- The startup, recently received the patronage of none other than the biggest industrialist of India, Ratan Tata.
- It follows a unique business model, centred around a pharmacy-aggregator concept model. It sources generic drugs directly from the manufacturers and supplies to the retailer, eliminating the middlemen completely.
- Since its launch in April 2018, Generic Aadhaar has clocked a revenue of 6 crores and has tied up with almost 35 retailers from Mumbai, Pune, Bangalore, and Odisha following a profit-sharing model.
The pharmaceutical industry in India is dominated by several established domestic players and some large global companies with their offshoots in India. In no way is this industry an easy playground for a beginner, yet a 16-year-old boy, Arjun Deshpande, Founder of Generic Aadhaar ventured into this unknown territory.
Armed with determination and conviction he began selling generic medicines, but little did he know he’d be a success story, just two years later. His parents were hesitantly supportive initially, and the big players mocked him, largely because he was young and inexperienced.
Yet, Arjun continued unfazed. At an age when teenagers in Mumbai would flood maidaans (grounds) of the city, Arjun was busy counting the number of retailers he has engaged with.
His efforts got noticed and his startup recently received the patronage of none other than the biggest industrialist of India, Ratan Tata. The amount of investment will be disclosed through an official event, once the dust of the pandemic settles.
Arjun, who completed his schooling from DAV Public School, Thane is a keen observer and erudite. As a young kid, he would often accompany his mother who worked at Mumbai-based Concept Pharma.
He received exposure early on, as he often visited pharma plants in the US, Europe, China, and several other countries. What struck him was that US, Canada, and Middle-eastern countries imported generics from India and made these superior quality medicines available to the masses at affordable rates. Ironically, medicines were priced higher in India, although the country is the manufacturing hub of the world for pharmaceuticals.
If foreign sellers can buy it from our country and sell it at a fair price, then why can’t we sell it within our own country, he asked rhetorically.
“In India, generic medicines are marketed as branded medicines, which increases the basic cost and people end up paying more,” said Arjun. He added that the medicines are manufactured in India, big companies take these generic drugs and brand it in their name, hence increasing the cost.
He spent the next few years understanding the trade, meeting people from the industry, and devising a strategy. Arjun learned that about 60% of Indians were unable to buy medicines due to the high costs. It was not only expensive for customers, but even retailers were not making much money. Margins for them were about 5-10%, compared to the 40-50% that generics offered!.
To resolve these issues, he reached out to manufacturers with WHO and GMP-approved facilities and convinced them to sell generic medicines directly to retailers. At the other end, he pulled together single-owner medical stores who were anyways reeling from the loss of business to online pharmacies.
He crisscrossed the length and breadth of Thane and the vicinity, making retailers aware of generic medicines and the business model that can help them make bigger profits. So, taking the plunge, Arjun invested 5 lakh rupees that he borrowed from his parents and launched Generic Aadhaar, selling generics directly to the end customer. He only took the initial investment from his parents, and since then the company has been making profits.
In the early days, it was a huge challenge to convince retailers to tie up with a teenager, shared Arjun. Also, it was equally important to spread awareness amongst people and convince them to buy generics that work the same as a branded one.
“It was not an easy task since people are habituated to buying branded medicine,” said Arjun, “Medicine is not a luxury, but a necessity and I wish to provide good quality medicines at an affordable price to as many people as possible.”
A Different Model
The start-up follows a unique business model, centred around a pharmacy-aggregator concept model. It sources generic drugs directly from the manufacturers and supplies to the retailer, eliminating the middlemen completely.
It is a B2B2C model that aims to provide Indians with affordable medicines along with supporting single medical stores across the country, which otherwise face competition from big brands and online pharmacies.
“When we tied up with the first retailer in Thane, he was happy to hear about the model since he knew that medicines are high-priced,” said Arjun. He took the franchise in December 2018 and his sales and margin went up. At the same time, end customers were getting quality medicines at a lower price.
“If a branded store is selling a product at 100 rupees, then we are selling it at 50 rupees,” he stressed.
