Netmeds Success Story - How it is Leading India's Online Pharmacy Segment?

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The e-commerce industry has garnered immense popularity in India in a really short span of time. It has allured the younger generation specifically. Consumers have become choice-savvy because online retail has redefined the concept of the shopping catalog; there are thousands of search results for every item you could possibly imagine. Why should medicines be left out when everything, from apparel to real estate, can be purchased online?

Medicines have long been a market dominated by unorganized players that were distanced from online business concepts. However, it is with the emergence of medicine eCommerce that the problems of shopping for medicines from traditional physical stores are likely to be alleviated. Netmeds, a Chennai-based company, is one of the promising medicine eCommerce service-based companies that are here to help you through its online pharmacy.

StartupTalky covers the success story of Netmeds — 'India ki Pharmacy' — in this post. Know all about how Netmeds works, its revenue model, funding, founder, owner, business model, startup challenges & more.

Netmeds- Company Highlights

About Netmeds
Netmeds - Target Market Size
Netmeds - Founder and Team
Netmeds - Startup Story | How It Was Started
Netmeds - Name, Tagline and Logo
Netmeds - Mission and Vision
Netmeds - Products and Services
Netmeds - USP and Innovation
Netmeds - Business Model and How It Works
Netmeds - Franchise
Netmeds - Revenue Model
Netmeds - Growth / Revenue
Netmeds - Valuation, Funding and Investors
Netmeds - Acquisitions
Netmeds - Marketing Campaigns
Netmeds - Startup Challenges
Netmeds - Competitors
Netmeds - Awards
Netmeds - Future Plans

About Netmeds

Netmeds is one of the top online pharmacies in India that deals with a wide range of healthcare products like high-quality prescription medicines, over-the-counter pharmaceuticals, general healthcare products, Ayurvedic medicines, and homeopathic medicines. It has delivery facilities across India. Netmeds is a subsidiary of Dadha & Company, one of India’s most trusted pharmacy brands possessing over 100 years of experience in dispensing quality medicines. Pradeep Dadha founded the company in 2010, and it is headquartered in Chennai, Tamil Nadu. Netmeds' parent company is Reliance Industries.

Netmeds - Target Market Size

It is estimated that more than 250 online pharmacies have sprung up in India in recent years, cornering INR 1,000 crores ($140 million) of the Indian drug market. The country’s overall drugs and medicines retail market is worth over INR 1.2 lakh crores.

Netmeds - Founder and Team

Pradeep Dadha is the founder and CEO of Netmeds.

Pradeep Dadha

Pradeep, the founder of Netmeds, was born and raised in the Chennai suburb of Royapettah. He worked in his family's business—Dadha & Company—and later set up its online presence. Along with being the Founder and CEO of Netmeds, Dadha also runs the Pradeep Dadha Group of Companies, a private holding company, and is the chairman of its subsidiary—Notch Media.

The other core member of the team is Bruce Schwack. Bruce is the Chief Communication Officer at Netmeds. The company strength is currently estimated 1500 plus employees.

Bruce Schwack left Netmeds in April 2023 and assumed the role of Director of Marketing and Business Development at SHAI. Prior to this, he had a long and accomplished tenure at Netmeds, where he served as the Chief Communication Officer for approximately eight years.

Netmeds - Startup Story | How It Was Started

Pradeep's family was steeped in the pharmaceutical retailing business since 1914 and forayed into the manufacturing sector of drugs in 1972. It was the manufacturing unit Tamil Nadu Dadha Pharmaceuticals Ltd (TDPL) that the family of Pradeep Dadha managed when it was acquired by Sun Pharmaceutical Industries Ltd in 1997. TDPL then merged with Sun Pharma. S. Mohanchand Dadha, Pradeep's dad and founder of the family business is on the board of Sun Pharma. Pradeep Dadha, CEO of Netmeds, started Netmeds.com to take advantage of e-retail and add a new dimension to his father's efforts.

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Netmeds - Mission and Vision

The mission of Netmeds is to "provide the people of India with convenient and affordable access to their everyday medicines".

The vision of Netmeds is built around the idea of providing "access to a full range of genuine medicine and reliable healthcare products to the consumers,” said the company founder Pradeep Dadha.

Netmeds - Name, Tagline and Logo

Netmeds' tagline reads as India Ki Pharmacy.

Netmeds - Products and Services

Netmeds' platform offers an impressive selection of both prescription drugs and non-prescription products (OTC).

Ordering medicines online at Netmeds.com is as easy as ABC; browse for the product, add it to your cart along with your prescription (if required), and proceed to make payment. Netmeds offers a wide range of products. It deals with prescription-based medicines for all major and minor ailments, ayurvedic, Unani, and homeopathic medicines, health foods, drinks, supplements, personal care products, and equipment such as orthopedic devices, surgical accessories, etc.

Products are sourced from more than 200 Indian manufacturers. The top 25 among these manufacturers are listed on the Netmeds website. These include Sun, Ranbaxy, Cipla, Dr. Reddy, and many other pharmaceutical companies. The company also has a diagnostics service that provides customers with expert advice from medical professionals.

