Online pharma cos’ business model not working, says Thyrocare founder
Informist, Thursday, Dec 21, 2023
By Reshab Shaw
BENGALURU – Online pharmaceutical companies are giving continuous discounts, but the business model itself is not working, says A. Velumani, founder of Thyrocare Technologies Ltd. He further said if businesses grow just through discounts, then it is not even a product.
"For a month or two you can give discounts to get familiarity, now for the past 4-5 years, all online pharmacy companies are giving continuous discounts… they are only trading… pharma companies are making business," Velumani told Informist on the sidelines of the PROFICORN December 2023 event, organised for micro, small and medium enterprises.
"Udhar ka nikal ke idhar dena hai, usme 20 taka hi milta hai wo bhi discount de diya to where from you will make money? (How will you generate profit if you provide discount over and above the margin of 20%?)," Velumani said.
In September 2021, API Holdings Pvt Ltd bought 66.1% stake in Thyrocare from the founder and affiliates at a price of 1,300 rupees per share, aggregating to 45.46 bln rupees. Velumani sold his entire 28% stake in the company. The deal was being touted as the first ever acquisition of a listed company by an Indian startup.
"The problem is startups get carried away by makeup," he said. "If you copy, you will (all) fall together."
Nonetheless, Velumani said online businesses will become very powerful only if they sell their products keeping a minimum margin of 5%. "That will be a huge margin because online businesses have lakhs of crores of turnover per annum," Velumani said. End
