The diagnostics industry in India is experiencing robust growth, fueled by various factors such as technological advancements, strategic collaborations, and the expansion of diagnostic chains. According to the latest report by TechSci Research titled “India Diagnostic Labs Market Industry Size, Share, Trends, Competition, Opportunity, and Forecast, 2019-2029,” the market was valued at USD 16,471.21 million in 2023 and is projected to grow at an impressive CAGR of 11.55% through 2029. The diagnostic industry in India is characterized by a high degree of fragmentation, with over 1,00,000 labs. This surge in growth is contributing to a significant increase in the market share of diagnostic companies in India, with a notable rise in the diagnostic market size in India.
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Market Dynamics
The expansion of diagnostic chains and their networks is a key driving force behind the growing demand for diagnostic lab services in India. These chains establish multiple laboratories and diagnostic centers across various cities and regions, including urban and rural areas, making diagnostic services more accessible to a larger portion of the population. This expanded network not only addresses healthcare disparities but also reaches underserved populations, ultimately contributing to the growth of the Indian diagnostic industry.
In July 2023, Metropolis Healthcare introduced a state-of-the-art diagnostic testing facility in Kunnamkulam, Kerala. This facility, equipped to handle a daily throughput of 200 samples, offers a spectrum from routine pathology tests to intricate molecular diagnostics. The expansion of companies like Metropolis Healthcare showcases their commitment to providing high-quality diagnostic services across different regions of India, thereby further driving the growth of the industry.
Fragmentation and Opportunity
This fragmentation poses challenges in terms of capability, scalability, and quality of labs, but it also provides an opportunity for newer business models to evolve. The pandemic brought about a paradigm shift in the diagnostic market, emphasizing the need for diagnostics and treatment. There was an increased consumer acceptance of point-of-care testing (PoCT) and home collection, leading several diagnostics chain players to improve their online presence and invest in technology and automation.
Market Penetration and Under-penetration
The Indian diagnostic market is significantly under-penetrated compared to other countries. Pathology tests per 1,000 population in India stand at 1,111, whereas it is 5,924 in Brazil, 10,000 in Australia, and 20,958 in the US. Similarly, the number of CT and MRI tests per 1,000 population in India is lower compared to other countries. Despite being highly fragmented, urban areas account for 74% of the market, with reasonable penetration in Tier 2 and 3 cities in terms of the number of labs.
New business models around teleradiology and telepathology are emerging to improve access, quality, and efficiency of diagnostics. Teleradiology market growth is estimated to boost in the forecast year due to the various factors which includes prevailing health conditions and the current medical facility provided among the population. However, the industry faces challenges such as regulatory issues, fragmented markets with low focus on quality, commoditization, increasing competitive intensity, non-access to specialized resources, and value-conscious Indian customers.
Competitive Analysis
The diagnostic industry in India is highly competitive and fragmented in nature, with the market share of organized players limited to around 17%. The major chunk of the market share is with unorganized players. Despite the low entry barriers, the market is witnessing increased competition due to factors such as rising income levels, advanced healthcare diagnostic tests offerings, and market penetration of healthcare insurance. Additionally, the diagnostic industry faces pricing pressure due to high competition and government-enforced pricing regulations.
More number of players in the industry are focusing on geographical expansion and inorganic growth by acquiring regional local players to capture higher market share. The companies are employing digitization and artificial intelligence/machine learning techniques since there is a rise in the customer demand for home-based diagnostic services.
Market Segmentation
The Indian diagnostic labs market is segmented based on provider type, test type, sector, end-user, and region. Stand-alone labs, hospital labs, and diagnostic chains are the primary provider types in the market. Stand-alone labs operate independently from hospitals or healthcare systems and focus exclusively on conducting diagnostic tests and providing medical services.
North India holds the largest share in the Indian diagnostic labs market, driven by factors such as medical tourism, the presence of renowned medical colleges and research institutions, and various government healthcare programs that make diagnostic testing more accessible and affordable.
Future Outlook and Opportunities
The Indian diagnostic industry presents significant growth opportunities, fueled by factors such as technological advancements, expanding healthcare infrastructure, and increasing awareness about preventive healthcare. As the market continues to evolve, companies will need to focus on innovation, quality assurance, and customer satisfaction to maintain competitiveness and capture a larger market share.
The major players in the diagnostic industry have focused on reinventing by integrating technology and digitization. Increasing demand for testing post-pandemic along with the need for faster results and accurate diagnosis has compelled the diagnostic companies to focus on a customer-centric approach.
The growth in the diagnostic sector is supported by an increase in healthcare spending by an aging population, rising income levels, and rising awareness for preventive testing. Diagnostic services are classified into pathology testing services and imaging diagnostic services, wherein the former accounts for approximately 60% of the market share while imaging tests account for the rest. The radiology market is growing rapidly due to the increasing demand for imaging services, while the pathology testing services market is also expanding due to the growing number of people undergoing preventive health check-ups. Overall, the diagnostic services industry in India is poised for continued growth in the coming years.
The Indian diagnostic industry is experiencing robust growth, driven by various factors such as technological advancements, strategic collaborations, and increasing healthcare spending. However, companies operating in this competitive landscape must differentiate themselves through service quality, innovation, and customer-centric approaches to capitalize on the lucrative opportunities presented by the growing demand for diagnostic services in India.
Some of the major companies operating in the India Diagnostic Labs Market include:
- Dr. Lal PathLabs Limited
- Metropolis Healthcare Ltd.
- SRL Diagnostics Pvt Ltd.
- Thyrocare Technologies Limited
- Vijay Diagnostics Centre Pvt. Ltd.
- Max Healthcare Institute Limited
- Apollo Hospitals Enterprise Ltd.
- Quest Diagnostics India Pvt Ltd
- Lucid Medical Diagnostics Pvt Ltd
- Suburban Diagnostics India Pvt Ltd.
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“Certain areas, particularly in North America, are projected to exert significant demand for Diagnostic Labs. The growth in the competitive landscape and the presence of well-established companies in the market, committed to enhance the overall wellbeing of people each year, are expected to contribute to a remarkable growth of the India Diagnostic Labs Market in the forecast period,” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based Global management consulting firm.
India Diagnostic Labs Market by Provider Type (Stand-Alone Labs, Hospital Labs, Diagnostic Chains), By Test Type (Pathology, Radiology), By Sector (Urban, Rural), By End User (Referrals, Walk-ins, Corporate Clients), By Region, By Competition Forecast & Opportunities, 2019-2029F hasevaluated the future growth potential of India Diagnostic Labs Market and provides statistics & information on market size, structure, and future market growth. The report intends to provide innovative market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in India Diagnostic Labs Market.
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