Throughout more than 2 years, the world has been devastated by COVID-19.

As a matter of
fact,  this outrageous situation has brought many product’s demand and supply into many
unexpected or expected fluctuations, and one of which is the price and quantity of oxygen
generators-one of the most prominent products that help people to deal with this disease.
Therefore, this essay will discuss the economic impact that COVID-19 had brought to the price
and quantity of oxygen generators, specifically in the Vietnam market. In addition, proper
analysis methods are included in this essay in order to describe the situation that the market has
been facing during the period from May to October 2021.

The oxygen concentrator market during the COVID outbreak is one of the markets that cannot be
ignored because its price has been fluctuating within just several months in 2021. Oxygen
generator is a medical device that takes air directly from the surrounding, through a filter system
to remove harmful substances, inert gas, and produces pure oxygen with a concentration of over
90% called medical oxygen. This is an easy-to-use device, so the patient can completely adjust it
without the help of a doctor or nurse. The  WHO says that 15 percent of COVID-19 patients
require medical oxygen because of breathing difficulties. COVID-19 clearly exposed a major
weakness in the health systems – that of medical oxygen production and delivery. Despite
administrations trying to do their best to supply medical oxygen, demand overtook the supply,
making its availability inadequate during the pandemic times. Before the COVID-19 outbreak,
oxygen machines and ventilators were usually only used for patients with chronic obstructive
pulmonary disease, the supply and demand are sufficient and reasonable, there is no shortage or
excess of oxygen generators. During the COVID-19 outbreak, demand increased suddenly
because people were concerned about the shortage of oxygen supply and the pilot isolation of F0
at home. Many people actively buy and store oxygen generators to prevent COVID-19, partly
because of being psychologically assured. According to a recent survey, oxygen generators are a
sought-after item by many people. Through the exchange, most of the big dealers specializing in
supplying machines in Ho Chi Minh City and Hanoi reported they were out of stock, especially
the popular models with a capacity of 3-5 liters/minute from the brands Yuwell, Philips, Owgels.
Similarly, on some e-commerce platforms such as Shopee, Lazada, etc., online medical
equipment supply stores also report out of stock and only accept pre-orders, waiting time from
10-15 days. The increase in demand leads to an increase in supply. The manufacturers and
distributors of oxygen generators have worked hard to create products to serve the needs of the
people. This is a monopolistic competition market. Because there are many sellers or brands
from many different countries in the world that produce oxygen concentrators, for example,
Philips (Netherlands), Owgels (Germany), LG (Korea), Yuwell (China), iMediCare (Singapore),
etc. Moreover, the product - oxygen concentrator in each brand is differentiated and each brand
set has a different price. This shows that they are price makers, not price takers. They compete
fairly with each other with various designs and prices. Furthermore, the demand curve in this
market is downward sloping and sellers in the market of oxygen generators are free to enter and
exit; in the long run the economic profit in this market may be zero.

Before the outbreak of the disease, the oxygen concentrator was known as a tool to support
patients who had difficulty breathing in daily life. At this time, most of the oxygen concentrators
sold were for use by patients with disease and life support, therefore, the number of sold oxygen
concentrators and the price of oxygen concentrators on the market was always kept at a stable
level. Although there are times when market demand increases or decreases, in general, there is
not a big change. On average, an oxygen generator might cost about 3-5 million VND,
depending on the capacity of the oxygen tank that the machine can hold. People with average
and economic conditions can easily buy the desired oxygen generator at a reasonable price.

Also according to this medical equipment distributor, the oxygen concentrator is the most
independent and important machine and the most common, and when the condition of a COVID-
19 patient becomes more severe, a ventilator is added. So the ventilator market does not become
as intense as the oxygen machine. Due to the sharp increase in the number of COVID-19 cases
from July to September in 2021, especially in Ho Chi Minh City, many people were in an
extreme panic and it was predictable that their basic instinct is to buy and to store a backup
oxygen generator for self-healing purpose in order to face the new wave of COVID-19, making
this item faced a substantial scarcity. As a result, the price of this device has gradually increased
since then.

