Forecast of the market for rental and leasing of medical equipment
The relevance of research
Medicine in India has ceased to be an exclusively state field of activity. Today, along with budgetary institutions, private medical structures operate on the market. The legislative and financial principles of the industry are changing. Not only the number of private medical centers and clinics is growing, but also the volume of services they provide. At the end of 2019, the market volume amounted to Rs 4,9 billion. In an effort to improve the quality of customer service, many medical organizations choose the rental or leasing of medical equipment as the most effective and reliable financial mechanisms.
As a result, any medical institution can increase the level of technical equipment with minimal investment. Moreover, in medicine, the latest equipment is a decisive factor determining success in a competitive environment: the better and more modern the equipment, the more accurate the diagnosis and the better the reviews about the clinic, and with it the reputation and, accordingly, the greater the influx of new customers.
Purpose of the study
Analysis of the state of the medical equipment rental and leasing services market, assessment of the market volume, competitor analysis, market development forecast, as well as identification of factors affecting the medical equipment rental and leasing services market.
Content
Chapter 1. Economic characteristics of the market for rental and leasing of medical equipment
1.1. Market size
1.2. Market Growth Rate
1.3. Market trends
1.4. The main problems of the industry
1.5. Industry life cycle stage
1.6. Estimation of the number of buyers and their financial capabilities
1.7. Estimated consumption per capita
1.8. The pace of technological change and product innovation
1.9. Sales channels
1.10. Compact location of industry companies in certain regions
Chapter 2. General economic environment
2.1. Economic components
2.2. Social Components
2.3. Technological components
2.4. Political Components
2.5. STEP-analysis of the market
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
3.2. Number of competitors and relative market shares of the largest competitors
3.3. Competition from substitute products
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
4.2. Analysis of the impact on the state aid industry at the current date
4.3. Studying scenarios for the development of the industry in terms of quarantine in connection with covid-2019
4.3.1. Single Quarantine Scenario (according to the Chinese release schedule)
4.3.2. Scenario of two quarantines
4.4. Analysis of existing cases of business restructuring in the industry
Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
5.2. Sources of information for forecasting
5.3. Timing of forecasting
Research excerpt
Chapter 1. Economic characteristics of the market for rental and leasing of medical equipment
1.1. Market size
At the end of 2019, the market volume amounted to … billion Rs. In an effort to improve the quality of customer service, many medical organizations choose the rental or leasing of medical equipment as the most effective and reliable financial mechanisms.
As a result, any medical institution can increase the level of technical equipment with minimal investment. Moreover, in medicine, the latest equipment is a decisive factor determining success in a competitive environment: the better and more modern the equipment, the more accurate the diagnosis and the better the reviews about the clinic, and with it the reputation and, accordingly, the greater the influx of new customers.
As the market for medical services develops, clinics have an increasing demand for specialized medical equipment. One of the trends in the medical equipment market in India is that the renewal periods of medical systems are 2-3 years, which contributes to both faster equipment renewal and popularization of medical equipment leasing in general.
1.2. Market Growth Rate
During 2013-2019 The volume dynamics of the medical equipment rental and leasing market is oscillatory (in some years even spasmodic). …
Diagram 1. Dynamics of the volume of the market for rental and leasing of medical equipment, 2013 - 2019, billion Rs.
1.3. Market trends
Let's highlight the main trends that affect the market for rental and leasing of medical equipment:
Growing popularity of paid healthcare services;
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1.4. The main problems of the industry
Illiquidity of medical equipment. Since medical equipment is a highly specific and extremely expensive product, it will be much more difficult to sell it if the leasing contract is terminated;
Lack of qualified personnel in the field of leasing;
Decrease in demand from customers who froze plans for the renewal of fixed assets due to the economic downturn in the context of the introduction of quarantine;…
1.5. Industry life cycle stage
The medical equipment rental and leasing industry is in a phase of … . This stage is very important for companies, as it creates the most favorable conditions for dominating the market and for increasing profitability and stability. …
1.6. Estimation of the number of buyers and their financial capabilities
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The total number of public and private medical institutions for the study period increased by … units. and at the end of 2019 amounted to … institutions.
The revenue received by organizations working in the healthcare sector in 2019 amounted to … billion Rs., which is … % higher than the revenue in 2015 …
Diagram 3. Revenue (net) from activities in the healthcare sector, 2015-2019, billion Rs.
