India's eHealth market holds $16 billion opportunity

10 February 2020 Consultancy.in

The burgeoning world of ‘eHealth’ in India could grow from just over $1 billion to more than $16 billion by 2025, according to new analysis from RedSeer Consulting. This growth comes against the backdrop of substantial growth across the healthcare sector driven by government policy and consumer awareness.

Digital health, or eHealth, spans a wide variety of digital products that have emerged in recent years to simplify the healthcare supply chain that is growing increasingly complex. The traditional set of stakeholders – suppliers, providers, consumers and insurers – is rapidly expanding as the suite and products and services evolve.

eHealth aims to ensure that the outpatient care remains smooth and accurate. Digital platforms are being designed to assist various outpatient care providers, including pharmacies, doctors and diagnostic centres. New platforms also benefit inpatient care providers, which refer to hospitals that offer a range of outpatient care services in-house.

eHealth market sizeRedSeer’s analysis confirms the growing move to digital platforms. In 2018, the eHealth market in India was worth an estimated 0.3 billion. This number is predicted to reach over $1 billion over the course of this year, and subsequently skyrocket in the lead up to 2025, reaching anywhere between $16 billion and $23 billion in value.

Breaking the figures down across the eHealth sector, most of this growth is expected to come in the e-pharma prescription space, specifically dealing with prescription drugs. Over-the-counter drugs will be the second largest segment by some distance in 2025, followed by diagnostics and consultation.

Online boom

The boom in eHealth will be driven, in part, by the rapidly expanding online shopping market in India. With an expected 850 million online users by 2025, a growing share of Indian households is engaging in ecommerce. According to RedSeer, usage in the eHealth space is similar to that in the eGrocery space, but lower in frequency than usage in the Foodtech space.

Consumer internet sections: Growth vs penetration

The firm lays out three potential scenarios for eHealth’s penetration in the Indian market over the next half a decade: a base, moderate and aggressive scenario. The base scenario involves a compound annual growth rate (CAGR) of 57% leading up to 2025, which will take eHealth permeation to 41 million households. This is the rate of growth that the eHealth sector has maintained thus far.

The moderate scenario involves permeation at the same rate as the eGrocery sector of 68%. As many as 57 million households will have access to eHealth in 2025 at this rate. The third scenario, or the aggressive scenario represents the scenario where eHealth grows at the same rate at Foodtech, or 74%, reaching 68 million households by 2025.

This growth is expected to unfold against the backdrop of growth in the healthcare sector. The government is prioritising the healthcare sector, and is aiming to increase spending in the sector from 1.6% of the GDP to 2.5% of the GDP over the next five years. “Moreover, increased awareness levels amongst consumers is further going to drive higher healthcare consumption levels,” states the report. 

eHealth Households Forecast

Other drivers of growth include positive receptiveness towards eHealth among consumers, as a result of the significant impact created by eHealth apps in enhancing the traditional outpatient care experience, and growing satisfaction of pharmaceutical firms (suppliers) as well as doctors (providers) about their partnerships with eHealth platforms.

In related news, a recent report by Bain & Company found that India's growing healthcare consumption market is driving major change in the life sciences industry. The consultancy also highlighted digitisation and platformisation as key trends in the landscape.


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