Digbijay Mishra spoke to Shah on what’s next for Thyrocare, API’s existing drug delivery business and what he makes of rivals like
Reliance Industries and the
Tata Group that have entered the space through acquisitions. Edited Excerpts:
Why the Thyrocare acquisition now?
I think the idea is very simple. I don’t think there’s any rocket science. I want to ensure that everything —information, consultation, test and treatment—is available to every person across the country, rich or poor, urban or rural, at an affordable rate within 24 hours. That’s the plan. I think that is what we’re going to fully work towards.
How does Thyrocare help in that?
Our belief is you have to be full stack in this country and service experience is paramount. To do that, you need a partner. Thyrocare has the highest reach, it has the lowest cost structure, because they have the highest volumes and the widest network in the country. So, then we don’t have to look too far.
What’s next for Thyrocare after the acquisition?
I am not at liberty to discuss specifics…they are larger than any other lab provider in the country. We think that a significant amount of business can be brought in here (Thyrocare). Our investments will be in technology and improving consumer experience. Today, a lot of Thyrocare business is B2B. Going ahead, along with B2B, we will also create a business, which is very, very strong on the B2C front.
What will that look like?
Today, the Thyrocare partner is responsible for generating sales. We will create a network where somebody can actually go on a self-serve basis and find out how you can get the diagnostic tests done. So, whether you are online or offline or whether you want the sample to be picked up at home, all of these things will be available and ready for people.
This is what we are building. You can walk into their labs or you can definitely request a sample to be collected from home. Only some of the partners have this facility now and we are working to make it available across the country.
Their full potential has not been realised and these things can help. To give an example, we are going to upgrade the restaurant (lab partner) with increased orders coming from our platform.
What plans do you have for e-pharmacy?
I think that business is doing very well. Right now, the focus is on Thyrocare. For e-pharmacy, I can tell you that we already have 90,000 retailers today across the country and plan to increase it to over one and a half lakh in the next two years. We also have more than 1.2 crore customers which we plan to double over the next three years. So, the idea is to double in both retail partners and users.
You are the only standalone player. and Tatas have entered. How will you battle that?
I feel that this is a sunrise sector right now. You should look at where the financial services sector was 30 years back. After economic liberalisation, there was growth, and now there are more than 30 listed banks and NBFCs. More than 100 (such institutions) can go public anytime they want. Same thing is happening with healthtech. People have started to understand the importance of health and wellness and it is not just illness.
As this continues to grow, we will start investing our time and money disproportionately in taking care of our health. With the advent of digitisation, the pace of adoption is much faster. What happened in financial services over the last five-seven years, it’s already happening right now. Entry of more behemoths will only give more credence and importance to the sector and customers will be the net beneficiary.
This is not a winner-takes-all (market). Big players will remain and so will smaller ones. With big people, we will also create our own path…but it’s not exclusive that if big becomes bigger we can’t grow.
At a personal level, I am the biggest fan of Mukesh Ambani and the way they build out the business. We are big fans of what they have done. Tatas have created the most trustworthy business in the country. With their entry, ultimately consumers will benefit.
But surely you see the competitive threat?
There is no competition—it’s like apples and oranges. They are miles ahead of us in terms of what they have achieved. We are starting our journey. We have a different way of doing it, they have a different way of doing it. Ultimately, the market is so large, there will be 10 other people who will come and become large. It’s not a binary market, like Uber vs Ola, that only one will survive.
I think this is a market which is like financial services, HDFC Bank and Kotak both are there and then there is ICICI Bank, Axis Bank and IndusInd Bank, among others. We are in a space where the sky’s the limit.
You are right now bigger than Tata or RIL in online medicine delivery…
That’s a narrow way of looking at it. In healthcare, you have to look at what problems are people solving—someone is solving diagnostics, someone else is doing medicine delivery or offline chains. It’s not a fair comparison. In retail, there is Reliance Retail, DMart, Future Retail and then there is Walmart (Flipkart).
Competition is everywhere but there are several large outcomes possible. They are $100 billion companies, and we are a small startup.
Do you see more consolidation in e-healthcare?
Everyone has to figure out their own strategy. In the past, we had done 32 acquisitions. We have a history of looking at good assets and acquiring them and integrating with them. So, if we get something at the right time, then we will definitely do it. We will definitely look at insurance. It’s been three days since we closed the Thyrocare deal. I am thinking of keeping my phone aside and going somewhere to take a break for 2-3 days. We have been working 18-20 hours every day.