Analysis of Sales Scale and Market Concentration in China's Medical Device Industry

According to the report released by the China Research Institute of Industry《2018-2023 China's Big Health Industry Competition Analysis and Investment Risk Prediction Report》statistical data show

the current operating status of China's medical device industry

I. Analysis of industry sales scale

With the improvement of the living standards of Chinese residents and the strengthening of medical and health awareness, the demand for medical devices continues to grow. Affected by the national medical device industry support policies, the domestic medical device industry has entered a stage of rapid growth. Data show: From 2010 to 2016, the domestic medical device market size increased from 126 billion yuan in 2010 to 448.44 billion yuan in 2017, with a compound annual growth rate of 19.67%.(Editor's Note: The market size in 2018 was 530.4 billion yuan)

Chart: Sales scale and growth rate of China's medical devices from 2010 to 2017

Although the sales volume of the domestic medical device market has grown rapidly,However, the consumption ratio of drugs and medical devices in 2015 was only 1:0.33, which is far lower than the global average of 1:0.7 and lower than the 1.02:1 level in developed countries,Therefore, the domestic medical device market has broad development prospects, and the market is far from saturated.

II. Market concentration analysis

1. Market concentration analysis

In China's medical device market, whether in production or sales,the concentration is relatively low.In 2014, the estimated annual sales revenue of 20 listed companies was 37.2 billion yuan, accounting for 14.55% of the total industry sales, whilein the medical device retail market, there is currently no listed company。

2. Enterprise concentration analysis

The top 10 medical device companies in the worldare Johnson & Johnson, Siemens, GE Healthcare, Medtronic, Baxter, Philips Healthcare, Boston Scientific, BD, Stryker, and B. Braun.

Chinese local medical device enterprisesAmong them, Mindray Medical, Yuwell Medical, Weier Technology, Jiuan Medical, Dongsoft, Lepu Medical, Wego, Microport Scientific, Yangpu Medical, Changfeng, Weida Medical, Xinhua Medical, Wanjie Gaoko, China Medical, Shanghai Medical, etc. are relatively leading brands.

3. Regional concentration analysis

From the geographical distribution, China's medical device industry is concentrated inthe eastern and southern coastal areas. The top six provinces account for 80% of the national market share, showing the medical device industryhigh degree of regional concentration. The Yangtze River Delta region, represented by Shanghai and Jiangsu, and the Bohai Bay region, represented by Beijing, mainly attract Investment, forming a dominant industrial cluster with foreign-funded enterprises as the main body.

The Yangtze River Delta region has an absolute advantage in disposable injection and infusion sets nationwide; the Beijing region has an absolute advantage in CT machines represented by GE; Shenzhen's medical device industry has developed from nothing to become an important manufacturing and processing base for China's high-end medical device industry in just over 10 years, and products such as medical imaging, blood analyzers, and patient monitors also have a place in the international market, with strong development momentum.

III. Scale of production and operation enterprises

China's medical device supervision regulations classify medical devices into Class Ⅰ, Ⅱ, and Ⅲ according to the degree of safety control during application, from low to high,Generally speaking, the higher the safety control level of medical device products, the higher the product added value and technological content.As of the end of November 2015, there were a total of 14,151 medical device manufacturing enterprises nationwide, including 5,080 Class Ⅰ, 9,517 Class Ⅱ, and 2,614 Class Ⅲ. From the statistical results, Class Ⅱ medical device manufacturing enterprises have always been the main body of China's medical device production. From January to November 2015, Class Ⅱ and Class Ⅲ manufacturing enterprises accounted for 67.25% and 18.47% of the total, respectively, which to some extent indicates that the technological content of China's medical device production is relatively low, and the product structure needs further optimization. In addition, the regional distribution of medical device manufacturing enterprises across the country is very uneven, mainly concentrated in the southeastern coastal urban areas.