventory to shorten the fulfillment time and reduce complexities to edge out pure-play third-party logistics players.

There are complexities in life-saving and sensitive prescription drugs. According to Zepto and Blinkit’s public announcements thus far, the platforms are not yet moving into this space.

While acquisitions may unlock economies of scale, reduce dependency on wholesalers and take control of margins, the supply chain ownership complexities will be different from those in groceries. 

Diagnosis: Logistical Complexities 

Pharma supply chain, according to industry stakeholders and quick commerce executives, is extremely challenging when it comes to sourcing medications. “Right from the dark store level to the sale of medicines – each step in the pharma business involves compliance-related burdens and that’s why it is such a difficult business to crack,” Swarup Bose of Celsius Logistics, which recently launched CelsiusPlus as a pharma supply vertical, told Inc42. 

“More than selling medicines, how they are storing the medicines, which contract manufacturers they are working with, even classification for generic and branded medicines – each of these steps require compliance,” he said. 

In fact, most prescription medicines are required to be stored at 25 degrees Celsius consistently, which is difficult to achieve all the time under Indian weather conditions, especially in a typical dark store. This is another challenge that the quick commerce companies will encounter as they scale up. 

Because of adherence to the strict protocols, the current crop of epharma companies like Tata 1 Mg, NetMeds and Apollo Pharmacy have not rushed to quick deliveries and still promise slotted deliveries which could be same-day or even 2-3 day deliveries. This shows that perhaps there’s some rationale to their reticence in launching 10-minute medicine deliveries.

A quick commerce executive involved with the pharma segment said that prescription verification or even consultation with a doctor after a user wants to buy Schedule H or X drugs could be another pain point for the speed-delivery format.

“Internally, we have been testing AI tools for faster prescription verification, however, the health industry runs on trust that needs human intervention across multiple touch points, particularly consumer-facing roles. Unlike groceries, pharma sales rely on customer support teams to understand the dosage, ingredients and the availability of various brands,” he added.

Complaints: Regulatory Roadblocks

Besides the cost overheads, compliance too inflates the financial burden on quick commerce companies.

The existing laws call for retail pharmacy registration and presence of a qualified pharmacist on the premises responsible for dispensing, while epharmacies are expected to keep clear records of medicine sales, especially for Schedule H1 Drugs. This is overseen by both the Central Drugs Standard Control Organisation (CDSCO) and state regulatory authorities. 

Regular monitoring and checks are done by the authorities on the way drugs are stocked and sold. Players in 10-minute medicine deliveries need to invest heavily to ensure that all state and central regulations are adhered to. 

Owning the pharmacy retail licence, often through acquisitions, reduces certain third-party legal frictions but does not eliminate the heavy cost of compliance, audits, pharmacist payrolls, security and special warehousing challenges.

Bose warned that all these costs will eat away the margins that the companies could earn unless they sell in large volumes. 

Non-SOS: Regular Prescription Drugs

While quick commerce companies aim for a small slice of the prescription drugs market, pharmacists suffer a blow on the coffers as vertical players like epharma companies corner an increasing share of antibiotics, common cold medicines, cough syrups, skin ointments and antihistamines which have a strong repeat purchase history. 

“Such medicines are usually prescribed by a nearby doctor and ordered from a pharmacy in the vicinity. These orders have suddenly started shifting online to epharma companies – not just because they are delivered to home, but also for the discount offered by the platforms,” Chawla of Kiko Live said.

The advent of quick commerce platforms in the pharma sector has fuelled the possibility of deep discounting, suggestions of alternative cheap generic brands for some medications, and quicker deliveries. Pharmacy stores are a worried lot, beyond doubt.

Bose pointed out the quick commerce edge in manpower deployment for deliveries – something that epharma companies lack.

“I think ecommerce companies have got a leg-up over 1MG and Apollo 24×7 because their network is much better and it’s ready. They’ve got the riders ready, they’ve got the dark stores ready. But how they bring the alterations to solve the challenges which epharma players face will be interesting to watch out for.”  

It is not that no one realised 10-minute medicine deliveries were needed. It is just that no one had the cash and scale to do it. “But buying medicines is not like buying Biryani,” Bose mentioned.

10-Minute Medicine Deliveries Vs Pharma Lobby

 

While the industry is abuzz with how the epharma industry dynamics will play out after quick commerce foray and pushback by pharmacist and chemist organisations, the overarching regulatory influence, especially online medicine sales, remains a cause for concern. 

The lobby against 10-minute medicine delivery has started calling for a ban on quick commerce supplying prescription drugs, arguing that it would trigger a rise in fake prescriptions and oversight in consultations or deep discounting which would eventually destabilise the industry.

For the quick commerce platforms, 10-minute medicine delivery is an audacious bet that would not only involve cash burns, but also confrontation with regulators and retailers.

But, if they can resolve the regulatory hurdles, address infrastructure limitations, and improve patient safety, the Indian healthcare sector would see a large-scale disruption in sync with a sizzling 280% surge in sales for the quick commerce top three with a cumulative topline of $1 Bn.

[Edited By Kumar Chatterjee]