Is the pharmaceutical industry ready for e-commerce?
Bangladesh, like most other nations, currently has a robust e-commerce market valued at over USD 2.0 billion which is likely to grow during the next five years. Since 2019, Jeeon Bangladesh Ltd. has been working on JeeonConnect — a B2B drug ordering e-commerce application for the pharmaceutical industry. As of December 2021, more than 3,500 small to medium-sized pharmacies in the greater Dhaka region had joined this platform, accounting for around 23% of the total market (in terms of customers). During its two-year journey, JeeonConnect also marked over BDT 50 million worth of transactions.
Yet, despite the many benefits of a digital platform, we were unable to compete with traditional sales approaches in the industry. To understand this better, we surveyed over 1,500 pharmacies at different points in time as part of our root cause analysis. 51% of pharmacies revealed that they are most comfortable ordering through medical representatives rather than the application, even though it greatly increased their freedom in conducting their business and allowed them to order at any time during the day without the presence of Medical representatives.
It turns out that when pharmacies place an order directly to the medical representatives, they are often given more discounts than the stated discounts. Sometimes, they are given gifts, samples, and even credits based on their relationship with medical representatives. These extra benefits are an unspoken norm within the industry- rarely demanded but always expected.
Based on the results of our commercial trial, we estimate that adopting the JeeonConnect platform could lead to an increment in sales of up to 9% for a pharmaceutical company. The platform also enables a company to educate pharmacies about new products, promotional offers, price changes, and similar necessary information and announcements easily and cost efficiently. Furthermore, judicious use of the application would allow Medical Representatives to focus on higher-value activities (e.g., doctor calls, new product introductions, product training, etc.) without losing sales.
However, despite such tremendous benefits to pharmaceutical partners, we struggled with whole hearted adoption of the platform with the internal teams- especially sales. It took us a long time to learn this, but it seems that there is a unanimous fear of losing the market to other competitors if they reduce their footfall in the pharmacy for order collection. There is also a tendency to push bundles of products even in the absence of demand. As a result, despite many meetings and many attempts at trying to convince the chain of command, JeeonConnect was generally restricted to small, fringe pharmacies where the sales team did not wish to compete. On the flipside, whenever we saw a significant growth in sales of what seemed to previously be a low-volume pharmacy, medical representatives started in-person visits and diverted orders away from the platform.
These informal practices have become mainstream in today’s competitive market. It is possible to integrate such facilities in an e-commerce application but recognising them in a formal system is not mainstream yet. So, with far more potential, the issue remains as to whether the e-commerce sector is ready to compete with traditional sales tactics in the pharmaceutical industry or not?
Written by
Shad M Farabe
Manager, Sales & Operations
Jeeon Bangladesh Ltd.
