Healthkart.com (Healthkart), established by the Gurgaon-based company Bright Lifecare Pvt. Ltd., is an e-commerce portal that aims to be a one-stop-shop for all consumer healthcare products. The founders, Sameer Maheshwari and Prashant Tandon, wanted to set up a venture of their own while working abroad. While Maheshwari had experience in technology implementation, Tandon had a strong foundation in the healthcare segment. Together, they decided to return to India and start a company in the healthcare space.
Started in March 2011, Healthkart has seen a month-on-month growth of 50 per cent in transactions. The team too has grown from three to around 100, spread across job responsibilities in category management, technology, marketing, analytics and operations.
Maheshwari graduated from the Indian Institute of Technology – Delhi in 1997, while Tandon completed his B.Tech from the same institute in 2002. Maheshwari worked 12 years in the U.S. implementing technology solutions, during which he also completed his MBA from Harvard Business School in 2007. He then joined Hewitt, an advisory services company that consulted for technology companies.
Transparency in the process, timely delivery, customer counselling for choosing the correct products, managing stocks are some of its key operations, and Healthkart now has experts to handle each of these services.
After engineering, Tandon joined Hindustan Lever in India and was involved in factory operations and innovation for Asia. He completed his MBA at Stanford University and then joined McKinsey & Company and consulted for healthcare companies in the U.S. The two met socially and soon discovered their common interest in becoming entrepreneurs. In November 2009, they narrowed their area of interest to healthcare and returned to India to set up Healthkart.
“Before starting the portal, we tried our hand in different sub-sectors within healthcare,” recollects Tandon. From venturing into public healthcare to offering practice management software for independent physicians and small clinics, the duo tried two to three different business models. “This software was an ERP (enterprise resource planning) solution to capture patient information,” he says. But the two also realised that they wanted to be in the consumer space, so after gaining enough experience and understanding of how the healthcare industry works, they started Healthkart for direct retail of healthcare products to consumers.
Healthkart.com (Bright Lifecare)
Founders: Sameer Maheshwari, Prashant Tandon
Investors: Kae Capital, Sequoia, Omidyar Network
Investment: US $ 7.5 million Series B
The working model
Healthkart currently caters to three segments: products for fitness, sports, nutrition and general wellness; diagnostic devices like diabetes and blood pressure monitors, and personal care and beauty products. Recently, it also launched an eye care section, which not only has sunglasses but also prescription-based glasses and contact lenses. For most products, the pricing online is also lower since the products are sourced directly from the vendors, eliminating the middlemen. In addition, for each category, the team ensures that a large range of products is available. To illustrate this further, Maheshwari points to the category of baby products. Initially, all baby products were available under the category name ‘baby products’, but as the product range expanded to include products relating to ante-natal and post-natal care, the category was renamed to ‘parenting’. It is this kind of attention to detail that the founders are focused on to ensure that the final product evolves as per consumer needs.
When compared to brick and mortar retail, Healthkart is not contained by the need for physical space to house all its categories. And Maheshwari believes that this is its most attractive feature. At present, Healthkart is the exclusive online retailer for companies like Abbott Nutrition and beauty products and it is working on becoming the exclusive online retailer for several other suppliers.
Attention to detail
Transparency in the process, timely delivery, customer counselling for choosing the correct products, managing stocks are some of its key operations, and Healthkart now has experts to handle each of these services. Online marketing and category management teams were also segregated, and while the former focused on optimising the company’s reach, the latter ensured that each category was well populated with the right kind of products. Healthkart has its own logistics team and delivery of orders over Rs. 250 is free.
Online advertisements – search engine marketing and social media – and word of mouth referrals have helped see a growth in its traffic and transactions. To drive traffic and increase transactions, the portal has introduced an affiliate programme. Healthkart rewards customers/affiliates for referring other consumers. Affiliates get up to five per cent of the purchases made by the referred customer as store credit, and the referred customer gets Rs. 100 off the first purchase.
Recounting the more challenging times, Maheshwari says, “The initial challenge was to convince people about our seriousness. Attracting talent was also difficult.” Once the company scaled up without compromising on quality, it was easier to get the kind of people it wanted and also grow the business.
The company was set up with seed funding from Mumbai-based Kae Capital and then, a Series A round of one million rupees from Kae Capital and Bengaluru-based Sequoia Capital. It recently raised a Series B round of US $7.5 million in December 2011 from Sequoia, California-based Omidyar Network and Kae Capital.
This funding will be used to scale up operations based on demand and the target areas include customer service and logistics. The funds will also be used as working capital besides being utilised to enhance marketing, strengthen the team and adding additional warehousing capacity. Currently, Healthkart has one warehouse and wants to add more in different parts of the country.
Looking to the future, Maheshwari estimates the overall healthcare market – online and offline together – at US $10 billion to US $20 billion. Currently the online share is small, but with time, he expects it to go up. As one of the early movers in this segment, he expects Healthkart to make best use of this advantage.
CARING ABOUT HEALTHCARE
The founders, Sameer Maheshwari and Prashant Tandon together have experience in technology and healthcare. It was only natural for the duo to look for technology solutions for the healthcare industry while looking to establish a business. However, it took them two years to narrow it down to online retail, catering directly to consumer needs. In March 2011, the founders started Healthkart.com, which now offers a wide range of healthcare products – right from baby care to sports and general wellness. Currently, the company has category management teams to ensure that each category includes a wide range of products. It also focuses on logistics and customer service to make sure customer experience online is smooth and products are delivered on time. Tie-ups with vendors have also ensured good pricing, making it more reasonable than offline retail in the same segment. The founders are upbeat about tapping the US $10 billion – US $20 billion healthcare market and capturing a sizable chunk of the online pie.