- Alex Goryainov and Yulia Kachalina founded MedsGo, an omnichannel pharmacy in the Philippines.
- They launched with personal savings and achieved profitability within 8 months.
- MedsGo aims to open 500 pharmacies in three years, focusing on underserved areas.
I recently had the pleasure of meeting Alex Goryainov and Yulia Kachalina who are the founders of MedsGo, which is an omnichannel pharmacy company that was started in Philippines last year.
It is already profitable and aims to open 500 pharmacies in the next three years in the country, which will it make it one of the largest. And they plan to be the dominant player in smaller cities and towns.
I think their story is one of grit and true resourcefulness, so I hope you enjoy it as much as I did.
The Backstory…. in Moscow
Alex and Yulia come from a pharmacy and ecommerce background in Russia. They were working for ‘Evalar’, which was one of the largest pharmaceutical manufacturers in Russia.
Together they set up and ran the e-Commerce business of Evalar and got to know it very well. Russia is a pretty evolved market when it comes to e-Commerce and so things were quite competitive. But they achieved good results.
And awhile later they were asked by a large Russian fintech, Robocash, if they wanted to start a marketplace for their planned digital ecosystem in the Philippines. And they decided to go for it.
So they packed their bags and moved to Manila to start UnaMarket.
A Change of Plans
As they were setting up the company a monkeywrench was thrown in their plans. The war in Ukraine happened.
And the company that was financing this new venture decided to pull out. Leaving Alex and Yulia in Manila with nothing to do.
But they saw the potential and decided they were going to do it anyway. On their own.
One story that Alex gave which gave him confidence was when he got a bacteria infection in his eye soon after his arrival in Manila. He went to seven different pharmacies looking for something specific and still couldn’t find it.
It was very frustrating, but demonstrated that there was an opportunity in the market. Because this type of problem hadn’t existed in Russia for a long time.
So they did customer interviews and began to learn about the antiquated supply chain of the pharmacies in Philippines. They rarely used any kind of inventory management system and so stockouts were commonplace.
They could create a business that would fix all of this.
The Starting of MedsGo
This is where I think the resourcefulness of the founders really shines through. They did not spend months looking for an investor… rather they jumped right in and invested $100k of their hard earned savings to get the business started.
They were going all in.
And they were also lucky enough to get accepted into a local incubator, who threw in another $50k.
With that they launched their online store and three offline pharmacies. To keep costs low they looked for locations where they would not need to invest much to refurbish the premises.
And they were also choosing out of the way locations where the big popular pharmacy chains were not present.
It was working!
Breakeven baby!
They broke even within 8 months.. which I found truly amazing.
All of the big eCommerce players like Lazada, Shopee, Tokopedia and the likes… were in the market for over a decade and were still losing money.
But here they were competing against those players (Lazada & Shopee both sell pharma items in Philippines) and they were already pumping out some profit.
When I asked them the secret to how they achieved this.. one main thing they explained was that they were competing against the small, independently owned pharmacies. These were usually owned by a single person and were not very professional.
They’d just buy the most popular items and not stock the rest because there was almost no financing available to them and distributors demanded cash upfront.
So it was generally easy to compete against these guys. And beat them.
And as it turns out more than half of all pharmacies in the country were of this type… so there was a lot of land to grab.
Where things are at now?
In the first quarter of this year they did over $100k USD in revenue and the business is growing 20-30% month-on-month.
They are aiming to put up 500 pharmacies in the next three years, and be the biggest chain in the ‘smaller’ towns and cities.
E-commerce comprises around 70% of their sales with in-store retail sales making the rest. They sell not just on their own site but also via Lazada, Shopee and Grab.
And all of these e-com orders are delivered from their stores, which helps keep the costs low since they don’t need a warehouse and don’t need to store all that additional inventory.
They are also starting a marketplace to be able to offer more variety to their online customers. They see a lot of potential in this, in part because manufacturers are willing to spend big to promote their products on such sites.
I asked if they were looking to raise capital and their answer was ‘yes but passively.’ Since they don’t need the money for operations…they are taking their time to find the right investors and holding ongoing meetings.
Ideally they want to raise up to $1 million to take things to the next level.
I wish Alex and Yulia the best and was really impressed by this story of grit.
