The online pharmacy being too unprofitable, Pharmasimple is moving towards physical pharmacies

When the French company Pharmazon wants to become the e-commerce platform for pharmacies in France and is accelerating its TV advertising campaigns in order to gain momentum, the Belgian Pharmasimpleone of the pioneers in the sale of online drugstores, is adapting its strategy and is aiming to open 200 physical pharmacies in five years in Belgium.

Marketing on Google has become too expensive

One of the explanations put forward is that marketing on Google is becoming too expensive to be profitable. This is according to Michaël Willems, CEO of Pharmasimple, which generates 70% of its turnover in France. To finance its physical transformation, Pharmasimple has entered into a €200 million financing agreement with the investment fund Alpha Blue Ocean.

With its three online sales sites, Pharmasimple, Parapharmaceuticals and 1001 Pharmacies, the Belgian company achieved a turnover of 30 million euros in 2021. But for Michaël Willems, the profitability rate of ROAS (Return On Ad Spend) advertising campaigns is alarming. ” Each euro invested in Google previously yielded €10” he said. “Today, this indicator is barely €3. It’s not enough to be profitable […] The problem is linked to Google and its algorithm which takes into account only one parameter: the price. It does not allow any actor to make money he continues.

A French market estimated at 500 million euros

The transformation of Phamasimple’s economic model towards a mix between online and offline has already been launched with the acquisition of 7 pharmacies in Brussels and Flanders. About thirty acquisitions per year throughout Belgium are planned with the final objective of forming a group of 150 to 200 pharmacies in five years.

Digital should only represent around 20% of the company’s turnover in the coming years. Phamasimple therefore chooses to leave its place to its increasingly numerous competitors on the online drugstore market in France. This would represent only 5% to 6% of the sales in France of the parapharmacy but it is in full progression.

A market of 500 million euros in France for parapharmacy sold on the internet

The online pharmacy being too unprofitable Pharmasimple is moving towards

The online pharmacy being too unprofitable Pharmasimple is moving towards

According to a study by the firm Grand View Research, the global online pharmacy market was estimated at approximately 51.9 billion euros in 2020 with an annual increase of 18.4% between 2021 and 2028. But the legislation differs depending on the country. Thus the sale on the internet of medicines without a prescription has only been authorized in France since 2013 for pharmacists established in France. Cross-border and particularly Belgian players such as Pharmasimple have been able to position themselves ahead of the game in this market.

It is rather the parapharmacy market that is very competitive. ” It is an important market of 500 million euros in France. It is mainly held by Belgian stakeholders » says Hervé Jouves, boss of the Toulouse group Laf Santé with 250 pharmacies under the brand. Laf Santé has just acquired “Cocooncenter” a pure player in the online parapharmacy which generates 50 million euros in turnover. Another indication of the transformation of the online drugstore sector is the takeover of French HealthDiscount by the Dutch group Atida and whose turnover is estimated at 100 million euros.

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The online pharmacy being too unprofitable, Pharmasimple is moving towards physical pharmacies

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