China: The Wild, Wild East for Medical Devices
This article was originally published in Start Up
Executive Summary
Every medical device company is asking, "How can we take advantage of emerging opportunities in China?" Given the country's economic and population booms--China is home to one fifth the world's population--many analysts expect its medical device market to shortly come into full bloom, enjoying a compound annual growth rate of 15% over the next 10 years from a base of approximately $10 billion in 2007. Fueling this growth are positive improvements in China's business climate, making China a much less risky place to do business. Multinational firms are forming alliances in China to help them reach an untapped 1.3 billion patient population, even as a new breed of venture capital-backed, Western-style Chinese companies begins to grab a home court advantage.
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China has become especially enticing as an unpenetrated, gigantic health care market, especially since the government in 2009 signed into effect a health care reform bill promising $125 billion over a three-year period to modernize the infrastructure of health care and provide insurance coverage to hundreds of millions of people. Medical device companies look to China as an enormous and rapidly growing market for medical disposables and equipment. However, the complex nature of the distribution infrastructure in China will make it difficult for companies to get a foothold. Headquartered in Beijing, TCT Medical Inc., which recently received $10 million in venture funding from Fidelity Asia Ventures and Fidelity Biosciences, its sister firm in the US, offers a potential solution for companies focused on women's health, and a model for the future.