To say China is a lucrative market for medical device brands would be an understatement. A rapidly aging population, combined with government policies as well as general consumer trends makes China an alluring market to invest in for many medical device companies looking to expand internationally.Many brands may view trade fairs in China, such as the China Medical Equipment Fair (CMEF) as an effective way to enter the market and raise brand awareness, but success involves much more than attending a trade show in China, especially when domestic brands are beginning to take hold in the market. So what do foreign medical device brands need to know about the state of healthcare in China and how this effects their marketing strategy?
In order to understand the medical device market in China, let’s take a look at the factors contributing to it’s growth;
Stemming from a baby boom during the Mao era and decades of a one-child policy, China’s population is beginning to reach a critical point of imbalance, where a large number of it’s citizens are over the age of 60. Experts estimate that by 2050 one third of China’s population, around 459 million, will be over the age of 60. While this unfortunately puts a strain on the labor force, it also creates opportunities and encourages innovation among medical device and medical technology companies, both foreign and domestic. This massive consumer group - and their children who will ultimately be their caregivers, is starting to demand high tech, quality products as well as comprehensive customer service.
At the end of 2016 the Chinese government announced it’s 13th five year plan - with a large portion of it targeting health and wellness. The aging population, as well as the decline in health of it’s overall population, encouraged the government to promote it’s “healthy China 2030” initiative. These new regulations and initiatives have spurred investment and policies that have grown the healthcare market at an impressive rate. Between 2015 and 2016 the healthcare market grew at a rate of 12% to USD 853 million, and the medical device market grew 20% to USD 56 billion. The government has also continued to reform regulations each year, including new regulations in 2017 for medical device classification and registration. These reforms demonstrate the government’s desire to help the medical device industry grow and compete against foreign brands. This is where brands entering the China market must take note - it is no longer enough to rely on brand origin, China is becoming a leader in technical and medical innovation - and consumers are aware of this.
Consumer trends affecting the medical device industry;
A 2017 McKinsey report showed that consumers are more health conscious than ever before, thanks in large to the push by the government after announcing the “healthy China 2030.” While this is a favorable trend, what foreign brands must be aware of is that this report found that brand origin is less relevant than ever before, with consumers ranking quality, value and service as highest. While foreign brands still dominate the market - Chinese brands are catching up, and they won’t be slowing down anytime soon. During 2016 National People’s Congress, President Xi Jinping called upon China to be a leader in innovation, and by doing so propel the nation’s economy. Xi announced his goal for China to become “one of the most innovative countries by the year 2020, and a leader in innovation by 2030.
As the industry becomes more crowded, and as consumer preferences no longer blindly favor foreign brands, how can these brands in the medical device industry stand out in China?
Focus on who you’re selling to
We’ve written a lot about this because it is crucial to the success of brands in China, but often overlooked. Knowing your target audience and their touchpoints is something that will save you money, time and secure a future for your brand in China. As a medical device brand, you’ll be facing increasing competition from domestic brands who have an easier time creating messaging targeted at Chinese, and may already have a high level of brand awareness. Focus on highlighting the quality of your product, the high standards of testing you do, the innovative benefits, or the after-sales service you provide.
Keep in mind that Chinese rely heavily on word of mouth recommendations, whether or not this is from immediate friends or family or an influencer (KOL), ensuring that you provide an over-the-top experience for your customers is paramount in China.
China trade fairs
As mentioned before, trade fairs like CMEF are a great opportunity for foreign medical device brands to gain awareness among their target audience, and test out the waters in China. Make sure you’ve already figured out your localized messaging and brand position beforehand. Steps to take before going to CMEF or other industry related trade fairs in China;
Invite the right people
Utilize your WeChat account and make sure to announce in advance that you will be attending, provide clear information about your booth, and why people should visit (we’ll get to this later). Promote this content using industry thought leaders, CEO’s, your sales team on the ground - make sure it is easy for people to send and share this content. Brandigo client Richard Wolf announces that they will attend CMEF, providing a detailed description of the event and their booth (photo below).
Make it personal
Send a direct mailer. Brandigo helped The Belgian Meat Association to research appropriate invitees and sent them each a personalized invitation, complete with a small gift.
Once you’ve set up shop, how to attract people?
If you’ve ever been to a trade fair you know it’s a sensory overload, so how do you attract the right people, and retain their information?
Put on a show
It sounds glitzy, but in China, people love it. One of the best we’ve seen recently is an influencer, or KOL (Key Opinion Leader) as they are referred to in China, was doing a live stream from the trade fair, attracting people to the booth, while also generating a buzz online.
Engage through WeChat
Brandigo helped client swissrent during a trade fair to develop an H5 which took visitors through an animated slideshow providing information about their app, and at the end, prompted users to enter some simple contact information. Due to the “walled-garden” nature of WeChat, a trade fair in China is a great time to grow social media fans and get them spreading content to their networks.
Chinese marketing collaterals
All marketing collaterals; brochures, your website, name cards, anything you bring with you to a trade fair in China, should all be localized. This doesn’t mean hiring a cheap translation agency to translate everything into Chinese - your messaging must be relevant, and it should be consistent across all channels. Don’t just get a brochure made, make sure any website or digital channel you’re connecting visitors to has been optimized for a Chinese audience.
It all comes back to doing your research
As more and more Chinese medical device brands look for serious solutions to compete, foreign brands cannot rely on their brand origin to do the work for them. Before showing up on the ground in China for a trade fair connect with a local team, make sure you know your target audience, advertise your presence and be able to clearly communicate the value of your product or service to those who stop by.