Catching the Tiger's tail: Medical device companies hope to ride India's health care boom

Catching the Tiger's tail: Medical device companies hope to ride India's health care boom

by Brendon Nafziger, DOTmed News Associate Editor | July 25, 2011
From the July 2011 issue of HealthCare Business News magazine


GE Healthcare, for instance, boasts a compound annual growth rate of 30 percent from its Indian division. And according to a recent interview with that group’s president, GE expects to keep in line with market projections, and more than double its sales over the next few years, going from $400 million now to $1 billion by 2015.

GE’s rivals tell similar stories. Royal Philips Electronics said its health care business grew 43 percent in India last year. And Siemens Healthcare’ most recent quarterly report, in May, found health care grew 47 percent over the same period last year.

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Many of these companies have turned to partnerships – or outright acquisitions – of local companies to produce “no-frills” products specifically designed for the Indian market. For instance, in 2008, Philips bought Alpha X-Ray Technologies, an Indian manufacturer of cardiac X-ray scanners. A Philips spokesman told DOTmed News the Dutch giant intends to use Alpha’s industrial footprint to make middle-range scanners that will cater to buyers in India and elsewhere in the developing world.

For imaging, imports lead the way
For now, the bulk of India’s imaging equipment comes from abroad, with refurbished and used equipment accounting for a sizable bit of sales, analysts say.

According to market analysts with Millennium Research Group, imports account for nearly 80 percent of new and used imaging systems. Foreign-made goods are especially dominant for high-end equipment, such as 3-Tesla MRI scanners and CT scanners with more than 64 slices, where the prestige of U.S. and international brands helps drive sales.

“Presently, the majority of India’s medical devices are based on foreign-made products; there is a tendency to view foreign-made products as more superior to locally manufactured devices,” Cindy Yip and Prabjot Bal, analysts with MRG, told DOTmed News by e-mail.

Indian dealers frequently trade in refurbished equipment manufactured abroad, and the country is relatively open to used and repaired goods. In fact, the U.S. Department of Commerce classifies it as one of several countries that allow the import of used products on the same terms as new ones.
Also, customs duties are typically lower for refurbished than for new equipment, Yip and Bal said, further increasing their appeal to thrifty buyers.

Low prices, big challenges
Still, the attraction of refurbished equipment points to one of the main challenges for foreign companies doing business in India: low price points and slow turnover. In fact, Yip and Bal said many Chinese companies have struggled to make a profit in India, because of the preference for low-cost goods.
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Sonia Bhola

FROZEN FLAMES-Medical device companies....

July 26, 2011 10:17

Very Interesting article indeed , However I would like to add some pointers as follows:-

1. "Partner with locals" adding to what yip & bal I wish to say that ... The easiest market entry strategy as per them is counter productive ALWAYS....The idea of USING THE OTHER PROFESSIONAL / PARTNER is VERY NEGATIVE. WHY CANT WE HAVE A PARTNER AND WORK TOWERS A COLLECTIVELY BENEFICIAL BUSINESS RELATIONSHIP FOR A LONG TERM BUSINESS RELATIONS.
It is not a one man job to have a decent market share in the INDIAN health care market.

2. Pick the right model:INDIA is a very vast and UNORGANIZED territory to analyze... ITS NOT CORRECT TO SAY.. "Indian businesses prefer capital purchase to leasing or subscription models"
In fact the INDIAN purchaser is more keen to acquire the equipments on LEASE, If we can have the same model of sales as in US or EUROPE, The BUSINESS TURNOVER ANALYSIS CAN BE THREE TIMES COMPARED TO CURRENT ASSESSMENTS OF MARKET.

Skip the IT: I am surprised to note that yip and bal say "Weak information technology infrastructure and the high costs of implementing health care IT mean the demand for these products is often lower in India"

I WOULD LIKE TO ENLIGHTEN THEM, BY REMINDING THEM THAT THE SERVICE AND MANPOWER COSTS IN INDIA ARE IN FRACTION OF THE SAME IN US OR EUROPE.
AND INDIA ALSO BOASTS TECHNOLOGICAL ADVANCEMENT COMPARED TO ANY COUNTRY.

REFURBISHED MEDICAL DEVICE MARKET IN INDIA IS VIRGIN, AS VERY FEW "REALISTIC" MARKET ASSESSMENTS / SURVEYS ARE CONDUCTED.

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Sonia Bhola

REFURBISHED EQUIPMENT MARKET

July 26, 2011 10:17

Hi,

We are determined to organize Biomedical Device industry and have started a few initiatives already.

Inviting all experts and professionals to join the movement...

We remain at your disposal for any other information.

Regards,
Sonia Bhola
+919990056364
Complete Medical Equipments
completemedicalequipments@gmail.com

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Sonia Bhola

REFURBISHED MEDICAL EQUIPMENT MARKET IN INDIA.

July 26, 2011 10:17

INDIA has a vast market for REFURBISHED medical equipments, As the market is very price sensitive along with being very cautious for the after sales service of the equipments, As there are very few trained, experienced and qualified engineers to assist in case of breakdowns.

We need to have a partnership in which the overseas companies identify a INDIAN partner , HAVE A POLICY OF EQUIPMENT DEPLOYMENT IN INDIA, TRAINING THE INDIAN PARTNER, AND TECH TRANSFERS.

WHAT COMPANIES DO AT THE MOMENTS IS... TO SELL THE EQUIPMENTS TO INDIAN DEALERS ON AS-IS BASIS.

VERY FEW DEALERS IN TURN ARE TECHNICALLY SOUND, AND QUALITY CONSCIOUS!!!! THEY IN TURN OFFLOAD THE EQUIPMENTS IN MARKET....WITHOUT SERVICE BACK -UP!!!!!

THIS SITUATION REFRAINS THE CAPITAL EQUIPMENT PURCHASER TO BUY A "REFURBISHED" MACHINE, THEY DON'T EVEN BUY THE "NEW" MACHINE AS THE COST IS PROHIBITIVE.

THE SOLUTION OF THIS SITUATION TO HAVE "EQUIPMENT DEPLOYMENT" IN INDIA ALONG WITH TRAINING THE INDIAN PARTNER, AND... LETTING BOTH THE PARTNERS BE TIGERS IN OWN MARKETS.

Regards,
Sonia Bhola
+919990056364
Complete Medical Equipments
completemedicalequipments@gmail.com

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Selvakumar Devanna

Re: REFURBISHED MEDICAL EQUIPMENT MARKET IN INDIA.

July 26, 2011 10:17

Dear Sonia,
I do agree with you. many local indian engineers are not rellay trainined to carry out the proper corrctive mintenence. So the qulaity oriented maintenence program will be the key.
Reagrds,
D.Selvakumar,
TriMed Helathare,

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Sonia Bhola

Re: REFURBISHED MEDICAL EQUIPMENT MARKET IN INDIA.

July 26, 2011 10:16

Thanks Mr.Devanna,

We are determined to organize Biomedical Device industry and have started a few initiatives already. Inviting all experts and professionals to join the movement...
We remain at your disposal for any other information.

Regards,
Sonia Bhola
Complete Medical Equipments

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