Pharmeasy: Expansion Dilemma Amidst Regulatory Uncertainties

The two co-founders of PharmEasy, an online medical store and pharmacy website launched in 2015, faced a new challenge in December 2018. Recent judgments by the Madras and Delhi High Courts had suspended the operations of India’s more than 250 online pharmacies until new industry regulations could be drafted. Only a few months earlier, in August 2018, the Indian government had released proposed draft regulations for the online sale of medicine. However, an organization representing more than 850,000 pharmacists in India had staged a one-day strike to protest the government’s proposal. Should PharmEasy take a cautious approach with its ambitious expansion plans until the government introduces regulations? Or would its competitors seize the opportunity to move forward aggressively to gain market share? The co-founders recognized that the regulatory uncertainty was creating confusion. They needed to decide on their next steps quickly—and communicate their intentions to all stakeholders.

This case is designed for graduate-level courses on strategic management, e-commerce, Internet marketing, digital marketing, or entrepreneurship. The case can be used for discussions on growth strategies, the challenges of e-commerce versus traditional distribution channels, and regulatory impacts, especially in emerging markets such as India. After working through the case and assignment questions, students will be able to<ul><li>analyze the evolving nature of a retail sector that is moving online;</li><li>identify the opportunities and challenges that industry disruption creates for stakeholders;</li><li>discuss the importance of business models and the need to continuously evolve a suitable business model to tap opportunities in a fast-changing business landscape;</li><li>analyze the importance of regulatory frameworks and their influence on the future of entire sector;</li><li>appreciate that a new category must sometimes deal with and overcome aggressive tactics employed by existing well-entrenched players; and</li><li>analyze the challenges of managing a start-up’s fast-paced growth operating in a hyper-growth category.</li></ul>

• e-pharmacies
• regulation
• business model
• growth retail
• pharmacy retail