How is the eHealth industry faring in its biggest defining moment?

Raunika Sharma

The eHealth* industry faces the biggest defining moment in their history now, akin to what demonetization did for the fintech industry. But will it?

The companies will only reap the benefits of Covid19 if they are able to brave out this storm, and brave it out well. However, recent incidents seem to be pointing to the contrary. The companies seem to be trapped in a conundrum.

Unlike other industries, the eHealth industry seems to be enjoying a period of increased demand. This increased demand has been led by a spike in the demand for sanitizers and disinfectants. Website traffic on these sites increased by as much as 30% during the initial few days of the lockdown in the country. While this may paint a rosy picture, the fact that major players seem to be getting a lot more negative reviews recently show that customers are dissatisfied.

Why are consumers dissatisfied? Are these players able to deliver on their promise of supplementing the industry?

Interviews with some of these dissatisfied consumers reveal some issues. Consumers are not able to find desired products on websites, if they do, the deliveries are delayed by as much as 100-200% of the usual time taken to deliver. Operations seem to be hit to such a level that companies have stopped delivering to Tier 1 & Tier 1+ cities.

The major players in the market report that these problems have arisen due to disrupted supply chains. With the initial lack of clarity by the Government, shortage of inventories and low attendance of the last mile delivery executives these companies are not able to deliver medicines, or their promises. Recent information release by the Indian Pharmaceutical Alliance notifies that there are no drug shortages in the country. Ministry of Health & Family Welfare, too, has now provided the clarity on the continuity of operations of the eHealth industry.

On the brighter side, some companies are taking the right measures. Medlife’s partnership with Uber to deliver medicines and provide a source of income for the drivers is welcomed. Practo has been reaching to doctors and hospitals for enabling live consultation.

What does it translate to for the industry?

Majority of these companies’ largest consumer base are the people with the requirement of acute medicines. This is the worst hit cohort right now, specially those who have taken subscriptions packs for their monthly medicines on these platforms. The companies may lose out on the confidence of most of these loyal customers. Another segment hit are the consumers from Tier 1 & Tier 1+ cities who are not being served right now. This is a relatively newer cohort for these companies. While companies are on a spree to open physical stores to woo these customers, thereby adopting an omni-channel approach, to further penetrate these geographies, not being able to serve  them right now may dampen the little confidence of these customers making it much harder and time taking for companies to penetrate these markets.

On the upside, companies could use this situation to revive their not-so-profit-making service, online consultation. Consumers who have been apprehensive to try this service may be forced by the situation to try it now. Companies could retain some of these customers by giving them a good experience.

So, will this be the “Demonetization Moment” for the eHealth industry?

Covid19 could either result in a booming industry if the players are able to redefine their supply chains and introduce strategies instrumental in instilling the lost confidence in them or it could take the industry 5 years back.

*eHealth industry encompasses companies delivering medicine, providing doctor consultation services or diagnostic test bookings online. Major players include MedLife, 1MG, Pharmeasy, Netmeds, Practo, mFine, etc.

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Frontier
Jun 6, 2020