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Global Laboratory Equipment Services
Basic Equipment used for functions…
Global Laboratory Equipment Services
Basic Equipment used for functions such as handling, measuring and storage of substances
Analytical Equipment used for complex operations such as determining the structure of substances and analyzing compositions
:star:Market Insights
:check:Market Overview
MARKET SIZE
2015- $18.2 B
2020- $29.8 B
CAGR- 10.4%
- Increased investments by global pharma and biopharma companies to upgrade laboratory equipment and enhance technological capabilities.
- More than 20% of lab equipment in pharma and biotech research organizations need to be replaced
- increased R&D spending by Pharma and biopharma companies
MARKET SIZE BY GEOGRAPHY
Americas- 42% Demand is likely to increase in next few years because of outsourcing of manufacturing and distribution to APAC countries
APAC- 32% Growth is driven by countries like India and China because of Pharma companies expanding in the region and Major players in the players expanding their operation reach.
Europe-21%
The Middle East and Africa- 5%
DEMAND - SUPPLY SHIFTS
Demand -
- Demand for laboratory equipment is largely driven by increased investment in scientific R&D of pharmaceutical, drug discovery and healthcare.
- Laboratories across the world are more on better equipment for improving productivity.
- Stringent regulations for pharmaceutical companies has prompted them to invest in better lab equipment.
Supply -
- Suppliers have increased investments in R&D activities, particularly automation technologies and microfluidics, due to the increased demand for sophisticated laboratory equipment.
:check:KEY MARKET TRENDS
:checkered_flag:Increase in adoption of automation and robotics in clinical and healthcare laboratories increase in the usage of auto-precision devices in a bid to automate laboratory testing and other processes.
:checkered_flag:Rise in demand for customized and portable analytical instruments there is a rise in demand for customized lab equipment to cater specific needs of customers
:checkered_flag:Need for energy efficient in clinical and research laboratories
Laboratory spaces need 10-15 times more energy than commercial space. Hence, there is renewed focus on developing
energy-efficient lab equipment particularly electrical equipments
:checkered_flag: Need for energy efficiency in Clinical and Research Laboratories Laboratory spaces estimated to require 5-10 times more space than office spaces. There is an increased focus on developing increased focus on developing energy efficient laboratory equipment, particularly electrical instruments which account for 10-15% of energy consumption.
:checkered_flag: Rise in Adoption of E-procurement there has been a shift in the procurement dynamics of laboratory equipment owing to the emergence of e-commerce -- end-user segments increasingly prefer procuring lab equipment online.
:check:GROWTH DRIVERS
Rise in demand for pharmaceutical laboratories in APAC emerging economies in APAC, such as India and China, are witnessing huge demand for Pharmaceutical facilities, which is proving to be a major contributing factor for the market. For Eg., the CRO Market in India grew at a CAGR of 11%-13% during 2011-2016 to reach US$1 B
Need for high-quality pharmaceutical products Growing demand for high-quality pharmaceutical products has prompted research laboratories is likely to be replaced over next five years.
Increase in Government Spending on Pharmaceutical R&D and Drug Discovery Emerging Markets such as China, India and South Korea are witnessing a rise in government spending on R&D activities
Rise in R&D activities of pharmaceutical companies Increased spending on R&D activities by Pharma companies has boosted the demand for lab equipment and instrument
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:star:Pricing Models
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Unit Pricing: Price is defined for each unit. The high degree of transparency but no quantity discounts
Fixed term pricing: Rarely used as most pharmaceuticals purchase instruments and equipment on an ad hoc basis.
Suitable for long-term contracts for the consistent supply of basic equipment.
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:star:Negotiation Levers
Tactical
Levers
Volume Based Discounts Possible Savings- 4%-7%, Related to Quantity of equipment purchased
Value Based DiscountsProbable Savings- 5%-7%, negotiating on blended rate of services- Negotiation on price per unit price and value additions such as maintenance
Contract Terms Probable Savings - up to 5%, Tenure of Contract - yearly contracts for basic lab equipment
Payment terms Probable Savings 45-60 days, Additional payback period without penalties/interest charged
Strategic
Levers
Ownership for sub-contracting Probable Savings - Up to 10%, On behalf of buyers, suppliers outsource functions that are not a part of their portfolio
Category Management Initiatives probable Savings - 8-10%, Identification of cost savings opportunities based on number of units purchased and sub-contracting
Risk-Sharing engagement approach Probable savings - 6-8%, Reward based engagement approach - cost savings on reduction of TAT
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Reasons Buyers want to engage with suppliers that can meet growing customization requirements via technological innovations and ensure consistent supply of equipment. Implications category managers are looking to engage with suppliers that are capable of the following-- 1. Providing preventive maintenance services as a oart of their portfolio. 2. Engaging in tech innovations to enhance sample processing speed 3. Employing sustainable practices to minimize energy consumption and emission
