Deep Dive into Pharmacy e-Commerce - Czech Republic & Slovakia MARTIN ŠLÉGL, General Manager, Czech Republic & Slovakia, IQVIA ONDŘEJ SÝKORA ...
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White Paper Deep Dive into Pharmacy e-Commerce Czech Republic & Slovakia MARTIN ŠLÉGL, General Manager, Czech Republic & Slovakia, IQVIA ONDŘEJ SÝKORA, Innovations Specialist, Czech Republic & Slovakia, IQVIA
Table of contents Introduction 3 Pharma e-Commerce Landscape in the EU 3 Key Players in Czech and Slovak Pharmacy e-Commerce 7 Product Fit and Customer Profile 9 e-Commerce Opportunities and Challenges 11 Conclusion 12 Appendix 13 About Authors 14
Introduction
The Internet has undoubtedly influenced every aspect of our lives, including the way we work, learn, and shop.
The recent COVID-19 global pandemic has only reinforced the position of digital commerce, which has seen
spectacular and sustained growth. While Czech and Slovak citizens are no strangers to online shopping (70% of
Czechs have made at least one online purchase in their lives and nearly 59% made an online purchase during the
past 12 months1; in Slovakia, 63% of citizens aged between 16 and 74 made an online purchase in the past year2),
purchasing health-related products has been relatively limited in the Czech Republic and Slovakia until now.
This white paper discusses the aspects of e-commerce in the pharmacy channel including its recent boom and
expected development in both the Czech Republic and Slovakia.
Pharma e-Commerce Landscape in the EU
Most countries in the European Union allow online sales of at least some non-Rx products, and the situation is
likely to evolve further in the near future.
Figure 1: e-Commerce Market Landscape in Europe as of April 2020i ii
Legal purchase of both Rx and CH products
Legal sales of CH products only (registered/non registered)
Legal only for food supplements and medical devices
(not legal for registered CH and Rx medications)
Online pharmacies not legal/
legal only in limited circumstances /
still considered, but not implemented yet
Out of scope
i Source: IQVIA
ii Consumer Health market definition: OTC, PAC, PEC, NUT (registered / non-registered products)
iqvia.com | 3To provide a better perspective on the Czech and Slovak markets, we may first look at the situation in neighboring
Germany. In 2020, Germany’s e-Pharmacies served 15% (in EUR, based on MAT 06/2020 data) of the country’s
Consumer Health market (registered and non-registered CH products) with approximately a 10% YoY growth.
Figure 2: e-Pharmacy Market Comparison for Selected EU Countriesiii iv
Volume [Units, MAT 06/2020] Volume [EUR, MAT 06/2020]
100 100
90 HUN 90
80 80 HUN
70 70
60 SVK 60
SVK
PPG(%)
PPG(%)
50 50
CZE CZE
40 40
30 30
POL POL
20 20
10 GER 10 GER
0 0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
e-Pharmacy market share e-Pharmacy market share (%)
Bubble size = Turnover (Units) Bubble size = Turnover (EUR)
In the past 12 months (MAT 06/2020), Czech e-Pharmacies served over 10% (in EUR) of the total Consumer
Health market but with a 44% YoY growth. Slovakia’s e-Pharmacies only served 4% of the CH market but with a
57% growth YoY. The Czech and Slovak e-Pharmacies cover a smaller portion of the market; however, they have
shown strong growth. Nonetheless, the market still has significant room that is yet to be filled, as Czech and
Slovak customers learn to subsequently transition to digital channels. Czech and Slovak shoppers are generally
considered to be e-commerce savvy, especially in some categories such as electronics and recently groceries
(mainly in the Czech Republic).
