market feasiability thailand presentation horace andy alex

ECONOMIC ANALYSIS

LOCATION INTRODUCTION• Borders the Andaman Sea and the Gulf of

Thailand

• Thailand is in the heart of Southeast Asia

• Urban centers are in Bangkok and Southern Region

• Currently rated one of the top 20 countries in the medical tourism industry

DEMOGRAPHIC ANALYSIS

THAILANDS GROWTH RATE

• HIGHER THAN CHINA’s RATE 1960’s

• RATE DECLINE 1965

• 2/3 FEWER CHILDREN THEN PREVIOUS GENERATIONS

• WOMENS RIGHTS

• AIDS MORTALITY

1950 - 2015

NUMBER OF LIVE BIRTHS

• RISE ATTRIBUTED TO FLUX IN MIGRANT ARRIVALS

• SINCE 1950’s, POPULATION HAS TRIPLED

• NEARLY AT PROJECTED MAX

THAILAND‘S CURRENT POPULATION

BIRTHRATES

• REDUCTION IN MARRIAGES

• REDUCTION IN FERTILITY

• 18 – 29 MOSTLY RESPONSIBLE

• 11 BIRTHS PER 1000 THAILAND FERTILITY RATE

DISTRIBUTION OF POPULATION

• HALF OF POPULATION IS CONCERNTRATED BETWEEN THE AGES OF 25 – 54

• OLDER MEN ARE MARRING YOUNGER WOMEN

• LACK OF FEMALES

• OLDER POPULATION OF MEN

AGE CONCERNTRATION

• 0 – 14: 17.41%

• 15-24: 14.78%

• 25-54: 46.69%

• 55-64: 11.26%

• 65+: 9.86%

SEX RATIOS

• HISTORICALLY MALES ARE BORN MORE OFTEN THAN FEMALES BY 5%

• MEN ARE THE DOMINATE SEX UP UNTIL THE AGE OF 24

• WOMEN BECOME THE DOMINATE SEX AT THE AGE OF 25

POPULATION BY AGE

GEOGRAPHIC AREAS

• SOUTHERN REGION

• EASTERN REGION

• CENTRAL REGION

• NORTHERN REGION

• NORTHEAST REGION

• BANGKOK

*This is based on natural features including landforms, drainage and human cultural patterns.

REGIONAL BREAKDOWNNorthern Region:

• Suburban, Rural Agricultural Zone

• Est. Population 12M

• 260 pp sq. mile

• Light Density

Northeast Region:



• 390 pp sq. mile

• Medium Density

Central Region:



• 450 pp sq. mile

• Medium Density

REGIONAL BREAKDOWNEastern Region:



• 600 pp sq. mile

• Medium-High Density

Bangkok Region:

• Urban, Metropolis


• 2600 pp sq. mile

• High Density

Southern Region:

• Suburban, Rural Tourism Zone


• 162 pp sq. mile

• Light Density

MIGRATION RATES & PATTERNS

• FAMILY PLANNING PROGRAM

• 1970’s INCREASE

• MAJOR CONTRIBUTERS:

• JAPAN

• CHINA

• INDIA

• MYANMAR

• MUSLIM ROHINGYA

POPULATION FORECAST

• THAI POPULATION DECLINE

• MIGRANT INCREASE

• CLOSE PROXIMITY TO BROKEN COUNTRIES THAT ARE EXPERIENCING INTERNAL ISSUES

ETHNIC GROUPS

• OVER 70 ETHNIC GROUPS

• 24 DIALECTS OF TAI PEOPLES

• TAI & THAI CHINESE ARE 90% OF THE

POPULATION

• 77.3% Thai

• 32.2% Central Thai

• 26.6% Isaan

• 10.6% Northern Thai

• 7.9% Southern Thai

• 10.5% Chinese

• 6% Malay

• 3.4% Khmer

• 3% Other

• 1 % Foreigners

GROSS NATIONAL PRODUCT

• FREE-ENTERPRISE ECONOMY

• DEVELOPED INFRASTRUCTURE

• PRO-INVESTMENT POLICIES

• SLOWED GROWTH FROM 2013-2016

• AGRICULTURAL

• ELECTRONICS

• AUTOMOBILES

• PROCESSED FOODS

• THAI BAHT 8% DEPRECIATION (2015)

