OTCs in E-Commerce: Opportunities and Barriers

The e-commerce market for OTC is growing very quickly but still represents only a small fraction of overall OTC sales

Internet sales of OTCs are still only a very small proportion of total OTC sales. While digital purchases are in general growing very quickly, OTCs have been slower to move into this space for two main reasons: first, consumers are used to buying OTCs at bricks and mortar outlets, and changing long standing habits takes time; second, the need for OTCs is reactive. Consumers don’t purchase them ahead of time because they don’t plan to fall ill, and when they do need them, they need them immediately.

Some OTCs may be more or less likely to fit the e-commerce delivery model due to varying consumer needs when it comes to timing

The proliferation of direct delivery services has given consumers the option of having medicines delivered to them within a delivery window of as soon as an hour in many metropolitan areas in the US. However, it’s unclear how many consumers are likely to utilise this option given the immediacy of their particular need, and the widespread availability of the bricks and mortar outlets with which consumers are already familiar.

Germany’s e-commerce market is booming and represents what the US market could look like in the future

One exception to these trends is Germany, where digital purchases of OTCs have exploded over the past 20 years. A number of factors have contributed to this growth, including the fact that Germany allows Rx drugs to be shipped via mail, the option of having drugs delivered from a neighbouring country at much lower cost, and the commitment of direct-seller DocMorris to fighting the legal battles necessary to gain control of the German e-commerce market.

OTC is a relatively static market overall, but e-commerce sales offer strong potential for future growth, so companies must learn to adapt or get left behind

The global market for OTCs is generally static, and what new market space there is for OTC products is occurring through online channels. While the space here is still small, it is an easy space to move into, and it is in manufacturers’ best interests to learn how to sell effectively online, or risk getting left behind in the future.