The current $1.2 billion eHealth sector in India is projected to grow at approximately 68% CAGR or 13x to become a $16 billion opportunity by FY-25. This growth will be driven by increasing consumer receptiveness towards eHealth models and rising provider/supplier willingness to partner with eHealth platforms, further supported by an increased influx of investments and pro-eHealth regulations.
RedSeer Consulting, a Bengaluru based consulting and research firm, released the report titled “Indian ‘eHealth’ at a tipping point” on Wednesday.
The eHealth sector is focussed on digitising the interaction between consumers & outpatient care providers, which include pharmacies, doctors and diagnostics centres.
The report begins the narrative by elaborating on the strong trajectory for the overall Indian healthcare industry, which as per RedSeer is set to grow at approximately 17% CAGR until FY 25 to reach $353 billion (approx 7% of the expected nominal GDP). Thereafter, it goes deeper into the strong use-case for the eHealth players, which is backed by the capability of eHealth models to meticulously resolve the challenges faced by the consumers through the complex traditional outpatient care. The insights are strongly backed by thorough research conducted by Redseer, where 1200+ consumers were spoken to, across India to understand their eHealth experience. Based on the same, it clearly came out that consumers significantly value the benefits of eHealth over the traditional outpatient care system across pharmacy, consultation, and diagnostics categories.
Anil Kumar, Founder & CEO, RedSeer, said, “Indian consumers face a host of challenges in the traditional healthcare system – be it availability of specialists or medicines at a nearby pharmacy or long waiting times to get diagnostic tests done. We believe e-Health platforms have a strong potential in changing the experience of the Indian consumer across the entire spectrum of outpatient services, across doctor consultation, diagnostics, and pharmacy. Over the next 5 years, we project the e-Health market to exponentially grow to a USD 16 billion market touching 57 million households, driven by positive reception from both consumers and providers along with supportive Government regulations and investments.”
Medlife, 1mg, Pharmeasy, NetMeds, Practo, DocsApp, Medplus and Healthians are some of the leading eHealth players in India. While some of them provide only a single category of eHealth service (out of ePharmacy, eConsultation and eDiagnostics), some of the others provide all the three eHealth services, making them a 'One Stop Shop' eHealth integrated solution provider, the report adds.
As part of the panel discussion at the launch event, Prashant Tandon, Co-founder & CEO, 1mg, shared his thoughts on the regulatory landscape in the Indian eHealth sector. He stated, “eHealth models are fully compliant with the existing regulations in India. The regulation process in this sector actually started with the leading Indian eHealth players initiating the dialogue with regulatory bodies and seeking a clear regulatory regime (similar to what most other countries have), to ensure that only compliant players operate in the eHealth space in the country. Post which, the government came up with the draft guidelines last year, which have been approved by DTAB (Drug Technical Advisory Board), the highest decision-making body on pharmaceuticals in the country, and is currently pending for sign-off. We actually want this process of finalisation of regulatory guidelines to move faster.”
The report states that the exceptional growth in the eHealth sector is primarily driven by four key factors viz. significant impact created by eHealth apps in enhancing the traditional outpatient care experience; pharmaceutical firms (suppliers) as well as doctors (providers) value their partnerships with eHealth platforms; multiple govt. policies aimed at regulating the eHealth market, have been introduced recently; and total investments in the eHealth sector grew by ~7x over the last 3 years.
On the topic of discounting in the eHealth sector, Ananth Narayanan, co-founder & CEO, Medlife, said, “eHealth is very different from the classic e-commerce sectors, say fashion – fashion-related purchase is generally impulsive, due to which the role of discounts as a key trigger for purchase becomes interesting. However, the case is very different in case of health – in case you’re a chronic diabetic patient, you need to have a regular access to medicines, irrespective of any trigger. This is where convenience & timeliness, along with quality & genuineness provided by eHealth platforms, become the key drivers for consumers to use and stick to these platforms, instead of discounts. As a result, we agree that the average discounts in this sector will come down to ~16-17% in the near future.”
Moreover, in its detailed report, RedSeer has also shared its perspective on the sustainability and success of eHealth business models in India. RedSeer believes that vertical focused e-Health platforms will dominate the landscape given the specialised nature of the domain, need for skilled personnel and required adherence to regulatory standards. Already, over 80% of the eHealth market today is dominated by verticals, the report states. Further, within the vertical play, RedSeer compares stand-alone eHealth models (offering just a single category of eHealth service) with integrated eHealth models (acting as one-stop-shop solutions through broader service portfolio) and asserts that, integrated models are likely to be successful in the longer run due to higher consumer stickiness and better projected margins.