The laboratory equipment market is booming, thanks to the huge scale investments in scientific and medical R&D – especially in emerging economies like India, China, and South Korea. Keeping this development in mind, category managers have adopted strategies which will help them procure the best equipment in a cost-effective manner. Hiring suppliers who provide bundled services and using performance tracking metrics to assess the performance of suppliers are some of the methods adopted by buyers for enhanced product and cost management. As our procurement specialist predict a positive growth of the lab equipment market, we give you the critical factors that are going to drive this market at the global level.
Category drivers which will change the face of lab equipment market
Demand for high-quality pharma products
The demand for high-quality pharma products has indirectly resulted in the demand for advanced laboratory equipment and instruments. Procurement teams are now focusing on equipment which will not only enhance the research quality but also have longer shelf-life. Given the fact that more than 20% of lab equipment are replaced every five years, it only makes sense to choose suppliers who provide equipment which is superior in quality and easy to maintain.
Increase investments by buyers on R&D activities
Buyers themselves, regardless of their size, are aggressively investing in several R&D projects. For instance, in the year 2014 US$125 billion was spent by biopharma companies on R&D activities. Procurement specialists predict the amount to reach US$148 billion by 2020. A lot of the investment will be routed towards establishing new labs, and upgrading the existing ones – which in turn will boost the demand for lab equipment.
Huge spending by governments across the globe
Research activities and drug discovery are no longer the force for developed nations alone. As emerging economies are working towards high self-reliance, governments here have increased the budget for R&D activities. A lot of research is now being undertaken in countries like China, South Korea, and India. In its 12th five-year plan Chinese government invested US$6.6 billion in drug discovery and development. Procurement teams in the US, Canada, Japan, and France are working towards building facilities where the best minds from across the world can collaborate in drug development process.
With huge investments being made, buyers, both private and public, prefer engaging with suppliers who can provide them technically advanced equipment to enhance the quality of lab testing.
Emergence of APAC as a hub for pharma labs
Several biotech companies from the West, are gradually coming up with lab facilities in the APAC region. Setting up of new biopharmaceutical facilities is incomplete without the right lab equipment. Moreover, this again contributes to the demand for suppliers who can provide a diverse range of pharmaceutical and biomedical equipment. In fact, all the major suppliers see APAC as one huge market of opportunities, which needs to be leveraged to strengthen their global presence.
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