Adoption of digital technologies is almost non-existent in this industry; hence, it retailers are difficult to reach digitally, said Suresh Satymurthy - Co-founder & CEO, Tarnea, a cloud based platform that helps small and medium-sized pharmacies to go digital.

Excerpts of the interview…

Please tell us about Tarnea and its entrepreneurial journey.
Suresh Satymurthy: Tarnea is a B2B Transaction and Data Analytics company based in Bangalore. We have built, India’s first and perhaps the largest cloud based digital platform for pharmaceutical retail - the Tarnea SmartMile™.

The company launched its platform Tarnea SmartMile™ in 2014. We have already transformed hundreds of independent small and medium-sized pharmacies into Digital Pharmacies. The platform has been implemented across 100+ locations in India and handles over 8 million transactions. We have served over 500,000 end-customers and run one of the largest customer loyalty programs in the industry. We have one of the largest datasets in the industry of over 110,000 SKUs and track over 200 market leading brands.

The platform enables brick-and-mortar pharmacies to become Digital Pharmacies with an ability to transact with customers and suppliers both online and offline. It completely automates their sales, purchases, inventory management and GST accounting. It also provides them with deep business insights through real-time data analytics.

Tarnea has been selected into Microsoft's Accelerator program from over 2,000 startups across the world. IIM Bangalore has written a case study on Tarnea and has been published by Harvard Business Review. Tarnea was selected into the Microsoft's Accelerator program from amongst over 2,000 startups in 2016. Our product has been selected for showcase in the first ever DEMO Conference in India.

What is the idea behind starting this company?
Suresh Satymurthy: The idea of founding Tarnea goes back to the early 90s. One of the co-founders was working in the area of Retail Distribution. The company he worked for was a pioneer in the retailing of fresh and frozen fruits & vegetables.

But not having visibility to the stocks and sales at the retail shelf was the single biggest problem for the company. There were extremes - loss of sales dues to stock-outs and quite often product losses due to perishable nature of the products. As a result, sales were erratic, and the morale of the consumers and retailers was quite low. However, there was no solution to solve the problem of visibility to the retail shelf, in sight.

Fast forward to 2018, Retailers still face the same problem. Less than 15% have any technology in their stores. The technology doesn’t harness the power of their own data for them to make better decisions. The technology is too complex and too expensive. And they are on a slippery slope with respect to the rapid changes in the market, where they face competition from a new breed of online retailers and their consumers are increasingly digital. But they are lagging behind both.

Tarnea believes that the small Retailers have two unique advantages - Local Availability and Human Touch. Both of these advantages cannot be easily supplanted by online retailers. All they lack is digital enablement. Tarnea has helped hundreds of retailers, to Go-Digital. It is now a $750 billion opportunity. India is already the 5th largest retail economy in the world. As it grows to become one of the 3 largest retail economies, some of these problems need a creative solution.

This enormous business opportunity brought the co-founders together - to offer a digital platform to retailers.

How Tarnea helps pharma retailers?
Suresh Satymurthy: Tarnea is enabling the brick-and-mortar pharmacies to Go-Digital. Going digital for a retailer means he is able to establish his digital presence through the Tarnea SmartMileTM platform. A “brick-and-mortar” pharmacy will be able to transform into a fully digital pharmacy in typically 5 hours!

When a brick-and-mortar pharmacy becomes a digital pharmacy, it will --

• Have its own online presence and serve its customers through their own mobile app

• Patients and suppliers will be able to transact and collaborate in real-time on a 24x7 basis.

• The digital ecosystem will ensure that no pharmacy ever runs out of essential medicines and patients are assured the availability of medicines at all times.

• Retailers will be able to run their own loyalty programs and be able to use the power of their data to use advanced analytics.

Please tell us about this MSE dominated sector?

Suresh Satymurthy: 

• The Indian pharma industry is most fragmented in the world.

Consider this, China with a comparable population has only 200,000 retail pharmacies, covering a larger geographic area. But India has over 800,000 pharmacies! Again, if you look at the distribution, China has about 13,000 distributors but India has over 80,000 distributors.

• The adoption of digital technologies is almost non-existent in this industry. Hence, it retailers are difficult to reach digitally.

• Pharmacies in India do a lot more than just sell medicines. At Tarnea, we call them the Good Health Warriors.

There are around 60 doctors per lakh of population in India, and about 20 Primary Healthcare Centers and only 2 Hospitals per lakh population. But there are over 100 pharmacies! They are the first line of defense against diseases and morbidity. They play an important role in helping patients with consultations and advice. What are the biggest challenges you have faced as a start-up? In which areas the ecosystem lacks?

Over 80-90% of the retailers do not use any form of automation. So competition in the traditional sense is not very significant. But we do have a challenge to take a contemporary digital technology to a segment which is not reachable digitally.

What are the services you offer?

Suresh Satymurthy: 

1. Cloud based platform: The platform provides 100% secure business operations which means no data loss, no crash issues, & no virus attacks. It works on military grade servers and Tier 4 Data center hosting. Also, retailer need not spend any effort or money to stay updated with any government or industry norm such as implementation of GST. Everything will be done remotely as and when it happens.

2. Customer engagement: The ability to delight customers and increase loyalty! The platform provides an ability to the retailer to digitally engage with customers, send them offers & promotions, provide invoices in the form of e-bills, run loyalty programs, etc. and thus give them a reason to come back happily. Also, the ability to learn purchase behavior and do up-selling & cross-selling accordingly makes customer management a seamless experience.

3. Inventory Management: First level losses to a retailer happen at store level itself. With expiry stock piling up and stock-outs happening, the chances to make money reduce. Tarnea offers an automated inventory management ability to the retailer to reduce these issues dramatically. Features like stock dynamics’ alerts keep retailer updated with stock levels throughout the day.

4. Purchase management: The platform provides an ability to a retailer to place e-orders with suppliers as and when required. Features like auto-replenishment learn the stock movement behavior and take care of when, what, and how much to order. After the supplies have arrived, retailer can update his stock by directly importing the invoices into the system in the form of a CSV file, thus eliminating the time and effort required to record every item manually.

5. Business intelligence and analytics: Tarnea offers a unique ability to a retailer to grow his business significantly. Useful insights on business performance are available in the form of visually rich reports that can be downloaded any time, thus providing a check on lead and lag areas. Tarnea EagleEyeTM mobile app keeps a retailer updated in real-time with store operations and daily performance, which makes sure no issue goes unnoticed. Imagine a tool which tells you what’s happening right now in your store and also gives you useful information and insights on how to improve business!

Please share your future plans. What is your growth plan in the coming years?