Author: ETHealthworld l February 06, 2020 l Image Source: Fotolia
India’s eHealth market, led by the online pharmacy category, is pegged to touch $16 billion over the next five years, from its current market size of $1.2 billion, according to market watcher RedSeer Consulting.
The growth will be driven by a massive influx of customers availing of online healthcare services, according to the report titled ‘Indian eHealth at a tipping point’.
The number of households using eHealth services will grow to a projected 60 million by 2025 from 4.3 million today, it said.
“Online pharmacies are just the trigger and will make consumers explore the second and third use cases,” said Anil Kumar, founder and CEO of RedSeer Consulting.
“E-health starts making sense only if you as a consumer look at it as a single-window service.”
Behind this massive growth in e-healthcare is growth in healthcare expenditure over the next five years, which, RedSeer says, will touch $353 billion from $135 billion today.
Its predictions are in part based on India’s $5 trillion GDP target, along with healthcare expenditure as a percentage of GDP growth over the past few years.
Along with this, a higher prevalence of lifestyle diseases such as diabetes and cardiovascular disorders, along with increasing instances of cancer will drive up use of e-healthcare.
“For certain sections such as people suffering from chronic diseases, e-healthcare is a no-brainer,” added Kumar.
According to RedSeer, Medlife is the number one player in this space, followed by Pharmeasy, 1mg and Netmeds in fourth position.
While competition is high in this space, the economics of companies looks far more promising than some other high-burn sectors such as e-retail, online food ordering and cab hailing.
Core to this is the high margins on pharmaceuticals and healthcare services, said Ananth Narayanan, co-founder and CEO of Medlife. “E-health and not just e-pharmacy, is the business model that works. The margins are there, and the frequency is also a lot higher,” Narayanan said.
For Medlife, which stocks its own inventory as it has been built using only domestic capital, margins on drugs is 30%, on private labels is closer to 70%, while for diagnostic lab tests, it is around 80%.
This is true for the overall sector as well, which is what allows players to give more discounts to attract customers, and also not burn a lot of money in the process.