Internal and External Analysis

How does 1mg make money?

The 1mg app makes healthcare accessible, affordable, and convenient for all users. The business
model of Tata 1mg builds various sources for an easy cash flow and assures

that if one source faces an issue of slowdown, another one would easily compensate.

Healthcare Products

The 1mg app sells myriad health and wellness products including supplements and personal
grooming items along with medical devices and ayurvedic products. The app also houses a range of
products from different brands and categories. The business model of the 1mg app puts a margin on
each product sold through the platform.

Lab and Diagnostic Tests

As stated earlier, Tata 1mg is beyond selling medicines; it offers an option to book laboratory tests
and diagnostic services within its partner network. The application offers several tests and services
including blood and urine tests, x- rays/ultrasounds along with tests of MRIs and CT scans. Users can
opt for certain tests by ordering sample collection at home and avail of free reports delivery/online
reports. The company charges some commission from the labs for each booking made on the app
ranging from 10- 40% depending on the tests.

Telemedicine

The 1mg business model also includes the services of telemedicine wherein patients can consult with
doctors and specialists through audio/visual medium, voice, or chat. The company has a tie-up with
over 20,000 verified doctors from almost all specialties such as cardiology, ENT, paediatrics, and so
on. Doctors can also view uploaded prescriptions, medical reports, and health records. The 1mg Tata
app charges some fees from the users for each consultation. Additionally, the app pays a part of the
fees to the partner doctors ranging from 50-80% depending on the doctor's seniority or ratings.

Marketing strategies

Tata 1mg business model became successful due to a comprehensive approach by the company. Tata
designed multidimensional approaches to revenues, features, and facilities on its 1mg application so
that collectively they achieve the company’s vision and mission of making huge profits despite terrific
competition in the on-demand delivery business market. To support its business models, Tata 1mg
has implemented various marketing strategies:
Referral programs

Tata 1mg encourages its users to refer their acquaintances to the app. By doing this, they are
rewarded with cashback and coupons, or free consultations. This business model helps the app
increase its user base and retention rate.

Promotions and Discounts

Another marketing plan that supports the Tata 1mg business model is regular promotions and
discounts on healthcare/wellness products and services. The app offers flat 20% off on medicines up
to 50% off on laboratory tests, and also free consultations which helps the platform attract new
customers and increase the sales.

Grandmaster Series Campaign

Tata 1mg drew everybody’s attention by launching a series of online events that featured popular
doctors, healthcare experts, and celebrities sharing their insights and tips on various health and
wellness subjects including diabetes, mental health, and fitness/nutrition. Tata 1mg raised brand
awareness and credibility through this.

Franchise Business

The business model of Tata 1mg also includes partnerships with local pharmacies and diagnostic
centres. It helps the online medicine delivery company expand its offline presence and customer
reach. Also, there is a remarkable improvement in faster and more convenient service to the app
users and an increase in the revenue streams.

Tata 1mg App business model

The concept of ‘easy reach’ to medical services i.e., doctors and pharmacy itself was a brilliant
healthcare business idea. Though it wasn’t new, 1mg tapped the market at the right time. Many
healthcare startups needed a solid platform for collaboration and growth, which 1mg core business
provided.

1mg understood the need for an online pharmacy centre and online healthcare solutions to provide
bespoke services that cover not only diagnosing the health ailment but also screening and medicines.
1mg dared to break a robust chain of doctors and chemists who had a strong hold over the market.
Discounts weren’t possible due to the nexus and patients weren’t benefited, not an iota.
How Does the 1mg App Make Profits :

Commission Fees

One of the main sources of income for Tata 1mg is charging a commission fee from its partner
pharmacies and labs. The online drug delivery platform offers excellent reach and visibility to millions
of its users. In return, the 1mg’s revenue has also come from some commission in accordance with
rules and regulations set and approved by mutual agreement or contract. Whenever a user orders
medicines or books a lab test through 1mg mobile app of Tata, the platform gets a percentage of the
transaction value as a fee. This fee varies depending on the type and size of the order, but it is usually
around 15-20%. This way, Tata 1mg earns money by facilitating the delivery of healthcare products
and services to its customers.

