Li & Fung backed IDS Medical eyes role among giants in Asia’s health care market
Amid fierce competition from internet heavyweights such as Amazon and Alibaba, which have set up online platforms selling medical supplies and pharmaceuticals, Hong Kong’s IDS Medical Systems Group can still be an industry leader in the health care sector, according to its chief executive and founding partner Ben Chang.
“There is a crying need for cheaper and faster health care service. That’s exactly the reason we want to tap into this sector,” Chang said.
Backed by Fung Investments, the private investment arm of multinational Li & Fung, IDS Medical sells medical equipment and offers outsourcing services to hospitals, such as equipment sterilisation.
The firm, founded in 2011, recently received US$60 million in equity from International Finance Corporation (IFC), a member of the World Bank Group.
The money will be used to “expand the provision of professional and affordable integrated medical solutions across Asia”, the company said in a statement.
With operations in eight Asian countries including Indonesia, Singapore, Malaysia, Hong Kong, Philippines, Taiwan, Thailand and Vietnam, Chang said the firm is looking to double the number of countries where it operates within four years. A public listing in either Hong Kong or Singapore is also being considered in the three to five year time frame, Chang added.
The health care sector in China is forecast to become a US$1 trillion a year business by 2020, according to a report by consulting firm McKinsey & Company, with growth driven by a change in the country’s long-time one-child policy and an ageing population. The situation is similar in other Asian countries, with pressure on national health care systems mounting from growing demand from an increasingly educated and affluent population for high-quality health care.
With such a potentially lucrative market, a number of internet giants have joined the party.
The health care flagship of e-commerce giant Alibaba Group, Alibaba Health Information Technology, last year opened its first online retail pharmacy for over-the-counter drugs, and is also trying to build an internet-based “tiered medical services” system in the country’s rural areas.
Separately, CNBC reported that Amazon is on the hunt for a general manager to lead a new pharmacy unit, noting that the US e-commerce heavy weight has been selling medical supplies for a while, sending signals that it is interested in the health-care industry.
In the face of such fierce competition, IDS Medical, with a staff of 1,200, said it would focus on expanding in other Asian countries in order to “scale up” the game.
Myanmar, Cambodia, mainland China, New Zealand and Australia would be on the firm’s radar for expansion, Chang said.
Alibaba is the owner of the South China Morning Post.