Surveys

Home Care and Rehabilitation Equipment Industry's Market and Economic Status Survey '99

1998 Market Exceeds 300 Billion yen Track Record

　The Health and Welfare Information Association has established policies to use as guidelines that will be valuable in making decisions to operate businesses. The purpose of those policies is to gain insight on the market trends in the home care and rehabilitation equipment industry from the market scale of home care and rehabilitation equipment, the economic status of companies entering the market and future business strategies. This is the second time that we have conducted this survey, of which last year was the first.
Through our survey of 178 of the domestic exhibitors of our 26th Int. Home Care & Rehabilitation Equipment Exhibition that cooperated, we will report on the market scale and business strategies of this industry.

■ Response Rate: 44.5% (178 out of 400 companies)

II. Market Scale of Industry

1. Market Scale of the Entire Home Care and Rehabilitation Equipment Industry

Total sales for fiscal year 1998 of companies that responded was approximately 324.7 billion yen, Total target and projected sales for the year 2001 is expected to be about 514 billion yen.

Total sales for the 1998 fiscal year of companies that responded was approximately 324.7 billion yen. (For reference, total sales for 1997 was 265.9 billion yen)

According to the industry's breakdown by product, the toilet/diaper related product category had the highest ratio with 31.1%, followed by mobility products and bed related products, 15.1%, and daily living aids, 10.4%.

Total target and projected sales for the fiscal year 2000 is expected to be 470.8 billion yen and 514 billion yen for fiscal year 2001. The yearly average growth rate for the fiscal year 2000 will be 120.4% and 116.6% for 2001.

Market Scale by Product

Toilets/Toilet Seats, Beds and Cars Equipped for Physically Challenged Had the Top 3 Sales Totals

For the 1998 fiscal year, the product categories having the highest total sales within the home care and rehabilitation equipment industry were the toilet/toilet seats, beds, cars equipped for physically challenged, followed by mattresses, bath tubs and clothing related products.


Home Care and Rehabilitation Equipment Sales*
1. Toilet/ Toilet seats 99,428
2. Beds 25,862
3. Cars equipped for disabled 17,040
4. Mattress 16,403
5. Bath tub 14,799
*Above figures are in millions of yen

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III. Business Strategies

High Expectations to Expand Markets and Increase Sales

After the implementation of the Care Insurance System, the most important goal in business strategies will be to "Increase Sales" according to the responses of 77.2% of manufacturers and 90.0% of retailers/wholesalers. They also expect to expand their markets.

Target Is High Premium Products. With the Exception of Rental Products Under the Care Insurance System

In regard to product strategies after the implementation of the Care Insurance System, emphasis on "daily living support products, with the exception of rental products under the Care Insurance System" was about 60%, and importance of "high premium products they have previously dealt in" was 70%.

《Business Strategies for Manufacturers》

1. Sales Strategies after Implementation of the Care Insurance System

Business strategies of companies trends are geared toward developing business with domestic companies rather than with overseas companies and to companies they have previously dealt with.

New customers categories they expect to target will be care shop, 60.4%, followed by social welfare institutions, 53.0%, and hospitals, 37.6%.

2. Expected Role of Retailers/Wholesalers

Industry manufactures will expect retailers and wholesalers to play a key role in high sales in specially defined territories/nationwide and in market creativity.

It is also expected that retailers and wholesalers will cooperate together to summarize consumers' needs and incorporate them in developing products.

《Business Strategies for Retailers and Wholesalers》

The types of retailers and wholesalers that manufacturers would like to deal with were "manufacturers that had a keen interest in consumers needs" or "manufacturers that had dealt in highly functional or expensive products".

The purpose of the Home Care and Rehabilitation Equipment Industry's Market and Economic Status Survey is to provide various indicators for the industry. We obtained the cooperation of 178 companies of the domestic exhibitors that participated in our 26th Int. Home Care & Rehabilitation Equipment Exhibition.
■ Response Rate: 49% (178 out of 362 companies that participated in H.C.R.)

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IV. Operating Conditions of Companies Entering the Home Care and Rehabilitation Equipment Industry

Excellent Operating Conditions for Home Care and Rehabilitation Equipment Industry

In comparing last year's survey results to this year's, the home care and rehabilitation equipment industry as a whole was far better for the 1998 fiscal year. Although there was a decrease in the ordinary profit growth rate and ordinary profit per person, there was a high growth rate and productivity remained constant.

