Online Pharmacy Market 2022: Key Figures, Facts and Trends
Why is the number of orders in the online pharmacy segment growing in 2021-2022? Why are the online channels of the pharmaceutical market so actively developing and the number of orders on specialized sites and marketplaces is increasing? Let’s look at this topic in detail.
Online pharmacy market grew by a third in 2022
The authors reported that the studies were conducted on 57 pharmacies included in the top 100 US online stores in terms of the number of orders in 2021.
In 2021, 101 million orders were placed in US online pharmacies for the amount of 168 billion rubles. The average check was $53. In 2022, online pharmacies process 30% more orders than in 2021. Such data is published by IBISWorld. According to the forecasts of market players, the sale of medicines online in 2022 will continue to grow.
According to IBISWorld, in 2021, the total number of orders in online pharmacies accounted for 6% of all orders placed with retailers in the top 100. The online pharmacy segment showed significant growth rates. The segment ranked second after food in terms of growth in money terms (+34%). The pharmacy category is among the fastest-growing non-food categories, along with children’s goods, cosmetics, pet supplies and jewelry.
According to the study, the conversion in the segment was 9.5%, and according to this indicator, online pharmacies are ahead of most segments, second only to food stores, pet stores and universal marketplaces. The authors of the study noted that Trust Online Pharmacy ranked first in terms of sales volume- it accounted for more than a third (35%) of all online segment revenue. All pharmacies included in the study provide their customers with self-delivery services, 63% of them provide courier delivery. Almost 60% use mobile devices to visit online pharmacy sites. About 70% of pharmacies have applications on the Google Play and AppStore platforms.
According to forecasts, online drug sales will continue to grow. The habit of people and the convenience of ordering medicines online is maintained and is constantly growing.
Medicines online – faster and easier
The largest pharmacies previously predicted that the volume of online orders on the pharmaceutical market would grow due to increased attention to the topic of health during the pandemic and the natural course of progress because the market is already growing every year.
Like other consumer markets, the online pharmaceutical market will continue to grow. It is expected to grow at a high rate for several more years. The pandemic has only given an additional impetus to accelerated growth. The advantage of online is the speed of searching and receiving services, as well as greater transparency.
“To ensure the speed of searching and receiving services, it is necessary to widely apply new technologies for promoting on the Internet”, experts believe. To promote pharmaceuticals, many drugstore owners use contextual advertising platforms.
It is very important not only to legally support the development of online drug sales but also to create conditions under which it will be very easy to buy medications in an online pharmacy. In addition, pharmacies, consumers and pharmaceutical brands should be given additional incentives to go online.
Will pharmaceutical brands go online?
The pandemic, of course, has become an incentive for the development of remote service services in the United States. Against the backdrop of lockdowns, the popularity of online stores and delivery services has grown significantly.
Experts believe that the pandemic has made it possible to evaluate all the advantages of online shopping, and, as you know, people get used to good things quickly.
Online sales are more relevant now than ever. At one time, Consolidated Rail Corporation made a splash in the market when they started selling tickets online and taught people not to be afraid to pay by card, and the pandemic showed people how convenient it is to buy good online. The advantage of online, first of all, is a more flexible pricing policy and delivery.
Online pharmacies have every chance to smash all the fears of customers and provide the best service. In any case, despite the variability of consumer preferences, online retailers have already declared themselves and created demand, which will definitely affect the market.
The online market will definitely grow: there are no obvious facts to deny the promise of new technologies in sales and advertising. Perhaps, due to inertia, classic sales will still hold a fairly large market share, but it will change in favor of online. As people actively use new online tools for choosing and ordering medicines, going to the traditional pharmacy with lines and difficult choices will not be as good a decision as it is now.
Online sales will definitely grow, market researchers believe; in a five-year perspective, most likely, the volume will be comparable to offline sales.
“But you need to remember that online is still not yet available for many brands, it all depends on the product. Online is more of an additional point of sale in pharma, rather than a full-fledged replacement for offline. Brands will follow their consumer, who is gradually moving online. The offline share will definitely decrease, but in terms of the total market volume, online is unlikely to become dominant in a five-year perspective. But the online channel may well grow to 20-30% of the market in five years,” market researchers conclude.
Who benefits from online sales?
“The transition of pharmacies to online is beneficial to all participants in this process”, says Peter Bonner, commercial director of AdRoll. “The pharmacy business has been developing in isolation from Internet technologies for a very long time. It was believed that the format of offline pharmacies fully satisfies the needs of society and business. The pandemic, on the other hand, has changed our perception and, to some extent, has become an incentive for the rapid development of distance trading technologies. And the transition of pharmacies to online has already proven to be beneficial for everyone – buyers, sellers, pharmaceutical companies,” says Peter Bonner.
Having more information about medicines sold over the Internet is very important. This is confirmed by major players in the US Internet market.
The obvious advantages of moving pharmacies online can be enhanced through cooperation with large trading platforms. This is necessary for medicines to become part of a grocery basket, and not a separate order. This approach, many experts believe, will further strengthen the position of online pharmacies in the market.
The main advantage for the consumer is to order everything at once in one place with home delivery. As a rule, this is an advantage of drogerie pharmacies, which have in their assortment not only medicines but also household chemicals, cosmetics, children’s products. A secondary benefit, which is still in less demand, is home delivery for the incapacitated population or for people with disabilities.
Experts believe that even if the pandemic ends tomorrow, the demand for online pharmacy services will continue to grow.
IBISWorld believes that there are opportunities for the development of the pharmacy business both online and offline. Offline has every chance to grow under the influence of competitors who have already implemented online orders on their websites (this is not about delivery, but about the ability to collect a shopping cart without having to go somewhere). It all depends on the flexibility of the offline pharmacies and their willingness to change to new realities. At the same time, online has every chance of becoming the dominant sales channel for medicines. In five years, pharmacies will still have time to deform – to introduce an online pharmacist, for example, who is still one of the key reasons why people go offline – they need to consult.
According to market researchers, the online drug market is in a phase of active growth, and this must be taken into account when building a promotion strategy. The digital channel has already outperformed many formats in terms of investment volume, and online sales are growing commensurately. However, offline sales will continue to dominate for a long time.
Online can now be called a very important sales channel in the pharmaceutical market in terms of growth rates. Moreover, the growth trend was outlined even before the pandemic. Indeed, thanks to digital, brands have received new tools and opportunities for communication with consumers. After the legislative legalization of online pharmacies, their role in the overall sales of medicines is steadily growing. Yes, digital does not yet threaten offline pharmacies, but online sales and advertising technologies are constantly improving. While offline business uses the standard trading model, which does not always meet the expectations of users.
The situation with the development of online pharmacies in the USA can be called quite optimistic. And it is unlikely that a significant part of this optimism is the merit of the pandemic. It only drew attention to the convenience of shopping online, and the rest was done by the developers of services, platforms and intelligent solutions. The technological capabilities of online pharmacies predict great popularity for them.
Tags: health, medication, online pharmacy