New Delhi: Online healthcare start-up 1mg Technologies Pvt. Ltd plans to start selling vitamins, health supplements and medical devices on its platform in a bid to improve margins over the next five weeks, according to a top executive of the company.
According to Prashant Tandon, chief executive at 1mg, industry margins on vitamins in retail are to the tune of 35%-45%, much higher than pharmacy (20%-24%).
While the segments are yet to be launched, Tandon expects them to contribute anywhere between 5% and 10% of revenue by March 2017. Currently, 1mg gets 75%-80% of its revenue from pharmacy.
1mg operates an online marketplace for medicines, besides facilitating medical appointments and diagnostic test bookings. Last month, it acquired diagnostic labs aggregator Medd (HolaMed Healthcare Technologies Pvt. Ltd) for an undisclosed amount, in a move aimed at boosting its diagnostic footprint.
Besides aggregating third party labs such as Thyrocare, Wellness Pathcare, Metropolis etc, it also offers custom lab packages under the 1mg umbrella. 1mg ties up with NABL certified labs at the back-end, who provide the laboratory services for this offering.
1mg offers custom packages to consumers, which are suitable for our customer base and these are then tested through certified laboratory partners. 1mgLabs, however, does not operate its own laboratory.
1mg was formed last year after Healthkart separated its generic drug search business HealthkartPlus as 1mg.com and raised $6 million for the new venture from existing investors.
It raised Rs.100 crore in a Series B round from investors including Maverick Capital Ventures, the venture capital arm of US-based hedge fund Maverick Capital Ltd, besides existing investors Sequoia Capital and Omidyar Network in April.
Later, in May, global healthcare-focused fund HBM Healthcare Investments AG also invested an undisclosed amount in the firm. 1mg is headed by Tandon, while Maheshwari continues to look after Healthkart.
Health supplements are the core business of Healthkart. When asked if there could be a potential overlap between the two ventures, Tandon said while there would be some amount of overlap, the target audience of the two companies are different.
“There is a difference in the kind of consumers. Healthkart attracts a fitness consumer—20-30 year old consumers, largely male. They do take multi-vitamins, fish oil, but for fitness,” said Tandon adding that for 1mg will cater mostly to patients who will be prescribed supplements by doctors.
“The health consumers who are ordering medicines need devices and supplements as well. A lot of doctors write prescriptions like vitamins, fish oils, calcium and things like that so those consumers also need a platform. For us, it is more about completing our range,” he said.
The products will be sourced from different vendors and 1mg will also use Healthkart as a partner for the brand they produce. Healthkart has private-label products in the nutrition and supplements business called MuscleBlaze and Incredio.
Last year, Maheshwari told Mint that private labels help Healthkart get 40%-50% margins. He also said these products are 30%-40% cheaper than imported brands which attract duties.
In devices, 1mg will start selling BP monitors, glucometres, pulse oximeters etc.
“Healthkart will sell its private brands on all relevant platforms. We expect that some of our products could be applicable for 1mg customer base, and those products could certainly be considered. We are constantly experimenting with multiple channels for our private brands, and no reason why 1mg would not be considered as a potential channel for products for which it makes sense,” said Maheshwari in an email.
Healthkart (Bright Lifecare Pvt Ltd) has also raised Rs..80 crore in a Series E round from exiting investors Sequoia Capital India and Kae Capital among others, Mint reported on 1 August.
According to a December report by Associated Chambers of Commerce and Industry of India and business consulting firm RNCOS, dietary supplements market in India is estimated at about $2 billion and is likely to double to $4 billion by 2020. Currently, vitamins and minerals accounts for about 40% in Indian dietary supplements market followed by herbal supplements, it said.