Online Pharmacy Market Size, Share & Trends Analysis Report By Medicine Type (OTC Products, Prescription Medicines), By Platform Type (Mobile, Desktop), By Product Type (Medication, Health Wellness and Nutrition, Personal Care and Essentials, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global online pharmacy market size was valued at USD 82.07 billion in 2022. It is estimated to reach USD 338.73 billion by 2031, growing at a CAGR of 17.06% during the forecast period (2023–2031). Increasing telemedicine visits, rising consumer demand for home delivery and e-commerce outlets, an increase in emergency medical situations, and new developments in digital health platforms are some of the key reasons propelling the market's revenue growth.

An online pharmacy or internet pharmacy is a pharmacy that functions through the Internet and dispatches customer orders via mail, shipping companies, or an online pharmacy web portal. The primary difference between legitimate mail-order pharmacies and local pharmacies is how medications are requested and delivered. Many online drugstores only offer prescription medications with a valid prescription, while some do not because some nations do not require them.

In certain instances, there is no doubt that online pharmacies can be of tremendous benefit to patients. This is especially true for those who reside in rural or remote areas or for those who may have trouble accessing a traditional community pharmacy. Online pharmacies can also increase the convenience of purchasing medications and provide economic benefits to many consumers regardless of location.

Market Dynamics

Global Online Pharmacy Market Drivers:

Increasing Chronic Diseases and Aging Population

According to the WHO, chronic diseases are the primary cause of death worldwide. For instance, cardiovascular diseases cause around 18.01 million deaths worldwide every year. Due to immobility, patients may be unable to go outside to purchase their medicines. In such cases, online pharmacies play a vital role. The medicines required by patients are ordered via the online pharmacy and are delivered within a short time. Such online platforms for medicines will allow patients to get medications delivered to their doorstep without much inconvenience, resulting in increased demand for online pharmacies.

Several research studies have suggested that the population of older population aged 65 years and above in the United States exceeds 46 million. It is projected that by the year 2050, the figure above will experience a substantial increase, reaching nearly 90 million. This growth in the aging population is expected to increase the demand for online pharmacies.

Improving Online Payments

Nowadays, companies are providing several payment options to consumers. For instance, if the company gives the option of online banking, credit cards, debit cards, coupons, or cash on delivery, it increases the chances of converting a maximum number of customers as customers are provided with numerous payment options and can choose as per their convenience. Cash on delivery is popular among consumers in Eastern Europe, and credit/debit card is popular in EU5 except in a few countries where payment wallets such as iDeal are popular.

Furthermore, mobile wallets and net banking transactions are rising for online purchases in developing countries like India. However, most buyers still prefer the cash-on-delivery payment model. Payment options like credit, debit cards, net banking, and e-wallets contribute to around 40% of all online purchases compared to cash on delivery in India. Owing to the various government initiatives, the online mode of payment is projected to increase during the forecast period.

Global Online Pharmacy Market Restraint:

Low Penetration in Rural Areas of Developing Countries

Low internet penetration in the rural areas of developing nations is expected to impede market growth during the forecast period. The rural areas have fewer options in terms of internet service providers. Similarly, the financial limitations associated with internet services hinder the ability of rural communities to access internet connectivity.

In addition, the weather conditions are the second major reason restricting Internet usage in rural areas. Internet connections need advanced equipment set up, which is not affordable for people living in rural areas. All these factors restrain the setting up and usage of the Internet in rural areas. Therefore, the low Internet penetration in rural areas is expected to hamper the online pharmacy market during the forecast period.

Global Online Pharmacy Market Opportunities:

Increased Collaboration Among Stakeholders

Online pharmacies can collaborate with health tech and MedTech companies to increase their market share. For instance, online health consulting companies can link themselves with online pharmacies where patients can purchase medicines from partnered pharmacies at discounted prices. This will make it convenient for patients to upload the prescription on another online pharmacy site or go to the physical pharmacy stores.

Many large insurance companies have partnered with online pharmacies for their outpatient department coverage because of the e-billing and tracking facilities they offer. Online pharmacies collaborate with insurance companies and corporates to get their customers and employees. This is expected to create opportunities for online pharmacy market growth soon. In many countries in North America and Europe, online pharmaceutical companies have already collaborated with insurance companies. For instance, the Zur Rose Group focuses on lower-priced healthcare in Switzerland. It supports insurance solutions, reducing the final pricing for consumers such as Multimed.

Regional Analysis

Based on region, the global online pharmacy is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America Dominates the Global Market

North America online pharmacy market share is the most significant global market shareholder and is anticipated to exhibit a CAGR of 16.92% during the forecast period. The increasing Internet and smartphone usage are expected to drive the growth of the North American online pharmacy market during the forecast period. E-commerce services, including online pharmacies, rely heavily on the Internet for the profitability of their business. The development of the online pharmacy market in North America is due to the higher investments and sponsorships of online pharmacies in North American countries. For instance, in February 2020, Pocket Pills, an online pharmacy operating in Canada, raised USD 7.35 million in new funding to expand its nationwide reach, opening distribution centers in Nova Scotia, Scotland, and Quebec.

Furthermore, the rise of e-prescribing technology is expected to allow online pharmacy service providers to increase their customer base and service levels. For instance, under a law passed by the Virginia HOUSE BILL 2165, effective July 1, 2020, all prescribers in Virginia, USA, must prescribe electronically monitored medications.

