In conversation with Balagopal, MD, Devi Pharma
Considering India’s high population, unlike places in Europe, to what extent will digitization make an impact?
The advent of online sales looks inevitable. While a majority of Kerala will take at least five years before resorting to online shopping for medicines on a large scale, generally, people will be acquainting themselves with it soon.
This will impact medical store sales. Major businesses are making their foray into the field, seeing it as a lucrative business. IT employees will make medical purchases online. There will be a 20 percent drop in sales. Those who shift their service models and use innovative strategies will survive. There will be businesses that will be forced to wind up. If we can make it without a steep drop in sales, I’ll be glad.
The pandemic-related lockdown last year had a few households with senior citizens ordering medicines online. Now, once medicines are available through online portals, what people resorting to such purchases need to be aware of is that those medicines need not always be as effective. Who’s to tell how it has been stored and from where it has been sourced? They will mostly come from vendors based somewhere in Chennai or Uttar Pradesh.
Medicines come with their own specific storage conditions in order to be effective. When a customer opts to walk into a neighbourhood pharmacy for, say insulin, he/she can see it being taken out of the refrigerator right before their eyes or if they are dissatisfied with a particular medicine, they can take it up with the pharmacist. In any business, only service matters. People will lean towards wherever it is that they find good service. Every store in Thiruvananthapuram will have to function 24*7 to stay ahead of the chain stores and online companies.
What does the future of pharma distribution look like?
The times are going to change. The world ahead is not easy. The next 10 years will not be like the last 10. If from the 90s’ to 2000, I worked 10 percent more, it would take me 20 percent more effort to make it past 2020. But now it will take another 40-50 percent more work to get past 2030 as the workload and competition are going to be intense. I have been watching the market keenly and have calculated some changes. Now it remains to be seen if it goes that way. We are bracing ourselves and are prepared for the same.
In 2020, when Covid hit, we thought everything would be fine in three months. It has been a year and a half now. 2021 is almost over. Did we manage to overcome the impact yet? The third wave is coming soon, according to the papers. There will be problems in every field and those who move carefully will survive; those who move in a calculated manner will just about make it through the next five years. It is why expenses should be made consciously. Companies should concentrate on finishing their liabilities and going debt-free at the earliest.
Online delivery companies will also see a jump in business. It might affect small shops and their volume of business will drop. The dependency on medicines and their demand is set to rise. India’s population makes it a prime market for manufacturers around the world.
Have you ever considered diversifying your reach or stepping into other sectors?
I have wanted to diversify but am yet to find the right field. I cannot invest without being sure that it is the right place and will only play on a sure bet at this stage. There are offers from various industries, but I need to be convinced. Destiny led me to pharma, if I am meant to, when it is time, I will be shown the next field to invest in.
As for expanding in pharma distribution, the model that I have developed and implemented here is scalable. But I will not be able to keep track as directly as I have with Thiruvananthapuram and some regions neighbouring Kollam these four decades. We largely operate on a Cash on Delivery model now.
What would be your advice to young entrepreneurs?
Work hard, sincerely, instead of looking for shortcuts through deceit. It won’t hold anyone in good stead in the long run. Be in love with what you do. For the next 10 years, there won’t be any new retail giants, like the big groups that we have now, coming up. The existing brands will manage to stay afloat while a few may not make it. The future is in IT as there has been impressive progress during Covid. New players will emerge; it will be the millennials who change the scenario.
