Online Pharmacy Market in Japan: Key Research Findings 2023

E-commerce Market for OTC Drugs Forecasted to Grow to 88,500 Million Yen by 2025

Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic online pharmacy market, and found out the market trends, the trends by segment, the trends of market players, and future perspectives. This press release discloses the forecast on the size of e-commerce market for OTC drugs.

Forecast of E-commerce Market for OTC Drugs (B2C)
Forecast of E-commerce Market for OTC Drugs (B2C)

Market Overview

The e-commerce market for OTC drugs in Japan (as a total of nonprescription drugs and designated quasi-pharmaceutical products) is expected to grow at a CAGR of 9.5% between 2020 to 2025 to reach 88,500 million yen by 2025 (B2C only, based on the shipment value at manufacturers). In line with the outlook for the whole domestic OTC market size to edge upwards to 800,000 million yen plus level by 2025*, e-commerce for OTC drugs is poised to grow further hereafter.

*Reference: “OTC Market in Japan: Key Research Findings 2022” (announced on July 29, 2022)

Noteworthy Topics

Drone Delivery of Medicine and Daily Necessities Advances to Commercial Phase

While feasibility of drone delivery of medication and daily necessities has been tested across the nation, particularly in remote islands and mountainous region from the standpoint of solving current issues of logistic industry (labor shortage), the services are expected to be commercialized widely hereafter. Nevertheless, companies need to make sure that they ensure safety and improve positional accuracy, while they scale the business and increase profitability.

Meanwhile, to save manpower, drone delivery service must be efficient. While drone delivery is attracting attention as a new delivery method, there are concerns over its social acceptability. Now that the level 4 drone flights (unassisted, out-of-sight flights in manned areas) have been approved, consumers may raise concerns or complain about drones flying over densely populated areas. The challenge will be on how to convince customers of the value of drones. Instead of making it look like just a switch from truck to drone, companies need to showcase the drone delivery service as a completely new set of technology/service, in terms of ordering & receiving system, flight operation management, routing, etc.

To expand drone delivery service for consumers (B2C), it is essential to reflect costs on service price, which is a common challenge for all last mile delivery services.

Future Outlook

The e-commerce market for OTC drugs (B2C) is expected to continue steady growth hereafter. Factors contributing to the expansion includes the growth of e-commerce market as a whole, including the direct-to-consumer business (an ecommerce business model that works by selling directly to consumers without using brick-and-mortar stores, wholesalers, or platforms), diversification in parcel delivery methods such as parcel locker, and increased consumer convenience by introduction of services like health consultation over chat.

Research Outline

1.Research Period: April to June 2023
2.Research Object: Online pharmacies and companies related to e-commerce of OTC drugs
3.Research Methogology: Face-to-face interviews by our expert researchers (including online interviews) and literature research

What is the E-commerce Market for OTC Drugs?

In this research, the e-commerce market for OTC drugs indicates the OTC drugs (over-the-counter [nonprescription] drugs and designated quasi-pharmaceutical products) ordered via Internet (including those ordered via email), and the market size is calculated based on the shipment value at manufacturers.

<Products and Services in the Market>

Online patient compliance instruction (drug instruction given using communication devices), electronic prescription system, last-mile delivery of medicine from pharmacies to patients, drone delivery of medicine, e-commerce market for OTC drugs

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