• LABOR SHORTAGES

• ATTRACTED 5 MILLION IMMIGRANTS

• MINIMUM WAGE POLICY

• TAX REFORMS

• MIDDLE CLASS HELP

1.071

1.107 1.107

y = 0.018x - 35.157R² = 0.75

1.07

1.075

1.08

1.085

1.09

1.095

1.1

1.105

1.11

1.115

1.12

2013 2014 2015

(US

) T

rill

ion

s

Year

GDP Purchasing Power

RATE OF GROWTH (GDP)

IN H

UN

DR

ED

S O

F B

ILL

ION

S U

SD

GDP – PER CAPITA (PPP)

AVERAGE FAMILY INCOME

CLASS INCOMES

• INCOME CLASSES: ECONOMIC & POLITICAL INEQUALITIES HAVE RESULTED IN ELITES CAPTURING MOST OF THE ECONOMIC GROWTH

• AUTHORITARIAN REGIMES DOMINATED

• PROMOTED CAPITALISM

• CAPITALIST AND MIDDLE CLASSES ARE PROTECTED

• INCOME INEQUAILITY & POVERTY REMIAN HIGH

DISTRIBUTION OF WEALTH

• Upper Class- 585,990

• Middle Class- 12,757,348

• Lower Class- 40,672,657

• Income Poor- 8,778,674

• Food Poor- 5,250,121

BY

PO

PU

LA

TIO

N

INCOME DISTRIBUTION DISTORTION

• TOP 10% CONTROL 51% OF THE WEALTH

• BOTTOM 50% CONTROL ONLY 8%

• 10% OF THE POPULATION OWNS 90% OF THE LAND

• HIGHLY DISTORTED SOCIAL CLASSES

MINERALS & RESOURCES

• OTHER RESOURCES:

• NATURAL GAS

• PERTOLEUM

• COAL

• LEADING PRODUCER IN:

• GYPSUM

• FELDSPAR

• CEMENT

• TIN

• RESERVES:

• ZINC

• IRON

• COPPER

• GOLD

SURFACE TRANSPORTATION

• MODES OF TRANSPORTATION

• BUS

• TAXIS

• METRO

• SKY TRAIN

• HIGH SPEED RAIL

• 2019

• AIR

• 11 INTERNATIONAL / 18 INNER REGION

• RURAL AREAS

• MOTORBIKES

• BICYCLES

• WATER TAXIS

• FERRIES

• FREIGHT TRANSPORTATION

• GROUND TRUCKS

• RAILROAD

AVAILABILITY• AVAILABILITY CHANGES IN EACH REGION

• HIGHLY MODERNIZED AREAS

• IMMEDIATE ACCESS

• UBER

• LIMO RENTALS

• LESS MODERNIZED AREAS

• SLOW ACCESS

• RESTRICTED TO LESSER MODES OF TRANSPORTATION

USAGE RATES (TRANSPORTATION)

