Health and aged care to Hong Kong

Trends and opportunities

The market

Hong Kong has the second-fastest ageing population in Asia. There are currently about 1.12 million people aged 65 or above in Hong Kong, meaning that one in seven people is an elderly person. This figure will rise to 2.28 million in 2034 and a further 2.58 million in 2064, translating into a ratio of one to three in both years (Source: Census and Statistics Department, Hong Kong Special Administrative Region, Mid-year Population for 2016, August 2016).

Continuing improvement in life expectancy contributes to the increasing proportion of older people in the total Hong Kong population. Life expectancy for Hong Kong’s women and men is high. The average lifespan for women is 87.7 years and men on average can expect to live to 81.7 (Source: Department of Health, Hong Kong Special Administrative Region, Health Facts of Hong Kong, 2018).

Apart from an increasing number and proportion of older people in the total population, there is also a higher incidence rate of chronic diseases and physical deterioration amongst older people in recent years. This increase in the number of the frail and elderly is resulting in rising demand for consumer health, medical devices and aged cared related products and services.

Care homes for the aged is one major part of Hong Kong's elderly care services. Hong Kong’s community and elderly home care services are usually provided by NGOs who are heavily subsidised by the government.

With the chronic shortage of subsidised care home places, elderly people have to wait a long time for a vacancy. The government has been urged to provide more subsidised places to meet rising demand. Currently, the waiting time for subsidised residential care services is more than three years. By August 2018, there were 39 950 elderly waiting for various types of subsidised care homes - care and attention homes for the more mobile elderly and nursing homes for those in need of full-time care (Source: Social Welfare Department, Hong Kong Special Administrative Region, Overview of Residential Care Services for Elders, August 2018).

Also, as the Hong Kong population becomes more affluent, discerning middle-income locals are willing to pay for quality and innovative health products. In view of the busy lifestyles of most Hong Kong people and their rising health consciousness, people are increasingly keen to invest in medical and healthcare consumables to monitor their health and enhance their overall well-being. This is leading to a rise in demand for age-related health products.

Opportunities

Hong Kong is facing the challenges posed by a rapidly ageing population. The demand for senior-specific residential care services has pushed this market into high gear.

Over the years, the Australian Council on Healthcare Standards (ACHS) has been providing consulting services to hospitals in Hong Kong and Macau, and has accredited most of the hospitals in Hong Kong. Thomson Adsett, an Australian architectural firm focusing on aged care facilities, also provides extensive consulting services and training to the Hong Kong government and developers.

A number of Hong Kong initiatives and emerging trends / consumer needs present multiple opportunities to Australian firms. These include:

• Hong Kong 10-Year Hospital Development Plan: Carried out by the Hospital Authority of Hong Kong, comprising of 18 major capital works projects, it will be a HK$200 billion plan implemented over the next 10 years. The Hospital Authority is aiming to bring new international benchmarking standards and seeks international expertise in hospital architectural and design firms and healthcare planners.
• Enhanced quality of publicly and privately-run care homes for the growing number of seniors who are more educated and financially capable. International benchmarking and accreditation standards will be needed to enhance the quality of residential care services. More stringent requirements and regulatory frameworks can help govern the operation and management of aged care homes.
• Smart homes for the elderly with smart appliances and healthcare: There is a general preference amongst elderly people to remain living in their own home in Hong Kong, rather than being institutionalised. Making use of technology can enhance the quality of living for the elderly by deploying smart health and safety devices into the home. Such devices include fall detectors, home monitoring IP cameras, panic buttons and flood sensors.
• Assisted living housing: to integrate conventional housing and care under one roof is an emerging trend. The Hong Kong Housing Society is a pioneer in this area of development. Opportunities in assisted living housing are expected to arise in special architectural design for this type of compact development.
• Government funding for gerontechnology: The Chief Executive announced in the 2017 Policy Address that the Hong Kong Government would fund HKD$1 billion to promote gerontechnology and subsidise elderly service units to trial and procure technology products.
• Government budget commitment to innovation, healthcare and technology: As part of the 2018 Budget, the Hong Kong Government has earmarked HKD$50 billion to invest in innovation.
• HKD$10 billion will be allocated to establish two Technology Research Clusters on healthcare technologies and on AI and robotics technologies. The aim of these clusters is to attract the world’s top scientific research institutions and research enterprises to conduct more midstream and downstream R&D projects in collaboration with local universities and scientific research institutions. The overall goal is to pool and nurture more technology talent in Hong Kong.
• HKD$20 billion will be allocated to support the first phase of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop. The funding will go towards the park’s site formation, infrastructure, superstructure and initial operation.
• HKD$10 billion will be dedicted to the Innovation and Technology Fund (ITF). It is anticipated that the demands for fund will continue to rise. The ITF will ontinue to support applied R&D work in Hong Kong with the additional resources.
• Innovation and Technology Fund for Better Living: The Government has also committed HKD$500 million for this fund, which supports innovation and technology projects that address the needs of specific community groups in health, education, daily living and more. Approved projects include the development of mobile applications designed to encourage the elderly to practice qigong, assist with rehabilitation, and provide health management services.

