The challenge for every healthcare provider is the same — to strike a balance between the care needs of patients and expectations of regulators with the job to maintain a healthy financial score.
It’s a tightrope walk but Amazon is not known to get many things wrong.
Last week, it announced the launch of Amazon Diagnostics, an at-home healthcare service that allows customers to schedule lab tests and receive reports online via the Amazon app.
Think of it as a fully integrated outpatient care experience on Amazon. While partner Orange Health handles the diagnostic operations — from assigning their phlebotomists to running the labs and pricing the tests — Amazon provides the digital platform with access to a large number of users. “Customers can seamlessly consult doctors through Amazon Clinic, schedule diagnostic tests with Amazon Diagnostics, and order the prescribed medicines via Amazon Pharmacy,” says Jayaramakrishnan Balasubramanian, category head, Amazon Medical, India.
Available at the moment in six cities (Bengaluru, Delhi, Gurgaon, Noida, Mumbai and Hyderabad), the service covers more than 450 PIN codes and offers access to over 800 diagnostic tests.
Experts reckon that Amazon’s entry will set the bar higher in at least two areas in India’s `1-lakh-crore diagnostics market — speed of delivery and structure of service. “A 60-minute pickup and 6-hour report is not just convenient, it is a direct challenge to how fast incumbents can operate,” says Somdutta Singh, founder & CEO, Assiduus Global.
Amazon’s data capabilities could also allow hyper-personalisation of health offerings, predictive recommendations, and loyalty-driven health plans over time. “The company’s entry could democratise access and redefine consumer expectations of tech-enabled care delivery,” points out Yasin Hamidani, director, Media Care Brand Solutions.
Amazon is clear it doesn’t wish to fight the war on price alone. But this won’t be an easy market to crack.
Prescription for growth
As things stand, a new entrant faces a largely well-served and competitive market with limited scope for differentiation. Consumers are driven by trust, says Vishal Arora, chief of business transformation & operational excellence, Artemis Hospitals, and are particularly concerned about the confidentiality of their health data.
That apart, the market is fragmented, with many small labs operating independently. Akshay Ravi, partner, healthcare consulting, EY Parthenon India, points out that Amazon will have to fight competition on multiple fronts. First, there are the legacy players like Dr Lal PathLabs, Metropolis, Agilus (formerly SRL Diagnostics) and Thyrocare, that together drive approximately 7,000 crore of the revenue (or 12% of the 55,000-60,000 crore pathology market). Then there are regional (Suraksha, Medgenome) and new-age health-tech players (Tata 1mg, Pharmeasy), besides a bunch of pharma company-linked (Pathkind, Lupin Diagnostics and so on) and hospital chain-led ones (Apollo Diagnostics, Max Labs, Manipal Healthmap), that drive another `4,300 crore of revenue (or 7-8% of the pathology market).
Increasing competition means slowing growth, especially in key metros and tier I cities (estimated to have come down from 12-15% more than two decades ago to 9-11% today). “What shall set Amazon apart is how it would use technology to make healthcare simpler and more accessible and at a price point that’s hard to ignore,” Arora adds.
In all this, Amazon’s biggest advantage would be its huge customer database. “This could allow Amazon to nudge users toward the right tests at the right time, bundle them with prescription refills, or surface reminders post-consult,” says Assiduus’ Singh. In other words, the company could potentially shift diagnostics from being a reactive task to a part of everyday health, powered by the same systems that drive product discovery and delivery, she adds.
“Incumbents must watch for Amazon’s tech-first model — AI-driven diagnostics, home sample collection optimisation, and subscription-based care — which could redefine consumer expectations,” warns Surjeet Thakur, founder & CEO, TrioTree Technologies. The focus must move from transactional lab services to holistic digital health experiences, he adds. Don’t be surprised if there is consolidation, with labs teaming up with logistics startups or generally investing more and more to gain last-mile control.
“To succeed, the brand’s ability to feel quietly competent in this space will matter more than loud marketing,” says Ambika Sharma, founder and chief strategist, Pulp Strategy.