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Digital promises new ways for businesses to interact with consumers. In this new retail reality, healthcare was not among the earliest adopters, but it has quickly become one of the fastest growing e-commerce markets around the world, and especially in Asia.
At the Frost & Sullivan's GIL 2017: Asia Pacific event held in Singapore, I shared my thoughts on the three key digital trends that I believe will shape the future of the consumer healthcare market. Here they are:
The digital transformation is revolutionizing the healthcare landscape around the world. Almost daily, we see the emergence of new technologies, be it mobile apps, wearables and even telemedicine which allow consumers to take more ownership of their health.
But it is the online retail space that has many healthcare brands excited. Internet retailing in Asia Pacific is expected to double within the next five years, with a compound annual growth rate (CAGR) of 12.5 percent. Though it comprises small volumes today, consumer health is forecasted to grow exponentially. According to Euromonitor, retail sales for healthcare in Asia will have exceeded USD 11 billion by 2021.
Unlike previously when consumer health products were only available at hospitals, pharmacies and other trade outlets, consumers can now buy these products online from healthcare companies’ websites or e-commerce portals like Lazada and Amazon. With Amazon’s widely anticipated entry into the healthcare space, millions of consumers are eager to see how the e-commerce giant will transform consumer healthcare retail and services.
However, the varying speed and maturity levels in Asia require a localized digital approach. Small e-commerce markets like Malaysia (USD 585 million) need to be approached differently than large e-commerce markets like China (USD 336 billion).
As an example, DKSH recently supported a global healthcare company in Malaysia to launch three brand flagship online stores, establish the brands’ presence on two leading e-marketplaces and get products to consumers within a single day. The partnership resulted in a significant increase in sales for the healthcare company
In the past, e-commerce for consumer healthcare was largely focused on just sales and product promotion. That isn’t the case anymore. Nowadays, e-channels are also a source of healthcare education and value-added content for personal care.
According to a Pew Internet Research survey, 80 percent of health inquiries start with a search engine query. Online users are turning to digital media for lifestyle guides, medical knowledge, rehabilitation advice, information on therapies and treatments, caregiving advice as well as emotional support.
With the continued increase of internet users and the increasing number of mobile phone users in Asia, it is only a matter of time until digital will reach an inflection point in Asia and e-commerce becomes the new normal.
Another key reason why e-commerce activities in the healthcare sector continues to grow is the increased flexibility of regulatory authorities’ when it comes to digital advertising practices and the online sale of pharmaceutical and healthcare products. Globally, regulators are implementing new laws and amending existing regulations as they acknowledge that analog-based regulations aren’t supportive of digital applications.
While recognizing that their foremost priority is to maintain consumer protection and safety, regulators also understand the need to fine-tune legal and regulatory issues if the online sale and distribution of drugs are to take off. For instance, the U.S. Food and Drug Administration has established the Digital Health Program which aims to develop and implement regulatory strategies and policies for digital health technologies among others.
The road ahead for the pharmaceutical and healthcare industries is undoubtedly through the digital route. To ensure a smooth journey, you need to ensure that you have a comprehensive roadmap to help you steer through the challenges to achieve your business objectives.
Bijay Singh is DKSH’s Head Business Unit Healthcare. Bijay has lived and worked in four continents and amassed over 15 years of work experience in the healthcare field across Asia. Read more about DKSH’s healthcare services.