Mounting patient population base for chronic and infectious diseases, clinical and technological expansions, and rising demand for minimally invasive diagnostic techniques have boosted the growth of global ultrasound market, which is expected to reach USD 6.86 billion by 2021 at a CAGR of 5.2% (MarketsandMarkets report, Feb 2017).
Emerging markets such as China and India, with swelling healthcare expenditure, are providing a huge fillip to the rapidly advancing ultrasound market. Indian sub-continent, with a market size of around USD 200 million in 2017 and growing at a CAGR of 6-8%, provides a high growth opportunity. Rising population, robust government efforts to expand healthcare coverage, increase in private sector spending on healthcare and bulging medical tourism industry encourages many players to expand in India.
Philips ultrasound technologies enhances diagnostic capabilities of the clinicians leading to innovative treatment options for patients.Philips Healthcare, a pioneer in medical and diagnostic imaging, is one the global market leaders in the ultrasound market and has a dominating presence in India. Philips ultrasound technologies support a range of sophisticated capabilities for intervention and surgery.
Fragmented ultrasound market
Ultrasound market is highly fragmented in India and can no longer be viewed as a one-modality market but as an assembly of many individual clinical applications markets, each with varying drivers and dynamics.
Arvind Srinivas, General Manager – Ultrasound, Philips India, explains “Ultrasound business does not generally witness large deal sizes (INR 3 crore and above) which happens in other imaging systems, primarily due to the ticket size of the products. Philips sells around 1300 ultrasound systems in India annually, across a gamut of clinical applications and are mostly sub INR 30 lakhs in value. Hence, such fragmentation calls for establishing strong mindshare to target all types of customers such as cardiologists, radiologists and interventionists.”
Philips has a very aggressive growth plan for ultrasound business in India. “Currently, we are at No. 2 position in market share and would like to get much closer to GE in a couple of years”. Companies such as Samsung, Toshiba, Mindray, Siemens etc., occupy the remaining market.
Market penetration through new avenues
Philips ultrasound business in India is split into 3 divisions catering to different market needs:
- OB/GYN (obstetrics & gynecology)
To significantly scale its business over the next two years, Philips is actively executing a series of planned steps:
- Partnerships with KOLs (Key Opinion Leaders):
Arvind describes, “There is a clear need for clinical education across all customer segments. Doctors today are constantly engaging themselves in various learning platforms to enhance their clinical knowledge and also keep themselves updated on the latest technologies”.
Philips is partnering with many Key Opinion Leaders and executing hands-on workshops where clinicians can actually experience working on these ultrasound systems and understand the nuances of it from the KOLs. This helps Philips to be a very strong clinical partners across modalities.
Arvind Srinivas, General Manager – Ultrasound, Philips India
Philips conducts weekly webinars focused on unique clinical topics (featuring these KOLs) and invites their customers to attend these. Focus of these webinars is to generate substantial thought leadership in this space, highlight latest clinical advancements in the imaging domain and demonstrate tangible clinical value to the customers.
- Attractive financing:
Total cost of ownership is becoming a very strong parameter in the decision of buying an ultrasound system. Arvind avers “These days a clinician or a hospital demands that the system should be covered for a period of 4- 5 yrs. To cater to this requirement, Philips has introduced an attractive financing program. We are one of the very few medical devices companies in India today which has a separate finance arm via which we can offer very attractive finance schemes. In Apr 2018, Philips launched a scheme, which enables customers to buy a Philips system with a 5-year warranty at a nominal interest rate of 8.99%, which has proven to be a very attractive proposition for the customers. We also provide the option of refurbished systems which are completely serviced and certified (by Philips) for use for the customers who are interested in upgrading their systems”.
- Growing salesforce:
Over the last few years, a new trend is rapidly picking pace where a lot of demand is generated from stand-alone radiology or cardiology clinics, especially from Tier 2 and Tier 3 cities. Many experienced and young clinicians are increasingly opening their own clinics and want an in-house ultrasound system. Arvind states the value of a strong salesforce “Most companies go indirect i.e. they only sell through channel partners and they do not have much of a direct salesforce. Over the last quarter, we have significantly invested in expanding our sales team which will eventually reflect in Philips having a greater presence in the market, being able to address our customer’s needs better and of course controlling the user experience in a much more efficient manner”.
- Inorganic growth:
Philips Healthcare indulges into relevant acquisitions of latest technologies to establish its dominance in various clinical applications. In 2015, Philips acquired Volcano to strengthen its position in the Interventional Cardiology market. Continuing this trend, mid-last year, Philips announced the acquisition of TOMTEC Imaging Systems, a leading provider of intelligent image analysis software for diagnostic ultrasound. “We expect the complete integration to take place by end-2018, after which we will be able to further strengthen Philips’ leadership position in cardiac ultrasound, and expand in other clinical areas, such as obstetrics and gynecology (OB/GYN)”.
Arvind states “POC (point-of-care) systems is a certain growth area for us and in India at present is at a very nascent stage. Very few players are playing into this segment. Recently, we announced our collaboration with B. Braun, where-in B. Braun will be selling specialised Philips point-of-care systems completely through their sales channel”.
Philips healthcare constantly launches new products and technologies to reduce procedure costs, simplify navigation and treatment, and ultimately improve procedure efficacy. Arvind asserts, “In July 2018, to build upon Philips ultrasound dominance in the premium cardiology segment, we are launching a new ultrasound system – Epiq CVX – focused towards Cardiology. We expect to see many more launches through the rest of this year, focused towards the mid-segments. Earlier this year we launched a new eL18-4 transducer, which provides extremely good resolution and high penetration allowing clinicians to produce high quality images in obese and pregnant patients. This launch has resulted in a significant growth in the sales of our units as the customers see the real value in this cutting-edge technology, which is unique to Philips.”
Arvind continues, “Though we are performing really well in Cardiology, it is perhaps not the fastest growing segment at this point. The growth is essentially in two segments: 1) OB/GYN & Radiology and 2) Value segment (sub INR 20 lakh systems). For the value segment, Philips has several products and plans to increase its presence there, especially by having more market visibility via sales force expansion, dedicated for this segment. We are also backing this up by launching several new products this year which are focused on multiple modalities such as cardiology, radiology, OB/GYN, and POC devices”.
The consolidation of the ultrasound market is moving towards varied clinical application groups. Innovation is the key to improving the current standard of care and many breakthrough technologies are being introduced to enhance the diagnostic capabilities of the clinicians. Philips Healthcare, with its focused approach aims to significantly strengthen its market position. Ultimately, it’s the patient who will benefit the most as it will lead to enhanced patient care and health outcomes.
About Arvind Srinivas
Arvind Srinivas heads the Philips Ultrasound business for the entire Indian subcontinent. For more information on Philips ultrasound systems, he can be reached at: Arvind.Srinivas@philips.com.