Figure 3: Consumer Health Product Sales in Czech Pharmaciesv
PCY sales in CZ [CZKm, Q3 2017 – Q2 2020]
5,006 6,197 5,972 5,400 5,229 6,786 6,234 5,962 5,705 6,822 7,415 5,333
5.0% 5.8% 5.8% 6.3% 6.2% 7.3% 7.7% 8.1% 8.6% 9.0% 10.3% 13.2%
Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Internet Retail Pharmacy
iii Source: IQVIA Pharmatrend CZ, SK, GER, POL, HUN
iv Germany allows both Rx drugs and Consumer Health products to be sold online. For comparison purposes, only Consumer Health products sales are
included in this chart.
v Source: IQVIA Pharmatrend CZ
4 | Deep Dive into Pharmacy e-CommerceFigure 4: Consumer Health Product Sales in Slovak Pharmacies vi
PCY sales in SK [EURm, Q3 2017 – Q2 2020]
147 138 135 159 160 150 150 170 194 134
1.7% 2.5% 2.7% 2.9% 3.1% 3.3% 3.4% 3.8% 4.2% 6.4%
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Internet Retail Pharmacy
The recent COVID-19 pandemic only stressed the general importance of e-commerce, as it drove Czech and
Slovak shoppers towards digital channels across the entire retail spectrum (which was boosted by 40% in the
Czech Republic3 during April 2020), including consumer health products. Due to generally lower adoption in the
pharmacy segment compared to other retail areas, the boost was much more dynamic.
During the peak weeks of the pandemic in the Czech Republic (mid-March), sales in e-Pharmacies increased by
more than 100% to over CZK 80 million per week in comparison to last year’s sales in the same period, showing the
capabilities of e-commerce in the pharma market and readiness of e-Pharmacy players.
In Slovakia, the COVID-19 peak weeks were slightly delayed (weeks 10-14, 2020); however, the sales quickly picked
up, nearly tripling from EUR 0.35 million in week 9, 2019 to over EUR 1 million in week 14, 2020.
In both countries, the e-Pharmacy channel experienced a steep decline when the COVID-19 situation started to
ease. However, e-Pharmacy sales continue to stay well above last year’s levels – 50% higher in the Czech Republic
and 68% higher in Slovakia in H1 2020. We have reason to believe that e-Pharmacy sales may remain at these
levels in the near future.
vi Source: IQVIA Pharmatrend SK
iqvia.com | 5Figure 5: Consumer Health Product Sales in Czech e-Pharmacies – YoY Evolutionvii
e-Pharmacy channel
80
70
60
Sales (mil CZK)
50
2020
40
2019
30
20
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Week No
Figure 6: Consumer Health Product Sales in Slovak e-Pharmacies – YoY Evolutionviii
e-Pharmacy channel
1.1
1.0
0.9
Sales (mil EUR)
0.8
0.7
0.6 2020
0.5
0.4
2019
0.3
0.2
0.1
0.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Week No
vii Source: IQVIA Pharmatrend CZ
viii Source: IQVIA Pharmatrend SK
6 | Deep Dive into Pharmacy e-CommerceKey Players in Czech and Slovak Pharmacy
e-Commerce
Valued at CZK 2.6 billion (actual public price including VAT, based on MAT 06/2020 value), the Czech e-Pharmacy
market is currently served by 123 registered e-Pharmaciesix. The Czech e-Pharmacy market covers 10% of the total
Consumer Health market (categories 1-97) in value and 8% of the OTC segment (categories 1-18 and 97) in value. At
a 44% PPG growth in value and 47% PPG growth in volume, the e-Pharmacy segment is not to be overlooked.
While the online Consumer Health market is currently mainly served by major e-Pharmacy players, it is expected
that full-line e-commerce players or online grocery stores may start exploring the Consumer Health segment to
boost their revenues as well – e.g. Rohlik.cz announced a partnership with BENU in October 2018.
