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EDITION 2016 1 | EVBN Healthcare: Medical Equipment in Vietnam Useful contacts More information EU-Vietnam Business Network (EVBN) General Statistics Office of Vietnam: 15th Floor, 5B Ton Duc Thang, District 1 http://www.gso.gov.vn/ Ho Chi Minh City, Vietnam Vietnam Customs Statistics: T: +84 (0) 38239515 http://www.customs.gov.vn/ www.evbn.org Vietnam Trade Promotion Agency (Vietrade): http://www.vietrade.gov.vn/en/ World Bank Vietnam: http://www.worldbank.org/en/country/vietnam The Landmark, 15th floor, 5B Ton Duc Thang St., District 1, Ho Chi Minh This publication has been produced with the assistance of the European City, Vietnam Union. Tel. +84 (0)8 3823 9515 Fax +84 (0)8 3823 9514 The content of this publication are the sole responsibility of EVBN and www.evbn.org can in no way be taken to reflect the views of the European Union 2 | EVBN Healthcare: Medical Equipment in Vietnam Table of Contents Executive Summary .................................................................................................................................. 6 Vietnam Overview .................................................................................................................................... 7 1. Demographics ............................................................................................................................................. 7 2. Vietnam Economics .................................................................................................................................... 8 a. GDP ......................................................................................................................................................... 8 b. Vietnam’s trade structure ....................................................................................................................... 9 3. Consumption ............................................................................................................................................. 10 a. Income and Expenditure ....................................................................................................................... 10 b. Structure of consumer expenditure ..................................................................................................... 10 4. Overview of Vietnam’s health sector ....................................................................................................... 11 Overview of the Medical Equipment Sector .......................................................................................... 12 1. Market overview ....................................................................................................................................... 12 2. Export – Import ......................................................................................................................................... 14 a. Export .................................................................................................................................................... 14 b. Import ................................................................................................................................................... 15 c. Trade flows with the EU ........................................................................................................................ 16 3. Market trends ........................................................................................................................................... 17 4. Key growth drivers ................................................................................................................................... 18 Competitive Landscape .......................................................................................................................... 20 Client and Distribution ........................................................................................................................... 22 1. Profile of end consumer ........................................................................................................................... 22 2. Potential distribution channel .................................................................................................................. 23 3. Case study of a Vietnam-based medical equipment wholesaler .............................................................. 23 Regulatory and Legal Framework .......................................................................................................... 25 1. Regulatory and legal framework............................................................................................................... 25 2. Market entry forms ................................................................................................................................... 27 SWOT Analysis ........................................................................................................................................ 28 Summary ................................................................................................................................................ 29 Annex ..................................................................................................................................................... 30 References .............................................................................................................................................. 33 3 | EVBN Healthcare: Medical Equipment in Vietnam Abbreviations CAGR Compound annual growth rate DMEHW The Department of Medical Equipment and Health Works EU European Union GDP Gross domestic product MoH Ministry of Health MOST The Ministry of Science and Technology NCDs Non-communicable diseases WB World Bank Currency Exchange The currency is converted to EUR (€) using the average value of 52W low and 52W high. Rates are compiled from Yahoo Finance. EUR/US$ 52W low 1.05 52W high 1.20 Average 1.12 EUR/VND 52W low 22,369.67 52W high 26,390.05 Average 24,379.86 4 | EVBN Healthcare: Medical Equipment in Vietnam Table of Figures Figure 1: Age pyramid in 2015 and forecast for 2030 ............................................................................................ 7 Figure 2: Forecast of rural and urban population in Vietnam and Asia Pacific in 2030 ......................................... 8 Figure 3: Vietnam’s GDP by sector, 2000 to 6-month 2015 ................................................................................... 8 Figure 4: Vietnam's export structure in 2014 ......................................................................................................... 9 Figure 5: Total personal disposable income and consumption expenditure, 2010-17f ....................................... 10 Figure 6: Structure of consumption expenditure per capita, 2014-19 ................................................................. 10 Figure 7: Causes of hospitalisations in Vietnam, 2010 ......................................................................................... 11 Figure 8: Number of deaths from NCDs in Vietnam, 2012/14 ............................................................................. 11 Figure 9: Medical equipment market value, 2014-19f ......................................................................................... 12 Figure 10: Medical equipment value per capita of selected countries in 2014 ................................................... 13 Figure 11: Medical equipment market structure, 2014-19f ................................................................................. 13 Figure 12: Medical equipment's export structure, 2010-14 ................................................................................. 14 Figure 13: Vietnam's medical equipment export by main countries in 2014 ....................................................... 14 Figure 14: Vietnam's medical equipment import structure, 2010-14 .................................................................. 15 Figure 15: Vietnam's medical equipment import by main countries in 2014 ...................................................... 16 Figure 16: Vietnam's medical equipment export to and import from EU region by main products in 2014 ....... 16 Figure 17: Population growth, 2015-30f ............................................................................................................... 18 Figure 18: Example of key players in Vietnam's medical equipment sector ........................................................ 21 Figure 19: Example of key medical equipment distributors in Vietnam .............................................................. 21 Figure 20: Number of health establishments by regions and by key cities in 2014(*) .......................................... 22 5 | EVBN Healthcare: Medical Equipment in Vietnam Executive Summary Since the economic reforms program (Doi Moi) in 1986, Vietnam has experienced multiple transitions. Vietnam is considered to be one of the region’s most attractive markets for foreign investors with a steadily increasing GDP and booming foreign direct investment, a pattern which is forecasted to remain stable in the upcoming years. The first six months of 2015 observed the fastest GDP growth at a pace of 6.3% and is expected to reach around €350 billion in 2020. Although the country’s healthcare sector has seen some considerable improvements regarding funding and regulatory framework in recent years, Vietnam’s public healthcare system remains inefficient and overloaded