After the catastrophic Wenchuan earthquake on May 12, 2008, China saw another large earthquake-Ya’an earthquake this year. During the rescue, we find medical devices including CT, ECG, anesthesia machines, defibrillators and portable ultrasound play an important role in saving people’s life and giving their hope.
China, the most populous country in the world, is also a victim prone to natural disasters. From rainstorm in spring, drought, flood and tycoon in summer to snowstorm in winter, along with irregular earthquakes, a variety of different disasters post strong demand for medical devices, which foresees the huge market potential in this field. According to a research report compiled by PharmaLive, a consulting firm, China is expected to overtake Japan as the world's second largest market for medical devices in five to seven years, and to dominate 25% of the world market by 2050, achieving trillion in revenue.
China’s new health care is one of the important driving forces. Based on a China Med 2013 press conference, out of all medical devices in the country's 175,000 health institutions, 60% were installed before the mid-1980s, and 15% in the 1970s, which requires a wave of replacement. In addition, it is reported 80% of the medical resources are concentrated in urban areas; over 800 million Chinese farmers only have access to 20% of the medical resources. This means the new medical markets will be very large. Furthermore, in 2010, the Chinese government issued a new policy to encourage private investment in healthcare, providing a more even playing field for non-public healthcare institutions.
Then the increased awareness of health and surplus money as well as the accelerated aging population also contribute to the rapid development of China’s medical device market. By the end of 2011, China had about 185 million people above the age of 60, or 13.7% of the population; this figure is expected to surge to 221 million in 2015, showing great pressure for the existing limited medical devices. So here comes the opportunity to boost and infuse energy to the weak semiconductor environment caused by the declining PC industry.
On the market landscape side, due to the precision and high-end need of medical devices, currently, China is dominated by multinational enterprises in foreign countries, mainly the US with market share at 41%, followed by Japan at 10% and Germany at 8%. Based on research data, around 74% of China’s medical devices come from import.
Citi analysts pointed out GE led the medical equipment market in medical consumables, especially in orthopedics and drug-eluting stents. Other suppliers include Siemens, Medtronic, Karl Storz, Covidien, and other foreign medical device companies. To grab market share, these companies continue deepening into Chinese market by obtaining sale channel through acquisition. For instance, Medtronic acquired two local medical device companies tostrengthen their presence and reputation in China. However, in recent years, Chinese domestic manufacturers emerge. But since they mainly focus on providing low-end medical products, 90% of high-end segment will still be at the hand of the original multination companies.
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medical device, medical equipment,