The global online pharmaceutical retail market has seen significant growth in recent years, and the trend is set to continue even in India. As more people prefer the convenience of ordering their medication online, especially post COVID-19, traditional pharmacies must adapt to stay competitive. During the pandemic, increased demand due to lockdowns and social distancing measures led consumers to rely more on e-commerce platforms for essential needs. Coupled with increased health consciousness, and a need for a robust healthcare system, e-pharmacies became a preferred convenience. However, even with increasing demand, the entry of new players in the online pharmaceutical retail industry can be challenging without the right market entry strategy.
According to this report by Research and Markets, the online pharmacy market in India was valued at INR 25.50 Bn in 2021 and is projected to grow at a CAGR of 22.20% from 2022 to 2027, with an estimated worth of INR 89.47 Bn.
Market entry strategy for Online Pharmaceutical Retail
Market entry strategy is crucial for any business, and even more so for online pharmaceutical retail due to the unique challenges and regulations within the industry. Here are 5 reasons why a well-planned market entry strategy is essential for success in the online pharmaceutical retail sector:
- Regulatory Compliance: The pharmaceutical industry is heavily regulated, and online pharmacies must adhere to strict guidelines to operate legally. Failure to comply with regulations can result in fines or legal action, which can be detrimental to the business. A market entry strategy can help ensure that all regulatory requirements are met before entering the market.
- Competitive Advantage: Entering a new market can be challenging, particularly in a crowded and competitive industry like e-pharmacy. A well-planned market entry strategy can help a business stand out from its competitors and gain a competitive advantage by identifying unique selling points and differentiators.
- Target Market Identification: A market entry strategy can help identify the target market and create a marketing plan that resonates with their needs and preferences.
- Risk Management: Entering a new market involves risks, and a market entry strategy can help identify and mitigate those risks. By conducting thorough research and analysis, businesses can make informed decisions and reduce the likelihood of failure.
- Allocation: A market entry strategy can help allocate resources such as time, money, and manpower effectively and efficiently to maximize return on investment.
Also, take ideas from our previous blog on: The KENTRIX Advantage
Why Data Analytics?
Data analytics can play a crucial role in developing an effective market entry strategy for online pharmaceutical retail. Here are some ways data analytics can help:
Market Research
Market research is essential to understand the market size, customer demographics, and competitors’ strengths and weaknesses. With data analytics, e-pharmacies can gather and analyze data to determine the potential demand for their products, identify their target customers, and determine their pricing strategy.
Product Selection
Product selection strategy enables e-pharmacies to offer products that meet the needs of their target audience while adhering to regulations. With data analytics, trends can be tracked and the most popular products can be identified, ensuring that the product selection is in line with customer preferences.
Customer Segmentation
With data analytics, companies can analyze customer data, consumer purchase behavior, and demographic data to segment their customers into groups. This can help them tailor their marketing strategy to each group’s specific needs, resulting in better engagement and conversion rates.
Marketing Strategy
With data analytics, the most effective marketing channels and tactics can be identified to reach the targeted customers. The performance of the marketing campaigns can be tracked and the strategy can be adjusted accordingly to maximize ROI.
Impact of AI on Market Entry Strategy
AI and Big Data can provide valuable insights to help online pharmaceutical companies make informed decisions about market entry strategy in e-pharmacy retail. E-pharmacies can use AI to improve consumer profiling, market analytics, pricing optimization, inventory management, and fraud detection. This can help companies to increase their chances of success and gain a competitive advantage in the market.
AI and big data can also impact market entry strategy greatly through granular market segmentation analysis, especially in a country like India where regional nuances make a huge difference in the consumer psyche. In a country as diverse as India, geospatial consumer data can contribute to a robust market entry strategy by:
Targeting specific geographic areas by identifying regions where there is high demand for specific products, allowing businesses to focus their marketing efforts and tailor their product offerings to meet the needs of those regions.
Identifying customer demographics by providing insights into the demographics of customers in different regions, such as age, income, and education level to predict consumer behavior and trends.
Forecasting demand by analyzing historical sales data, and using this data to plan inventory levels and optimize pricing strategies.
Geomarketeer by Kentrix is a tool that provides geospatial analysis and market segmentation to help businesses build their market entry strategy and expansion. For e-pharmacies, it can help in identifying the most profitable regions, local customer needs, and preferences. With Geomarketeer, businesses can also gain insights into competitor activity and market trends. The tool uses a combination of data from various sources, including geospatial data, social media, and business intelligence, to provide accurate and detailed insights into market segmentation and consumer spend behavior, which can strengthen market entry strategy and ultimately lead to increased profitability and success.
Also, take ideas from our previous blog on: How do I get the most out of consumer data?