by Brendon Nafziger
, DOTmed News Associate Editor | July 25, 2011
From the July 2011 issue of HealthCare Business News magazine
“It is important for U.S. companies to be cognizant of the fact that the Indian consumer, whether hospital or physician, values cost and practicality the most (fancy add-ons or features are deemed as extra costs that are unnecessary),” they said.
There are also important cultural differences with the rest of Asia. Unlike in, say, China, where consumers want the newest thing and imaging equipment is replaced very few years, the analysts said in India buyers expect capital equipment to last eight to 10 years.
“This leads to low replacement rate of capital equipment in India and limited [year-over-year] market growth,” they said.
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Still, India’s health care sector is doing gangbusters, and many device companies are making a bet on its continued success. If you’re going to do business in India, Yip and Bal have some pointers:
• Partner with locals:
Yip and Bal said pursuing a joint-venture agreement with a local distributor is the easiest market-entry strategy, although once you get some experience on the ground, you might find it better to go off on your own.
• Pick the right model:
Indian businesses prefer capital purchase to leasing or subscription models, so keep that in mind when developing proposals.
• Skip the IT:
Weak information technology infrastructure and the high costs of implementing health care IT mean the demand for these products is often lower in India.
• Watch out, colleagues can become competitors:
Compared to China, India has had fewer radiology brands become global forces, but Yip and Bal warn that won’t be so forever. Government moves to lower duties on raw material imports and the knowledge gained from multinational partnerships are inspiring many local entrepreneurs to launch their own equipment startups. “In the next 10 years, we may witness a local Indian player become a global player, primarily through expansion in regional and emerging markets,” they said.
Finally, you should be aware of regulations. Currently, India has a rather accessible market, but the government is trying to move its regulations more in line with those from the Global Harmonization Task Force. In fact, some experts believe India could decide on new regulations – better clarifying what’s a device, and what’s a drug – as early as this summer.
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