The 20-distributor problem on every pharmacy counter
A single pharmacy works with around twenty distributors just to keep its shelves stocked. That isn't a quirk. It's the tax that fragmentation charges the entire chain.
Walk behind the counter of a typical Indian pharmacy and you'll find a quiet kind of chaos. To keep roughly the right medicines in stock, the owner deals with around twenty different distributors — each with its own order book, its own delivery van, its own credit terms, its own salesperson who drops by on his own day of the week.
One counter, twenty relationships
Multiply that across about 9 lakh pharmacies and some 80,000 distributors and you get a web of relationships so dense that no one — not the pharmacy, not the manufacturer, not the regulator — can see it whole.
Twenty inbound relationships per counter. Each spoke is a separate ordering process, credit line, and delivery rhythm. Illustrative.
What the fragmentation actually costs
It's tempting to see twenty distributors as merely inconvenient. It's far more than that. Fragmentation imposes a real, recurring cost at every link:
For the pharmacy: hours lost reconciling twenty order books and twenty payment cycles, working capital trapped in duplicated safety stock, and no single view of what's actually selling.
For the distributor: thin routes, sub-scale delivery, and a constant scramble for the same retailers — margin competed away on service nobody can afford to provide well.
For the manufacturer: almost no visibility past the first hop. Demand signals arrive late and blurred, so production and promotion are guesses dressed as plans.
Why it persists
If it's so costly, why does it survive? Because the relationships are real. The salesperson who extends a few extra days of credit when the month is tight, the van that shows up before a festival rush — those bonds were built over decades, and they don't transfer on a spreadsheet. That's exactly why a financial roll-up struggles here and an operator doesn't.
The shape of the fix
The answer isn't to sever those relationships. It's to put a single operating layer underneath them — one system where ordering, logistics, credit, and data are unified, even as the human trust at the counter stays exactly where it is. Twenty fragmented relationships become one coherent supply, without the pharmacy losing the people it relies on.
That's the unglamorous middle of the chain we're building. The 20-distributor problem is, in the end, the whole opportunity wearing work clothes.
The Founder's Office is our monthly read on Indian pharma — the macro forces, the structural shifts, and what they mean for everyone building in this market.