This article is part of an ongoing ‘Asia Pacific Insights Series’, co-authored by Elvina Tio, Sandy Lam and Nicole Yee designed to give you quick and simple tips to access new markets and elevate your business.
Research by Global Market Insights has projected that the digital health market will rise to $917 billion by 2026. This is more than six times the market value in 2019 that stood at $148 billion.
COVID-19 fast-tracked telehealth consultations and telemedicine convenience and instantly created new export opportunities. Asia Pacific countries like Indonesia have experienced an annual growth rate of 60% with revenues expected to reach $973 million by 2023.
With local government supporting digital health adoption and the increased take up of smartphones, tablets and wearables, there’s never been a better time for the Australian medtech and pharmaceuticals sector to seize the moment.
Indonesia’s booming healthcare market
Indonesia’s investment into health innovation has rapidly grown over the last 10 years from $1.6 billion in 2010 to $19.6 billion in 2018. They have one of the largest and fastest growing internet economies in Southeast Asia, set to reach $174 billion by 2025 (valued at $54 billion in 2020). With a tech-savvy population and patient behaviours changing, the country will need the digital capabilities and infrastructure to meet new demands.
Indonesia quick facts:
- World’s 16th largest economy and rising
- 263 million population (world’s fourth largest population)
- Approximately 40% of the population is under 25 years old
- 170 million internet users and growing
- 90% of young Indonesians use the internet
- $973 million expected from digital health revenues by 2023 (previously $85 million in 2017)
Indonesia is challenged with delivering health services to a large dispersed population (17,000 islands). A shortage of healthcare professionals, physical and internet infrastructure and the rush of people using digital health apps presents a unique opportunity for international capabilities to come on board.
The competitive edge for digital health companies
With Australia’s reputation for its world-class healthcare system and affordable health services, we’re strongly positioned to export to the Indonesian market. Australian digital health companies interested in exporting will need to customise their products and operations to accommodate the cultural nuances and language differences.
Pathways to access the market:
- Targeting business-to-business markets (such as hospitals, healthcare companies, pharmaceutical companies and digital health companies).
- Collaborate with local Indonesian companies to reach the consumer market and get support with language, culture, market dynamics and regulatory requirements.
- Establish trust with strong local networks and government bodies through regular communication and availability for meetings.
The advantage for Australian healthcare providers:
- The IA-CEPA allows up to 67% Australian ownership in hospitals, medical and dental clinics as well as residential and aged care with no geographic limitation.
- Australia has a deep expertise in preventive and protective health policies and programs. This gives Australian healthcare providers the opportunity to improve disease prevention control in Indonesia.
- Australian aged care providers can leverage their expertise in aged care and geriatric services to service the untapped opportunities in aging Indonesian population.
- Indonesia has a high demand for diagnostic devices technology as 90% of its medical devices are imported.
- Australia’s telehealth and telemedicine solutions can be used to service Indonesia’s population spreading across 17,000 islands.
- The IA-CEPA provides opportunities for Australia’s vocational education and training facilities to deliver accredited training for healthcare professionals in Indonesia.
Australian support for digital health exporters
Digital health links across different industries including manufacturing, medical technology, biotechnology, medical devices and pharmaceuticals.
Click here for resources available
Click here for NSW Exporter Support
Click here for a list of export assistance and funding
Click here for guide to invest in Indonesia
Click here for Indonesian National Agency of Drug and Food Control (BPOM)
Click here for Indonesian Association of Medical Devices and Laboratory Appliances Companies (GAKESLAB)
About Jakarta – the digital health capital
Jakarta is Indonesia’s digital health capital due to its more-established digital ecosystem with access to health professionals, better health infrastructure and more investment opportunities. Other cities like Bandung and Surabaya are increasingly promoting and incentivising startups via subsidised rent, incubator program and grants.
The annual health expenditure in Indonesia is only 3% of its GDP in 2018 which equates to $39 million. This is relatively small in comparison to the outbound medical spending by Indonesian middle class travelling to neighbouring countries such as Singapore. The 2018 report by Oliver Wyman estimated the size of this spending amount to US$1.9 billion annually. In light of the travel restriction around the world due to the COVID19 pandemic, this gives a lot of opportunities for both Indonesian and Australian healthcare providers.
Other articles in this series: