BUILDING LANDMARKS, CHARTING GROWTH
57
Annual Report 2015
In Singapore, Perennial intends to establish a JV which
will operate a TCM Centre at the House of Tan Yeok
Nee. The House of Tan Yeok Nee has an iconic classical
Chinese architectural presence that is highly suitable for
the practice of TCM. The JV plans to collaborate with a
leading TCM hospital in China to bring advanced TCM
medical practices and accredited products into Singapore
to target the regional market. Senior TCM physicians
from Singapore and China will offer complementary
treatments for oncology, pain management, sub-fertility,
skin disorders and chronic diseases. The TCM JV will be
the platform for Perennial to develop a premier wellness
facility and brand for the Asian market.
Market Review and Outlook
China’s healthcare and elderly care markets are expanding
rapidly, driven by an ageing population, stable economic
growth and the growing demand for basic health care
and insurance
20
.
Healthcare expenditure in China has maintained double
digit annual growth rate in the past 11 years and is
expected to reach US$1 trillion by 2020
21
. The elderly
population is estimated to double to over 400 million
by 2040
22
. The expectation for high quality healthcare
will continue to rise as incomes and living standards
improve. The country’s existing hospitals do not have
sufficient capacity to cope effectively with the increasing
demand for medical and hospital services. The Chinese
government has thus liberalised the healthcare sector
and encouraged private capital, both local and foreign, to
invest in healthcare facilities and services. It has lowered
the barriers of entry for foreign investors, by easing
regulatory controls on foreign ownership of hospitals and
allowing doctors to simultaneously practise in both public
and private hospitals, amongst other measures
20
.
Separately, there is also a growing emphasis on the
integration of medical, rehabilitative and senior housing
facilities to support the country’s ageing population.
The declining birth rates and extended average life
span have led to an increasing ageing population.
With the earlier one-child policy, the elderly community
is increasingly choosing to stay in retirement homes to
lessen the burden on their working children. These well-
designed retirement complexes are typically integrated
with healthcare services and leisure facilities to provide a
comfortable, safe, enjoyable and high quality living space
for the residents. Currently, premium facilities make up
less than 1%
23
of the whole elderly care market, providing
significant opportunity to penetrate this under-served
market, particularly with the growing affluence of the
Chinese population.
Specifically in Chengdu city, one of the more affluent
cities in China, there is a strong demand for quality
eldercare services as there is an inadequate supply
of eldercare and senior housing facilities. As at end-
2014, there were 2.49 million people who were aged
60 and above (accounting for about 20.6% of the total
population of Chengdu), and only 257 eldercare homes
providing less than 71,000 beds
24
.
With the burgeoning ageing population, on-going
healthcare reforms, supportive regulatory policies
towards foreign participation and strong desire of the
local government to upgrade the standard of living for its
elderly citizens, there is immense growth potential in the
China healthcare market.
Singapore, renowned as a major healthcare hub in Asia,
is seeing an increasing demand for professional medical
services, especially in the areas of health maintenance and
complementary treatment for diseases relating to ageing.
With the growing acceptance of the integration of TCM
into mainstream medical services, quality TCM services
provided by accredited practitioners in a premium setting
are expected to be well-received by both the local and
foreign customers.
20 Source: Deloitte Report 2015.
21 Source: McKinsey & Company article dated November 2012.
)
22 Source: South China Morning Post article dated May 2015.
)
23 Source: PwC China Report dated November 2015.
24 Source: Chengdu Municipal Government Report 2015.
