Analysis of the laboratory diagnostic services market in India
The relevance of research
Laboratory diagnostics is an important component in the chain of patient research. It is with the analyzes that the process of making an accurate diagnosis and the subsequent appointment of adequate and correct treatment begins. Based on laboratory tests, the doctor draws conclusions about the presence of a particular pathology, identifies viruses, and assesses the general condition of the body.
Purpose of the study
Analyzing the state of the market also identifying the factors affecting the market for laboratory diagnostic services in India
Content
Part 1. Overview of the Indian market for laboratory diagnostic services
1.1. Definition and Characteristics of the Indian Laboratory Diagnostic Services Market
1.2. Dynamics of the Indian market for laboratory diagnostic services, 2017-2021
1.3. Market structure by type of laboratory diagnostic services provided in India
1.4. The structure of the laboratory diagnostic services market in the Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity
Part 2. Competitive analysis in the market for laboratory diagnostic services in India
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of the consumption of laboratory diagnostic services
3.1. Estimated consumption of laboratory diagnostic services per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis
Part 4. Assessment of factors of investment attractiveness of the market
Part 5. Forecast for the development of the market for laboratory diagnostic services until 2026
Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
Research excerpt
Part 1. Overview of the Indian market for laboratory diagnostic services
1.1. Definition and Characteristics of the Indian Laboratory Diagnostic Services Market
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Laboratory examination is carried out in several stages, each of which affects the reliability of the result:
- The preliminary stage (preanalytical) is the collection and transportation of biological material to the laboratory.
- The analytical stage is the study of biological material in the laboratory. It is a set of manipulations performed with biomaterial samples for their study and determination of parameters in accordance with the type of analysis assigned.
- The final stage (post-analytical) is the communication of the results of the analyzes, as well as their interpretation.
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The basis of modern methods of treatment is the use of information about the individual characteristics of individual patients for a more accurate diagnosis and the appointment of the most optimal methods of prevention and treatment.
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In India, medical laboratory diagnostic services are provided by public medical institutions - scientific centers, clinics and hospitals, as well as commercial organizations - medical centers and independent laboratories.
1.2. Dynamics of the Indian market for laboratory diagnostic services, 2017-2021
Let us consider the dynamics of the volume of the laboratory diagnostic services market. The market volume is calculated based on the data of two segments: CHI and commercial.
Diagram 1. Dynamics of the market volume of laboratory diagnostic services, 2017-2021, billion Rs.
The dynamics of the volume of the laboratory diagnostic services market is growing. The number of laboratory tests carried out annually grew both in public medical institutions and in commercial laboratories.
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In 2021, the volume of the laboratory diagnostic services market increased by …% compared to 2020. Several reasons contributed to this growth: an increase in the incidence of coronavirus, which led to an increase in the volume of research aimed at its detection; implementation of deferred demand for medical services after the strict quarantine restrictions of 2020; the resumption of the provision of planned medical care by state medical institutions.
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In the commercial sector of laboratory diagnostics, there are both large network companies and small laboratories. Network laboratories conduct research on their own technological complexes, and biomaterial is collected in a network of medical offices. Such companies serve not only individuals, but also other medical institutions. The majority of market participants are represented by medical offices, where samples are actually taken, and the biomaterial for research is sent to one or more laboratories. Private market players attract customers with the level of service, the speed of providing results and the opportunity to do unique surveys.
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The development of private laboratory diagnostics is also affected by the imperfection of the provision of medical services within the framework of public medicine - queues, a narrow range of studies, a low level of service, while private laboratories make analyzes of any complexity, are ready to send their results via the Internet the next day, and provide services home visits, etc.
1.3. Market structure by type of laboratory diagnostic services provided in India
The ratio of service types was calculated by GidMarket based on a statistical analysis of the state of the laboratory service in India according to the federal statistical observation form No. 30 of Rosstat, data from the BusinesStat agency on the number of laboratory tests aimed at detecting coronavirus.
Diagram 2. Market structure of laboratory diagnostic services by types, 2021, %
In the overall structure of the market for laboratory diagnostic services, the main type of research is general clinical with a share of …%. General clinical studies include hematological and chemical-microscopic analyses.
Hematological studies include: a general (clinical) blood test (hemoglobin, erythrocytes, leukocytes, platelets, counting the leukocyte formula with a description of the morphology of formed elements, calculated indicators from a hematological analyzer or calculated by formula / nomograms), hemoglobin and its compounds, etc. .
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The second place is occupied by PCR and immunochromatographic analyzes (share of …%), which are direct methods of testing for a new coronavirus infection COVID-19. The PCR diagnostic method allows you to identify the genetic material of the virus (RNA) in human biological material; an immunochromatographic rapid test detects the proteins that make up the virus, which are recognized by the immune system.
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1.4. The structure of the laboratory diagnostic services market in the Union Territories
The structure of the service market by union territories was calculated by GidMarket in terms of value according to data on revenue from laboratory diagnostics by private commercial companies in the market, and estimated data on the share of revenue from diagnostics in the total revenue of each company.
