The Healthcare industry in Vietnam is filled with enormous opportunities and countless potentials for foreign investors due to the high influx of foreign enterprises, rise in disposable income, steady economic growth, and a booming demographic trend.
Healthcare is a “defensive growth” sector due to its low correlation with global macro conditions, and its high demand is resilient and less impacted by economic swings. The sector accounted for 12.5 percent of the country’s GDP, suggesting a strong area for investors.
More so, the growing demand for investment in healthcare in Vietnam is bolstered by growth from demographic trends and innovation, aging populations, shortage of medical staff, obsolete equipment for surgery, increasing wealth, and a rising middle class. This stresses the boundless opportunities in the healthcare and pharmaceuticals industry.
Further attention on the healthcare sector has increased due to the impact of COVID-19, which is also another opportunity for enterprise and foreign investors to take advantage and invest in the sector.
At the same time, increase in economic status of Vietnamese, improved life expectancy and increasing older population which is projected to triple to 18.4 million by 2040, according to the UN has increased the demand for pharmaceuticals products. More so, technology and innovation are affecting the way healthcare is being delivered daily in Vietnam, which is creating new opportunities for local and foreign investors.
Privatization and Eliminating Governments Restrictions on Foreign Investments in Hospitals
Due to the high influx of patients at public hospitals, which are always overcrowded, Vietnam’s government began to deregulate the healthcare industry in 2015 and, as a result, opened itself to the establishment of more private and international hospitals. Since the beginning of this initiative, more private hospitals are being established in Vietnam, and the healthcare sector is getting more competitive.
A conglomerate led by GIC, recently announced an investment of $203.1 million for a stake in Vingroup JSC. The fund is aimed at expanding Vinmec’s medical and clinic network in Vietnam. A Vietnamese tech-enabled healthcare provider, Nhi Dong 315 closed its pre-Series A financing from a group of international investors late last year. The paediatric clinic is expected to use the funds to establish itself as a leader in providing affordable and accessible paediatric care to the growing populace of Vietnam.
More so, in August last year, VinaCapital also invested $26.7 million in Thu Cuc International General Hospital (TCI), a private healthcare provider in Northern Vietnam. These investments are a testament to the tremendous potential and attractiveness of Vietnam’s private healthcare sector.
Furthermore, since the government has eased restrictions on foreign investments in healthcare, there has been an upsurge of foreign investments directed towards private hospitals. The healthcare sector, which was formerly a government-led sector, is now a market that is easily accessible by foreign enterprises. The trend of foreign investments towards the healthcare sector is set to increase moving forward.
Read also: How to Set Up a General Hospital in Vietnam
The Healthcare industry in Vietnam: High Demand for Foreign Medical Staffs
The country has also witnessed a paradigm shift regarding the employment of foreign medical doctors. The majority of the medical staff in Vietnam resides in the urban areas, even though only 30 percent of the country’s total population lives in urban areas, which leaves a high demand for doctors in other parts of the country.
Also, doctors working in government hospitals are not well paid, and almost 80 percent of them shuttle between public and private hospitals, which gives them little time to enhance their medical skills. Though the demand for doctors is high, it is not that simple to readily increase the number of doctors because it takes 8 to 10 years of training to become a full-fledged medical doctor In Vietnam. Due to these reasons, the country is more open to employing foreign medical doctors.
Medical Equipment and Pharmaceuticals
The government encourages the importation of medical equipment because local production cannot meet the burgeoning demands. More so, these imported equipment have low import duties and no quota restrictions. However, you should note that those medical equipment are subject to regulation and licensing by the Ministry of Health (MOH).
The demand for pharmaceutical products has also rapidly increased due to high economic growth, increasing income per capita, upsurge urban population, and an aging population. According to Business Monitor International (BMI), Vietnam’s healthcare expenditure was forecasted to grow to US$22.7 billion in 2021 from US$16.1 billion in 2017, representing a compound annual growth rate (CAGR) of about 12.5% from 2017 to 2021. A Grant Thornton report also revealed that in Vietnam, healthcare and pharmaceuticals ranked third in terms of industry attractiveness for investors.
This has made Vietnam one of the fastest-growing markets for pharmaceutical products.
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.