The company also provides the following value-added services:

• Automated refill reminders.
• Loyalty programs.
• Expense analytics.
• Digital copy of prescriptions.

It uses data analytics to predict demand with high accuracy. This enables Netmeds to improve its inventory management setup and ensure the availability of stocks during unforeseen situations like changing seasons and epidemics.

It normally takes just one day to deliver in metro cities. In general, the delivery time may vary depending on the location. No delivery charges are imposed on orders above INR 1000. For orders below this value, shipping charges are from INR 25 to INR 50.

Netmeds - USP and Innovation

Netmeds banks on the following USPs:

• Over 100 years of service in the Pharma industry.
• Delivery all over India.
• Pharmacy of choice for more than 3 million Indians.
• High-quality, genuine medicines.
• A team of highly experienced pharmacists.
• State-of-the-art warehouses.
• A large inventory of medicines/35000+ SKUs.
• The customer gets to know the expiry date of the medicines while ordering.

The company also has an app that makes it convenient for users to find and order medicines, track orders, and make payments. It is available on both the App Store and Google Play Store. The app offers benefits such as amazing discounts on shopping, online consultation, free access to healthcare and medicine-related information, and timely medicine refill reminders.

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Netmeds - Business Model and How It Works

Netmeds sells prescription-based medicines, over-the-counter medicines, and health-related products online. Furthermore, the company also has certified pharmacists who screen the prescriptions uploaded by the customers before dispatching their orders.

The company is considering a B2B business model through which it will offer medicines to pharmacies at wholesale rates. At present, the company offers up to 20% discount to its customers on prescribed medicines. Netmeds is currently evaluating the B2B business model's potential.

Netmeds founder Pradeep says, “It would work like a B2B business, we will be doing wholesale business with them".

Netmeds - Franchise

Netmeds is also taking the franchise route to expand its presence in India. The company is planning to open a minimum of 1000 franchise stores within the next five years. Besides publicizing the brand name, it will use this model to assist franchise partners with inventory planning, stockkeeping, IT infrastructure, and marketing efforts. Netmeds is also attempting to partner with banks to provide loans to applicants eligible for a franchise.

To be eligible for a franchise, one is expected to have a 300 sq. ft. store on the ground floor located on the main road of any neighborhood. Anyone meeting these conditions and willing to invest around INR 20 lakhs can tie up with the company to set up a Netmeds store. One can contact Netmeds for franchise-related queries through the contact details available on its site.

"With the selection of the right location and stock availability, we expect about 100 footfalls a day. Indicative break-even period is 12-18 months", netmeds owner Pradeep tells.

The company opened its first franchise store in Nanded (Maharashtra) in 2018. In 2019, Netmeds opened its first retail store in Karnataka's Belgaum. It plans to open 20 more such retail stores in Karnataka by 2020.

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Netmeds - Revenue Model

Netmeds' revenue model is divided into 3 parts: commission, marketing, and shipping charges. Of these, commission is the largest contributor as the company earned INR 4.46 crores from commissions in FY18.

Our revenue model caters to the chronic segment, which represents patients across India and totals about $10 billion a year. Thus, we provide medicines to those patients who take the same medication regularly with a dependable online resource. It helps them accessing their medication and having them delivered to their home without any hassle on time. We also offer a wide range of OTC (over the counter) and FMCG products. So like the typical US Walgreens, CVS or Boots, customers will come for the prescription drugs, available at great prices, while they fill the basket with other needed items - Pradeep Dadha, Netmeds owner said.

Netmeds - Growth / Revenue

Netmeds has quickly established itself as a leading name in the online pharmacy segment. Some growth milestones achieved by the company are:

• Netmeds India provides prescription medicines and healthcare products to more than 3,000,000 patients across India, serving over 19,000+ pin codes.
• It has seen double-digit growth rates month-on-month since inception. In FY 2018, its revenue grew 2.5 times. In 2017, it earned a revenue of INR 3.94 crores while in 2018, its turnover increased to INR 10.05 crores.
• It has around 35,000 stock-keeping units (SKUs) across various tier-2 and tier-3 Indian cities.
• Netmeds claims to have eight fulfillment centers in Chennai, Bengaluru, Hyderabad, Delhi, Pune, Ahmedabad, Raipur, and Kochi.
• The company currently has 13 warehouses.

The company plans to expand its presence soon by setting up warehouses through tie-ups in 16 metro and non-metro cities. Netmeds will be focusing on building its infrastructure to improve overall efficiency.

Financials

In FY21, Netmeds' revenue from operations amounted to Rs 13,423.42 lakh and decreased to Rs 10,776.96 lakh in FY22. Simultaneously, the company's profit surged from Rs 104.77 lakh in FY21 to Rs 1,057.69 lakh in FY22.