Australia’s health care sector and capabilities in aged care are highly regarded in Hong Kong. There are opportunities for Australian companies that can leverage this strong reputation while offering consumer health products, medical devices and aged care-related services. Examples include:

• Education and training: there is always a shortage of non-professional or general frontline workers across the aged care sector. The demand for skilled health and care worker training is strong given the limited education options for the domestic aged care labour market. There are also limited and competitive places in local universities for allied health sciences education programs such as physiotherapy, occupational therapy, optometry, etc. There are organisations who are actively promoting Australian standard training and train the trainer programs in Hong Kong. The Royal District Nursing Service is one of the leading Australian suppliers of aged care services and training has set up a JV in Hong Kong to train the Hong Kong aged care workers and provide home-care services to local families.
• Aged care industry qualification framework: The Hong Kong Qualification Framework Secretariat started to develop the vocational qualification framework for the aged care industry drawing on the Australian Qualification Framework as a model to guide this development.
• Consumer health, aged care-related products and medical devices are also in demand, these include:
  • Hospital furniture: beds, mattresses, stretchers trolley
  • Hospital medical devices: artificial limbs and orthopaedic products
  • Mobility aids and rehabilitation equipment: walking aids, wheelchairs, special step and chair
  • Medical and healthcare consumables: body temperature, blood pressure, blood glucose monitoring devices
  • Consumer health and OTC pharmaceuticals: joint and bones dietary supplement and vitamins and nutritional milk powder for adults
  • Healthcare digital products: smart wearables, e-Smart health app, electronic medical records

Competitive Environment

Competition for consumer health products is fierce as the Hong Kong market is highly fragmented and saturated with products from a wide array of suppliers in China, Japan, Europe and the United States.

The medical device market is very competitive with little product differentiation between brands. Some international brands have dominated the domestic market for years.

In terms of aged care home governance, management and accreditation services and training, Australian service providers are perceived to be of high quality and would be readily accepted in the market.

Tariffs, regulations and customs

There are no tariffs in Hong Kong on imported consumer health and medical device products.

As for health supplement products, only pharmaceutical products are required to be registered with the Department of Health in accordance with the Pharmacy and Poisons Ordinance Cap 138. In general, products carrying ‘medicinal’ claims fall within the meaning of pharmaceutical products and need to be registered. For more information about registration for pharmaceutical products, please visit the Hong Kong Department of Health.

In terms of medical devices, regulation is very stringent. Medical devices are classified according to the risk level associated with their intended use. In general, the risk level depends on the design of a medical device as well as its intended use. For details, please refer to Classification Rules of Medical Devices. For more information about the regulation on medical devices in Hong Kong, please visit the Medical Device Control Office.

Marketing your products and services

Market Entry

The most effective way for consumer health products to enter the market is to work with local distributors or agents, who normally contribute not only to the sales and marketing, but most importantly to brand building activities and sustainable development of the brand in the market.

For medical devices, customer service and assurance of technical support is considered critical. The most common means of entry is also through an agent or distributor.

Direct selling to aged care facilities is not recommended unless the company has an established office in Hong Kong. The most important qualities for aged care related products are:

• reliability
• durability
• ease of operation
• high-quality after-sales service.

In Hong Kong, there is a shortage of technical support specialists, so companies that can provide long-term training and technical support services will be received more favourably.

For training, accreditation and consultancy services to seniors living projects, in-market representation is highly preferable or at least stable arrangements with a local partner.

A local presence is also highly preferable (at least for the life of the project) for companies aspiring to work with investors to develop aged care and senior living projects in China.

Distribution channels

The major retail distribution channels for consumer health, aged care-related products and medical devices include:

• department stores
• beauty specialist retailers such as Sa Sa, Bonjour and Colour Mix
• supermarket chains
• independent drug stores, dispensaries and key pharmacy chains, such as Watsons and Mannings.
• public and private hospitals and medical clinics
• elderly care homes and nursing homes.

Links and industry contacts

Census and Statistics Department
Department of Health
Federation of Medical Societies of Hong Kong
Hong Kong Association of Gerontology
Hong Kong Elderly Commission
Hong Kong Health Food Association
Hong Kong Medical Association
Hong Kong Social Welfare Department

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

• develop international markets
• win productive foreign direct investment
• promote international education
• strengthen Australia's tourism industry
• seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.