“Healthcare” needs to be “Scalable, Accessible, Available & Affordable” | Niche-Speciality Healthcare space| ETRetail

Established in the year 1949, Dr Lal Path Labs has come far in an attempt to “Redefine the pathology testing landscape”. From scaling up as a trustworthy brand to providing home testing facility, the 150 centres strong diagnostics chain with 2000 collection centres, has become a reliable destination for consumers across the cities.

With a target of reaching 200 centres by 2014, Lal Path Labs promises to stick to its last. In an email interview OP Manchanda, CEO, Dr Lal Path Labs and a speaker at the upcoming Knowledge Series, mentioned about the “challenges of operating in this Niche-Business”. Edited Excerpts : 

What are the challenges of operating in the pathology space in India ?

The diagnostics pathology (Niche Speciality Healthcare space) today in India is deregulated, fragmented and localised. Anyone with a decent capital in his coffers can set up a testing lab these days. This is evident in the fact that thousands of mom and pop shops working under claustrophobic conditions are springing up by the day. This should serve as a wake-up call for the system and the public in general.

Healthcare being the ‘highest involvement’ category as health is crucial has got ignored in terms of barriers of entry and some filter to see the credentials and accreditations before these are set up.

The need of the hour is to have some market laws and market criteria mechanisms in place in the diagnostics space that restricts fly-by-night entities setting up shop as they can compromise the health of patients and jeopardise the reputation of the industry.

Which services for you sell the most? What is the average ticket price for you ? 

Our top tests are the preventive tests and more on chronic / lifestyle segment as this segment has seen an upward trend due to health consciousness, proactive mindset of Indian’s that is being seen off-late last seven years.

We have seen that customers of today are convenience seekers – so our services like home collection of samples, digital reports and IT enabled services are seeing a big demand and we can claim that we have the best IT and marketing apparatus to provide these services and delight them. This is what differentiates us from others – we are a consumer brand apart from being a hard core diagnostics company – we are both — as customer centrality cannot be ignored in any business and we have both sides to our business – best technology and best customer mindset.

Please share some details on your format of operations. How many labs do you have, at which locations and how many more are you planning to launch ? 

We have over 150 labs and over 2,000 collection centers across India, a central lab in Delhi and also a National Reference Lab at Rohini (New Delhi).

We work on a unique hub and spoke model. The collection centers collect the samples which are then tested at the nearest lab. This model is time tested for us and this has been mastered by us over the years like the Dabbawalas of Mumbai.

This logistics is in house for us and this ingenuity and indigenous approach coupled with 6 decades of learning curve in our business day in and day out – gives us that edge over others – to provide an accurate, fast report delivery and the best service in our Industry. We will be around 200 centres by exit 2014.

Please share your experience on how a business can scale up in the health & wellness space in India ? 

Philip Kotler told the world about the 4 P’s of product, price, place and promotion. Today the corporate world talks about customer centrality and not what a marketer wants.

“I believe, it’s not about products anymore – it’s about needs – it’s not about pricing but about affordability and the value point “.

In healthcare as well, it’s the 4 A’s that matter. Accessibility, affordability, awareness and availability play a crucial role in gaining market share and mindshare. A business may have the best healthcare products which are not available and accessible to a multitude – but this does not help.

We see many standalone diagnostic units today which have a great name but these are manpower-driven and lakhs of customers cannot access them or the services are not available. This does not do any good to the society and also from a business perspective.

Healthcare needs to be scalable, accessible, available, and affordable. And we need to create awareness about where we are, who we are, what we do, what we can offer. So marketing plays a key role in building a brand. In our company we have a strong product mindset to bring the best pathology tests but we have teams to scale up and make products available as also to market in order to create awareness.

Please tell us about your Finances, Private Equity if any, any other monetary support for your operations? What is the average cost of operations in this business on annual basis ? 

We manage from internal accruals. 40% of our costs are locked up in direct and indirect overheads.

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