Source: The Economic Times.
Dr. Madhukar Gangadi of MedPlus goes the retail way to sell medicines
It’s 9 am and Dr Madhukar Gangadi, founder & CEO, MedPlus Health Services, already needs to recharge his mobile phone. This is just the start of what will be another 14-hour day. Such is life for the person at the helm of MedPlus, India’s fastest growing chain of full-service pharmacies. In less than two years, Dr Gangadi has taken MedPlus from a concept into a major retail player with over 120 outlets spread across Andhra Pradesh and Karnataka. With a commitment to deliver 250-300 outlets more by the end of June, Dr Gangadi and his team are working overtime these days.
MedPlus as an idea was conceived while he was doing his MBA at the Wharton School of Business. He had been researching healthcare in India as part of a business plan he proposed to write for his class project and that's when Dr Gangadi uncovered an astonishing report by the World Health Organisation (WHO) which suggested that a sizeable percentage of India's medicines may be spurious. A medical man himself, he knew the dangers this posed for the Indian consumer. “This wasn't just a matter of people being cheated out of their hard earned money, the Indian consumer's health was at risk,” he says. That's when he decided that for the sake of his family — Madhukar’s father is a diabetic — and the Indian consumer, something had to be done.
Raising funds proved to be a big challenge. “I first tried doing so in the US, but people were skeptical,” says Dr Gangadi. Then, there was the ethical issue of a medical doctor getting into the pharmacy business which kept many investors away. Finally, he approached his classmates, friends and family members to raise the first $500,000 and MedPlus opened its first store in Hyderabad in February ’06. “Within two weeks more funds poured in and once we touched 100 stores several VCs were willing to invest,” he says.
Fast forward 18 months, and MedPlus has logged close to Rs 50 crore in annual sales. It now has the financial backing of a premier Indian venture capitalist, iLabs, which recently invested Rs 23 crore into MedPlus. Madhukar's infectious enthusiasm for improving access to quality healthcare has not just attracted capital, but people as well. The 900-employee strong company is run by a talented five man management team that's growing stronger by the day.
MedPlus' success in pharma retailing stems not just from its commitment to quality healthcare, but also from its operating model. "I wanted Wal-Mart pricing in a Starbucks like store. This way, we would be able to bring low prices, consistency make healthcare more accessible in India," says Dr Gangadi. In keeping with this philosophy the size of most of the company's stores is between 200-400 sq. ft. This provides MedPlus the flexibility of locating its stores where customers need them the most – near their homes, hospitals, workplaces, or shopping areas. The model also reduces MedPlus' capital requirements, speeds up store rollout and enables the company to react faster to changing market.
Developing a successful business model is only the beginning for Dr Gangadi. He knows that the success or failure of the model would largely be based on the customer’s experience. “We win or lose everyday in the shop, and I hate to lose,” he says. The company has therefore invested heavily in employee training, creating a one of a kind facility in Hyderabad in which all shop employees receive in-depth product knowledge and practical customer service training. "We take accredited pharmacists and experienced shop assistants and give them the tools they need to be part of a modern pharmacy chain,” he says. The result has been a dedicated staff of employees who are not just able to dispense medicines but also provide valuable advice to make customers better informed about their health.
After the first phase, Dr Gangadi is looking at expanding the footprint, and launching the organisation’s integrated health centre concept. Dr Gangadi believes that branding is not just about brand recognition but also about the entire customer experience, the services which MedPlus offers, the partnerships which it explores, and the quality of medicines the company sells. Footprint expansion is also critical, as it means more consumers can enjoy the benefits of high quality medicines at low prices. The company has set aggressive growth goals for itself, and believes it can end 2007 with between 700-800 outlets across India.
What really gets Madhukar excited these days, is the Integrated Health Centre. He believes that the same lack of consistency which governs the pharmacy industry is present in the highly fragmented pathology labs and clinics across the country. As a result, the company has announced its intention to broaden its services to include diagnostic labs and clinics. The company successfully recruited a number of the senior management of a major diagnostic lab chain into MedPlus to lead the pathology lab efforts, and is in discussions with doctors to staff the clinics. All this growth has its challenges, but Dr Gangadi remains confident, “We’re improving the lives of the Indian consumer – when you're motivated by a larger cause, you can achieve amazing things.”
Little wonder then he plans to expand nationally and take on bigger rivals like Apollo Pharmacies as well as emerging retailers such as Fortis Health World and Medicine Shoppe.