WORKING CONDITIONS

• EMPLOYEE PARTICIPATION

• HIERARCHICAL SOCIETY

• STRICT RULES

• RAN LIKE FAMILIES

• HARMONY TO AVOID CONFLICT

• MANAGEMENT IS CLOSELY FOLLOWED

• TOP-DOWN APPROACH

• NO PERSONAL RELATIONSHIPS

• EMPLOYEES ARE HUMBLE

• EMPLOYER-EMPLOYEE RELATIONS

• GOVERNED BY THAI GOVT

• LABOR LAWS PROMOTE SAFEGUARDS

• RIGHTS & OBLIGATIONS

• CONTRACT EMPLOYEMENT

• WRITTEN OR VERBAL

• ACT ON COMPANY’S BEHALF

• ONLY TERMINATED IF CONTRACT IS VIOLATED

WORKING CONDITIONS

• SALARIES & BENEFITS

• AVERAGE INCOME• 14K BAHT MONTHLY OR

$4500 USD

• BENEFITS• 13 PAID HOLIDAYS

• 10 VACATION DAYS

• MEAL ALLOWANCE

• 30 BAHT OR .84 USD

• MEDICAL INSURANCE

• ENTIRE FAMILY

• SOCIAL SECURITY

• MARRIAGE PAY

• $28 USD

• FUNERAL PAY

• $140 USD

PRINCIPAL INDUSTRIES

• AGRICULTURE

• 10.4% OF GDP

• 69B USD

• INDUSTRY

• 37.7% OF GDP

• 253B USD

• SERVICES

• 57.7% OF GDP

• 388B USD

• RATIO PUBLIC/PRIVATE

• 45.9% PRIVATE 308.9B USD

• 45.8% PUBLIC 308.2B USD

FOREIGN INVESTMENT• FDI

• INCREASED BY 40115 THB M

IN 2016

• SKILLED WORKFORCE

• STRATEIC LOCATION

• HEART OF ASIA

• THAI GOVERNMENT

• PERMOTES FDI

• EXTENDS HELP

• INDUSTRIES

• AGRICULTURE & FOOD

• ENERGY

• AUTOMOBILE

INTERNATIONAL TRADE STATS

• MACHINES $37.1B 17.6%

• ELECTRONICS $29.3B 13.9%

• AUTOMOBILES $26.6B 12.6%

• RUBBER $12.3B 5.8%

• PLASTICS $11.7B 5.6%

• GEMS $10.8B 5.1%

• OIL $8.3B 3.9%

• MEAT/SEAFOOD PREP $5.9B 2.8%

• MEDICAL $5.2B 2.5%

• CEREALS $4.6B 2.2%

• MAJOR EXPORTS


• EXPORTS (2015) 210B USD

• DOWN 7% SINCE

• TOP 10 EXPORTS

• 72% OVERALL

• TOTAL GDP FROM EXPORTS

• $1.1T USD

• 72% OVERALL

• 19.% ECONOMIC OUTPUT

• EXPORT TRENDS


• CAPITAL GOODS 78M

• INTERMEDIATE GOODS 60M

• CONSUMER GOODS 43M

• RAW MATERIALS 43M

• PETROLEUM 33M

• GOLD 6.4M

• ELECTRONICS 6.3M

• CRUDE OIL 5.5M

• COMMUNICATIONS 3.8M

• MAJOR IMPORTS


• IMPORTS (2015) 17B USD

• DOWN 7% SINCE MAR 2016

• IMPORT TRENDS


• BALANCE-OF-PAYMENTS

• 3B USD SURPLUS

• UP 1.5B USD FROM 2015

• RECENT TRENDS

• SALES INCREASE 19B USD

• GOLD, AUTO, MACHINES

• IMPORTS DROPPED 7%

• FEB 2016 4.9B USD SURPLUS


• EXCHANGE RATES• SINGLE EXCHANGE

• THAI BAHT

• TRENDS

• DOWN .14% MAY 2016

• UP 6.34% FOR YEAR

• JAN 1998 HIGHEST

• 55.50

• JUY 1981

• 20.36


• HARD CURRENCY

RESERVES

TRADE RESTRICTIONS

• TRADE ASSOCIATIONS

•WTO MEMBER (1995)

• GATT (1982)

• ASEAN

• AFTA

•NO TRADE RESTRICTIONS

•QUOTAS

• AGRICULTURAL PRODUCTS

• MILK/CREAM 164 TONS

• POTATOES 51 TONS

• ONIONS/SHALLOTS 62 TONS

TRADE RESTRICTIONS

• IMPORT TAXES

• RATES VARY 0 TO 80%

• AVG RATE 21%

• FREE DUTY

• ELECTRONICS

• COST, INSURANCE AND FREIGHT

• TAXES BASED OFF CIF

• TARIFFS

• AVG 10%

• PROCESSED FOODS• 30 TO 50%

• AGRICULTURAL• 70%

• AUTOMOBILES• 80%

• MOTORCYCLES• 60%

• PLASTICS• 30%

TRADE RESTRICTIONS

• LICENSING

• 1999 FOREIGN BUSSINESS ACT

• NOT RESTRICTED ON FOREIGNERS

• CUSTOM DUTIES

• HARMONISED SYSTEM

• CERT OF GOODS

• LICENSING

• 1999 FOREIGN BUSSINESS ACT

ECONOMIC ACTIVITY

• COUNTERTRADES

• REFINED OIL

• TECHNLOGY

• MINERALS

• COUNTER PURCHASE

• CRUDE PETROLEUM

• CIRCUITS

• AGRICULTURE

• FOREIGN AIDE

• NONE (2002)

