The healthcare sector stands out as one of the most rapidly evolving and impactful industries in terms of both employment opportunities and societal contributions. The continuous progress of technology within the medical field has yielded numerous innovative medical devices that greatly assist both patients and healthcare professionals in delivering top-notch medical care.
While the concept of medical devices has ancient roots in human history, the contemporary medical device industry as we know it today finds its origins in the mid-19th century during the post-Industrial Revolution era.
The growth of medical tourism, along with the overall prosperity and GDP expansion in the healthcare market, has spurred the integration of cutting-edge medical equipment. In India, where the healthcare system heavily relies on imported medical technology, this accounts for a substantial 80% of total sales.
Medical equipment tends to be expensive due to the intricate multi-tier distribution system, a market primarily influenced by suppliers, and limited access to information. This high cost dilemma often drives many towards unregulated Chinese alternatives, which are more budget-friendly.
In fact, approximately 70% of the medical device market is made up of smaller healthcare facilities, including hospitals, clinics, and nursing homes, each having fewer than 100 beds at their disposal. Unfortunately, these under-resourced entities are underserved by the current distribution system, which results in them bearing the brunt of elevated prices owing to added margin markups along the convoluted supply chain.
In 2017, the Government of India (GOI) implemented a comprehensive regulatory reform for the medical device sector, providing a significant boost to the industry by introducing a 'risk-based' regulatory framework.
It also allowed 100% FDI in the sector giving a long-desired boost to the medical device industry. The Indian government's 2017 national health policy supports progressive universal health care for citizens, envisioning equitable well-being for all sections of society.
Handling the commercial activities of medical devices requires a significant and distinct kind of expertise. In 2010, the duo of Nikhilesh Tiwari and Dr. Ashutosh Raghuvanshi came up with an idea to establish an online platform to supply medical devices pan India.
The idea turned into a reality in the form of Collateral Medical (ColMed), headquartered in Mumbai. In a conversation with Nikhilesh, he narrated the whole idea of an online platform in an interview with Start-up City magazine.
He indicated that the accessibility of medical devices and healthcare is quite restricted, highlighting the inadequacies within the institutional framework of the supply chain. They have employed IT to transform the industry by mitigating the overall supply chain cost. The organization is adding more value to its offerings primarily through a group purchase facility.
Collateral Medical further enhanced its standing when it welcomed Sanjay Jha into the company's fold. Sanjay Jha, after gaining valuable insights into the effectiveness of Group Purchase Organizations and prominent nationwide distributors in the United States during his extensive tenure with GE Healthcare and Johnson & Johnson, joined the team.
The online platform Colmed. in brings benefits to Medical professionals and hospital purchase managers. It is serving through direct mail, industry-specialized support staff, field sales representatives, and use of the Internet and mobile technologies.
Developing nations largely have been dumping grounds for cheap quality products of different MNCs. According to a global health technology report published by the prestigious medical journal, 'The Lancet', around 40% of healthcare equipment in third-world countries is out of service.
The firm aims to target these unmet opportunities as a market leader with innovative technology. It is bringing customers and manufacturers in proximity.
Col Med's progress has followed a deliberate and consistent path. With a remarkable year-over-year growth rate of 100%. They have positively impacted more than 15,000 clients, with over 40% returning for their services. The team has now expanded to over 100 members and anticipates tripling its clientele in the forthcoming year primarily through internal referrals.
The company addresses the needs of diverse entities, including nursing homes, NGOs, UNDP programs, and various corporate clients throughout the nation. What sets them apart is their pioneering use of technology, resulting in cost savings of 25% and time savings of 50% for their valued clients.
The product offerings of Col Med include Stethoscopes, diagnostics, Medical Equipment, Surgical Supplies, Chronic Care, Furniture, lights, First Aid and Dental to name a few.
Col Med is not only involved in the supply of medical devices but also helps small nursing homes and hospital partners in their inventory management.
The company is increasing its disease and speciality focus. They are following the innovative route of internal partnership with logistics firms instead of sticking to old methods like other companies. Col Med partnered with 3M Healthcare for the supply of medical devices on a transparent platform.
Now Col Med successfully sources medical devices from firms like Johnson & Johnson, Boston Scientific, GE, Philips, Bard, Nipro, and others after becoming their all-India distribution partner.
The online platform boasts an extensive inventory, offering a selection of over 10,000 products. It consistently expands its product catalog by introducing thousands of new items each month. To enhance convenience, multiple payment options are available, including Debit/Credit cards, EMI, COD, Digital Payments, and bank transfers.
This sector represents a distinct niche and remains relatively untapped, which translates to limited competition for Col Med within the online platform market. The company's commitment to a culture of collaboration plays a pivotal role in securing complete customer satisfaction by consistently going above and beyond expectations.
The total spending on medical services in India is a little over 1% of the total GDP. The size of the Indian medical device market is around USD 5.2 bn. It is expected to reach USD 50 bn by 2025 at a CAGR of 15.8%, vis-à-vis a CAGR of 4.1% for the Global medical devices industry.
Collateral Medical plans to mark its footprint in tier 2 and tier 3, penetrating the multi-tier distribution set-up in India. They are also looking to raise equity in the coming months.
The firm plans to redefine the delivery of its offerings to provide a satisfactory end-user experience. Col Med's team of Biomedical Engineers is identifying the unsatiated demands of their clients.
To enhance their customer understanding and purchase strategies, Col Med hired a VP (supply chain) from a leading hospital chain. The R&D team plans to develop a few in-house products to decrease the cost significantly.
Col Med intends to leverage the Series, A funding secured from Carpediem Capital to spearhead transformative enhancements within its medical device distribution network. This strategic move aims to facilitate business expansion and drive the integration of innovative technologies, ultimately leading to further cost reductions in their product offerings.
At present, they are actively developing IT solutions designed to establish direct real-time connectivity between hospitals and the Col Med platform. This initiative includes the implementation of SAS-based inventory systems, effectively eliminating the necessity for manual online order placement.
Col Med initiated working on smart devices that can be connected to cloud-based systems making healthcare accessible to patients in remote areas.
The company aims to evolve into an all-encompassing solution provider for the procurement requirements of hospitals and small clinics. The primary focus is on serving the primary care sector. Furthermore, it is strategically planning an expansion into the secondary care domain.
The executive operations of the company are under the capable leadership of Nikhilesh Tiwari, who also serves as the Director. With an extensive background spanning over a decade in the medical device industry, Nikhilesh is a distinguished alumnus of IIT Delhi and holds an MBA from the London Business School.
His professional journey has encompassed pivotal roles with prominent medical device and healthcare enterprises across the United States, the United Kingdom, Germany, and India.
Sanjay Jha is the Director with over a decade of medical device and IT experience. He is an IIT Kharagpur Graduate and Postgraduate in management from INSEAD.