Before that, from the beginning of May to June, the number of COVID-19 cases did not increase
severely, averaging about 100-200 cases a day compared to more than 2000 cases a day in the
period of July to September. Therefore, the price of oxygen generators ranged from 3 to 5
million VND, and the market could provide enough oxygen generators for patients.

The below diagram shows the market price and quantity of oxygen generators in two months of
May and June 2021. It can be seen clearly that the equilibrium price at that time was 4 million
VND  and the quantity demanded was at Q1. In this period, because the infection did not spread
sharply and was still under control; therefore, the demand to buy this machine was kept low.

During the complicated development of the COVID-19 epidemic (from July to September),
many people were afraid that hospitals and medical facilities would be overloaded, so they
actively sought ways to protect themselves. Along with masks and protective gear, oxygen
generators are the most sought-after item. According to Portal of the Ministry of Health on the
passion of COVID-19, the number of cases at that time increased to more than 2000 - 3000 cases a

day, leading to a substantial increase in the demand for oxygen concentrators. I n an interview
by a news outlet, an interviewee said that "With the current COVID-19 epidemic situation,
young people can easily overcome it, but for elderly people with underlying medical conditions
like my parents, it is very difficult. Even though I do not know how effective the machine is, I
still decided to buy one to keep at home for my grandparent's peace of mind. If anyone gets sick
with COVID-19, we can use it right away." It can be obviously seen that at this time, buying an
oxygen machine to store at home gives people a sense of assurance, rather than for treatment,
which triggered a huge demand for this machine. As a result, the price increased 3 to 4 times in
the oxygen concentrator market, compared to that of two months ago. 

Looking at the above diagram which demonstrates an increase in demand compared to the
beginning of the epidemic, leading to a shift to the right of the demand curve from D1 to D2. The
equilibrium price in the oxygen concentrator market increased 4 times during this time (from 4
million to 16 million VND), along with the increase in quantity demanded from Q1 to Q2.
Although the price was very high, buyers were still hunting for it at that time, this machine was
constantly out of stock and the seller always stimulated the demand of buyers by having to pre-
order to have the machine used.

However, at present, the average price of an oxygen generator is also 1.5 to 2 times lower than
that in the peak period of this pandemic, which is about 8 million VND. At the present time, the
number of COVID cases has not shown any sign of decreasing, but it seems that the period that
people panic and buy this medical machine continuously has passed. Moreover, everyone is
vaccinated and the cases is more under control than at its peak time, so the demand has not risen
as strongly as it did in 3 months ago. 

The above graph shows the price and quantity demanded of oxygen generators from October to
now. Because of a sharpened rise in demand in the peak period of this pandemic, oxygen
generator manufacturers and distributors have strived to produce more goods that meet the needs
of the public. Therefore, the supply of this machine in the market has risen, which shifts the
supply curve to the right from S1 to S2. The shift in supply curve has caused the equilibrium
price falling from 16 million VND to 8 million VND. Consequently, that fall in equilibrium price
has lead to a slight rise in quantity demanded from Q2 to Q3. Although the price has decreased,
it is still about 2 times higher than that at the beginning of the pandemic. Throughout different
stages, it can be witnessed that these consecutive outbreaks are bringing the equilibrium price of
oxygen generators into drastic fluctuating circumstances, which may continue to happen again in
the near future. 

The COVID-19 pandemic occurred globally, many countries, economies and markets around the
world were affected by it and the oxygen concentrator market in Vietnam is no exception. The
demand of the people has increased sharply compared to before, which has pushed the price of
oxygen generators to an unprecedented level, creating a great change in the oxygen concentrator
market in particular and the market for medical supply in general. Through this essay, readers
might have better understanding of oxygen concentrator market including its changes in price
and quantity caused by the COVID-19 pandemic; which could be helpful for them to use this
essay as a reference source for their research in the future.