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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Advice for doing business
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:
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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.
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Pick the right model: Indian businesses prefer capital purchase to leasing or subscription models, so keep that in mind when developing proposals.
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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.
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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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(1)
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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