|How does the refurbished equipment market operate? What is the size of the refurbished medical equipment market?
A large part of Indian population does not have access to quality healthcare due to very high costs. Hence, many of the healthcare service providers view refurbished medical equipment as an alternative to new equipment. In recent times, we have seen demand for refurbished medical equipment is increase in India, especially as the healthcare service providers are focusing on Indian rural markets. Coupled with cost sensitivity, the demand for refurbished medical equipment has growing rapidly. The refurbished equipment market operates similar to other new equipment business, except for the fact that the business is concentrated more in the tier II-III towns/cities. Presently, the refurbished market is approximately 20 per cent of the overall equipment sold and almost 30 per cent of the sales in the private sector.
What are the opportunities and challenges associated with the business of manufacturing and selling refurbished equipment in India?
Some cringe at the very mention of used or pre-owned. Whether its in the eyes of the buyer or the seller, the patient or the healthcare provider, there is often a negative association connected to these terms. Whatever we may call it, remanufactured, reconditioned, re-assembled refurbished, pre-owned, plainly speaking it comes under one class second hand or used equipment. If good quality refurbishment processes can be created with the active support of the manufacturing company, then refurbishing equipment in India will definitely give a tremendous boost to the business as costs can be greatly reduced as compared to refurbishing at facility abroad. To start a good quality refurbishing facility in India it is essential to have the involvement of the parent company manufacturing these goods, and that practically seems to be difficult presently. Moreover the present tax rates are much higher for manufacturers as compared to direct imports.
Can you name a few cities where the demand for refurbished medical equipment is high?
The demand for refurbished medical equipment are more in developing states, specifically in states where infrastructure and healthcare facilities are growing fast. An approximate zone wise assessment indicates that the northern states in India are leading in volumes of refurbished equipment sales
Refurbished equipment vendors have few responsibilities to which they must adhere. Can you name a few parameters that you consider while designing refurbished medical equipment?
Due to complex nature of the equipment, the after sales support, quality of the product provided by the vendors directly impacts the reliability. Most important parameters being considered by us are age of the systems, emphasis on latest technology of the equipment, upgradability of systems, ease of availability of spare parts, actual users review in terms of stability of product and installation base in international market. Indian customers demand latest technology equipment supported by proper technical service with and assured 95 per cent + uptime for equipment which is the key to future business.
Where do you see this market in the next five years?
India is the biggest market in Asia for refurbished medical devices. India is one of the largest emerging medical equipment markets in the world. It is estimated to grow at a rate of 15 per cent with a Compounded Annual Growth Rate (CAGR) to exceed $4 billion by 2015. The increased need can be attributed towards growth in medical tourism, increase in health budget, rise in population associated with increase in lifestyle diseases and growing economy have led to stupendous demand for medical devices. As a country, we are cost conscious and still evolving strategies towards managing toxic wastes. Refurbished medical equipment allows for affordable machines without sacrifice of quality.