Medical technology is poised to become one of the industries expected to break through in emerging markets and move onto the global stage due to soaring demand for medical care, according to a Boston Consulting Group (BCG) report released over the weekend.
In the medical technology industry, emerging markets currently account for less than one-quarter of the industry's global revenue, yet their stake is likely to reach nearly one-third by 2022, the report noted.
As the second-largest market in this sector, China is projected to record annual growth of about 13 percent from 2015-22 with local Chinese companies making inroads, it said.
The Chinese medical technology market has maintain double-digit growth for over a decade, according to data from U.S. official website export.gov. In 2016, the market reached .38 billion, increasing 20.5 percent year-on-year, the data showed.
Medtech companies in emerging markets have the potential to grow rapidly from a small base, the report said, noting that among the top 100 global pharmaceutical companies, revenues of those from emerging markets has risen from .5 billion to 9 billion in a decade since 2005.
Compared with multinationals that currently hold a strong position in emerging markets, companies in these markets have shown their in-built advantages in lower costs, localized products, innovative marketing approaches and government support, according to the report.
For example, China's Mindray, one of the leading global providers of medical devices and solutions based in Shenzhen, South China's Guangdong Province has a presence in nearly three-quarters of the medical organizations in India by conducting deep customer research, establishing local operations and tailoring its products to meet local needs.
Wego Group, a medical device and medication company based in Weihai, East China's Shandong Province, offers another example. The company's orthopedic plates for mending bone fractures are less expensive and reimbursed at a higher rate than imported products in China.
Despite their relatively small shares in the medtech industry, emerging-market companies are endeavoring to catch up by making acquisitions and fostering innovation-led, organic growth. Several of them have bolstered their international presence, the report noted.
For example, Mindray ranks the third among suppliers of patient-monitoring equipment across key global markets in China, Japan, Europe and the U.S.
In face of the rising challenge of their emerging-market competitors, many multinationals have adjusted their strategy by adapting their product portfolios, reducing costs, localizing their marketing approaches and acquiring emerging-market competitors, the report showed.