With a series of innovations and new ideas, the digital healthcare sector shows immense growth and performance. Consider the case of CareOnGo, after setting up a mobile chain of co-branded pharmacy stores which allows users to buy medicines from their neighbourhood approved pharmacies, it tried to expand its offerings.
According to CareOnGo, during its course of aggregating micropharmacies on a single platform, it observed lots of lacunae in the B2B pharmaceutical segment. Owing to lack of use of technology, there were many inefficiencies in the industry. The B2C segment was much more organised and comparatively more advanced than B2B. Being the segment that does not deal directly with end consumers, it has been ignored for long. CareOnGo thus identified the opportunity to provide end-to-end technology solution to the micropharmacies instead of just being an incremental sales partner. The platform reshaped its model and merged inventory, sales, and procurement into one platform.
“The reason behind changing the model was to redefine end-to-end solutions by catering to the needs of micro-pharmacies from both procurement and sales segments,” says Yogesh Agarwal, Co-founder of CareOnGo.
Recently, CareOnGo launched a B2B mobile app ‑ InstaStock ‑ to facilitate pharmacy retailers, hospitals, health institutions to procure medicines and health products from more than 100 brands directly from the manufacturers. It has also tied up with LendingKart, allowing instant working capital loans to the tune of Rs 1 crore and allows higher margins through bulk procurement for retailers. According to the platform, more than 800 pharmacy retailers are actively using the InstaStock app and buying from the platform.
“Pharmacy supply chain has been devoid of high-end technology till now and distribution has been running in a traditional way, with no accountability and efficiency in the processes. The vision of the company is to simplify the pharma supply chain through technology helping retailers overcome major operational hurdles in logistics, procurement of products, margins, and credit facilities. The company has identified the scope in India to bring transparency in the healthcare sector and to also aggregate the players in the entire supply chain. “With more than eight lakh pharmacies in India, we are aimed at streamlining both the consumer and retailers to bridge the gap,” says Yogesh.
CareonGo seems to be consistent in its B2B approach. Early this year, targeting the B2B segment, it introduced Pharmalytics feature, an analytic platform dedicated to pharmacy retailers, on its platform. This analytic platform helps retailers to analyse sales, purchase and inventory stock to solve the business challenges. With data analytics, the platform is enabling these pharmacies to cut down their logistic costs, calculate their margins on the spot, and stock up for specific orders for infections that require temperature control.
It also introduced Caresol, a desktop and cloud-based ERP solution that comes with an in-built POS solution to help these pharmacies to streamline the payment process, both online and offline. The ERP solution is linked to the inventory of the pharmacy, enabling real-time availability of medicines and OTC products. The ERP solution uses the localised demand analytics data shifting pharmacies from blind inventory to predictive inventory management for greater savings and better stock management.
Journey into the past
Launched in August 2015 by Yogesh, Aditya Kandoi and Ritu Singh, CareOnGo started out its operation from a small office at Karol Bagh in Delhi with four tech team members. Initially bootstrapped, it pumped Rs 40 lakh into the company and also launched its first version of the app, which they claim has crossed 10,000 downloads in just 15 days.
In February this year, the platform had raised $300,000 in a seed funding led by Farooq Oomerbhoy, who co-founded Orios Venture Partners, along with Raj Mishra of Indea Capital and Vineet Ganesh of Imperial India Investment.
After the funding round, CareOnGo expanded its reach to the Delhi-NCR region including Gurgaon, Faridabad and Noida.
Within two months, they raised a pre-Series A led by Farooq Oomerbhoy, followed by Anupam Mittal and Anand Mittal of People Group; Ravi Garikipati, Head of Flipkart’s Ads Business; Vibhu Garg, Co-founder of Unicommerce, along with Singapore Angel Network and Konglo Ventures, among others.
When growth took off
After two consecutive rounds of funding, the platform claims to make a sharp headway. From expansion in cities to onboard stores to new services, it claims to have come a long way in this segment.
The platform started its service in two cities — Delhi and Bengaluru — and has expanded to Delhi-NCR, Hyderabad and Kolkata. From a few hundred tie-ups, it has increased its reach to 800 stores. Besides, it has also tied up with around 100 brands, which are offering direct service to stores via the InstaStock platform, slashing the role of middlemen and directly offering benefits to drug stores. They are planning to expand to more cities by the end of this year. It will also be venturing into diagnostics by bringing a similar solution for local diagnostic labs.
CareOnGo has been growing at a rate of 90 percent month-on-month in terms of sales. They are a 21-member team with a workforce cut-across technology, marketing and business partnerships.
What others are doing?
According to IMS, retail pharmacy was expected to cross $11.5 billion by the end of 2015, growing at a rate of 20 percent year-on-year.
In this enormous market, there are various players that are vying with each other to grab the largest piece of the pie. Some of the big names in the sector include 1mg.com, BigChemist, NetMeds, mChemist and Practo.
In April this year, 1mg, the digital healthcare platform, raised Rs 100 crore in Series B funding led by Maverick Capital Ventures. Existing investors Sequoia India and Omidyar Network also participated in the round.
Late last year, Netmeds.com, India Ki Pharmacy, closed on $50 million in tranched financing, led by OrbiMed.
After acquiring the likes of Fitho, Genii, Insta Health and Quikwell last year, Practo entered into online medicine ordering segment with Practo Order in January this year.
Experts says that the e-pharma players are trying to set up an ecosystem that will address various issues related to the industry. The idea is to solve the problem of authenticity (currently this market has more than 30 percent counterfeits and spurious medicines) and unavailability (more than 40 percent of the orders are either partly fulfilled or not fulfilled at all) of medicines. Using technology, these players are trying to address the issue and giving the industry a wholesome solution.
They, however, add that amidst the continuous resistance posed by the drug association and struggling with many government regulations, it will be interesting to see how the e-pharma industry solve industry problems and brings more transparency in the market through technology.