DKSH research: outsourcing of commercial services on the rise in Asian healthcare

Bangkok, Thailand, August 30, 2017 - A study by DKSH Business Unit Healthcare, a leading partner for healthcare companies seeking to grow their business in Asia, revealed that almost twice as many healthcare decision makers in Asia plan to increase (36%) versus decrease (20%) the outsourcing of commercial activities to a third party in the coming twelve months.

Commercial outsourcing is defined as the contracting of sales, marketing and other commercial services from an external partner for some or all of the organization's product portfolios. 68% of the respondents from brand owning companies consider working with a company like DKSH to expand into new Asian markets. Among companies new to Asia, this is 76%, versus 64% among the well-established companies in Asia.

Although three out of four (78%) of the respondents rate their company's performance in 2016 as either good, very good or excellent, challenges for growth remain. Decision makers state the increased need for market insights, return on investments and sales force effectiveness as key challenges.

"General managers of healthcare companies are playing catch-up in a fast-changing Asian environment and are pressured to do more with less. More than ever, they need to assess their companies' core strengths, determine which areas they need to focus their resources on, and where they would be better served leveraging a strategic business partner. Therefore, at DKSH we continue to invest in training our dedicated healthcare salesforce - with 4,200 specialists the largest in Asia - as well as in our team of 70 regulatory experts," said Bijay Singh, Head, Business Unit Healthcare.

To be considered in the first place, commercial outsourcing partners need to demonstrate market understanding and sales capabilities. Commercial services most considered for outsourcing are in-field execution of sales and promotions, consignment inventory management and merchandising.

Singh added: "Beyond these direct needs, clients tell us in the research that people make the difference in the relationship; how they communicate, demonstrate understanding of the business and act in a compliant manner. Proper alliance management on both sides is key, as are regular business reviews, clear targets and reporting and joint problem-solving where appropriate."

The "Growth in Asia: to make or to buy?" research was conducted between April and July 2017 by Be Digital, a Bangkok-based research company. The research consisted of an online survey and phone interviews among 90 of the total 4,000 healthcare decision makers in DKSH's database in Asia, mostly with regional responsibilities.