Ads for content, digital health tools are in the works for 2017: 1mg's Tandon
Gurgaon-based Bright Lifecare Pvt. Ltd, which owns and operates online drug marketplace 1mg, made two acquisitions last year: in December, it bought Mumbai-based online hospital MediAngels and, in July, it acquired diagnostics bookings platform Medd.in. With these acquisitions, 1mg widened its product offerings and expanded into new geographies.
1mg also raised Rs 100 crore ($15 million) in a Series B funding round led by Maverick Capital Ventures and from existing investors Sequoia Capital and Omidyar Network last year. In an interview with Techcircle, co-founder Prashant Tandon talks about how the company will grow in the new year and why content is at the heart of the platform. Edited excerpts:
What are your expectations from 2017?
I think we are looking to grow rapidly in 2017. Thanks to Reliance Jio, broadband prices have dropped, bringing a new set of consumers online. Besides this, the digital push from the government has also given us a boost. Specifically in healthcare, I think the government has announced some meaningful things in the Budget. We look forward to see what happens.
Your platform offers a gamut of services, from booking doctor's appointments and ordering medicines to lab tests. What is the future of 1mg?
An integrated healthcare play is what is really meaningful because that is where you are able to understand users' health requirements better. Going down the line, not too many healthcare apps would be on a phone and the one app that sits should be the one that is able to take care of all your requirements. Data analytics, personalisation and all of that is possible only if you have an integrated view of a consumer.
What is your traction for appointment booking and e-consultation services? You also compete with Practo which is the biggest player in the booking services category.
Booking services is a very small part of our business and we recently started e-consultations, which see around 2,000-3,000 chats and are available for free.
Can you provide a breakdown of the number of users your platform receives? Which category receives the highest number of user visits?
On the content side, we receive around 3.5 million unique users and 12 million visits on the platform on a monthly basis, besides over 40 million page views.
Content is at the heart of the 1mg platform. The majority of users come to the platform to read about medicines and their healthcare needs. Besides this, we now provide e-pharmacy, e-diagnostics and e-consultations. Consumers use all the services. The overlap is very high.
Our services have been traditionally available in few of the largest cities and now we are expanding that.
Besides the commission model 1mg operates on, what other revenue streams are you looking to add?
We earn our commission from vendors. We have just started toying with an advertising model for the content side of our business. Many healthcare companies want to advertise and there are few targeted platforms, and we have just done some pilots such as banner ads and videos. We are working with a few companies to decide on our advertising model.
Will 1mg achieve profitability? Any numbers that you can share?
We are looking to grow between three and four times over the next year and we feel we are on track so far. The margins in the healthcare sector are pretty healthy. I would say we are at least 18-24 months away from profitability, because there is so much opportunity to keep investing and growing faster. We are not in a hurry to achieve profitability but are right now focused on scale and sustainable unit economics.
Which new verticals are you looking to enter going forward?
With the MediAngels acquisition, we entered the B2B space and the insurance segment, and also offer super specialist consultations. Besides making our content available in local Indian languages, we also plan to launch several digital health tools. We just launched a pill reminder and services for smart digitised diagnostic reports. We are looking to develop a tool for smart prescriptions, provide emergency and ambulance services, and access to blood banks. Once we find the right partners, we will offer those services.
How has demonetisation and Reliance Jio affected you?
Cash on delivery, OTC and lab tests were affected by demonetisation, but medicines were not since it is not a discretionary purchase. Most of our consumers used digital platforms and online payments, so we grew a little less than normal but we still grew. But January saw us revert to strong growth.
A new set of consumers who are using the Internet for the first time are coming online, and we are still figuring out the best model to cater to this new customer base. As a response to that, we have already launched our services in two local languages. Thanks to Reliance Jio, we saw a 40-45% jump in our new customer base. We'll be launching in three more [languages] by the end of February.
In how many cities do you offer your services?
Till the end of December, we were in around 13 Tier 1 and Tier 2 cities, and now we have covered almost 275 cities already. We have e-pharmacy, OTC and e-consultation in every city, while the diagnostic and appointment booking services are only available in 25 cities.
Are you also looking at the prevention-side of healthcare?
At this stage, we are very focused on the curative, medical side of things, and not on wellness.
What are your views on the health-tech space and what opportunities do you see in the market?
The offline space in healthcare is broken. It operates on a very transactional model, where whether it's a doctor or hospital, they only seek an opportunity to milk as much money as they can. It's up to the entrepreneurs in the space to find pockets of pain where consumers need a solution. There are plenty of opportunities in specialties, disease management, and access to services and information in local languages.