‘We plan to deploy big data and AI engines to test reports’ say Tushar Kumar and Prashant Singh
In less than three years, Medlife has made a niche for itself in the online pharmacy business in India and growing continously. The company is also expanding its business portfolio and implementing AI platforms to its various segments. Revealing more about the company’s expansion plans Tushar Kumar, Founder & CEO and Prashant Singh, Founder and Director, Medlife also talk about the challenges and opportunities existing in online pharmacy with Usha Sharma
Tell us the business strategies of Medlife and how it is different from its competitors?
The biggest differential is our quality of service and customer obsession. Other than this, where we are different is that we have our own dispensing and hence quality controls are massive and we achieve a near zero error in dispensing compared to reports of 30-40 per cent errors when dispensing is outsourced. Other than us being inventory led, we are also the only one to have physical infrastructure in 20+ cities which allows us to offer a much better customer experience and roll out new features very quickly.
Why did you choose to venture into the diagnostic business when the market is flooded with organised and semi organised players?
Even though the market has enough diagnostic players, there has not been a true tech disruption of this space and we felt we could do that. To begin with all the three process involved in the pathology business viz. order generation, collection and processing is being handled by us directly which is usually done by three different companies. This allows us to pass the margins saved to the consumer, hence bringing the cost of tests down for them. Later we plan to deploy big data & artificial intelligence (AI) engines to test reports to be able to provide deep and meaningful interpretations to the doctors and patients alike.
The company has its own diagnostic lab in Bangalore, how do you plan to scale up your lab business across India?
We are coming up with our lab setup in 10 cities this quarter and 50 cities in the next year. We are looking to invest ₹50 crores in this space in the next 12 months for expansion.
Which other portfolio are you eyeing to explore for expansion of your healthcare portfolio and how do you plan to execute it?
Other than the pharmacy and lab business, our next area of focus is our private label business which comprises of health supplements, herbal products, first aid and emergency kits, devices and specialty products for chronic disease care. From ₹ 5 crores a month, we want to scale up to ₹ 15 crores a month by next year.
How do you justify your claim to be the largest e-Pharmacy?
We would be closing this year with ₹830 crore which we believe is 30 per cent of the online pharmacy business. These are estimates derived through what we hear from vendors and industry people. Based on our estimates the second player is half of our sales on a monthly basis.
As the company is into five different business segments namely; e-pharmacies, diagnostic, doctor interface, essential medicines and e-consultations, how much does each segment contribute in the company’s annual growth, please give us the break-up and how much percent growth you expect in the next 2-3 years?
Our doctor interface and e-consultations are mainly products for the future as the time and right technology for those to be meaningful has not come yet. Our focus for the next three years shall be only on the pharmacy, private label and labs business. We expect them to contribute 70 per cent, 10 per cent and 20 per cent to the revenues over the next 2-3 years.
The company has started using AI platform for inventory predication, how do you plan to use it in other segments?
We plan to use big data and AI in inventory planning, customer management, efficiency planning and e-consultations.
Give us a brief understanding on your latest acquisition of E-clinic 24×7 and how it will add value and volume to your business?
Like iterated above, this is more with an eye on the future where we believe that 20-25 per cent of doctor consultations in urban areas would move to the virtual space. E-clinic has the right technology and features in place to allow to us to cater to that demand. In the interim this acquisition would help our pharmacy business.
How keen are you in expanding your business through franchise segment?
We definitely want to have an omni channel model in the tier II & III cities and are actively looking for franchise partners. To ensure control and our zero error dispensing; we would be making it mandatory for our systems, processes and a pharmacist deployed by us to be present at the stores.
Tell us the company’s future plans and how do you plan to execute it?
We plan to do $1 billion revenue in 2020 and reach $5 billion by 2023. With the expansion of the pharmacy business into newer cities and scale up of our labs and private label business this is very achievable. We are confident of beating our own estimates and plan to take 50 per cent of the online healthcare market by the next year and then continue to maintain it, if not add to it.
The recent saga of online pharmacies vs offline has impacted the common man perception, what role will you be playing in educating the masses? Does it impact your business?
Yes, sometimes certain reports or news is wrongly interpreted by the common man and it leads to a wrong perception. However, we also have the support of millions of customers who have been with us for long and considering that 70 per cent of our orders are from repeat customers; they help thwart such wrong perceptions. We also keep educating the customers to ensure that they can trust our brand and they understand the pains we go through to bring quality products to them.
How do you see the online pharmacy sector evaluating in the next 2 years?
We expect online pharmacies to witness a boom once the new draft regulations are a law as trust would increase multifold and we feel this sector to own 6-7 per cent marketshare in the next two years.