Express Pharma

Netmed.com’s expansion will ensure faster delivery and efficient order management

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Less than five-year-old, e-pharmacy Netmed.co has already established its presence in almost every household and is continuously striving to grow bigger. The company is looking forward to operating within a conducive legal framework and having an organic as well an inorganic growth. Pradeep Dadha, Founder and CEO, Netmeds.com talks about the company’s business strategies and expansion plans with Usha Sharma

Netmed.com has planned to open 26 Fulfillment Centres (FCs) across Indian metros and tier II cities by the year 2020. Where will those warehouses be?
We plan to set up 26 Fulfillment Centres (FCs) across metros and tier II cities by the year 2020 in an effort to reach rural as well as urban areas and facilitate quick and efficient last-mile delivery of medicines. Currently, Netmeds has 14 Fulfilment Centres across the country spanning over 3 lakh sq. ft, with three centres in Chennai and the rest in Bengaluru, Hyderabad, Delhi, Mumbai, Kolkata, Ahmedabad, Pune, Noida, Lucknow, Raipur and Guwahati. The largest FCs are currently situated in Hyderabad and Kolkata — both spanning 25,000 sq ft. Each of these cities process over 100,000 orders every month. We recently established new master warehousing facilities in Delhi NCR and Mumbai followed by four more support centres in tier II cities namely, Indore, Jaipur, Patna and Chandigarh. Netmed will set up six more FCs in tier II cities after assessment of demand in different zones. These FCs will span over 2 lac sq ft. covering top metros and tier II cities of the country.

How will the company’s new warehouses scale-up the delivery process efficiently? And how is it different from your other competitors?
The new facilities will improve the customer experience by enabling faster delivery, higher fill rates and improve the overall efficiency of logistics and supply chain management at Netmeds.com. These state-of-the-art facilities will ensure speedy order processing and efficient inventory management. The newest addition to our warehousing and operations facility will not only ensure faster delivery and efficient order management but also make medicines accessible to previously non-serviceable parts of the country.

What is the market size of Netmed.com in India and post the setup of the 26 FCs how much do you expect it to increase?
Our growth will be market-driven. Our healthcare niche is still nascent, to the extent that the industry as a whole is yet to scratch even a single percentage point of the overall retail pharmacy spend. According to Frost & Sullivan, the e-pharmacy market in India is estimated to grow at a CAGR of 63 per cent by 2022. As the industry settles into a comfortable position, new regulations are put in place and the public continues to embrace the concept, we expect exponential growth in the sector. Netmeds serves about 3.7 million customers, as a result of 20 per cent month-on-month growth, doing about 10,000 orders a day and shipping them to more than 600 cities, including metros, as well as tier II, III and IV towns and rural villages.

The latter half of the last year has seen some tough times for online pharmacies. Though the sector is yet to get framed guidelines, how do you see the future of online pharmacies?
We support the government’s initiative towards providing quality healthcare and affordable medicines to the masses. And we believe that the draft on e-pharmacies will further bring clarity on the legal as well as the social responsibilities that entail the e-pharma industry. As directed by the Delhi High Court, the Centre has released a draft for further consultation and due diligence. We believe that the government will enforce regulations on the conduct of e-pharmacies after careful consideration. As a fully licensed pharmacy, Netmeds.com is committed to adhering to all the guidelines and standards as prescribed under the Drugs and Cosmetic Act, Personal Data Protection Bill as well the Pharmacy Act.

Regulations for online pharmacies are likely to be among the Modi government’s priorities in the first 100 days of its second term in office. We look forward to operating within a conducive legal framework that would give a much-needed push to the e-pharma and related health-tech businesses. According to an EY report, the e-pharma industry is expected to reach a combined market size of $2.7 billion by 2023. Market sentiments, overall improvement in the legal and the regulatory environment and enthusiastic adoption of e-pharma and other health-tech companies by consumers in itself is an indicator of the growth in this sector.

In the recent past, online pharmacies have chosen to grow inorganically. How will this trend shape the industry? And what are the challenges and the opportunities associated with it?
Inorganic growth avenues such as acquisitions/mergers are merely a way to strengthen the product suite and offerings at Netmeds.com. Netmeds.com acquired online video consultation app JustDoc in September 2018 venturing into healthcare services, diagnostics and consultation. In March 2019, Netmeds also acquired health tech start-up KiViHealth, a clinic management platform providing cloud-based, Artificial Intelligence (AI) powered tools for effective doctor-patient interaction. With these acquisitions, Netmeds.com continues the transformation into a complete healthcare product and service company.

How is Netmed.com impacting the patients’ lives?
Netmeds.com has become the online pharmacy market leader, by realising the need for intelligent, far-reaching and quick healthcare solutions in urban and rural areas. Our goal is to make medicines affordable and accessible to every Indian and to reach even the most outlying corners of the country. Setting up FC in tier II cities helps us achieve that objective. Through these centres, medicines are readily available, allowing us to process and deliver orders quickly and efficiently, thereby reducing the overall turnaround time even in the most under-served areas. The newer and bigger warehouses will give us more control and scalability. This is an important step towards Netmeds’ goal of becoming a pan India patient-centric, complete healthcare product and services company.

What are the company’s strategies for the domestic market and are there any plans to expand its footprint in the global market?
Netmeds will focus on the domestic market for now. Our plans include what one might describe as a sort of a contrarian approach. Although we are fully aware of and on board with tech advances and their importance in the healthcare scenario, we are moving to expand our ‘non-tech’ presence by opening physical ‘brick-and-mortar’ with franchisees. We think the local, traditional walk-in pharmacy can continue to play an important role in the local neighbourhoods, and even these ‘good old-fashioned’ stores can be completely up-to-date, aided by new tech inventory management and even may offer online video consultations.

Likewise, with the rising trend toward implementation of AI, we are taking great care to be sure that our customer service and patient outreach touchpoints continue to maintain the empathetic quality necessary to provide holistically effective healthcare. The future plans of the company include creating partnerships with other pharma/nutritional companies and using data analytics to enable the targeting of specific patient groups.

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