In an exclusive conversation with Indiaretailing Bureau, Manu Grover, Founder, Healthgenie.in, talks about the growing significance of retailing healthcare products online.
Q. Please tell us about the market prospects for online health retailing?
Q. Please tell us about the market prospects for online health retailing?
A. There has been a significant increase in life expectancy combined with a growing demand for quality healthcare products. This has led to huge online demand for healthcare products in India. As healthcare facilities are still catching up in tier-II and -III cities, there is immense demand from these cities as the maximum traffic comes from here. Also, the recent rise in GDP and the yearning for basic healthcare amenities among the new age population have helped and allowed e-tailing players in healthcare to make a beeline for the opportunities available in this sector. As per the market scenario, only 26 per cent of Indian specialist physicians are catering to a sizeable 78 per cent of the rural population; the vast geographical expanse certainly lacks an effective delivery mechanism. This has turned healthcare e-commerce into the fastest growing segment to cater to this growing demand, especially from tier-II and -III cities.
With healthcare industry slated to grow by US$ 280 billion in another 5 years in India, healthcare e-commerce is exploding. Healthgenie.in boasts of its 55-year-old lineage, and has special expertise in manufacturing and selling health and wellness products. The company has resolved to translate this wealth of knowledge and propel the brand and sales to greater heights in the industry, which is poised to grow significantly in coming years.
Q. Why do online health retailers shy away from getting into the business of selling prescribed and over-the-counter (OTC) medicines?
A. Online health retailers cannot immediately jump into the business of selling prescribed medicines as Indian drug laws are not that e-commerce friendly. Healthcare pharmacies are legally bound to verify the legal dispensing by authorised people and also authenticate the user and the prescription before they sell selling medicines, as it is an Indian drug law mandate.
Many online healthcare retailers have started delivering OTC medicines but the ticket size of that customer base is very small. Also, OTC medicines are usually led by a customer’s immediate need. Hence, any delay in delivery by e-tailers will eventually defeat the purpose of timely intake of such medicines. We are in the process of devising a model by which we can check this delay.
Q. Who is your competitor in India and which e-commerce retailer do you look up to here?
A. We are our own key competitors, as we believe in competing with ourselves. However, the customer demand defines our growth and pushes us to strive and do better than what we did yesterday. If we had to name one e-commerce player we look up to, it would be Amazon as it is one of the most customer-centric and mature player in the market today. Amazon has been extremely diligent with their customer service and delivery in addition to having a great user interface to maintain traction.
Q. Please share the turnover for Healthgenie.in in FY 13–14. What are your expectations for the next financial year?
A. Healthgenie.in is a fairly new boot-strapped startup, yet we have clocked a turnover of Rs. 5 crore in FY 2013–14. We are expecting to grow by 250 per cent in FY 2014–2015. In the coming FY 15–16, we hope to become the first e-commerce company to be operationally profitable as we are aggressively pursuing our LEAN business model and once funded, we would be able to achieve a turnover of approximately Rs. 40 crore.
Q. Tell us about Healthgenie.in subscription business model and the loyalty programme?
A. Healthgenie.in has pioneered an innovative subscription model for repetitive buying of the same product periodically. With a high repeat business in segments like diabetes, elder care, nutrition supplements, women healthcare, etc., our customers can subscribe for the products that are required weekly or fortnightly or monthly, and that too at a discounted price. These are usually the products which are bought by customers on a recurring periodic basis.
We strongly believe that retaining an old customer is far lucrative than acquiring a new one. So we honour our existing clients by offering them redeemable loyalty points against future purchases.
Q. Please tell us about hybrid delivery through local distributors and retailers.
A. To grow consistently and become the market leader in online healthcare retail space, we need to master the depth first. We are a niche portal and we believe in creating niche within niche before we expand the category width and vertical. We are planning to establish a hybrid marketplace delivery mechanism system, the next level of omni-channel retailing, which will be a game changer in the coming years. So I guess you will just have to wait and watch.
Q. Are you raising external funds? If yes, then please share the details on the same?
A. Even though we have been boot-strapped, we have attained the second position purely by providing a leaner and better end-to-end solution to our customers. We are constantly being approached and are in discussions with some key investors for funds. Once we are funded, we would be able to grow by at least 6 to 8 times in the next 15 to 20 months, gunning for the leadership position. We are also evaluating the scaling up of our venture internationally.
Q. How important is CRM for e-commerce players?
A. The whole crux of e-commerce business lies in acquiring a larger customer base, ensuring they provide repetitive business. Living up to customers’ expectations is possible only through a great customer-centric user interface and SOPs. To evolve ourselves as one of the key players in the e-commerce sector, we have converted ourselves as one of the leanest organisations, with our customers being our brand ambassadors. Our core strategy is to convert ‘friction to traction’ by analysing the needs and desires of the customer and turning them into opportunities for us. Constructive feedback from the customers is the key to our continual re-engineering of our business. Better user interface, better filter, better descriptions and hand-holding our customers into decision making has resulted in 87 per cent customer satisfaction and higher conversion rates.
At Healthgenie.in, customers are the real brand ambassadors and they are the ones who have helped us to attain the second position in healthcare e-tailing in just two years. Reaching out to our customers and listening to them is a key priority for us, as we believe customer feedback is valuable for continual innovation and improvement as a brand. Our customer’s loyalty, trust and confidence has benefited in etching a success story for Healthgenie.in.
Q. Do you have any plans to diversify in any other category apart from healthcare?
A. We are a niche healthcare and wellness brand in the online space. To grow and gain leadership, we still need to master the depth first, niche within niche, before we look to expand the category width for ourselves. We still have a potential to grow 50x within our present domain. We shall look at diversifying once the foundation is well laid out and geared to stabilise the future exponential growth.