For many years, healthcare in Vietnam was closely regulated by the Vietnamese government. However, ever since the country opened up to privatization, the health care industry has become an area of interest to foreign investors. Demand for better healthcare services from a Vietnamese population of increased wealth is driving this foreign health investment, and there are many challenges to Vietnam’s healthcare sector that foreign investors hope to address through their involvement.
Vietnam has a growing population of approximately 86 million which makes it the 13th most populous country in the world. A million babies are delivered each year in Vietnam, and with this increase in population, hospital and health system development becomes a necessity. Thomson Medical, a Singaporean health group, has set up its first overseas venture half an hour from Saigon (HCMC) called the Hanh Phuc International Woman and Children Hospital. It has 250 beds (compared to the original 190 at Thomson Medical Center in Singapore) and will be opened in cycles.
As reported on Vietnamplus.vn, Allan Yeo, Chief Executive of the Happy Hospital under Singapore’s Thomson Medical Centre commented, “With its large population, Vietnam is recognized as a potential market offering many opportunities for foreign investors in medicine and health care.” He believes that among the foreign investors involved in Vietnam’s health service, “Singapore is considered the country with the greatest potential.”
Unlike many other fields in Vietnam, like finance, real estate, tourism, the health service was paid less attention to in the world of foreign investment in the past, but this has changed.
On August 8, an investment newspaper in Vietnam reported that the flow of foreign investment into Vietnam’s health sector had increased dramatically with news that Indian group Fortis Healthcare intends to purchase 50 percent of the share in HCMC’s Hoan My Medical group. This investment would in turn benefit both Vietnam and India. The transaction would assist Fortis Healthcare in increasing its presence in Southeast Asia.
Parkways Health of Singapore, Asia’s top private medical group, entered the Vietnam market by taking on the role of manager at the HCMC high-tech health center. This investment was done through the Hoa-Lam-Shangri-La joint venture.
So why has Vietnam’s healthy industry grown in interest to foreign investors?
According to Damien Duhamel, Managing Director of Solidance’s Asia Pacific offices, when looking into investing or opening a medical device plant, one takes a look at two factors: the cost of manufacturing and the quality output. Vietnam is highly attractive due to its low cost of labor and manufacturing. Vietnam has a very industrious population keen on developing their technical skills.
Additionally, foreign companies with experience venturing into China and successful with medical devices manufacturing and distribution will have an advantage in Vietnam. Going forward, investing in Vietnam may be more beneficial than in China due to its cheaper labor and competitive operating expenses
Wonderful article,Merill. You made some great points.
This is a great article. Thank you. I think it is important to realize the enormous potential that developing the health sector could have for Vietnamese residents. However, the way the health system is set up currently, it will be quite a challenge to realize this potential. Using the typical “quick fix” approach that is often used when entering emerging markets will be disastrous for the country. It will become another service industry for the rich and the traveling expats. However, the health system foundation makes a lot of sense. If money was injected in the right places, something great could happen in that country.