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        China Will Become the World’s Second Largest Medtech Market by 2020.

        Number of visits: Date:Oct 31,2014

          Global management consulting company The Boston Consulting Group launched the latest report Winning in China’s Changing Medtech Market in Beijing on October 29.The report pointed out that the pace of growth will continue to be healthy, at about 14 percent annually between 2013 and 2020, and China’s medtech market is expected to emerge as the second largest in the world by 2020, increased to USD 55 billion. With the continuous propulsion of healthcare reform, fundamental changes will happen to China’s medtech market layout and local companies continued to rise and have taken a lead in many medtech products.
          The report also said that great changes have taken place in China’s healthcare system with the propulsion of healthcare reform. Major trends include changing regulatory policies are encouraging innovation and leveling the playing field; pricing pressure is intensifying; reimbursement coverage is broadening—but hospital budgets are getting tighter; the provider landscape is changing, with smaller hospitals taking on a larger role; sales and marketing practices remain under a microscope.
          The report also disclosed three biggest changes in light of China’s medtech market in the future: First, a larger and more important midmarket. For example, the projected compound annual growth rate for the premium and low ends of the CT imaging market from 2013 to 2020 is 13% and 5%, respectively—but 18% for the midmarket segment; second, local companies will expand their reach. Local companies are already leaders in many medtech categories. With governments’ strong support in upgrading their technology innovation and quality, local enterprises will cover more market share in premium end products segment; third, the sales and distribution machine will be revamped. With the growth of the basic healthcare system as well as private hospitals, customers are becoming more physically dispersed. This will call for diversified sales and marketing coverage by manufacturers.
          The major author of this report, John Wong, a senior partner of The Boston Consulting Group said that both multinational corporations and local companies need to change at times and adopt differentiation strategy in face of changing China’s medtech market. For example, currently, multinational corporations focus on premium market in their product line while local companies on middle and low ends products segments. To succeed in fast-growing midmarket, multinational corporations need to review their product portfolios, considering whether to gain midmarket products through local products development or acquisition. Local companies shall transfer their focus from low end products to midmarket products, and gradually change their competitiveness from cost advantages to costs, quality and even innovation.
          Therefore, The Boston Consulting Group recommends that both multinational corporations and local companies need to adopt their business models in order to tap the opportunities created by the changes sweeping the market. Multinational corporations must defend their leadership position at the premium end of the market against increasingly stronger local rivals, while at the same time expanding their reach in the fast-growing midmarket. Local companies, meanwhile, must up their game, developing the products, skills, and talent required to succeed at the upper end of the midmarket—and even in some premium segments.
         

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