Healthcare Retail Opportunities In India - Kapil Khandelwal, EquNev Capital, www.equnev.com
Picking up pace
Kapil Khandelwal says that healthcare retail emerged as a
concept around two years ago. However, its convergence
with cross-domain sectors like retail, education and
manufacturing is a very recent development
Over the last few years, the Indian retail, healthcare and Organised retailing
information communications and technology (ICT) In urban India, it is estimated that over 200 retail stores
sectors have undergone rapid growth and transition to and malls are in the pipeline, with over 200 million
meet the western standards of quality and service square feet of space. Under the current circumstances,
delivery. However, the current economic slowdown is with the lowering of rental yields and higher cost of
forcing each of these sectors to rethink their business finance, it is imperative to innovate newer retail models.
and operating models and innovate.
Healthcare retailing and care delivery
Current trends and challenges ahead With approximately 4-5 percent of the overall organised
The current economic scenario has created several retail space in urban India dedicated to healthcare and
systemic shifts in the way retail, healthcare and ICT allied products and services, there is potential to grow
players can leverage the emerging consumer trends and be at par with our western counterparts.
ICT players and solution providers in India have
introduced new low-cost solutions that can serve a
potential population base of over 70 million in urban and
semi-urban India. The role of ICT services is expected to
grow the distribution of healthcare delivery outside the
traditional setting of the doctors clinic. With the kick-off
of national ID initiative announced in the recent budget,
a unique ID would serve in enabling a portable
healthcare record system in a seamless health
information system linked to the unique ID by the
healthcare and ICT solution providers.
Consumer needs and preferences
There are potentially over 40 million households in
urban and semi urban areas, predominantly in the
northern, western and southern Indian states that have a
high risk of chronic diseases, given the genetic
disposition. With consumerism in healthcare,
households in SEC segments A and B have identified
issues to access and price their wellness, preventive,
curative and chronic healthcare, pharmacy and
With the current economic slowdown, there have
been increased preferences to switch and delay wellness
and preventative care products and services. Consumers
also prefer providers who can give appointments the
same day, consult over the phone, or extended hours and
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on weekends or holidays in the same shopping vicinity,
avoiding long trips. Clearly, price and proximity matters
as consumers are altering their shopping patterns for
price, availability and access. Some of the above
emerging trends in the sectors are enabling a
convergence and a paradigm shift towards health retail
2.0. that leverages on the convergence of retail and
healthcare delivery integrated with ICT solutions.
Healthcare retail 2.0: Conceptual framework
Healthcare retail 2.0 emerged as a concept around two
years ago. However, its convergence with cross-domain
sectors like retail, education, manufacturing, etc is a very
recent development. There are several key characteristics
that emerged as a result of this:
A new location or a way of connectivity between
patients, and patients with their care provider
The sharing and transparency of information about
care, health and providers, and the support in choice and
delivery of healthcare care in a retail format
The self-management and access to health
information of individual patients in any health status,
whether healthy or chronically sick
Interoperability of health information, which benefits
the sharing and access to this information leveraging ICT
technologies from one service provider or location quick consultation and turnaround for the whole
to another spectrum of healthcare, right from wellness to chronic
The empowerment of patients through widespread disease management. Such clinics would have specialist
and richness of information to make choice on the physicians available for consultation virtually, for referral.
location of his care and its setting
The open conversation about and innovation of health Emerging retail formats
care through consultation of all stakeholders and Some of the newer formats that would emerge out of
application of a new business model based on multiple health retail 2.0 convergence would be ones that create
value creation new innovative and disruptive delivery models of
Growing role and importance of various players and healthcare in India. These would include:
intermediaries, who enable the conversation between In store clinics:
patient and caregiver, at the same time contributing to it These clinics would look like urgent care clinics that
would be located in retail/pharmacy chains with a space
The branded healthcare clinic chains have been in of 100 to 200 sq feet. The nurse/general practitioner
India for a few years with well established names such as would have access to specialists for referral to the hospital
Apollo, Manipal, Fortis, Kaya, Ayush, VLCC etc. to name chain to which it is affiliated. These clinics would be
a few. Newer ICT-enabled models such as EMRI, HMRI, operated seven days a week with extended hours.
