How Zeelab Is Turning Its Affordable Pharma Play Into A ₹200 Cr Business

For most consumer businesses, a lower price is a unique selling proposition (USP). But for Zeelab Pharmacy founder and CEO Rohit Mukul, it is a more fundamental need and a way to correct a market where consumers have historically had little choice.

Mukul’s thesis is rooted in socialist thinking, which began taking shape in 2018, after he returned from the London School of Economics (LSE) and started spending time understanding and studying India’s pharmaceutical ecosystem, comprising manufacturers, doctors, distributors and pharmacies.

His diagnosis was straightforward: too many middlemen in the supply chain were bloating prices. “A ₹10 medicine takes a long and expensive journey before reaching the consumer, with multiple intermediaries adding to its final price. By the time it reaches the end user, that ₹10 product could cost ₹100,” Mukul said.

This became the bedrock for Zeelab, which started operations in April 2020 with the ambition of making medicines affordable and more accessible.

Six years on, Mukul’s thesis appears to have found traction. Zeelab now has more than 300 stores and processes around 10,000 orders a day, with its online and offline businesses contributing roughly equally to revenue. After generating around ₹110 Cr in operating revenue in FY26, the company is now targeting ₹200 Cr in FY27.

But scale alone does not answer whether Zeelab can preserve its affordability proposition as it grows. 

Putting Affordability Thesis To Test

Zeelab’s founding thesis rests on a rather socialist proposition: medicines, unlike televisions or restaurant meals, are not luxuries from which a consumer can simply walk away. 

When a doctor writes a prescription, the patient has little room for negotiation. The medicine must be bought, whatever the price. Mukul said what he encountered during his early market research was not merely a pricing problem but a more uncomfortable reality facing Indians, who were being forced to make difficult choices around recurring healthcare expenses.

This prompted the founder to rethink the supply chain itself, cutting out unnecessary layers to make the same medicines available to consumers at substantially lower prices. There is no promotional sleight of hand here. Mukul wants affordability to be the identity of the brand.

“A diclofenac pain-relieving gel, such as Moov, could cost a consumer around ₹150, while the equivalent product made by the same manufacturer for Zeelab could be sold for ₹25,” Mukul said.

According to him, the consumer proposition goes beyond saving money. If a customer discovers that something they have been buying for ₹150 is available for ₹25, the emotional response is not merely about saving ₹125 but realisation that they may have been paying far more than necessary all along. This gives Zeelab a hook beyond price.

However, it also creates the first strategic tension. If affordability is the brand promise, Zeelab has to keep proving that the lower price is structural.

The Franchise Experiment That Changed Zeelab’s Strategy

Zeelab started operations in April 2020, at the beginning of India’s Covid-19 disruption. Its first store was in Delhi’s Rohini, located below its office, a decision Mukul describes as one driven largely by convenience and ease of control rather than a grand expansion strategy.

The company’s first real strategic lesson, however, came when it tried to scale through franchisees. In its first six to seven months, Zeelab saw encouraging customer traction and began looking at franchising as the natural next step for expansion. But the economics that worked for franchisees did not align with Zeelab’s founder.

“Franchising looked promising initially, but we realised we couldn’t control how franchisees managed their money. If they didn’t have enough money to maintain inventory, customers wouldn’t get the medicines they needed,” the founder said.

Therefore, Zeelab moved to a company-owned model to have greater control over its retail network and inventory. The decision increased operational responsibility, but it also gave Zeelab greater control over the customer experience.

Also, Zeelab is not trying to win pharmacy retail by having the biggest stores. In fact, its typical store is around 200 sq ft and highly standardised, with similar sizes, product portfolios and operating expenses.

The idea is to keep the stores small and efficient while putting them close to the customers they serve. This gives Zeelab a physical presence in each market without taking on the cost of running large-format pharmacies. Moreover, these stores also serve as local fulfilment points for its online business.

As Zeelab adds more stores, each location helps the startup reach more customers, distribute medicines and fulfil online orders. This is where its offline and online businesses begin to work together.

Zeelab’s Omnichannel Advantage

Unlike many consumer internet businesses that start online and later expand into physical retail, Zeelab launched its online and offline operations just two months apart. Today, the two channels contribute roughly equally to its revenue.

But Zeelab does not view its stores simply as another sales channel. Its physical network is the infrastructure supporting its digital proposition.

