NirogStreet Case

Strategic Management
Executive Summary: Key takeaways from the NirogStreet case
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Should we expect the online Ayurveda
pharmacy industry to be profitable?
What, if any, competitive advantages does
2
NirogStreet have over other online Ayurveda
pharmacies or a brick and mortar Ayurveda
pharmacy? What about a competitor that
adopts a hybrid strategy?
Given the structure of the Ayurveda industry
3 and any current NirogStreet competitive
advantages, what is your prescription to
unlock future growth?
 Online Ayurveda pharmacy industry has multiple strengths like growing demand and
good doctors but is also faced by challenges like lack of trust from patients and unclear
regulatory framework
 There are multiple opportunities how the industry can unlock future growth and
profitability and, hence, this industry is expected to be profitable in the long term
 NirogStreet has a sustained competitive advantage over its peers making it a unique
value proposition
 Major competitive advantages include community engagement and knowledge sharing
which leads to building trust between doctors, patients and manufacturers
 To unlock future value I recommend that NirogStreet:
 Scale up operations to capture more of the Ayurveda market
 Focus on technology so that it can add further revenue stream to its business model
 Expand internationally to reach untapped market
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Online Ayurveda Pharmacy Industry Overview

 Online Ayurveda pharmacy basically provides a

platform which allows Ayurveda manufacturers,
Ayurveda doctors, and patients to interact in a seamless
Doctors manner

 Through online pharmacies, manufacturers can sell

their products to doctors or patients, doctors can buy
from medicines from manufacturers, and prescribe
and sell medicines to patients while providing online
consultations, and patients can get consultations and
Online medicines without leaving their homes
Ayurveda
Pharmacy  Major players include NirogStreet, Jiva Ayurveda,
Baidynath, and PharmEasy

 COVID-19 pandemic accelerated the growth in the

industry as patients, doctors and manufacturers
searched for ways to interact without physically
Ayurveda meeting
Patients Medicine
Manufacturers  The industry is expected to grow considerably as
patients look for natural and holistic healing, and
prefer online pharmacies over traditional pharmacies

Source: NirogStreet Case Study, web search 3

Agenda

1. Should we expect the online Ayurveda

pharmacy industry to be profitable?

2. What, if any, competitive advantages

does NirogStreet have over other online
Ayurveda pharmacies or a brick and
mortar Ayurveda pharmacy? What about
a competitor that adopts a hybrid
strategy?

3. Given the structure of the Ayurveda

industry and any current NirogStreet
competitive advantages, what is your
prescription to unlock future growth?

4
Online Ayurveda Pharmacy Industry Overview
Strengths
 Growing customer demand
driven by COVID-19
pandemic
 Good doctors are present
but not getting quality supply
of medicines
 Access to wide range of
natural herbs and
ingredients locally in India
 Economies of scale can be
generated as volume
Source: NirogStreet Case Study, web search
Weaknesses
 Unstructured industry as not
government regulated
 Patient trust is not present
because of counterfeit and
low quality products from
some manufactures
 High competition from other
sources
 Limited presence in global
markets
Opportunities
 Increasing focus on healthy
living
 High growth rate due to
possible standardization of
the services and generating
platform network effects
 Possibility of global
expansion
Threats
 Risk of counterfeit products
 Emergence of new
technological disruptions
 Regulatory hurdles as lack of
a clear framework for
ayurveda medicines
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Online Ayurveda Industry faces challenges due to (1) substitute products,
(2) industry rivalry, and (3) buyer bargaining power
Threat of Substitutes (High):
• There are multiple options for the
patients to choose from like Ayurveda,
homeopathy or allopathy and customers
might prefer the cheapest option and
hence this threat is high

