With a massive influx of foreign companies, rising disposable income, consistent economic growth, and a burgeoning demographic trend, the prospects of the healthcare industry in Vietnam looks promising.
Demand in the healthcare sector is robust, resilient, and is less affected by economic fluctuations, and has a low dependency on global macro circumstances. According to the 2018 Business Monitor International report, the Vietnam healthcare market had a value of USD 17.4 billion in 2018, making the nation the second-largest medicine market in South East Asia.
Moreover, the growing need for healthcare investment in Vietnam is fueled by demographic trends, an aging population, a lack of medical personnel, outdated surgical equipment, and a rising middle class. This emphasizes the industry’s limitless potential in healthcare and pharmaceuticals.
Furthermore, the impact of COVID-19 has heightened the concern in the healthcare industry, providing another chance for businesses and foreign investors to reap greater yields and invest in the area. More importantly, technology and innovation are changing the way healthcare is delivered in Vietnam daily, opening up new potential for both domestic and foreign businesses.
Easing Government Restrictions on Foreign Investments in Hospitals
As a result of the high influx of patients at public hospitals, which are always overcrowded, the government began to deregulate the healthcare industry in 2015, allowing more private and international hospitals to enter and make the best of Vietnam’s healthcare industry. More private hospitals have opened in the country since the initiative began, and the healthcare sector is becoming more competitive.
GIC, Global Insurance Company, headed a conglomerate that just announced a $203.1 million investment in Vingroup JSC. The funds will be used to develop Vinmec’s Vietnamese medical and clinic network. Late last year, Nhi Dong 315, a Vietnamese tech-enabled healthcare service, received pre-Series A funding from a group of foreign investors. The funding will be used to help the pediatric clinic establish itself as a leader in delivering cheap and accessible pediatric treatment to Vietnam’s expanding population (source).
Moreover, VinaCapital invested $26.7 million in Thu Cuc International General Hospital (TCI), a private healthcare provider in Northern Vietnam, in August of last year (source). These investments demonstrate Vietnam’s private healthcare sector’s enormous potential and appeal.
Furthermore, since the government relaxed limitations on foreign investment in healthcare, there has been an increase in investment in private hospitals. The healthcare industry, which was formerly dominated by the government, is now a market that international companies may readily penetrate. This trend of foreign investment in the healthcare industry in Vietnam is expected to continue in the future.
Read also: How to Set Up a General Hospital in Vietnam
The Healthcare industry in Vietnam: High Demand for Foreign Medical Staffs
There has been a paradigm shift in the country when it comes to the hiring of foreign medical doctors. Although just 30% of the country’s population lives in cities, the bulk of medical personnel in Vietnam is concentrated in metropolitan regions, resulting in a significant need for physicians in other parts of the country.
Furthermore, doctors working in government hospitals are underpaid, and the majority of them alternate between public and private institutions, leaving little opportunity to improve their medical abilities. Though there is a significant need for physicians, it is difficult to quickly expand the number of doctors since becoming a full-fledged medical doctor in Vietnam requires 8 to 10 years of training. As a result of these factors, the country is more willing to hire foreign medical doctors.
Medical Equipment and Pharmaceuticals
Because local manufacturing cannot keep up with demand, the government supports the importation of medical equipment. Furthermore, some imported items enjoy minimal import tariffs and are not subject to quota limitations. One should be aware, however, that medical equipment is regulated and licensed by the Ministry of Health (MOH).
High economic growth, rising per capita income, a growing urban population, and an aging population have all contributed to a rise in pharmaceutical product demand. According to Business Monitor International (BMI), Vietnam’s healthcare expenditure is expected to rise to US$23 billion in 2022 from US$17 billion in 2019, reflecting a compound annual growth rate (CAGR) of around 10.7%. Moreover, according to Grant Thornton’s research, healthcare and pharmaceuticals are the third most attractive areas for investors in the country. As a result, Vietnam has become one of the fastest-growing markets for pharmaceuticals.
Contact CEKINDO for Assistance
From what has been observed thus far, Vietnam’s healthcare industry is entering a period of transition, which has attracted the attention of private investors. More are seeking opportunities in the country, especially in the area of healthcare and pharmaceuticals.
Are you looking to tap into the opportunities that abound Vietnam’s healthcare industry? Contact Cekindo today for assistance for everything from Health Product Registration to Setting up a Private Hospital.