South Korean Diabetes Diagnostics Markets

A report by Frost & Sulivan

Market Dynamics

Market Overview

The South Korean diabetes diagnostics market grew at a higher pace in 2005 over 2004, and is expected to grow even at a higher compound annual growth rate (CAGR) from 2005 to 2012. This is considered to be a high growth market with a major potential. The increasing incidence of diabetes and the resulting higher volumes of diagnostic tests are expected to support this strong growth.

Around 43.0 percent of the total South Korean diabetes population of 4.0 million is diagnosed with diabetes. However, the affected population of 2.28 million remains undiagnosed, reflecting the future long-term potential of this market. By 2012, it is estimated that 46.0 percent will still remain undiagnosed of diabetes. This shows the steep increase in the incidence of the disease with the simultaneous rise in the diagnosis rate.

The South Korean diabetes diagnostics market is in the mature stage characterized by lower profit margins, high number of market participants, decreasing prices, and increased competitiveness. The distribution is done through local distributors and in some cases it is supplied directly. The smaller manufacturers are marketed through the distributors that act as middlemen between the manufacturers and customers.

Industry Challenges
The following are the industry challenges that are likely to be faced by participants in the
South Korean diabetes diagnostics markets from 2006 to 2012:

• Identification of diabetes among the major part of the population
• The increasing aging population creates a burden on the healthcare system
• Strict government regulations lead to a complex registration process
• Expensive distribution systems

Market Engineering Measurements

Market Stage

The South Korean diabetes diagnostics market is a mature one. The laboratory diabetes diagnostics market segment is also highly mature characterized by lower profit margins, large number of market participants, decreasing prices, and increased competitiveness. On the other hand, the point of care testing (POCT) diabetes diagnostics market segment is in the high growth stage of the development process that is characterized by new product launches, higher profit margins, high growth rate, and increasing number of market entrants. This segment is clearly fragmented among eight market participants. The laboratory segment is a fragmented market, contradicting the nature of one that is mature. In the laboratory diabetes diagnostics market segment, around 14.0 percent of the market revenues were generated by the regional participants in 2005. This segment has the fourth highest market share.

The revenue of the South Korean diabetes diagnostics market is expected to grow at a moderate pace from 2005 to 2012. The South Korean market is mature and around 43.0 percent of the diabetes population is diagnosed with the disease. Hence most of the test volumes are attributed by the regular health check ups and diagnostic testing done by the nondiabetic population. With the sluggish growth of the test volumes, the market revenues are also expected to grow at a moderate pace.

Market Revenues

Laboratory Diabetes Diagnostics Market Segment
Laboratory testing is the largest diabetes diagnostics market segment contributing to around 80.5 percent of the total market, with revenues of $38.0 million in 2005. Worldwide, laboratory testing has been the golden standard for diabetes testing worldwide for a long period and it still continues to remain so. The high awareness levels about the disease condition among the South Korean population had led to an increased number of regular health checkups. Moreover, the testing volumes of the nondiabetic patients undergoing diabetes diagnostic tests are also high in South Korea, as the entire population is covered for medical insurance. These factors have contributed majorly for the market revenues in 2005.

POCT Diabetes Diagnostics Market Segment
The POCT diabetes diagnostics market segment had revenues worth $9.2 million contributing to 19.5 percent of the total diabetes diagnostic market. This has been the fastest growing segment. Quick results with comfortable ease and less pain are the main drivers for the POCT diabetes diagnostics market segment. However, POCT is carried out predominantly during hospitalization of patients and when quick results are required such as when in a critical care unit.

Market Growth Rate
Laboratory testing had witnessed a growth of 4.4 percent in 2005, and is expected to grow at a steady CAGR from 2005 to 2012. This diabetes diagnostics market segment is expected to grow at a moderate pace with the highest growth rate anticipated in 2009 and the subsequent years witnessing a minor decline. This is because the POCT that is anticipated to gain more acceptance among the people and the medical community. Hence, POCT is expected to capture some market share of laboratory testing volumes. However, the major reason for a flat growth rate of the laboratory diabetes diagnostics market segment is attributed to the mature market condition and the likely introduction of noninvasive technologies by late 2009, which is set to revolutionize POCT. Hence, the POCT diabetes diagnostics market segment that had grown by 10.8 percent in 2005 is expected to grow at a higher CAGR from 2005 to 2012 with increased growth rates from 2010 onwards.

Market Revenue Forecasts

Revenue Forecasts
In 2005, the revenues for the South Korean diabetes diagnostics market were worth $47.2 million and is estimated to grow at higher CAGR to reach significantly higher revenues in 2012. The diabetes population is growing at 2.0 percent per annum and the increased awareness of the disease condition is driving the growth of this market. The technological infrastructure is bound to be improved, with the South Korean laboratories adopting to advanced automation systems. Moreover, with the Government strongly motivating the emergence of an increased number of private insurance participants in the market, this is expected to greatly influence reimbursements. Currently, private insurance participants cover just 47.0 percent of the total population. As a larger population gets covered under the medical policies, the testing volumes are also expected to rise.