Consumer healthcare, also known as over-the-counter medicines (OTC), is an industry that continues to grow and evolve.
In Europe, 80% of the online pharmacy market is shared by the UK and Germany. A recent study by James Dudley Management found that the industry is now worth almost 3 billion Euros. OTC products (non-prescription medicines) account for more than a third of the market.
Mail Order and Internet Pharmacy in Europe 2017: Reaping the Benefits of an Omnichannel Presence covers 17 European territories, as well as looking at the influence of both China and the US. The James Dudley Management report finds that the European online pharmacy market can be categorised into three segments: entry, developing and mature – based on the position of development the market in a country is currently at.
Entry-level countries (defined as having less than 4% of the overall market share of sales of non-prescription products) include the likes of Belgium, Bulgaria and France. Developing countries (those with 4%-10% of market share) are Norway, Sweden, Poland and Austria. Only the UK and Germany (with a 10%+ market share) are classed as being mature.
The digital retail landscape is evolving too. A split has emerged depending on the different regulatory conditions that exist across European countries. Some territories allow a full range on online pharmacy services, including prescription fulfilment. Others restrict the market to non-prescription products only.
The second key split is in the different approaches that markets are employing to the wider issue of retail sector e-commerce. In countries where there are major pharmacy chains, omnichannel retailing is the growing trend, and this is transforming the traditional ‘bricks and mortar’ retail sector. In territories where major chains are less prevalent, ‘pure-play’ businesses have more success in the market.
Therefore, there are markets where traditional and e-commerce retailing are merging and blending in an omnichannel approach, and other countries where the two methods of retail are still clearly distinct and separate. The difference is best exemplified by the industry’s two largest markets. The UK market takes a mainly omnichannel approach – thanks largely to the big players: LloydsPharmacy and Walgreens Boots Alliance – and enjoys a 45% share of the overall online pharmacy and mail order market in Europe.
The major retail pharmacy chains have begun to integrate their traditional offer with online services and, increasingly, mobile applications, focusing on providing quick access to a brand for the consumer.
In contrast to the UK, Germany stands are the largest market for ‘pure play’ retailers. Online brands such as DocMorris – owned by Swiss Zur Rose – account for 90% of all e-commerce sales in the OTC segment.
Zur Rose is planning further expansion through an IPO later this year. Buoyed by the sales recorded by DocMorris in the first quarter of 2017, with sales up by 17.4%. Zur Ross is looking to expand into new markets as well as seeking to grow in existing ones. The company sees the OTC markets as being “ripe for digital disruption.”