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‘We Want To Be A Long-term Player’
Fredrik Stenmo, director, Medicover Holding, talks to BW Businessworld about how the company is expecting to generate revenues of over $100 million in about five years
Photo Credit : Suresh Gola
Fredrik Stenmo, director, Medicover Holding
The IVF market is estimated to be underpenetrated by 9-12 times than the addressable demand in the key cities such as Delhi, Mumbai, and Bangalore, and will provide a huge opportunity for penetration of IVF centres across the country. Fredrik Stenmo, director, Medicover Holding, talks to BW Businessworld’s Paramita Chatterjee about how the company is expecting to generate revenues of over $100 million in about five years. The Swedish IVF chain is also planning to launch 50 greenfield fertility clinics across the country. Edited excerpts:
The IVF market in India is still at a nascent stage. It is underpenetrated and highly fragmented with about 50 per cent organised players operating currently. What is your overview of the market and what are your plans for the future?
We at Medicover decided to foray out of the European market for the first time and set up our establishment in India. Ours is the first European family-owned organisation to bring in 100 per cent investment in healthcare delivery to India. We are very positive about the Indian market and want to cash in on the huge opportunity it offers. It is the underpenetration of IVF centres in India that throws open a plethora of opportunities for both domestic and foreign players wanting to enter the market. But having said that, what is particularly significant for us is the fact that India as a business destination is not unfamiliar for us in Medicover. After all, the Medicover group of healthcare businesses was launched by the same family that launched the Oriflame cosmetics brand in the country, which even today has a strong presence across India.
We want to open around 50 greenfield fertility clinics across the country and we are expecting to generate revenues of over $100 million in five years. In the first phase, we will be looking to tap the market in Delhi, the National Capital Region (NCR), and states like Punjab, Uttar Pradesh, Maharashtra and Rajasthan. So, it is absolutely fantastic to be in India, as there is incredible potential in the domestic market, which offers a great diversity.
There are quite a few organised players — both foreign and domestic — operating in the domestic market currently. How do you plan to take on them and establish your presence? Going forward, do you plan to get into any strategic tie-ups with other IVF players?
Well, India currently is an unregulated market and we definitely want to bring in our knowledge and processes from the European market. And, we want to do this on our own. We are not contemplating any partnership with anyone. In order to tap the Indian market, we are planning to bring in the latest technological advancements to ensure superior pregnancy outcomes. Since we understand that no two patients are the same, we offer fertility treatments that are highly personalised and meets each individual’s unique needs.
Like, we at Medicover Fertility are bringing in the latest genetic testing, embryo growth monitoring, and medical protocols that are adapted to different cases of infertility. All in all, we want to be a long-term player in the fertility market in India, which today has close to 30 million infertile couples. In fact, it is this number itself that offers us a significant opportunity to bring the best clinical practices, trust, transparency, high quality service and leverage of our European experience and expertise to serve them.
Could you throw some light on the growth rate of the IVF market in India? Also give us some comparison with other nations?
The IVF market in India has grown at a fast pace, with IVF cycles growing at 18 per cent compounded annual growth rate (CAGR). The penetration of the IVF market is significantly low in India with only 2,800 cycles/million infertile women in the reproductive age group (20-44 years) as compared to China, which has 6,500, USA 46,042 and Germany 50,884. The key challenges are lack of awareness, affordability and accessibility. India is also increasingly becoming a preferred destination for fertility tourism due to its medical expertise and cost-effective technology. The main drivers that are giving a rise to fertility tourism are quality healthcare services and cheaper cost of treatment when compared to other countries.
So, what are the key factors that are driving the infertility cases in the country?
Changing lifestyles, stressful work and personal environment, increased consumption of alcohol, tobacco and rising levels of obesity, among other factors, are leading to a drastic rise in infertility cases across the country. Besides, medical conditions such as poly-cystic ovarian syndrome, endometrial tuberculosis and sexually transmitted infections too are adding to infertility problems. Going forward, the numbers of infertility cases are expected to rise further. In fact, if you take the past few years into consideration, you will find that the sector has witnessed an exponential growth for IVF centres and the key drivers behind it are increased availability/accessibility of competitive treatment procedures.
What are the key challenges in the market today?
Well, to understand this, let’s first focus on what strategy is. For now, we are focusing on couples with fertility issues, between the ages of 20 and 44. Now, here itself, there is a huge gap in accessibility as far as patients are concerned. Of the potential 30 million IVF cycles, there are only 150,000 taking place annually. There are other challenges too, including an inadequate number of doctors, trained clinicians and embryologists, stringent clinical processes, the availability of globally accepted best practices and most importantly, transparency. We will address all these issues.