Medical Devices and Healthcare IT

China Medical Electronics Set for Bustling Growth

25 October 2013

China’s medical electronics market is set for strong double-digit-rate expansion by the end of 2013 and in the next few years ahead, propelled by demand for equipment in a country increasingly beset by First World-type ailments, according to a China Electronics Supply Chain topical report from IHS Inc.

Total revenue for the China medical electronics industry will reach an estimated $5.47 billion at year-end, up 15 percent from $4.74 billion in 2012. Next year’s growth will be even higher at 16 percent when revenue hits $6.34 billion, with the three years after that yielding near-equivalent expansion rates ranging from 13 to 14 percent. By 2017, China’s medical electronics market will be worth some $9.25 billion.

China is the world’s third-largest medical equipment market, making up nearly 9 percent of global medical electronics revenue this year. More than half of industry takings are derived from overseas markets, but Chinese exports of medical equipment slowed slightly during the first half of this year compared to the same time a year ago, victim to global economic unease.

Nonetheless, the country’s medical electronics industry continues to grow because of various factors. China is rapidly urbanizing even as its population shows signs of aging. Meanwhile, demand for medical care is expanding in the rural areas, investment into the medical sphere is flowing from the private sector and medical insurance coverage is improving.

But the industry is also hobbled by a few challenges, including a lack of scale in medical equipment manufacturing, insufficient funding for research and development and generally weak innovation that has resulted in a severe homogenization of the market at the low end.

Technological barriers explain why international vendors are mainly responsible for driving the country’s vigorous blood-glucose-monitor market, among the most promising segments in the consumer medical electronics space. While there are more than 30 manufacturers of blood-glucose-monitoring systems in the country, it is the global giants—Roche, Johnson & Johnson, Bayer and Abbott—that dominate in the field, possessing a combined market share in 2012 of 65 percent. Some smaller international brands make up another 5 percent, so total share for non-Chinese vendors in the blood-glucose-monitor market stands at approximately 70 percent.

The rise in demand for blood-glucose monitors is especially striking as diseases typical of sedentary First World lifestyles and rich diets from the developed world manifest in China, by all accounts a developing nation despite having the world’s second largest economy. Diabetes, for instance, is now the third-largest chronic ailment for the Chinese as incidence rates rose rapidly in the past decade.

Other important medical health devices besides blood-glucose monitors are hearing aids, heart-rate monitors, digital thermometers and blood-pressure monitoring devices. The devices are all part of the consumer medical electronics segment, in which revenue is driven mainly by surging demand for home-use portable electronics.

The consumer segment is, in fact, the second-largest sector of China’s overall medical electronics trade, exceeded only by the imaging equipment division. Other segments in China’s medical electronics market are diagnostics, therapy, patient monitoring, information and medical instruments.

In the area of medical electronics semiconductors, revenue from the China market is projected to reach $296 million at the close of 2013, up an anticipated 18 percent from 2012.

Semiconductor innovations in medical electronics mainly focus on aspects such as high integration, high performance, standardization and miniaturization, and solutions with high functionality that lend themselves to easy integration are required.

Read more >> Blood-glucose-monitoring market growing rapidly

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