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Expanding Profitability in Chinese Grassroots Markets

22 August, 2012 | imaging equipment, medical equipment, News

As part of China’s campaign to improve public access to health care, its grassroots rural areas have been enjoying a much needed infusion of government funding to the tune of $9.86 Billion USD. Medical equipment purchasers need to equip 33,000 new and renovated facilities with cutting edge medical equipment. Although health care providers lean towards the stability and durability of major western medical equipment companies, facility budgets necessitate practical problem solving strategies from equipment companies to balance affordability with western quality.

In addition to major medical equipment, there is demand for wireless diagnostic devices for traveling doctors who take care of widely dispersed rural communities. Doctors’ require affordable, reliable, devices for imaging and vitals monitoring with wireless capabilities for diagnosis consultation with other doctors located at larger facilities.

Major medical equipment companies GE Healthcare, Siemens Healthcare and Philips Healthcare who combined already represent 70 percent of the high end medical device market in China have been gearing up to expand their market share in this new growing rural market and meet their immensely diverse needs As an example,answering to the challenge to maintain quality on all products and yet reduce their prices, these major manufacturering companies have established production and development centers in western China where they can increase cost efficiency by using the local work force and domestic parts.

Competing western medical equipment companies are focusing their market expansion efforts on the medium cost area which they feel has the most potential for growth. For example, GE Healthcare plans to market 32 new medical products, 70 % of which will be geared towards China’s rural market over the next 3-4 years.
Similarly, company Siemens Healthcare has launched a 2-yr initiative to focus on mobile medical devices in the ‘medium price range’ in new and developing markets. This initiative includes R&D development of products specifically for county hospitals in rural China.

The relative ease in commercializing new products as well as the high demand for western quality medical equipment technology makes increasing market presence and distribution channels in China and the rest of Asia to be highly profitable and forward thinking.