VALUE PROPOSITION FOR CUSTOMER

1. CONTENT: -
 Unlike buying mobile phones and apparel, buying medicine online
requires a high level of trust from consumers. Content helped 1mg
build trust with consumers and minimised consumer acquisition
cost. According to data by App Annie, 1mg has about 36% overall
traffic in the medical app section in India. For generating content, it
has a team of about 40 content writers comprising doctors and
pharmacists.

 1mg claims to have 40% conversion from content besides strong

word of mouth effort in driving transactions. Content is the
backbone for its business and they invest heavily in it. Importantly,
online advertising for medicines and drugs isn’t allowed on Google
and Facebook, so using content marketing is an obvious proposition
for 1mg.

2. CORPORATE PARTNERSHIPS: -
 For corporates, 1mg is offering a dashboard to manage and monitor
employee health. Corporates like this initiative as they can analyse
and gain understanding about the health of the workforce. Better
knowledge of an employee’s health equips corporates to negotiate
premiums with insurance companies.

 At present, the company is working with five corporates and claims

to manage the health of about 1,00,000 employees working with
these corporates. It intends to bring 50 corporates to the platform
by the end of this year.

3. OPD INSURANCE: -
 State of Outpatient Department (OPD) insurance (it covers
consultation fee, diagnosis, medicine) in India hasn’t taken off. One
is entitled for insurance only when he or she is hospitalised. So far,
most insurance companies deny OPD insurance over fears of misuse
by policyholders.
  OPD insurance requires a lot of petty paperwork. Hence, the
possibility of fraud is high. However, with platforms like TATA 1mg
that are completely digitised, the chance of fraud is negligible.
Besides adding the aforementioned verticals, TATA 1mg has
recently started working with pharma companies for their patient
support programme. Many pharma companies want to work with
chronic patients through their lifetime and TATA 1mg intend to help
them in this.
HOW IT MAKES MONEY ……
1. Lab and Diagnostic tests
On their web platform, you have the option to order a lab or
diagnostic test. The TATA 1mg representative visits your home for
sample collection, takes a small fee for the same. The sample is
then sent over to the affiliated labs for testing.
You pay the fixed fees per test out of which a predecided
commission is paid to 1mg for enabling the transaction. The lab
earns the rest of the commission. Currently, these online diagnostic
tests and lab tests make up the majority of TATA 1mg’s revenues.

2. Online medicine order delivery

The founders of the company started 1mg to make medications
accessible to everyone. They wanted to solve the problem of not
having some important medicines available at local pharmacies.
But, this segment of their business hasn’t picked up as well as they
expected it and generates a lesser but still significant amount of
revenue (57.6cr in FY 2020).

3. Doctor consultation
To diverge from the business, 1mg began offering online doctor
consultations. This was in line with their existing business and
revenue models and was a perfect addition. You can ask questions
to a doctor directly on the web without the need to go out of your
 house. The lockdown of 2020 has made people realize the
importance of having a doctor available online to discuss any issues
without visiting the clinics.

4. Healthcare Partnerships
For most companies, it’s mandatory to have a healthcare plan for
their employees. And companies spend a lot of money on the same.
1mg took this as an opportunity to use their existing brand value
and connect with businesses.
They tie up with insurance companies and offer affordable
healthcare plans to employees of multiple companies. These
include regular check-ups, discounts on medications, or even care
plans that are free for employees while the employer can avail the
same for the company at a discounted rate.

5. Subscription – based care plans

This is one of the newer additions in their existing business model.
Example diabetics need to consume medicines and visit the doctor
for testing on a regular basis. It costs a lot over the longer term for
the patient. But with the Diabetes care subscription plan, 1mg
offers benefits that save the patient a lot of money for what they’d
have otherwise paid more for.
Once a patient opts for the subscription, they get early access to
discounts on 1mg, get added savings on every order for being a
member, and free delivery. The plans also include lab tests, and
doctor consultations apart from the other additional benefits.
REFERENCES
 https://moneymodels.org/business-models/how-does-1mg-make-
money/
 https://entrackr.com/2017/09/1mg-leverages-content-drive-
commerce/#:~:text=Our%20first%20goal%20was%20to,
%2Dfounder%20and%20CEO%2C%201mg.&text=Importantly%2C
%20online%20advertising%20for%20medicines,an%20obvious
%20proposition%20for%201mg.