LABOR FORCE

• SIZE

• 39.64M PEOPLE

• 38.2% AGRICULTURE

• 13.6% INDUSTRY

• 48.2% SERVICES

LABOR FORCE

INFLATION RATES

SCIENCE & TECHNOLOGY

• TECH AVAILABLE

• AGRICULTURAL ENGINEERING

• COMPUTERS

• INDUSTRIAL MACHINERY

• LANDSAT (GIS)

• R&D

• $366B USD ANNUALLY

CHANNELS OF DISTRIBUTION

• RETAILERS

• 29 MAJOR

•ABLNBEV, AHOLD, AMAZON, BA, CARREFOUR, COCA-COLA, CONAGRA, DANONE, DIAGEO, EBAY…

• 11 LOCAL

•ASIA BOOKS, BI C, CENTRAL GROUP, HONDA, TESCO LOTUS…

• SIZE OF OUTLETS

•LARGE 5500 - 12000

•MED 1000 - 5000

•SMALL 100 - 300 (sq. m)


•MARKUP

• STANDARD

•METHODS OF OPERATIONS

• BARTER SYSTEM

• CASH DOMINATE

• CREDIT CARDS GROWING


• WHOLESALE

• FIRMS• COMMISSION

• IMPORT/EXPORT AGENTS

• IMPORTING LICENSES

• WAREHOUSING

• EASY FOR STARTUP

• 30 WEEKS AVERAGE

• URBAN/RURAL MARKET PENETRATION

• DEVELOPMENT OF CHINA’S CONSUMPTION

• RURAL CONSUMERS CRUCIAL

• URBAN CONSUMERS SPEND 20% MORE

MEDIA

• MEDIA AVAILABILITY

• WELL DEVELOPED MEDIA FORUM

• FREE

• GOVT CONTROLLED

• COSTS

• TV

•80% RELY ON TV

•4.4B USD

•24 STATIONS

• RADIO

•500 FEQUENCIES

• PRINT

•NO GOVT VONTROL

•MASS CIRCULATION

• INTERNET

•NO GOVT CONTROL

• OTHER MEDIA (CINEMA)

• SIAM CINEMA 757 SCREENS

• 45 FILMS PRODUCED

• 142M ANNUALLY

• AGENCY ASSISTANCE

• U.S. EMBASSAY • TO CONDUCT BUSINESS

• COVERAGE OF MEDIA

• MASS POLITICAL DALLIES

• POPULATION REACHED

• INTERNET 30%

• CELL 142%

• SATELLITE/CABLE 44%

• RADIO 36%

COUNTRY ANALYSIS

• NEVER UNDER EUROPEAN DIRECT RULE

• CONSTITUTIONAL MONARCHY IN 1932

• MILITARY RULE UNTIL 1970’S

• LIBERAL DEMOCRATIC RULE UNTIL 2014

SOCIAL INSTITUTIONS

• FAMILY STRUCTURE

• COUPLES URGED TO SET UP HOME AS SOON AS POSSIBLE

• FREEDOM TO FIND MATE

• MAY LIVE WITH UNMARRIED SIBLINGS OR WIDOWED PARENTS

• MALE IS HEAD OF HOUSEHOLD, THOUGH WIFE HAS POWER AT HOME

• DIVORCE NEVER DIFFICULT TO OBTAIN

• SOME POLYGAMY IN WEALTHIER FAMILIES

• RECENT PUSH FOR GENDER EQUALITY

SOCIAL INSTITUTIONS• EDUCATION

• ORIGINALLY CARRIED OUT BY BUDDHIST MONASTARIES

• TAUGHT TASKS THAT WOULD BE USEFUL TO LIFE

• SINCE 1990’S ECONOMIC DOWNTURN, COMPULSORY

EDUCATION EXTENDED

• 22.3% OF NATIONAL BUDGET SPENT ON

EDUCATION IN 2010

• 76% FINISH PRIMARY LEVEL

79% SECONDARY, 29% HIGHER EDUCATION

SOCIAL INSTITUTIONS• POLITICAL

• KING IS OFFICIAL HEAD OF STATE

• DEMOCRATIC LEADERSHIP REMOVED FROM OFFICE MAY 7 2014

• MARTIAL LAW MAY 20 AND COUP MAY 22

• EARLIEST EXPECTED ELECTIONS MID-2017

• GENERAL PRAYUT CHAN-OCHA LEADS MILITARY

• MAJOR PARTIES PRIOR:

