Amazon is entering the fast-growing online pharmacy market in India. The service will initially be available in the city of Bengaluru (also known as Bangalore) with plans for pilots in other parts of the country.

The move comes amid increased demand for online health services in India during the coronavirus pandemic with established firms and start-ups witnessing strong growth and investment activity. According to RedSeer Consulting, India’s digital health market will expand to $4.5bn in 2020, compared with $1.2bn last year. This is expected to accelerate to $25bn by 2025.

The Amazon Pharmacy service will offer OTC and prescription-based medicines, basic health devices, and traditional Ayurveda (herbal) medication. The launch date has yet to be confirmed.

“This is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home,” an Amazon spokesperson said.

Amazon took a major step into the US healthcare market when it bought online pharmacy PillPack in 2018 for a reported $1bn. The impact of the move was reflected at the time in a sharp drop in the share prices of traditional players in the US pharmacy sector such as Walgreens Boots Alliance, Rite Aid, and CVS. Analysts highlighted that Amazon’s entry could lead to a major shake-up as has been the case in other sectors where it has built a presence.

Earlier this year, it was revealed that the online giant had filed to trademark the name Amazon Pharmacy in the UK, Australia and Canada. The move was seen as a sign that the company was planning to expand its prescription business outside of the US.

Amazon already has a strong presence in India in the general merchandise and grocery sectors. Like rival US retailer Walmart, Amazon sees huge growth potential in the fast-growing economy with its Chief Executive Jeff Bezos recently pledging to make major investments in the country.