Amazon’s Growing Interest in Healthcare Sector Unsettling Few Nerves

Healthcare Sector

Amazon’s interest in healthcare industry continues to grow. The online-retailing giant looks keen on restructuring virtually each sections of the economy as utilizes its enormous distribution network to deliver logistical coherence. Having a healthy dominance in the consumer market, the company is now trying to enter the business-to-business segment as it further expands it seller base. The Seattle-based company is expected to integrate its vast technological capabilities in healthcare sector to improving the supply chain of various medical products. It has been almost two years since the launch of Amazon Business Platform, which is actually facilitates several services to third-party vendors. The platform provides commodity pricing, discount and quantity analysis of over 5 million products. It also provided additional services such as same-day shipping, potential sales tax exemptions, zero two-day shipping charge on purchases of more than $49. Big organization can assimilate Amazon Business into their purchasing structure that can instantly transfer to further simplify processing. In its first year, the platform successfully generated a whopping $1 billion in sales.

Reportedly, Amazon’s entry to the medical supply space is likely to disrupt distributors existing in this segment as it has in other industries. Pressure to introduce products at more competitive pricing will pull down profit margins, thus causing distributors to readjust. It is likely that most business models followed by medical suppliers could be challenged, as Amazon has a track record of offering cost-effective and reliable services that most other business fail to offer. Currently, Amazon Business features a wide range of medical supplies including catheters, infusion pumps, sutures, IV bags, hospital beds, forceps, scalpels and other lab items. According to online sources, AmScope biological microscope, Jellas pocket-size PH meter and Famili nonslip digital bathroom scale are some of its highest grossing items. Industry experts believe that the firm will typically pull down margins by nearly 10% to 20%.

As average life expectancy increases and the global geriatric population continue to expand, healthcare will typically present lucrative growth opportunities to market players. Amazon might also look onto the prospects of pharmaceutical business, however there has been no official statement regarding the report.  In the US, demand for disposable medical items is expected to increase significantly over the next couple years. Amazon has robustly increased its capabilities in Amazon Web Services and Cloud-computing service, which is essentially enabling it to collaborate with a number of genomics and life sciences companies.

About Sabyasachi Ghosh 4 Articles
Sabyasachi Ghosh is an experienced market research analyst and consultant, with over six years of experience in end-to-end project management. He has worked at numerous leadership positions and has a vast experience of compiling high-quality market research reports. Sabyasachi is an authoritative voice in the market research sector, and has been cited in top industry publications. He is a travel junkie, and loves to travel far and wide with his friends.

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