3 reasons why consumer healthcare in India is set to take-off

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This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Prabu Thiruppathy, Principal, KOIS Mumbai

  • COVID-19 restrictions have led many Indian consumers to use online health platforms.
  • Together with better access to affordable technology, and an interest in healthy living, consumer healthcare is set to become a growth industry.
  • The challenge for businesses is to understand the needs of their customers.
  • 1. Increasing digital penetration

    With the democratization of telecomms, Indian consumers have seen a dramatic shift in their ability to access healthcare products and services. Smartphone penetration in rural India has risen from 9% in 2015 to 25% in 2018, and it is expected that internet users in India will increase by 64% by 2023.

    Today, a semi-rural consumer can access health information through a platform like myUpchar and order feminine hygiene products online. They can track their fitness levels through a mobile app and get personalized coaching or manage their ovulation cycles through a digital monitor like Inito. Furthermore, the advent of digital has allowed innovative start-ups to reach their customers online and not depend on traditional channels like pharmacies and doctors.

    2. Growing health awareness

    Indian health consumers have become more aware of their own healthcare needs. This awareness is due to increased education levels as well as the easy availability of credible medical content through digital channels.

    Armed with this knowledge, consumers have been trying to take an active role in their medical decision-making alongside their doctors. Additionally, they have been focusing more and more on preventive health – by seeking healthcare and lifestyle advice.

    3. Increasing affordability

    As India moves closer to its target of becoming a middle-income country by 2030, the average per capita income has grown by 30% between 2015 and 2019. This has also led to an increase in disposable income of almost 50% in the same period. While the former is crucial for critical health expenditures, the latter is the key driver for discretionary purchases like consumer health. As India’s middle class sees its purchasing ability increase, it will provide a boost to consumer health. health and healthcare, COVID

    How has the Forum navigated the global response to COVID-19?

    One year on: we look back at how the Forum’s networks have navigated the global response to COVID-19.

    Using a multistakeholder approach, the Forum and its partners through its COVID Action Platform have provided countless solutions to navigate the COVID-19 pandemic worldwide, protecting lives and livelihoods.How can we collaborate to stop the spread of COVID-19?

    Throughout 2020, along with launching its COVID Action Platform, the Forum and its Partners launched more than 40 initiatives in response to the pandemic.

    The work continues. As one example, the COVID Response Alliance for Social Entrepreneurs is supporting 90,000 social entrepreneurs, with an impact on 1.4 billion people, working to serve the needs of excluded, marginalized and vulnerable groups in more than 190 countries.

    Read more about the COVID-19 Tools Accelerator, our support of GAVI, the Vaccine Alliance, the Coalition for Epidemics Preparedness and Innovations (CEPI), and the COVAX initiative and innovative approaches to solve the pandemic, like our Common Trust Network – aiming to help roll out a “digital passport” in our Impact Story.

    COVID-19 and consumer health

    Despite all these factors and being a predominantly out-of-pocket expenditure driven market, growth in consumer healthcare in India has remained relatively slow. However, COVID-19 may be the watershed moment that propels Indian consumer health forward. The pandemic has already had a significant impact on how, what, and where healthcare is consumed. For example, industry sources indicate that the sale of vitamin C and such preventive drugs have almost doubled in 2020. While this should be expected to come down, it may not reach the baseline and points to a further increased focus on preventive care.

    Also, consumers are now more open to purchasing healthcare services online. While telemedicine has been the broadly quoted example, the same phenomenon has played out in other areas including fitness and weight loss services. Customers who previously needed an in-person sale for a weight loss product regime are now comfortable buying them online or through a video call. This instantly brings down the cost of acquiring a customer because the company does not need to rely on cost-intensive direct sales personnel anymore.

    Consumers have also become more conscious of what they ingest, be it food or medicines, with a trend to go organic/natural. Home-made remedies for preventing COVID-19 were very prevalent, and even government hospitals included herbal medicines as part of their treatment regime. This affinity to natural and perceived “non-toxic” products will continue and can create a significant product opportunities.

    Challenges for the sector

    While the sector promises a tremendous opportunity, it also demands a nuanced understanding and playbook to win. For example, a consumer seeking healthcare products may do so due to a variety of value propositions: Ayurvedic vs natural vs organic. While they may be served by a single product, different consumers are seeking different benefits from these products. Therefore clear consumer segmentation and product differentiation are crucial for success in the consumer health market.

    Additionally, too many start-ups in the space have burnt too much cash in their zeal to grow fast. In general, healthcare businesses are going to take a longer time to grow than other consumer businesses. Therefore, patience is key for building a sustainable business without suffering too much equity dilution.

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