In recent years, the market for medical devices has grown substantially in China, Mexico and Brazil. Many medical device companies are looking to these emerging markets for consistent revenue growth.
China is currently the third largest market in the world for medical devices and likely to become the second largest soon. 31% of the devices in use in China are imported from the United States. The Chinese are willing to pay premium prices for medical devices from Western countries, which they consider to the safest and most reliable. There are many governmental restrictions on medical devices in the country, so it does take some extra effort to enter this market.
Mexico’s economy has been improving exponentially, and as a result, Mexican healthcare organizations have begun importing better quality medical devices from countries such as the US. Mexicans are particularly interested in American devices, due to their high quality and reasonable prices. Also, Mexico serves many American patients who cross the border to receive less expensive healthcare than they can get in the US, and these customers prefer American devices. Since Mexico does not have high tariffs or import licenses, it is a good market for American companies seeking to broaden their customer base.
The Brazilian government is investing significant funds in improving its healthcare. Local companies are developing medical devices but there is still a large market for imports. Unfortunately, this market is harder to penetrate than Mexico’s, because the government has imposed high tariffs on imports. But both the government and private healthcare organizations are in the market for innovative and high quality devices and most of the major American medical device companies have already penetrated this emerging market.
In order to enter any of these markets, medical device companies must become familiar with local regulations and procedures. They must also rethink their current business models and distribution channels, which may contradict local regulations. They may have to establish local operations in order to be admitted into the country. They should also consider how their products will compete with or complement locally produced devices. But they can capitalize on the reputation of American medical devices to maintain profit margins and succeed in these markets.
What are the impacts of the emerging markets for your company?
At Triode, we specialize in developing new products and services for complex industries like medical devices and transportation. We work with you closely to help define product strategy, with an emphasis on reducing the risks associated with innovating in these sophisticated and often regulated consumer-oriented environments.