Challenges & Opportunities in the Indonesia Radiology Market
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The world’s market for diagnostic imaging is growing fast. Specifically, it is expected to grow at a at a compound annual growth rate (CAGR) of 4.7% from 2013-2018, reaching around $27.1 billion by 2018. In 2013, the US had the largest portion of market share at about 34%, followed by Europe. However, the Asia-Pacific region is poised to grow at about 5.9% from 2013-2018. There is a lot of room for growth in this market as the countries in that region matures and become increasingly ready to acquire new technologies in diagnostic imaging.
The Republic of Indonesia is located in Southeast Asia. It boasts the world’s 4th largest democracy with about 250 million in population by the end of 2013. According to the CIA World Factbook, Indonesia’s economy is growing strong with annual GDP growth of about 5.3%, valued at around $1.285 trillion (purchasing power parity).
The medical supplies market size in Indonesia is valued at around $593 million in 2013, with diagnostic imaging taking up 35%, or about $207 million. This includes CT, MRI, Fluroscopy, X-ray systems (Analog, CR, DR), Films, Mammography, and Ultrasound. Indonesia lacks expertise in the manufacturing of these advanced medical devices, and therefore relies on imports. Indonesia imports 97.2% of all its medical supplies. Based on this research, we have discover a few key challenges and opportunities in Indonesia’s growing diagnostic imaging market:
- Budget Constraints: X-ray systems in Indonesia are still often used beyond their average lifespan. Some have been in use for over a decade. It is difficult for premium products to enter the market as most hospitals do not have the budget necessary to make a purchase. This may be a challenge, but it can also an opportunity to focus on value-tier equipment.
- Infrastructure: High-speed internet is easily accessible in the US, connecting more people than ever. This enables DR technology to thrive in the country. In many rural parts of Indonesia, internet is a luxury. Many hospitals do not have access to the internet and therefore are not able to adopt DR technology. However, Indonesia is growing. The government will increase spending on infrastructure and in the future, internet will be accessible to most Indonesians, even in rural parts. Therefore it is imperative to invest in CR technology now and upgrade to DR later when they are ready.
- Need-driven market: In the US, most radiologists and hospitals purchases of diagnostic imaging equipment are driven by the notion of efficiency to the workflow. They want equipment that delivers efficiency, not just to save money and time, but also to capitalize on opportunity costs. In Indonesia, with a population of over 250 million people, there are only about 1000-1500 radiologists, and less than 2000 hospitals. Moreover, many of the hospitals do not have any imaging equipment. Workflow is not in the mindset of these hospitals yet, because they would first have to first have the technology. This results in low penetration of the PACS system or the DR system in the market. DR systems have a very low market share of less than 10%. For them, CR is efficient enough because they would not have to develop films in the dark room. As Indonesia grows, the number of hospitals and radiologists in the country will follow suit. Soon they will have to adapt to the growing number of patients, and ultimately improve their workflow.
Comparing the diagnostic imaging market in the US and Indonesia is difficult as the US is a mature market compared to the emerging market of Indonesia. However, Indonesia displays promising growth as the nation matures itself towards better, more advanced, and more reliable healthcare technologies. Despite the challenges the young nation might have, as shown, there are numerous opportunities available that we expect to see come to light in the future.