Ad Spaces

Another way that the online pharmacy app Tata 1mg makes money is by selling ad space to
healthcare brands and providers. It has a large and engaged user base that visits its website and
mobile app regularly to access health information, tips, and articles. This makes it an attractive
platform for advertisers who want to reach out to potential customers and promote their products
and services. Tata 1mg charges advertisers based on the number of impressions or clicks that their
ads generate on its platform.

Premium Subscriptions

A third revenue stream for Tata 1mg is offering premium subscriptions for personalized health advice
and discounts. The on-demand medicine delivery application has a feature called 1mg Care Plan,
which allows users to pay a monthly or annual fee and get access to exclusive benefits such as
unlimited free doctor consultations online, free home sample collection for lab tests, extra discounts
on medicines and tests, and priority customer support. This subscription model helps 1mg retain its
loyal customers and generate recurring revenue.

Data and Analytic Services

A fourth type of 1mg revenue model is by providing data analytics and insights to healthcare
stakeholders. The online healthcare platform has a vast amount of data on its users’ health behavior,
preferences, needs, and outcomes. This data can be used to generate valuable insights for
pharmaceutical companies, insurance providers, hospitals, doctors, and policymakers. These buyers
use data to understand the market trends, customer segments, gaps, and opportunities in the
healthcare sector. 1mg can monetize this data by selling reports, dashboards, or consulting services
to these stakeholders.

Featured Listing
 Tata 1mg’s business model includes a featured listing of pharmacies and even medicines. Those who
want to build an app like Tata 1mg and succeed should consider feature listing as one of the primary
income sources. The products with featured listings have additional and top visibility on the e-
pharmacy delivery application. Any sponsored announcement, top listing, or pinned post is
chargeable that the company that wants the promotion should pay to the digital consumer
healthcare platform.

Commercials

Tata 1mg website traffic and mobile app users are in great number; hence, putting advertisements or
commercials of all kinds can help the app owner with remarkable revenue. The advertisements are
not restricted to e- pharmacies or local chemists and druggists; instead, the commercials can be
offered as healthcare partnerships with various healthcare plans in all sectors including healthcare
insurance and ambulances.

1mg Grandmaster Series Campaign

1mg came up with their first campaign called ‘Grandmaster Series’, which strives to recognize unsung
champions in the field of medicine. The initiative, planned and managed by Humour me, emphasizes
the Grandmasters or veteran medical practitioners from various specialties of medicine who are still
practicing medicine and sincerely serving the community.

The first video in this series featured Dr. Anand, a pediatrician who is still practicing in Mumbai at the
age of 83. He is well renowned for his book on infant and toddler care, as well as his untiring
advocacy for the benefits of breastfeeding.

Marketing Channel Distribution

Direct 20.89%

Referrals 0.55%

Search 76.21%

Mail 1.31%

Display 0.46%
Social 0.58%

Influencer marketing
The vision of 1Mg is to tap into a market, where the public is unaware of the brand’s health benefits.
VURoll met its requirement of generating ROI by implementing influencer marketing on well-known
social media networks such as Facebook and Instagram. Facebook and Instagram were used as
communication channels since they are the most effective platforms for product reviews and
feedback. Influencers highlighted the health benefits of items by using the 1mg product. VuRoll
selected the most suitable influencers for the company from its extensive database, and the
influencers were then divided into groups based on the number of specialty audiences and channel
preferences.
Successive Factors of 1mg

 Since its establishment, 1mg has provided outstanding service at the most affordable price to
its consumers. They've also received a number of well-deserved awards over the years. 1mg
got the mBillionth Award for m-health in South Asia in 2014, just one year after its launch.
 In the Smart CEO-Startup 50 India 2017 program, 1Mg was named one of the top top 50
businesses. In terms of app success and user engagement, it has increased by 600 percent by
the year 2017. They expanded their product line to include Ayurvedic and homeopathic
remedies.
 The startup raised 37 million dollars in five rounds of fundraising between 2016 and 2017.
 The BML Award for 'Business Excellence through Learning and Development' was also given
to 1mg in 2018.
 They were named 'Best Content in a Healthcare/ FitnessApp' at the 2018 content leadership
awards. At the India Mobile Congress, 1Mg was also named the "Best Mobile Innovation for
Health Award."