The healthcare market in Vietnam has high growth potential.

Healthcare is a service industry where suppliers and users interact through service prices.

 

Overview of the healthcare market in Vietnam in 2022:

 

According to VIRAC’s report, spending on healthcare products and services in Vietnam has grown strongly over the years with a CAGR (2011-2021e) of 11%, thanks to the aging population, increasing income, and government healthcare policies. In recent years, Vietnam has had the second highest total healthcare spending as a percentage of GDP in Southeast Asia, after Cambodia

However, there has been a slowdown in growth in 2020 and 2021 due to the impact of Covid-19, which has reduced spending on healthcare services, especially due to social distancing measures that have led to people staying at home more, resulting in a decrease in accidents and limited access to medical check-ups due to the pandemic.

 

The increasing demand for healthcare poses significant challenges in terms of financial and capacity issues for healthcare in Vietnam, as the public sector plays a dominant role in the system. Public hospitals account for 84% of the total number of hospitals in Vietnam and are classified into four administrative levels: central level, provincial level, district level, and medical stations. To be eligible for full reimbursement, patients need to follow the referral system from local to central levels, but in many cases, patients tend to bypass the system by going directly to central hospitals in cities

 

• Structure of healthcare spending by services

 

 

According to VIRAC’s Q4/2022 Healthcare report, the value of the healthcare market has continuously increased from 2011 to 2021e with a CAGR of 14.5%. The market value in 2021 reached over 45 billion dong, an increase of over 10% compared to the same period last year.

 

• Structure of healthcare consumer products by function

 

 

Vitamin supplements and functional foods, pain relievers and cough, cold and allergy medicines are categories with particularly strong growth rates in both value and sales.

The COVID-19 pandemic has increased demand for vitamins and functional foods, pain relievers and cough medicines. In 2021, consumer demand for health products such as vitamins and functional foods, pain relievers and cough medicines remained high due to the presence of COVID-19. The Ministry of Health also encourages people to exercise regularly and take daily vitamin supplements to strengthen the immune system and fight against the virus. All of these factors have helped boost sales volume and value in these categories in 2021.

 

However, products such as wound care and digestive remedies continue to have lower demand in 2021 as people limit their time outside. Nevertheless, overall, the consumer health market in 2021 is seeing stronger growth in sales value than last year, mainly due to a more optimistic economic situation and aging population.

 

A new survey on the use of nutritional supplements in the Asia Pacific region was conducted by Herbalife Nutrition and a nutrition council responsible for 3,000 consumers in Indonesia, Japan, Malaysia, the Philippines, Singapore, and Vietnam. The survey showed that Vietnamese consumers are more focused on health-related goals.

• 51% of respondents said they are eating healthier and adding more vitamins and minerals to their diet.
• 40% are more focused on overall health in terms of mental, physical, and social aspects.
• 50% understand the health benefits of vitamins and supplements.
• 48% and 40% of respondents said they often receive information about vitamins and supplements from online sources and their doctors, respectively.
• 79% of consumers incorporate nutritional supplements into their diet.
• The most common reasons for using vitamins and supplements are: To support immune function (58%); To improve overall health (42%); To support digestive health (44%); For skin, hair, and beauty (35%); To improve energy and focus (23%).

 

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• Top companies in the consumer health market 2016-2021e.

 

 

In 2021, international companies such as Abbott Vietnam Co Ltd, Herbalife Vietnam Ltd, New Image Vietnam Co Ltd, GSK Consumer Healthcare, and Sanofi-Aventis Vietnam Co Ltd continued to dominate the consumer healthcare market, especially the OTC market, thanks to their high brand reputation, wide distribution network, and strong financial capabilities.

To compete with foreign competitors and gain attention from Vietnamese consumers, many domestic pharmaceutical companies such as Dược Hậu Giang, Nam Hà, Traphaco, and OPC have focused on upgrading their factories to achieve higher quality standards such as EU-GMP, PIC/S, and JAPAN-GMP, while also launching new products with higher quality. Furthermore, these companies are increasingly focusing on improving their distribution chains through the application of new technologies as a sustainable strategy for long-term development.

 

Dược Hậu Giang, one of the oldest companies in Vietnam, recently received investment from the Japanese conglomerate Taisho. The company’s prominent products are functional foods, OTC products, and medicines for coughs, colds, and allergies.

Traphaco, the first modern factory in Vietnam, ranked 6th thanks to its strengths in vitamins, functional foods, OTC products, and herbal/traditional sleep aids

 

–  The healthcare industry has been influenced by several factors in recent years. 

 

In the healthcare field, consumers today tend to seek convenience and simplicity in using services; there is a shift from inpatient to outpatient care; technological innovation; an increase in complications in certain diseases; a higher prevalence of sedentary lifestyles leading to certain illnesses; and an expectation of longer lifespans… These factors are impacting the healthcare industry in Vietnam in various ways:

• Changes in demographics:

  Demographic changes have spurred healthcare reform. A new model of collaboration between the public and private sectors is developing to transform healthcare delivery and financing. Partnerships with new market participants from retail, technology (artificial intelligence, robots, teleconsultation, analytics); healthcare and wellness (i.e., non-traditional/non-transmitted healthcare fields) are expanding and reshaping the healthcare system.

• Resource depletion:

  Faced with a shortage of skilled labor, technology has become a potential solution for the healthcare industry. Some services such as remote monitoring, telemedicine, and mobile devices will help doctors/healthcare workers save time in direct consultation and communication with patients, make quicker decisions… With the ability to bring innovation, improve efficiency, and unique solutions, the private sector has become an attractive potential healthcare partner.”

• Consumer have more choices:

  Consumers (patients) are becoming more knowledgeable and involved in their own healthcare. This leads to a shift from fragmented care to integrated models: Organizations, communities, and social service providers collaborate on their services and patients become active partners in their healthcare.

• Increasing prevalence of chronic diseases:

  Lifestyle changes are increasing the prevalence of chronic diseases (diabetes, cardiovascular diseases, cancer…), thereby increasing the need for care and treatment. This leads to higher costs and requires new service models. Early and accurate diagnosis and detection of diseases have made significant progress, helping to reduce treatment costs. For this reason, preventive healthcare solutions are receiving more attention, opening up doors for non-traditional healthcare industries.

• Lack of trust in traditional healthcare models:

  Consumers are showing a lack of trust in traditional healthcare models due to ongoing and unresolved issues. For example, hospital overload, administrative issues, lack of trust in drugs/inputs/quality of care… They are willing to seek outside services. New technology and service developments are making this easier for them.

• mHealth (healthcare or health-related information service via mobile devices): Mobile devices make healthcare more accessible through online channels in addition to traditional health checkups. It is faster, cheaper, saves travel time and queues. Patients have easier access to health information and can monitor their healthcare process.

 

Information on the healthcare market situation in Vietnam is compiled from the “Q4/2022 HEALTHCARE INDUSTRY REPORT” conducted by VIRAC. The full report will provide customers with in-depth analysis of the business environment, as well as the global and domestic market situation. In addition, VIRAC also provides some prospects, forecasts, and recommendations for businesses in the process of business and production.

 

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Additionally, VIRAC can conduct customized research and reporting to meet specific and in-depth needs of customers. Register for the report HERE. 

 

VIRAC was founded by a team of reputable personnel with expertise in information, finance, and market research in the region. VIRAC specializes in providing products and services related to:

• Industry research
• Business research
• Market research
• VIRACE data platform

VIRAC’s partners include:

• Vietcombank
• Vietinbank
• Agribank
• MB Bank
• Unilever Vietnam International Company Limited
• Olam International
• FrieslandCampina.