Ex-president of Ranbaxy Rajiv Gulati takes an entrepreneurial leap to address chronic diseases with mChemist
The startup fever is incredibly contagious and any person with an appetite to make an impact on the world catches it easily. India has witnessed an unexpectedly booming startup ecosystem with the entrepreneurial fire burning in youngsters and adults alike.
Rajiv Gulati, an ex-President at Ranbaxy is one such individual who resigned from the company in November 2014 and started his own venture mChemist in Dec 2014.
It is essentially a retail pharmacy delivering medicines at home. But gradually, the startup has started offering 15 per cent discount on the prices of medicines by surpassing the distribution chain and saving immensely on real estate, inventory, salaries and utilities.
The company offers free services such as dosage reminders, refill reminders, free diet counselling and digital retrieval of prescriptions. It also provides access to thousands of non-prescription products such as OTC medicines, herbal supplements and devices.
Our prime focus is to address chronic diseases. We believe that patients procuring medicines for chronic and lifestyle diseases like diabetes, hypertension (high blood pressure), and high cholesterol will benefit the most by registering with mChemist. They require a regular supply of these medicines for long periods in their lifetime. Our current run rate would lead to approximately 600-700 deliveries a month.
After completing bachelors and masters in pharmacy, Rajiv Gulati did an MBA from IIM-Ahmedabad and started his career at Ranbaxy. He then continued as a pharma professional for 30 years across India and US playing C-level management roles. He worked as a CEO of Eli Lilly India followed by Head of India-China Strategy and Global Anti-Counterfeiting Operations from Eli Lilly’s headquarters in the US.
However, Rajiv says he has always been keen to start his own venture in the pharma sector. He returned from US in 2011 and joined Ranbaxy again as President of their Global Pharma Business. During the stint at Ranbaxy, Rajiv had evaluated and found it not to be a financially viable business.
The thought stayed with me till I came across the idea of 'online pharmacy'. By leveraging my 30 years of experience and expertise in the pharma industry, we quickly adapted the US mail order concept to the Indian environment.
A thoughtful start
In August 2014, Rajiv's friend Rajiv Rajan sent him a 57-page presentation on CVS-Caremark, a US mail order pharmacy. Both of them spent hours brainstorming and finally decided to Indianise the concept through mChemist.
The startup is a self-funded venture with a capital of Rs 2.5 crore. In the initial days, Rajiv Rajan had met several investors for funding but they were all asking for the proof of concept on how mail order can be done in India.
However, Rajiv Gulati says,
The initial response was very good and we believe that we can turn profitable by ourselves next year, and can sustain. The model has been tested. It is working well and is eminently scalable.
Building a team
Rajiv Gulati and Rajiv Rajan are the company’s founders. They brought Navinder Sethi who had been Head of Sales for Chronic Medicines (especially diabetic products) at Eli Lilly. Then came Gurvinder Baxi who managed one of the most successful retail pharmacies in Delhi-NCR and is well-versed with procurement and efficient distribution of medicines. Currently, the startup has ten employees.
The company has tied up with eight pharma companies and some major distributors to provide every prescription and non-prescription medicine. According to Gulati, almost two-thirds of their revenue comes from sale of prescription medicines, and one-third from non-prescription. In terms of revenue, the startup will surpass Rs five crore in the next fiscal year, he adds.
Gone are the days when local pharmacies used to dominate the healthcare products industry based on trust of the consumers. Today, with the growing acceptability of online shopping among Indian consumers, the trend in the industry has witnessed a dynamic shift and led to the birth of many startups in the Online Healthcare Products Market.
Startups like 1mgAyush.com, Healthkart, Healthgenie, Healthadda and Deemark Health are competing with each other by implementing various initiatives to grab the bigger pie in the market. However, Healthkart has been able to command the significant market share in terms of GMV during FY’2015.
According to a healthcare report by KEN Research, online sales of healthcare products in India generated a total revenue of Rs 5,075.9 million in FY’2015 which has surpassed from Rs 771.0 million in FY’2012. In addition, the average order size of the healthcare products has been estimated at Rs 1,762.0 in FY’2015.
The above statistics depicted the fact that the Indian Online Healthcare Product Industry is set to contribute significantly in the overall eCommerce industry by FY 2020.
Though Rajiv Gulati agrees with the fact that startups led by young entrepreneurs over the last decade experienced a huge success, simultaneously he believes that pharma industry is a difficult beast to tackle without experience and expertise.
He adds, “We understand the ground realities of the business better than anyone else and have couple aces up our sleeves.”