India's Digital Healthcare Likely to Reach $37 Bn by 2030: BCG & B Capital Report

The digital healthcare sector generated $2.7 billion in revenue in 2022, representing 1-2% of India's total healthcare market. However, it is projected to grow significantly, reaching 7-8% by the end of the decade, according to the report.

Digital healthcare in India may reach a significant $37 billion market size by 2030, from $2.7 billion in 2022, reveals a joint report by Boston Consulting Group (BCG) and VC firm B Capital. The report, titled 'A Digital Pill for Revolutionizing Healthcare,' underscores the remarkable growth potential of India's digital healthcare market.

In 2022, the digital healthcare sector generated $2.7 billion in revenue, accounting to 1-2% of the country's total healthcare market. However, by the end of the decade, this share is expected to increase substantially, reaching 7-8%, as indicated in the report.

The digital healthcare market is segmented into six sub-sectors, each with distinct growth prospects. These sub-sectors include e-pharmacy, e-diagnostics, teleconsultation, surgery aggregation, healthcare financing, and fitness and specialty care.

Leading Sub-Sectors of Digital Healthcare

E-pharmacy led the way in 2022, generating $1.1 billion in total revenue, yet it only represented 3.5% of the overall retail pharmacy sector. However, this share is forecasted to expand significantly, reaching $12 billion with a market penetration of 12-15% by 2030.

The other sub-sectors are also expected to experience remarkable growth. By 2030, e-diagnostics is projected to become a $10 billion market, surgery aggregation and healthcare financing will each reach $5 billion, while teleconsultation and fitness and specialty care are estimated to be $3 billion markets.

According to BCG senior partner and managing director Priyanka Aggarwal, e-pharmacy will likely remain at the forefront of India's digital healthcare sector, as it accounts for the largest portion of consumer spending in the healthcare domain.

The COVID-19 pandemic has played a significant role in reshaping consumer behaviour, with digital healthcare becoming a newfound habit. Aggarwal highlighted the emergence of partnerships on the supply side, leading to more integrated healthcare ecosystems rather than fragmented business models.

The upgrading of capabilities and infrastructure throughout the healthcare ecosystem is expected to create numerous opportunities in the future.

Despite temporary slowdowns in business and funding, founders in the digital healthcare space are utilising this period to recalibrate their business models, emphasising credibility and value chain differentiation. Startups have come to realise that an omnichannel and omnipresent approach, rather than a purely digital model, is vital for long-term success.

Karan Mohla, a partner at B Capital, said, "Startups have realised over a period of time, especially after COVID, that it may not necessarily be a pure digital model, but having an omnichannel and an omnipresent approach is important."

Mohla noted the importance of "patient capital" for the health tech sector, highlighting the need for companies to balance aggressive marketing with trust and credibility-building.

"It's much more about a pull than push-based approach that is needed. Over a period of time, healthcare tends to be very profitable. That is just the nature of the business," he added.

B Capital, a global tech-focused investment firm co-founded by Facebook cofounder, Eduardo Saverin, has made strategic investments in Indian health tech companies including PharmEasy and Innovaccer, both of which have achieved unicorn status.

The firm's involvement underscores the growing interest and confidence in the potential of India's digital healthcare landscape.