The rising purchasing power of the Association of Southeast Asian Nations (ASEAN), which still has inadequate healthcare infrastructure, can be an excellent opportunity for Korean healthcare companies to seek growth, a report said.
According to Hong Kong-Shanghai Banking Corp., ASEAN countries have been witnessing an expansion of the middle class and the domestic demand, with an increase in households’ purchasing power.
The Organization for Economic Cooperation and Development (OECD) also forecasts the population of the middle class in seven countries of the ASEAN – Indonesia, Thailand, Cambodia, Malaysia, the Philippines, Singapore, and Vietnam – would climb from 80 million in 2009 to 499 million in 2030.
Korean companies will have more chance to enter various healthcare businesses in the region, a report by a Korean biotech industry group said.
The Korea Bio-economy Research Center, run under the Korea Biotechnology Industry Organization, published the report on the ASEAN’s healthcare industry recently. “ASEAN countries have achieved rapid economic growth in recent years. Korea has been exporting over $200 million worth medical devices to ASEAN since 2013,” the report said.
The number of doctors per 1,000 people in ASEAN is 0.57 on average, significantly low compared to the OECD average of 3.3. The shortage of doctors in ASEAN is also an opportunity for Korean hospitals to enter the region, the report said.
“Exporting Korea’s medical ICT technologies to address the shortage of medical professionals in ASEAN can help the region build medical IT infrastructure and Korean hospitals and companies expand their business in the region,” Ahn Ji-young, the author of the report, said.
Korean companies are competitive enough in the region because the nation is equipped with excellent IT infrastructure, a good national health insurance system, medical professionals, and medical big data, she added.
Ahn took an example of a large Korean hospital seeking cooperation with overseas counterparts to create medical innovations. Seoul National University Bundang Hospital signed deals to build its self-developed hospital information system in Saudi Arabia, the U.S., and Lebanon,” she said.
As ASEAN consumers are growing rapidly, Korean companies are expected to engage more in the healthcare sector in the region, she noted.
According to data from the World Bank, Indonesia had the highest medical cost among ASEAN countries, spending $29.5 billion in 2015. Thailand came next with $15 billion, followed by the Philippines with $12.9 billion, Singapore with $12.6 billion, Malaysia with $11.5 billion, and Vietnam with $10.9 billion.