NRI Papers
No. 179 November 1, 2012
  Development Stage Model for Healthcare Markets and Business Opportunities for Japanese Companies in Emerging Economies
— Case Study Examining the Chinese Market —

Healthcare markets in emerging economies tend to be regarded as being somewhat less attractive than are those in developed countries. Therefore, companies are generally slow in making decisions to invest their resources in developing these emerging markets. Nevertheless, if a decision to enter the market is made when the market has already reached the stage of rapid growth, it is very likely that any latecomer will face an already highly competitive environment and will find it very difficult to attain any growth. As such, it is very important for companies to identify the trends in changes in the business environment. Based on the identified trends, companies must consider a strategy and invest their resources with focus placed on environmental changes that are likely to occur in the near future.

The healthcare markets in these countries are generally developed in four major stages, during which supply-side healthcare facilities are developed by the government as part of its policy and patient needs are satisfied on a step-by-step basis. Discontinuous market growth will be observed during the third of these four stages (Stage 3) when the market expands in Tier 2 cities.

The Chinese healthcare market entered Stage 3 sometime after 2000, and the market is already showing signs of discontinuous growth. However, many Japanese healthcare companies have not yet been able to take full advantage of such rapid growth. As the market progresses towards Stage 4, the markets of major inland cities and those of primary care medical institutions are expected to grow along with the enhancement of standard clinical practice guidelines. Japanese healthcare companies need to take notice of these changes in the environment and must make full use of the business opportunities presented by these changes.

If a company is to fully leverage the growth potential of these emerging markets, investment must be made to establish its presence when the target country is in Stage 2. Currently, ASEAN (Association of Southeast Asian Nations) member countries and India are in either Stage 1 or Stage 2. The time is fast approaching for Japanese healthcare companies to decide on how best to make investment to enter these markets and pursue growth.

I Features of Healthcare Markets and Issues Related to Business Strategy in Emerging Economies
II Development Stages of Healthcare Markets in Emerging Economies
III Case Study: Development Stage of Chinese Healthcare Market and Related Business Opportunities
IV Business Opportunities in Healthcare Markets in Emerging Economies


Copyright(c) Nomura Research Institute, Ltd. All rights reserved.