Diagram 3. The structure of the provision of laboratory diagnostic services in India by Union Territories in 2017-2021, %
The absolute leader in the provision of laboratory diagnostics services is the Central Federal District with a share of …% in 2021.
It is in these centers that large laboratories are concentrated, the revenue of which is several times greater than that of other market participants. Over the period 2017-2021, the share of the district tends to decrease due to the emergence of private laboratories in the states of India and the implementation of the centralization of laboratory services, within which the integration of laboratory information systems is being carried out.
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1.5. Assessment of current trends and development prospects of the studied market
The market for laboratory diagnostic services in India is in a growth stage and has not yet reached saturation.
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The prospects for the market under consideration are as follows:
- continuation of informatization and centralization of laboratory research;
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1.6. Assessment of factors affecting the market
Macroeconomic factors affect the dynamics of all sectors of the Indian economy, including the market for laboratory diagnostics services. The main groups of factors are: economic, political, social and technological.
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Thus, experts disagree on the real dynamics of India's GDP in 2022: a decrease of …%-…% is forecasted. At the same time, the forecast for the current year is characterized by an extreme degree of uncertainty, experts note that the real drop in GDP will depend on the duration of India's special operation in Ukraine and on the duration of sanctions. Currently, the factor of the decline in GDP in 2022 has a negative impact on the market.
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The situation on the exchanges began to change after the news about the transfer of settlements on gas contracts in rupees. As of April 25.04.2022, 2022, the average monthly dollar exchange rate in April 79,5 is Rs.
Given that laboratory testing equipment and reagents in most cases have to be purchased from foreign manufacturers, the depreciation of the rupee against the dollar and the euro has a strong negative impact on the market in question.
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One of the major problems that laboratories are facing in 2020 is the lack of consumables for research, namely plastic. Many organizations are testing for COVID-19 almost simultaneously, and suppliers' warehouses are almost empty. Finding a manufacturer that has the necessary registration certificates and the ability to import its products was not easy: for example, for PCR, you can only use DNA-free plastic products that are not manufactured in India, and during the pandemic, foreign factories primarily served domestic markets .
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For the period 2015-2021, there has been an increase in the share of medical services in the structure of paid services of the Indian population. Despite the decline in real money incomes of the Indian population over the analyzed period, the share of medical services in 2021 compared to 2015 increased by … percentage points.
This trend is positive both for the paid medical services market in general and for the laboratory diagnostics market in particular.
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The morbidity of the population is characterized by the number of patients with a diagnosis established for the first time in their life, identified during the year when applying to a medical institution or during a preventive examination.
Statistical data indicate an increase in the incidence of the population over the period under review. In 2020, the number of registered diseases diagnosed for the first time in life increased by … % compared to 2019.
The increase in the number of diseases leads to a growing need for the fastest possible diagnosis of such diseases for the timely selection of optimal therapy, which contributes to the development and growth of the market for laboratory diagnostics services.
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Let's present the results of the analysis of factors influencing the market in the form of a STEP-analysis table.
According to the results of the performed STEP-analysis, macro-environmental factors have a negative impact on the laboratory diagnostic services market to a greater extent.
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1.7. Analysis of sectoral indicators of financial and economic activity
Important data for analyzing the state of the industry is the dynamics of such indicators as profitability, liquidity, business activity, and financial stability. Industry indicators are calculated by GidMarket on the basis of financial ratios for the largest market operators. For 2021, an estimated indicator is presented, calculated on the basis of retrospective data.
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Table 4. STEP analysis of factors influencing the market for laboratory diagnostic services
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Chart 12. Profitability before tax (profit of the reporting period) in the field of laboratory diagnostics services in comparison with all sectors of the Indian economy, 2017-2021, %
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Let's consider the liquidity indicators in the industry of laboratory diagnostics services. The indicator of current liquidity is a measure of the solvency of the organization, the ability to repay the current (up to a year) obligations of the organization.
The estimated indicator of the current liquidity of a normally operating solvent legal entity must be at least 1, i.e. it is necessary that the total value of current assets be greater than the amount of short-term liabilities.
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During the period under review, the indicator for all sectors of the Indian economy did not fall below … , which indicates a sufficient level of absolute liquidity in the country as a whole. In the field of laboratory diagnostic services in 2017, the value of absolute liquidity was below the norm, which indicates an insufficient level of solvency of enterprises in this period. In 2019-2021, on the contrary, the indicator was significantly higher than the normative value, which indicates an irrational capital structure: the share of non-performing assets in the form of cash and funds in accounts is too high.
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The dynamics of the average turnover period of receivables in the period from 2017 to 2020 tends to decrease, the maximum value is observed in 2017 - … days. days Compared to 2017, the indicator decreased in 2020 by … times, which is a positive trend.
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The indicator for the considered sector of laboratory diagnostic services was above the normative value of … % during the entire period, and also exceeded the level of the coefficient for all sectors.
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Part 2. Competitive analysis in the market for laboratory diagnostic services in India
2.1. Major players in the market
There are three groups of market participants that compete in the laboratory diagnostic services market:
- Clinical diagnostic laboratories of state healthcare facilities (including federal and departmental ones), which provide the population with free / paid services for clinical laboratory diagnostics.
