At a time when people are reeling under the double whammy of rising inflation and the pandemic, a startup named Generic Aadhaar is delivering quality generic medicines at up to 80% lower prices as compared to branded counterparts to end-users directly, eliminating middlemen costs. Its pharmacy-aggregator franchise model, with a special focus on tier-II and tier-III cities, enables consumers to order medicines via the Generic Aadhaar app and have them delivered within two hours. Customers can also walk in to Generic Aadhaar pharmacies to buy medicines. In case the prescription mentions a branded drug, the chemist at the store can suggest the generic salt formulation.
“About 80-90% of drug companies are generic manufacturers but branding and marketing costs push up the cost of the final branded product. The margins of the stockist, sub-stockist, distributor, retailer all add to the cost,” explains Arjun Deshpande, founder, Generic Aadhaar.
Taking inspiration from the government’s Jan Aushadhi initiative which makes available quality drugs at affordable prices, Generic Aadhaar has aggregated 1,500 pharmacies in over 150 cities across the country since its launch in February, 2019, when Deshpande was only 16 years old. It makes local pharmacy owners switch to the digital world through its user-friendly software. “If a chemist earlier earned a revenue of Rs 4-5 lakh a month with 5% profit margin, as a franchise of Generic Aadhaar it will earn Rs 3.5-4 lakh but with a 40% profit margin as his procurement costs are much lower,” says Deshpande. “In the next one year, we aim to add 800-1,000 more franchise stores.”
Unlike on-demand medicine delivery apps which are basically logistics players, Generic Aadhaar supports small retailers as it directs the online order to the nearest store which delivers to the customer. Responding to the Confederation of All India Traders’s (CAIT’s) recent call for a ban on e-pharmacies alleging that they are killing standalone stores with their discounts, Deshpande says Generic Aadhaar’s model instead provides franchises to standalone stores with brand value, marketing, and promotional help, thereby generating a league of self-sustaining entrepreneurs.
Asked whether he sees any synergy between Generic Aadhaar, which has received funding from Ratan Tata in his personal capacity, and online healthtech firm Tata 1 Mg, he rules out any immediate tie-up given that the two business models are completely different, even as he adds, “what happens in the future is anybody’s guess”.