A customer can order online and collect or return through an offline store. Someone walking into a store can order a product that is not physically stocked there and have it delivered to their home.

Mukul calls it an “unlimited shelf” – what a store lacks on its shelves, the wider Zeelab network can still make available digitally.

The physical network therefore serves three purposes simultaneously:

• Retail outlet
• Trust layer
• Fulfilment infrastructure

This is one of Zeelab’s biggest strategic advantages. India’s rising expectations around delivery, accelerated by ecommerce and quick commerce, have changed what customers consider acceptable. Delivery expectations have moved from days to same-day and increasingly faster windows.

With 300 stores, Zeelab also aims to plug logistics partners into this network and offer medicine delivery within 60 minutes in approximately 30 cities. The advantage, according to Mukul, is that Zeelab does not have to build a completely separate warehouse network to create this speed.

The Micro-Market Bet & The ₹200 Cr Question

The startup’s other major strategic choice has been to concentrate its expansion in select markets. According to Mukul, Zeelab prefers to become deeply present in a particular micro-market rather than scatter its stores across multiple geographies.

“The logic is straightforward. A pharmacy benefits from local awareness, convenience, repeat purchases and trust. If a consumer sees the brand repeatedly in their neighbourhood and can access a physical store while also ordering online, the channels reinforce each other,” the founder said.

Mukul also believes this density creates network effects and improves fulfilment economics. The closer the inventory is to the customer, the easier it becomes to fulfil an online order quickly. That means store expansion could potentially improve both offline revenue and digital fulfilment.

However, while a 300-store network can create a powerful distribution advantage, it can also create a large fixed-cost base. 

Zeelab’s FY27 target is ambitious. After generating around ₹110 Cr in revenue in FY26, Mukul is eyeing ₹200 Cr in FY27.

His confidence emerges from two areas:

1. The first is ecommerce customer behaviour

Zeelab’s customer cohorts are encouraging because customers who purchase from Zeelab once continue returning for months. This is especially important in medicines. Unlike many consumer categories, pharmacy has an inherent repeat-use component. Chronic patients can require medicines every month. Families can repeatedly purchase healthcare and personal-care products.

If Zeelab can acquire a customer once and retain that customer for a long period, the economics of customer acquisition can improve over time.

2. The second growth engine is physical expansion

The founder believes its store strategy is now working and can continue adding capacity. “July 2026 revenue was 100% higher than July 2025, suggesting the company is entering FY27 with momentum,” Mukul said.

But there is a crucial distinction between revenue compounding and economic compounding. A customer returning every month is valuable only if the company earns enough gross profit from that customer after procurement, fulfilment, store operations and other costs.

What Zeelab Needs To Prove Next

When asked about its biggest competitor, Mukul points to the government’s Jan Aushadhi initiative. This gives another interesting aspect to Zeelab’s positioning. Jan Aushadhi has helped build awareness around affordable medicines, but it also makes affordability a more competitive proposition for Zeelab.

Zeelab has spent its first phase proving demand for affordable drugs. But with Jan Aushadhi Kendras acting as its direct rivals, Zeelab’s differentiation will increasingly have to come from availability, convenience, trust and service, rather than price alone. Its store network is therefore strategically important to turn price leadership into distribution leadership. 

All said and done, the next phase of growth seems harder because all of its USPs could become more expensive to maintain at scale. Think rent, staff, inventory, working capital, local operating costs, and we have barely scratched the surface.

But the metrics that will stay most relevant going ahead are: 

Store Productivity: Are new stores generating enough revenue to justify the cost of setting them up and running them? Zeelab will need to track revenue per store, sales growth at mature stores and the time it takes for a new store to break even.

Repeat Economics: Are customers coming back often enough to make each acquisition worthwhile? It will need to show repeat purchase rates, revenue from existing customer cohorts and customer lifetime value to prove that it can grow without constantly spending more on customer acquisition.

Omnichannel Profitability: Do physical stores actually make the online business more efficient? The startup will need to demonstrate that stores lower fulfilment costs, improve delivery times and generate enough incremental online orders to justify the cost of maintaining the network.

In a nutshell, the opportunity is significant, but so is the challenge. If Zeelab can make its physical and digital networks work in tandem, its affordability thesis could evolve into a genuine competitive moat.

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