2017 GCC Medical Devices Market Snapshot - Reciprocusreciprocus.com/sites/default/files/2017 Medical...
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2017 GCC Medical Devices Market Snapshot Prepared by: Reciprocus International Date: January 2017
Transcript of 2017 GCC Medical Devices Market Snapshot - Reciprocusreciprocus.com/sites/default/files/2017 Medical...
2017GCCMedicalDevicesMarketSnapshotPreparedby:ReciprocusInternationalDate:January2017
TableofContents
ExecutiveSummary 2
MacroeconomicOutlookoftheIndustry 3
IndustryOutlook andAnalysis 4
RegionalLandscapeandAnalysis 5
OpportunitySpotlightandAnalysis 6
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ExecutiveSummary
• TheGCCregionhasanoverallstrongdemandformedicaldevicessupportedbythekeydrivers,primarilyledbyincreasingdemandforhealthcareduetochronicdiseaseburdenassociatedwiththeageingpopulationsandunhealthylifestyles.
• However,exportsofmedicaldevicesfromASEANtotheGCCregionshrankataCAGRof-7.9%toaexportvalueofUS$20.5million,primarilyduetotheeconomicslowdownintheUAE,whichmakesupthesecondlargestmarketshareamongGCCcountries.
• Despitethis,growthopportunitiesarestillpresentintheregion, withthreeexamplesbeingQatar,Oman andSaudiArabiaamongothers.
• Basedonourresearch,ASEANexportstoSaudiArabia,amongtheGCCcountries,hasbeengrowingatarapidrate,withaCAGRof20.2%toreachavalueofUSD9.3millionin2014,andalsohasahighgrowthforecastinhealthcareexpenditureintheregion,whichisexpectedtoreachUSD41.0billion,withaCAGRof3.3%.
• Ontheotherhand,ASEANexportstotheUAEhavedeclinedfastestamongtheGCCcountries,withaCAGRof-22.6%.ThisisduetothesaturationofthemarketwithlargemultinationalplayersfromtheUS,GermanyandNetherlandsestablishingregionalsubsidiariesinDubai,whichispositionedasahubforre-exporttootherGCCcountries.
• GiventheamplepossibilitiesbeingoverservedacrossGCCmedicaldevicemarkets,wewouldrecommendthatSingaporecompaniesconsiderexploringopportunitiesinthisregion,withaparticularfocusonOman,QatarandSaudiArabia.
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MacroeconomicOutlookoftheIndustry
BusinessOverview
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Ø TrendAnalysis:TheMENAmedicaldevicemarketisprojectedtogrowatasteadyCAGRof5.4%overtheperiod2015-2020andreachamarketvalueofUS$9.8billionby2020,butthisgrowthisexpectedtobecontainedbymacroeconomicimbalancesduetotheloweroilprices,particularlyintheGCCregion.Despitethisslowdown,SaudiArabiawillcontinuetoleadtheGCCmarketandtheUAEwillremainapredominantbaseformultinationalcompaniestoestablishregionalheadquarters.
Ø KeyDrivers: TheMENAregionaldemandformedicaldevicesisprimarilydrivenbygreaterdemandforhealthcarestemmingfrompopulationgrowth, expansionoftheprivatehealthcaresystem,increasingmedicaltourism,withDubaipositionedasahub,andplanstodevelopanintegratedmedicalcityintheGiza,Egypt.
Ø MarketLeaders:ThemedicaldevicesmanufacturingspaceisdominatedbymultinationalcompaniessuchasGE,Philips,Siemens,Fujifilm,HitachiandMedtronic.ThesecompanieshaveasignificantpresenceintheUAEprimarilyasadistributionbaseforothercountriesintheMiddleEastandalsoduetothepresenceoftheDubaiSciencePark.
MENAMedicalDevicesIndustryValue MENAMedicalDevicesGeographicBreakdown
-4% -2% 0% 2% 4% 6% 8% 10% 12% 14%
0.001.002.003.004.005.006.007.008.009.00
2010 2011 2012 2013 2014 2015
MarketValue,$billion Growth,%
Bahrain1%
Kuwait5%
Oman
2% Qatar3%
SaudiArabia26%
UnitedArabEmirates13%
OtherMENAcountries
50%
IndustryOutlookandAnalysis
AnalysisBreakdown
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Porter’s5ForcesAnalysisØ PowerofBuyers:Thelimitednumberofbuyersof
medicaldevices,meansthatbuyershaveacertaindegreeofbargainingpower.Economicdifficultieshaveseendisposableincomesshrink,resultingindecreasingsurgicalprocedures,particularlyincountrieswhereausteritymeasureshavebeenimplementedandthepublicsectoraccountsforalargeamountofhealthcareexpenditure.
Ø PowerofSuppliers:Often,playerswillsourceinputsfromavarietyofsupplierstoreducetheirdependenceonasingleprovider.Whilethereislittledifferentiationinsupplymaterials,giventheimportanceofhygieneandsafetyinthismarket,supplierswithaprovenrecordmayholdanadvantageoverthosethatdonot.
Ø DegreeofRivalry:Thehealthcareequipment&suppliesmarketischaracterizedbythepresenceoflargescaleinternationalincumbents,increasingthelevelofrivalry.LargeplayerssuchasGE,SiemensandToshibaareabletodifferentiatethemselvesthroughextensiveresearchanddevelopment,reducingrivalrytoanextent.
