The digital health of e-health market is made up of three segments viz., online pharmacy to order medicines online, online doctor consultation, and online diagnostics including test booking, home sample collection.
Health-tech or e-health market in India is likely to see a spurt in its user base (households) from around 4.3 million in 2020 to anywhere between 41 million and 68 million — growing at a CAGR of 57 per cent to 74 per cent. In terms of size, the market is expected to grow from $1.2 billion to $11-19 billion by FY25, as per a RedSeer report. The growth will come on the back of 60 million such online shopping households willing to try digital-health services out of which 4.3 million are already using e-health. These 60 million are around 65 per cent of 90 million households or around 135 million online shoppers out of 580 million people having internet access in India.
The optimistic growth targets are expected amid the regulatory uncertainty in which the online pharmacies continue to operate. “e-pharmacy is well covered under existing laws. There is no violation of any existing act and rules. However, there are certain difficulties that the sector has been facing towards ease of doing business due to regulatory uncertainty. This is because of the pending Draft e-Pharmacy Rules,” FICCI had said last month.
The 4.3 million users are “regular online shoppers and are primarily present in metro cities. Most of them are convenience seekers, who enjoy the timely at-home access to e-health services,” the report titled Indian eHealth at a Tipping Point said. Non-users who are willing to opt for online healthcare services also seek high convenience but but “do not currently use the e-health apps because of limited awareness and serviceability of e-health in the areas where they reside. However, with eHealth apps expanding to Bharat, such limitations should be resolved in the coming years,” it added.
The digital health of e-health market is made up of three segments viz., online pharmacy to order medicines online, online doctor consultation, and online diagnostics including test booking, home sample collection. India’s e-health market has added multiple players over the years including 1mg, Practo, Pharmeasy, Medlife, NetMeds, DocsApp, Medplus, Healthians etc.
Among Medlife, 1mg, PharmEasy, and NetMeds, e-pharmacy is the biggest business category dominated over 85 per cent of the GMV share as on December 2019 while online diagnostics as a segment had a minuscule GMV share of over 13 per cent for Medlife, 14.5 per cent for 1mg, 7.7 per cent for NetMeds and 1.5 per cent for PharmEasy. The share of online consultation was even lesser at 0.8 per cent, 0.4 per cent, 2 per cent for Medlife, 1mg, and NetMeds respectively.
“Medlife is poised to end this year with a GMV run rate of $220 million. We believe E-health & not just e-pharmacy is the mantra for this sector. Our lab diagnostic business scale-up, expansion of our private label portfolio and the e-consultation platform will allow us to achieve stellar growth from these additional areas. We target to be an over $2 billion player by 2024,” Ananth Narayanan, CEO and Co-founder Medlife said in a statement.
E-health market is also better placed in terms of contribution margin in comparison to other sectors including online retailing, e-grocery, and foodtech. The gross revenue or take rate ( as a per cent of GMV) is highest at 29.7 per cent in e-health market vis-a-vis 10.7 per cent, 16.9 per cent, and 26.8 per cent for the other three markets. The contribution margin in four sectors less costs related to supply chain, fulfilment costs, payment gateway, and marketing including discounts stood at minus 5.5 per cent for e-health, minus 13.6 per cent for e-retail, minus 18.7 per cent in online grocery, and minus 18.5 per cent for foodtech.