Market Entry Strategy For India

Market Entry Strategy For India


India, the 2nd most populous country of the world, with over 1.2 Billion people is the largest democracy on the planet. The sheer size of the country itself makes it such an attractive market for both B2B and B2C businesses around the world. In this post, I want to discuss the possible market entry strategy for India especially for an internet based business. Since, I have a deep interest in eHealth sector I will fabricate my market entry strategy for a US based eHealth company planning to enter the Indian market: ZocDoc.

ZocDoc – Entry To India

ZocDoc, a US based eHealth company, offers a web-based tool allowing consumers to find and book a doctor online. Millions of patients each month use ZocDoc to find a nearby doctor and instantly book an appointment online. The company’s product, ZocDoc Check-In, allows patients to fill out their paperwork online in advance of their appointment. By revealing the ‘hidden supply’ of appointments, ZocDoc helps patients receive faster access to care and optimizes doctors’ schedules.

ZocDoc’s Performance

ZocDoc is one of the market leaders in US and has raised close to $97.9 Million in 5 Rounds. The biggest round being in 2011, $75 Million in Series C funding by Digital Sky Technologies and Goldman Sachs. From the recent numbers, it seems ZocDoc is serving about 6 Million patients via its platform.

ZocDoc’s Revenue Model

ZocDoc makes money by charging doctors for the listing, which is close to $300 per listing. There are other premium services such as promoted doctor listings and ads that are additional revenue streams. For patients, the platform is absolutely free of cost and they can book an appointment as and when they want.

Competitors

There are four big competitors of ZocDoc in the Indian market (not in any particular order):

1. Practo: Raised close to $34 Million in 2 rounds, main investor – Sequoia Capital

2. Ziffi: Raised $2.4 Million in 1 round, main investor – Orios Venture Partner

3. Lybrate: Raised $1.2 Million in 1 round, main investor – Nexus Venture Partners

4. HelpingDoc: Raised $1.7 Million in 2 rounds, main investor – Senior Marketing System

In the table below, I show the dominant presence of these companies in major Indian cities-

Lybrate Ziffi HelpingDoc Practo
Mumbai Y Y Y
Delhi/NCR Y Y Y Y
Bangalore Y Y Y
Hyderabad Y Y
Chennai Y Y
Kolkata Y Y
Pune Y

(Y = Yes)**

Key Factors For Business

After studying the business model, I have identified 3 main criteria for viable business in India and these factors are:

1. Internet Penetration

2. Number of doctors

3. Doctor to patient ratio

Let’s go in more detail of each one now.

1. Internet Penetration in India

Based on the recent reports by the telecom officials India had about 243 million Internet users as of June 2014. The internet penetration is still 26% and slowly growing. The top 10 States with the highest number of broadband subscribers in India are-

State Broadband Subscribers (million)
Maharashtra 4.8
Tamil Nadu 2.9
Andhra Pradesh 2.4
Karnataka 2.1
Kerala 1.7
Uttar Pradesh 1.7
Delhi 1.5
Gujrat 1.4
West Bengal 1.3
Punjab 1.1
Total 21

For the sake of simplicity, I will be considering the Broadband subscribers for this analysis rather than all internet subscribers. There are close to 90 Million broadband subscribers, bigger than the size of population of Germany.

Method:

  • Took the most populous cities of India
  • Assumed that 90% of the internet broadband subscribers are in the most populous cities of India
  • Distributed the spread of internet broadband subscribers on the basis of population of cities within a state, meaning the most populous city in the state to have the most number of broadband connections

On the basis of above calculations, here is the list of top 30 Indian cities with broadband connection subscribers-

City State Broadband Subscribers (million)
Mumbai Maharashtra 1.39
Chennai Tamil Nadu 1.32
Delhi Delhi 1.26
Bangalore Karnataka 1.15
Hyderabad Andhra Pradesh 1.03
Pune Maharashtra 0.56
Ahmedabad Gujarat 0.52
Trivandrum(Thiruvananthapuram) Kerala 0.47
Kolkata West Bengal 0.44
Kochi (Cochin) Kerala 0.38
Ludhiana Punjab 0.37
Surat Gujarat 0.37
Kozhikode (Calicut) Kerala 0.27
Nagpur Maharashtra 0.26
Amritsar Punjab 0.26
Visakhapatnam Andhra Pradesh 0.26
Kollam (Quilon) Kerala 0.22
Coimbatore Tamil Nadu 0.21
Madurai Tamil Nadu 0.21
Thane Maharashtra 0.21
Thrissur Kerala 0.20
Jalandhar Punjab 0.20
Lucknow Uttar Pradesh 0.20
Pimpri-Chinchwad Maharashtra 0.19
Kanpur Uttar Pradesh 0.19
Salem Tamil Nadu 0.17
Tiruchirappalli[N 3] Tamil Nadu 0.17
Nashik Maharashtra 0.17
Vijayawada Andhra Pradesh 0.15

You can have a look at the complete list here on Internet Penetration Ranking sheet. The list gives the first indication on which cities to enter in India.

2. Number of Doctors in India

For a business like ZocDoc, it is really important to see the Doctor population, who are actually the paying customers for the business. This will help determine the market size of the segment.

