Brimming with promise
It has only been about five years since its inception but Shanghai United Imaging Healthcare is already looking like a promising contender from China that can disrupt the foreign monopoly on the country’s high-end medical equipment industry.
The Chinese company, which has submitted an impressive total of 1,035 patents to date, received 1 billion yuan ($161 million) worth of contracts in 2014, and its goal for 2015 is 2 billion yuan.
Founded in 2010 by 11 Chinese members who boast valuable experience in foreign medical device companies, United Imaging Healthcare has the aim of becoming a reputable Chinese brand for medical devices. The team had decided to locate the company in Shanghai’s Jiading district due to the city’s abundant resources in this particular industry and the level of support provided by the municipal government.
The potential for growth in this particular sector is high as there is a great demand for high-end medical equipment from numerous Chinese hospitals and medical institutions.
“We want to become a Chinese medical device company that is equivalent to global-standard ones,” said Xue Min, chairman of the board and chief executive officer of the company.
However he admitted that the odds were always against them. Chinese companies have typically had little success in this field as they lack access to technology and innovation. Most of the local players were simply too small and all they could do was vie for meager profits in the lowend market. For instance, the total output value of China’s nearly 15,000 medical facilities providers was around 180 billion yuan ($29 billion) in 2012. In contrast, the global revenue of one foreign medical device maker alone amounted to $19 billion.
To address this issue, United Imaging Healthcare devoted much focus to designing their own products — about 60 percent of the company’s 2,000 employees work on research and development. The move paid off as the company has since launched 18 state-of-theart products, with seven of them having won the prestigious iF Product Design Award and Red Dot Design Award, also known as the “Design Oscar”.
To become more competitive, United Imaging Healthcare priced their products about 20 percent lower than their international counterparts. Potential consumers soon started to take notice of this new company and their achievements, and it wasn’t long before major market players started to lower their prices too.
“In major hospitals, most of the high-end medical equipment is purchased from foreign brands, who charge high prices and maintenance fees for their products. This may be one of causes for China’s high medical treatment cost,” said Zhang Qiang, co-president and member of the board at Shanghai United Imaging Healthcare Co Ltd.
“The same set of equipment may even cost twice in China compared to abroad. We should change the situation, and this is also a mission to improve the medical treatments received by the Chinese people,” Zhang added.
But there is still much to do be done before the monopoly held by multinational corporations is broken. Currently, three foreign organizations still claim more than 70 percent of the shares in the highend medical device market in China.
“The journey will be difficult, but at least we have started,” said Xue.
Shanghai United Image Healthcare has seen success with their focus on designing their own products.