• PHEU THAI

• DEMOCRATIC PARTY

SOCIAL INSTITUTIONS

• BUSINESS TAXES

• VALUE ADDED

• DEALS WITH GOODS AND SERVICES IN EXCESS OF 1.8 MILLION BAHT ($51,000)

• 7%

• MOST THAI COMPANIES ARE EXEMPT

• SPECIFIC BUSINESS

• USUALLY BANKS AND FINANCIAL INSTITUTIONS

• 3%

SOCIAL INSTITUTIONS• LEGAL

• MIXTURE OF CIVIL AND CANON LAW

• GERMAN, SWISS, FRENCH, JAPANESE, ITALIAN AND INDIAN

• ALSO SOME ISLAMIC IN SOUTHERN PROVINCES

• 4 JUDICIAL COURTS

• CONSTITUTIONAL, COURTS OF JUSTICE, ADMINISTRATIVE, MILITARY

• GENERAL COURTS

• CIVIL, CRIMINAL, MUNICIPAL, PROVINCIAL WITH 2 IN BANGKOK

• INTERNATIONAL LAWS

• 1979, PATENT LAW

• PARIS CONVENTION 2009

• MEMBER WTO, IMF AND WORLD BANK, FOUNDING MEMBER OF ASEAN

SOCIAL INSTITUTIONS

• SOCIAL ORGANIZATIONS

• NON CONFRONTATIONAL, SHOWING ANGER OR RAISING VOICE IS SIGN OF WEAKNESS

• AVOID TOUCHING AND USE WAI IN DAILY MEETINGS

• HIERARCHY

• WEALTHY AND THOSE WITH TITLES

• CITY VS COUNTRYSIDE

• ETHNIC BACKGROUND

RELIGION AND AESTHETICS• RELIGIONS

• BUDDHISM 93.6%, ISLAM 4.9%, CHRISTIANITY 1.2%

• LARGEST SECT: THERAVADA 85%

• CENTRAL THAI: LANKAVAMSA, FROM SRI LANKA

• MOST YOUNG MEN BECOME BUDDHIST NOVICES

• AESTHETICS

• WRITTEN LANGUAGE DATED TO 1250 AD

• POETRY AND SONGS WRITTEN BY MONARCHY

• POPULAR PLAYS AND FICTION PORTRAY COMMON PEOPLE AND UNDERCLASS FACING ADVERSITY

• DANCE INFLUENCED BY INDIAN HAND GESTURES AND LEG MOVEMENTS

• CLASSICAL DANCES LOOKED DOWN UPON BY LIBERAL LEADERS, BUT POPULAR TOOL OF MILITARY

LIVING CONDITIONS

• DIET AND NUTRITION

• MEAT (BEEF, CHICKEN, FISH OR CRAB), SOUP, CURRY, SALAD, RICE

• SMALLER CONSUMPTION OF BEEF DUE AS SEAFOOD IS POPULAR

• NUTRITION HAS IMPROVED, BUT NORTH DOES NOT HAVE SAME ACCESS

LIVING CONDITIONS

• HOUSING

• RAISED ON POLES, OPEN FOR VENTILATION, OVERHANGING ROOF

• APARTMENTS IN BIGGER CITIES

• 1/5 RENT AND MORE EXTENDED

FAMILIES LIVING TOGETHER

LIVING CONDITIONS• CLOTHING

• RATHER MODERN, EIGHT VERSIONS FOR FORMAL OCCASIONS

•BUSINESS: WORK AROUND HEAT

• SHIRT AND SLACKS NO TIE

• LIGHT JACKET FOR STATUS

• DARK SUIT OR THAI SHIRT

AT NIGHT

LIVING CONDITIONS

• RECREATION

• SPORTS

• MUAY THAI (THAI KICKBOXING)

