What is the
Potential of Indonesia Healthcare Market?
Indonesia healthcare market has shown a
positive incline during 2012-2017 but with respect to the expanding population
of Indonesia, the market is still underserved especially in the underdeveloped
and rural areas as of 2017. People across Indonesia are facing several health
care issues due to sedentary lifestyle and fast food consumption habits, such
as obesity, diabetes, and other cardiovascular diseases, which are demanding
for technologically advanced healthcare infrastructure. The healthcare market
has increased on the account of increasing healthcare facilities, innovation in
pharmaceutical manufacturers and clinical laboratory services and expansion of
pharmacy retail chains across the country. The market has witnessed enhancing
innovation in nutritional health segment, biopharmaceuticals and specialty
pharmaceutical products.
Hospitals in the country contributed to the
maximum share of overall healthcare market as of 2016. Over ~% of the market
revenues were generated from the hospitals segment followed by the
pharmaceutical market with ~% in 2017.
Indonesia
Healthcare Market
revenue has increased from USD ~ billion in 2012 to USD ~ billion in 2017
primarily due to rising prevalence of non-communicable and lifestyle diseases
including diabetes, asthma and heart disorders. The industry has undergone
various deregulation programs which has encouraged foreign investment in the
industry. Furthermore, increase in demand for generic medicines has led the
major players in the industry to expand their production capabilities.
How is the
Indonesia Pharmacy Retail Market Growing?
Indonesia pharmacy retail sector is in the mid
to late growth stage with the presence of over ~ drugstores and pharmacies
along with revenue CAGR of ~% in the last five years. Already established
players such Guardian Pharmacy, Kimia Farma, Apotek K-24 have increased their
number of pharmacy retail outlets over the period 2012-2017. The number of
pharmacies operated by Guardian pharmacy increased from ~ in 2013 to ~ in 2016
whereas for Kimia Farma, the number of pharmacies increased from ~ in 2013 to ~
in 2016. Over 2012-2017, the number of pharmacies has inclined at a CAGR of ~%.
Increasing incidence of life-style related ailments such as Diabetes, Obesity,
hypertension and various heart related diseases and prevalence of communicable
diseases such as TB, influenza among the growing population are the main reasons
behind positive growth in pharmacy retail revenue due to growth in private
label goods.
How Have the
Various Segments Performed in Indonesia Pharmacy Retail Market?
Pharmacies have accounted for ~% of the share
of Indonesia pharmacy retail revenue in 2017 whereas drugstores have accounted
for ~% of the revenue share. The number of pharmacies increased from ~ in 2012
to ~ in 2017 with average revenue of a pharmacy estimated at IDR ~billion in
2017. The number of drugstores increased from ~ in 2012 to ~ in 2017 with an
average revenue of IDR ~billion. The drugstores are defined as retail outlets
which are licensed to sell medicinal drugs and private label goods whereas
pharmacies are licensed to sell only medicinal drugs. Narcotics and
psychotropic drugs are sold at pharmacies but not at drugstores.
Large proportion of pharmacies is located in
Java and Sumatra since 70% of the hospitals are located in these developed
regions of Indonesia. With the implementation of JKN, the sale of prescribed
generic drugs has increased which is a major driver of the pharmacies’ revenue.
Pharmacies get higher discount from the pharmaceutical companies which leads to
higher margins on the sale of drugs as compared to drugstores. Due to rising
awareness amongst people about the drug name for a common ailment and growing
tendency of Indonesians of treating themselves has led to the increase in sale
of OTC drugs over the years
How have the
Major Segments in Indonesia Pharmacy retail Market Performed?
West Java has gathered ~% of the total
pharmacies and drugstores in Indonesia in 2015. This can be attributed to more
number of hospitals located in the region. West Java accounted for ~% of the
hospitals beds in the private hospital market in Indonesia. East Java has
captured ~% of the pharmacies and drugstores driven by increase in foreign
investment in the pharmacy sector. For instance, industries in Singapore
invested USD 15 million in pharmacy in Indonesia in 2015. This is followed by
Central Java with ~% and Jakarta with ~% and North Sumatra with ~% of the
pharmacies and drugstores in Indonesia in 2015. Rest of Indonesia has accounted
for ~% of the drugstores. High population in the region, presence of generic
drug manufacturers and economic stability to purchase patented drugs in the
market are the major factors which are responsible for high number of
drugstores in Central Java
What are the
major growth Drivers in Indonesia Pharmacy Retail Market?
Indonesia government has made several changes
to encourage foreign investment in the healthcare industry. For instance,
before 2017 foreigners were allowed to invest in specialty hospitals only and
not in general hospitals. However, the government (through Presidential
Regulation No. 44/2016) allowed foreign entities to have a maximum stake of 67%
in general hospitals which have further supported the growth of pharmacies and
drugstores in hospitals and healthcare institutions. During 2012-2017, average
life expectancy of the Indonesia people has increased from 68.5 years in 2012 to
72.7 years in 2016 reflecting improved means of controlling communicable
diseases and better medical amenities. These two factors have gradually led to
an increase in median age of the population of Indonesia over the past five
years. The share of population above 65 years has increased from 4.9% in 2011
to 6.8% in 2016. Normally, individual healthcare expenditure is high during the
later stage of a person’s life. With increasing old age population, sale of
medicines in the country has also inclined over the period 2012-2017. In order
to increase accessibility and convenience, almost all the major pharmacy retail
chains have started offering their products through online portals. This is
further supported by growing medical awareness and increase in number of
internet users in Indonesia
What Are the
Major Companies Operating in This Space?
The pharmacy retail market in Indonesia is
highly fragmented with major organized chains (Guardian pharmacy, Kimia Farma,
Apotek K-24 and AS Watsons Group) accounting for 6.9% of the revenue share in
2016. Independent pharmacies have registered a market share of 50.0% in
Indonesia pharmacy retail channel in 2017. Pharmacies and drugstores have
accounted for 40.0% of the revenue share. A major factor behind the rising
number of pharmacies is the growth of prescription sales driven by an aging
population and a range of new drugs. Independent pharmacies have also added
value with specialty services. This includes free home delivery, after sale
services for medical equipment and medication synchronization and counseling,
especially for more complex drugs like the biologics. These players compete on
parameters such as proximity, value added services, availability of drugs,
promotional offers and tie ups with major healthcare institutions. In order to
increase their revenue, the players offer their products through online
portals.
What is the
Future Potentail of indonesia Pharmacy retail Market?
Indonesia pharmacy retail market is expected
to increase from USD ~ billion in 2017 to USD ~ billion in 2022 at a CAGR of
~%. The market will be driven by improving healthcare infrastructure of the
country driven by increase in number of hospitals, pharmaceutical clusters, and
primary health clinics and geographic expansion of major pharmacy chains in
Indonesia. Further, with the implementation of JKN by the government, the
demand for prescription and generic drugs will increase. This will lead more
pharmacies to set up around public and private hospitals augmenting the revenue
of the pharmacy retail market. The major pharmacy chains are expected to launch
various mobile applications and online retail services thus increasing
accessibility and convenience of home delivery and online payment facility. The
online stores will be backed by a strong expansion of offline pharmacies in
order to reduce delivery time and improve accessibility.
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information on the research report, refer to below link:
Related
Reports by Ken Research:
https://www.kenresearch.com/healthcare/general-healthcare/uae-healthcare-market-report/37505-91.html
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