China’s Med-tech Sector: Technology Takes Time
China is pursuing a great leap forward in high-end medical equipment. By 2025, the government hopes that 70 percent of high-performance medical devices sold in the country will be local. Are Chinese manufacturers on track to reach this target?
Wieland Paul shared his view on this and other industry trends from his position as Director of International Sales at PARI – a leading German manufacturer of respiratory therapy equipment. A lot has changed in the Chinese market since PARI entered it nearly 20 years ago: fast-growing online channels, tighter regulations, and a rise in respiratory sicknesses. But in the company’s niche, the technological lag of local competitors remains.
Are Chinese manufacturers matching the quality of foreign medical devices?
In our product category, Chinese manufacturers are not competing in the premium segment yet. Some of them have grown big and are even branching out internationally, but their focus is on the very low-price segment. We are seeing more devices that are similar to ours in terms of look and design but their performance and technology are still behind.
“It will certainly take time for Chinese manufacturers to get to where we are now”
Inhalation devices are always used together with medication, and getting the right combination takes extensive testing. We have invested a lot of time and resources into this since our beginning in 1906 to ensure stable quality, and we are backed by over 300 scientific publications providing clinical proof for our products. It will certainly take time for Chinese manufacturers to get to where we are now. Because of their focus on low prices, investing in quality control might be a challenge for them.
How do you deal with the challenge of having less competitive prices?
With our high quality products we are in a unique position. Most nebulisers in the world are made in China, and within China cheap devices take a big share. But the demand for our “made in Germany” products is growing. Aside from that, we are now looking to localise our business more to develop products that are even more suitable for the Chinese market in terms of quality, price, and design.
PARI SINUS is a nebuliser system for treating acute and chronic sinusitis – one of many respiratory sicknesses that are becoming more frequent in China due to severe air pollution.
What is driving China’s growing demand for high-end medical devices?
In our segment, China’s air pollution problems paired with improvements in diagnostics are important factors. Our products help people with airway diseases, such as children with allergies or asthma as well as patients with sinusitis or chronic obstructive pulmonary disease (COPD). Some of these conditions become more severe with pollution.
In terms of business segments, the fastest-growing one is home care – patients who buy devices for personal use at home – a large part of which is online. The proportion of online business in China is certainly bigger than in Germany. It’s important to work with experienced partners and key online platforms to seize opportunities in this channel.
Are you also facing new difficulties?
At the moment, we are spending a lot of time and money on the registration process for some of our new devices, often much longer than the period outlined in official documents. Counterfeits and trademark infringements are another on-going challenge. Sometimes our customers are confused by companies who falsely claim to represent PARI products in China.
How do you overcome these challenges?
What we always do, also in China, is build a very strong relationship with key opinion leaders such as doctors. We collaborate with them on trainings, studies, and papers to prove that our products are up to standard not only in terms of regulations and quality, but also from a scientific point of view.
What can foreign medical devices firms learn from their Chinese peers?
It would certainly be good to get some of their speed. In China we see new products emerge every few months. They try different things and improve their quality over time, whereas we have longer processes to make sure that every product we bring to the market is 100% perfect. There is a reason why we take longer. Any mistake would damage our brand, which is already established worldwide, so the pressure is bigger. Having a local team involved in product development and production will help us follow the speed of the Chinese market better and offer an even better service to our local customers.
Contact us at contact@fiducia-china.com for strategic and implementation support in Greater China. Drawing from our extensive experience in the med-tech sector, our team can guide you through the complexities of registering products with the CFDA, localising your operations, finding the right distributors, building a go-to-market strategy, and more.