e-Commerce Update: Zur Rose, Amazon

Swiss-based Zur Rose, which posted a 0.4% rise in external revenues to CHF963.9mn (US$1bn) in local currency terms in H1 2022, declined to comment on reports that it was exploring strategic options, including a possible sale. According to Bloomberg, Europe’s leading online pharmacy is working with advisors to look at alternatives and has held talks with potential suitors including US-based private equity groups KKR and Hellman & Friedman. Zur Rose, which gets most of its revenue from Germany and Switzerland, was founded in 1993 by a group of doctors and went public in 2017. It runs online pharmacies, has a medical wholesale business in Switzerland and also operates a marketplace in southern Europe for consumer health and beauty products.

In other news, Amazon will reportedly cease offering its on-demand 24 / 7 healthcare service Amazon Care at end-2022. According to a memo sent to employees by Amazon Health Services Senior V-P Neil Lindsay, it was not the right “long-term solution” or a “complete enough offering for the large enterprise customers we have been targeting”.

Nicholas Hall Writes: e-Commerce has grown significantly in recent years, especially during the pandemic, but clearly it is not a licence to print money as many had thought. The fact that Europe’s No.1 e-pharmacy has consistently lost money is a sobering fact. Zur Rose, which owns DocMorris, could pursue other options to improve its balance sheet, and a deal isn’t expected in the near future given current valuation levels; but the company is unprofitable and the glory days of the pandemic, when its capitalisation soared, are behind us. Nevertheless, the company has more than 11mn active customers across its core European markets, and some analysts bet that Zur Rose will get a boost from the accelerated roll-out of electronic prescriptions in Germany. 

And when we look more broadly at the concept of digital health, even the behemoth Amazon doesn’t always get it right. Analysts are saying that the end of Amazon Care is just a stumble on the company’s path to taking a comprehensive position in the US$4tn US healthcare sector, and eventually the world market. But it looks as though the playbook will need to be rewritten if Amazon and its Chinese and European competitors are to meet their ambitious goals. Maybe one of these companies will buy Zur Rose!

Trevor Gore, Founder of Maestro Consulting, will discuss Opportunities with Collaboration in the Self-Care space during our Asia-Pacific e-Conference on 23 November. This will also include the presentation of our Regional CHC Creative Marketing Award. For more information, or to register, please contact elizabeth.bernos@NicholasHall.com.

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