Telehealth services have been on the rise in the past years and experienced a boom due to the COVID-19 pandemic. This increase in demand will continue its course irrespective of a second wave. However, the market is evolving very quickly and the most reputable service providers are being chased after via partnerships and acquisitions. Thus, companies that want to make an entrance must scan the telehealth ecosystem of different countries, identify their niche and develop a corresponding suitable strategy. Above all, they must act now before it is too late.
Last week, one of Germany’s largest online doctor consultation platform, Teleclinic announced its acquisition by the online pharmacy Doc Morris, making it part of the Swiss Zur Rose Group. The merger, which has been valued at “mid eight digit figure’’, is one of the latest examples of the growing interest in Telehealth from investors and industry players. This interest is driven by the significant increase in importance of online doctor consultation during the COVID-19 pandemic.
In the beginning of this year, Teladoc Health announced a $600 million purchase of InTouch Health, a fellow telehealth provider focused on enterprise offerings. Even chronic care management provider Livongo has stepped into the market by partnering with MDLIVE and Doctor On Demand. These, trends show that companies are recognizing the value of telehealth more and more and are acting very quickly to gain market share through acquiring or partnering with existing reputable service providers.
Apart from new mergers and partnerships, the pandemic has also boosted the already rising use of telehealth. In just the first quarter of 2020, Teladoc reported 2 million online doctor visits, which is a significant increase compared to 2019, where it conducted 4.1 million consultations for the whole year. The company, expects a revenue of $800 million for 2020; a 44% increase from the previous year.
Other service providers have also experienced up to tenfold increase in their service usage and some countries made it the only way to receive primary care during the lockdown period. This has greatly impacted telehealth adoption rate (share of telehealth in total doctor consultations), which ranges from 1%-12% in countries with established markets, with a corresponding estimated revenue upto $30 billion for 2020 (R2G market analysis).
Although, there has been an overall surge in telehealth, the adoption of the service has varied amongst different counties – often significantly, with the US being the largest market. The following factors must be accounted for when assessing market entry options:
Telehealth has been on the rise for the last few years and will continue in this path irrespective of whether a second wave of the pandemic will take place or not. Patients will not only use it for one time visits or acute care, but together with Remote Patient Monitoring (RPM), the service even has the potential to become the primary revenue source for digital chronic care companies in the next 2-3 years.
At the same time, the market is evolving rapidly and investors, as well as key industry players are rushing to either acquire or partner with reputed service providers and expand quickly. The run for telehealth vendors has begun!
Thus, to make an entrance, relevant companies must increase their knowledge of telehealth ecosystem in different countries, find their niche and develop corresponding service offerings or identify the right partners. Above all, they must act now before it is too late, and markets become too saturated.
Get in touch to discuss potential market entry options for your business.