Technically, the term e-commerce refers to the use of electronic information technologies to conduct business transactions among buyers, sellers, and other trading partners. Experts believe that the objective of e-commerce in healthcare is to provide information and generate revenues through sales of products and services.
Small but significant
E-commerce is used by many hospitals in India to varying degrees. Almost all tertiary care hospitals in the private sector and 70 per cent in public sector have functional websites; providing information on the history of the hospital, doctors/consultants working there and the services provided along with the contact details. Some hospitals conduct dedicated e-commerce activities through their website.
Dinesh Madhavan Director, Healthcare Services, HCG |
“E-commerce is a sunrise sector in healthcare, mostly used by tertiary care providers. The online information gives access to users, be it patients or primary physicians, about the services and products of the provider,” explains Dinesh Madhavan, Director, Healthcare Services, HCG Hospitals. HCG Hospital Group has a huge online presence and generates a fair amount of revenue from its collective e-commerce activities.
Rajiv Katoch, GM Marketing, Global Hospitals Mumbai says, “E-commerce has changed the way healthcare is delivered. Patients today are more active in their treatment-related decision making. With web access they can make an informed decision about their treatment, they understand the ailment better and seek good service providers.” While the flagship hospital under the global banner has more web presence, the newly operational Global Hospital Mumbai is slowly and steadily building its web presence.
“E-commerce has definitely added another dimension to marketing hospitals and they are exploring this channel seriously,” says Vinay Kaul, VP-Sales and Marketing, Columbia Asia Hospitals.
Current market in India
Rajiv Katoch GM Marketing, Global Hospitals |
India has a large and rapidly growing middle class, accelerating Internet access and a staggering penetration of mobile phones making it a hot-pot of Internet-based activities. Currently, India has an Internet user base of about 150 million users. However, the penetration of e-commerce is low as compared to developing countries but is increasing at a steady pace. A report released in mid-2013 by the Internet and Mobile Association of India (IAMAI) and IMRB International valued the e-commerce market in India at Rs 47,349 crores in December 2012. The same report predicts that e-commerce market in India is expected to grow by 33 per cent to reach Rs 62,967 crores by the end of 2013. India has close to 10 million online shoppers and is growing at an estimated CAGR of 30 per cent as compared to a global growth rate of 8–10 per cent. Electronics and apparel are the biggest categories in terms of sales. Popularity of Flipkart, the country’s most prominent e-commerce player and other brands like Makemytrip, Jabong, Shaadi.com, Naukri.com, etc,. have reached consumers in non-metros and smaller towns, who have embraced this concept, many on their mobile phones.
Healthcare e-commerce is very different from retail, but it holds much promise and is set to grow rapidly. There are no studies looking at the size of e-commerce in healthcare services but experts opine that a 300-bed tertiary care hospital specialising in high-end treatment can generate around Rs 75 lakhs per month from its e-commerce activities.
Leading the pack
Ankur Warikoo CEO, Groupon India |
Hospitals sound positive. Some of the biggest hospitals in India are now venturing into e-commerce and others are betting big on it too. While TopDoctorsonline, Ask4healthcare, Rx HealthCare Magic are old players, Surgerica, MediAngels and Ehealthaccess are the new players exploring this segment. There are many third party vendors selling healthcare services for these hospitals too. Companies like Groupon and SnapDeal are now offering healthcare services among other things. “Around 7 -10 per cent of our merchants are healthcare providers,” reveals Ankur Warikoo, CEO, Groupon India. “Some of the bigger brands who have associated with us are Fortis Hospitals, GenX Diagnostics, Oncquest, Vasan Eye Care, Visual Aids Center, Thyrocare, Manipal Hospital, Medinova Laboratories and more,” he adds.
Customer behaviour
Shrikant Soman CEO, Bhatia Hospital |
There is a lot of scepticism among marketing managers on how patients behave online. While some experts feel that patients are not interested in buying services online others believe that it will be a better revenue generator in future. “As of today, e-commerce does not have much significant impact on the business of the hospitals,” says Shrikant Soman, CEO, Bhatia Hospital, Mumbai. “It has major impact on the areas of medical tourism. However this is only the beginning. Going forward to the next three years, we expect e- commerce to come into prominence,” he adds.
Bourn Hall India’s MD and CEO, Gaurav Malhotra says, “E-commerce may work for a limited number of speciality.” “It is a short-term marketing tool to bring in footfalls but may not guarantee repeat business,” he adds. According to Malhotra only health check-ups, dental services and skin and beauty services can benefit from e-commerce.
Concurring to his thoughts Katoch says, “Treatment decisions are not impulsive they are very emotional in nature and include all stakeholders, therefore patient may not be willing to buy it online.” He further adds that e-commerce may benefit preventive service providers but again the industry does not have uniform costs of services. In addition, costs of tests or services are not exhibited online for patients to compare therefore it’s difficult to make an immediate buying decision.”