Figure 7: Czech e-Pharmacy Market: Key Figuresx
e-Pharmacy landscape in the Czech Republic - MAT 06/2020
Top e-Pharmacies in alphabetical order
e-Pharmacy e-Pharmacy
(all in IQVIA e-Pharmacy CZ panel) e-Pharmacy market PPG market share in
market value (CZK) growth (value) total CH (value)
Apotek BENU Dr.Max
Lekarna.cz Pilulka.cz
2.6bn 44% 10%
Pharmacies Active e-Pharmacies
2730 123
IQVIA e-Pharmacy e-Pharmacy e-Pharmacy
market value market PPG market share in
represented growth OTC segment
by TOP5 (volume) (value)
80% 47% 8%
e-Pharmacies
Registered
e-Pharmacies 123 5
IQVIA panel
e-Pharmacies
ix According to SUKL database
x Source: IQVIA Pharmatrend CZ
iqvia.com | 7Slovakia’s e-Pharmacy market is valued at EUR 28.3 million (actual public price including VAT) with 57% PPG growth
in value and 58% PPG growth in volume. Slovak e-Pharmacies account for 4% of the total Consumer Health market
and 4% of the OTC segment in value.
Similarly, it is expected that major Slovak online retailers may enter the Consumer Health segment. Many online
retailers are present in both the Czech Republic and Slovakia; therefore, it is likely that similar strategies could be
deployed.
Figure 8: Slovak e-Pharmacy Market: Key Figuresxi
e-Pharmacy landscape in Slovakia - MAT 06/2020
e-Pharmacy
Top e-Pharmacies in alphabetical order market PPG e-Pharmacy
(all in IQVIA e-Pharmacy CZ panel) e-Pharmacy growth market share in
market value (EUR) (value) total CH (value)
BENU
Dr.Max
Mojalekaren.sk
28.3 56.5 4.4 mil % %
Pilulka.sk
IQVIA e-Pharmacy e-Pharmacy e-Pharmacy
Pilulka24.sk market PPG market share in
market value
represented by growth OTC segment
TOP4 e-Pharmacies (volume) (value)
5
Pharmacies
2100 75 58 3.9
IQVIA panel
e-Pharmacies
% % %
xi Source: IQVIA Pharmatrend SK
8 | Deep Dive into Pharmacy e-CommerceProduct Fit and Customer Profile
When it comes to popular categories in e-Pharmacies, Czech consumers most often purchase online products of
preventive character – vitamins, minerals and nutritional supplements, pain relief, baby foods, beauty products for
women, but also cough & cold and other respiratory products. These categories represent almost half of all sales
in Czech e-Pharmacies.
In Slovak e-Pharmacies, the trend is somewhat similar – vitamins, minerals and nutritional supplements sell the
most, followed by pain relief products, beauty products for women, digestive and other intestinal products, tonics
and other stimulants. These categories account for nearly 50% of all sales in e-Pharmacies in Slovakia.
Dr. Max disclosed that their typical e-Pharmacy customer is a 29-year-old woman4, and Pilulka.cz published that
70% of its customer base are women5. The store also mentions that 40% of its customers prefer to pay online by
card, while the second most preferred method is cash on delivery – however, this payment method has seen a
decline since last year.5
Figure 9: Czech Republic: Top 10 Best Performing Brands in e-Commercexii
TOP 10 Corporations [MAT 06/2020;mil CZK]
Wobenzym
Liftactiv
120 112.6 Nutrilon 100%
110 104.0 Pharmaton Vitamin C
96.0 Vlasové
100 hnojivo 74% 77% 80%
90 Biopron9
75.9
80 Atoderm
71.3 66.0 Curaprox 60%
70 58.4 Eucerin
60 57.2 51.5 47.3
50 46% 40%
40 40%
30 18% 34%
20 27% 28% 7% 20%
7%
10
0 0%
NESTLE
LOREAL
DANONE GROUPE
SIMPLY YOU
SANOFI
STADA
NAOS
DR.MAX
CURADEN
BEIERSDORF
PPG Sales Value
xii Source: IQVIA Pharmatrend CZ
iqvia.com | 9Figure 10: Slovakia: Top 10 Best Performing Brands in e-Commercexiii
TOP 10 Corporations [MAT 06/2020;ths EUR]
1800 Lipikar VitaminC 140%
1551 130%
Wobenzym Vitamin C 120%
1500 Muconasal
Jamieson
1208 Plus 100%
1200 1139 Sensibio
613 80%
828 106% Curaprox Eucerin Nutrilon Eucerin
900 565
727 676 613 78% 607 60%
600
7% 40%
68% 4% 53%
300 48% 39% 55%
20%
0 0%
LOREAL
NESTLE
DR.MAX
NAOS
JAMIESON
CURADEN SWISS
BEIERSDORF
SANOFI
DANONE GROUP
SIMPLY YOU
PPG Sales Value
The sales data suggests that consumers mostly purchase products that are used on a regular basis. In other
words, they can stock up in advance because they know they will consume these products. Diapers, vitamins,
generic pain relief products, beauty products, or any other products that are used on a regular basis and are
generally bought in bulk sell well online. During the COVID-19 pandemic, no new popular segments emerged in
the online space. The pandemic simply amplified e-Pharmacy sales in general.