1.7. Estimated consumption per capita
According to GidMarket analysts, after a two-year decline (2016-2017), the volume of consumption of rental and leasing services of medical equipment per capita in 2018 amounted to … Rs./person, which was the maximum figure in the period under review. …
1.8. The pace of technological change and product innovation
In general, the pace of technological change in the rental and leasing market for medical equipment is low.
The events of spring 2020 showed that digitalization is a way to save a business, including a leasing one. Electronic document management (EDM) allows you to remotely sign all necessary documents (contracts, additional agreements) with clients, send official letters and primary documentation to clients, and receive documents on new transactions from clients.
Leasing companies note a significant increase in interest in remote maintenance and the willingness of customers to work with EDI. And it is obvious that this is not only due to coronavirus restrictions, but is also a requirement of modern life. Perhaps the pandemic has slightly accelerated the “departure” of leasing, which is a more “traditional” business area, to online processes.
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1.9. Sales channels
The introduced quarantine did not lead to a significant increase in the share of online applications, which, according to the results of the 1st half of 2020, amounted to only … % in the sales structure. …
Also, rental or leasing transactions are concluded by announcing tenders. This method is used mainly by government agencies.
1.10. Compact location of industry companies in certain regions
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Chapter 2. General economic environment
2.1. Economic components
GDP dynamics
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According to the results of 2017-2019, the dynamics of GDP is positive, but, contrary to optimistic forecasts, it is not high, which indicates the revival of business processes in the country, but not constructive changes at the macroeconomic level. According to Rosstat, in 2019 the GDP growth rate was 1,3%.
Let's take a look at some experts' assessments:
• On September 14, 2020, the Ministry of Economic Development improved the forecast for the development of the economy: according to the baseline forecast, the Ministry of Economic Development expects a decline in India's GDP by 3,9% in 2020. In 2021, an increase of 3,3% is expected, in 2022 - by 3,4, 2023%, in 3 - by %.
• ...
Currently, the decline in GDP in 2020 has a negative impact on the rental and leasing market for medical equipment.
Dollar exchange rate. In 2015, the change in the dollar exchange rate is oscillatory. In February of the following 2016, the maximum dollar exchange rate was 76,1 Rs., And then there is a gradual decrease in this indicator and in December this value is 63,8 Rs. …
The depreciation of the national currency has a negative impact on the market.
Development of paid medical services. During 2016-2019 The volume of paid medical services to the population has been constantly increasing. At the end of 2019, the indicator amounted to … billion Rs., which is more than in 2015 by …%. …
Since the beginning of the pandemic, the turnover of medical institutions has been limited by the self-isolation regime, the instructions of Rospotrebnadzor, people's fears of contracting the coronavirus when visiting medical institutions, as well as a decrease in the income of the population.
2.2. Social Components
Real disposable money income
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According to the results of 2019, real money incomes of Indians grew by 0,8%, follows from Rosstat data. The peak value was reached in 3 sq. - 3,1%, in the 4th quarter. the growth rate of the indicator slowed down to 1,1%. …
The reduction in real disposable income of the population has a negative impact on the market under study.
Population decline. During 2012-2017 India's population has shown a positive trend. However, in 2018, the vector changed - the population decreased due to the natural population decline in 2017-2019.
The current demographic situation in India is characterized by natural population decline (since 2017), which is accelerating, and migration growth, which does not compensate for natural decline. …
2.3. Technological components
The degree of depreciation of fixed assets
The depreciation coefficient shows the degree of depreciation of fixed assets, the value of the indicator shows how depreciated the fixed assets of one or another group and for the enterprise as a whole. In other words, the depreciation coefficient gives an idea of the state of fixed assets and determines the amount of worn-out equipment in the total amount of fixed assets.
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Diagram 12. Depreciation rate of fixed assets in healthcare, 2012-2019, %
import dependence
Health care is one of the strategic sectors in any state. The production of medical equipment has a particularly strong impact on the state of national security. In India, this industry is highly dependent on imports, which negatively affects the market.
Subtleties at work. Working with clients in the medical field has its own subtleties. Managers of leasing companies need to be aware of all the novelties, technologies and methods of modern medicine in order to form optimal and interesting service packages for their clients. Therefore, it is necessary to constantly monitor the market and participate in industry events in order to be aware of all the news.
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2.4. Political Components
State support
From October 1, 2017, additions to Article 149 of the Indian Tax Code came into force. According to the new subparagraph of paragraph 33 of Art. 2, the transfer of medical devices that have the appropriate registration certificate under financial lease agreements (i.e. leasing) with the right to purchase is exempt from VAT. The abolition of the payment of value added tax changed the rules of financial leasing and made it more attractive and profitable for lessees. …
Credit policy
The Government of India is actively working towards the availability of credit funds. As can be seen in the table, the weighted average interest rate in 2016-2020. tends to decrease. …
2.5. STEP-analysis of the market
According to the results of the performed STEP-analysis, macro-environment factors have a negative impact on the development of the medical equipment rental and leasing services market to a greater extent.