Approach:

  • Took the data of number of registered doctors in India
  • Assumed that 90% of the doctors are in the most populous cities of India
  • Distributed the spread of doctors on the basis of population of cities within a state, meaning the most populous city in the state to have the most number of doctors

As per the report, there are in total around 883K registered doctors in India. On the basis of above approach, the ranking for the top 30 Indian cities with the most number of registered doctors looks like this-

City State/Territory Doctor Population
Bangalore Karnataka 52183
Chennai Tamil Nadu 42870
Mumbai Maharashtra 40937
Hyderabad Andhra Pradesh 30342
Kolkata West Bengal 20988
Ahmedabad Gujarat 18894
Guwahati Assam 18176
Pune Maharashtra 16375
Ludhiana Punjab 13833
Surat Gujarat 13603
Patna Bihar 12502
Trivandrum(Thiruvananthapuram) Kerala 11406
Jaipur Rajasthan 10253
Amritsar Punjab 9683
Kochi (Cochin) Kerala 9125
Srinagar Jammu and Kashmir 7789
Nagpur Maharashtra 7778
Visakhapatnam Andhra Pradesh 7586
Jalandhar Punjab 7331
Delhi Delhi 7244
Aligarh Uttar Pradesh 7236
Lucknow Uttar Pradesh 7236
Gorakhpur Uttar Pradesh 7236
Varanasi Uttar Pradesh 7091
Coimbatore Tamil Nadu 6859
Madurai Tamil Nadu 6859
Indore Madhya Pradesh 6538
Kozhikode (Calicut) Kerala 6501
Thane Maharashtra 6141

You can have a look at the complete list here on Doctor Population Ranking sheet. The list gives the clear indication on which cities have the most number of registered doctors.

3. Doctor to Patient Ratio in India

The third most important factor to look into is Doctor to Patient Ratio. This ratio will suggest the number of doctors available per patient. This number will tell if the doctors in particular region are busy or free, basically the business occupancy.

Method:

  • Took the data of number of registered doctors in India
  • Assumed that 90% of the doctors are in the most populous cities of India
  • Distributed the spread of doctors on the basis of population of cities within a state, meaning the most populous city in the state to have the most number of doctors
  • Calculated the doctor to patient ratio and considered only the cities with over 3500 registered doctors (looking only at significant markets)

On the basis of above approach, the ranking for the top 30 Indian cities with the worst doctor to patient ratio looks like this-

City State/Territory Doctor Population Doctor to Patient ratio
Delhi Delhi 7244 0.001
Lucknow Uttar Pradesh 7236 0.003
Rajkot Gujarat 3779 0.003
Vadodara Gujarat 4912 0.003
Surat Gujarat 13603 0.003
Ahmedabad Gujarat 18894 0.003
Aurangabad Maharashtra 3684 0.003
Nagpur Maharashtra 7778 0.003
Pune Maharashtra 16375 0.003
Mumbai Maharashtra 40937 0.003
Kalyan-Dombivali Maharashtra 4094 0.003
Navi Mumbai Maharashtra 3684 0.003
Nashik Maharashtra 4912 0.003
Pimpri-Chinchwad Maharashtra 5731 0.003
Indore Madhya Pradesh 6538 0.003
Jaipur Rajasthan 10253 0.003
Jabalpur Madhya Pradesh 3530 0.003
Bhopal Madhya Pradesh 6015 0.003
Gwalior Madhya Pradesh 3530 0.003
Vasai-Virar Maharashtra 4094 0.003
Thane Maharashtra 6141 0.003
Vijayawada Andhra Pradesh 4551 0.004
Visakhapatnam Andhra Pradesh 7586 0.004
Hyderabad Andhra Pradesh 30342 0.004
Kolkata West Bengal 20988 0.005
Howrah West Bengal 5037 0.005
Varanasi Uttar Pradesh 7091 0.006
Hubballi-Dharwad Karnataka 5740 0.006
Bangalore Karnataka 52183 0.006

You can have a look at the complete list here on Doctor to Population Ranking sheet. The list gives the clear indication on which cities have the worst doctor to patient ratio.

Market Entry Strategy For India

Now on the basis of 3 key factors analysed above there could be different possible strategies to enter in India and drive growth.

Strategy 1: Target and drive growths at markets where there is little or no competition.

For e.g. from above it seems like Ahmedabad and Surat cities in Gujarat state are a great place to enter in India and drive growth from there.

Strategy 2: Focus on cities with the highest number of doctors and the most number of broadband users.

In this scenario Chennai, Tamil Nadu is the market to target. Obviously, there is competition already but at the same time the size of the pie is bigger!

Strategy 3: Focus on cities with the highest number of doctors and the worst number of doctor to patient ratio.

For this particular strategy again Ahmedabad and Surat cities in Gujarat state are a great place to enter in India and drive growth from there.

Ideal Strategy: Combination of strategy 1, 2 and 3. Look for a balanced approach! For this strategy again the winner is Ahmedabad in Gujarat state to enter in India.

Market Entry Framework

You can adapt the approach for other internet based businesses, the important thing is to really understand the key business factors and then evaluating them against the market. This will give you certain sets of data that you can use to formulate and evaluate the market entry strategies!

Hope you find it useful and please feel free to reach out to me in case you have a question – viveknanda1@gmail.com

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Vivek Nanda

Vivek's passion for technology is only rivaled by his desire to connect with others through social media. He is an avid blogger and a hardcore foodie. He has special interests in the areas of entrepreneurship, social media, online marketing and strategy. In his spare time, he loves exploring the web and thinking of new ideas that can change the world.

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