Dawaa Dost’s path to reducing India’s prescription costs and deliver medicines door-to-door
For 42-year-old Leela Diwakar, buying the medicines she needed was a regular affair. Seeing this, a friend recommended that she try outnearly a year ago and has been a regular customer since.
Leela isn’t the only one. At the moment, about 500,000 Indians get their medicines delivered through the app, says Amit Choudhary, CEO of Dawaa Dost—a platform looking to deliver medicines to consumers and reduce the cost burden of prescriptions.
Amit, along with his colleagues Yash Harlalka (COO) and Anirudh Batwara (CTO), have been operating Dawaa Dost since 2018. Cut to nearly five years later, it has reached about 19,000 pin codes and has expanded to establish 70 stores in nine cities in Rajasthan, Karnataka, Telengana, Maharashtra, and Delhi. It currently works on an omnichannel model where customers can avail services both online and offline.
“We are the only platform that is solving the healthcare challenge full circle,” says Amit. In April 2022, Dawaa Dost became the first private company in India to raise funds from Grameen Impact.
It has also raised less than $4 million in funding, backed by marquee angel investors like Kunal Shah (CRED), Arun Srinivas (Facebook, Ola), Saurabh Garg and Amit Agarwal (No Broker), AN Seshadri (Nalanda Capital), Amit Lodha (Fidelity International), Pankaj Khusrani (Elastic, Google), Ashish Goel (Urban Ladder), SGAN (Thakral Group of companies), Karthik Rajeshwaran (Flipkart), Suresh Mahadevan (Sure Cash), Amrish Rau (Pine Labs), Shankar Narayan (The Carlyle Group, Sanaka), Samardeep Subandh (Bajaj, D Mart), and Govind Rajan (Cue Math, Unilever).
Reducing prescription bills
For people like Leela with recurring prescriptions, costs can become a burden. One of the claims put forth by Dawaa Dost is the promise of cutting down the expense of prescriptions by at least half. It is able to do this through procurement of medicines directly from respected pharma companies like Cipla, Zydus, Abbott, and Sun—ensuring up to 80% of savings on each prescription, it said.
Dawaa Dost also relies on trade generics—versions of medications prescribed by parent companies of a prescribed drug that isn’t pushed by sales representatives. Dawaa Dost recommends the same medicine with a different brand to the prescribed drug along with details of the alternatives available to its consumers through a 4-tick process. It is not an unusual practice for pharmacies to suggest alternatives to prescribed medicines. Based on research by BRIEF India (Bureau of Research on Industry and Economic Fundamentals), 67% of people are offered an alternative brand at pharmacies.
“We’re not doing something dramatically unique; it is happening at your go-to medicine stores too, but no one is passing on the savings to consumers because the pharmacy is keeping the extra margin,” says Amit.
The company claims to have enabled Rs 400 million in savings to over 3.2 million people through its stores, its kirana-tech model (partnership with over 2,500 kirana stores across Rajasthan), and its website. “Our stores are designed as ‘omni-channel units’; they are physical stores as well as fulfilment centres for digital orders, and are located in high footfall areas such as near bus stands, railway and metro stations,” said Amit.
Finding the right pieces
Well into the early days of Dawaa Dost, Amit realised that its competitive advantage would come from striking the balance between the benefits of the physical world and the elasticity of the digital world.
“Dawaa Dost is a company leveraging the benefits of the offline unit while scaling up using the non-linear growth potential of the online world,” Amit told YourStory.
Compared to its rival Pharmeasy, which had 2.4 million annual transacting users, Dawaa Dost had 1.5 million users. “This shows our model is much easier to scale with better unit economics,” Amit said.
With its physical pharmacies Dawaa Dost can also personalise care and build strong connections with customers, which can lead to customer loyalty and repeat business, the company said.
The startup claims to deliver ~Rs 90 crore GMV in FY23 which is growing at 342% on top of FY22 with net sales of Rs 50 crore in FY23. Last year, it hit a GMV of Rs 20 crore, with a net sale of Rs 12.2 crore.
“We have been a high single-digit operating profitable company since November 2022 with 3 digit ROCE(return on capital employed) delivered,” says Amit.
Beyond delivery and prescriptions
In 2021, the company launched Medwiki, a search engine-based video library, curated by a team of pharmacists, which aims to help users understand their medicines better. The platform has over 3.5 million videos in six languages, and has been watched by 50 million Indians to date.
Its online application called Karma Dost, reminds users when to take their medicines. Available on android with 59,000 downloads, Karma Dost is used by 100,000 people across India and has been able to improve medicine adherence amongst users by above 60%, claims Amit. According to Leela, the app has been instrumental in helping her parents take their medicines on time.
To leverage its kirana partnerships and extend its last-mile delivery, it has partnered with 2,500 kirana stores across Rajasthan to sell medicines through them and launched an assisted selling platform.
Consumers can scan the QR code available at Dawaa Dost’s partner kirana stores, go to the Dawaa Dost website, and register themselves after which consumers can either upload the prescription on the website, order medicines and get them delivered to their doorstep, or get help from the command centre if they don’t have a prescription or even a photograph of the medicine.
If consumers don’t have a smartphone, the kirana store owner can help place the order on Dawaa Dost business-to-business (B2B) app. The kirana stores get a commission for the origination of orders, while fulfilment takes place from a Dawaa Dost store.
In the next year, Dawaa Dost aims to reach over Rs 200 crore GMV, serve over 400 million Indians, and achieve a base of four million active transacting users. It is also piloting a last-mile delivery service—Dawaa Dost Express (DD Express) that will help direct-to-consumer (D2C) healthcare brands offer quick commerce deliveries to customers. It plans to extend DD Express to include over 50 partnerships next year.
“We are growing exponentially, and are looking to expand our footprint across the country. We aim to add 100 physical stores, and take Dawaa Dost to three additional cities in Rajasthan within this year. To penetrate deeper into India’s hinterlands, we hope to go pan India with our kirana tech model in 2024,” Amit concludes.
Disclaimer: This story has been updated to remove the name of a person mentioned.
Edited by Kanishk Singh