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Chinese companies increasing share in medical ultrasonic equipment market

By Zheng Yiran | China Daily | Updated: 2019-05-31 11:02
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A visitor tries out a medical ultrasonic diagnostic equipment at a health industry expo in Kunming, capital of Yunnan province. [Photo provided to China Daily]

The market size of China's medical ultrasonic diagnostic instrument industry is estimated to reach $1.58 billion by 2022, maintaining an average annual growth rate of around 6 percent, and domestic brands will see more opportunities thanks to technological advances, rising demand, and supportive policies, a recent report said.

The report by market research consultancy QY Research showed that in 2016, the country's medical ultrasonic diagnostic instrument market was $1.15 billion, and its 6 percent average annual growth rate is double the global growth rate of 3 percent.

The market volume generated by hospital color equipment replacement will be 7 billion to 20 billion yuan ($1.04 billion to $2.98 billion) because major hospitals normally change their color equipment every three years, an estimate by QY Research said.

"Currently, the market pattern of China's medical ultrasonic diagnostic instrument has changed from foreign brands' absolute monopoly to a relative monopoly," said the report.

Before 2004, no domestic companies produced color equipment, and the market was totally monopolized by foreign brands. Between 2004 and 2006, General Electric Co, Royal Philips and Siemens AG accounted for 95 percent of market share, QY Research explained.

But domestic brands such as Mindray and SonoScape, which are both headquartered in Shenzhen, entered the medical ultrasonic diagnostic instrument market and their entry resulted in over 30 percent and 20 percent price drops for the low end and medium to high end color equipment respectively.

Data by the China Association of Medical Equipment showed that as early as 2015, the sales volume of Mindray's color equipment had surpassed those of foreign brands such as GE, Philips and Siemens, breaking their absolute monopoly.

Domestic brands are now entering the global market. Data from Wismar Equipment Research Center said China's export volume of color equipment has steadily risen in the past few years. In 2017, exports reached $600 million, up 19.28 percent on a year-on-year basis.

Statistics from the General Administration of Customs showed that domestically produced color equipment is now exported to 160 countries and regions, with Asia, North America and Europe the main targets.

He Xujin, general manager at the Medical Imaging System Division of Mindray, said that "with China's economic development and policy support, Chinese medical ultrasonic diagnostic instrument brands are growing rapidly. The market share of domestics brands in China increased from 5 percent in 2006 to 28 percent now.

"Currently, Chinese companies are gaining a firm foothold in the high-end medical ultrasonic diagnostic instrument market, and accepted widely by users. The dominance by foreign enterprises results in high prices for the devices. The rise of domestics brands has brought prices down."

He noted that with rising income levels of Chinese residents and the public paying increased attention to health issues, healthcare demand has gone up.

"Medical ultrasonic diagnostic instruments have no radiation hazards and are cost effective with high level of performance. Therefore, it is being applied in more and more medical institutions. In addition, the government has also been offering favorable policies, encouraging the localization of high-end instruments. China is undergoing medical reforms to enable patients to get easier and cheaper treatments where domestic devices are needed," the Mindray official said.

He added that China, as the fastest-growing medical ultrasonic diagnostic instrument market in the world, is likely to become the largest market player in one to two years, and domestic enterprises are the biggest winners. "Chinese brands have high cost performance, and the quality of their products is getting better."

Market insiders said that China's medical ultrasonic diagnostic market is also entering an era of artificial intelligence and big data so the market volume is expected to expand.

Domestic brands in the market are shifting their focus from the low-end market to the medium to high-end market, and some new enterprises are targeting high-end color equipment. Domestic companies have begun to attach more importance to research and development and innovation.

While there is still a gap between domestic and foreign companies, and with policy support, a better market environment, and the efforts of local companies, the rise of domestic brands is a trend that is expected to continue in the years ahead, they said.

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