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Cranfield, UK, 12th July 2024, Written by Mustafa Hassan, PhD and Aiyana Amess –
Workforce challenges and inflationary pressures hampered the global growth for the ultrasound market in 2023. Customers became increasingly price conscious, which provided an opportunity for Chinese vendors to increase their presence and competitive edge against global vendors through pricing tactics. The impacts of these and other macro-influences also impacted regional markets with varying degrees – our round up of the trends impacting the ultrasound market in the main geographical markets are outlined below.
Western Europe: Market growth hindered by the Economic Climate
The struggling economies within many Western European countries dampened growth prospects in the ultrasound market for 2023, as customers delayed investment and shifted purchasing priorities. Tighter hospital budgets led to a purchasing shift towards systems that provided the best features for the cheapest price. This shift in purchasing habits favoured Chinese vendors, which subsequently gained greater presence in the market, particularly in the low-end segments further contributing to the pricing decline in the region.
The Western European ultrasound market is projected to pick up in 2024 driven by tender activity as governments prioritise increasing the quality of care provided. The Spanish public spending programme, INVEAT aims to replace all systems that are older than 12 years to ensure accessibility to high-tech systems across the country. Tender activity, though benefiting the market, is also fuelling price erosion in the region. For example, the Italian CONSIP has highlighted the 30-40% saved through the purchase of lower end systems, with vendors pushing prices down to remain competitive in the tenders.
Eastern Europe, Middle East and Africa: Russia Weighing the Market Down
The Eastern European market has saw an estimated decline once again in 2023 due to the ongoing sanctions imposed on Russia due to the invasion of Ukraine, driving down the overall size of the regional market. Purchasing was slow for most of 2023 in many Eastern European countries, due to customers delaying investment. This was due to the economy, reduced EU investment, and country elections.
Similarly to Western Europe, Eastern Europe and MEA are experiencing price erosion in the lower end segments. Eastern Europe remains highly price sensitive, the increased Chinese vendor presence both here and in MEA is driving price erosion with Chinese vendors pricing tactics forcing global vendors to price low to remain competitive in the market.
The Middle East and African markets were once again the fastest growing regions in EMEA in 2023. The fastest revenue growth was seen in the Saudi Arabian market, driven by public framework deals.
North America: Electoral Build up Gives Rise to Uncertainty
The US market was estimated to have seen slow growth in 2023. High inflation rates extended purchasing cycles and customers favoured lower-cost systems for better trade-in value. There is a continued demand for features to optimise the workflow. There is also a growing need for cybersecurity and data and device management tools.
However, the upcoming US elections is causing the market to be cautious in 2024, prompting hospitals to delay budget decisions, awaiting new healthcare policies.
Latin America: Investment Continues
The LATAM market experienced high single-digit growth in 2023, driven by increased government investment and large account purchases. In radiology, customers continued to prioritise price over features. The low-end segment is expanding due to increased penetration by Asian vendors, who are offering lower priced systems. Their low pricing is influencing purchasing strategies and pricing in the region, driving price erosion similarly to EMEA.
Localisation policies are increasing in the region with the Brazilian government implementing a 45% tax on imports and a 10% preference for local products, reflecting a trend toward localisation to drive a much-needed boost to the economy.
In Chile and Colombia, left-wing governments are pushing to transition from private to public healthcare systems, which may potentially benefit the market in 2024. However, corruption issues with centralised budgets could negatively impact this transition.
China: Anti-Corruption Policies Causes a Halt in Purchasing
In mid-2023, the Chinese government intensified anti-corruption enforcement in healthcare, culminating in the 12th amendment to the PRC Criminal Code. This crackdown significantly slowed the market in the second half of 2023. The anti-corruption policies are anticipated to further dampen growth in the first half of 2024, impacting all clinical applications.
Despite the unchanged local production policy from May 2021, which requires 85% of systems to include locally made products, deals now take longer to finalize, with some purchases cancelled or delayed. Additionally, the Chinese government’s volume-based procurement strategy, initially applied to drugs and now to medical devices, is expected to drastically lower average selling prices. However, increased activity in higher-end systems by some Chinese vendors may partially mitigate this decline.
