This article was also published on MPO
Western medical device companies are eagerly looking towards Asia for sales, investment and expansion. Currently, Asia’s medical device market is estimated to be $55 billion, about 22% of the global medical device market. The medical device market in Asia has a compound annual growth rate of 10% and is expected to exceed $70 billion by 2015. Asia’s medical device marketgrowth rate is higher than the global medical device market growth rate which is about 4%. Asia’s medical device market growth is heavily influenced by three major factors – (1) large population size, (2) strong economic growth and (3) rapidly aging populations.
Asia’s medical device market is attractive for Western medical device companies due to the sheer size of its population. The global population is approximately 7 billion, with Asia being the home of approximately 4.5 billion people. The most populous country, China, has 1.3 billion people. India is close behind with a population of 1.2 billion. The smaller Southeast Asian countries are still highly populated, with Indonesia having approximately 250 million people and Vietnam having a population of 100 million. These Southeast Asian countries are also becoming more developed with rapid economic growth, thus, they have a significant need for more advanced medical devices.
Strong economic growth in the Asian countries also contributes to growth in Asia’s medical device market. In fact, despite the global economic downturn, Asia is the fastest growing region, enjoying a 5-8% GDP growth rate. Comparatively, the United States and Europe have been growing at 0-2.5%. This strong economic growth means that Asian countries have the resources to invest more in their healthcare markets.
Additionally, Asia’s middle class is expanding more quickly than any of the other continents. Asia is expected to be the home of over 50% of the world’s middle class population by 2030. This rising Asian middle class is projected to increase consumer spending to $30 trillion by 2020 from $5 trillion in 2009. The Asian middle class is expected to be responsible for 60% of global middle class spending by 2020. The majority of the Asian middle class also lives in urban cities that are easily accessible to international medical device companies.
As the Asian population experiences increases in wealth, the healthcare sector and Asia’s medical device market will expand as well. Asian countries such as China, India and Vietnam have already made the development of healthcare products and services a top priority. China has heavily increased the amount of funding towards medical device research and product development to position the country as a rival to the United States in the future. The Indian government has pledged, at least in theory, to double public spending on healthcare by 2017 in order to provide “free” healthcare to all of its citizens. As the spending power of Asian countries increases, Asian consumers have also become increasingly brand conscious. This will lead to a rise in demand for higher end quality Western medical devices.
As of 2010, the average life expectancy for people in Asia is 70 years. The average life expectancy is expected to rise to 75 years within the next 30 years. Due to longer life spans, Asia’s elderly citizens are rapidly becoming a higher percentage of the overall population. The number of senior citizens is expected to continue to increase – by 2050, senior citizens over 60 are estimated to constitute 25% of the Asian population, a significant increase from 10% in 2012. These demographic trends are leading to growth opportunities for Western medical device companies, especially those specializing in geriatric products. As Asia’s population ages, Asia’s medical device market will grow and more Western devices will be needed
These three factors — population size, economic growth and aging populations — will continue to contribute to a robust Asian medical device market. The cardiovascular, diabetes, infection disease and orthopedic sectors are expected to experience the most growth within Asia’s medical device markets. With such positive prospects for the future, Western medical device companies should give Asia serious consideration for further expansion and investment.