Asia Medical devices – The rising competition with emerging players
Being an emerging market in medical device market, Asia offer huge opportunity to expand its shares in the global medical device market. While import still dominates, local players have started to emerge as competitors, especially those in China which has recently step up into challengers to the global international players both in domestic and regional markets.
Those emerging Chinese players who used to compete through pricing by offering imitated products have posed a serious threat through innovation. Patent filing pressure, large capital, abundant resources, and strong support from Chinese government have driven the increase in R&D investment in the country. Not only large local corporations are investing but those small- to mid-size have also displayed innovation initiatives through cooperation with top research institutions.
In order to understand the upcoming threat, challenge, and competition in the medical device market in Asia, deep understanding towards these emerging players are extremely crucial. Understanding the growth strategies of these companies in the area of product innovation, market expansion, pricing strategy and cost structure, as well as sales and distribution enhancement would determine the success of global international players in sustaining their leading positions.
Take an example of Mindray, a leading local producer of imaging systems and monitoring equipment; the company has exceed an annual revenue of $1 billion through selling low-price products to lower-tier hospitals and the key reason the company was able to do so is by having a much lower production cost (up to 45%) compared to that in MNCs. In order to compete with these emerging players, MNCs are required to replicate this pricing by having tier-2 products. This can be done either through establishment of local manufacturing, new product development partnering with local research institutions, or even acquiring competing company to obtain the products, channel, and customers as well as eliminating competition.
Another example was Lepu Medical Technology, who five years ago was not present in any of international market and now its key target market is Southeast Asia, South America, and some developing countries in Europe, competing with global international players who are expanding in these geographies.
- Who are these emerging competitors?
- Which among them would be a serious threat or can potentially support our business in the near future?
- What are the threats? How can we anticipate or eliminate these threats?
- What are the current best practices in the target segments?
- How can we recover/maintain/improve our market performance/share?