Medical Devices and Household Healthcare Devices
Indonesia shows good future prospects for the healthcare medical devices market, this report would not be complete without mentioning the challenges that go together with doing business in Indonesia. Of all, corruption and heavy bureaucracy are an indisputable presence in the Indonesian market.
The pricing of the products might also be a challenge for European companies.While the Indonesian medical industry has a preference for high-quality products from Europe, USA, and Japan, the pricing of the product is important, especially considering the current euro exchange rate, which slightly unfavourable in comparison to other currencies. A favourable payment term also plays a role in the decision, and inflexibility in terms of sales, payment schedules and length of contract could pose a barrier for buyers.
Some regulations regarding medical devices might pose a challenge for Europeancompanies, such as the mandatory registration of medical devices at the Ministry of Healthbefore clearance through Indonesian Customs. Based on a regulation by theMinistry of Trade, all imported goods have to be labelled in Bahasa Indonesia prior to arrivalin the country.
Fourthly, like other developing countries, Indonesia’s lack of infrastructure is hindering itsdevelopment. In some areas, the lack of continuous and stable electricity might raiseproblems in the healthcare sector.
A further challenge is related to the awareness of both professionals and the public regarding existing treatments for certain common ailments. Companies can help to raise awareness by organising workshops for professionals, or by using media outlets to reach the public.
Medical and Surgical Devices
The objective of this market study was to highlight the opportunities and challenges forEuropean companies in the Indonesian healthcare equipment and medical devices market.With an evolving, globalised market and the current economic climate, Indonesia’shealthcare sector is an attractive option.
Indonesia has a population of nearly 250 million people and is therefore home to one of thelargest healthcare industries of the world. Currently, half of the population is belowthirty years old, the elderly population is expected to quadruple by 2025. This rapidlyincreasing elderly population will have major consequences for Indonesian society, especially in the healthcare sector.
Since 2014, the Indonesian government has implemented a National Health Insurance System, the JKN. Its goal is to provide, for the first time, healthcare to all Indonesian citizens by 2019 and this will make it the largest healthcare insurance system in the world. The implementation of this universal system will create widespread demand for surgical and advanced medical equipment like X-ray machines, CT scanners, MRI machines, defibrillators, gamma knives for incision-free surgeries, as well as different types of drugsrelated to the expected increase in the prevalence of diabetes and cardiovascular diseases.
Indonesia’s healthcare system is suffering from a shortage of specialists. Doctors are mostly located in the urban areas of the two main islands, Java and Sumatra.The domestic healthcare sector has been underfunded for more than 30 years, with lessthan 3% of GDP invested in healthcare.
Overseas companies account for 97% of total supplies, including the more sophisticated medical and surgical instruments and infrastructure, such as medical lasers and diagnostic equipment. With strong annual industrial growth rates and the implementation of the National Health Insurance System, there are profitable opportunities for international companies in Indonesia’s healthcare sector.
The most valuable business opportunities in the medical devices market lie in surgical equipment, diagnostics, and medical imaging equipment. Regarding dental equipment, lucrative submarkets include devices for polishing and scaling, for bleaching, and for orthodontics. Sustainable opportunities for laboratory equipment are related to, among other things, tests kits for hepatitis and infectious diseases, and for instruments related to clinical chemistry, immunology, and haematology.
International companies like Philips, GE Healthcare, and Pfizer are already active in Indonesia’s healthcare sector. Some of these companieshave production facilities in Indonesia due to the low production costs.
Foreign companies are required to cooperate with local agents or distributors to bringmedical devices to the Indonesian market. Reliable and good distributors and agents aretherefore of great importance.
While Indonesian medical buyers have a preference for high-quality products from Europe, the USA, and Japan; pricing and payment terms are key factors in successfully doing business in the Indonesian medical devices market, given that local buyers look for beneficial price deals. International companies should also provide good after-sales services, offer reliable products of high quality, do effective promotion, and explore extensive distribution channels.
No restrictions exist on the importation of medical equipment. There is, however, oneexception: the Indonesian government prohibits, in general, the import of used equipment.The distribution of nearly all medical equipment and supplies requires a license from the Indonesian Ministry of Health, which needs to be obtained before importing.
European companies are, above all, strongly advised to invest time and effort into finding a good and reliable local partner, as serving the Indonesian market requires cooperating with an Indonesian agent and/or distributor. Attending events and conferences is a good strategy for meeting equipment importers, distributors and agents.