Release date: 2008-08-01
Philips values ​​China's 100 billion medical equipment market
"Philips will increase its investment and acquire the leading companies in China's healthcare sector in a timely manner, turning the Chinese market into a bridgehead for Philips' transformation into a global healthcare leader." July 24, John Miclot, CEO, Philips Home Healthcare Solutions Said to reporters.
Shao Jun, director of program development for Philips Healthcare Greater China, believes that high-energy, low-consumption semiconductor medical electronic products that are domesticized, portable, and networked are increasingly favored by the market. The corporate strategy of “entering the family health care field†will be the first in China. High-growth emerging markets such as India have started. “Philips is also sharing the fast-paced localization channel of the home medical equipment market while sharing the feast of high-end basic medical equipment brought by China's medical reform.â€
In this regard, Zhang Yihua, director of the communications department of Philips Electronics China Group, confirmed to reporters that Philips has indeed adjusted its China market strategy as planned, simplifying its business structure and establishing three business divisions - Philips Healthcare, Philips Lighting and Philips Quality Life.
In fact, this is an extension of Philips' global adjustment. Earlier this year, global CEO Ke Cilei slimmed down Philips, who had done everything, and cut five branches into three, focusing on healthcare, lighting and home appliances - a household name branch and the production of electric razors. The branch of small household appliances and personal care products is integrated into the Quality Life Division; the medical imaging equipment is produced exclusively for the medical equipment part of the hospital, and it is merged into the part of the home quasi-professional medical care equipment production to become the new healthcare business unit.
Expanded Chinese market
“China is already the third largest medical device consumer market in the world, and the Chinese government’s investment in medical equipment is still growing at a rate of 13% per year.†John Miclot believes that in 2007, the economy accelerated and the hospital informationization process accelerated. Under the influence of several relevant favorable factors such as changes in relevant national policies, the scale of China's medical electronics market is close to 25 billion yuan, reaching 24.68 billion yuan, an increase of 17.1% year-on-year, which is significantly higher than the growth rate of similar global markets. With the significant increase in middle class income, People's health awareness has increased, and household medical device consumption has accounted for about 75%, far higher than the global average of 45%.
“It’s critical that Philips’ health care revolution can quickly reach the home digital health market and succeed.†John Miclot points out that imaging technology products, such as X-ray and ultrasound monitors, and other products that detect patient health are almost Accounted for 1/3 of Philips' total annual sales in 2007; but with the advent of the era of high global inflation and the introduction of relevant procurement regulations in the US market, spending on high-end medical devices is being significantly reduced; while on the Internet and semiconductor technology Under the rapid development, the health awareness of emerging market people is awakening, and with the aging of society, the market of low-end and mid-range electronic medical equipment is rapidly expanding. “So the traditional positioning of China to Philips globally has changed†Manufacturing R&D base is the most important consumer market."
In this regard, Song Yu, deputy general manager of CCID Consulting's Semiconductor Industry Research Center, pointed out that although the current regional structure of the global medical electronics market, the United States, Europe and Japan are still the main market for medical electronics, but with the medical electronics in these regions The system is becoming more and more perfect, and its growth space and potential are very limited. The emerging regional markets, such as the Asia-Pacific region represented by China and India, are driven by the rapid growth of the economy on the one hand. Under the circumstance, the medical electronics market has maintained a high growth rate in recent years and has become an important region driving the growth of the global market. “So it has become a new market target for international big companies to compete for.â€
"According to China's "10th Five-Year Development Plan for Medical Device Industry", by 2010, the total output value of medical devices in China will reach 100 billion yuan, and the share of the world medical device market will account for 5%, which will surpass Japan and become The world's second largest medical device market." Song Yu believes that the combination of the above two figures combined with Chinese household medical equipment up to 75% is enough to illustrate the use of cutting-edge technology such as modern computer technology, semiconductor technology, precision optical technology and the Internet. The digital home healthcare products and services have huge commercial space in the future Chinese market.
Song Yu expects that China's portable medical electronics market will enter a stage of rapid growth. Portable medical equipment such as electronic thermometers, sphygmomanometers, blood glucose meters, disease monitoring systems will become an important driving force for the next round of semiconductor market growth.
M&A expansion
In April of this year, Philips wholly acquired Shenzhen Jinkewei Industrial Co., Ltd., the second largest patient monitoring company in China, and integrated it into the patient monitoring system of Philips Healthcare.
“Successful mergers and acquisitions of Jin Kewei are the first step for Philips to expand the Chinese family health care market. In the future, it will also adopt a series of combined M&A actions to increase investment in China’s domestic healthcare market and compete for market leading position. Shao Jun said that Philips will continue to invest more in the Chinese market, focusing on family and community health care products, and promote the popularization of the Chinese family health care market.
For the acquisition of Philips Medical in China, industry insiders generally believe that it is Jinkewei's sales channel layout in the field of patient monitoring, after Philips accounted for 38% of the global patient monitor market, mainly in China. Occupy the high-end market in the field of patient monitoring, but it has been difficult to make a big difference in the family medical market. The wholly-owned M&A, according to Philips' prediction, will expand Philips' market share in China's medical field, which is expected to bring annual About 10% growth.
In this regard, Shao Jun said that home medical equipment is very different in sales and service from products supplied to professional medical institutions, and needs to be sold more efficiently and in close proximity to consumers.
The reporter was informed that internal news from Philips China shows that following the merger and acquisition of Jin Kewei, Philips' new investment plan in China may start in the year, the focus of mergers and acquisitions in the field of lighting and healthcare, and Philips is currently the second largest in TCL Group. Shareholders and established a joint venture with Neusoft in the CT field.
At present, on the one hand, Philips is actively looking for ways to sell the Chinese market to Chinese families in the form of “lifestyleâ€; on the other hand, traditional domestic medical equipment companies are also keeping up with the pace of the market. .
A medical equipment dealer in Beijing told reporters that China's medical equipment market was basically monopolized by Philips, General Electric and Siemens, and the competition among the Big Three in the Chinese market has shifted from technological innovation competition to product price competition. The price has shrunk. The price of a 16-slice CT machine from Philips was 800,000 US dollars two years ago. Now even the 64-slice CT machine has entered China, which forced the 16-slice CT machine to drop sharply. At $500,000, the same equipment still sells $800,000 in the US market.
"No way, China as an emerging market, technology products are faster than mature markets in Europe and America, coupled with fierce competition and increasing price pressures." The dealer said that the procurement mechanism relative to high-end medical equipment has been formed, The price competition is fierce. The medium and low-end home medical electronic equipment not only has more and more market demand, but also the price is relatively opaque. The sales profit of some equipment can even exceed 50%. In addition, there are not many multinational companies that are fully engaged in the market. Not enough yet. ——Shanghai Medical Device Industry Association
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