HYDERABAD: Doctor-turned-entreprenuer Madhukar Gangadi started pharmacy chain Medplus in 2006 with an initial capital of Rs 2.25 crore.
Madhukar started his career in 1999 with a startup in the Bay area, US, but quit within three years to pursue an MBA in healthcare management from the Wharton School of Business. He returned India to set up his first medical store in 2006, when competitors like Apollo Pharmacy had stores up and running.
“As per a WHO report, over 30 per cent of the drugs sold in India were spurious. At Medplus, the idea was to give access to genuine medicines,” said Madhukar, Founder & CEO, MedPlus.
A serial entrepreneur, Madhukar, wanted to create value by establishing a robust supply-chain involving reliable suppliers.
Though the initial funds came from friends and family, within the first year of operations, Medplus managed to get on board private equity investor Peepul Capital, who bought in Rs 25 crore. Since then, there was no looking back. With over 45 stores in 2006, Medplus now operates a chain of 1,240. “We currently have predominant presence in south India, Delhi and Kolkata. But we have plans to go pan-India,” he said.
The company is currently in dialogue with investors to raise its next round of funding. “We need to raise over $75 million, which we expect in the next six months. This will facilitate our expansion to 10,000 stores in next few years,” Madhukar explained.
As per estimates, the pharmacy market in India is pegged around Rs 80,000 crore, of which less than 1 per cent comprises organised market. “Organized market is about Rs 5,000 crore and Medplus has over 20 per cent market share,” he said.
Interestingly, more than 95 per cent of its stores are company-owned and employs over 5,000. “The next level of expansion will focus more on the franchisee model,” he said.
This is expected to help the company deploy capital in strengthening its warehouses and supply-chain system across the country. Meanwhile, the company clocked turnover of Rs 1,430 crore in FY14-15, up from Rs 1,070 crore the previous fiscal.
Apart from the usual business, Medplus also retails its own branded personal hygiene products. So far, it has 140 products covering beauty, skin care etc, which together fetch over 4-4.5 per cent revenues. Going further, this is likely to double. For the convenience of customers, MedPlus luanched an e-commerce initiative -- medplustmart.com -- that will allow users to click, pick and save medicines. Customers, however, have to visit nearby stores to take medicines as delivery without seeing a prescription is illegal. “With the added convenience and benefits this service brings to the customers, we expect to double our consumer base within a year from the current 2 lakh. We are all set to replicate this model shortly in the 12 states where we have presence,” he said.
The online store offers discounts and let users book reward points with the FlexiRewards scheme of MedPlus,’’ Madhukar added.