A degree from Stanford or Harvard Business School would automatically win anybody tickets to a lucrative job. And it was no different for Sameer Maheshwari and Prashant Tandon. While the former is a Harvard graduate, the latter got his degree from Stanford. But, their degrees alone couldn’t lure them into continuing their lucrative jobs with fat paychecks. In fact, Maheshwari and Tandon quit their jobs to start, Healthkart.com, a one stop online shop for healthcare needs.
Focusing on consumer healthcare products, Healthkart was started in 2011 and presently sells over 10,000 fitness, health and personal care products across different categories. Shipping up to 800 SKUs everyday, the venture generates revenues of Rs 2 crore every month.
“I think both of us were very much aligned in our thought processes. We wanted to do something of our own. We wanted to come back to India. We were working out of the same building in the US and used to exchange a lot of ideas. Finally, healthcare technology seemed like a great fit. We had compatible skills, non-overlapping skills. We were a good team and everything was right about coming back to India,” said Tandon.
Tandon explained, “Healthcare, technology and consumer behaviour, a lot was happening. We wanted to be a part of the action and we came back. I think there is a huge potential. We operate in a USD 15-20 billion market of which only 3-4% is actually organized, even if you look at the offline retail. We see ourselves as an organized player taking our store all over the country. In fact, we will be able to do it faster than an offline retail player could. There is a huge space, a huge need of good products. I don’t see any ceiling for growth in this space.”
With a lot of headroom for growth, Tandon and Maheshwari are pushing their team to reach higher. With an average transaction price of Rs 2,000, Healthkart has seen 40,000 transactions being concluded on the site, with products being moved to 400 cities across India.
Healthkart’s top selling categories are nutrition and diabetes products and they claim to ship 800 products everyday. With a 50% monthly growth rate, Healthkart clocks revenues of Rs 2 crore every month. While Safeexpress handles warehousing, delivery is handled by companies like Blue Dart, FedEx and India Post among others.
Sameer Maheshwari added, “In healthcare, the big problem is authenticity of the products. There is a lot of fake, counterfeit products in the market. We do a lot of quality check in terms of making sure that the products are authentic. We only work with either direct manufacturers or authorized distributors and provide 100% genuine products. In addition to that, there is a huge knowledge gap in healthcare. People don’t know what to buy. We have a very advanced call centre where we provide a lot of support to customers in terms of understanding what product is a right fit for them. We also provide a lot of assistance in selling these products. For example, we have trained nutritionists onboard. These people are always on the phone, chat. People, for instance, can register on our website for free nutrition counseling. With a focus on healthcare, providing authentic products and the right education about products is what differentiates us.”
Setting themselves apart from the neighbourhood chemist, Healthkart wins points for its wide range of products. With over 10,000 healthcare, fitness and personal care products on offer, additional services such as preventive health packages, diagnostic tests, gym subscriptions and spa treatments also keep customers wanting more. While Sameer and Prashant looked to turn profitable soon, they have understood that the bulk of the business comes from the tier-2 and tier-3 cities of India.
“The value proposition is much stronger in the tier-2, tier-3 cities because people now have disposable income. They want to spend money on a better life, better health products. They don’t have access to a lot of these products which people in metros might have. So we take organized retail and our products to these tier-2, tier-3 towns and make it accessible to people all over,” clarified Tandon.
Tandon further said, “We are fortunate that already 45% or so of our sales are coming from tier-2 and tier-3 cities. With increasing internet penetration, growing awareness and with our focused marketing, I am sure we will get more and more orders from these areas. What we are doing at our end is stepping up our marketing efforts, focusing on the tier-2 and tier-3 cities. We are also contemplating a few offline marketing initiatives as well.”
While technology helps, two rounds of funding don’t hurt either. Having received USD 1 million in seed funding from Kae Capital and Sequoia Capital in April last year and the recent second round funding of USD 7.5 million from existing bankers and Omidyar, Tandon and Maheshwari envision a healthy future. The duo plans to use latest funding for stocking inventory, scaling up warehousing facilities, expanding the team and beefing up marketing activity.
“We see as the go to destination for all kinds of healthcare needs. So we really feel that every consumer in India knows that if they need any type of healthcare products Healthkart would be the online destination,” concludes Maheshwari.