HeyCare Sees E-Commerce as a Stepping Stone to Distribution, and Vice Versa

There are a number of healthcare startups in India that offer features such as pill reminders, let you upload your prescriptions, or monitor your shots. There are companies like Practo that are trying to handle every aspect of the wellness space, while others such as Netmeds focus on specific areas such as medicine deliveries. Startups like Lybrate let you chat with doctors and get a second opinion from home. HeyCare is yet another entry into this crowded space, and as of now, it's focusing on medicine deliveries, appointment bookings, and exclusive wellness products.

That third part of the business is what really caught our eye though, as HeyCare sees it as a stepping stone towards its next step, which is to build out its logistics and become a distribution partner for the large pharmaceutical companies, helping them streamline and focus their reach.

HeyCare's CEO Deepak Tomar says, "The app, and website, is just 20 percent of our mission."

The company launched its e-pharmacy in September, and built it for e-commerce, but according to Tomar, 96 percent of the population in India is still buying its medicines offline. "E-commerce doesn't work in villages, and small cities, beyond the T1, T2, T3 cities," he says. "The logistics aren't in place, and where they can make a delivery the mindset isn't ready for it."

For that reason, HeyCare is trying to build an assisted selling model, where it uses digital tools for pharmacists in remote regions. These tools will enable accurate inventory management and enable better logistics, while the actual on-ground selling is still done offline.

"India is first world India, then there is Hindustan, which is the smaller cities, but still urban, still connected," says Tomar. "Then there is Bharat. We're trying to bring all of this together. Right now, HeyCare is an e-commerce product that is limited to the big cities. We have an e-pharmacy licence so we don't need to work with your local chemist, and we have our own e-wallet so you can pay seamlessly."

Building logistics for distribution
This is just a phase though, he says. HeyCare manages its own logistics, and has exclusive OTC products. It's also been working with over 200 chemists in rural areas, who can order these products via a separate app.

"We are selling our own products to the chemists right now through this app, and by doing this, we are eliminating the middlemen," says Tomar. "The app gives better visualisation of logistics and inventory, so that we can suggest when they should buy new products, and track deliveries."

This is something that is only getting off the ground, but Tomar has big plans ahead for this side of the business. "Phase two is therefore to get our exclusive OTC products to the chemists all over India, who are not being served well by regular distribution channels," he says. "The next step will be to become the total logistics partners for these chemists - we will be managing all products and not just our own."

"Once this distribution is in place, we will become a distributor for pharmaceutical companies," says Tomar. Of course, this doesn't really address the fact that there are deeply entrenched distribution systems in place that have evolved over decades, and that can apply significant pressure on the companies.

"It's just like e-commerce," says Tomar. "There is lots of inefficiency in existing distribution channels, you need feet on the street to poll chemists to get visibility on sales, people have not leveraged technology."

Distribution can help e-commerce
Tomar is realistic when he says that HeyCare isn't going to win in e-commerce alone. "It's not easy, you have to spend a lot to get customers on board, so while we're making margins on order to order, giveaways and discounts, are a challenge," he says. "With our own products (the OTC products) the margins are higher, and once we have the distribution channel in place, that will also help margins on e-commerce."

According to Tomar, the e-commerce business right now is more about building the brand, and developing its logistics network - which in turn will provide synergy to the e-commerce business as well, as the two verticals would complement each other.

To accomplish this, HeyCare is now seeking to raise funds - the target is $2 million (approximately Rs. 13 crores) - in order to grow in the various districts and also market the e-commerce arm of the business.

Tomar believes that this will allow the company to grow from the ground-up as well as capture the big cities, in order to provide a comprehensive solution he sees as missing in India.