2025 – Our new 2020

The last 5 years have gone excellently well for healthcare and medical devices-cum-equipment industry, including other sectors like defense. The capital markets have given phenomenal returns over the last 5 years and a new era of AI has begun.

From a global standpoint, sectors other than software seem to be performing average, and with increased geopolitical tensions across the globe, countries are pushing toward localization more than ever. The volatility due to India’s political scenario has also stabilized this year after BJP’s win in June.

In 2024, I had the time to explore several countries starting from Arab Health 2024, China Medical Expo Shanghai 2024, Shenzen 2024 and an academic trip with my IIM B cohort to South Korea to learn and explore business opportunities. Further, I had invested several weeks at IIM B in the last few months.

Leading a team of roughly 200 employees, manufacturing syringe and infusion pumps for over 28 years, and observing the global economic scenario and touching upon learnings from case studies in IIM B, I have drawn upon few trends that our medical industry can look to take advantage of over the course of next 5 years, and more so in 2025.

Information access. This is the best of times to be in medical equipment/devices industry in India; no time in the past, have we seen information, knowledge available to entrepreneurs at such costs. Online courses are free or the paid versions start from `99. We at AKAS have decided to take advantage of this and increase the knowledge base of all our employees by having to participate in few courses a year, which are suitable to their current role. For example, calling up a person or texting them has never been easier than today. Even sending out a google form is as cheaper as it gets.

Increased bonding. From my limited time spent with other industry entrepreneurs and with Rajya Sabha MPs, whom we met recently on their invitation to take inputs from medical devices sector, we find an increased bonding and togetherness in this journey. Covid has made us realize what is truly important. Bringing people together has always been for the collective good for all. We at AKAS have decided to share our knowledge with other companies in our industry for the collective growth of all, leading to increased industry profitability and overall well-being.

Human capital. Our industry’s success majorly lies in investment in human capital. What is human capital? Human capital is basically the knowledge one holds and that knowledge is our capital. Tremendous growth can be achieved by unlocking this human capital, which is what I believe our industry needs to start investing in. A company when started from scratch focuses on survival for the first 5 years and then creating competitive products for the second 5 years and creating infrastructure for the third 5 years and improving operational efficiency for the fourth 5 years, the fifth 5 years period is for human capital improvement and so on. The companies we compete against from Japan and Germany are all 50–100 years old, who have invested significantly in human capital. We hence find it very difficult to compete with them. AKAS has decided to start continuously investing in learning over the next 5 years, which we believe could yield superior returns.

I would like to draw upon few trends, which are in the decline, but are also important, so that our investments do not go wrong.

Investing in cost reduction versus Investing in value addition. The olden era of customers being extremely price-sensitive is coming to an end, with increased penetration of health insurance and credit availability in the market. Consumers, hospitals, and patients, whosoever be your customer, are looking for quality and additional value. Investment in cost reduction, while necessary, should be balanced out with investment in value addition. In many cases, there is very little scope for cost reduction and more scope for value addition.

Traditional marketing. As observed over the last one year, branding and marketing in the traditional sense is not yielding sufficient returns. There is a high need to connect digitally to customers. Knocking on the door sales is slowly changing to brand-oriented purchase and online sales.

Asset light model. Companies are coming up with business models and methodology in business to have lighter assets. This allows companies to grow faster, of course, at a certain cost. But investing in high-yielding activities is more essential at the moment.

I further foresee Indian medical devices-cum-equipment companies dominating the global healthcare market like pharma and consumables by 2050. The world is going to be looking to buy India-manufactured medical equipment.

Our roadmap for 2025 is to follow these trends, as written above, and additionally take complete advantage of the India growth story. You can expect AKAS to have a bigger product basket by the end the year.