In the case of products that are used for immediate relief such as medication for oral ulcers, urethra
inflammations, or any similar “time-sensitive” supplements, most consumers will head directly to a traditional
pharmacy. These products still find their place in traditional brick and mortar pharmacies.
This shopping behavior is further confirmed by the reluctance of Czech and Slovak consumers towards delivery
payments. It is very common for consumers to pre-order or reserve products online, only to visit the physical store
of an e-Pharmacy to pick up their order for free. According to Dr. Max, 85% of their online customers pick up their
orders in a physical pharmacy.4
Czech and Slovak consumers are open to ordering Consumer Health products online but generally refuse to spend
additional money on shipping or delivery unless there are savings on the product price.
xiii Source: IQVIA Pharmatrend SK
10 | Deep Dive into Pharmacy e-Commercee-Commerce Opportunities and Challenges
With such a high annual growth rate in each e-Pharmacy market for MAT 06/2020 in value – 57% in Slovakia
and 44% in the Czech Republic, it may be presumed that brands that do not actively engage in growing their
e-commerce presence miss out on a very promising opportunity.
On the other hand, the e-commerce space also comes with new challenges – patients do not communicate with
their local pharmacists face to face and are likely to resort to “self-medication” practices without any guidance,
which makes communicating each product or brand’s benefits over competitive products more challenging.
Usually, e-Pharmacies offer a Q&A box, which allows customers to receive a professional answer to their email
and/or post their question publicly on the store’s website. Established full-line e-commerce players usually provide
more responsive online forms of communication. The Internet also removes any kind of exclusivity; consumers
can easily shop for the best price or find a completely new alternative – all with just a few clicks.
Looking forward, major e-Pharmacy players expect further accelerated growth of the e-Pharmacy market in
2021. Some e-Pharmacy players expect further growth to be mainly on top of other sales channels and not at
their expense. When new players enter the e-Pharmacy market, such as major online retailers or grocery stores,
some e-Pharmacy players expect it may actually help boost the entire e-Pharmacy market, as the new retailers
may bring different types of customers that do not currently purchase any pharmaceutical products online,
consequently leading to increased e-Pharmacy consumer demand. Solving the issue of “urgency” outside of
Prague may be another potential growth driver for players that would be willing to introduce a service catering to
consumers seeking immediate relief without leaving their homes and heading to a physical pharmacy nearby.
In general, the introduction of online Rx dispensing is perceived as another very significant growth driver for the
e-Pharmacy market, which would likely push sales higher across all segments. Most of the major e-commerce
players are ready for the possible launch of online Rx dispensing; however, the legal framework timeline remains
uncertain.