Contrary to this, Madhavan says that the more complicated an ailment the more information is sought by the patients. If there is stigma related to a disease patients like the anonymity that the Internet provides and thus prefer online information search and consultation. “Patients who seek tertiary care may combine chat and buying activities but in wellness – all categories – people are willing to buy online,” informs Madhavan.
“Groupon thought it might be a good idea to offer a platform for pushing healthcare services; which otherwise people put on the backseat,” says Warikoo. “If a person gets up in the morning and receives an email with a deal on full body check-up at his/her doorstep by a reputed diagnostics brand at an unbeatable price; which includes diabetic screening, cholesterol, liver, renal, thyroid profile, complete haemogram and more, they tend to act on it impulsively,” he explains. “We were ourselves surprised when a lasik eye surgery deal with one of India’s foremost eye care centres sold 150+ Groupons which was priced at Rs 25000 each. 1000s of Groupons for skin care treatments, weight loss deals, dental check-ups and professional dietician services have been sold in the past one and a half years. The best part for the service providers is that instead of paying upfront for advertising, they only have to pay when the customer walks in,” he further adds.
Ever evolving
“Today e-consultations have become common. We have many features on our website for patients who seek appointments, second opinions, diagnostic appointments etc.,” explains Madhavan. “Most hospitals have chat function on their websites, they have third-party payment portals by which patients can pay bills online. Some hospitals have webcasts for live surgeries and informational video-online.” he adds. “HCG is developing active pod-casts and live digital radio station to further enhance the user experience on its website,” Madhavan informs.
SaaS-based on-site customer engagement tool for online businesses, is also gaining popularity with healthcare providers. These solutions allow online businesses to run promotions and offers on their websites and gather customer insights.
Plus points
Gaurav Malhotra MD and CEO, Bourn Hall India |
The foremost advantage of e-commerce is that it breaks the location barrier. “With medical tourism gaining momentum in the country, e-commerce has definitely expanded the market for the hospital and the universe for the consumer,” says Malhotra.
Besides, there is no limitation of space and abundant information can be packed in the same platform for patients to make informed decisions. “Some healthcare providers use the website to promote brand loyalty by building relationships with patients, developing new web-based markets, and collecting information about consumers’ buying habits,” informs Katoch.
Today, hospitals spend a huge portion of their budgets on marketing activities to attract and retain patients. “The role of formulating a proper marketing strategy and its effective implementation is vital for any healthcare facility, be it for-profit, trust or public,” says Madhavan. “Many successful healthcare facilities tend to struggle to maintain constant revenue growth without marketing; apparent long gestation period for a new hospital is often a consequence of inadequate marketing. E-commerce not only offsets rising marketing costs but also delivers higher profitability,” he adds. “Patients buy services through our website, however its magnitude is very small at present,” informs Soman.
Vinay Kaul VP-Sales and Marketing, Columbia Asia Hospitals |
In addition, there are plenty of third-party companies that are helping promote e-commerce activities in India. “We have partnered with such portals and the response has been encouraging. There are certain healthcare specific portals that have come up over the past few years and these are gaining momentum,” says Kaul.
“By working with Groupon, service providers get a free marketing platform to advertise their brand/ business and get new customers from this platform. Customers who are likely to come back if the service they experience the first time is beyond their expectations,” explains Warikoo.
“We can market their new services and promote their specific ones and can make city aware of their brand,” he adds.
Explaining the working of his company Warikoo says, “Hospitals also need to bear in mind that if a customer has purchased a deal and he/she is not eligible for that particular medical procedure; it needs to inform the customer immediately. Groupon will then refund the amount to the customer. All necessary documents/certification needs to be in place in order to be listed on Groupon.”
Talking about Groupon, Kaul says, “If there is a service like this available, there is no harm in promoting healthcare services through them. It adds to the number of channels which are available to the public for buying the product/service. Marketing through these channels also add to awareness generation among the target group.”
Concerns
While the Indian e-commerce space may look very appealing with unimaginable potential; it is abound with various issues. There are ubiquitous concerns about security, patient confidentiality, and technology expenditures. There is a need of higher internet penetration and cheaper data plans to boost mobile commerce or m-commerce. “Building customer confidence is the key and the presence of new and more convenient ways to pay will boost e-commerce,” says Malhotra.
The next step
Once hospitals get into this e-commerce bandwagon they will be looking for newer avenues to explore. Mobile commerce will become the next big thing in e-commerce. With the staggering number of mobile phone users and ease of mobile money, use of debit and credit cards, this segment sure has the potential to drive growth in the coming years.
Social media networks such as Facebook are likely to increasingly become channels for sales and consumer engagement. “HCG is already active on various social networking sites. The group launched a mobile app for breast cancer earlier this year and we are in the process of developing more apps for mobile phones,” reveals Madhavan.