By Reid Kirchenbauer
Vietnam is a relatively unknown country in the business world when compared with nearby countries such as Thailand and China. However, the country is worth looking into for many reasons despite showing the lowest GDP growth in the CLMV region (Cambodia-Laos-Myanmar-Vietnam).
One of such reasons is that Vietnam's healthcare market is set to grow exponentially, attracting huge foreign direct investments into facilities and services.
But before exploring the opportunities, let us first have a brief introduction to better familiarize ourselves with Vietnam. Currently, the 3rd most populous country in ASEAN.
A Brief Introduction to Vietnam
With a total population of more than 90 million people, Vietnam is one of the biggest markets in ASEAN by both population and size and is continuously growing in its importance.
Vietnam is welcoming change. With more than 40% of its population under the age of 24, Vietnam has a noticeable amount of young people who are open to more practices and values from western culture. These young people are also working adults with a higher average income than any in other era of the country.
However, Vietnam will get old quickly. With the average life expectancy on the rise for the past 25 years from below 70 to a record high of 75 years in 2015, Vietnam has a population that will be not only be outliving most of its closest neighbors, but one that is aging rapidly.
With that said, there will be a large number of young adults who will have the disposable income, the desire, and the necessity to spend more on modern healthcare services whether it may be for themselves or for their aging relatives.
Healthcare in Vietnam: A Good Investment?
Despite the Vietnamese government making healthcare one of the top national priorities, there is still a lack of adequate facilities to meet the demand. The government acknowledges that the public health sector has limited abilities to cover all needs of Vietnam's growing population, and has an ambition goal to grow the number and size of private hospitals by 20% before 2020.
Healthcare providers now consist of an estimated one thousand public health providers along with about a hundred private hospitals. Vietnam represents a huge healthcare and medical equipment market, especially with more government involvement in the industry's development. Consequently, the public healthcare sector has received even more government budget allocations as well as interest from the private sector.
There is now an excess demand for healthcare services in Vietnam. This has been caused by an increase in disposable income and more awareness about the benefits of preventive care. It is predicted that the middle and affluent classes of Vietnam will double in size between 2014 and 2020. This leads to opportunities for healthcare development outside of the urban development hubs.
In short, with increasing demand for better healthcare and services from Vietnam's open-minded young population, both government and foreign investors have stepped up their game.
The government has increased its budget allocation and made the improvement of healthcare services a national priority. FDI into this sector is also on the rise as foreign healthcare providers look to fill the void and capture the healthcare market of one of the Asia's fastest growing economies.
With over 4 billion people and rapid economic expansion, Asia will be the main driver of growth in the 21st century.