• TAKRAW

• ACTIVITIES

• TEMPLE FESTIVALS

• SPAS, GOLF

LIVING CONDITIONS

• SOCIAL SECURITY

• ESTABLISHED 1954, ENFORCEMENT STARTED 1972, FULL PROGRAM 1990

• HEALTHCARE

• COUNTRY OF SPECIALISTS

• TRAVEL BETWEEN HOSPITALS AND CITIES

• STRONG USE OF TELEPHONE

• EMERGENCY SERVICES STILL DEVELOPING

• NO NATIONAL HEALTHCARE, INSURANCE OR MONEY NEEDED

LIVING CONDITIONS

• LANGUAGE

• THAI 90.7%, BURMESE 1.3%, ENGLISH (SECOND LANGUAGE OF WEALTHY AND STUDENTS)

• RELATED TO VIETNAMESE, MYANMAR, LAOS

• CENTRAL DIALECT, BANGKOK THAI, IS NATIONAL LANGUAGE

• DIFFERENT LEVELS IN SPOKEN LANGUAGE

• ROYAL

• RELIGIOUS

• FORMAL

• RHETORICAL

• COMMON

MARKET DESCRIPTION

• CONSUMER BUYING HABITS

• Stability in the past year

• Increasing concern with car and mortgage loans

• Dependent on elderly for childcare

• Large presence of online-shopping

• Heavy use of social media use

MARKET DESCRIPTION

• CONSUMER SPENDING

• 1% increase in the first quarter of 2016

• 33% increase since 1993

https://www.youtube.com/watch?v=UrVLswbeoH0

https://www.youtube.com/watch?v=UrVLswbeoH0

WORLD LEADER IN MEDICAL TOURISM

VOLUME OF MEDICAL TOURISTSin 2013

POPULAR MEDICAL TOURISM COMPANIES IN THAILAND

• METAMORPHOSIS MEDICAL RETREATS

• INTERNATIONAL MEDICAL HEALTH SOLUTIONS

• LOTUS MEDICAL INTERNATIONAL

COST DIFFERENCES IN MEDICAL PROCEDURES

• Heart bypass procedure $120,000 more in the US

• Hip replacement procedure $150,000 more in the US

• Knee Replacement procedure $30,000 more in the US

THAILAND’S MEDICAL TOURISM MARKET GROWTH

• Has grown from roughly 5

million arrivals in 1998 to

roughly 30 million in 2015

• 500% increase in 17 years

ENTRY PLAN

• Develop medical tourism agency

• Takes care of itinerary and legwork for travel, medical procedure, and lodging

• Headquarter office in Bangkok

• Satellite office in US, Switzerland, and Norway for recruiting patients

• Partnerships with airlines, resorts, and medical facilities

• Develop contractual agreements that guarantee a quota of patients in order render discounted rates

• Mark-up rates for a profit margin

TARGET AUDIENCE

• Nations with high medical costs

• Nations with high health insurance costs

• Long medical waitlists

• Low to medium income levels

PER CAPITA MEDICAL EXPENDITURE

PRIVATE HEALTH INSURANCEIN THE UNITED STATES

• Average of 64% with health insurance in 2014

• 13% decrease since 1984

AVERAGE COST OF MEDICAID BY STATE PER YEAR

TRANSPORTATION

• BANGKOK AIRWAYS

• THAI AIRWAYS

PARESA RESORT PHUKET

BUMRUNGRAD HOSPITAL

BANGKOK HOSPITAL

BENEFITS

• No monthly insurance rates

• Flexibility

• Logistics are handled by agency

• Lower medical costs

• No deductible

• Resort-style recovery

• No recurring charges

• One flat fee

CONCLUSION

• Medical tourism has just recently taken off in Thailand. The industry is at its height and continues to grow. With expected revenues of $30 billion in 2017, there is no better time to enter this market. Medical costs continue to grow by 8% annually in the US and being privately insured is slowly becoming a thing of the past. With the demand for change in the medical industry knocking at the door, Thailand welcomes it with open arms.

market feasiability thailand presentation horace andy alex

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