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Competition forces major players in the laboratory analysis market to offer their customers a wider range of studies, new types of services and actively introduce modern technologies in their activities.
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2.2. Market shares of the largest competitors
The rating of market leaders is built taking into account the divisions of one medical network.
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3.3. Description of consumer preferences
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Consumer preferences were analyzed by GidMarket based on patient reviews of various clinics providing laboratory diagnostic services. All mentions in the reviews are grouped into the main criteria reflected in Diagram 20.
Diagram 20. The importance of criteria for choosing a clinical diagnostic laboratory by consumers, points
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3.4. Price analysis
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During the entire period, prices for laboratory diagnostics services were growing – CPI annually exceeded …%. Over the specified period, the largest price increase occurred in 2021, the growth rate amounted to …%, which was partly due to the unstable economic situation in the specified period and the depreciation of the rupee. The smallest increase (…%) falls on 2018.
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Part 5. Forecast for the development of the market for laboratory diagnostic services until 2026
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Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators
In the human body, there are many different processes that ensure its vital activity. The slightest violations of their natural order indicate the presence of diseases and pathologies. It is almost impossible to determine such changes visually. Therefore, in the presence of any ailments, medical specialists use laboratory diagnostics, modern methods of which contribute to obtaining the most informative data. Thanks to these studies, 80% of information about the state of health can be obtained.
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Diagrams
Diagram 1. Dynamics of the market volume of laboratory diagnostic services, 2017-2021, billion Rs.
Diagram 2. Market structure of laboratory diagnostic services by types, 2021, %
Diagram 3. Structure of the provision of laboratory diagnostic services in India by Union Territories in 2017-2021, %
Diagram 4. Dynamics of India's GDP, 2013-2021, % to the previous year
Chart 5. Monthly dynamics of the US dollar against the rupee, 2017-2022 (Jan-Mar), Rs. for 1 US dollar
Diagram 6. Dynamics of the share of medical services in the structure of paid services of the population of India, 2015-2021, %
Chart 7. Dynamics of the population of India, as of January 1, 2013-2022 , million people, %
Diagram 8. Population forecast for India, for the period 2023-2026, million people
Diagram 9. Dynamics of real incomes of the population of India, 2014-2021, % to the previous year
Diagram 10. Dynamics of the number of registered diseases in patients diagnosed for the first time in their lives, 2011-2020, at the end of the year, million units
Diagram 11. Dynamics of the number of laboratory diagnostics personnel, 2015-2020, thousand people
Chart 12. Profitability before tax (profit of the reporting period) in the field of laboratory diagnostics services in comparison with all sectors of the Indian economy, 2017-2021, %
Diagram 13. Current liquidity (total coverage) in the field of laboratory diagnostic services for 2017-2021, times
Diagram 14. Business activity (average term of receivables turnover) in the field of laboratory diagnostic services, for 2017-2021, days days
Diagram 15. Financial stability (security of own working capital) in the field of laboratory diagnostics services, in comparison with all sectors of the Indian economy, 2017-2021, %
Diagram 16. Shares of the largest competitors in the laboratory diagnostic services market in 2021, %
Chart 17. Dynamics of the total revenue of the largest operators of the laboratory diagnostics services market (TOP-5) in India, 2017-2021, billion Rs.
Chart 18. Consumption of laboratory diagnostic services per capita, 2017-2021, Rs./person
Figure 19. Life cycle stage of the market for laboratory diagnostic services
Diagram 20. The importance of criteria for choosing a clinical diagnostic laboratory by consumers, points
Diagram 21. Forecast of the volume of the market for laboratory diagnostics services in 2022-2026, billion Rs.
Tables
Table 1. Methods of laboratory diagnostics
Table 2. Forecasts by various sources and experts on real GDP in India in 2022-2023 (base scenario), %
Table 3. Parameters of franchising programs of the main companies providing services in laboratory diagnostics
Table 4. STEP analysis of factors influencing the market for laboratory diagnostic services
Table 5. Gross Margin of the Laboratory Diagnostic Services Industry Compared to All Industries in India, 2017-2021, %
Table 6. Absolute liquidity in the laboratory diagnostic services sector compared to all sectors of the Indian economy, 2017-2021, times
Table 7. Main companies participating in the laboratory diagnostic services market in 2021
Table 8. Basic information about participant No. 1 of the laboratory diagnostic services market
Table 9. Basic information about participant No. 2 of the laboratory diagnostic services market
Table 10. Basic information about participant No. 3 of the laboratory diagnostic services market
Table 11. Basic information about participant No. 4 of the laboratory diagnostic services market
Table 12. Basic information about participant No. 5 of the laboratory diagnostic services market
Table 13. Consumer price indices in the laboratory diagnostics market in India in 2017-2022 (Jan.-Mar.), %
Table 14. Average prices in the laboratory diagnostic services market by Union Territories, 2020-2022 (Jan-Mar), Rs.
Table 15. Assessment of factors of investment attractiveness of the laboratory diagnostic services market
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