Philips Healthcare Localizes Business for Key India Market

The $4.8 billion Indian health care equipment market is dominated by three large multinational companies—Philips, GE Healthcare India, and Siemens—which together account for a  major share of high-end equipment. Dutch company Philips, is the market leader.

To keep ahead of the competition, Philips India’s operations will re-organize shortly

Philip India  as restructured in 2016

Three factors, which are unique to India’s healthcare sector, are driving changes in Philips’s business model in India, reports Forbes:

1. Cash-Strapped Sector – India’s per capita healthcare spend, at $45, is way below other BRIC countries. India’s total expenditure on healthcare is about 5.2 percent of its GDP of which 1.2 percent is funded by the government according to PricewaterhouseCoopers data. Enter the PPP model – Private-Public Partnerships: “This model brings in private sector capital and efficiency, uses government infrastructure and draws in modern technology to deliver equitable, affordable and quality health care,” says Chhitiz Kumar, head, Philips Capital and Business to Government and PPPs. He says this model has gained a lot of traction in the states of Rajasthan, Gujarat, Karnataka and Haryana. Philips’ revenues through the PPP route are growing at 70 percent year-on-year, adds Chhitiz Kumar.

The other innovation is the ‘pay-per-use’ model. “The cost of health care equipment works up to 30 percent of a hospital’s project cost,  and  if this can be eliminated through a pay-per-use basis, the initial investment costs come down dramatically,” says Vishal Bali, former group CEO of Fortis Healthcare. “The pay-per-use structure also helps hospitals price their services aggressively.”

2. Need for Localization – “India-focused innovation brings down costs and gives the much-needed edge in a competitive market,” says Dr Rana Mehta, partner & leader, Healthcare, PricewaterhouseCoopers India. Philips’ Healthcare Innovation Centre in Pune, in the western state of Maharashtra “combines technology and market knowledge. It also helps design products that are unique to India’s needs like that of durability, higher throughput and handling voltage fluctuations,” explains Rekha Ranganathan, head of this institute. The Pune centre has so far launched five products, focusing on the twin aims of affordability and profitability. “When it comes to value engineering, India is the best,” Ranganathan added referring to the company’s initiative to increase manufacturing in India which has been nominated as the global hub for the company’s mobile surgery business.

3. Shift to Services – customers are increasingly seeking to buy better services, and Philips recently launched a Healthcare Transformation Services business. “Health care is shifting from doctor/hospital-centric to patient-centric. Also, delivery is becoming dis-aggregated. Single monolithic entities are giving way to small specialty hospitals. Our focus is to help hospitals change in line with these trends,” says Dr Adheet Gogate, senior director, Healthcare Transformation Services. He and his team study the process flow in hospital wards to find ways to improve productivity—whether it is reducing the time taken to discharge a patient, increasing an equipment throughput or optimizing work flow in operation theaters.

November 10, 2015   No Comments

Amazon India Localizes

With increasing awareness, and Internet penetration in India, e-commerce is blooming. Currently, Amazon India has launched bookstores in Hindi, Kannada and Tamil – three regional languages in India.

The Hindi bookstore was launched in April 2014 with over 23,000 titles. It offers a vast selection of genres ranging from literature, fiction, biographies, children’s books, and classic novels by famous authors. “Additionally, there is a vast collection of reference books and textbooks to help students and job aspirants prepare for interviews and tests. Customers can also enjoy reading Hindi translation of more than 800 bestselling English books,” says Noor Patel, director (Category Management) at Amazon India.

In July 2014, Amazon launched the Tamil (the language mainly spoken in the south-eastern state of Tamil Nadu) bookstore with a selection of over 8000 titles making it the largest Tamil book store in India.

And in the month of October of the same year, titles in Kannada (the language mainly spoken in the southern state of Karnataka) were made available, with more than 7300 books, 4700 movies, and 2500 music albums. The company recorded a 30 per cent growth in the demand for Kannada books in three months, Patel observed.

Patel added that regional books used to face significant challenges in reaching its customers due to the highly fragmented publishing industry and its ability to reach all points of sales even within the states where they are published, reports SiliconIndia News.

“But e-commerce has played a key role in bridging this gap, taking books to their readers irrespective of their location and language. Due to the wide range of languages in India and the high levels of inter-state mobility, several readers were unable to buy books published in their mother tongue or language of their choice. Identifying this need, we launched the regional bookstores,” explained Patel.

October 12, 2015   No Comments

Ikea to Operate 25 Stores in India

The Swedish home furnishings company IKEA has announced a long term plan to open 25 stores in the country at a cost of $80 million per store. In July this year the company bought land in Hyderabad in south India for its maiden store.

Business Standard reports that IKEA has signed a memorandum of understanding with various state governments in India: Andhra Pradesh, Telangana, Karnataka, Uttar Pradesh, and Maharashtra for its stores to be located in these states.

IKEA in India

“Our priority is to find the right locations for our stores, to increase our supplier base, and establish long-term relations with the authorities and other important partners. In the first phase we are looking at establishing IKEA stores in Delhi-NCR, Mumbai, Bengaluru and Hyderabad,” a company spokesperson told Business Standard in reply to an emailed questionnaire.

October 12, 2015   No Comments

ExxonMobil to Invest $400Min India

Oil major ExxonMobil will set up a technical and business support center as well as an R&D facility in Bangalore, the capital of the southern state of Karnataka. When the center starts in late 2015 it will initially have about 1,000 employees, and this number is likely to increase five or six times when it is fully operational.

When The Times of India contacted a spokesman from Exxon the person confirmed that the company is “establishing a new affiliate to develop a business support center in Bangalore later this year to provide a range of technical and business support services for the company globally.”

September 3, 2015   No Comments

Make in India: Aequs Commences New Automotive Manufacturing Facility

In the latest example of a commitment to the Make in India’ initiative, Aequs Automotive, headquartered in Bangalore, announced the inauguration of its new 100% export-oriented automotive manufacturing facility in Belagavi. Located in the state of Karnataka, Belagavi is India’s first precision engineering special economic zone.

The 27,000 square feet facility will manufacture engine, transmission and hydraulic components for passenger and commercial vehicles for export to Aequs customers such as Jacobs Vehicle Systems, Bosch Group, Danaher Group, and Eaton Corporation.

Aequs Automotive in Belagavi

Aequs Automotive in Belagavi

Rajeev Kaul, Group CFO and Managing Director, India of Aequs said, “The launch of this new manufacturing facility and our planned investment of an additional $5 million to upgrade the facility over the next two to three years reflect our confidence in India’s ascension as a major automotive manufacturing hub and in our ability to serve the needs of our global customers.”

June 10, 2015   No Comments