Bargaining Power of Suppliers (Low):
• Limited number of good quality
manufacturers
• Suppliers face difficulties to sell due to
fragmented distribution channels and
expensive outreach to doctors
Industry Rivalry (Medium):
• Competitive rivalry in the online
ayurveda pharmacy is medium as few
players have entered and is still growing
• Companies need to have a wide product
range, quick delivery and brand trust in
order to succeed
Bargaining Power of Buyers (Medium):
• Online ayurveda pharmacies face stiff
pressure physical pharmacies as
customers may prefer the low-cost
alternatives
• Buyers also emphasize on the trust the
company builds with its patients

Threat of New Entrants (Low):

• Relatively easier to enter as all that is
needed is an online platform which
requires very less capital than a physical
store
• Brand power and trust can influence how
successful the players eventually will be
Source: NirogStreet Case Study, web search 6
Agenda

1. Should we expect the online Ayurveda

pharmacy industry to be profitable?

2. What, if any, competitive advantages

does NirogStreet have over other
online Ayurveda pharmacies or a brick
and mortar Ayurveda pharmacy? What
about a competitor that adopts a
hybrid strategy?

3. Given the structure of the Ayurveda

industry and any current NirogStreet
competitive advantages, what is your
prescription to unlock future growth?

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There is a sustained competitive advantage in the industry
Valuable
• NirogStreet provides a platform
for Ayurveda practitioners and
patients to interact
• They also enable education and
knowledge sharing on their
platform for doctors and
patients (in development) which
creates significant value for both
groups
• They also partner with high
quality manufacturers to source
the right medicines for their
doctors and patients which help
create trust and is valuable
Source: NirogStreet Case Study, web search
Rare
• NirogStreet has a very unique
value proposition where it
emphasizes on building
communities and facilitating
knowledge sharing of ayurveda
practitioners, manufacturers
and patients
• There are very few other
competitors providing this value
proposition
• It also provides tech enabled
software tools to doctors which
sets it apart from its competitors
Imitable
• While some of its services are
provided by other competitors,
replicating the trust NirogStreet
brand has built over the years is
very difficult
• Co-branding with pharmacies
and partnerships with quality
manufacturers has enable the
brand to be associated with
quality product and service
which takes resources and time
to build and is not easy
Organization
• NirogStreet's leadership team,
including Ram Kumar and
Abhishek Gupta, have seen the
benefits of Ayurveda first hand
and have deep expertise in
Ayurveda
• This creates a sense of belief in
the Ayurveda industry which
flows to the doctors and patient
communities which enable
further network effects
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Competitive advantage of NirogStreet (1/3)

NirogStreet Online Ayurveda Pharmacies Hybrid Ayurveda Pharmacies NirogStreet

Physical Ayurveda Pharmacies

Bra n d tru st

Bra n d tru st

5
5
4
4
3
3

2 2

Gro wth p o te n tia l

1 P ro d u ctq u a lity P e rso n a lize d se rv ice s

1 P ro d u ctra n g e

T e ch n o lo g y

C o st

NirogStreet has competitive advantages on all fronts NirogStreet has competitive advantages in 3 of 4 fronts

