Business Opportunities For DNA Testing Kits

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DNA Kits
DNA Kits
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The market for genome data testing is disrupting globally. The direct-to-consumer genome testing market is expected to be worth 340 million USD by 2020, growing annually at 25 per cent—according to the latest findings by Credence Research.

DNA testing kits are used to conduct all kinds of DNA tests on plants or humans. The demand for these kits has increased manyfold in the recent decade due to commercialisation of DNA testing for humans and use of the results for various health and lifestyle benefits.

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Dr Saleem Mohammed of XCode (DNA testing kits provider for both consumer and clinical genomic applications) shares, “India is increasingly becoming a genomics hub due to low-cost testing as well as availability of skilled IT resources. Core investments for DNA testing kits business go into people, R&D on machine learning, AI and automation.”

India is playing a significant role in the growth of DNA testing kits business globally. Various companies in the west (America, Canada and Germany primarily) are looking for partners to offer various kinds of DNA kits in India. With companies like Qaigen (Germany-headquartered DNA kits provider) setting up offices in India, manufacturing in the segment is also slowly picking up.

Dipender Singh of Royal Life Sciences, Indian partner for MIDI Sherlock USA, a company with clients across the globe, informed that the demand of their products had increased about ten times in India in the last seven years. Almost 30 per cent of their clients are from other countries as well.

Conventionally, DNA testing kits were used by labs and research centres to diagnose the DNA sequence for research and forensic purposes. However, with 23andMe (funded by Google) and Ancestry (offshoot of National Geographic) leading the R&D of DNA testing, companies around the world are working towards making DNA testing kits available to the masses. The US Food and Drug Administration (USFDA) has approved DNA tests by 23andMe to predict the risk of developing Parkinson’s disease. With such strong organisations in the front, DNA testing kits is today one of the most lucrative business opportunities for investment.

Direct-to-consumer DNA testing kits have become common, subject to the development and investment in the business of bio-technology. Commercialisation of genome testing has attracted the attention of a lot of enterprises, research institutions and government bodies to the segment. Some of the market players in India include DNA Labs India, Map My Genome, Thermo Fisher, MedGenome, XCode and Indian Biosciences.

DNA Kits Study
DNA Kits Study

Business segmentation

Those willing to enter the market can either start as an independent Indian brand provider or serve as Indian partner of a foreign brand.

The Indian providers set up their own brand and independent company. Such companies may also invest in research. These either manufacture their own kits or, as in most cases, import in bulk from China and sell in India under their own brand name.

Indian partners of a foreign brand take exclusive partnership rights to sell DNA testing kits of established brands from the west. They focus on sales. Research and manufacturing is taken care of by the parent company. Such businesses offer high returns on low investment.

Whether you choose to create your own brand or partner with a foreign brand, you’ll require channel partners across business services to help in research and interpretation of results.

How to get started?

A minimum of three million rupees (can go much higher depending on the business plan) is required to set up a DNA testing kits business. The investment amount includes the costs for infrastructure establishment, IT and automation. It takes 3-5 years to break even depending upon the competition in market and your business identity as an Indian brand importing DNA kits from China or the subsidiary of a western counterpart. Currently, direct-to-consumer kits start at around ` 2000 and cost as much as ` 200,000 for specific tests.

A major capital investment is required to set a corporate facility and getting trained manpower on board. Another major requirement is a profitable marketing and distribution channel powered by the right logistics. Companies like Quick source DNA use LED lighting solutions from Philips to save power costs. XCode uses artificial intelligence solutions offered by Amazon.

DNA testing kit providers need to conform to various ISO quality standards. While organisations seeking to assure responsible environment management system should get ISO 14000 certified, some also oblige to ISO 9001 to assure high-quality practices. Companies that provide a complete solution with their own DNA testing laboratories need to be ISO 17025 certified. For companies providing DNA kits commercially, the formal guidelines aren’t yet clear. For other research, some healthcare categories and forensics, specific guidelines prescribed by the concerned agencies need to be followed.

The DNA testing kits market is huge and highly untapped. Thus there is scope for enormous growth. Cost to start the business is relatively low and return margins are huge. A DNA kit costing ` 100 to a dealer might be sold in the market at a price of ` 1000,” says S. Balaji of Geneagic Testing Kits.

Diagnostic labs are aggressively looking for suppliers of human DNA testing kits since the demand for direct-to-consumer business is growing exponentially, says a spokesperson from Dr Lal PathLabs. They have tied up with Map My Genome to source their DNA testing kits and further sell these to their channel partners.

Western parent companies (especially from USA and Europe) expect their Indian partners to set up a basic facility running on energy saving resources like solar panels and LEDs because they believe in responsible business management.

Profitability is ambiguous since the business territory is new. Also, the path to reach the untapped end consumers isn’t yet defined. The sole source being relied upon is the Internet. There is intense pressure on the firms to conform to regulatory requirements. Also, the standardisation process is highly dubious.

DNA testing business is all about utilising biotechnology to analyse people’s DNA sequence for interpretations related to ancestry, identifying health related risk factors and learning about individual physical body characteristics. Currently, the results are being harnessed by health, sports, beauty and lifestyle industry segments. The Internet of Things (IoT) and artificial intelligence are contributing significantly in the collection and analysis process.

Pro Gen Bio Lab: A Business Case

Pro Gen Bio Lab is a B2B company providing DNA testing kits of various brands from Germany and the USA in India. It serves as an exclusive partner for these brands to sell their products in India. The company sells DNA kits in neighbouring countries like Sri Lanka and Bangladesh, too. The kits, claims the company, match the international ISO quality standards.

The company has shown positive signs of growth since the last decade. “The demand of our products, especially DNA isolation kits, has increased due to the vested commercial interest of the diagnostic labs. We are now thinking to set up our own manufacturing plant. The machine and equipment investment for the same is around 50 million Indian rupees. We plan to recover our investment within the first four years, keeping in view the pace at which our business is expanding,” says Ritesh, founder of Pro Gen Bio Labs.

“The avenues and demand of DNA testing kits are increasing with each passing year. Being an Indian company also gives us the power to leverage opportunities in the Asia Pacific region and the rest of the world,” explains Ritesh.

Most of the companies selling DNA testing kits in India are subsidiaries of their western counterparts. They need to embed efficient technology processes at the core of their business strategy.

“With coherent technology enablers like automation and IoT, my business efficiency has increased almost ten-fold,” informs Pranav Mishra of Genetic Biotech. “We utilise Syska LED solutions for our enterprise. This has saved us about 40 per cent of our annual power expenses. Our genetic modelling and interpretation is enabled by Amazon’s AWS Artificial Intelligence.”

The market for DNA testing kits is quite young and very dynamic. It needs greater support, clearer guidelines and better standardisation from the regulatory authorities.

Abdur, co-founder of XCode India, shares, “DNA testing kits are in demand by clinics, nutritionists, physicians and other healthcare professionals as well. Personalised recommendations in these domains based on genetic know-how is an added advantage. We provide continuous training programmes to our business partners so that they are aware of the latest in genetic science.”

The market environment for DNA testing kits is changing at a very fast pace. Those who invest in this business are likely to gain advantage from the initial momentum upsurge.

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