A number of years ago I met Siamak Sani at an audiology meeting in Wyoming. At that time, he was passionate about bringing highest audio quality hearing instruments and hearing healthcare to the third world. As a seasoned entrepreneur, Siamak has spent the past 15 years in the hearing industry and continues his work towards addressing the world’s hearing impairment with his technology and products. It is our pleasure at Hearing International to have this unique perspective on the problems of bringing hearing healthcare to the international community.
Global Market Dynamics: A Crisis Growing Rapidly
by Siamak Sani
In 2014, 13 million hearing aids were sold globally, only serving 6-7 million people. Roughly 3 million were sold in the United States, 6 million in Europe and the balance of about 4 million in the rest of the global markets, with the huge need of 600 million. Despite stigma, denial, costs and other factors, market penetration in several European countries have reached as high as 40% and 23% in the United States.
These hearing device sales data suggest that there is less than a 1% world market outside the EU and the US. Since many of the market penetration challenges have been surmounted in Europe and the United States, it follows that solving the key barriers in international markets could increase penetration substantially over the current 1 percent. With 1+ billion people needing amplification products, the international markets for hearing instruments continue to present an incredible opportunity for hearing device manufacturers, distribution partners and governments.
Problems and Challenges Facing International Markets
2. Product and performance
3. Price and availability
4. Expanded Global Training Programs
Currently only serving 1% of the need, distribution channels are clearly neither efficient nor capable of providing the service network for achieving significant global growth. Moreover, these channels are bound by the existing high priced dynamics of the major manufacturers protecting their high profit business model. Lack of an adequate number of service providers continues to hinder volume growth with today’s “service+device” business model. Some of the issues surrounding the growth of these markets are:
1. Significant investment and training are required to grow the number of service providers to reach a level that would generate reasonable growth in a short period of time. The current service providers are extremely valuable resources in training the next generation of those that will provide devices. However, the fear of developing a competing point of service limits the desire to grow this glaring need from within the global hearing industry.
2. The business to consumer channels such as the crowded Internet space provide confusing information with little product differentiation for the average patient. Lack of traction in over-the-counter channels would perhaps point to minimal patient trust in making such purchases. Difficulty of self fitting, self tuning, and general use of high quality hearing devices continue to play significant roles in limiting user growth in the third world.
Clearly, new channels need to be developed and the complexity of training required to expand beyond current delivery and service platforms need to studied. Developing a significant number of “device + service points of sale” populated with properly trained personnel is a key requirement for addressing this sector.
Such significant undertaking requires cooperation from both private and government sectors. Given that third world hearing care remains highly underdeveloped, one can deduce that the current players are neither capable nor willing to take on such development. Prospects of creating thousands of jobs have obviously not reached the proper government entities interested in such mandates.
The business to consumer segment holds the greater promise by far for inducing third world market growth. Similar to the concept of reading glasses, workable options could include the development of high performance technologies and products that bypass the need for service and could allow patients to self test and self select their needed fitting profiles.
Large volume channels such as Internet, over-the-counter/retail sale in pharmacies, clinics, optic shops, etc. provide the required “access points” where patients could purchase and try products. If a high quality audio product allowed patients to determine which of a number of programs worked best for them, they could be the “reading glasses” of hearing devices, which could in turn help open high volume global sales channels.
Stay Tuned for next week’s Hearing International when Mr. Sani will look at the Product and Performance issues required to increase global market share ….RMT
Mr. Sani holds a BS degree in Electrical Engineering and Computer Sciences from UC Berkeley and an MS degree in Engineering Management from Santa Clara University. He is President & CEO of World Hearing Organization (WHO) Inc., a company that for the past 10 years has been creating the highest audio performance, 8- prescription hearing aids, consumer Wearable devices and developing innovative distribution platforms for the global hearing consumer markets. For more than 30 years in executive management of start-ups and $100M public corporations in the Semiconductor and Hearing Industries, he aspires to address the 99% unmet needs of the world’s 2nd largest medical condition, hearing loss. Siamak may be reached at: firstname.lastname@example.org.
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