Source: NirogStreet Case Study, web search 9

Competitive advantage of NirogStreet (2/3)
Brand Trust
NirogStreet  NirogStreet brand trust is very
high as the company has always
focused on building communities
and enabling knowledge sharing
acoss practitioners and patients
and sourcing high quality products
at the same time
Online Ayurveda  Online pharmacies also have a
high trust due to the transparency
Pharmacies
the platform provides to let
patients view and choose from
different manufacturers with its
public ratings
Physical Ayurveda  Low trust due to low transparency
as patients are generally unaware
Pharmacies of the product source which can
lead to high risk of counterfeit
products
Source: NirogStreet Case Study, web search
Product Quality
 150+ partnership with good
quality manufacturers and co-
branding of pharmacies by
certifying using NirogStreet brand
name
 Higher than the physical as it is
standardized and have to have a
higher quality than the physical
ones as they will not have sticky
customers if it is not good – imp
for ecommerce business
 Since the industry is not
standardized, the product quality
and sourcing is mostly
questionable and leads to
counterfeit products or low quality
products
Technology
 NirogStreet has industry leading
technology products like the Saas-
based software for clinic
operations which provides a
unique value proposition to its
customers
 High quality in general and high
focus is on technology as the
effectiveness of the technology
will eventually define the
effectiveness of the company
 Low focus on technology as it
requires further investment apart
from the overhead required for
brick and mortar stores
Growth Potential
 High growth given the same side
and cross side network effects of
the platform
 More doctor interaction will lead
to better knowledge sharing
 More patient interaction will lead
trust building
 More manufacturer interaction
will lead to standardization of
product and increase quality
across the industry
 High growth in general
accelerated by high mobile and
internet penetration, COVID-19
and 5G introduction
 Low growth as it requires high
infrastructure investment
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Competitive advantage of NirogStreet (3/3)
Brand Trust
NirogStreet  NirogStreet brand trust is very
high as the company has
always focused on building
communities and enabling
knowledge sharing acoss
practitioners and patients and
sourcing high quality products
at the same time
Online Ayurveda  Hybrid competitors also have
Pharmacies high brand trust, but they lack
the community engagement
developed by NirogStreet
Source: NirogStreet Case Study, web search
Product Range
 150+ partnership with good
quality manufacturers and co-
branding of pharmacies by
certifying using NirogStreet
brand name
 Product range is slightly
limited as the brick-and-
mortar store can only store a
limited range of stock and due
to limited partnerships with
manufactures, overall product
range is limited
Cost
 Lower cost due to economies
of scale and warehouse
storage
 Higher cost due to overheads
like rent and employee cost
Personalized Services
 Slightly low services to the
customers as the customer
only interacts with the
application / website
 Higher personalized service as
customers have an option to
choose to shop locally or
online creating a sense of trust
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Agenda

1. Should we expect the online Ayurveda

pharmacy industry to be profitable?

2. What, if any, competitive advantages

does NirogStreet have over other online
Ayurveda pharmacies or a brick and
mortar Ayurveda pharmacy? What about
a competitor that adopts a hybrid
strategy?

3. Given the structure of the Ayurveda

industry and any current NirogStreet
competitive advantages, what is your
prescription to unlock future growth?

12
We recommend NirogStreet to (1) scale up operations, (2) improve
technology and (3) expand internationally to unlock future growth

1 ​Scale up operations 2 ​Improve technology 3 ​Expand internationally

​Currently NirogStreet is focusing on too
many aspects like apart from being a
platform like online consulting,
providing technology as a service,
doctor and patient apps
​If it wants to succeed in the long term, it
should focus on scaling up its
operations with doctors and
manufacturers in order to develop the
market share
​It should focus on its technology as it
will enable seamless transactions
between doctors, manufactuers and
patients which will improve trust and
transparency
​Cross side network effects will also
increase with the improvement in
technology
​NirogStreet should consider expanding
internationally as it will enable them to
increase the addressable market
​They should initially focus on Indians
living outside of India as they are more
aware about the benefits of Ayurveda
and its products
​Eventually can increase the market to
the foreigners as they can invest more
in marketing

Primary objective of NirogStreet is to make quality Ayurveda medicine and care to be available to as many patients as
possible. Through these recommendations, NirogStreet will be able to maximize on it objective and unlock future growth

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List of References
https://www.statista.com/topics/5025/online-pharmacy-in-india/

https://www.ibef.org/industry/pharmaceutical-india.aspx

https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/ayurveda-drugs-sales-grow-7-5-pc-in-q1/articleshow/72216824.cms?from
=mdr

https://www.nhp.gov.in/ayurveda-siddha-unani-in-india_pg

https://www.business-standard.com/article/companies/ayurveda-market-in-india-expected-to-grow-at-cagr-of-16-till-2025-study-121021101570_1.html

https://nirogstreet.com/

https://www.moneycontrol.com/news/business/startup/startup-corner-nirog-street-connects-ayurvedic-doctors-with-patients-online-4016581.html

https://www.businesstoday.in/current/economy-politics/future-of-ayurveda-industry/story/424750.html

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