‘E-commerce business is all about logistics, technology, and customer retention,’ Furquan Kidwai, founder and CEO, Dawaai.pk
Furquan Kidwai is an entrepreneur who is building Pakistan’s first digital health platform. Prior to launching Dawaai.pk in 2014, Mr. Kidwai was an investment banker for over eight years in London. His last position was at the Royal Bank of Scotland (RBS) as the Head of CEEMEA Financing and Director in the Fixed Income business. Before joining RBS, he worked as an Associate at Merrill Lynch and Lehman Brothers in their London and New York offices.
Mr. Kidwai is also a member of the Board of Imperial College Business School, London. He has a Master’s degree in International Relations from Cambridge University, and also holds M.Sc. in Applied Mathematics from Imperial College London and B.Eng. (Hons.) in Computer Systems Engineering from the University of Bristol, UK. Below are edited excerpts from BR Research’s recent interview with Mr. Kidwai.
BR Research: Starting off, how do you frame the core service offered by the startup, Dawaai.pk?
Furquan Kidwai: Dawaai.pk is a private limited company with nearly fifty team members. It offers a number of services. Primarily, it undertakes home delivery of authentic medicines procured directly from manufacturers and delivered to the doorstep at market prices. It also offers maintenance of medicine purchase record for every patient including batch information and expiry dates.
Dawaai.pk also offers lab-test sample collection at home and availability of results on your mobile device from any of the top laboratory services in Pakistan. In addition, it helps schedule doctor’s appointment within the same system.
BRR: What led you to launch this startup?
FK: Honestly, it was the pent-up desire to return to Pakistan and make a difference in whatever capacity I could. I wanted to be more than an expatriate indulging in fire-side criticism sitting in the comfort of a Kensington house.
On the business side, a major glut in the availability of quality medicines easily is what led us to launch this venture. We wanted to ensure authentic medicines become easily accessible to every Pakistani at no extra cost. Frankly, this should have been the case without a need for a tailored business model but the ground reality is very different.
BRR: What is your target market? What channels are you using to reach the potential customers?
FK: Our target market is every Pakistani who knows how to operate a mobile phone and is able to open websites, apps, WhatsApp, etc. We use all of the digital marketing channels. Then our partners promote us to their customers to offer home delivery convenience.
We have also partnered with banks offering discounts to bank cardholders. This is to encourage people to start transacting over the internet with their bank cards, build trust and see the convenience first hand.
BRR: Who is your competitor?
FK: Technology-enabled business and digital health is a new industry in Pakistan. Competition is a healthy thing and certainly keeps us on our toes. Many people are entering this field with new ideas so definitely it is an incentive for us to not relax at any point. Digital health has become a thing globally. We are seeing that trend in Pakistan, too. That is a much-welcome trend given the dire need for access to quality healthcare in the country.
BRR: Since quality medicine is Dawaai.pk’s raison d’être, how do you ensure product quality for end customers?
FK: We have in-house quality control processes. We procure medicines directly from brands or their authorized dealers. Most importantly, all applicable warranties apply to products sold by us which allows customers to claim directly from manufacturers.
BRR: What types of investments were made early on?
FK: We have invested close to a million dollars in the company. All of this has so far gone in developing our technology, hiring talent, bringing operational efficiencies, and some marketing.
BRR: Have you received external funding to date?
FK: We have raised capital from within and outside Pakistan. Investors included Crimson Seed Capital (USA), Node One Ventures (South Africa), Planet N (Pakistan), Noor Abid (Bahrain), and a couple of angel investors from the UK.
BRR: How many unique customers have been served so far?
FK: We have served over 110,000 unique customers so far.
BRR: Can you tell us a little bit about your sales, in terms of gross merchandise value, geography, product mix, demographics, etc?
FK: We are generating sales across Pakistan. About 60 percent of the business originates from KLI (Karachi, Lahore, and Islamabad). The remaining 40 percent of sales comes from Tier-2 and below cities. The sales mix spans across healthcare, predominantly including vitamins and supplements, healthcare devices, beauty and skincare, consumer electronics, etc.
BRR: What are the business objectives for the coming years?
FK: Starting as the only technology-enabled digital pharmacy in the country, we are now on to disrupting healthcare in a big way and making it accessible to consumers. Dawaai.pk is well on the way to turn the healthcare business model on its head through technology and make it super convenient for consumers across Pakistan.
We are building a one-stop platform which brings healthcare to consumers’ home across Pakistan. Our offerings include an ePharmacy platform with very reputable hospital partners, ‘Refill reminders’, eLabs at home, Doctor Chat & Appointment, and our in-house team of qualified healthcare professionals to provide advice as and when needed.
BRR: Based on your experience thus far, what are some of the critical success factors (CSFs) for an online marketplace to become commercially viable in Pakistan?
FK: Number one is to build customers’ trust by supplying authentic products, in a timely manner with all relevant warranties. This may not be a very profitable thing to start with but long-term dividends are unmatched. It is essential to understand that without having a repetitive and loyal customer base; it will be prohibitively expensive to sustain a business on a long-term basis with constant need to acquire new customers. Customer acquisition is an expensive proposition and every effort has to be made to retain acquired patrons.
More importantly, it is essential to understand that e-commerce business is more than just setting up a website and having a few product photographs put up. It is all about logistics and technology. Unless one is able to bring out operational efficiencies, maximize user retention, generate repeat orders, up-sale, and effectively build last mile capabilities, the business will have neither barriers to entry nor it will have a chance to be profitable at any point in time.
BRR: How does your firm stack up against those CSFs?
FK: We are perhaps one of the very few startups in Pakistan who remained focused on building our proprietary technology from day one. Some of the biggest players in the market have failed to recognize its importance and instead remained focus on advertising more. Secondly, we are also slowly but steadily focusing on building out our last-mile capabilities.
These investments bite to start with but soon the dividends start coming and opportunity is not lost for a later stage switch to such investments (at a much higher cost).
Most importantly, we are very focused on our vertical – Health – which has helped us develop deep in-house knowledge-base as well as longevity of customers. Most of our business partners recognize us within our space. Being the first one and effectively the trendsetter in the digital health space, the depth of business understanding within puts us on a pedestal.