A macro Market Analysis of Indian Healthcare

With a growing Indian economy and multiplying middle class Indian Healthcare and Well- Being space appears very attracting. According to McKinsey Global Institute (MGI) 13% of the every household spending would go to healthcare and medical services market itself would be of 6,941 billion Indian Rupees (~ $154 billion) by 2025¹.


Indian Healthcare and well-being market space can be segmented in following way:

Domestic Healthcare Users

With 80% spending by private sector domestic healthcare users avail medical services like hospitalization, surgeries, and visiting doctors’ etc¹⁴. Although there are big healthcare providers in cities and there are also a number of small and medium providers. The latest trend in this space is retail healthcare. Currently with 40 million potential urban users, 4-5 % of total retailing (estimated to be US$ 700 billion¹⁷) contributes to healthcare with major providers pitching in this space⁶.   

Medical Tourism

McKinsey & Company estimates that Indian medical tourism alone will grow to $2.3 billion by 2012 (from US$ 350 million in 2006)⁹. As India provides low cost medical services patients across the globe (majority from west) fly to India and the current traffic rate is growing 30% each year¹¹. India can also be a worldwide hub for alternative treatment and Yoga with its rich heritage¹⁵. All most all medical tourists search internet before they take any decision²⁵.

Health Insurance

In the years 2002–2007, health insurance premiums increased five-fold from INR 6.75 B to INR 33 B (approximately $800 M). As per IRDA database in 2008 itself 3 million policies covered 24 million users which show that only 14% of the population is insured⁴. According to Boston Analytics the market is currently expected to reach INR 200 B (approximately $4.4 B) within the next five years⁵. The latest trend in this sector is retail health insurance where providers targeting to sell to individuals instead of through employers¹⁸.

Well-Being Space

With increasing income of middle class which itself is multiplying there is a huge unorganized market in well-being space as people are being more and more health conscious. There is an increasing trend of life style and chronic diseases.  According to recently published report by Boston Analytics 52% of respondent got engaged in work out programs and 42% changed diet in last 12 month⁵. The middle class is also being active in personal and beauty care. According to a BBC report⁸ “the Indian whitening cream market is expanding at a rate of nearly 18% a year. The country's largest research agency, AC Nielsen, estimates that figure will rise to about 25% this year - and the market will be worth an estimated $432m, an all-time high.” This, itself shows the potential of this market space. The wellness sector is poised to grow at a healthy rate of 19 per cent over the next five years with certain segments such as spas, beauty salons projected to grow at over 35 to 40 per cent⁷.

In this huge and fast growing market space there is also a targeted segment for a ‘Health and Well-being internet portal’ where users can avail necessary health and well-being information, collaborate with the providers, compare and buy related services and product from the providers. Stay tuned!

NB: I prepared it in around April 2010. For sources of information please find the first comment.

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