“Our focus is on providing our customers with a retail experience that goes beyond simply purchasing medicines and key necessities,” he says. Wellness offers a wide assortment of merchandise comprising approximately 91,500 pharmaceutical and wellness products, and each of the stores features an average of approximately 13,000 products, including fast-moving consumer goods (FMCG), fast-moving health goods (FMHG), nutraceuticals and medical equipment, alongside over-the-counter and prescription medicines. Wellness Forever’s target customer demographics are primarily middle income and upper-middle income customers, who exhibit higher per-sale ticket costs and have shown a growing demand for high-quality, premium wellness products.

Wellness’s first drug store was Shivkrupa at Parel in Central Mumbai which opened in 2008. Over the years it has expanded its retail footprint to a total of 236 stores in 23 cities across Maharashtra, Karnataka and Goa, serving a registered customer base of 6.7 million customers as of 30 June, 2021. “As a testament of our success,” Biran says.

As per Technopak estimates, Wellness generated the highest revenue per retail sq ft in the Indian pharmaceutical retail industry for 2020 and 2021. For the fiscal years 2019, 2020 and 2021, the company’s revenues derived from the sale of non-pharmaceutical products were Rs240.7 crore, Rs312.2 crore, and Rs408.7 crore, constituting 36.78 per cent, 37.91 per cent and 45.72 per cent of the total revenues respectively, which is significantly higher than the main competitors in fiscal year 2021.

“Our stores deliver a distinctive shopping environment and ambience for our customers,” says Chavan, as they are strategically located, most are open 24-hours a day and are on an average considerably larger in size than those of the main competitors. Most of the stores are designed in a differentiated, self-browsing format with qualified pharmacists at service at all times which promote an aspirational element and help to position the company as a premium wellness brand, Chavan explains.

On the quick operation style, Bakhtiani says: “We utilise our brick-and-mortar stores as a relatively quicker base for fulfilling omnichannel orders as compared to a centralised distribution centre, which allows us to target delivery of products to our customers within two to six hours from when the order is placed.” This provides customers with the convenience of seamlessly shopping through the omnichannel platforms around the clock and from the convenience of their homes.

According to Technopak, the Indian pharmacy retail space offers attractive opportunities for significant growth based on India’s favourable demographic trends such as increasing life expectancy, growing levels of disposable income, increased digitisation, greater prevalence of chronic diseases, higher access to healthcare coverage and increased overall demand for pharmaceuticals and wellness products.

“Its simultaneous presence across online and offline channels allows the brand to mitigate risks and generate synergies,” says Biran.

The onset of the Covid-19 pandemic has significantly increased demand for the company’s omnichannel platforms. As a result, the management has accelerated investments in retail channels and made several enhancements to online and mobile application platforms that “we believe have meaningfully improved the overall customer experience and allowed us to drive growth”, he says.

Within a short span of re-launching the e-commerce platform in July 2020, Wellness has already reached average volumes of over 2,528 transactions per day across all of its omni-channel platforms over the six months ended 30 June, 2021. It had approximately 2,27,982 registered online customers as of 30 June, 2021. On its mobile application, which was re-launched in July 2020, the company has reached average volumes of over 923 transactions per day over the six months ended 30 June, 2021.

“Our brand, reputation and customer satisfaction are critical factors in developing our business,” says Bakhtiani. “Over the years, we have built a reputation for selling quality, trusted and genuine products by dealing strictly with reputed manufacturers and authorised distributors. By combining these strategies with our customer-focused orientation, we have been able to build a brand in the Indian pharmaceutical retail industry. Today, the Wellness Forever brand is a trusted and recognisable wellness brand in Western India with a series of awards and accolades,” he claims.

The company enjoys strong technological capabilities with its IT-enabled, centralised logistics, fulfilment and distribution infrastructure. In recent years, it has made significant investments in talent, technology, fulfilment capacity, infrastructure and marketing in order to deliver on its ambitious future expansion plans. In 2014, it developed and commissioned ZEDC – the principal, distribution centre with an area spanning over 100,000 sq ft.

“We believe that the size and scale of our owned store operations and franchisee network will continue to provide us with significant bargaining power with our suppliers and also greater distribution capacity for our products. Our expansion strategy involves primarily strengthening our position in places where we are already present and increasing our geographic presence by entering new, neighbouring regions,” says Biran.