Europe online pharmacy market growth is estimated to exhibit a CAGR of 17.39% over the forecast period. In some European countries, spending on healthcare is increasing because capital allocation accounts for a high proportion of national financial budgets. Factors contributing to this include the higher prevalence of chronic diseases and an aging population. In response to such a scenario, an increasing GDP is devoted to health in developing European countries. The UK is revamping its National Health Service, developed more than 60 years ago, to optimize healthcare while finding high-efficiency savings. In addition, government healthcare initiatives will likely boost online pharmacies as consumers improve their health, leading to higher spending on over-the-counter drugs during the forecast period. Similarly, the growth of the online pharmacy market in Europe is highly affected by the increasing internet penetration, the implementation of e-prescribing norms, the improvement of virtual payments, and the rapidly aging population.

In Latin America, the market is witnessing positive growth due to the growing popularity of smartphones and tablets with high-speed internet connections. The market is witnessing strong growth with the launch of online pharmacy applications that benefit the end-users. The rising awareness about convenient and easy shopping drives market growth in the region. In addition, the increase in the size of medical centers and their demand for e-prescribing has driven the market demand significantly over the past few years.

The surging Internet of Things (IoT) usage is another factor driving the region's market growth. The expansion of capital income in the region is anticipated to contribute to an increase in market demand in the coming years. The integration of contemporary technical advancements in online services enhances growth prospects for the regional industry. However, the lack of standardization is limiting market demand in the region.

Segmental Analysis

The global online pharmacy market is segmented by medicine type, platform type, and product type. 

Based on medicine type, the global online pharmacy market is divided into OTC products and prescription medicines. 

The OTC products segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 16.76% over the forecast period. OTC products do not require a doctor's prescription and are sold directly to consumers by pharmacy stores. They are used to prevent and treat mild ailments, i.e., Sanofi and Bayer. Vitamins, minerals, supplements (VMS), and weight-loss OTC drugs contributed to the biggest share of the overall market. In addition, the weight-loss and dietary products segment is believed to witness the greatest CAGR during the projection period because of the growing awareness of the general population about health and the growing consumption of junk food, leading to the higher prevalence of lifestyle-related diseases.

Patients prefer using online pharmacies for the purchase of prescription medicines. One of the major reasons for choosing online pharmacies is the lower price of prescription drugs compared to those sold in retail pharmacies. The surging incidence of chronic illnesses like obesity, cardiovascular disease, and diabetes will drive selling incentives for prescription medications in the market over the next few years. The flourishing number of cases of chronic diseases would also have a huge impact on the market share of prescription drugs. The ongoing clinical trials of leading players in the production of innovative drugs will enable significant market growth in the future years.

Based on platform type, the global online pharmacy market is divided into mobile and desktop. 

The mobile segment dominates the global market and is predicted to exhibit a CAGR of 17.55% over the forecast period. The pattern of mobile phone ownership is quite different since some people have one and some have more than one mobile phone. In 2017, there were close to 470 million unique mobile subscribers in Europe, equivalent to around 85% of the population, showing how mobile phones are rapidly becoming essential personal devices. Hence, most people use the mobile platform to get medicines and useful materials from online pharmacies. In addition, there are many apps nowadays to support and grow the demand for online pharmacies. Individual pharmacies have their apps from which one can order medicines.

The presence of desktop computers and laptops in offices and households has increased. Online services are often accessed through a desktop computer. The pharmacists and pharmacists in the stores are more likely to use a desktop computer than a mobile device. This is due to the medicine data entry process, maintaining records of the expiry of medicines, and other related entries. These factors contribute to the growth of the desktop platform in the online pharmacy market.

Based on product type, the global online pharmacy market is bifurcated into medications, health wellness and nutrition, personal care and essentials, and others. 

The medications segment is the highest contributor and is anticipated to exhibit a CAGR of 17.20% over the forecast period. Medications are usually drugs or medicines prescribed by the physician to cure or prevent diseases. People generally tend to self-medicate over concerns with the common cold and flu. Thus, the increasing prevalence of the common cold and flu is driving the demand for medicines for self-medication. The increasing patient population, along with the rising geriatric population, is driving the demand for medications. A growing number of people prefer online pharmacy platforms to purchase their medications. This is due to various reasons like increased convenience. The patient can order the medicine anytime through their mobile phone or using their computers with internet connectivity.

The increasing concerns related to health, body image, self-grooming, and hygiene among millennials is the key factor driving the demand for personal care products in recent years. Online pharmacy platforms are considered one of the better places to purchase personal care products, as they can be ordered anytime. Moreover, intimate products like condoms can be ordered through online platforms and would be delivered to the doorsteps of customers. The increasing awareness about the importance of the overall personal care regime and the emerging trends in fashion and social media influence towards aesthetically appealing looks is also anticipated to boost the demand for online pharmacies.

Recent Developments

• February 2023- Ourshopee.com introduced its new online pharmacy, providing an easy and convenient way to obtain medication. Ourshopee.com partnered with Z Neem Pharmacy to provide a comprehensive selection of medications and healthcare products with secure and convenient transactions on the platform.

• July 2023- Mark Cuban Cost Plus Drugs, an online pharmacy founded by the billionaire to sell drugs directly to customers at low prices, announced that they will shortly begin selling the biosimilar version of AbbVie Inc's (ABBV.N) blockbuster rheumatoid arthritis drug Humira, Cuban said.