Delhi based online pharmacy BigChemist vows to become a Rs 15 crore entity in 2016
A science graduate from Delhi University and an MBA from IFIM Business School, Puneet Kapoor (41) has executed over 150 ERP and BI projects of varied size and complexity, across team roles, in his 17 years of professional journey. In May 2013, Puneet and his colleagues, Arvind Yadav and Anil Asnani, decided to start BigChemist.com.
The aim behind BigChemist.com is to facilitate people with originality in medicine at genuine price and create awareness on generic pharmaceutical needs. BigChemist.com currently has more than 5.6 lakh visitors with over 20,000 registered customers.
In the last two years, the team at BigChemist focused closely on analysing the pharma market, understanding the key pain points in supply and demand areas, and studied how the local pharmacies operate, their scope for profitability and revenue increase.
BigChemist.com was started with a seed capital of $1 million. So far, half a million has been utilised in escalating the business operation. The biggest challenge which the startup initially faced and still does is the non-availability of a valid prescription with the order, which leads to it getting rejected.
Many consumers are not even aware of the mandatory need for prescription as they have developed a habit of buying medicines from local chemists without such requirement.
Mechanism of ordering medicines
Consumers can order medicines via BigChemist's mobile app or website. The app has the feature of Rapid Order where one can take a picture of the prescription and upload it. Once the pharmacist validates the prescription, consumers get notification to confirm and pay for the order. Then the order is processed and delivered at the customer's doorstep. It takes 24 to 72 hours for delivery.
The startup has served 191 cities across India and has tied up with three logistic partners - BookAWheel, GoJava and Delhivery. It receives 150 to 200 orders a day with a ticket size of Rs 700 to 750. BigChemist has both online as well as offline presence with physical stores in Delhi and NCR. The startup currently has a manpower of 60 people.
With 1.5 lakh SKUs, the product offerings cover healthcare and lifestyle wellness categories like health and nutrition, sports & fitness devices, parenting, personal care, beauty and fragrance, and adult products. It offers 15 per cent discount on medicines and with its loyalty programme BigHeart, users can earn reward points for immediate redemption.
Procurement of medicines
BigChemist has a network of 30 authorised distributors or channels to procure directly from manufacturers. The products are then stored in a clean environment with proper bar coding and tractability.
All our products are shipped with mandatory information like manufacturer details, batch number, expiry details, etc. This allows for complete tracking of that product. All medicine orders are processed by qualified pharmacist in operations and store. Even our customer care is manned by qualified pharmacist. All purchases are on the invoice from authorised channels with drug licence details at their end.
Creating a thriving ecosystem
As a part of the expansion plan, BigChemist will open its physical stores in eight cities- Mumbai, Bengaluru, Chennai, Hyderabad, Lucknow, Jaipur, Kolkata and Pune. It also has plans to have one signature store in all the major cities where customers can experience the offerings and share their feedback in person.
Puneet adds, “Our major investments will be towards developing the ecosystem by investing in the POS hardware, software, value chain integrated business application for B2B and B2C marketplace.”
BigChemist is working towards disease management programmes which, according to Puneet, are currently unavailable in the market. The programme will focus both on preventive and corrective aspects of the disease. It has also collaborated with e-clinics to offer instant video consulting which will soon be integrated in the platform. Moreover, the startup is in the process of collaborating with healthcare service providers to offer consultation and diagnostics services.
In terms of revenue, the startup is growing by 25 per cent month on month. Puneet states that the margin on every product sale varies from 17 to 200 per cent. By 2016, BigChemist aims to reach 3,000 orders per city with average bill value of Rs. 900 to Rs. 1,000, and to touch the revenue of Rs.15 crore with GMV of Rs 20 crore.
IT infrastructure and software and robust supply chain play a major role in fuelling the innovation in the e-pharmacy segment. According to a healthcare report by KEN Research, online sales of healthcare products in India generated a revenue of over Rs 5,000 million in FY 2015 which surpassed the Rs 771 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. Startups like 1mgAyush.com, Healthkart, Healthgenie, Healthadda, mChemist and Deemark Health are in the tug of war to grab the bigger pie in the market.
However, the thriving e-pharmacy business recently has been threatened when All India Organisation of Chemists & Druggists (AIOCD) called for a nationwide strike to oppose the 'illegal' online sale of medicines.
In July, the Central government formed a Drugs Consultative Committee which has a dedicated sub-committee to look into the viability of e-pharmacy business model and come up with a draft regulatory policy for adoption for the e-pharmacies to operate.
BigChemist seems to be extra cautious while selling the medicines and therefore operates in strict compliance with drugs and cosmetics rules, pharmacy practice regulations and other mandatory acts. It also has proper drug licence to dispense the medicines from the authorised location.