On expansion strategy, he explains: “We intend to spread our network by increasing the number of stores in the areas in which we currently operate and that have a high-growth potential or unsatisfied demand.” In particular, “we intend to focus on metropolitan markets where living standards and consumer purchasing power are relatively high, and the affluent areas within Tier II and selective Tier III cities”, he says. The company aims to reduce execution risks and decrease customer acquisition costs by focusing on expansion in selected states neighbouring the existing string markets.

According to Technopak, pharmacy e-commerce is expected to be one of the fastest growing segments by fiscal year 2025 among all the various retail categories, and is estimated to grow at a CAGR of about 45 per cent. “We believe that we are in a favourable position to capitalise on attractive growth opportunities. A significant portion of the recent jump in online business was driven by changing consumer behaviour associated with the pandemic and the resultant lockdowns imposed across India. Yet, our e-commerce sales still represent a relatively small portion of our overall revenues, signalling significant room for growth from this distribution channel,” says Bakhtiani.

For fiscals 2020 and 2021, its e-commerce sales represented only 0.49 per cent and 1.66 per cent respectively, of its total revenues. In addition, as of 30 June, 2021, the company had approximately 227,982 registered online customers, as compared to approximately 6.7 million across its brick-and-mortar retail network. “Therefore, we believe we have significant room for growth by investing in our digital sales platforms and deepening their integration with our stores,” he says. The company has transferred its e-commerce business to its subsidiary, Wellness Forever HealthTech Limited, to streamline focus on the online aspect of its business and ensure compliances with the applicable laws.

Spreading love for wellness

Apart from outsourcing globally reputed suppliers, Wellness Forever has its own manufacturing unit at Baddi in Himachal Pradesh – Amore Health Essential Pvt Ltd under the leadership of renowned Ayurveda expert Dr Vijay Singh Chauhan, an MD in Ayurveda. “Amore stands for love in French and we want to spread love for wellness,” says Biran.

Dr Chauhan is a perfect example of enthusiasm, for at the age of 70, he works like a 17-year-old boy. He scrupulously adheres to the 5,000-year-old Chikitsa (treatment). For instance, “he ensures that we pick the gooseberry (Amla) that we use from Talwada in Punjab for its rich Vitamin C content”, Biran says and points out that Dr Chauhan is also very particular about the time the fruit is plucked as this affects its medicinal value.

The company is at inflexion point, Bakhtiani says. Wellness Forever Medicare is now going public, having filed its Draft Red Herring Prospectus (DRHP) with market regulator SEBI. The company is the second pharmacy chain to file for an IPO after Hyderabad-based MedPlus which submitted its DRHP last August.

Wellness’s IPO consists of a fresh issue of equity shares aggregating to Rs400 crore and an offer for sale of up to 1.60 crore equity shares, according to DRHP. As a part of OFS, up to 7.20 lakh shares each are on offer by Ashraf Mohammed Biran and Gulshan Haresh Bakhtiani, up to 1.20 lakh shares by Mohan Ganpat Chavan and up to 144.85 lakh shares by other existing shareholders.

The company proposes to utilise over Rs70 crore from the fresh issue for expansion and settling debts. IIFL Securities Limited, Ambit Private Limited, DAM Capital Advisors Limited, and HDFC Bank Limited are book running lead managers to the issue.

 “Our target is to become India's most respected chain of pharmacies and wellness stores,” says Bakhtiani, “on the strength of our performance and continued support of our investors who will continue to stay with the company ever after the IPO.” The DRHP lists 44 ‘other existing shareholders’ including Adar Poonawalla’s Serum Institute of India and three Allana group companies. Says Poonawalla: “The company has performed well and is on an impressive growth rate without burning a lot of cash to attain growth. Initiatives such as the expanding private label will be good value drivers going forward.”

Another investor, Sajid Fazalbhoy, says Wellness is “a lot more than a typical pharmacy.” It is modelled around leading global chains such as Boots and Walgreens with a large self-browsing format store. Also, the company has the ability to be unique in offering a hyper-local omnichannel experience, given its large store footprint.

As the post-Covid healthcare scenario is dramatically changing, Wellness Forever Medicare appears to be well set for a new innings of growth. Watch this space.