On May 7, 2023, during the main forum of the 7th Future Healthcare 100 Summit, Kevin Yang, CFO of HTDK, delivered a keynote speech titled “Navigating the Post-Procurement Era to Unleash the Potential of the Medical Device ‘Central Nervous System’.” He shared HTDK’s journey of standing out in the highly competitive distribution market to become the leading private sector player.

Strategic Development of HTDK’s High-Value Medical Device Commercialization Platform

Kevin provided a detailed explanation of HTDK’s strategic layout for its high-value medical device commercialization platform. He highlighted the increasing importance of the Chinese market, now the world’s second-largest, where global high-value medical device brands lead the high-end market. For these brands, selling products in China involves complexities such as language barriers, local regulations, cultural differences, and the need for deep distribution channel and supply chain infrastructure. Leveraging its extensive experience in supporting cross-border business, HTDK helps clients reduce complexity and cost as they seek business growth in new markets, becoming a key partner in the value chain for global high-value medical device market entry and penetration.

The Growing Importance of the Chinese Market

In February 2023, Roland Berger Management Consulting published the “2023 China Medical Device Industry Development Status and Trends Report,” indicating that the Chinese medical device market size was estimated to reach RMB 958.2 billion in 2022, with a compound annual growth rate of about 17.5% over the past seven years. Despite this growth, the ratio of drugs to medical devices in China is only 2.9, compared to the global average of 1.4, highlighting significant potential for market expansion.

The high-value medical device industry in China is relatively young, about 20 years old, and exhibits three main characteristics: high industry barriers, low concentration, and overall low technical level. In categories with higher technical thresholds, such as imaging diagnostics, dialysis, endoscopy, and minimally invasive surgical instruments, foreign devices still dominate 80-90% of the market.

Challenges for Global High-Value Medical Device Brands Entering China

As domestic demand for high-value medical devices grows, so does the desire of overseas brands to enter the Chinese market. However, commercialization is challenging. Overseas brands often lack familiarity with Chinese regulations, local insights, and extensive resources, making it difficult to select compliant service providers, including supply chain warehouses, transportation services, and local sales distributors.

High-value medical devices require specialized handling due to their life-saving nature and stringent regulatory standards. Managing uneven demand and ensuring timely delivery are supply chain pain points. The devices are sold as SKUs to meet various patient conditions, physician preferences, and operational needs, often as multi-configuration kits, necessitating specialized handling, meticulous monitoring, and skilled operations throughout the supply chain.

Post-Procurement Era: A Preference for Platform-Based Partners

High-value medical consumables, crucial for safety and strictly controlled in production and use, have a market size of approximately RMB 177.9 billion in 2022, with a six-year compound growth rate of about 20%. Categories like intraocular lenses, orthopedic products, and coronary intervention consumables face significant procurement pressures. The National Medical Insurance Administration plans to expand procurement coverage and guide provinces in conducting provincial or inter-provincial alliance procurement.

To cope with procurement trends, medical device companies must focus on comprehensive product line layouts, systematic product innovation, and rapid iteration to build core competitive advantages.

HTDK’s Comprehensive Solutions for High-Value Medical Devices

According to a report by China Insights Consultancy, HTDK is the second-largest commercial solutions platform in China for high-value medical devices (including IVD equipment) by GMV in 2020, with a market share of 12.3%. It is also the largest private commercial solutions platform, offering end-to-end professional solutions, including product registration, import/export, warehousing, distribution, commercial channel management, inventory management, and after-sales service.

For ophthalmology, HTDK has developed a unique platform for integrated management and comprehensive business operations, linking manufacturer strategies, private group strategies, and hospital needs, providing quality, full-chain supply services to ensure business synergy.

For orthopedics, HTDK has developed a customized IT service system and diversified business models, helping manufacturers manage tools, improve channel efficiency, and reduce risks associated with critical surgical tools. HTDK’s diverse business forms include wholesale, bidirectional logistics, consignment services, and short-term lending platforms, collaborating with nearly 400 distributors.

Innovating in the Context of High-Value Consumable Procurement

HTDK continues to explore clinical needs, leverage commercial model innovation, and deepen market penetration with a diversified layout to find breakthrough solutions. As a leading partner for global medical brands entering China, HTDK provides professional, customized, and comprehensive solutions, helping products quickly capture market opportunities and efficiently cover national distribution networks.

Kevin emphasized, “HTDK is the preferred partner for international innovative products in China. We provide end-to-end professional commercial solutions for high-value medical devices, leveraging our commercial platform strength, nationwide sales and distribution network, and efficient processes and IT services to accelerate product commercialization.”

HTDK remains committed to collaborating with brand partners to expand China’s rapidly growing healthcare market, enhance market expansion efficiency, reduce distribution costs, and promote the accessibility of medical innovations.