Strong Growth in Asia Pacific Medical Devices Sector

Jennifer Lau - Consultant, Healthcare PracticesFrost & Sullivan Asia Pacific

Part of the global medical devices sector worth USD 213 billion in revenue, Asia Pacific has been showing higher growth potential compared to other markets. Although the U.S. is still the largest medical devices market in the world, it is slowing down with only 5.2% year-on-year growth from 2008 to 2009. On the other hand, Asia Pacific has made a significantly leap of 8.5%. It is estimated that, by 2013, the medical devices market in Asia Pacific will reach USD 71 billion in revenue with a CAGR of 7.6% from 2009. Newer medical devices innovations are likely to drive the global market further with the inclusion of green technologies, integration of healthcare technology, increased usage of nanotechnology in medical devices, varied applications of artificial intelligence, and growth in demand for homecare equipment - areas with high growth and demand in the next 5 to 7 years.

South Korea, Taiwan, and Singapore have well-established consumer electronics companies such as LG, Toshiba, Samsung, Hitachi, and Acer that have gained international recognition. Majority of these companies ventured into the medical devices industry as part of the survival strategy to seek out new growth sector and divert away from the intense competition within the consumer electronic products industry. While these countries have shown measure of success in capturing global market share for medical devices and expanding their brands worldwide, there are still areas of opportunities for developing more medical technology-related products.

Growing population and ageing society increase demand for innovative medical devices

As one of the fastest-growing economies in the world, opportunities for local medical devices manufacturers in Asia Pacific are enormous, as most of these economies have witnessed GDP growth rates above 6% in 2010, which are higher than the average growth rates of western European countries and the U.S. The demand for medical devices increases with increasing patient count and investment in hospital infrastructure. The population of Asia Pacific is expected to be on an uptrend, as it is expected to grow between 1.0% and 2.0% per annum, with the exception of Japan, South Korea, and Taiwan whose growth rates are expected to remain low between 0.2% and 0.3% or in negative value (source: http://www.cia.gov). On another scale, the graying population in Asia Pacific has been increasing gradually and thus inadvertently increases the healthcare costs within most countries in the region. Demands for new and cost-effective medical devices to be developed by local companies have been growing steadily as a result of the increase of the ageing population.

Developed economies such as South Korea, Taiwan, and Singapore are expected to experience a substantial increase in the number of people aged above 65 years due to the lower birth rate within the countries. This ageing population trend is prevalent across Asia Pacific, and this will contribute to an increase in patient count as the population of this age group usually develops one or more chronic diseases, thus requiring extra medical care and devices to manage their health. In addition to having ready access to a growing medical devices market, Asia Pacific countries have other supporting infrastructure such as precision manufacturing industries, government research institutes, and increasing venture capitals within the private sector that drive the market forward.

Transformation of the Asia Pacific medical devices industry

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