We asked some of the leading experts in the elderly care and rehabilitation sector in China to shed some light on the industry’s latest developments and to provide advice to foreign equipment manufacturers wanting to enter or expand in the Chinese market. Keep reading to learn some of the key points we discovered during our interviews.
If you are active in the elderly care or rehabilitation sector you are probably well aware of the potential the Chinese market holds. Because of China’s greying population there is a growing need for elderly care and rehabilitation facilities and consequently the market for rehabilitation and assistive devices has been growing at a fast pace.
However, because the market is still in its infancy it also poses considerable challenges. Foreign companies that want to successfully compete in the rehabilitation and elderly care sector in China should therefore be well informed about what to expect when entering the market.
Let’s take a quick glance at some interesting sector developments.
There is a growing need for elderly care and rehabilitation facilities. By 2050, Chinese senior citizens will number approximately 350 million, representing nearly 25% of the population. The country is however inadequately prepared for its greying population and is now playing catch-up to develop a suitable infrastructure to support its elderly demographic. In addition to having the world’s largest elderly population, China is also home to 65 million people with disabilities of which 80% cannot live without assistive devices. This, coupled with an increasing consumer purchasing power, is creating more opportunities for specialized healthcare providers and equipment manufacturers.
The private sector will play an important role. The public sector is battling with long waiting lists for nursery care homes and a lack of rehabilitation facilities. Consequently the government is relying on the private sector to help fill the supply and demand gap and is loosening certain FDI regulations in an effort to attract more foreign companies and institutions to enter the market. At this moment the majority of hospitals, elderly care facilities and rehabilitation clinics are government-owned. However, the government aims to have approximately 70% of all facilities privately owned in the near future, which will give way to more competition and force facilities to compete on products and services.
Consumers want higher quality products and services. A higher living standard coupled with more quality awareness is driving consumers to purchase better products and services. Whereas previously every purchasing decision was based on price –it is now based on value. As a result the midmarket segment is growing and creating more opportunities for high-quality product manufacturers in the retail and medical care sectors. Particularly foreign companies are able to benefit from this development because of the Chinese consumers’ preference for foreign brands. However, this mainly applies to more developed regions in the East where people enjoy the highest living standards.
A nascent market with many challenges. In terms of available products, services and knowledge China’s elderly care and rehabilitation market is still in its infancy and underdeveloped compared to more economically developed regions and countries. It’s therefore important to educate the market about your products and solutions and provide continuous training to your distributors and stakeholders. The majority of distributors are accustomed to selling on price points and not on quality or service and therefore require on-going training and support from you on how to position and sell your products in the market. Although there is no doubt the rehabilitation and elderly care market will experience high growth in the coming years, the question remains as to what type of facilities will proof to be successful in the future and the opportunities they offer to foreign equipment manufacturers.
The only way to compete is to localize. We spoke to experts from all areas in the rehabilitation and elderly care industry and everyone agreed on one thing: the need to localize. From developing elderly care communities with Chinese characteristics to creating a local sales presence and moving part of the manufacturing process to China. Localization equals competitiveness and even more so in China. Particularly now Chinese manufacturers are catching up in terms of quality, the need to compete on price is gradually becoming more important. And this applies not only to the rehabilitation equipment sector but also to the service sectors.
Visit our resources section to get a free copy of our report on selling in the Chinese elderly care and rehabilitation devices market.
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