Expenses Breakdown

In the fiscal year 2022 (FY22), Netmeds saw a reduction in several key expenses compared to FY21. Employee benefits expense decreased to Rs 2,268.13 lakh, finance costs decreased to Rs 144.12 lakh, and depreciation and amortization expenses were reduced to Rs 134.19 lakh. Additionally, other expenses also decreased to Rs 7,544.59 lakh in FY22, reflecting the company's efforts to manage its operational costs.

Netmeds - Valuation, Funding and Investors

Netmeds has raised $99 million in funding over 3 rounds. The latest round of funding was in September 2018 where it raised $35 million from the Southeast Asian business conglomerate Daun Penh Cambodia Group (based in Singapore).

Here is a list of funding rounds of Netmeds:

Mukesh Ambani-led Reliance Industries Limited is reportedly in advanced talks to acquire a majority stake in Chennai-based online pharmacy Netmeds. As part of the deal, Reliance may integrate $130-$150 million for the asset through one of its subsidiaries along with a fresh infusion of capital in Netmeds to expand the operations.

It’s worth noting that Netmeds recently launched its grocery delivery service via RIL-owned Reliance Retail.

Reliance Industries Ltd acquired a majority stake in Netmeds for approximately $83 million (INR 620 crore) in cash. This investment secured 60% ownership in Vitalic Health's equity share capital and 100% ownership of its subsidiaries.

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Netmeds - Acquisitions

Netmeds has acquired 3 organizations.

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Netmeds - Marketing Campaigns

Netmeds' multi-crore TV, digital, and print advertising campaigns have made it a household name with the backing of a large customer base. The company launched a TV commercial featuring actors Krushna Abhishek and Sudesh Lehri in its initial days.

Netmeds has signed MS Dhoni as its brand ambassador. The commercial starring Dhoni has garnered more than 34 million views to date.

Netmeds - Startup Challenges

Buying medicines online brought a new paradigm shift. Convincing and educating consumers to adopt this shift and think beyond traditional brick-and-mortar pharmacies was a challenge for Netmeds.

Like any other e-commerce company, dealing with the logistics of a country so vast has not been easy. The typical chronic patient may be taking as many as six medicines a month and sometimes more. Netmeds has to quickly source and deliver the required prescription-based medicines and over-the-counter products in one basket.

The need for a medical prescription for ordering from Netmeds may seem awkward and unnecessary for many. But by doing so, it is encouraging people who have avoided hospital visits to finally see a doctor.

Netmeds - Competitors

Netmeds competes in a segment filled with well-funded rivals. Major competitors include:

• 1mg
• PharmEasy
• mChemist
• Myra
• BigChemist
• Care on Go
• Click on Care
• Lybrate.

Netmeds - Awards

Netmeds bagged the Health Tech Start-Up of the Year at the NDTV Unicorn Start-up Awards 2016. It was selected as ‘Asia’s Most Promising Brand 2018’ by Int+ WCRC International.

Some other awards and recognitions that Netmeds received are:

• Netmeds was declared as ‘Asia’s Most Promising Brand 2018’ by Int+ WCRC International
• Announced as the ‘Best Digital Healthcare Start-up’ by ET's Now World Health and Wellness Congress in 2019
• Conferred upon the title ‘Digital Healthcare Company of the year’ in 2019 by ET Now World Health and Wellness Congress
• Voted as one of the 50 Most Influential e-Commerce Professionals of India by E-commerce Summit and Awards 2019
• Received the Global Adjustments’ India Living Award where it was named as ‘Business Innovator of the Year’ 2018
• Declared as the winner of the Zee Business Dare to Dream Award where it was named as the ‘Emerging company of the year’ in 2018
• Obtained the title ‘Game changer of India ’ by Economic Times in 2018
  Named as ‘Asia's Most Promising Brand’ WCRC in 2018

Netmeds - Future Plans

Netmeds plans to team up with other pharma/nutritional companies to target specific patient groups by leveraging the power of data analytics.

The company is laser-focused on increasing the number of warehouses and fulfillment centers across India. It currently has 14 fulfillment centers across India and is planning to add 12 more fulfillment centers by 2020.

Netmeds - FAQs

Who is the Founder of Netmeds?

Pradeep Dadha is the founder and CEO of Netmeds.

Who is the Owner/Parent Organization of Netmeds?

Reliance Industries Ltd. It has acquired a majority stake in online pharmacy Netmeds for about $83 million.

How much is Netmeds Revenue?

Netmeds Marketplace, the B2C e-commerce unit of online pharmacy Netmeds, saw its total income decline from Rs 15,123.76 lakh in FY21 to Rs 11,148.72 lakh in FY22.

What is Netmeds Latest News?

Reliance Industries Ltd has acquired a majority stake in online pharmacy Netmeds for about $83 million (INR 620 crore) in cash. The investment represents 60% holding in the equity share capital of Vitalic Health and 100% direct equity ownership of its subsidiaries.

Who are the top competitors of Netmeds?

1mg, PharmEasy, mChemist, Myra, BigChemist, Care on Go, Click on Care, and Lybrate.