Increasing demand for generic medicines, a challenge for the e-pharmacy industry in the Kingdom of Saudi Arabia: Ken Research

17-Apr-2023   Anonymous, Designation: Business Development Director, at a leading online pharmacy company   Author: Navya Dalakoti

In conversation with Commercial Manager, at a leading online pharmacy company, we made an attempt to understand the Online Pharmacy Market in the Kingdom of Saudi Arabia.

1. How has COVID-19 impacted the online pharmacy market in Saudi Arabia? How the companies have evolved their growth strategy?

When COVID happened there was a sudden great shift from the brick-and-mortar sales to the online sales as it was the most feasible option for the consumers during curfew. Not all the platforms and pharmacies were ready to cope with the sudden heavy demands through online channels as many lacked capabilities. Still, the online sales doubled and hence COVID had a very positive impact on the industry.

2. After COVID, had the consumer again shifted to traditional purchase method or they sticked to online mode of purchasing medicines?

Majority of them have sticked to the online purchase of the pharmaceutical products. Also, majority of retailers are now focusing more on the online sales as they now understand that COVID has taught many the online purchase of medicines. The retail chains are doing heavy marketing of the online mode of purchase to attract the customers, they are also helping to educate consumer on how to order medicines online to increase their online customer base.

3. How much time does it takes for the order to get delivered?

100% of the orders get delivered the same day, within 2 hours. When you buy online you have two options, which day you want the order to get delivered and at what time slot. If the consumer voluntarily opts for a time or date other than the same day then, it gets delivered on that particular day otherwise, it gets delivered the same day. For big and imported items it can take up to 2 weeks.

4. What are the government rules and regulations in the Saudi Arabia Online Pharmacy Market?

It is the same as that for any retail pharmacy. The pharmacist has to be a registered pharmacist and the sale of prescribed drugs can only be done after the original prescription is presented by the consumer / patient.

5. What are the major challenges in the Saudi Arabia Online Pharmacy Market?

It has to be the price wars between the online players. Companies are decreasing the margins to win the consumer and acquire more market share. Heavy promotion of online channels by the online players is leading to decrease in margins.

6. What are the major factors fueling the growth of the Saudi Arabia Online Pharmacy Market?

Though there are many factors pushing the further growth of online pharmacy market, the convenience it provides to the consumer has to be number one factor. It gives convenience to the consumers that the bulky products like baby milk and diapers gets delivered at home. Also, it avoids the hassle and saves time of going to the pharmacy, getting the prescription approved by the pharmacy, and then a pharmacist filling the order. Price comparison and lower prices available online also attracts the consumers.

7. When we segment the market, which segment holds the highest percentage contribution to the total revenue being generated, Prescribed drugs VS OTC Products VS Non-Pharma Products?

Majority of the orders are normal, non-pharma products like milk & diapers. Prescribed drugs make no more than about 5% of the total online sales.

8. What are the reasons of low volume of prescribed drugs sales through the online channels?

The sale and purchase of prescribed drugs needs prescription uploading, verification by the pharmacist and then approval from the insurance companies. Till now this process is a little bit complicated for the end users.

9. Do customers order majorly from mobile app or website?

Majority of the orders are through the app, say, 80-90%. Websites are only used by people who have laptop and on duty hours they might just order from laptop, if they want something in their office during meetings. Otherwise, mobile. Also, in the future a greater number of users will be placing orders via mobile.

10. How do you predict the Saudi’s online pharmacy market to grow in the next 5 years?

The online pharmacy market has a long way to go. It provides convenience, saves time and has broad range of options that might not be available in the retail stores. A 30-40% of growth in the next 5 years can be expected.

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Ken Research
Ankur Gupta, Head Marketing & Communications