Dusseldorf, Frankfurt The perfumery chain Douglas takes over the mail-order pharmacy Disapo. “For us, this is the strategic entry into the German and European online pharmacy market, which with a three-digit billion volume is even larger than the beauty market,” said Douglas boss Tina Müller of the Handelsblatt. “This offers us enormous potential.”
It’s a frontal assault on the pharmacy business. With an estimated annual turnover of almost 90 million euros, Disapo is not one of the really big mail-order pharmacies. For Douglas, however, the acquisition is a door opener: “We have e-commerce expertise and a huge customer base with around 50 million customer cards in Europe,” explains Müller. “In this way, we can reach millions of customers with our pharmacy offers in one fell swoop.”
Douglas is not just aiming for the exclusive pharmacy cosmetics that the company is already offering via its online platform with the help of partners. The retailer also wants to have prescription medicines in their range soon and thus open up the entire pharmacy business.
In Germany alone, more than 64 billion euros were sold via pharmacies in 2020, according to figures from the market research institute IQVIA. Last year, this mark was likely to have been significantly exceeded again, with the market already growing by 6.5 percent in the period from January to September 2021.
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Douglas takes over Disapo.de BV from founder and CEO Sebastian Kraus. According to company circles, the perfumery chain is said to have paid an amount in the mid double-digit millions. The takeover still has to be approved by the Cartel Office and should be completed in the spring. Kraus is to remain the managing director of Disapo, based in Heerlen, the Netherlands.
The e-prescription should give a boost to the mail order business
The online retailer goes back to a pharmacy founded in Offenbach in 2004, which has been active in the distribution of medicines since 2005. Entrepreneur Kraus, who joined Disapo with his family, founded the mail-order pharmacy Disapo.de BV two years ago in the Netherlands. There is no ban on third-party ownership like in Germany, where only pharmacists are allowed to run a pharmacy. That’s the only reason why Douglas now had the option of making an acquisition.
“Douglas has a large customer base, has a very wide reach and is known for a high degree of digitization. If I hand my company over to someone else, then it has to fit. At Douglas, I think it’s a good fit both in terms of strategy and management,” says Kraus, explaining his decision.
In the first step, Disapo is to be integrated into the Douglas marketplace as a sales partner for pharmacy cosmetics and over-the-counter medicines – like the mail-order pharmacy Eurapon, a subsidiary of the Zur Rose Group, which also owns the market leader Doc Morris.
However, at more than 50 billion euros, the largest part of the pharmacy market is accounted for by prescription drugs. Mail order has so far played a subordinate role here. The online share is estimated at one to two percent.
The e-prescription, which is to be introduced this year, should bring a real growth spurt for the online business with medicines. Because this eliminates the hurdle for customers to send in a paper prescription in order to get prescription drugs in online pharmacies.
E-commerce at Douglas increased by 50 percent
The e-prescription issued by the doctor can be submitted digitally in the future. According to the marketing consultancy Dr. According to Kaske, the mail-order business with prescription drugs could achieve a market share of around ten percent by 2030.
“When the e-prescription comes, we will provide this digital service and also offer prescription drugs via our platform,” announces the Douglas boss. “The e-prescription offers excellent growth opportunities and we will secure a piece of the market.”
This is another building block in the digitization strategy that Müller has prescribed for the company since it took office a good four years ago. She has significantly expanded sales across all digital channels, strengthened marketing via social media and at the same time reduced the branch network.
>> Read here: How digital boss Vanessa Stützle is driving Douglas’ online business
The strategy paid off in the corona pandemic. Despite lockdowns and restrictions in stationary business, Douglas was at least able to keep sales almost stable in the financial year that ended in September at 3.1 billion euros on a like-for-like basis.
Significant declines in the branches were compensated for by an almost 50 percent increase in online business. E-commerce now accounts for almost 40 percent of total sales.
Douglas wants to forestall Amazon with medicines
In the healthcare market, Douglas wants to stake out the terrain early on. Market-dominating platforms like Amazon are also believed to be able to take over small competitors in the drug trade. “Of course we also wanted to take the chance to be faster than others,” says Müller.
Amazon, along with other companies, is already a competitor in the cosmetics business. “But we get along well with this competition and will also get along well with it in the online pharmacy business,” explains the top manager.
The market leaders in European medicine mail order, the Swiss Zur Rose Group with Doc Morris and Shop Apotheke Europe, are also counting on a growth spurt through the e-prescription. Both companies have grown strongly in recent years through acquisitions and marketing investments and generate billions in sales.
“Consolidation in the market is progressing,” observes Disapo boss Kraus. A few players are getting bigger, which was also a reason to act now. “With Douglas, we can develop Disapo much faster than we would be able to do on our own,” he emphasizes.
The Disapo takeover also involves a change in strategy in the stationary business. A good three years ago, the Düsseldorf-based company launched the Douglas Pro concept, which initially offered exclusive pharmacy cosmetics in a branch in Hamburg, but was intended to be expanded. The company does not want to expand further with this idea, as Müller said.
Pharmacy business creates prospects for an IPO
“Instead, we will set up more pharmacy counters in our flagship branches,” says the Douglas boss. Pharmacists are to be hired there who will initially offer advice on special pharmacy cosmetics and dietary supplements. “We have already implemented this in our branch on the Zeil in Frankfurt and it has been very well received.”
Later, these counters could also become pick-up points for prescription drugs ordered online. By then, at the latest, Douglas would become a direct competitor to stationary pharmacies.
The prospect of this lucrative market is important for Douglas on the way to the planned return to the stock exchange in the medium term. Müller qualifies that it would still be a bit too early to talk about an IPO. But she emphasizes: “The purchase of Disapo will certainly be positively received by the capital markets.”
Officially, there is no timetable for an IPO. But industry sources say majority owner CVC will sell most of its stakes through a share issuance by the end of this year. Müller does not want to reveal anything about this, but says: “I think that we would basically be capable of an IPO.”
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