Netmeds is one of India’s leading online pharmacies. Launched in 2015 and later acquired by Reliance Retail, the platform sells prescription medicines, OTC drugs, health products, wellness items, and diagnostic services. It became popular for convenience, discounts, home delivery, and a wide catalog of healthcare essentials.
But online medicine is a tightly regulated, low-margin business. So how does Netmeds actually make money? Here’s a clear breakdown of its business model.
Understanding Netmeds’ Core Business
Netmeds operates in the online pharmacy + telemedicine + diagnostics ecosystem.
It offers:
- Prescription medicines
- OTC and general wellness products
- Health supplements
- Ayush and herbal products
- Beauty & personal care
- Lab tests and diagnostic services
- Teleconsultation with doctors
The platform combines e-commerce convenience with healthcare services.
Key Components of Netmeds’ Business Model
a) Inventory-Led E-Commerce Model
Unlike marketplaces, Netmeds stocks medicines in its own warehouses.
This ensures:
- Faster delivery
- Better quality control
- Higher order accuracy
b) Wide Product Catalogue
From chronic illness drugs to daily essentials, Netmeds offers thousands of SKUs.
c) Heavy Focus on Discounts
Discounts attract price-sensitive Indian users and increase repeat orders.
d) Integration with Reliance Retail
Reliance’s supply chain and offline presence reduce costs and improve logistics.
How Netmeds Actually Makes Money?
Here are all major revenue streams:
a) Medicine Sales (Primary Revenue Source)
Netmeds earns the bulk of its income from selling medicines online.
Income comes from:
- Retail margins (10%–20% typically on most medicines)
- Higher margins on wellness and OTC products
- Long-term refill customers (chronic patients)
Because medicines are essential and recurring purchases, this segment offers steady revenue.
b) OTC & Wellness Product Sales (High-Margin Segment)
OTC items have much better margins than prescription medicines.
This includes:
- Vitamins & supplements
- Immunity boosters
- Health foods
- Skin & haircare
- Personal hygiene
- Fitness products
Netmeds earns strong profits from this category because:
- Brands offer higher margins
- Demand is rising
- Customers often add these products along with medicines
c) Private Label & In-House Brands
Netmeds sells its own branded items in:
- Wellness
- Healthcare devices
- Nutrition
- Daily essentials
Private labels offer very high profitability since Netmeds controls manufacturing and pricing.
d) Diagnostics & Lab Testing Services
Netmeds offers:
- Blood tests
- Full-body checkups
- Diabetes profiles
- Thyroid tests
- RTPCR and other health screenings
Revenue comes through:
- Commissions from partner labs
- Home sample collection fees
- Lab processing charges
Diagnostics is a fast-growing and high-margin business.
e) Telemedicine & Online Doctor Consultations
Users can book:
- General physician consultations
- Specialist consultations
- Follow-up sessions
Netmeds earns through:
- Consultation charges
- Platform fees
- Subscription models
Telemedicine increases medicine sales because users tend to purchase prescribed drugs immediately.
f) Subscription & Membership Programs
Netmeds offers loyalty and subscription programs that include:
- Extra discounts
- Cashback
- Free delivery
- Priority support
These programs bring:
- Monthly or yearly membership fees
- Higher customer retention
g) Delivery Charges
Though many orders feature free delivery, Netmeds charges shipping fees for:
- Small orders
- Remote locations
- Express delivery
This reduces logistics cost and adds incremental revenue.
h) Advertisements & Sponsored Listings
Healthcare brands pay Netmeds for:
- Featured product listings
- Banner ads
- Sponsored search results
- Promotional campaigns
This is a high-margin revenue source because of Netmeds’ large user base.
i) Corporate Wellness Partnerships
Netmeds partners with companies to provide:
- Annual health packages
- Medicine subscription programs
- Employee healthcare discounts
Corporate clients pay for these services, creating a stable business line.
Why Netmeds’ Business Model Works
a) Essential Category with Repeat Usage
Patients need medicines regularly—especially chronic patients (diabetes, BP, thyroid).
b) Reliability & Convenience
Doorstep delivery solves a major problem for elderly and busy users.
c) Strong Parent Company
Reliance provides:
- Logistics support
- Warehousing
- Offline store integration
- Financial stability
This gives Netmeds a competitive edge.
d) Multi-Category Offering
Medicines + wellness + diagnostics keeps customer spending high.
e) High Customer Lifetime Value
Customers often stay for years due to recurring refills.
Challenges Netmeds Faces
Even with a solid model, challenges remain:
- Heavy competition from 1mg, PharmEasy, Apollo 24×7, Amazon Pharmacy
- Thin margins on medicines
- Strict regulatory environment
- Discount-driven market reduces profitability
- High logistics cost for cold-chain medicines
- Return or exchange complications for pharma items
To succeed long-term, Netmeds must balance growth with profitability.
The Future of Netmeds’ Growth
Netmeds is expanding through:
- More diagnostics and home testing
- Offline-pharmacy integration via Reliance stores
- Growth of private-label products
- AI-based prescription refills
- Subscription-based medicine delivery
- Faster hyperlocal delivery
The combination of Reliance’s retail network and Netmeds’ digital presence positions it strongly for future healthcare demand.
In conclusion, Netmeds makes money through medicine sales, OTC and wellness products, private-label brands, diagnostics, telemedicine, subscription programs, delivery fees, advertising, and corporate wellness partnerships. Its blend of essential products, high repeat usage, digital convenience, and Reliance-backed logistics makes Netmeds one of India’s strongest online pharmacy platforms.