Japan: Yen Depreciation Hits the Market Again
Economic growth in Japan was projected to rise in 2023, supported by monetary and fiscal policies. However, the Japanese Yen depreciated in 2023, causing the Japanese ultrasound market to decline in USD terms. Corporate profits will benefit from the weaker yen and previous project delays, boosting business investment.
Projected growth from 2025 to 2028 will be driven by Japan’s national health transformation plan starting in 2024, focusing on diseases like cancer, stroke, myocardial infarction, diabetes, and mental illness to address the growing aging population. The first phase, the 8th Medical Plan, will run from 2024 to 2029.
Southeast Asia: Investment will Drives Growth
Localisation remains a dominating factor in Asian Markets. The Indian government continued its strong push for local manufacturing, offering tax incentives and stipulating tenders that include around 50% locally manufactured components. While inflation caused significant price increases across most system pricing levels, aggressive strategies by vendors kept entry-level prices low. Local manufacturing helped mitigate overall price hikes in the country.
In Indonesia, a policy mandating that at least 25% of primary care systems be locally made facilitated market growth, largely due to government investment in cardiac disease and increased local manufacturing. The policy, expected to extend to other clinical segments soon, primarily impacts lower-end device manufacturers.
Large deals and government funding within the region have driven strong growth within the Asian market. Thailand saw a multi-year deal land in 2023 resulting in significant growth for the country. The Korean New Deal facilitates the implementation of smart healthcare infrastructure. Around 0.2 trillion Korean Won ($149.5 bn) will be invested between 2020 and 2025.
The Signify View
Though growth in 2024 is anticipated to remain low, due to the continuation of regional issues from 2023, more stable growth is projected for the next five years. Investment in healthcare still remains a priority for governments; frameworks and transformation plans starting this year will benefit the latter half of the forecast period. Vendor innovation continues to drive the market as they adapt to new challenges and varying demands from the consumers. Price sensitivity remains the core theme globally affecting purchasing habits and vendor preferences, driving vendors to diversify their portfolios with new releases in the low-end segments. International vendors are adding premium features to their performance solutions to retain competitive edge in this increasingly competitive market. Whilst the market is currently mired in caution and uncertainty, a brighter horizon lies just ahead.
Related Research
“World Market for Ultrasound Equipment – 2024 Edition”
“World Market for Ultrasound Equipment – 2024 Edition” provides a data-centric analysis of current and projected demand for cart, compact and handheld ultrasound systems. It features analysis of 30 geographic markets, with breakdowns by clinical application and product mix. The report is based on a robust primary research method and sales data reported by vendors of ultrasound equipment.
About Mustafa Hassan, PhD
Mustafa joined Signify Research in 2020 as part of the Medical Imaging team which covers areas such as ultrasound, general radiography and machine learning in medical imaging. Prior to that he obtained a PhD in Pharmacy and Physiology from the University of Kent and has three years of post-doctoral experience working on optimising healthcare for genetic Cardiac diseases.
About Aiyana Amess
Aiyana joined Signify Research in 2023 as part of the Medical Imaging team. She graduated from Loughborough University with a BSC in Medicinal and Pharmaceutical Chemistry, receiving a diploma in industrial studies after completing an internship at Roche. Away from the office Aiyana enjoys powerlifting, long walks in the woods and creating mini figures out of clay.
About the Medical Imaging Team
The Medical Imaging team provides market intelligence and detailed insights on the medical imaging markets. Our areas of coverage include MRI, CT, X-Ray and Ultrasound. Our reports provide a data-centric and global outlook of each market with granular country-level insights. Our research process blends primary data collected from in-depth interviews with healthcare professionals and technology vendors, to provide a balanced and objective view of the market.
About Signify Research
Signify Research provides healthtech market intelligence powered by data that you can trust. We blend insights collected from in-depth interviews with technology vendors and healthcare professionals with sales data reported to us by leading vendors to provide a complete and balanced view of the market trends. Our coverage areas are Medical Imaging, Clinical Care, Digital Health, Diagnostic and Lifesciences and Healthcare IT.
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