„I'm just tapping the card“. Who hasn't heard of Shop Apotheke's advertising message, which Günther Jauch spreads across German television stations every evening. The fact that Shop Apotheke has landed a real advertising coup with the well-known moderator as a testimonial is easy to see from the development of sales and customer figures in the prescription drugs (Rx) business.

In the first quarter alone, the active customer base across the group grew by 0.6 million to 13.1 million users, while Rx sales in Germany almost doubled to 108 million euros. The mail-order pharmacy now has 1.1 million Rx customers.

In a conversation with Börsen-Zeitung, CEO Olaf Heinrich does not want to reveal how much Redcare Pharmacy, the company behind Shop Apotheke, is investing in the campaign. „The campaign with Günther Jauch helps us to make the Shop Apotheke brand and e-RX better known in the relevant target group,“ says Heinrich, preferring to keep it general. The fact is, however, that Shop Apotheke overtook its biggest competitor DocMorris last year with flying colours, and now claims to be the market leader. Before the launch of e-prescriptions, the two mail-order pharmacies were on a par.

Nonetheless their market share is still modest at 0.88%, since the pharmacy market in Germany is dominated by bricks-and-mortar pharmacies – not least due to the ban on third-party ownership. The market volume for prescription drugs in Germany is estimated at 55 billion euros. Heinrich estimates that around 1.7% of this is currently accounted for by mail order. According to industry estimates, this is likely to rise to 10% over time.

According to Heinrich, the success of Redcare Pharmacy is also due to the fact that the company invested heavily in marketing even before the introduction of the Cardlink solution, which opened up access to e-prescriptions for online pharmacies in the first place. In the beginning, the main aim was to make patients aware of the alternative solution to the brick and mortar pharmacy. And after that, customers still had to be taken out of their usual routine of going to the pharmacy after visiting the doctor.

„In online business, you always have to invest up front. The crucial question is how quickly the investment pays off,“ says Heinrich. This is a key performance indicator in online business. However, Heinrich does not want to say which target applies at Redcare Pharmacy. The Rx customer does cost more to acquire. However, as these are primarily chronically ill people, Rx customers also generate 4.7 times the annual turnover of non-Rx customers.

The race for pole position has been going on for a year, and Heinrich is well aware that the market shares are now being carved up. It is therefore important to increase marketing costs in order to generate growth. Of course, this costs a margin. It was not without reason that Redcare Pharmacy cut its forecast last autumn in order to be able to pump more money into marketing. However, Heinrich is convinced that he has „found a good balance between growth and earnings“ with the forecast for 2025.

But it remains a balancing act. In the medium term, the mail-order pharmacy has promised an operating margin based on earnings before interest, taxes, depreciation and amortisation (Ebitda) of 8%. However, the plan for 2025 is only 2% to 2.5%, compared to 1.4% in the previous year. By its own admission, the mail-order pharmacy has it in its own hands when the margin target will be achieved. „As long as we can grow at reasonable costs, we will do so. This will enable us to expand our market leadership,“ says Heinrich, adding: ’We have a clear growth strategy that we can implement without acquisitions.’

Market leadership in online retail is associated with many advantages: „The market leader always benefits, be it through brand awareness, the relationship with the industry, or through economies of scale in logistics,“ says Heinrich, who is not only a proven mail order expert, but was also at the helm of DocMorris for twelve years. In view of the fixed price regulation that applies to prescription drugs in this country, volume discounts cannot be negotiated in purchasing, but the traffic generated is a factor that should not be underestimated - keyword: retail media.

Although this does not apply to the Rx business, it does apply to pharmacy-only products and brands that are only sold through pharmacies, such as Vichy. According to Heinrich, a functioning online retailer needs three components for success: its own retail business, a marketplace, and retail media. The latter is not only a fast-growing market, but also a highly profitable one.

Nevertheless, Heinrich remains tight-lipped about sales and earnings figures beyond his own retail business. One can only guess how great the competitive pressure in the market is. However, Heinrich is not afraid of this. „We feel we are ideally positioned to compete because we are positioned as a pharmacy and not as a platform,“ says the manager. That's why he – unlike his investors – wasn't too worried when the drugstore chain dm announced at the end of 2024 that it was entering the mail-order business with non-prescription medicines.