The Indian healthcare sector is among the largest sectors in India and has been attracting foreign players. It is crucial that they have the necessary knowledge about the sector to be able to penetrate the market.
The Indian healthcare sector is among the largest sectors in India both in terms of revenue and employment and has been growing at a tremendous pace, also witnessing significant entrepreneurial initiative over the last few years. The size of the sector is currently estimated at USD 120 billion (2015) and is expected to reach USD 280 billion by 2020
Various segments such as life sciences, medical devices, biotechnology, pharmaceutical and diagnostics have been attracting foreign players to the country for both collaboration as well as investment purposes. All the same, it is crucial that foreign companies wanting to penetrate the Indian healthcare market understand ground realities and existing trends besides identifying the most appropriate business model and suitable target segment relevant to their offering.
Growing population, increasing affordability, comparative cheaper treatment costs as opposed to the West and medical tourism thereof, increased health insurance penetration, increased patient awareness, out-of-the-box unconventional thinking by healthcare players for better operations, government opening up its arms to Public Private Partnership (PPP) and even providing tax holidays will be the key factors to look out for to drive the future of healthcare in India.
Rural India, which constitutes over 70 % of the country’s population, is a major demand source keeping in view healthcare spending as a percentage of India’s population. Per capita healthcare spending rose by about 9 % over the past five years. Spending is expected to gain further traction considering increasing per capita income levels, better access to healthcare facilities, and government’s universal healthcare plan that is aimed at providing guaranteed benefits at a cost of INR 1.6 trillion.
However, healthcare provision remains inequitable and challenges in access to quality, affordable healthcare persist in large parts of the country. The medical devices sector has also grown considerably during this period and plays a critical role at each stage of the healthcare continuum. Although it has been instrumental in improving access and affordability of healthcare services, a number of ecosystem constraints have led to a high dependence on imports for addressing domestic demand.
For imported medical device manufacturers, one of the best practices to enter and sustain in India medical devices market is to maintain one or more technically trained agents or distributors. These distributors can be appointed to sell a specific medical device or a group of medical devices. There could be multiple distributors for the same device in a city or just one distributor can sell these devices in the entire city.
Few large companies have their own distribution channels. However, due to the vast diversity in India in terms of language, different health policies in different states, disparities between the markets in urban, semi urban, and rural areas, many tend to opt for third party distribution as a medium.
Key marketing strategies opted by medical devices manufacturers agents/distributors include the following,
- Direct contact with the end user (doctors, technicians, other end user) of the devices
- Setting counters during medical conferences and trade shows
- Key account managers (KAM): KAM is a single point of contact for integrated delivery networks, regional purchasing groups, large hospital chains, and other big hospitals
These are some of the findings of a recent report prepared by Innovation Norway, New Delhi. For the detailed report and queries, please contact:
Innovation Norway, New Delhi