As large conglomerates gradually enter the diagnostics market, dominant players such as Dr. Lal Pathlabs and Metropolis Healthcare are developing plans to maintain their leadership position in the game.
The diagnostic majors are eyeing inorganic growth for their network expansion, further intensifying the competition. For example, Dr. Lal PathLabs acquired Suburban Diagnostics in 2021 for Rs 925 crore in Western India. It also plans to expand into South India with a reference lab in Bangalore which is a major market for Metropolis Healthcare.
In the same year, Metropolis Healthcare acquired Dr. Ganesan’s Hitech Diagnostic Center (Hitech) and its subsidiary Centralab Healthcare Services (Centralab) for Rs 636 crore. SRL completed the acquisition of DDRC-SRL JV in April 2021, allowing it to consolidate its market share in Kerala and strengthen its B2C presence.
Hyderabad-based Vijaya Diagnostics also said it plans to expand into Andhra Pradesh and Telangana, and is keen to acquire lucrative diagnostics companies in eastern India to explore business opportunities. In the region.
Diagnostics companies are focusing on new segments and trying to penetrate new geographies that have become all the more important after the pandemic. Dr. Lal PathLabs focuses on Tier II and Tier III cities, especially in the northern and eastern regions of India, as well as metros and Tier I cities in southern and eastern India. west of India. With covid testing no longer a profitable area, Dr. Lal PathLabs aims to invest in IT and digital and focus on wellness packages. The noted diagnostic channel also focuses on bundled and preventative health check packages.
“We identify and focus clinical segments such as allergies, autoimmune diseases, etc. We also want to strengthen the online retail segment. As far as our expansion plans are concerned, we want to look to the South and West markets,” says Dr. Om Manchanda, Managing Director, Dr. Lal Pathlabs. “India is a very under-penetrated market. After Covid, the penetration of diagnostics will increase as the practice of medicine becomes more evidence-based, especially in Tier II and Tier III cities,” he says.
Likewise, for SRL Diagnostics, another major player in diagnostics, the expansion of the test menu to offer more diagnostic solutions, the expansion of the network to gain market share and new customers, and the constant supply of high-quality diagnostic services continue to drive growth. Developing a strategy for growth, in FY22, SRL added over 1,000 centers to its network and in the first quarter of FY23, it added approximately 250 more.
“These new touchpoints are part of our strategic growth plan. We are investing in our capabilities to offer services through digital touchpoints and strengthening our home collection units to respond to changing customer behavior post-pandemic,” says Anand K. CEO, SRL Diagnostics.
According to market analysts, India’s diagnostics industry is estimated at Rs 675 billion, with the industry growing at an annual rate of 8-9%. Domestic players hold around 15% of the market share and hence there are ample opportunities for growth. Recent acquisitions by large laboratory chains and the entry of new players will allow the industry to consolidate at a faster pace.
Metropolis Healthcare Ltd has also made clear that it aims to develop and expand the reach of oncology, prenatal testing, transplant immunology and infectious and chronic diseases through next generation sequencing and intelligence artificial.
“To achieve this goal and catalyze optimal patient care, we have created an innovation cell for molecular genomics, super specialized pathology and the expansion of companion diagnostics. We will continue to build our capacity in different areas and look for more opportunities to offer ‘affordable’ testing to patients as we move further into Tier 2 and Tier 3 cities,” said Ameera Shah, Developer and Director. General of Metropolis Healthcare. ltd.
Shah is aware that over the past 2-3 years due to the Covid-19 pandemic, the industry has gone through several structural changes and consumer behavior towards health has changed to a greater extent. Shah noted that new players have jumped into diagnostics and are primarily focused on the bigger cake in the “Chronicle and Wellness” segment.
“People have become more health conscious and have started to proactively invest in health packages and want to keep tabs on their health. Therefore, our goal will now be to focus on 100% of the population, which includes chronic and wellness patients. We aim to target them through well-priced wellness packages, loyalty programs, etc. says Shah.