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Investment Opportunities are Plenty in Latin American Hearing Devices Market, New Report Launched

In Latin America, 4% to 6% of the population is affected by a disabling hearing loss, whereas the rates among North American and European countries are between 2% and 4%, according to World Health Organization estimates. There are approximately 32 million people in Latin America who suffer from mild to severe hearing loss, making up about 9% of the world’s total hearing impaired population.

To address this issue, some countries like Brazil have a public health care program that provides free-of-charge hearing health care services, including diagnosis, treatment, hearing aid distribution, and rehabilitation. However, poor socioeconomic conditions and geographical differences slow down the overall development of hearing healthcare across the region. Current short-term awareness campaigns and the limited number of initiatives by associations and government organizations are insufficient to improve adoption rates.

Low Penetration Rates

The largest segment of the Latin American market for hearing devices is the market for hearing aids, accounting for approximately 750,000 hearing aids sold annually. According to a new report published by iData Research entitled Brazilian Market for Hearing Devices and Batteries, 2015 will see a large proportion of the overall hearing aids sold in Brazil, which represents almost 50% of the entire Latin American market. These numbers reveal how underdeveloped the Latin American market is compared to the U.S., where more than 3 million units are sold on an annual basis.

Relatively low hearing aid usage penetration rates are seen in most developed countries. These rates are even lower in Latin America. In Denmark, where three of the biggest hearing aid manufacturers are based, the adoption rate is approximately 45%. In Europe and the United States, the rates are slightly higher than 22%. But in Brazil, the largest country in Latin America and consequently the biggest Latin American market, only 5% of the hearing-impaired population is using hearing aids. Mexico, the second largest country in Latin America, has a slightly better estimated penetration rate at approximately 9%.

Public Sector As A Market Driver

The public market and government reimbursement plans are some of the biggest drivers for the Latin American hearing device market. Public health care policies help fulfill the need for diagnosis, treatment, and device donations.

Specifically, the majority market share for hearing devices in Brazil, Colombia, and Chile is in the public sector. In Brazil, for example, costs for hearing devices and implants are usually borne by the government.  In 2014, the Unified Health System (Sistema Único de Saúde, or SUS), which is the Brazilian public healthcare network, is expected to provide hundreds of thousands of hearing aids and conduct the majority of all cochlear implant fittings.

Additionally, in June 2014, the Brazilian Ministry of Health published an ordinance to incorporate bone-anchored procedures into the SUS, based on the recommendation report of the National Commission for Incorporation of Technology in SUS (Comissão Nacional de Incorporação de Tecnologias no SUS, or CONITEC). As a result, the bone-anchored hearing aid market in Brazil is expected to experience double-digit growth through 2021.

Nevertheless, the government cannot ensure adequate treatment coverage for the hearing-impaired population in the long term. There is no expectation that the number of devices provided by the public sector will increase significantly; growth rates will continue to be lower than the rates in the private sector. That being the case, hearing health in most of Latin American countries remains highly vulnerable to the changes in government policies and investments.

Lack Of Awareness Remains A Limiting Factor

The rate of hearing aid adoption is still very limited due to a general lack of knowledge and awareness. It is estimated that hearing-impaired individuals wait nearly 10 years on average before seeking treatment after their initial diagnosis. Hearing aid adoption is more frequent in patients with moderate to severe hearing loss.

Aesthetic concerns also contribute to the low rate of adoption. Many patients avoid hearing aids in order to conform to perceived social pressures. Despite the many new hearing aid styles and discreet designs, some still regard hearing aids as a symbol of advanced old age and incapacity. These attitudes and concerns will continue to limit overall hearing aid market growth.

In an attempt to change this perception, the hearing aid industry has been promoting campaigns and initiatives to raise patient awareness. Some manufacturers feature hearing centers dedicated to providing information, education, screening, counseling, support, and technology solutions for people with hearing loss. However, more needs to be done. Larger and longer-term investments can only be made by associations or government organizations.

Holding Groups Lead Latin American Hearing Device Markets

Large holding companies operating within the hearing device market have a strong influence in Latin America. Each holding company owns several individual brands in various market segments. These include the Sonova Group, William Demant Holding Group, and GN Store Nord.

Sonova operates out of Switzerland and holds the Phonak, Argosy, Unitron, and Advanced Bionics hearing aid brands. William Demant operates out of Denmark and holds the Oticon, Oticon Medical, Sonic, and Bernafon hearing aid brands. GN Store Nord also operates out of Denmark and holds the ReSound, Beltone, and Interton hearing aid brands. Other notable competitors in the hearing market include Cochlear, MED-EL, Siemens, Starkey, and Widex.

Each brand is often regarded as a separate entity, but as a group, they can usually offer a complete solution for clinics. Trading premium hearing products like implantable devices, audiometers, tympanometers, and otoacoustic emissions analyzers coupled with hearing aids, holding companies can offer more attractive bundles with a significantly lower average selling price.

Sonova Group leads the Brazilian hearing aid market with the Phonak brand. Today, Brazil is one of Sonova’s top 10 markets by revenue. The country accounts for approximately 4% of group sales, with strong double-digit sales growth in local currencies.

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