Medical network - on November 10, 2016, continuous release positive policy in the country, driven by domestic medical equipment manufacturers to complete the import substitution also entered the crucial years in an instant, multinational medical equipment giant is still the biggest opponent: they side still firmly grasp the high-end medical equipment market "initiative", high-end market coverage reached 85%, the other side of the strategy of "localization" and layout are flawed.

Only look at price, ignoring technological time is past, the domestic medical device manufacturers battle "import substitution" how broken?

Import substitution tide

Three big multinational medical equipment giant GPS (GE, philips, Siemens) the collective absence from this year for the first time the 76th CMEF (China international medical equipment fair fall).

This article is modest in the circle of news: said big, because as an industry event, CMEF has held 76 sessions, in previous years, often at the fair directly when purchasing, GPS collective absence is incredible; Said is not big, because since last year, including GPS equipment manufacturers began publishing news, in the future will no longer take part in the autumn fair, "collective absence" also can be said to be within the expected.

Card side, including al film, mindray, neusoft domestic medical equipment manufacturers to replace the GPS became the mainstay of this exhibition, it's a bit like a microcosm of China's 300 billion medical equipment market nowadays, domestic goods are on the map, import substitution spring really come. In spite of the transnational giants momentum fierce "localization" strategy, the alternative is not easy.

Data show that in the current domestic medical device market accounts for only 14% of the total pharmaceutical market share, the proportion in the world is 42%; The global medical device industry is expected to average annual growth at 4.1%, but the Chinese compound growth rate has reached 20% in six years, China's medical equipment market is "fat", who all want to fight.

"Want to use the method of high efficiency to pursue import vendors. If you want to compete head-on and GPS, will be very difficult, so you need to use some differentiation method, chasing in certain markets." Chairman of mindray medical ChengMing and told the first financial daily "said in an interview.

But he also admitted that the era of purely on price to fight for market share is over. According to the state development planning commission of statistics, the current domestic medical equipment in the domestic market accounts for absolute number is lower than not, even more than 80%, but focus more on the mid-range, vicious competition. And imported medical equipment to the number of less than 20% proportion, won 90% of the market profit. Local companies want to turn a profit, to improve technical strength is still the only way.

Mergers and acquisitions and synergy

But, unlike the traditional way, local companies are faster and more directly through mergers and acquisitions path to complete technical breakthrough, in the process, the capital is playing A more and more important role, domestic medical equipment A few giants: neusoft, diving, Germany early already in a-share listed, mindray in 2006 after the nyse listing way for mergers and acquisitions, and privatised back this year, looking for A bigger space for domestic capital; And, according to people familiar with the shadow is also listed in the sprint planning.

"From mindray since going public in the United States, eight years before and after we finished nine domestic mergers and acquisitions, cross-border mergers and acquisitions, 3 times on the merger and acquisition, we open the overseas market, has been in the key technology of niche." ChengMing and revealed to merger three years ago the United States the manufacturer of the ultrasonic diagnosis system ranks fifth ZONARE (ZONAREMedicalSystems, Inc) as an example, based on the merger and acquisition, mindray knocked on brand trust high ultrasonic markets in the United States, and once the occupancy of the ultrasound market increased from 8% to 10%. In the integration of three years later, the combination of ZONARE technology accumulation, introduced a domestic brand Resona7 ultrasound, won the red dot award. Relying on such a technical breakthrough, the domestic market, the monitor is first in the number 2015, philips, mindray rose to second, GE third; The lighthouse bed occupancy of mindray market has ranked first; In anesthetic, medical equipment, biochemical analyzer, ultrasonic market, mindray have third position the market share.

"In fact, after the merger of synergy is important, we are still stay in the United States's approach is to technical team, to shift production to China, to reduce the cost. Both China and the United States in the process of technology, the production team there is overlap, need to integrate repetitive functions, leave what we really need. On management, IT, finance to unicom, but separate management, we mainly adopt is the general manager responsibility system, the local staff or run by local people." ChengMing and the "first financial daily" reporters.

Creations based on the acquisition of technology upgrade, there are a few steps is critical, first is the need to use the vertical procurement cost advantages, in the price than imported equipment more attractive; Secondly, on the channel they choose more layout to the township hospital these past has not yet been fully tap the market, with GPS on China's "emerging markets" on the same starting line competition; Third, must complete talent management train of thought on strategy, because of frequent flow of talent in a multinational company, sustainability is poor, but for enterprise, talent is very important; In addition on the after-sale service, they will try to get experience of medical institutions to domestic medical equipment: the ratio of bad time, multinational companies usually products will collect money for the maintenance of a domestic equipment manufacturers association packaging services for many years, however, this for daily maintenance of medical equipment can save a lot of money.

Resource integration

As early as in 2014, President xi jinping has said, medical equipment is necessary for the development of modern medical means, and to accelerate the process of localization of high-end medical equipment, reduce costs, promote national brand enterprise continuous development. Then, in 2015, the state council promulgated "made in China 2025", also the domestic high-end medical equipment into strategic task and emphasis. And just released the "healthy China 2030" planning outline also said China construction to promote health.

"In the stock market now, more than 85% of the high-end market is dominated by GPS, but with the development of policy as well as the medical equipment renewal time node comes, the domestic medical equipment will have a great alternative space, the trend is clear." Medical industry is very high for investors who managing partner Yu Jianlin in an interview with "first financial daily" reporter said.

In his view, with the domestic medical equipment together with the rise and trade m&a tide, "including mindray, shadow, and three biological, diving, everyone only has niche in their own competition advantage, China's medical equipment industry concentration degree is low, there are more than ten thousand medical equipment manufacturers, but the United States is only a couple of hundred, including Johnson &johnson, roche is more than billions of industry scale, so the trend of mergers and acquisitions in the future will be very obvious."

In fact, the trend of m&a has emerged, according to pricewaterhousecoopers released in June this year, the China medical equipment industry merger review and outlook report: China market in 2015 a total of 81 medical equipment acquisitions (not including overseas mergers and acquisitions), more than 2014 in 69 increased by 17%. Including 57 deals from local strategic buyers, followed by risk investment trading (12), private equity deals (7) and strategic buyers abroad (5). In terms of trade value, the value of more than 16 trading at more than $50 million, the average deal worth $56 million, that number was 83% higher than in 2014, deals worth $3.9 billion, up 156% from a year earlier.

"The state shall encourage medical equipment localization is to the Chinese manufacturer, actually for hospitals, doctors at the end of the day and see how a product's cost performance. For us, it can make use of local advantages, integration of high quality resources to the chain through." ChengMing and said, "through integration of resources, to realize the systematic layout, then when competing with foreign manufacturers will also have more advantages."