In India, the world's largest maker of generic drugs, a battle is raging between pharmacies found on the streets and online ones.

India has pharmacies on almost every street corner, many of which are decades-old family businesses. But the monopoly of these shops is now being challenged by online players which entered the market in the last three to four years amid an e-commerce boom.

At online pharmacy 1mg, all medicines can be bought at a 20 per cent discount. Consumers can upload their prescription on 1mg's website and order medicines for delivery in a day or two.

This virtual pharmacy launched in 2015 already has six million users and delivers to over 500 cities.

Mr Prashant Tandon, the CEO and founder of 1mg and president of Digital Health Platforms, an association of around half a dozen online pharmacies, said there was resistance to change in a sector that has remained static since the 1950s.

The All India Organisation of Chemists and Druggists (AIOCD), an association of 550,000 members, held a protest against online pharmacies, among other issues, on May 30.

Said Mr Tandon of the association: "There are huge issues around a cartel and they don't want progress."

Online pharmacies suited people on regular medication, he argued.

"The benefit of e-pharmacies is access. You can get all the medicines in a convenient form. In a typical pharmacy, not all medicine may be available... We have come up with our own code of conduct. So there is an entire audit trail, vigilance and no transactions without prescriptions."

India's pharmacy retail sector is estimated to be a US$18 billion (S$25 billion) industry. Online pharmacies, which number about four dozen, account for a very small proportion of this pie, but are expected to mount a strong challenge.

"Online is still very small in terms of consumer spending. But bricks- and-mortar shops are taking a proactive role to slow growth (of online pharmacies). They are not an immediate threat but will be one in five to seven years," said Mr Arvind Singhal, chairman and managing director of Technopak, a management consulting firm.

The government is in the process of formulating regulation for online pharmacies, but the AIOCD has complained that these pharmacies are undercutting the business of their bricks-and-mortar rivals through offering discounts, and that medicines could be sold without checks.

"In our nation of 1.25 billion people, 65 per cent are youth who are well accustomed to technology. Such people will tamper with prescription drugs or habit-forming medicine," said Mr R. J. S. Shinde, president of AIOCD.

"Thousands of transactions take place online... who will check it? In India, drug regulation is very weak."

But other observers note that regulation is lax in India even for bricks-and-mortar shops, with pharmacies known to sell medicines without checking prescriptions; there is also the problem of fake drugs entering the system.

The government, which sees online pharmacies as a possible way to deliver medicines in remote areas, has proposed a way to better track drugs through an e-portal on which chemists will have to upload details of all medicines bought and sold.

Health experts noted the need to regulate the entire sector better.

"India has a big problem in terms of spurious drugs getting into the supply chain," said Mr Singhal.

He said "offline pharmacies are also guilty of carrying drugs which are not genuine" and consumers might not be knowledgeable about drugs, not to mention those who are illiterate.

These are challenges in the physical world and these challenges are even greater for online, he added.

Some online pharmacies have already been hit by competition by their bricks-and-mortar rivals.

Online pharmacy Medidart shut down operations after its distributors and suppliers were threatened for supplying to it.

Mr Kiran Divakaran, who founded Medidart in 2014, said they were now setting up their own supply network and waiting for the government to introduce regulation for online pharmacies.

The government is expected to come up with regulations soon.

"Our distributors and retailers faced a lot of discrimination. We are setting up our own distribution," said Mr Divakaran.

"And we are waiting for proper guidelines from the drug department. That will clarify things."