General Electric (GE) India?s pampered child?GE Healthcare (GEH)?is in a phase of transition and enthusiasm at the moment. ?My aim is to have one GE representative physically present in each district in India in the next two years,? says V Raja, president and CEO (South Asia), GE Healthcare. Though the company currently covers 300 of the total 600 India districts, it has physical presence in only 150. Raja?s vision is undoubtedly very ambitious and there is a lot of planning going on in his mind. He plans to make GEH a billion dollar company within three years from $550 million right now. Strong backing from GE India, unique marketing initiatives, continuous localised strategies and its public private partnership (PPP) business model is what the firm is playing its cards on.

GEH today contributes close to 20% ($550 million) business for GE India and employs 30% (2,800) of GE India?s headcount. The forte of GEH is its integrated presence in engineering, technology, sales, services and manufacturing?which other businesses of GE India such as appliances, finance, aviation, media and entertainment might fall short of.

The local flavour

?What we sell in India, we also sell in other countries including the US. The features might be less in these medical equipments, but the quality is same,? says Raja with pride. ?Healthymagination? is the mantra of GEH in India . It has three goals?lowering the costs of healthcare, increasing the access of healthcare and improving the quality of healthcare. ?We also want to bring in innovative solutions aligned to the market needs which could be products that you make specifically for this market, solutions that you do specifically for this market. We believe we can help in creating some new markets,? notes Raja.

The example of some localised products is the ECG machine, Mac I, which is a low-cost portable unit that addresses the growing cardio-vascular disease burden. Another medical equipment is to address infant mortality in India, which is a low-cost baby-warmer-cum-incubator. At present, the company has 14 products which are locally developed.

GEH has been a successful example in the PPP model. Currently the company gets 70% revenues from the private sector and 30% from the government. Raja does not see this changing in the near future but believes that the government will drive more business in the coming years. ?The government should concentrate on healthcare regulations and not healthcare delivery,? feels Raja.

The focus of the government should be that healthcare reaches the poor at an affordable price and is accessible to them. This can be done through longer tenure for healthcare loans, more seats in medical colleges, assured healthcare insurance in a bigger way. Some of the examples of GEH?s initiatives in PPP are high-end imaging with government of Madhya Pradesh and improved and replicated the model in Gujarat. This includes a centralised telemedicine facility for the state of Gujarat. The firm has also signed an agreement with Phoenix Medical Systems India for design and distribution of low cost, high quality maternal infant care systems. GEH has also set up first Integrated Development Centre in Bangalore to conduct multi-country clinical trials, learn and develop new imaging agents or find new indications for existing agents. The studies are being done with Manipal Hospital.

A new area of opportunity for GEH is partnership with general physicians (GP) in the tier 2 cities and rural areas. The company is looking at this as a new market. It will and also does provide high technology products to these general physicians and explains to them the relevance of these equipments. Thus GPs can guide the patients better.

Example, GEH also created an ECG tool especially for the general physician level which could be understood by them better and they just don?t simply recommend patients to cardiac specialists.

Navi Radjou, executive-director of the Centre for India & Global Business at Cambridge University shows us the global picture, ?The western economy is over dependent on specialists in the urban cities who usually have a 4-5 months waiting period to attend the patients. This is because GP?s recommend patients to specialists very often. The solution lies in creating awareness amongst GPs and sending selected problems to high end specialists. The same philosophy goes for economies like India.?

Positioning in Indian market

?We survive on volumes, though the margins are very low in India,? confesses Raja. The company grew 12-13% in 2009 but this year it is growing at 25-30% and Raja feels the government business will help in even better growth rates next year.

The global healthcare business of GE stands at $16 billion and India right now is only 2-3% of it. But, GE Healthcare aims to be a billion dollar business by 2015. Raja also clarifies that as you compare India to a global market, potential is huge but the size comparatively is small.

GEH faces decent competition from companies like Siemens for its high-end products and Philips for mid and low end products. Industry analysts feel that GEH has an edge over the other two because of its strong marketing strategies and not doing research and development (R& D) in an old fashioned way. It is a company that believes in customer research, communication strategies and is market driven. Even now, GEH is concentrating on hiring people in each district for front-end related activities such as marketing and sales or market research.

Navi from Cambridge paints the apt picture, ?Healthcare equipment market is still in a nascent stage in India and the initial years might not give GE very high revenues. But, this is the time to experiment for the company and make long term investments?to reap the benefits in future. It is also a phase of patience for GE but at the same time they have to explore multiple business models and be flexible in the country.?