Ø SubstituteThreat:SubstitutesassuchdonotexistinthismarketduetothespecificfunctionofvarioustypesofequipmentsuchasMRIsorultrasoundscanners.
Ø LikelihoodofNewEntry:TherearerelativelyhighbarrierstoentryduetothehighcapitalexpenditureandinvestmentinR&Dneeded.Thereisalsoalargedegreeofregulationinvolvedandapprovalforproductsusuallyinvolvetimeconsumingandexpensiveclinicaltrials.
012345
Power of Buyers
Power of Suppliers
Degree of Rivalry
Substitute threat
Likelihood of new entry
RegionalLandscapeandAnalysis
APACOman,QatarandSaudiArabia
areexamplesofgrowthopportunitiesintheGCCregion
AmericasEMEA
BubbleChart
Ø Growingdemandformedicaldevices: Therecentperiodoflowoilpriceshascreatedfiscalpressureontheoil-basedeconomiesintheGCCregion.Despitethis,thehealthcaresectorwillremainapriorityformostMENAgovernments,largelyduetoitsimportanceineconomicdiversification.Theregion'sgrowingburdenofnon-communicablediseasesisexpectedtobeamajordriverofincreasinghealthcareexpenditureandmedicaldevices.
Ø EmergingopportunitiesinASEANexportmarket:SingaporeiscurrentlythelargestexporterofmedicaldevicestotheGCCcountriesamongtheASEANcountries.However,thereisstillopportunityforgrowthastheGCCcountries’importvolumefromSingaporeisrelativelysmallcomparedtolargerplayerssuchastheUS,GermanyandNetherlands.
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ASEANExportsofmedicaldevicestoGCC:GrowthandVolumebyCountry
Negative Growth
High Export Volume
Low Export Volume
Philippines
Singapore
Malaysia
Indonesia
Thailand
Positive Growth
Vietnam
Population:2.2millionTotalGDP(2015):US$164.6billionMedicalDeviceImport(2014):US$661.6million10-YearCAGR:14.0%
Qatar
Population:4.5millionTotalGDP(2015):US$69.8billionMedicalDeviceImport(2014):US$134.2million10-YearCAGR:8.4%
Oman
Population:31.5millionTotalGDP(2015):US$646.0billionMedicalDeviceImport(2014):US$7.75billion10-YearCAGR:7.0%SaudiArabia
OpportunitiesSpotlightandAnalysis
WhyOman?
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WhileOman,QatarandSaudiArabiashowpromisingsignsofgrowth,weseepotentialforheadwindsintheUAEmedicaldevicesmarket.Inadditiontotheslower economicgrowthinanenvironmentofweakeroilprices,theUAEservesprimarilyasare-exportbasetootherGCCcountriesandissaturatedwithlargemultinationalmarketleaders.Assuch,ASEANexportsofmedicaldevicestotheUAEhave shrank,witha3yearCAGRof-22.6%.However,giventheoverallgrowthofothercountriesintheGCCregion,thissuggestsASEANhasbeenmissingoutonopportunitiesandshouldconsiderexploringthepotentialforgrowthinthisregion.
WhyQatar?
QatarHealthcareIndustryValue
OmanØ GrowthinexportsofmedicaldevicesfromASEANtoOmanisthesecond
highestamongtheGCCcountries,witha3yearCAGRof24.8%.Ø OmanihealthcareexpenditureisforecastedtogrowataCAGRof4.2%
overtheperiod2015– 2020toreachavalueofUSD3.64bn.Ø TheMinistryofHealthalsocontinuedwithhealthcareexpansion,signing
agreementsfortheconstructionoffournewhealthcentresin2016aswellasthecontinueddevelopmentoftheUSD1bnInternationalMedicalCity.
QatarØ AmongtheGCCcountries,ASEANexportstoQatarhasoneofthefastest
growthrates,witha3yearCAGRof22.2%.Ø Qatar’shealthcareexpenditureisexpectedtogrowataCAGRof6.1%
over5yearstoreachavalueofUSD6.47bnby 2020.Ø WithmassiveinvestmentininfrastructureprojectsforFIFA2022,health
infrastructureprojectsinQatarareincreasinglydelayed.However,inthelongrun,theQatarigovernmentisexpectedtocommittonewhealthinfrastructureprojects,supportingthedemandformedicaldevices.
0%
10%
20%
30%
0
5
10
2011 2012 2013 2014 2015HealthcareExpenditure,USDbnGrowth,%
0%
10%
20%
30%
40%
0
2
4
2011 2012 2013 2014 2015HealthcareExpenditure,USDbnGrowth,%
OmanHealthcareIndustryValue
SaudiArabiaØ SaudiArabiaisoneofthefastestgrowingdestinationforexportsof
medicaldevicesfromASEAN,witha3yearCAGRof20.2%,andalsohasthelargestmarketformedicaldevicesamongtheGCCcountries.
Ø It’shealthcareexpenditureisexpectedtogrowataCAGRof3.3%over5yearstoreachavalueofUSD41bnby 2020.
Ø HealthcaredemandisrapidlyrisinginSaudiArabiaduetothecountry'shighbirthrate,growingburdenofnon-communicablediseasesandgreaterparticipationoftheprivatesector,creatingdemandformedicaldevices.
WhySaudiArabia?
SaudiArabiaHealthcareIndustryValue
-20%
0%
20%
0
50
2011 2012 2013 2014 2015HealthcareExpenditure,USDbnGrowth,%
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