The interim possible step between brick and mortar dispensing and full Rx drug delivery may lie in “third-party
delivery.” In the meantime, e-Pharmacies can work with quasi-delivery services and/or reservation of Rx drugs in
physical pharmacies.
iqvia.com | 11Conclusion The growth of e-commerce in the Czech and Slovak pharmacy space started well ahead of the COVID-19 pandemic, which simply amplified its importance. On top of that, Czech and Slovak e-Pharmacy players are very well developed from the distribution as well as customer standpoint and remain innovative from the EU perspective. While the pandemic certainly boosted e-commerce significantly, the extreme spike in sales was only temporary. In both countries, e-Pharmacies experienced a steep decline when the COVID-19 situation started to ease. However, sales continue to stay well above last year’s levels – 50% higher in the Czech Republic and 68% higher in Slovakia in H1 2020. The e-Pharmacy channel has the potential to grow further, but its growth pace may depend on the future development of the COVID-19 pandemic to a large extent. Besides COVID-19, the other main accelerators of growth are emerging online Rx e-Pharmacy services, which are driven by e-prescriptions and currently work with quasi-online delivery models. When online Rx drug dispensing is allowed, it may change the playing field for Rx brands and distributors. On the other hand, the role of a professional pharmacist cannot be substituted, and e-Pharmacies will have to invest in developing a proper digital pharmacy experience for Rx consultations and dispensing. Both the Czech Republic and Slovakia have a very well-developed network of physical pharmacies, which is an important factor to consider for both physical pick up capabilities and distribution channel competition. 12 | Deep Dive into Pharmacy e-Commerce
Appendix
1. Czech Statistical Office. Využívání informačních a komunikačních technologií v domácnostech a mezi
jednotlivci – 2019. 2019 November. Available from: https://www.czso.cz/csu/czso/16-nakupovani-pres-
internet-g6pxx9rqfw.
2. Statistical Office of the Slovak Republic. Survey on information and communication technologies
usage in households 2019. 2019 December. Available from: https://slovak.statistics.sk/PortalTraffic/
fileServlet?Dokument=257a0255-207a-42dd-b4b3-6cc951908e09.
3. Asociace pro elektronickou komerci. E-shopy zaznamenaly v dubnu meziroční růst přes 40 %, koronavirus
přinesl rekordní tržby a nové příležitosti. 2020 June. Available from: https://www.apek.cz/clanky/e-shopy-
zaznamenaly-v-dubnu-mezirocni-rust-pres-40.
4. Dr.max.cz. E-Shop Dr.Max je nejrychleji rostoucím internetovým obchodem svého druhu. December 2017.
Available from: https://clanky.drmax.cz/tiskove-centrum/tiskove-zpravy/e-shop-dr-max-je-nejrychleji-
rostoucim-internetovym-obchodem-sveho-druhu.
5. Pilulka.cz. Pilulka.cz zažila rekordní rok. Meziročně zvýšila tržby o 24 % na 2,45 miliardy korun. January
2020. Available from: https://download.pilulka.cz/new/Pilulka.cz_zazila_rekordni_rok.Mezirocne_zvysila_
trzby_o_24_procent_na_2,45_miliardy_korun.pdf.
Note: IQVIA Pharmatrend is a pharmacy sell-out data service that provides a complete insight into actual
patient and consumer behavior.
iqvia.com | 13About the authors
MARTIN ŠLÉGL ONDŘEJ SÝKORA
General Manager, Innovations Specialist,
Czech Republic & Slovakia, Czech Republic & Slovakia,
IQVIA IQVIA
Martin Šlégl has over a decade Ondřej Sýkora is an innovative
of experience in the area of management consulting marketing professional with business experience from
with expert knowledge of the pharma market. Before Europe, North America, and Southeast Asia.
becoming the General Manager of the Czech Republic
Before joining IQVIA, Ondřej worked at a New York
and Slovakia, Martin managed consulting, market
City-based investment firm where he was responsible
research, advanced analytics, and the Real World Data
for digital marketing, process automation, and public
team in Southeast Europe, covering 10 countries. Prior
relations.
to joining IQVIA, he worked at Roland Berger.
Ondřej holds an MSc in Strategic Marketing from
Martin holds CEMS Master’s in International
Imperial College London Business School.
Management and Master’s in Business Economics
degrees from ESADE in Barcelona and the University of
Economics in Prague.
14 | Deep Dive into Pharmacy e-CommerceCONTACT US
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186 00, Prague 8
Czech Republic
+420 246 044 111
DLE-CZSKClientservice@iqvia.com
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