Table 4. STEP-analysis of factors influencing the market for rental and leasing of medical equipment
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
In the market of rental and leasing services for medical equipment, national competition is most strongly developed. Despite the fact that most of the companies are located in, the possibility of remote processing of transactions allows you to work with clients throughout India, regardless of the region. …
3.2. Number of competitors and relative market shares of the largest competitors
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Table 5. Main companies participating in the rental and leasing market of medical equipment in 2019
At the end of 2019, the top three leaders in the rental and leasing of medical equipment services were …
Diagram 13. Shares of the largest competitors in the market for rental and leasing of medical equipment in 2019, %
The dynamics of the total revenue of the leading leasing companies shows growth every year. GidMarket estimates that in 2019 the total revenue of the TOP-5 leasing companies in the field of rental and leasing of medical equipment amounted to … billion Rs., having increased by …% compared to 2018.
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3.3. Competition from substitute products
The main competition for rental and leasing is loans, as well as the purchase of equipment at their own expense.
For small and medium-sized businesses, as well as large enterprises, attracting significant financial resources for purchases is not always rational, as there is an outflow of money from the company's budget, which leads to cash gaps. The main advantage in favor of choosing rent and leasing for legal entities is the preservation of working capital.
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In addition, do not forget about the most important condition for maintaining medical equipment in working condition - maintenance. With leasing, the client receives not only financial benefits, but also service benefits. In a leasing company specializing in medical equipment, the client can be advised on which equipment is best to purchase and how to organize its delivery.
Chapter 4 Industry Forecasts
List of diagrams
Diagram 1. Dynamics of the volume of the market for rental and leasing of medical equipment, 2013 - 2019, billion Rs.
Diagram 2. Dynamics of the number of medical institutions in India, 2015-2019, units
Diagram 3. Revenue (net) from activities in the healthcare sector, 2015-2019, billion Rs.
Diagram 4. The volume of consumption in the market of rental and leasing services of medical equipment per capita, 2015-2019, Rs./person
Diagram 5. Compactness of location of companies in the industry in certain regions, 2019, %
Diagram 6. Dynamics of India's GDP, % to the previous year, 2012-2 quarter 2020
Chart 7. Expert forecasts for a decline in real GDP in India in 2020 (baseline/neutral scenario), %
Diagram 8. Monthly dynamics of the US dollar against the rupee, Rs. for 1 US dollar, 2015-Oct. 2020
Diagram 9. The volume of paid medical services to the population in India, billion Rs., 2015-2019
Diagram 10. Dynamics of real incomes of the population of India, % to the previous year, 2012-Aug. 2020
Diagram 11. Dynamics of the population of India, million people, as of 01 Jan. 2012-2020
Diagram 12. Depreciation rate of fixed assets in healthcare, 2012-2019, %
Diagram 13. Shares of the largest competitors in the market for rental and leasing of medical equipment in 2019, %
Diagram 14. Dynamics of the total revenue of the largest operators in the market for the rental and leasing of medical equipment (TOP-5) in India, 2015-2019, billion Rs.
Diagram 15. The share of satisfied applications for the restructuring of leasing agreements, H1 2020, %
Diagram 16. Forecast of the volume of the market for rental and leasing of medical equipment in 2020 - 2024 – under the scenario of one quarantine, billion Rs.
Diagram 17. Forecast of the volume of the market for rental and leasing of medical equipment in 2020 - 2024 – in the scenario of two quarantines
List of tables
Table 1. Sales channels
Table 2. Contracts for tenders for rental and leasing services of medical equipment concluded in the period from 01.07.2020/25.10.2020/5 to / / in the amount of more than million Rs.
Table 3. Weighted average interest rates of credit institutions on credit operations in rupees (% per annum), 2015-1 quarter 2020
Table 4. STEP-analysis of factors influencing the market for rental and leasing of medical equipment
Table 5. Main companies participating in the rental and leasing market of medical equipment in 2019
Table 6. Assessment of the impact of recent crises on the industry
Table 7. Analysis of the impact on the industry of the state aid proposed as of April 25.10.20,
Table 8. Forecast indicators for the basic and pessimistic scenarios for the development of the crisis, 2020-2022, %
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