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Rapidly evolving market dynamics have encouraged healthcare companies to find new and innovative routes to market in the Asia Pacific to enhance cost-effectiveness and differentiate services.
That’s why commercial outsourcing becomes a viable option. Learn how and why healthcare decision-makers see commercial outsourcing as the right option to grow business from DKSH's market research Route to Market: Commercial Outsourcing as a Business Growth Strategy for Healthcare in Asia Pacific.
At DKSH we define commercial outsourcing as the contracting of sales, marketing, and other commercial services from an external partner for some or all of an organization’s product portfolios.
Of the healthcare decision-makers (in brand owning companies) who were surveyed, 56 percent of the companies plan to maintain the outsourcing of commercial activities to a third party, 27 percent plan to increase more, and eight percent plan to increase much more outsourcing activities in the upcoming 12 months.
Only 8 percent of companies expect to decrease their activities. Compared to 2017 when DKSH conducted a similar survey, around 20 percent of companies planned to decrease their activities. This implies that, in the recent survey, more companies see value in commercial outsourcing and see it as an important part of their growth strategy.
Businesses view outsourcing mainly as an opportunity to expand geographical coverage in some markets: 69 percent of the respondents stated they would consider a partner in such a situation. 60 percent would like to expand into new markets and 50 percent would consider outsourcing to drive sales of strategic products.
Interestingly, new companies stated that they would pay more attention to new products and market expansion, while established companies consider outsourcing mature products to a third party.
Decision-makers in the multinational pharma companies we surveyed stated there are many valid reasons to work with commercial outsourcing partners: Companies would like to grow rapidly while maintaining focus on their core competencies like product development. More than ever, companies need to assess their core strengths, determine which areas they need to focus their resources on and where they would be better served to leverage a strategic business partner. (Read also: Six Reasons Outsourcing Could Benefit Your Business)
The research also shows that pricing pressures, salesforce effectiveness, and market presence are the top-three challenges that hinder further growth for pharma companies in Asia. Driving an effective sales force across Asia’s fragmented healthcare sales channels is a crucial need for many companies. Not even the largest pharmaceutical or OTC/consumer health companies can economically justify a full coverage field force in this channel outside the smallest markets, let alone an omni-channel approach.
So what stops companies from outsourcing more? A key barrier for decision-makers to adopt commercial outsourcing is finding the right skill set in a partner. Brand owners look for partners who can deliver sales team coverage, sales capabilities as well as market understanding and knowledge. Also, brand owners that partner with well-established outsourcing companies in the markets are not worried about losing control and a lack of transparency over how their business is running.
Compliance, transparency, and ethics are the first prerequisites to be even considered as an outsourcing partner. Outsourcing partners must provide transparency throughout the relationship. Proper alliance management on both sides is critical, as are marketing strategy, sales forces allocation, regular business reviews, clear KPIs, and reporting. It is up to the client how involved they want to be.
At DKSH, Commercial Outsourcing is at the core of what we do. From launching in a new market to expanding channel reach, we are your healthcare marketing and sales partner, and with a strong footprint in eCommerce channels, we help you reach consumers offline and online.
Do share your views with us on commercial outsourcing and how outsourcing may benefit your business.
The Route to Market: Commercial Outsourcing as a Business Growth Strategy for Healthcare in Asia Pacific research was conducted between August 5 and October 25, 2021, by Be Digital, a Bangkok-based research company, among DKSH’s database of 1,200 healthcare decision makers in Asia. The research consisted of an online survey and phone interviews. Two-thirds of the respondents are high-level decision makers responsible for commercial outsourcing decisions across multiple Asian markets. 49 percent of the respondents represented healthcare companies that are well-established in Asia with operations in five or more Asian markets.