As the APAC region poises to become the second-largest market for medical technology, organizations are reassessing their conventional strategies and developing new business models to establish their presence in the evolving market.
FREMONT, CA: The healthcare landscape in the APAC region is steadily changing as major organizations turn toward digitalization of critical processes. The APAC region comprises over half of the world population, which drives the demand for effective healthcare. Even today, a significant portion of the population does not enjoy access to modern medical technology. Also, factors such as population growth, income difference, diseases, and lack of awareness are widening the demand and supply gap in healthcare.
Medical technology organizations face multiple challenges in introducing robust solutions to the APAC region. Only a few companies have successfully broadened their reach and formed strategies to deliver quality products and services to patients. According to the McKinsey report, the market for medical technology in the APAC is expected to reach $133 billion by the year 2020.
The complications arise from the gap in the individual markets dominating the APAC region. Several factors lead to the widening of this gap, including political systems, economic development, cultural mores, and disease profiles which differ from one country to another. Although high tech companies have been successful in addressing some of the complexities, their offerings have failed to reach a significant portion of the population.
The population of over 3.7 billion people generates unprecedented demand for better healthcare. According to McKinsey, a quarter of this population will have aged by 2025. Also, 65 million births are reported in the APAC each year. As such, the market is witnessing rapid growth.
McKinsey predicts that APAC will overtake the European Union as the largest market for medical technology after the United States. Global organizations will be spurred to reassess their strategies and develop new business models which address the deficiencies in the region, thus reaching new patients with enhanced innovation.
Medical technology companies in the APAC are hindered by multiple obstacles, including limited financial resources, the sparing investment in healthcare. The disjoint customer segments in the region make it difficult for organizations to function efficiently. The lack of workforce training and the less-than-essential infrastructure has significantly slowed down the adoption of medical technology.
Although medical technology companies have been active in the APAC for the last decade, their growth has been slow owing to the regional constraints. However, as the region poises to become the second-largest market for medical technology in the region, leading companies are exploring new opportunities to establish their presence.
Based on the research by McKinsey, APAC has a diverse collection of markets, all of them facing a deficit in healthcare technology. The vast medical needs in the region are often unmet due to the challenges faced by the providers, including the diversity in demographics, disease profiles, healthcare systems, and regulatory regimes.
The conventional regulatory agencies in the APAC are struggling to keep up with the rapidly evolving medical technology. Often, the regulatory personnel lacks the capabilities needed to assess the research and clinical trials provided by the companies. This disparity could also hinder the development processes of medical technology manufacturers.
The organizations which successfully overcome these hurdles will enjoy an unparalleled advantage in capturing the market. It will provide them with an opportunity to pursue innovative products and services for the customers. Medical technology organizations will be able to move beyond the premium layer of the market and penetrate its more significant portion.
Medical technology companies will need to form better connections with the end-users and develop clear insights as to the demands of the market. It will enable them to build products and services appropriate for the market. The removal of barriers hindering the growth can be overcome by driving greater collaboration among the stakeholders, including regulators, academics, industry executives, healthcare providers, trade groups, and patient groups.
A robust collaboration strategy encompassing the entire industry will have a significant impact on medical technology. Organizations can enhance their capabilities by partnering with educational institutions, while also contributing to the improvement of medical education. Organizations will also have to reexamine their commercials models and channels to provide better offerings to patients with diverse needs, while also accommodating their different levels of medical awareness.
To connect better with the individual markets, organizations will have to move beyond their dependence on distributor networks and offer more market appropriate products that appeal to the bigger pool of customers. The products must be able to meet the needs of the customers, and at the same time, maintain cost efficiency. Also, reaching a broader range of customers will make it imperative for them to augment their supply chain models.
Global medical technology companies will have to empower their local divisions to serve the specific needs of the individual markets. Local companies have an edge when responding to patient needs in particular regions. Hence, global organizations must offer greater autonomy for their local managements in adapting to specific demands.
A growing number of new trends are driving the demand for improved healthcare in APAC. Several countries are considering the institutionalization of universal healthcare. Private hospital chains are also witnessing a rapid expansion, with increased access to new funding channels.
APAC offers excellent opportunities for medical technology companies in addressing the needs of underserved patients and penetrating new markets. The region claims a sizable portion of the global innovation, especially in the segment such as digital healthcare delivery, care for the elderly, and cost-effective products and services designed for specific markets.
The demand for enhanced healthcare is on a continuous rise as the APAC region poises to take its position as the second-largest medical technology market in the world. Global companies will be able to develop innovative offerings and reach new customer pools by taking a more personalized approach to asserting their dominance in the dynamic market.