Philips Medical Systems, which supplies defibrillators and X-ray
machines, predicts China will soon surpass Japan to become its
second-largest market next to the United States.
The unit under Dutch industrial giant Royal Philips Electronics
achieved double-digit growth in China last year.
T.L.V. Kumar, chief operations officer of Philips Medical
Systems Asia Pacific, said he expected sales in China to expand
more than 10 percent annually in the next few years, largely
outpacing the global average of approximately 5 percent.
Philips Electronics has been putting more emphasis on developing
its lucrative healthcare segment, which is expected to be a major
contributor to the company's profits. The giant that makes products
from TVs to hairdryers said it recognized the potential for growing
its medical businesses in China.
"We are making a concerted effort to grow our healthcare
business," said Kumar.
China's healthcare market is currently valued at approximately
US$1.2 billion, and in the next five to seven years, China is
expected to surpass Japan, making it the second largest market for
medical equipment in the world.
China has a strong demand for low to mid-range healthcare
products. David Jin, CEO of Philips Medical Systems China said
about 75 percent of the country's medical equipment market is made
of middle- and lower-range products.
"The market opportunity is immense and the winning companies
will be those who tailor solutions to the unique circumstances of
China and the diversity of facilities that exists here," said
Jin.
As many medical imaging technologies are considered too
expensive for the Chinese market, Philips has strengthened its
ability to offer lower-cost products through its partnership with
Shenyang-based Philips-Neusoft Medical Systems Co Ltd, its only
joint venture outside the United States and Europe.
"Given China's call for more affordable medical services and the
government's pledges to increase investment in the sector, the
lower-end category bodes huge market opportunities," said Jin.
The joint venture is mainly engaged in developing and
manufacturing medical imaging systems. Philips Medical expects to
expand its revenue by approximately 30 percent annually over the
next five years.
With a major focus on the domestic market, the Philips-Neusoft
plant will start to export products to South Korea, Southeast Asia,
the Middle East and Africa in the second half of this year, said
Jin.
Jin said the joint venture this year will not only increase its
production volume, but also the types of products to satisfy the
overseas market.
Jin refused to reveal the sales figures in China last year, but
said the Chinese market accounted for nearly 10 percent of the
global market last year.
(China Daily March 15, 2006)
