Chinese imaging market to top $2.5B by 2016

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The Chinese government’s large investment in bridging the gap in healthcare quality between rural and urban hospitals will be the largest driver of growth in the Chinese diagnostic imaging market, according to Millennium Research Group (MRG). Domestic competitors will maintain a strong presence, particularly in lower-end x-ray and ultrasound systems, while consumer preference for known brand names will support sales by multinational manufacturers.

The overall Chinese diagnostic imaging market will grow modestly to reach a value of more than $2.5 billion by 2016, according to MRG’s “Chinese Markets for Diagnostic Imaging Systems 2012” report.

As part of the Chinese government’s $125 billion New Medical Reform Plan, intended to provide affordable healthcare to the entire population by 2020, it will invest money to upgrade lower-tier rural hospitals, as well as construct new facilities. As a result, higher-tier hospitals will be able to replace outdated systems, while smaller, less affluent hospitals will be able to invest in initial purchases, particularly CT, MRI and nuclear medicine systems. This will represent a significant sales opportunity for manufacturers of such systems, MRG said in a release.

Domestic competitors have a significant role in the market for analog x-ray and lower-end ultrasound systems, and have relatively lower production costs than multinationals. The large number of these domestic competitors keeps prices for these systems low, which makes them attractive for less-affluent hospitals and clinics. In 2011, Beijing Wandong Medical Equipment was the overall leader among domestic competitors.  

The report predicted the planned entry of Konica Minolta and Agfa HealthCare into the digital radiography retrofit market could contribute to growth in that segment.

The ultrasound market will see the largest revenues over the forecast period, according to MRG. Growth will be fueled by additions to ultrasound system functionalities, replacement sales and upgrades to existing systems.

Each of the top three multinational competitors in China—GE Healthcare, Siemens Healthcare and Philips Healthcare—has shares in each of the market’s segments: MRI, CT, x-ray, ultrasound and nuclear medicine. As a result, they can leverage their position to raise brand awareness and establish strong customer relationships. Wealthy urban Chinese show a strong preference for known international brands, and this influences hospital system purchases.

“The Chinese government also has an implementation initiative for PET/CT systems,” MRG Analyst Michelle Chan said in a release. “They plan to increase licensing and install many new PET/CT systems by 2016. This initiative will initially be limited by the need to establish a radiopharmaceutical supply chain. Once that infrastructure is in place, we can expect to see a rapid increase in sales, probably by 2015.”

The report identified several barriers to market expansion, including the slow medical device registration process, which delays the introduction of new technology, and entry of cutting-edge technology into the market—restrictions on the implementation of advanced diagnostic imaging technology and heavy competition from local vendors.

MRG’s Chinese Markets for Diagnostic Imaging Systems 2012 report includes unit, average selling price and revenue information, along with market drivers and limiters and competitive landscape for MRI, CT, x-ray, ultrasound and nuclear medicine systems in China.

For more information about the report, click here.