(1) Growth Rate Indicator

  • Growth Rate of Sales Volume 10.1% (1998: 6.5%)
  • Growth Rate of Ordinary Profit 12.2% (1998: 14.3%)

(2) Income Rate Indicator

  • Ordinary Profit Rate of Total Capital 7.2% (1998: 3.1%)
  • Turnover Rate of Total Capital 2.2 times (1998: 1.6 times)
  • Ordinary Profit Rate of Sales Volume 2.6% (1998: 2.7%)

(3) Productivity Indicator

  • Sales Volume per Person
    4,001,800 yen per month (1998: 4,867,000 yen per month)
  • Ordinary Profit per Person
    107,300 yen per month (1998:117,700 yen per month)
Ordinary Profit Rate of Total Capital Reflects how much ordinary profit a company produces from their total capital. An overall profitability indicator.
Turnover Rate of Total Capital Indicates how many times total capital is turned over in one year and indicates how active sales is.
Ordinary Profit Rate of Sales Volume This index indicates the normal efficiency of a company's management activities.In comparing this figure with the sales profit rate, and if a company has a high ordinary profit rate, this is an indication that they are actively investing their capital in various portfolios.

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V. Home Care and Rehabilitation Equipment Distribution System

Overall Trend
  • The most significant overall trend was that companies were manufacturing only their
    own products (including OEM) through their specified channels and most companies
    do not have a wide distribution channel.
  • Companies were not yet affected by the restructuring of the distribution system.
    Product categories such as mobility products (walkers, canes, etc.) and bed related
    (mattresses, etc) will possibly change due to the restructuring of the distribution
    system within 2 to 3 years.
Companies Devoted to Manufacturing
  • The majority of companies, 98.3% are manufacturing their own products.
  • Companies selling through wholesale distribution were 92.1%. Of the other 7.9%, these companies do not deal in wholesale sales and their direct sales is low as their manufacturing and distribution functions are separated.
Companies that Deal in Both Manufacturing and Distribution
  • The percentage of manufacturers that purchase from other domestic companies is 32.2%, and importers is 10.9%.
  • The percentage of companies that deal in wholesale sales is 42.9% and their distribution routes were on the whole, fixed. Additionally, more than half of those companies sell their products through retail sales or to individuals and are selling at a level close to the end users.

《Home Care and Rehabilitation Equipment Distribution System by Category》

Product Category Companies Devoted to Manufacturing Companies Dealing in Manufacturing & Distribution Special Feature
% Manufactured By Own Company % of Retail Sales % Manufactured By Own Company % of Retail Sales
Overall 98.3% 92.1% 56.7% 42.9% In general, few products were purchased from other companies. Wholesale sales were high.
Mobility 95.8% 15.9% 84.5% 20.7% The ratio of direct sales is high.
Toilet/Diaper 100.0% 100.0% 6.8% 58.8% Distribution system for industrial type products.
Bed Related 100.0% 65.4% 90.3% 99.6% Company made own products & had wholesale distribution.
Construction/Home 52.3% 52.5% 23.6% 23.7% Various purchase and distribution channels.
Daily Living Aids 98.3% 80.5% 44.7% 37.1% Manufacturing &distribution separated.
Bathing Related 97.6% 43.7% 6.9% 48.3% Half wholesales and half retail sales.
Communication Equipment 77.8% 0.0% 31.4% 43.6% Various purchase and distribution channels.

Product categories in which sales of other companies' products are high.
Product categories in which direct sales takes an importance.

VI. Interviews

n view of the implementation of the Care Insurance and expected changes to take place in the home care and rehabilitation equipment distribution system, interviews were conducted with large scale care shops and home care and rehabilitation equipment distributors (including rental of care related products) about their business strategies.

The home care and rehabilitation equipment market is expected to expand as a result of the Care Insurance, however, the companies interviewed indicated that it would be difficult for them to survive if they rely only on the Care Insurance System, and thus will have to also expand into the elderly and physically challenged markets.
Additionally, the majority of companies indicated that the manufacturers taking the lead in planning and developing products would have to move toward taking more into consideration the users' needs in developing products and incorporating the distribution system as well.

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