Release date: 2013-05-15

With the aging of China's population and the advancement of urbanization, multinational companies that have long occupied the high-end market of medical devices have begun to “lower down” and enter the low-end medical device market.
On May 10, Philips, one of the major suppliers of medical devices, announced that its first batch of basic medical equipment developed and produced in its Suzhou plant was off the assembly line. This means that the strategic layout of the foreign medical device brand represented by Philips in the primary medical market in the Chinese market is even further. Previously, GE, Medtronic and other companies have entered the low-end medical device market in China.
For a long time, in the case of multinational companies monopolizing high-end medical devices, local brands have more to survive in the basic medical device market. Today, local brands will be connected to these multinational giants. A person in charge of a medical device manufacturing company in China told reporters that once a foreign brand is spread out, the impact on them will be very large, but local companies have long-term roots and also have certain advantages.
Multinational companies are deeply cultivating the Chinese market According to the reporter, in October last year, Philips released its first basic medical strategy in China. According to Philips' plan, new products developed and produced this year will be launched. In the next two years, differentiated service models will be gradually realized. Then enter the stage of rapid growth.
The reporter was informed that the traditional business of Philips Healthcare is mainly concentrated in the middle and high-end market, and together with General Electric, Siemens and so on are considered to be the three major suppliers in the medical equipment market. And now, many companies have entered the low-end medical equipment market. For example, in recent years, GE Healthcare has launched a strategy such as “GoBlue” to develop the primary medical market. Medtronic has also deployed second- and third-tier cities through the acquisition of Kanghui Medical.
“The basic medical business is a fast-growing business. In the past, Philips Healthcare was more focused on high-end products. We have seen in recent years that the demand for basic medical care is very high in markets around the world, including China. Zhang Wenming, president of the Greater China Region of the Healthcare Division of Philips (China) Investment Co., Ltd., said in an interview with reporters that from the perspective of the entire industry market, the proportion of basic medical care in the entire medical care is now 15% to 20%, which is expected to be very It will reach 35% to 40% soon.
According to statistics from the Zero2IPO, the basic composition of China's medical device market in 2010 was 25% for high-end products and 75% for low-end products. This shows that the medium and low-end medical equipment has huge market space. In addition, foreign companies are more concerned about the opportunities that medical devices are welcoming in the context of urbanization.
China Health Statistics Yearbook data shows that as of 2011, there are 6,468 medium-sized general hospitals in China, including county-level hospitals and secondary hospitals. There are 14,112 small-scale hospitals providing basic medical care, including township-level hospitals, first-class hospitals, and communities. Hospital and community health centers. There are only 1,399 high-level general hospitals and specialized hospitals.
"In the context of urbanization, the medical device industry will usher in the spring, and it is expected to reach a scale of 300 billion yuan by 2015. The aging of the population and the improvement of the medical system are also opportunities to promote the renewal of medical devices." A pharmaceutical industry analyst told reporters that the development of county-level hospitals has been faster than urban hospitals in recent years, and the market for basic medical care has grown rapidly. This has also brought greater opportunities for basic medical care. Foreign-funded enterprises have entered the basic medical field.
Will impact on local enterprises In the view of local medical device brands, the positioning of foreign brands is a great threat. The person in charge of the above-mentioned domestic medical device manufacturing company told reporters that medical equipment brands such as Philips and Siemens are more dominant in brand accumulation, and for foreign-invested enterprises, the deployment of low-end products and sales networks is not a problem.
“In the past, China’s low-end primary-level medical market was mainly done by domestic enterprises. The current situation is that foreign-funded enterprises have begun to penetrate into the low-end market while ensuring the high-end medical equipment market, and even enter the primary hospitals in third- and fourth-tier cities. Private hospitals.” The above-mentioned pharmaceutical industry analysts told reporters that this is mainly a strategic adjustment made by foreign-invested enterprises to adapt to changes in the needs of the entire domestic healthcare industry.
Taking Philips as an example, the company's basic medical business mainly focuses on secondary, county-level hospitals, township hospitals and private hospitals. At present, the company has 120 engineers in various places, and then more talents will be recruited directly in the third and fourth-tier markets.
Shi Lichen, a partner of Peking University’s pharmaceutical company, said in an interview with the Daily Economic News that domestic companies have an advantage in the primary health care market for a certain period of time, but once foreign companies rely on strong government public relations capabilities and market expansion capabilities, Market management capabilities and advanced technology of equipment have begun to occupy this market, and domestic enterprises will begin to be suppressed, which has a very large impact on domestic enterprises.
The person in charge of the above-mentioned medical device manufacturing company said, “Once these enterprises are spread out on a large scale, the impact on domestic brands is very large.” But he also said that relatively speaking, local enterprises have the advantages of cost and terminal control, and local enterprises have long-term advantages. Rooted, in terms of product after-sales service, it has advantages over foreign-funded enterprises.
Zeng Jinchuan, vice president of Philips Healthcare Greater China and head of the basic medical business, also admitted that due to China's vast territory and large number of small and medium-sized hospitals, the biggest obstacle is that there are not enough people and resources to communicate with the hospital. “I think the biggest challenge we face now is that the needs of primary hospitals are different and need to be customized. For example, some hospitals buy machines, but doctors may not operate. In this case, the corresponding training should be kept up.”

Source: Kexun

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