Healthcare Magic, etc have also emerged as a Medical spas:
complement to delivering healthcare consultation and These would potentially be offering lifestyle oriented
response remotely. Initiatives in rural India are already consultations within salons and spas. They would address
ongoing to ensure that the village entrepreneur who is areas from nutrition, exercise to massage, cosmetic
operating the Information Kiosks can also enable surgery etc. These outlets would be affiliated to beauty
ICT-enabled healthcare delivery. Diagram 1 in this article and cosmetic counters.
provides a contextual frame of reference for healthcare Express health and diagnostic clinics:
retail 2.0 operating model. Typically staffed by a nurse or a general practitioner, these
With potential retail space available in metros, urban are walk-in clinics to facilitate quick diagnostic and check
and semi urban at lower rentals, there is potential for a up for non-emergency care for preventative and chronic
business model of conveniently providing standardised, care.
fast, limited services at transparent prices by retail chains Health and wealth counselling:
in partnership with pharmacy or healthcare clinic chains. These clinics would provide specialist counselling
These clinics would be enabled by technology to facilitate sessions that would involve both a health assessment and
RETAIL BIZ JULY 2009 25
insurance/wealth management advise including product Cost:
solicitation. The formats here could be single brand While consumerism is forcing transparent low-cost
or multi-brand. models to emerge, successful models would be the ones
Specialist clinics: that can clearly provide value at lower operating costs. A
Linked with particular brands and products, these clinics transparent menu card pricing approach for the services
would offer scope for augmentation through specialist would drive traffic. While costs and time are critical
consultations with dermatologists, dietician, dentists etc. elements of this model, retailing of healthcare would need
Call center-based disease/case management with
b to create an ambience which is in line with these.
community clinics: Standardisation of services:
This model emerged in the US where case managers are Care delivery models that would have standarised process
assigned to the patient who is chronically ill. In case of would have the biggest impact on the cost and value
any consultation or walk-ins required, the patient walks delivered. These could be stretched further to include
into the in-store clinics in their community. quality measures to improve on the services and the care
Kids health and wellness: outcomes.
These clinics are within children stores that can provide Time and place convenience:
easy diagnosis for common ailments and also One of the critical riders of success of such models is the
vaccinations and inoculations that are due. ability to provide seamless 24x7 anytime, anywhere
service. ICT technologies coupled with location of
Key success factors for healthcare retail 2.0 such clinics would augment the value of the
While the jury is still out there to evaluate the emerging services delivered.
shifts in healthcare delivery innovation in India, some of Branding:
the critical success factors to this emerging model for care Services co-branding with healthcare products/services
delivery include: provider would definitely positively associate with such
Integration with hospital provider: services and also enable additional foot falls into the retail
Consumer confidence to such disruptive innovation in outlets.
healthcare delivery would be instilled if there is a Information technology:
branded hospital provider supporting the seamless Affordable, compact diagnostic devices that are
delivery of care. connected with healthcare ICT systems and evidence-
Wellness Health Status Disease Treatment
& Prevention (CDC Adapted) & Management
Heally Vulnerable Aﬀected Sick (Acute) Sick (Chronic)
Work Employee clinics
Outpatient clinic Healthcare retail 2.0
Emerging Urgent care clinics (After hours)
26 RETAIL BIZ JULY 2009
based health information systems are the key to success in India, these clinics would be low-cost access points for
for any retail-based healthcare delivery model. customers and opportunity to augment their service
Continuity of care: offerings.
As the retail models of healthcare delivery would evolve Venture funding and investors:
over time to become mainstream, the need for continuity The key driver for growth of such innovative models for
of care for conditions is important. Linkages through healthcare delivery would be funding for such outlets.
hospital tie-ups and information systems is an important There is potential for PE and VC firms to explore such
aspect here. models for entrepreneurial investments in healthcare
that provide quicker break even and exits in less than
Key stakeholder perspectives three to four years timeframe.
The win-win from various stakeholders in the emerging Quality accreditation agencies:
healthcare retail models would have to be analysed to Agencies like NABH, JCIA etc would have to evolve
ensure that tweaks are made appropriately for long-term approaches to ensure that these models are accredited to
success: provide consumer confidence.
Retailer/mall host: Consumers:
The retail player gains through participation in the The healthcare retail models offer consumers to decide
model by ensuring increased foot falls and private label how, when, where to seek healthcare services from a
sales. Apart from lease rentals and/or profit sharing, wide range of options and formats. Most conventional
other incremental revenue streams that would accrue healthcare providers may disagree about what the
from this model include shelf slotting fees, co-promotion patients think and require. However, the innovation life
and sponsorship. cycle in retail takes three to five years to mature as
Healthcare retail operator: compared to over 15 years in healthcare and hence this
While the economics for the healthcare retail operator could lead to breakthroughs in meeting consumer
are challenging, the operating costs have to be managed requirements.
tightly. The pricing strategy would have to ensure that With the successful emergence of various
there are adequate number of customers averaging four healthcare retail formats and transparency of
to five per hour. information about care, health and providers, and the
Healthcare insurance providers: support in choice and delivery of healthcare care in a
While outpatient visits are currently not covered by many retail format, there is nothing can that stop healthcare
of the health insurance providers in India. These models retailing in India from moving forward and achieving
could enable newer products that would cover outpatient an 'at par' status with its western counterparts in the
health insurance as well as tie-ups for health-wealth years to come.
counselling setting to solicit health insurance coverage.
Disease management providers: The author is one of India’s leading experts in healthcare and
As new models of chronic disease management emerge life sciences IT in Asia Pacific and emerging markets.
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