Inc said on Friday it will launch an online pharmacy in India that will serve the city of Bengaluru, the latest move by the e-commerce giant to widen its reach in a key growth market. The service, “Amazon Pharmacy”, will offer both over-the-counter and prescription-ba\]\

sed drugs, basic health devices, and traditional Indian herbal medicines, the company said in a statement, without giving a timeline for the launch.

The move comes amid increasing competition in India with rivals Walmart-owned Flipkart, billionaire Mukesh Ambani’s upstart online grocery service JioMart and a range of other smaller players. Also, last month, the company decided to open 10 new warehouses in India and start offering auto insurance. Amazon had also secured clearance for alcohol delivery in one Indian state, Reuters reported in June.

India is yet to finalize regulations for online drug sales, or e-pharmacies, but the growth of several online sellers such as Medlife, Netmeds, Temasek-backed PharmEasy, and Sequoia Capital-backed 1mg has threatened traditional drug stores. The companies have said they comply with all Indian laws even as many trader groups continue to protest against e-pharmacies, saying that would lead to the sale of medicines without proper verification.

“Amazon’s customer base is very high, so we are bound to lose business. There are 5 million families dependent on this (offline) trade,” Yash Aggarwal, legal head of South Chemists and Distributors Association in New Delhi, said on Friday. The group will raise objections against Amazon’s move with the government, he said.

According to RedSeer Consulting, India’s digital health market will expand to $4.5 billion in this financial year, compared with $1.2 billion in FY20. The consultancy has upped its estimate of the digital health market to $25 billion in FY25, compared with its pre-COVID estimate of $19 billion. Medicine delivery will continue to comprise a large majority of the market, according to RedSeer.

Bigger healthcare firms like Practo, 1mg, Medlife, PharmEasy, Netmeds as well as smaller startups like BeatO and mfine are registering increasing user interest and demand post-COVID, as people spend on boosting their immunity, treat illnesses through online consultations and buy medicines online. 

Teleconsultations at Bengaluru-based on-demand healthcare service Mfine have grown 3-4 times in recent months. E-health platform Practo Technologies too registered a 600% growth in online consultations since the lockdown started in March, with 70% of all users being first-time telemedicine users and 45% from smaller cities.

Several countries are trying to shift healthcare delivery on to the internet, incentivize telemedicine, encourage online medicine bookings, and use chatbots to answer patient queries.