Last week, Tencent and Huawei entered the medical device industry in the form of strategic cooperation and business scope changing, following Baidu, which announced earlier this year that it is entering the game. It's learned that after years of rapid growth, China's overall market for medical devices has jumped to the second place in the world. Along with great shortage of devices in grass-root medical institutions, this has attracted many major fortune hunters into the market.
Three major players start to sell medical devices
Last week, Philips (China) Investment Co., LTD. established strategic cooperation with Tencent, focusing on R & D cooperation in the field of intelligent healthcare. On March 25, Tencent entered into another strategic cooperation with Novartis China, aiming to build a platform integrating innovative drugs, artificial intelligence and social media, so as to serve patients with chronic diseases.
Likewise, last week, Huawei changed its business scope officially to include a new business of medical devices distribution, which means that it has officially entered the medical device industry. According to Tianyancha, an information sourcing website for social entities, Huawei Device Co., Ltd. has also changed its business scope on March 21, adding a business of medical devices (category II).
Obviously, the two ones are not alone among those who are interested in medical devices In fact, this year, Baidu Online Network Technology (Beijing) Co., Ltd. has also changed its business scope, adding new distribution business of category II & III medical devices, and invested Neusoft Medical Systems Co., Ltd. on March 19.
The medical device market shows a high growth rate
It's learned that in recent years, China's medical device market has grown at a rate of more than 20%, far higher than that of China's drug market, which is about 10%. China ranks second now in the market scale of the medical devices industry. A recently released research report shows that the market scale of medical devices in China reached USD 75.9 billion in 2017, accounting for 18.8% of the global market, with a growth rate higher than that of the global market for six years in a row.
However, there are still gaps in the market to be filled.
The reality that the market is getting larger is accompanied with the fact that there are still huge gaps to be filled. It is known that under the promotion of China's Hierarchical Medical Policy, continuous increase in the number of beds and patients in grass-root medical institutions are also calling for more medical devices because of great shortages. This has created a vast grassroots market which has painted a promising future for the giants.
According to the Plan for Deepening Reform of the Medical and Healthcare System During the 13th Five-Year Plan Period (2016-2020), by 2020, China will strive to provide TCM services to grass-root health institutions, covering all the community health service institutions and township hospitals as well as 70% village clinics and equip those institutions with corresponding medical treatment facilities.
"Hence, the producing capacity is exactly the one that cannot match the broad market currently. "At present, China's medical device industry is still in a "small and scattered" situation. The entering of the Internet 'major players' can stimulate the industry with an injection of funds and technologies and may boost the transform and upgrade of the industry." From the perspective of an industry observer, China's high-end medical device market is still dominated by foreign brands, while in the middle and low-end market, the distributors are scattered and under-organized. All of these call for a more integrated market.
Giants joining with capital and technology to promote the development of the industry
It is known that among Chinese medical device enterprises, only four listed companies’ registered revenues were more than CNY 5 billion in 2017, including Mindray Bio-Medical Electronics Co., Ltd., Weigao Group Medical Polymer Co., Ltd., Shinva Medical Instrument Co., Ltd., and Di'an Diagnostics Co., Ltd.. The total operating revenue of the domestic listed companies is CNY 83 billion, accounting for less than one-fifth of the overall medical device market in China. Industry data shows that at the end of 2017, there were 16,000 medical device manufacturers in China.
"There seems to be a great number of manufacturers. But most of them, actually, are small in scale and poor in competitive ability, overshadowed by foreign giants in multiple fields such as technology and humanized operation." As the observer said, the good news is that there are huge market potentials, high profit margins and preferential policies in China's medical device industry; being well-prepared, the financial Titans may as well change the market structure in the future, argued the observer.
Three major players start to sell medical devices
Last week, Philips (China) Investment Co., LTD. established strategic cooperation with Tencent, focusing on R & D cooperation in the field of intelligent healthcare. On March 25, Tencent entered into another strategic cooperation with Novartis China, aiming to build a platform integrating innovative drugs, artificial intelligence and social media, so as to serve patients with chronic diseases.
Likewise, last week, Huawei changed its business scope officially to include a new business of medical devices distribution, which means that it has officially entered the medical device industry. According to Tianyancha, an information sourcing website for social entities, Huawei Device Co., Ltd. has also changed its business scope on March 21, adding a business of medical devices (category II).
Obviously, the two ones are not alone among those who are interested in medical devices In fact, this year, Baidu Online Network Technology (Beijing) Co., Ltd. has also changed its business scope, adding new distribution business of category II & III medical devices, and invested Neusoft Medical Systems Co., Ltd. on March 19.
The medical device market shows a high growth rate
It's learned that in recent years, China's medical device market has grown at a rate of more than 20%, far higher than that of China's drug market, which is about 10%. China ranks second now in the market scale of the medical devices industry. A recently released research report shows that the market scale of medical devices in China reached USD 75.9 billion in 2017, accounting for 18.8% of the global market, with a growth rate higher than that of the global market for six years in a row.
However, there are still gaps in the market to be filled.
The reality that the market is getting larger is accompanied with the fact that there are still huge gaps to be filled. It is known that under the promotion of China's Hierarchical Medical Policy, continuous increase in the number of beds and patients in grass-root medical institutions are also calling for more medical devices because of great shortages. This has created a vast grassroots market which has painted a promising future for the giants.
According to the Plan for Deepening Reform of the Medical and Healthcare System During the 13th Five-Year Plan Period (2016-2020), by 2020, China will strive to provide TCM services to grass-root health institutions, covering all the community health service institutions and township hospitals as well as 70% village clinics and equip those institutions with corresponding medical treatment facilities.
"Hence, the producing capacity is exactly the one that cannot match the broad market currently. "At present, China's medical device industry is still in a "small and scattered" situation. The entering of the Internet 'major players' can stimulate the industry with an injection of funds and technologies and may boost the transform and upgrade of the industry." From the perspective of an industry observer, China's high-end medical device market is still dominated by foreign brands, while in the middle and low-end market, the distributors are scattered and under-organized. All of these call for a more integrated market.
Giants joining with capital and technology to promote the development of the industry
It is known that among Chinese medical device enterprises, only four listed companies’ registered revenues were more than CNY 5 billion in 2017, including Mindray Bio-Medical Electronics Co., Ltd., Weigao Group Medical Polymer Co., Ltd., Shinva Medical Instrument Co., Ltd., and Di'an Diagnostics Co., Ltd.. The total operating revenue of the domestic listed companies is CNY 83 billion, accounting for less than one-fifth of the overall medical device market in China. Industry data shows that at the end of 2017, there were 16,000 medical device manufacturers in China.
"There seems to be a great number of manufacturers. But most of them, actually, are small in scale and poor in competitive ability, overshadowed by foreign giants in multiple fields such as technology and humanized operation." As the observer said, the good news is that there are huge market potentials, high profit margins and preferential policies in China's medical device industry; being well-prepared, the financial Titans may as well change the market structure in the future, argued the observer.