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A MedTech Boom in Southeast Asia

The Asian medical market is booming. McKinsey predicts that Asia will become the second highest medical technology market in the world by 2020, and it could account for a third of global sales by 2025.

APAC MedTech Market

In the ASEAN countries, with its population of over 600 million people and a GDP of 2.76 trillion U.S. dollars, there is a rapid growth of the middle class and expansion in healthcare coverage. Both of which are factors driving the use of medical devices across Southeast Asia. Such products are likely to see growth of between 8 to 10 per cent in most markets, led by the consumables, diagnostic imaging and lab devices segments.

Singapore: The heart of MedTech in Asia

  • A competitive economic hub for the region in terms of:
    • Ease of doing business
    • Best labour force
    • Strong IP protection
    • Asia’s leading logistics hub
  • Competitive MedTech manufacturing hub
    • Continued growth in manufacturing: MedTech output has grown annually by 11% versus 6.3% in general manufacturing for the past 5 years
    • Strong supplier base: 6 of the world’s Top 10 EMS companies undertaking activities from the entire value chain, in medical imaging equipment, analytical lab instruments, medical consumables, patient care devices and diagnostics equipment
  • Commitment to R&D capabilities
    • S$19 billion set aside for research, innovation and enterprise (RIE) activities in Singapore until 2020
  • Home to a growing community of start-ups
    • Availability of public funding
    • Infrastructure for early stage innovation through biomedical sciences accelerators, private sector translators, hospital incubators, IHL incubators & prototyping facilities
    • Growing number of commercialized innovations and start-ups
      • 122 local start-ups & SMEs segments include in-vitro diagnostics, cardiology, surgery and patient monitoring

The ASEAN medical device market

The region’s medical device market is expected to grow strongly and access to the market will improve in the coming years due to a number of factors:

  • Size of middle class in the region is rapidly expanding. Asian Development Bank expects this group to grow from 24% of the total population in 2010 to 65% by 2030. Additionally, demographic trends such as population aging and urbanisation, is expected to fuel demand for better quality healthcare, and contribute to the expansion of Southeast Asia’s medical device market.
  • Penetration of medical devices into ASEAN is still relatively low, thus, there is much room for growth and market expansion. The heterogeneity of the ASEAN market allows medical device companies to adopt different market strategies and provides ample room for device segmentation
  • Another important consideration for medical device companies entering the ASEAN market is the lack of domestic competition in the region. Overall, ASEAN is a net importer of medical devices. Vietnam for example, currently imports 90% of all the medical devices used in the country.

(Source: Singapore Economic Development Board, Ernst & Young Solutions, McKinsey & Company, The Business Times, Sector Specific Accelerator (SSA) Programme / SPRING Singapore, Skyrocketing Healthcare Demand in ASEAN Opens Door to Medtech)

South East Asia