In today’s NYTimes business section there is a brief article reporting that direct to consumer (DTC) genetic testing start-up 23andMe is slashing the price of conducting a test by a whopping 60% (from $999 to $399).
The cost to do such tests is continuing to drop as the technoloy matures, but a 60% drop, that’s drastic and signals a couple of things:
- 23andMe is not getting the kind of traction they hoped for and are now going for a volume pricing model – lower margins, but greater sales numbers to compensate.
- This young market is beginning to get crowded and pricing is one key path to differentiation.
Now the question is: How will 23andMe’s competitors respond? Is this the first salvo in a pricing war to capture market share?