Jakarta, Indonesia, March 5, 2025 – DKSH, a Strategic Healthcare Solutions Partner and leading provider of Market Expansion Services for pharmaceutical, over-the-counter (OTC), consumer health and medical device companies, and FrontierView, a leading business intelligence and advisory firm, have published a whitepaper with the title “Southeast Asia as a Growth Accelerator for Global Healthcare Firms”. It provides a comprehensive analysis of the healthcare landscape in Southeast Asia and offers valuable insights into the region’s healthcare market, with a particular focus on Indonesia’s burgeoning sector, its key challenges, and the abundant opportunities that lie ahead. The whitepaper highlights Indonesia’s growth and industry development, reaffirming its potential as a key market for healthcare companies. It also emphasizes the need to address the market’s challenges in order to expand healthcare access and ensure services for all.
Indonesia’s healthcare sector has seen increasing growth, largely driven by an increasing demand for medical tourism, the expansion of private healthcare services, and the exploration of public-private partnerships (PPPs). However, this growth is accompanied by several challenges, ranging from workforce shortages to financing gaps and regulatory pressures. As the industry continues to evolve, addressing these issues will be crucial in ensuring that Indonesia’s healthcare system can meet both domestic needs and regional competition.
Elamaran Kaliani Sundram, General Manager, Business Unit Healthcare, DKSH Indonesia, said: “The findings from the whitepaper reinforce our belief that Indonesia continues to be one of the most promising markets in the region for pharmaceutical, consumer health, and medical device companies. While significant opportunities lie ahead, there are challenges that must be addressed to fully realize their potential. Recognizing these shifts, DKSH has developed strategies, products and services that will help our partners navigate the evolving market trends in Indonesia, including the expansions of the middle class, the aging population, and the rising importance of the private sector”
Booming Private Investment
As the Whitepaper shows, private healthcare in Indonesia used to largely rely on out-of-pocket spending. However, in recent years, private hospitals have experienced significantly faster growth compared to public hospitals. Leading private hospital groups are consistently increasing their CAPEX, especially for the development of new hospitals. Providers are also investing in more advanced capital equipment to enhance their specialty care offerings. Another notable trend is the growth of private insurance. Health plans among individuals in Indonesia are showing the most growth among life insurers.
Addressing Challenges in Indonesia’s Healthcare System
Despite the substantial growth in the healthcare sector, Indonesia faces several challenges that must be addressed to ensure long-term sustainability. These challenges also apply to the other markets analyzed in the whitepaper, namely Malaysia, and Thailand:
- One of the issues is the shortage of healthcare professionals. Many doctors, nurses, and other healthcare workers are attracted to the private sector, leading to a disparity in the distribution of healthcare workers across the country. Public sector hospitals are struggling to meet the rising demand for care.
- Regulatory dynamics continue to shape the healthcare sector’s growth. While Indonesia has made strides in simplifying market entry through initiatives like the “ASEAN Joint Assessment pathway”, it still faces hurdles in local pharmaceutical and medical device production. Despite tax incentives and government efforts to encourage domestic manufacturing, Indonesia remains heavily reliant on imports for medical products. The influx of foreign companies could further exacerbate these localization pressures.
- Indonesia’s private healthcare sector is also facing the challenge of rising global interest rates, which have made it more difficult for private hospitals to secure financing for infrastructure and equipment. Many hospitals are opting to lease medical equipment instead of purchasing it outright, a reflection of the increasing cost of capital.
Balancing Opportunities and Challenges in the Future
Indonesia’s healthcare market offers immense opportunities, particularly with the ongoing growth of the private sector. To maintain this positive trajectory, the whitepaper outlines that Indonesia must tackle the challenges of workforce shortages, financing gaps, and regulatory inefficiencies. Public-private partnerships present a promising solution, but sustained collaboration between the government, private sector, and healthcare professionals is essential to ensure the long-term sustainability of the healthcare system.
“At DKSH, we use our expertise in commercial market expansion, regulatory compliance, and supply chain processes to support the growth of Indonesia’s healthcare sector and to enrich people’s lives by providing better healthcare for all. Being the trusted partner for navigating and thriving in Asia for o160 years, we have developed a great deal of knowledge. Believing that this whitepaper will provide the latest insights to succeed in the dynamic Southeast Asian healthcare landscape, we are proud to have contributed our knowledge and expertise in supporting it,” added Elamaran.
To learn more about the healthcare challenges and opportunities in Indonesia and other ASEAN markets, read the full whitepaper here: https://bit.ly/hecwhitepaper.
