Surfing the digital wave in pharma retail
The pharma retail space has had a digital component to it for quite a while, but the pandemic has served notice to the laggards in the sector. Here’s a quick look at how newcomers like O4S as well as stalwarts like AIOCD AWACS are positioning themselves to fill the gaps
India has now overtaken Brazil as the second-highest confirmed cases of COVID-19, behind the US. The country is placed second in terms of the COVID-recovered, and third in terms of deaths related to the pandemic, according to the Johns Hopkins Coronavirus resource centre.
In India, more restrictions are eased each month, as the central and state governments strike an uneasy balance between lives and livelihoods. While the pandemic seems to be in control in some metros like Delhi and Mumbai, the former hotspots, new ones like Pune, Maharashtra now tops the list with the highest daily additions of COVID-19 cases.
Companies are now resigned that though travel restrictions will ease and more they will be allowed to call in more staff, sanitation and physical distancing will be the new normal. Most corporates have in fact used the pandemic to adapt to new ways of working, by enabling employees to Work from Home (WFH) where possible. Most of the new normal will pivot around migrating more tasks to the digital medium faster. And pharma sales and distribution is one segment where this has already become the norm.
The pharma sales and distribution space has had a digital component to it for quite a while, but the pandemic has served notice to the laggards in the sector. And has also uncovered the gaps.
This is where companies like O4S, an enterprise SaaS start-up, come in. Founded in 2016 by Divay Kumar and Shreyans Sipani, O4S is a Series-A funded, $3.5 million worth company based out of Gurgaon, Hyderabad, and Bangalore. Speaking about their future plans, CEO and MD Kumar indicates that they hope to have a second round of fund raise by year-end.
O4S works by enabling supply chain visibility through UID serialisation at the product manufacturing level using proprietary technology. The UID serves two purposes: improving visibility into the pharma supply chain particularly during secondary sales (sales to retailer) and tertiary sales (sales to consumer). This level of granularity was previously the domain of distributors. This information will help optimise planning and production.
Secondly, it helps curb counterfeiting. End users can authenticate their purchases using the Android-based mobile app platform, by scanning the UID code at any stage of the retail chain.
According to Kumar, O4S works with over 10 pharma clients including companies like Zydus and Le Renon. They also serve other sectors like FMCG and agriculture, which like the pharma sector, need large retail networks across the country, leading to a disconnect between the various levels of the supply chain.
In early June this year, O4S went a step further, by launching Gynger, a digital trade promotion platform for pharma companies. This is another pain point, where pharma manufacturers traditionally struggle to control spends and derive maximum RoI as they cannot directly track individual retailers. As company literature puts it, Gynger automates the process of incentivisation to strengthen retailer engagement.
Kumar indicates that they are targeting to onboard over 5,00,000 Gynger subscribers by end of 2021, with 35 per cent of overall revenue to come from the digitised Trade Promotions and Management (TPM) solution in the current financial year itself.
So how does Gynger work? And why is the company projecting such a sizeable portion of its revenues in the first year of its launch?
Explaining the rationale for the launch Kumar said, “With complex supply chains for distribution and their varying levels of maturity, companies across sectors including FMCG, agriculture, and pharma face the challenge of disconnectedness with the retailers and influencers. The widespread retailers’ network which commands a significant share of product sales, needs stronger and direct engagement, powered by automation. The current approach to trade promotion planning and execution by companies is often based on “gut” and “experience” of the trade marketing team and the tools to manage and measure promotions are understated. Hence, Gynger offers the right tools to companies for complete control over their TPM schemes to plan, execute, assess, and gather actionable insights on their effectiveness in real-time, enabling mid-way course correction and bringing value to enterprises. The uniqueness of our solution ensures that the entire process is data-driven, eliminates reliance on any middlemen, and adapt to the existing schemes format to reward the champions in order to achieve the desired sales result.”
The pharma supply chain has been defined by limited visibility, due to the lack of an