Tata 1Mg has entered a new phase of growth, introducing deep care plans for specific diseases, while emphasising women’s health and elderly care. However, recent reports about the government considering banning or creating a permit system for e-pharmacies on concerns about data privacy and predatory pricing have shrouded the company in some uncertainty. In an interview to Geetika Srivastava at TiEcon Delhi 2023, CEO Prashant Tandon said the company was in a wait-and-watch mode and that the digital healthcare sector is poised for rapid growth. Edited excerpts:
Q. Is Tata 1mg ready to fight the increasing competition in the digital healthcare space from giants such as Reliance and Medlife?
There’s no doubt that the digital healthcare sector is seeing a lot of competition but given its scale and scope, it is not a “winners take all” kind of space. Here, many different players serve many different customers. Companies must be laser-focused in such a market and should make sure that their proposition stands out. They must stand for something. We at Tata 1Mg stand for 100% authenticity. Consumers can trust the quality of what we deliver as we invest a lot in our processes to ensure that we maintain it. This is why we are one of the strongest players in the space today.
Q. In addition to its online pharmacy platform, the company also offers a range of other health and wellness services. How do you see these evolving in the future?
We believe in “integrated lifecycle healthcare”. In the last five-seven years, we have put together individual building blocks in place — pharmacy, diagnostics, consultation, information, etc. We made sure that a seamless process could be delivered to the consumer. Now we’re trying to bring it all together because, at the end of the day, the consumer wants to get well. We are focusing on the patient and building deep care plans for diseases such as cancer, diabetes, obesity, PCOS, and elderly care. The elements are already in place; this phase is about bringing it all together, and next, we will look at all the wonderful work AI and data sciences can bring to create a personalised, predictive, and preventative model of healthcare. India has a huge opportunity to be the leader here.
Q. Which segments of the business give you the best margins, where is the growth potential, and how long will it take for the company to become profitable?
We expect to be profitable in around 2-2.5 years.
As for margins, we see improvement across the board. Diagnostics is doing very well. Our care plans, disease management offerings, and corporate health and wellness offerings are very exciting. We are going deep into specialty care and other rare diseases. It’s not simply about getting medicine, it’s about a lot of other aspects. Diseases themselves are such a burden but learning how to navigate the ecosystem to get what you need is another pain. We are trying to alleviate that on an end-to-end basis. That’s where we believe the next big opportunity lies.
Q. Do you plan to target any specific demographic? What is the approximate market size for your services?
Health care is something that is required across the spectrum. We are a digitally-led player, so our natural first market is the internet consumer. There are over 700 million of those in the country. Our platform sees around 35 million-40 million unique users every month, therefore we have a very broad demographic. If you look across all the top players, around 60 million-70 million users are engaging with online health care platforms every month. The ecosystem now needs to better tailor offerings to those at the bottom of the pyramid — the tier-II, tier-III, and tier-IV cities. Our app is now available in five regional languages. We need to do a lot more, like incorporate voice search, etc.
Q. Any new projects or initiatives that will help you grow faster?
We are excited about our vertical disease management programmes. We are also partnering with a lot of hospitals to make them “smart” hospitals, take over pharmacies, etc. Corporate health and wellness is also exciting because, after Covid, companies have a direct incentive to participate in maintaining the well-being of employees. They are now starting to spend some money on the same. Lasty, insurance is also taking a more proactive role and we are partnering with a bunch of insurers to create outpatient insurance models. The scope of what we’re doing is extremely expansive and it is a very busy phase.
Q. As per reports, a draft of the New Drugs, Medical Devices, and Cosmetics Bill, 2023, seeks to create a permit system or altogether ban e-pharmacies. Any comments?
We are in a wait-and-watch mode. We have been in the industry for the last eight years. There has been some chatter, some of it positive and some negative. At the end of it, we believe we are in full compliance with the law. Moreover, the digital health agenda is high on the priority list of the government. I don’t think that the growth of the digital health sector will slow down. We haven’t had direct conversations with the government and the regulators on the Bill (the revised draft of the New Drugs, Medical Devices and Cosmetics Bill, 2023), so I cannot comment further.
Q. How can you assuage government concerns about patient data and predatory pricing?
Privacy and data management are table stakes. All responsible companies have to ensure the same, otherwise, our customers won’t trust us. We are extremely careful and compliant with all prevailing laws and beyond. We do much more than is required because the game is not just about being compliant with the law, it is about gaining the trust of the consumer, for which you need to have a very high level of norms. We see it as a business requirement, not a compliance burden.
Predatory pricing is an ecosystem concern and the government has taken note of it and formed a committee to look into the same. I am certain that they will come up with the right laws and all e-commerce systems will benefit from them and comply.
Q. In a nutshell what are some of the biggest challenges facing Tata 1mg, and how do you plan to overcome them?
One of our main challenges is that this is a very large and competitive market attracting a lot of capital. As a result, we have to be very nimble and must out-innovate others. It is not a market with easy pickings, so you have to win the trust of the consumer and always be on your toes. We have to work on engagement with consumers, customer service, delivery, and overall authenticity and reliability. Trust can be lost very quickly and takes a long time to rebuild.
