With the world still battling COVID-19 and its aftermath, it’s easy to forget that there are sectors out there experiencing strong, even remarkable growth.
One of these is the medical technology (medtech) sector in the healthcare industry, where Asia’s medtech industry is predicted to be the second-biggest of the world’s fastest-growing regions over the next few years.
It will also account for 35% of total growth and serve as the leading growth engine in international medtech markets.
With many parts of Asia becoming tech hotspots, this is exciting news for the area. In this article, we take a closer look at the medtech scene in the bustling Southeast Asia region and the opportunities it offers.
What is Medtech?
Broadly speaking, medtech covers products, services, and solutions that use technology for medical purposes, from diagnostic devices and therapies to digital health solutions.
This can include everything from X-ray machines to blood pressure monitors, pacemakers to cancer treatments, and even smartphone apps that allow you to book appointments or check your symptoms.
With an ageing population and rising income levels, there is an increasing demand for better quality healthcare globally, and medtech innovators are rushing to meet this demand.
In Southeast Asia, healthcare is growing at an incredible rate as the population becomes more affluent and ages.
However, the rising costs of the healthcare system due to a variety of factors, like inflation, supply chain woes, and more may affect consumers across the board.
Medtech offers a value-based solution to the problem of high healthcare costs as it allows for the development of new technologies that can make healthcare more affordable.
Medtech also solves the problem of access to healthcare as it allows for the development of new technologies that can make healthcare more accessible.
Therefore, it is a healthcare solution for different challenges faced, making it highly attractive.
Why is Southeast Asia Uniquely Positioned to Capitalise on Medtech?
Why is the Southeast Asia medtech sector well-poised for growth?
There are a number of reasons why this region is an ideal place for medtech to flourish:
Firstly, the region is home to some fast-growing markets. Indonesia, Vietnam, and Thailand are all predicted to be in the world’s top 10 economies by 2030, and Malaysia, Singapore, and the Philippines are also experiencing strong growth.
This is partly due to population growth – the region is home to around 680 million people, and this is expected to rise to around 717 million by 2030.
But it’s not just the size of the market that’s important – it’s also the way that Asians are consuming medtech products and services.
There is a growing middle class (expected to be 396 million strong by 2030) in the region that is increasingly aware of the importance of health and wellbeing and is willing to spend money on products and services that improve their quality of life.
In turn, governments are also looking at ways to enhance access to better healthcare solutions to also help healthcare providers better manage patient care and outcomes.
An Ageing Population
Equally important is the growing age of the region’s population. While Southeast Asia is a very young population (most of ASEAN’s population is under 30), there is a significant number of people growing older.
While the percentage of people in Southeast Asia aged 60 or above was 9.8% in 2017, it will more than double to 20.3% by 2050.
This means that not only is there a growing number of potential consumers for medtech products and services, but also an increasing need for them.
Another key factor is the region’s digital transformation. About 350 million Southeast Asians have bought at least one online service, and over 3 million people in the region are going online for the first time every month.
Those are staggering numbers that lend credence to the belief that Southeast Asia is on the brink of a digital revolution.
And this digital transformation is starting to have an impact on the healthcare sector. Online appointment booking, for example, is becoming increasingly popular, as are online symptom checkers and health tracking apps.
This digital revolution presents a huge opportunity for medtech companies, who can develop innovative solutions that take advantage of the growing digital infrastructure in the region.
What Are Some Potential Challenges for Medtech Companies?
Certain aspects may pose a challenge for medtech companies looking to penetrate the region.
For example, SEA consists of a diverse array of markets unique to each other. They come with distinct cultures, healthcare systems, and even regulatory environments.
Companies that fail to consider these aspects depending on the country they are looking to enter will face difficulties.
Even though countries in Southeast Asia are pivoting towards harmonisation in terms of their regulatory requirements, it takes time.
On the bright side, despite these unique regulatory requirements, Southeast Asia is still a greenfield for innovative medtech developments. Firms can expect their products to hit the market faster and more easily.
Medtech firms also need to manage growing consumer expectations and their demands for improved healthcare and wellness.
What Are Some of the Top Medtech Startups in Southeast Asia?
There are various medtech startups in Southeast Asia, with these at the forefront:
- Biocare Medical
- See-Mode Technologies
- Curiox Biosystems
Medtech Innovation in Southeast Asia
Southeast Asia is increasingly recognised as a prime source of product technology innovation.
To serve the region rather than the global market, some considerations need to be made.
The Southeast Asian market is relatively less connected with lower GDP spend on healthcare as compared to other bigger and more developed economies like the US.
Therefore, medtech innovation needs to be affordable for the common people to a certain extent in order to take off. However, this may not be a necessity if the desired result is achieved through a different approach.
The Medical Devices Market in Southeast Asia
What about medical equipment, like medical devices?
Southeast Asia’s medical device market is expected to undergo immense growth, with improved market access for medical device companies looking to enter.
This is due to a few reasons:
- A fast-growing middle class market, from 24% in 2010 to 65% by 2030
- Demographic trends like an ageing population will drive demand for better quality healthcare across the region
- Comparatively low penetration of medical devices, which presents an opportunity for growth and expansion
- The absence of domestic competition since the region is largely an importer of these devices
- The diverse and dissimilar market, which means that medical device companies can use different strategies and make use of device segmentation
What is Singapore’s Role in the Medtech Sector?
Singapore is known as the heart of medtech in the region. It is a competitive manufacturing hub, where medtech output has risen yearly by 11% over the past 5 years.
It also boasts a robust supplier base, with 6 of 10 of global Electronic Manufacturing Services (EMS) firms taking on activities across the entire value chain.
The government has also recognised medtech as a critical sector in the biomedical sciences industry slated for development.
The city-state is home to a flourishing community of startups like HealthSTATS and Veredus Laboratories, with the government providing plenty of funding. It also has a strong infrastructure in place with incubators, accelerators, and more.
It is the R&D base for 30 global medtech firms like Becton Dickinson, Alcon and Hill-Rom, and Biosensors.
A Huge Commercial Opportunity
The fast-growing markets and digital transformation of Southeast Asia present a huge commercial opportunity for medtech startups in the region to serve their own population, and eventually, the world.
The combination of a large and growing population, an increase in income and middle class, and a desire for better healthcare make Southeast Asia an ideal place for medtech to flourish.
And with the region’s digital transformation well underway, there has never been a better time to get involved.
- Medtech is the industry that deals with the design, development, production and marketing of medical devices. It is a rapidly growing sector as new technologies are developed and the demand for healthcare services increases.
- Medtech is a solution to expensive healthcare and the lack of accessibility to healthcare for many consumers.
- The industry needs to focus on issues like cybersecurity, regulatory requirements, attracting the right talent, and enhancing their digital capabilities.