Dr. Madhukar Gangadi of MedPlus goes the retail way to sell medicines
It’s 9 am and Dr Madhukar Gangadi, founder & CEO, MedPlus Health Services, already needs to recharge his mobile phone. This is just the start of what will be another 14-hour day. Such is life for the person at the helm of MedPlus, India’s fastest growing chain of full-service pharmacies. In less than two years, Dr Gangadi has taken MedPlus from a concept into a major retail player with over 120 outlets spread across Andhra Pradesh and Karnataka. With a commitment to deliver 250-300 outlets more by the end of June, Dr Gangadi and his team are working overtime these days.
MedPlus as an idea was conceived while he was doing his MBA at the Wharton School of Business. He had been researching healthcare in India as part of a business plan he proposed to write for his class project and that's when Dr Gangadi uncovered an astonishing report by the World Health Organisation (WHO) which suggested that a sizeable percentage of India's medicines may be spurious. A medical man himself, he knew the dangers this posed for the Indian consumer. “This wasn't just a matter of people being cheated out of their hard earned money, the Indian consumer's health was at risk,” he says. That's when he decided that for the sake of his family — Madhukar’s father is a diabetic — and the Indian consumer, something had to be done.
Raising funds proved to be a big challenge. “I first tried doing so in the US, but people were skeptical,” says Dr Gangadi. Then, there was the ethical issue of a medical doctor getting into the pharmacy business which kept many investors away. Finally, he approached his classmates, friends and family members to raise the first $500,000 and MedPlus opened its first store in Hyderabad in February ’06. “Within two weeks more funds poured in and once we touched 100 stores several VCs were willing to invest,” he says.
Fast forward 18 months, and MedPlus has logged close to Rs 50 crore in annual sales. It now has the financial backing of a premier Indian venture capitalist, iLabs, which recently invested Rs 23 crore into MedPlus. Madhukar's infectious enthusiasm for improving access to quality healthcare has not just attracted capital, but people as well. The 900-employee strong company is run by a talented five man management team that's growing stronger by the day.
MedPlus' success in pharma retailing stems not just from its commitment to quality healthcare, but also from its operating model. "I wanted Wal-Mart pricing in a Starbucks like store. This way, we would be able to bring low prices, consistency make healthcare more accessible in India," says Dr Gangadi. In keeping with this philosophy the size of most of the company's stores is between 200-400 sq. ft. This provides MedPlus the flexibility of locating its stores where customers need them the most – near their homes, hospitals, workplaces, or shopping areas. The model also reduces MedPlus' capital requirements, speeds up store rollout and enables the company to react faster to changing market.
Developing a successful business model is only the beginning for Dr Gangadi. He knows that the success or failure of the model would largely be based on the customer’s experience. “We win or lose everyday in the shop, and I hate to lose,” he says. The company has therefore invested heavily in employee training, creating a one of a kind facility in Hyderabad in which all shop employees receive in-depth product knowledge and practical customer service training. "We take accredited pharmacists and experienced shop assistants and give them the tools they need to be part of a modern pharmacy chain,” he says. The result has been a dedicated staff of employees who are not just able to dispense medicines but also provide valuable advice to make customers better informed about their health.
After the first phase, Dr Gangadi is looking at expanding the footprint, and launching the organisation’s integrated health centre concept. Dr Gangadi believes that branding is not just about brand recognition but also about the entire customer experience, the services which MedPlus offers, the partnerships which it explores, and the quality of medicines the company sells. Footprint expansion is also critical, as it means more consumers can enjoy the benefits of high quality medicines at low prices. The company has set aggressive growth goals for itself, and believes it can end 2007 with between 700-800 outlets across India.
What really gets Madhukar excited these days, is the Integrated Health Centre. He believes that the same lack of consistency which governs the pharmacy industry is present in the highly fragmented pathology labs and clinics across the country. As a result, the company has announced its intention to broaden its services to include diagnostic labs and clinics. The company successfully recruited a number of the senior management of a major diagnostic lab chain into MedPlus to lead the pathology lab efforts, and is in discussions with doctors to staff the clinics. All this growth has its challenges, but Dr Gangadi remains confident, “We’re improving the lives of the Indian consumer – when you're motivated by a larger cause, you can achieve amazing things.”
Little wonder then he plans to expand nationally and take on bigger rivals like Apollo Pharmacies as well as emerging retailers such as Fortis Health World and Medicine Shoppe.
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