Inorganic growth path India has standalone labs which have been doing the bulk of diagnostic business

for years, but the scenario is slowly changing. In India, the public healthcare system is falling apart, whereas the private sector has been witnessing around 20% growth each year. International health insurance companies entering India ti e up with pathology chains, thereby changing the face of the diagnostic industry . With the advent of large pathology laboratories chain, the Indian diagnostics la ndscape has undergone some major changes in the last four to five years. One of the significant impacts has been the rising competition among the large players, which may not have cut down the prices to the consumers, but has surely raised the entry barriers for small path labs, which mushroomed in the nineties to unco ntrollable proportions. Now, large path labs say that consolidation is imminent and they quote the US example which evolved in a similar way, but is today domin ated by only four major chains of path labs. Though large path labs have been showing impressive growth rates, a large portio n of the market is still dominated by the unorganized sector. Large path labs have outperformed the industry growth estimates and it is obviou s that they are eating into the share of small labs. For instance, a test for di abetes is generally done at small labs by arbitrary calculation in 80-90% of the cases. Large labs claim that this method is unreliable, while direct estimation offer accurate results. As the consumer awareness is increasing, organized play ers with more focus on quality and accuracy are taking on smaller players head-o n. Moving toward wellness testing Preventive care is becoming the buzz word in India. Many people are now going in for annual check-ups even though there is no apparent problem. Wellness testing is a new concept and is meant for apparently healthy individuals who are not aw are whether they are suffering from a particular disease. Among the organized pl ayers, there has been an increasing trend towards targeting healthy individuals who have sedentary lifestyles and are more risk prone for lifestyle diseases suc h as cardiovascular and diabetes ailments. Organized players have developed specific panels such as full body screening pan els, diabetes panel, cardiovascular panel, thyroid panel etc. to tap into this s egment. There are packages designed for end customers and are easy to understand and provide a comprehensive analysis as compared to individual tests. The whole notion behind this is to encourage consumers to self-initiate these tests rathe r than taking a doctor s prescription which is generally required for advanced and c omplicated tests like cancer, osteoporosis and other ailments. Thus, companies a re trying to create an interest for the diagnostics category amongst the masses so that they can monitor their disease levels themselves and thus generating a l ot of end-customer involvement. Brand Building initiatives by Organized Players

Recently a lot of action is seen in advertisement space from major diagnostic pl ayers and hospitals. There has been a conscious effort by major players to diffe rentiate their brands and services from competitors and the unorganized segment. From SRL, Fortis, Dr. Lal Pathlabs, Apollo Clinics, everyone is using advertisi ng and focusing more towards brand development which was absent around 3-4 years back. The companies are also creating promotional campaigns that are event base d. For instance they would promote a well woman package for woman s day. The companie trying to create specific testing products in the form of health and disease pa

nels which generally include a bouquet of tests for general health checkup or pa rticular ailments. In conclusion India has the potential to become the global hub for R&D, clinical trials and pa thology services. The major reasons in support of this are the growing health aw areness and quality consciousness in the increasing middle class, opening of the health insurance industry, advent of private players and consolidations in the diagnostics and pathology segments.