Generic Aadhaar focuses on drugs for Diabetics, Blood Pressure, Hypertension, Gastro, and Cardiac since these are fast-moving medicines. It has a tie-up with four WHO-GMP certified manufacturers in Palghar in Maharashtra, Ahmedabad, and Baddi in Himachal Pradesh.
Arjun shared that currently, a few medicines used in the treatment of COVID patients are difficult to procure, although most medicines are readily available.
To spread awareness amongst people about generics, Generic Aadhaar conducts health camps for thousands of people, offering them free medical tests for kidney, liver, and many others.
Taking it Forward
Since its launch in April 2018, Generic Aadhaar has clocked a revenue of 6 crores and has tied up with almost 35 retailers from Mumbai, Pune, Bangalore, and Odisha following a profit-sharing model. The startup has also signed up with more than 100 retailers across many cities such as Sangli, Satara, Ahmedabad, Udaipur, Jaipur, Delhi, and Odisha which could be operational by September.
Its team of 55 employees’s works tirelessly to add more medicines to the network to make maximum drugs available for the masses.
Given the positive response from store owners, retailers from other cities are also reaching out to him now. There are about 1 lakh manufacturers and around 10 lakh brick-and-mortar medical stores across India. The scope is massive, he pointed.
In the near future, Generic Aadhaar aims to partner with 1500-2000 pharmacies on a franchise-based model and expand its reach to markets in Gujarat, Tamil Nadu, Andhra Pradesh, New Delhi, Goa, Rajasthan, Gujarat, and many others.
Arjun envisions Generic Aadhaar, with 150 crores in revenue, providing affordable medicines across 125 cities in the next two years – an ambitious but not an impossible target.
“It’s a win-win model for everyone – The manufacturers benefit, retailers get higher margins, and customers get lower prices,” he says. Generic Aadhaar also benefits from the zero-investment, asset-light model. It has a profit-sharing agreement with its franchisees where the start-up pockets a cool 15%.
Apart from the basic 200-250 products, Generic Aadhaar will soon start offering cancer drugs at rates much lower than the market price.
“Ratan Sir advised me to get into cancer medicines since these are highly-priced,” said Arjun.
“Generally, oncology medicine that is produced at 500 rupees is sold at 25-30 thousand rupees so most people fail to access it,” he added. The firm is trying to bridge this gap from a source in Delhi.
In the coming month or so, Generic Aadhaar also plans to launch a mobile app through which medicines could be delivered at home within 2 hours.
He is motivated by the blessings and kind words of his customers. “When I visit the shops, senior people tell me that they have benefitted from the medicine and offer their blessings,” said Arjun.
The Entrepreneur Corner
Arjun has been awarded the Student Entrepreneur of the Year 2019 at the world’s biggest Entrepreneurship Event by Entrepreneurship India, Entrepreneur Magazine, and Zee Business. The teenager has also donated his 3-month salary to PM-CARES and plans to provide kits for Mumbai police and health professionals.
Arjun is a voracious reader and is a football fanatic. He believes that there is really no end to absorbing knowledge, and keeps himself abreast of everything around entrepreneurship. He looks up to Ratan Tata, Elon Musk, and Jeff Bezos, and wants to revolutionise the pharma industry by making medicines affordable to every section of society. But of course, one step at a time.
“The focus should be on building a great product so that it needs less branding and can spread by the word of mouth,” said Arjun. “There will be many players who will try to restrict your growth but you should not be bowed down and your vision and focus clear,” said Arjun.
Apart from medicine, he is drawn towards the solar and agriculture sector. He might look at investing in solar, since it is the future of energy, while agriculture is a pressing subject.
Arjun has a piece of advice for the Indian youth – be a job creator, not a job seeker. He emphasised on working for one’s own dream rather than working for someone else’s. One should be fearless in pursuing ideas and not be afraid of failures.
“Be confident and never let age come in between your ideas,” concluded Arjun.
(Edited by Anu Choudary)
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